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Offshore Drilling Backed as Remedy for Oil Prices
McCain told reporters last month that "we have untapped oil reserves of at least 21 billion barrels in the United States." In fact, the U.S. Geological Survey estimates that there are "undiscovered conventionally recoverable resources" of 17.8 billion barrels. That's not the same thing as "reserves." In the oil business, "reserves" refers to oil that has been found and "proven," whereas "resources" refers to promising geological structures where the presence of oil remains uncertain.
In the eastern Gulf of Mexico, those "resources" are likely to represent actual oil because the geology is an extension of the western Gulf of Mexico, where oil has been drilled for years. There is less certainty about what may lie off the Atlantic coast.
If, in fact, there are 17.8 billion barrels of oil offshore, that would equal half the reserves of Nigeria or about 60 percent of proven U.S. reserves. It could substantially reduce U.S. imports for a decade or two or sustain U.S. production when other fields decline.
But developing those resources would take time. A report last year by the Energy Department's Energy Information Administration said that "access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017." It added, "Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant."
Drilling proponents say that drilling today is much more sophisticated than it was in 1969. Oil companies and their supporters boast about how their platforms and pipelines withstood the hurricanes of 2005. "I think people are reassured that not a drop of oil was spilled during Katrina or Rita," McConnell said. "Those rigs in the Gulf, there was not a single incident of spillage that anyone reported."
Although the overwhelming majority of safety valves did in fact work during the hurricanes, the Minerals Management Service of the Interior Department reported that there were five spills, each between 1,000 and 2,000 barrels. Altogether, 125 small spills totaled 16,302 barrels, almost a quarter as big as the Santa Barbara spill. (The MMS says that over the past 20 years, less than 0.001 percent of oil produced in U.S. waters has been spilled.)
Foes of offshore drilling argue that the oil industry isn't taking advantage of lease areas already available on federal lands and waters. Democratic Sens. Russ Feingold (Wis.), Christopher J. Dodd (Conn.) and Robert Menendez (N.J.) have introduced "use it or lose it" legislation.
"For years, oil companies have been sitting on millions of acres -- doing nothing to develop them for drilling -- while hardworking Americans grapple with skyrocketing prices at the pump," Dodd said in a statement.
But oil companies say they need time to line up rigs and crews. G.L. Kirkland, head of exploration and production at Chevron, said that 498 of Chevron's 796 leases are considered "undeveloped," but that plans for drilling are moving ahead. He noted that oil companies pay rent to the federal government on undeveloped leases and lose undeveloped leases after 10 years.
Many oil companies and Bush administration officials say that it is hypocritical to pressure other countries to open new exploration areas, especially offshore, when the United States refuses to drill in its own waters. Indeed, many of the world's hottest oil prospects are off the shores of West Africa, Thailand, Australia, Brazil, the Persian Gulf and the Arctic Circle.