Drilling for oil

There’s a plan out there that will create jobs, collect revenue for state and federal governments and improve the environment. And it won’t come at any cost to the taxpayer but if the administration doesn’t act, it will be a net drain on the economy. 1.) What is it? 2.) Why haven’t Congress and the administration acted? The answers are increased oil and natural gas production in the United States and we have no idea.

The costs of the ban: A new study commissioned by the National Association of Regulatory Utility Commissioners (NARUC) details the social, economic and environmental effects of oil and natural gas exploration on and beneath federal lands. The report estimates that consumer energy costs will increase and cumulative gross domestic product (GDP) will decrease by $2.36 trillion over the next two decades.

The other cost on inaction is an environmental one and specifically relates to offshore drilling. Off the coast of Santa Barbara and elsewhere, oil seeps from the ocean floor release oily bubbles or droplets of oil. The non-profit organization Stop Oil Seeps (SOS) California details that these “Oil slicks of varying thickness form on the sea surface and spread out under the influence of wind and currents. As the oil loses its lighter fractions and undergoes weathering, some of it sinks to the ocean floor, some is dispersed by wave agitation into the water column, and some eventually washes up on shore or sticks to rocks near the high tide line.”

The benefits of action: An enormous amount of energy in a variety of forms exists in the United States that, if developed and commercialized, would create hundreds of thousands of sustainable jobs and largely benefit our overall economy without accumulating massive debt. The Heritage Foundation estimates that increasing domestic oil production by 2 million barrels a day would create 270,000 jobs. Further, increasing supply will either relieve the upward pressure of prices that is likely to worsen as global demand surges when countries come out of their respective recessions. Since states and federal government would collect royalties from the production, it would actually help to lower deficits.

A risk of oil spills, albeit greatly diminished with improved technology, does exist with new drilling activity. But it would also significantly reduce the pressure on offshore seeps and decreases marine oil pollution. Bruce Allen, co-founder of SOS California has argued to lift state and federal moratoriums on offshore oil production. SOS California’s new documentary, A Crude Reality, points out the environmental problems oil seeps present. The Heritage Foundation will be hosting the Washington, DC premiere of A Crude Reality, followed by a discussion with Mr. Allen on February 24, 2010 from 12-1:30. You can RSVP here or watch online at Heritage.org.