Politics & Policy

Drill, Baby, Drill: For Onshore Oil and Offshore Natural Gas

Today's mess may grease the skids for a grand compromise.

New Orleans — From within the elegant and delicious Restaurant August at the corner of Gravier and Tchoupitoulas Streets, the City that Care Forgot is quintessentially carefree. The chandeliers glisten, the patrons glow, and the oysters with truffle spoonbread could not be more delightful.

But about 40 miles south, a Delaware-sized oil slick threatens to blacken the coast like a nasty-tasting, pepper-encrusted redfish. As New Orleans and its environs confront one more undeserved sucker-punch in less than half a decade, it’s time for serious oil-and-gas reform.

“We are starting to hear that there may be shortages of Gulf seafood in the next few weeks,” laments Crawford Leavoy, a manager at Restaurant August. “We focus on using local products from the waters of Louisiana and the Gulf of Mexico, but, because of this disaster, this may change for all of us in New Orleans. Restaurant August will continue to support local fishermen and shrimpers until we are told otherwise. Most importantly, we think of our customers first, and their safety is our priority.”

Worries about petroleum-marinated seafood, oil-infused waterfowl, and crude-battered beaches have chilled lawmakers feet about expanding ocean-based oil production.

Regarding President Obama’s plan to broaden offshore drilling, Sen. Bill Nelson (D., Fla.) told MSNBC: “I think that’s dead on arrival.”

This calamity could metastasize. Some forecasters warn that the Loop Current could drive the oil slick from the ruins of BP’s Deepwater Horizon rig south along Florida’s west coast and around Key West. Once in the Gulf Stream, the oil spill would speed up the eastern seaboard, potentially fouling beaches from Miami to the Carolinas.

Such a fiasco surely would kill new offshore oil for a generation.

Today’s mess may grease the skids for a grand compromise: a red light for new offshore oil in exchange for green lights for onshore oil production and offshore natural-gas drilling.

True, this approach would overlook plentiful oil supplies beneath U.S. oceans. “You have over four times more resources offshore,” says Dr. John Felmy, the American Petroleum Institute’s chief economist. In federal lands and waters, he says, “there are about 21 billion barrels of oil onshore, mostly in Alaska, and 86 billion barrels of oil offshore.”

Some 4 billion barrels of untapped oil rest under Montana and North Dakota. Americans use about 7.3 billion barrels annually. While the U.S. would consume this deposit alone in just seven months, many similar reserves sit beneath American soil, rather than below domestic waters.

Meanwhile, natural gas abounds, offshore and on.

“There are about 420 trillion cubic feet of natural gas offshore,” Felmy estimates. “You have 187 trillion cubic feet of natural gas onshore. . . . You also have exciting, new shale gas supplies. The Marcellus shale deposits in Pennsylvania and upstate New York are huge. There could be as much as 500 trillion cubic feet in Marcellus alone.”

Americans use about 20 to 25 trillion cubic feet of natural gas annually. Hence, Marcellus could represent a 25-year natural-gas supply. Existing offshore reserves could add 20 more years of natural gas to America’s energy menu.

Producers could also extract offshore oil via underground, land-based, horizontal drilling. Essentially, oil would be sucked to shore via pipes beneath the ocean floor, rather than through pipes in the water. This should be far less risky and far more earth-friendly than today’s drilling regime. At least with existing technology, however, this only would work to drain deposits about five to ten miles offshore, far shy of where many deposits lie, up to some 200 miles from land.

Drilling is much cheaper onshore than off. According to December 2009 Energy Department figures, from 2006 through 2008, major domestic firms spent $36.90 to locate and collect an average barrel of onshore oil. The equivalent offshore figure: $73.47 — almost precisely double.

It’s worth restating the obvious: Offshore natural gas does not spill. At worst, if a natural-gas rig exploded, the ensuing fireball might scorch a passing flock of seagulls. The only onshore impact might involve sunbathers rising from their beach towels and asking, “What the hell is that?”

Offshore drilling will not end today, nor should it. But given its catastrophic potential, plus the immediate availability of cheaper and less environmentally calamitous substitutes, perhaps the Left and Right can agree, for once, to deemphasize offshore oil while passionately embracing onshore oil and offshore natural gas.

This may be the best policy to keep the cares to a minimum and, as this city does so well, let the good times roll.

Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University.

Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor of National Review Online, and a senior fellow with the London Center for Policy Research.

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