June 23, 2008

Why Offshore Drilling is a Pander

"The worst thing we can do as a nation is taking the easy way out. ...If you start opening up offshore drilling, then you are buying time and you are not addressing the fundamental problem with fossil fuels." -Lindsey Graham (one of McCain's top boosters)
Sounds like a pretty reasonable argument to me, but for some reason that argument has changed lately. Now Graham and McCain are supporters of legislation that would open a 27 year moratorium on offshore drilling. This is a political pander and nothing more. 8 years ago, while running for the Presidential nomination, John McCain espoused on the reasons offshore drilling would not help Americans in the long run, now the tune has been reversed and he is going public with his idea that offshore drilling will lower prices of oil and open up a new supply of domestic oil. The only problem with this is that it will not help. This is simply a political line that Republicans are using just like they used terrorism in 2004. People are scared of rising gas prices squeezing extra income from their households, scared that they will have to start sacrificing the needs of their family simply to commute to work or the grocery store. And these are real concerns unfortunately, but let's look at why an expanded offshore drilling program will not address the issue of price or supply.

First, in 2006 legislation was passed that opened up 8.3 million acres in the Gulf of Mexico to oil exploration. From these 8.3 million acres there has been a 0% increase in US oil production, the returns have yet to be seen. The federal government also leased 91 million additional acres for domestic production, most of which is going unused. So we know that opening up offshore drilling will not produce benefits within 2 years. We also know that there is plenty of offshore drilling space that has been granted but is yet to be used, so why do we need more? We really don't until we have used what has been granted so far, but don't take it from this liberal Dem, here's Florida House Speaker Marco Rubio, a Republican, calling out McCain:
"For anyone to represent that someone drilling off the coast in Florida is going to lower gas prices here or anywhere in this country is disingenuous and a flawed argument...Oil drilling could take 10 years before any oil is pulled out of the ground, and there are a large number of leases held by oil companies that are not being exploited right now. We can't say we need more until we've exploited these."
But wait Marco, John says "There are areas off our coasts that should be open to exploration and exploitation, and I hope we can take the first step by lifting the moratoria...[drilling] would be very helpful in the short term in resolving our energy crisis."

Well let's ignore the fact that since 2006 (the short term) we haven't seen any help in resolving our energy crisis or help with gas prices since opening up about 100 million acres to drilling. What do you need to get to the oil at the bottom of the ocean? Ships.

Unfortunately for us there are no ships! This New York Times article says that the world's existing drill-ships are booked solid for the next five years. And shipyards have ramped up production on new ships, unfortunately they fall prey to the same workings of every market and with the increased demand, the price of the ships have increased. In fact, in Asia (where most shipbuilders are located) the prices of a drill-ship have increased over $100 million a vessel to about a half a billion dollars. All of this demand also raises the price of running the rigs as costs for the newer rigs have reached about $600,000 a day, compared to $150,000 a day in 2002. Even those in Big Oil, like the American Petroleum Institute, the oil industry trade group, says drilling offshore is unlikely to provide Americans with more oil for at least 7 to 10 years.

So we've seen that what he have opened to offshore exploration has not yielded any results (we are talking about short term relief, right?) and that even if we allow drilling we don't have the capabilities to exploit it. The third problem facing John McCain's idea that offshore drilling will ease short term fears about oil is that there simply isn't that much oil down there. Let's hear what people from the Bush administration have to say about the supply of oil offshore (Remember that McCain is running on a platform of being less oil dependent as well as easier on the environment).

From the Energy Information Administration (Official Energy Statistics from the U.S. Government) we have a report that says reserves found on the outer continental shelf for the lower 48 states will yield enough oil to supply the U.S. for 2.5 years at our current consumption rate. 2.5 years is not enough to make a difference in our supply, and what happens after we've exhausted those 2.5 years worth of oil? Where do we go drilling next to lower the price of oil? Unfortunately the answer is probably the north pole (which is a whole other can o' worms) where technically nobody owns the land or rights to drill, can't wait for that war for resources.

So we have established three points against the ability to relieve our dependence on foreign oil and alleviate rising gas costs. 1) Past legislation opening up offshore drilling areas has yet to yield any rise in production and has done nothing to alleviate the price expansion over the last two years; 2) There is a shortage of infrastructure (ships) that is required to extract oil from deep sea floors; 3) The supply of oil in proposed drilling areas will provide at most 2.5 years of oil at our consumption rate.

It should be clearly established now that either the McCain campaign has done little research and doesn't understand the requirements to extract oil from deep sea floors or they are trying to give the voters a false sense of security in an election year. This is the definition of a pander, expressing views during an election cycle that will resonate with the fears of the voters in lieu of the fact that the policy will do little to change the situation. So next time you hear John McCain talk about how he is doing everything he can to help the public pay less for gas, or that his opponent doesn't care about the welfare of the people, make sure to do a little fact checking yourself to determine if there is value in what he is saying, or if he's just playing off of your fears of $5/gallon gas.

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