The Washington Post just ran an editorial highlighting an ad the NRDC Action Fund printed in the paper. The ad, which featured a drawing of President Bush holding a bottle of elixir, said the claim that offshore drilling will drive down gas prices is “100% Snake Oil.”
The Post agreed with the NRDC Action Fund that more offshore drilling will not impact the price of gasoline today because it will take years to get to the pump. But, the editorial continued, “There are three ‘truths’ masquerading as fact among drilling opponents that need to be challenged.”
We need to keep the energy debate grounded in fact, not fiction, so I appreciate the paper’s effort to examine these assertions. Still, I stand by the ad’s figures and explain why below.
Before I do, I want to say that there is one critical area where the Post and NRDC agree wholeheartedly. The editorial says, “The strongest argument against drilling is that it could distract the country from a pursuit of alternative sources of energy.”
I couldn’t have said it better myself. The argument that drilling is a distraction is not just theorizing; it is real. All of the attention on drilling has:
- Distracted Congress from even CONSIDERING a bipartisan tax incentive for home retrofits that could produce more oil sooner than offshore drilling and that would reduce energy costs to consumers.
- Diverted Congress from extending the clean energy tax incentives for both efficiency and renewables that could produce more than 10 times as much energy as the Arctic National Wildlife Refuge just in the form of gas savings from efficiency in buildings.
- Prompted representatives engaged in the pro-drilling political theater now occurring in the closed House chamber to vote against clean energy 93 percent of the time during this Congress.
This is actually what is happening as a result of the politics of drilling.
Now, on to why I think the Post’s facts aren’t quite right.1. Even with More Barrels, We Will Never Have a Big Piece of the Pie
The Post says it is erroneous to claim that America has only 3 percent of the world’s oil reserves, because new technology estimates there could be more barrels of oil under the sea than previously thought. I don’t dispute that. But:
- Even if we add twenty or thirty billion more barrels into the mix, we will only increase our share by a few percentage points, so maybe our total share would be 4 percent, maybe 5 percent. That still doesn’t make us a player in the global oil market.
- China and India’s rising demand will quickly dwarf any significance our tiny percentage increase may garner.
- We can have a much bigger impact on the global market by reducing our demand through efficiency. Just look at the past few weeks. Oil prices have dropped because our nation has been conserving.
The Post disagrees with the assertion that oil companies are failing to develop a large portion of the leases they already have. The paper cites as an example five Shell leases that are not classified as active, but where the company has been in fact laying the ground work for drilling.
- But can the paper verify the same is true for the rest? There are 7,740 active leases on the Outer Continental Shelf, and only 1,655 of them are in production.
- And what if we turn the question around? A full 80 percent of all offshore drilling areas are open to development. Why don’t companies exhaust those before asking for the remaining 20 percent?
- Instead of favoring exploration, the so-called Big Five oil companies-- BP, Chevron, ConocoPhillips Company, ExxonMobil, and Royal Dutch Shell—have spent 56 percent of their soaring operating cash flows on share repurchases and dividends. Despite declining production rates, these stock buy backs roughly exceed $200 billion over the past five years.
The Post reminds us that the technology for preventing oil spills has improved over the past decade. I agree, but large oil spills still occur.
- From 1985 to 2005, there were 187 large oil spills on the Outer Continental Shelf, each one emitting more than 2,100 gallons into the Gulf of Mexico.
- Katrina and Rita alone dumped an amazing 685,000 gallons of oil, contrary to misleading industry claims.
The paper also says that no form of energy is perfect or without trade-offs. But that doesn’t mean the trade-offs are of equal weight.
- Which would you choose: seeing offshore wind farms on the horizon from your canoe or being unable to canoe because a recent oil spill fouled the waters?
- There is a pollution-free alternative: efficiency. Analysis by the Department of Transportation shows that new vehicles could be averaging 40 percent higher fuel economy by 2015 using off-the-shelf, cost-effective technologies.