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EIA: New offshore drilling will lower gasoline prices in 2030 a few pennies a gallon

By Joe Romm on February 1, 2011 at 11:54 am

"EIA: New offshore drilling will lower gasoline prices in 2030 a few pennies a gallon"

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But still, top Republicans exploit Egyptian uprising to shill for more domestic oil drilling

EIA Offshore 2009 small

The U.S. Energy Information Administration’s 2009 report, “Impact of Limitations on Access to Oil and Natural Gas Resources in the Federal Outer Continental Shelf” analyzed the difference between full offshore drilling (Reference Case) and restriction to offshore drilling (OCS limited case).  In 2020, there is no impact on gasoline prices (right hand column).  In 2030, US gasoline prices would be three cents a gallon lower.  Woohoo!

I have previously written about the trivial impact of opening the OCS further to drilling “” The oil companies already have access to some 34 billion barrels of offshore oil they have barely begun to develop (see “The cruel offshore-drilling hoax“).

If you are concerned about the impact of high oil prices from Middle East instability, the only viable long-term strategy is one aimed at ending our addiction to this climate-destroying fossil fuel.  Even the once-staid and conservative International Energy Agency understands that (see World’s top energy economist warns peak oil threatens recovery, urges immediate action: “We have to leave oil before oil leaves us”).

But far from wanting to leave oil before it leaves us, top Republicans are exploiting the Egyptian uprising to press for more domestic oil drilling.  Think Progress has the details:

As thousands of Egyptians continue to take part in a pro-democracy uprising that is threatening to unseat President Hosni Mubarak, many in the international community are wondering about the global ramifications of the protests and a possible new Egyptian government.In the past few days, a number of high-profile Republican legislators have responded to the protests not by commenting on the need to support the movement, but by exploiting the uprising to shill for more domestic oil drilling here in the United States. These right-wing figures have argued that the demonstrations are likely to lead to a rise in oil prices and/or result in a government that restricts trade in the Suez canal, therefore the United States should expand its domestic oil drilling here at home:

- Sen. David Vitter (R-LA): Vitter told Fox News that, “in light of the developing situation in Egypt,” gas prices will only continue to increase, “whether it’s because of the Suez Canal or just world conditions.” The senator said that Americas “are fed up” of the Obama administration’s failure to use “our domestic energy resources,” referring to domestic oil drilling. [1/30/11]

- House Energy and Commerce Chairman Fred Upton (R-MI): “The tenuous situation in Egypt underscores our vulnerabilities and the need for American-made energy,” Upton told Politico on Sunday. “Now is not the time for policies that lock away our domestic oil and gas resources.” [1/30/11]

- Rep. Jeff Landry (R-LA): “I want to see Coastal Louisianans allowed back to work finding and recovering our domestic energy sources,” said Landry, responding to the Egyptian protests. “Allowing production to occur in the Gulf”¦will help alleviate the economic crisis of a Suez Canal shutdown and prevent Americans from pay[ing] 5 dollars a gallon for gas.” [1/30/11

Yesterday, Landry appeared on Fox & Friends, where he compared the situation in Egypt to the OPEC oil embargo in the 1970s and affirmed to the Fox hosts that we need to “drill now” thanks to unrest in the Middle East. The congressman evoked the threat of the Suez canal being shut down to justify his demands for more drilling:

HOST: How serious is a situation with what we see in Egypt with oil prices, and what are you calling on the President and Congress to do immediately?

LANDRY: I think we’re back to where we were in the 1970s. The Department of Energy was tasked, was created, to shield the United States economy from exactly what we’re seeing today, unrest in the economy that is going drive the price of energy through the roof. It is the kind of danger that will just take the steam clean out of any recovery we have out of our economy right now.

HOST: Now, you’re calling for the president to drill now. And obviously given the April 20 explosion there on the Deepwater Horizon rig, there’s all kind of regulations in place for Deepwater drilling, you say this is something they need to start doing today and lift those regulations.

LANDRY: Well, that’s correct. If we hope for any economic recovery to take place, we’re gonna need affordable energy. The amount of daily production in the Gulf of Mexico surpasses the amount of oil that passes through the Suez canal. If we have a problem in the Middle East, if that canal is shut down, the price of oil and the price of gas, that we pay at the pump for all Americans are gonna pay is gonna go through the roof.

It is remarkable that the aforementioned legislators immediately jump to exploit the uprising in Egypt to push their own dirty energy agendas. A quick review of their congressional websites finds that not one of the three has posted statements in support of democracy in Egypt or called into question U.S. military and economic aid to the authoritarian leadership. It appears that they are much more concerned with politicizing the demonstrations for their own purposes.

To claim that the Suez canal is in danger of being shut down is wildly sensationalist. Although there was major unrest in the oil market on Friday, much of it was cleared up by today. “There’s still concern but with the Suez Canal operating as normal”¦there’s a little bit of relief coming to the market,” said financial analyst John Brady of MF Global. He noted that Friday’s unrest was “driven by a lack of liquidity and the selloff got a little bit exaggerated.”

While the GOP strategy would have no impact on U.S. gas prices for the foreseeable future, it would ‘drain America faster’ and cause more offshore oil disasters.

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8 Responses to EIA: New offshore drilling will lower gasoline prices in 2030 a few pennies a gallon

  1. Roger B. says:

    The US DOE/EIA has a terrible record of predicting future oil production and their AEO2009 (or AEO2010) will again prove their inability to correctly predict future oil production.

    I’m in the process of writing a commentary in which I’m looking back at a paper I wrote in 1999 concerning Norwegian and U.K. oil production. For the 2010 projections, it look like I’ll be off by maybe a percent or two for total Norwegian/U.K. oil production in 2010. The US DOE/EIA will be high by ~120% based upon their 1999 International Energy Outlook.

    Below is a paragraph I’m planning on putting in the commentary:

    “A flurry of new developments in the deepwater GOM during the 2007-2010 period lead to an increase in U.S. oil production for several years. Just as in the case of North Sea oil development, there are a limited number of large fields to bring on-line in a timely manner to negate the decline of the older deepwater fields so we should expect deepwater GOM and total U.S. oil production to generally decline after 2010.”

    Roger Blanchard
    Sault Ste. Marie, MI

  2. Prokaryotes says:

    Re Suez Canal shut down, last happend just 6 weeks ago, cause of a major storm in the area.

    Sand, snow, lightning storms wreak Mideast havoc
    December 12, 2010. A sandstorm, strong winds and lashing rains swept across Egypt, closing several ports and disrupting traffic in the Suez Canal http://www.terradaily.com/reports/Sand_snow_thunderstorms_wreak_Mideast_havoc_999.html

  3. I would much prefer renewable oil alternative such as butanol: far better than deep ocean drilling, and likely cheaper in the long run. For details on why butanol is such a good alternative to gasoline: http://www.bio-catalyst.com/we-need-advanced-biofuels-is-butanol-the-best-choice/

  4. Michael says:

    34 billion barrels of offshore oil?

    That’s like, oh, one year of present global consumption…

  5. Raul M. says:

    Atmospheric engineering.

  6. Raul M. says:

    Biochar is a better form of atmospheric
    engineering than burning gas.

  7. Roger B. says:

    Michael (#4),

    The 34 Gb value for offshore oil is the technically recoverable amount of oil based upon an MMS (Minerals Management Service) assessment. My experience is that what is actually recoverable is typically quite a bit less. To give one example, the US Geological Survey was estimating a technically recoverable amount of oil for the National Petroleum Reserve-Alaska (NPR-A) at ~9.5 Gb until they downgraded it last year to around 1/10th of that value. I had been saying for a long time that the ~9.5 Gb value was grossly exaggerated. They finally figured that out.

    Roger Blanchard
    Sault Ste. Marie, MI

  8. Mulga Mumblebrain says:

    It has to be the boiling frog analogy. Peak Oil is here, yet the frogsters cling on to the delusion of eking out a few more years from increasingly dodgy, and increasingly polluting, sources like oil sands, shale gas etc. Work on reducing dependency on fossil fuels continues to be thwarted, because that threatens future profitability. Now, I used to assume that Homo sapiens were higher up the evolutionary tree than amphibians, but I changed my mind some years ago. It became undeniable that many Rightwingers, media propagandists in particular, in this country, displayed a close physiognomical resemblance to one of our many introduced pests, the dread cane toad, Bufo marinus. I became convinced that some dreadful, early, experiment in transgenic, indeed trans-species, genetic engineering, must have gone tragically awry. Well, tragic for some, but not for Rupert Murdoch who, out of his legendary kindheartedness, offered these poor refugees from some modern Island of Dr Moreau, sanctuary, and job opportunities in his media pathocracy. It appears that they were easy to train as well, and their talents at regurgitation, once confined to feeding their young with tasty, pre-digested morsels, were just as efficacious at force-feeding the public with Rightwing ideology.