Some members of Congress contend that the oil companies are currently authorized to drill where 80% of our oil and gas resources are located. The fact is that 84% of our continental offshore shelf is off limit to exploration or production.
Some members of Congress contend that we don't have enough oil and gas resources to solve our petroleum problems. According to estimates provided by the U.S. Department of the Interior, our oil reserves are larger than the known oil reserves of Iran, Iraq, Russia, Nigeria or Venezuela. There is, however, a large number of conflicting estimates of our petroleum reserves in large areas. Most of these estimates are based on speculation instead of scientific exploration.
Some members of Congress contend it would take 10 or more years to produce additional oil and gas if present legal restrictions were lifted. According to driller that know the facts, there are areas where oil rigs with with pipelines to shore are located adjacent to off-limit areas and those areas could be in production within a year. Of even more importance, as explained in a recent article by Martin Feldstein - 'We Can Lower Oil Prices Now' - if additional drilling is authorized now, it will immediately increase supply and lower prices.
Oil producers have a supply of oil in the ground and if they have an expectation that the oil prices will increase at a faster rather than the interest rate, they have an incentive to leave the oil in the ground. Conversely, if they think oil prices will decrease, they have an incentive to produce more oil now. If they produce more oil now the speculation bubble will burst.
It is essential that we obtain reliable estimates of all our petroleum reserves. Exploration should be allowed in all areas provided it is performed with a method i.e. seismic or electromagnetic that is deemed harmless and approved by the Dept. of the Interior within a prescribed period of time. Additional reserves would undoubtedly be found if additional modern exploration were allowed. With today's technology, this could be done rapidly and with no effect on the environment.
Many of the existing drilling leases are in areas that are difficult and time consuming to exploit. For example, some are in very deep water and some require long pipelines. The key to fast and successful production is to allow determination of the potential in each areas. This would allow drilling in optimum locations to produce oil and gas in the shortest time.
Arguments that the development of alternate fules will solve our petroleum problems are ludicrous. For example, we can't fuel our vehicles with windmills. We can make some electricity with windmills, however, we already know how to make electricity and that hasn't solved our petroleum problems. The mistake of biofuels is already well documented.
Alternate fuel solutions will take decades to develop and implement, however, even then they won't replace our nee for oil and gas because oil and gas are the raw materials needed to produce chemicals, plastics, pharmaceuticals and fertilizers.
The high price of natural gas in the US compared with other locations has resulted in the loss of hundreds of thousands of US jobs. Natural gas is very expensive to ship therefore low cost gas requires supply through local pipelines. The result is that he cost of natural gas in Dubai is much lower than the cost in the US. That is why G.E. sold their Plastics Division to Dubai. If we don't correct this problem, there will be an OPEC for all products made from natural gas. It should also be noted that we have huge reserves of natural gas in shallow waters and that any accidental gas leakage wouldn't create pollution.
The Chinese are preparing to drill in Cuban waters less than 50 miles off the coast of Florida into a huge dome of natural gas. With the latest horizontal drilling technology, the Chinese could even harvest natural gas 7 miles closer to Florida under our waters. Our self-imposed restrictions prevent us from drilling into the same dome.
It should be noted that in the UK they are drilling under the sea from onshore locations, which eliminates any possibility of water or shore pollution.
The proposal by some members of Congress to simply increase taxes on our oil companies was tried by President Carter and it was a complete failure. It created a critical shortage of petroleum.
We should unleash our free enterprise system to solve our petroleum problem. We should allow our US entrepreneurs to determine the location and magnitude of all our petroleum reserves and to drill in all reasonable locations. In return for these opportunities, we should penalize oil company profits that are not used for exploration and production, and reward those that are used.
Our current drilling bans are self-destructive. The provide financial support to our enemies in the War on Terror and to our Communist adversaries, and they are destroying our economy.
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