Anne Northup: Oil Reserves In Alaska, Elsewhere Could Ease Crisis.

Oil reserves in Alaska, elsewhere could ease crisis

June 17, 2007
By Anne M. Northup

Two years ago, Nancy Pelosi and the Democrat Congress promised to devise a national energy policy and lower the cost of gas, which was about half the price it is now. When asked what he and the other Democrats have done to fulfill that pledge, Congressman Yarmuth points to legislation they passed to suspend shipments to the Strategic Petroleum Reserve. He initially claimed this legislation “could reduce prices by about…25 cents per gallon gasoline,” but later downgraded the expected effect of this action to only 5 cents per gallon. It’s a little surprising that anyone would boast about saving a nickel when gas prices have risen $1.63 since Yarmuth took office and the Democrats took control of Congress.

But there’s more. Just last week, our Representative joined ten Democrats who filed a “use it or lose” bill which would force oil companies to use the federal leases they currently have or forfeit them. The truth is, oil companies have had very little success with these leased lands, with 52 percent of the leases turning up no oil. Many more were leased for the purpose of recovering natural gas only. Other areas are prohibitive in terms of the cost to drill, and questionable in the amount recoverable oil. It is hard to fathom the thinking of a person who would propose forcing companies to drill all over the continent in places with marginal or no reserves, but refuses to allow drilling where there are plentiful reserves.

Other actions contemplated by the Democrats in Congress include suing OPEC to increase production. They also plan on launching their seventh investigation into “Price Gougers” and their fourth investigation into “Speculators”. In addition, they want $20 billion in windfall profit taxes on oil producers, a failed strategy tried by a previous Democrat Congress in 1980, and signed into law by Jimmy Carter. It stifled domestic oil production, resulting in an even greater dependence on foreign oil. One needn’t be an energy expert to understand that none of these actions will produce one more drop of oil for our country.

By halting shipments to the SPR, and trying to force OPEC or our own energy companies to increase production, the Democrats are at least indicating that they understand that increasing the supply of oil is vital to lowering our prices. The question is, why won’t they take realistic, concrete steps to do that instead of trying to demonize the oil companies and posturing against OPEC?

We do not have to look overseas for our oil. Alaska’s ANWR alone contains 10.4 billion barrels of oil. Likewise, the Outer Continental Shelf is estimated to contain 19 billion barrels of oil. There are other estimates that put our oil reserves in the hundreds of billions of barrels. When given the opportunity to tap these abundant resources, the House Democrats overwhelmingly opposed it while House Republicans overwhelmingly supported the increased production. Even when the Republicans were in the majority and passed it in the House, the Senate could not muster the 60 votes necessary to pass the bill and send it to the President because of Democratic opposition.

Recently, such large reserves of shale oil were discovered that some now refer the United States as the “Saudi Arabia of shale oil”. Yet last year this Congress banned all new shale oil extraction. That’s right: no matter where or how safely it could be recovered, this new reserve is now off limits nationwide.

We know where the major reserves of clean, light, easy-to-refine crude oil are located. Even though a majority of people in this country believe we can harvest our oil in an environmentally safe manner, this Congress seems to be too frightened of an environmental lobby that has become increasingly irrational.

The high price of oil is jeopardizing the entire economy and our balance of trade. It has triggered fears of inflation and a subsequent recession around the country. From Wall Street to the unemployment office to family dinner tables, the talk moves from higher gas prices to higher food prices to higher unemployment to greater inflation, and a real fear of the economy collapsing. As for our balance of trade, when we depend on foreign oil and the price goes up, we ship more of our American dollars overseas. Today we send $500 billion to countries, most of whom do not even like us. This is simply unacceptable.

Conservation is important, but it’s not enough. Some individuals can bike or carpool to work or consolidate trips or take a shorter vacation, but many people and many industries must depend on energy for their livelihood, and high fuel prices are threatening their survival. Hard working truck drivers, farmers and airline workers rely on oil to fuel their business, as do millions of other Americans. Energy underpins our whole economy and the long term need for energy is vital.

The U.S.must start drilling now. While it will take years for the new oil to enter the marketplace, that is no excuse for not starting now. Economists agree that passing legislation to open up drilling in ANWR, the gulf and the Outer Continental Shelf will instantly lower oil prices. It will send a clear message to speculators and other countries that we are serious and proactive about solving our energy problems. In seven to ten years, oil will start flowing from these and other explorations, will become an asset to our economy, improve our balance of trade, increase our international competiveness and ensure that our national security is unthreatened by the need for foreign oil.

This will give us the time we need to begin a national path towards energy independence using not only our own oil, but clean coal, nuclear, fusion, hydrogen, solar, and wind energy. There will be new economic confidence, a pride in our country’s “can-do” determination and new technologies to export around the world.

Affordable, dependable energy is not a new issue. Economists have been warning us for years that energy independence and the need for more oil are critically important. For ten years, I supported every effort to expand drilling in ANWR, in the Gulf and off our coasts despite the political and personal attacks – especially in the last election – because the people in this district deserve a strong, honest leader who says what needs to be said. But today, this issue is more than a campaign issue. It is a national emergency. To purposely stand in the way of an obvious solution to a national crisis is inexcusable. Let’s get going.

Editor's comment: While I mostly agree with Anne on the points she has made here, I have to disagree on some points:

1) I support the Democratic idea to stop putting fuel into the strategic oil reserves as a temporary stop gap measure to increase supply. In fact, I will go so far as to order that the stored petroleum be used to flood the market until prices stabilize. Everyone knows that increasing supply will reduce the price of gasoline!

NOTHING will "send a clear message to speculators and other countries that we are serious and proactive about solving our energy problems" than flooding the US oil markets with our SPR fuels;

2) I believe that price speculators are partly responsible for the "price gouging" that goes on, so I support the Democratic idea of investigations and prosecutions of those speculators who violate our anti trust laws; and,

3) I do NOT support drilling in ANWR, period. I think it is NOTHING short of a feel good measure that does NOTHING to discourage our oil GLUTTONY or provide us with enough oil to satisfy our UNQUENCHING thirst for oil.

Update: Even John McCain, who now has flip flopped and joined the "drill", "drill" rah, rah team, has Douglas Holtz-Eakin, a senior advisor to McCain's campaign, acknowledge in a conference call to reporters that new offshore drilling would have no immediate effect on supplies or prices, though he added: "There is an important element in signaling to world oil markets that we are serious."