I don’t know why exactly the oil price has been falling (who does, but I suspect that perceptions of demand destruction are a big part of the story). Doubtless the Democrats will convene congressional investigations to investigate, but while we’re waiting for those, this piece in the Washington Post is well worth reading, in particular this:
Opposition to offshore drilling goes back to 1969, when 80,000 barrels of oil from an offshore oil well blowout washed up on the beaches of Santa Barbara. In 1971, the Interior Department instituted a host of reporting requirements (such as the resource development and oil spill recovery plans mentioned above) and stringent safety measures. Chief among them is a requirement for each well to have an automatic shut-off valve beneath the ocean floor that can also be operated manually. According to the MMS, between 1993 and 2007, there were 651 spills of all sizes at OCS facilities (in federal waters three miles or more offshore) that released 47,800 barrels of oil. With 7.5 billion barrels of oil produced in that time, that equates to 1 barrel of oil spilled per 156,900 barrels produced. That’s not to minimize the danger. But no form of energy is perfect or without trade-offs. Besides, if it is acceptable to drill in the Caspian Sea and in developing countries such as Nigeria where environmental concerns are equally important, it’s hard to explain why the United States should rule out drilling off its own coasts.
The strongest argument against drilling is that it could distract the country from a pursuit of alternative sources of energy. There’s no question that the administration has been lax on that front. True leadership would emphasize both alternative sources and rational approaches to developing oil and natural gas. No, the United States cannot drill its way to energy independence. But with the roaring economies of China and India gobbling up oil in the two countries’ latter-day industrial revolutions, the United States can no longer afford to turn its back on finding all the sources of fuel necessary to maintain its economy and its standard of living. What’s required is a long-term, comprehensive plan that includes wind, solar, geothermal, biofuels and nuclear — and that acknowledges that oil and gas will be instrumental to the U.S. economy for many years to come.
As for Obama, well, he appears to be shifting his position (somewhat), but I was intrigued to see this from a recent article by Deroy Murdock:
To pinpoint America’s offshore oil deposits, congressional Democrats, starting with Sen. Barack Obama, love disco-era maps. Despite his conditional, latter-day support for limited offshore drilling, Obama is the sole sponsor of legislation that would block geological research to locate offshore oil.
Federal officials currently employ estimates based primarily on two-dimensional maps that oil-industry surveyors produced in the 1970s and furnished to the Interior Department. Since 1981, Congressional appropriations amendments effectively have barred Interior from financing or permitting survey expeditions— particularly and precisely in the 85 percent of the Outer Continental Shelf where oil production and exploration are verboten.
In 2005, Congress mandated new, quintennial inventories, then gave Interior six months and $0 to assess how much oil and natural gas under gird the 1.76 billion-acre Outer Continental Shelf – a laughably impossible task…
Obama’s “Oil SENSE Act” would repeal the 2005 Energy Policy Act’s authorization of these inventories. S.115 would leave decision makers with Carter administration maps drawn with pre-PC technology. This is like engineering a Space Shuttle mission with slide rules.
Obama’s bill would prohibit expanded use of 3-D seismic techniques that locate and measure underwater oil deposits. In October 1999, President Clinton’s Energy Department evaluated the environmental quality of 1970s’ 2-D equipment against last decade’s 3-D technology. With the latter, Energy concluded, “Overall impacts of exploration and production are reduced because fewer wells are required to develop the same amount of reserves.” In 1970, 17 percent of offshore wells struck oil. By 1997, that figure was 48 percent.
It’s important to realize that seismic surveys have relatively low environmental impact, but it’s possibly even more important to understand what Obama’s opposition to such surveys could mean. If I read the implications of this correctly, he simply doesn’t believe that people can be trusted with knowing what reserves may, indeed, be out there. Telling, that.