Posted: 07/31/2006 | Author: H. Sterling Burnett
Mideast crisis dramatizes need to strengthen U.S. energy security with offshore drilling
WASHINGTON - The hostilities in the Middle East serve to dramatize the serious problems with our nation's energy security.
While U.S. oil consumption will grow by one-third by 2025 - even with the rise of renewable fuels such as ethanol and bio-diesel - the United States remains dangerously dependent upon foreign nations, many in the war-torn Middle East, for a majority of our oil needs.
Unfortunately, much of our domestic petroleum supply is vulnerable to nature's whims. Hurricanes Katrina and Rita highlighted the fact that we have too many of our energy eggs in one very fragile basket - the Gulf of Mexico. Nearly 30 percent of our offshore oil and gas production comes from the tropical storm-ridden Gulf of Mexico - 21 percent of which remains offline nearly a year after the storms.
Unfortunately, other, less storm-prone coastal areas are off-limits to new petroleum production. Ending the moratoria on new production in the U.S. Outer Continental Shelf (OCS) is one of the most responsible actions Congress could take to help consumers while decreasing America's vulnerability to foreign powers. The Minerals Management Service has estimated that the OCS contains more than 46 billion barrels of oil - more than double current U.S. reserves.
While offshore platforms once occasionally had substantial spills, technology has improved greatly in recent years. Although Hurricanes Katrina and Rita destroyed 111 production platforms, damaged an additional 52 platforms, and disrupted 457 pipelines bringing oil to shore, no major oil spill impacting shores or wildlife happened.
It is unconscionable that Congress and the president refuse to allow new offshore exploration and production. The United States is the only industrialized coastal country on earth that is not actively seeking new oil deposits off its shores.
Canada and even economically backward Cuba are moving forward with plans to drill in offshore areas that abut U.S. coastal waters. Since pools of oil do not respect national boundaries, Canada and Cuba will be extracting petroleum resources that could be developed by America for Americans.
Yet hope may be on the horizon. Congress finally is considering bills that would end the federal moratoria on new drilling. Currently, production on the OCS is a net loser for coastal states.
The federal government reaps almost all of the benefits from OCS production, it gets all of the revenue from the royalties, leases and taxes, while the states bear most of the risks. If spills occur, it is the states that lose tourist revenue and their environments that suffer.
Sadly, the Senate still lacks the courage to stand up to special interests, even on an issue as important as America's energy security. Thus, its proposal would allow drilling in only a small part of the storm-ridden Gulf of Mexico off Florida's coast. That means that Cuban drilling platforms will be closer to Florida than ours.
By contrast, the House of Representatives in late June passed the "Deep Ocean Energy Resources Act of 2006," which would end the federal moratoria on new offshore oil and gas production on most of the Outer Continental Shelf.
The House bill lifts the leasing ban beyond 100 miles from state shores; allows new production between 50 miles and 100 miles of state shores, unless a state acts to block new leases; and permanently bans exploration and production within 50 miles of state shores unless a state chooses to opt-out of the restriction.
In exchange, states that choose to allow drilling off their shores would share the revenue with the federal government. Initially, coastal states would get 25 percent of the proceeds, but their share could rise to as much as 75 percent of the revenues in the future.
It's time for Congress to put America's security and economic needs ahead of desires of powerful lobbyists. The Deep Ocean Energy Resources Act of 2006 is a good start.
H. Sterling Burnett is a senior fellow at the National Center for Policy Analysis (ncpa.org, a conservative, free-market think tank.)