Some change, some hope, in offshore drilling
Posted March 31, 2010 at 9:35 am 
Filed in: Today, President Obama announced that the federal government will pursue oil and natural gas exploration and development in areas off the Atlantic Coast and Eastern Gulf of Mexico. Signaling its intention to promote greater domestic production of these resources is a positive step towards reducing our unnecessary over-reliance on imported oil, much of which flows from unstable parts of the globe.
President Obama emphasized that “this announcement is part of a broader strategy that will move us from an economy that runs on fossil fuels and foreign oil to one that relies more on homegrown fuels and clean energy.” He correctly asserted that our continued oil dependence is a grave threat to the nation, and recognized that the transition to a post-oil economy will be a long process. Increased domestic production of oil and natural gas will provide the United States with greater flexibility in managing this challenge.
According to the latest MMS and National Petroleum Council (NPC) data, the Eastern Gulf of Mexico contains more than 3.6 billion barrels of technically recoverable oil and 22 trillion cubic feet of technically recoverable natural gas. Offshore areas on the Atlantic coastline are estimated to contain an additional 3.8 billion barrels of oil and 37 trillion cubic feet of natural gas. The Beaufort Sea and Chukchi Sea areas in northern Alaska, for which lease sales have already begun, are estimated to have even greater oil reserves—8.2 billion barrels and 15.0 billion barrels respectively (following through on these lease sales is critical). For some of these areas, this is the first time that leases will be offered in more than two decades.
The development of these resources must, as the president noted, “employ new technologies that reduce the impact of oil exploration.” Expanding domestic production in a sustainable way is tremendously important, and the benefits are likely to be great. Billions of dollars of royalties and taxes for the federal government and state governments will help their economies prosper. Tens of thousands of jobs could be achieved. Billions of dollars could be avoided in imports.
However, there is an additional caveat. Until Congress lifts the moratorium on exploration and production in the Eastern Gulf of Mexico, some of the most energy rich areas within U.S. borders will remain unutilized. In June 2009, the Senate Committee on Energy and Natural Resources passed legislation on a bipartisan basis that included measures to lift these moratoria. It is important that Congress moves forward with this legislation.
The president’s policies, “from hybrid fleets to offshore drilling, from nuclear energy to wind energy,” do indeed underscore the seriousness with which he and his administration view the challenge of energy security. Let us hope that policymakers continue to take these crucial steps towards enhancing it, and not forget that much remains to be done on many fronts.
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