Is there no end to the soaring fuel prices? Crude oil may reach as high as $150 or $200 per barrel by the end of this year according to many analysts.
The world’s oil supply is perilously tight. American dependence on unreliable foreign sources for more than 60 percent of domestic oil demand, indeed, drives the price at the pump. With new policy, the United States certainly could increase domestic production of oil.
Such is the impetus behind The American Energy Production Act of 2008, introduced in the U.S. Senate on May 1 and supported by our Texas Senators, Kay Bailey Hutchison and John Cornyn. The legislation would stimulate domestic oil production by removing federal bans on oil development in Alaska and off the Pacific and Atlantic coasts, expediting EPA permits for refineries, encouraging leases for oil shale development, and mandating production of coal-derived fuels.
U.S. oil production has steadily declined since the 1970s. Over these 35 years, oil exploration, pumping, pipeline infrastructure, and refining have been consistently opposed by the powerful environmentalist establishment … and with great success. It is time to reconsider these constraints on domestic production.
Consider the volumes of U.S. oil resources. The most conservative measure is “proven reserves.” To be proven, it must be reasonably certain that the crude oil can be produced using current technology at current prices, current commercial terms, and with government consent. The U.S. Energy Information Agency (EIA) estimates the U.S. has 21.8 billion barrels of oil (bbo) in “proven reserves.”
At today’s consumption rates, proven reserves would last 50 years. Yet the amount of proven reserves might jump to more than 50 billion barrels if the government “consented” to development of areas now off-limits.
And “recoverable reserves” — known oil resources capable of recovery, but with more cost and technical difficulty than proven reserves — hold several thousand times more. These resources include: light oil in place (293 bbo); heavy oil (81 bbo); oil sands (80 bbo); and the mother lode, oil shale (2,118 bbo). Add the 21.8 bbo proven reserves and 30 bbo off-limits, and the total 2.6 trillion barrel endowment of American oil resources would support U.S. demand for thousands of years.
Unlike Britain, Canada, or Norway, federal decision has barred offshore oil exploration in half the Gulf of Mexico, and off the East and West coasts. The U.S. Department of Interior estimates that these offshore bans cover more than 16 billion barrels.
The environmental establishment still preaches that producing oil and preserving the environment are mutually exclusive propositions. But the original environmental risks have been almost eliminated by creative technology and safeguards. None of the offshore platforms hit by the gales of Hurricane Katrina spilled a drop of oil. In the Gulf of Mexico, where offshore production is allowed, innovative means of enhancing aquatic habitat have been highly successful.
Alaska’s Arctic National Wildlife Refuge is considered the largest untapped oil field in North America. Even with elaborate means to preserve wildlife habitats, former President Bill Clinton vetoed legislation to allow its development. Estimates of practically recoverable crude oil there are between 10 and 12 billion barrels.
The 92 million acres of federal lands in the lower 48 states also contain oil resources. Shortly after 9/11, Congress reviewed all energy resources on federal lands. Their study found that only 25 percent of the lands were accessible for oil development. Restrictions precluded access to all but 18 percent of the estimated 4.2 billion barrels of recoverable oil.
With ever increasing global demand for fuel, all cost-efficient and environmentally responsible energy sources are needed. For the next several decades, however, there are no realistic alternatives to the petroleum dominance in transportation fuels. Renewable fuels, batteries, and hydrogen fuel cells can, in the near future, provide only a sliver of the volume needed.
What percentage of voters would still support environmental policies that constrain U.S. production of oil? In a March 2008 nationwide survey of registered voters by the Institute for Energy Research, 72 percent prioritized U.S. energy independence ahead of global warming concerns.
The American Energy Production Act of 2008 offers a critical step forward. After 9/11 and again after Hurricanes Katrina and Rita, comparable legislation was introduced. As the urgency waned, so did enthusiasm for the new policy. Perhaps gasoline at $5 or $6 per gallon could break the inertia that perpetuates American dependence on foreign oil.
Environmental protection and affordable energy are compatible. Like no other, this country can still achieve ever greater levels of environmental quality, reliable energy, and national security.
Kathleen Hartnett White is Director of the Center for Natural Resources at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. She is the former Chair of the Texas Commission on Environmental Quality.
Labels: Arctic National Wildlife Refuge, energy, institute for energy research, john cornyn, kathleen hartnett white, kay bailey hutchison, oil, texas public policy foundation, tppf
