The GOP and McCain/Bush keep insisting that an end to the federal moratorium on (some) offshore drilling is a major solution to America’s oil woes, even though Bush’s own energy analysts make clear it is not (see EIA bombshell: Offshore drilling “would not have a significant impact on domestic crude oil and natural gas production or prices”³).
That Energy Information Administration analysis is, however, a couple of years old, so I called up the author today and asked if it was being updated. Turns out a new version will be published in a couple of days, but she explained to me that the “answers are not very different” — no significant impact for the duration of the analysis (through 2030) — for reasons I will discuss below. First, however, it wasn’t until I talked to her and looked closely at the original analysis — Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf — that I understood what a cruel hoax this whole issue is.
The oil companies already have access to some 34 billion barrels of offshore oil they haven’t even developed yet, but ending the federal moratorium on offshore drilling would probably add only another 8 billion barrels (assuming California still blocks drilling off its coast). Who thinks adding under 100,000 barrels a day in supply sometime after 2020 — some one-thousandth of total supply — would be more than the proverbial drop in the ocean? Remember the Saudis couldn’t stop prices from rising now by announcing that they will add 500,000 barrels of oil a day by the end of this year!
Here is the key data from EIA:
Look closely. As of 2003, oil companies had available for leasing and development 40.92 billion barrels of offshore oil in the Gulf of Mexico. I asked the EIA analyst how much of that (estimated) available oil had been discovered in the last five years. She went to her computer and said “about 7 billion barrels have been found.” That leaves about 34 billion still to find and develop.
The federal moratorium only blocks another 18 billion barrels of oil from being developed. But, as you can see, most of that is off of California, which has bipartisan opposition to drilling from Republican Governor Schwarzenegger — who, unlike McCain, seems serious about his commitment to greenhouse gas reduction — and the Democratic legislature, which remembers all too well the devastating 1969 oil spill off the coast of Santa Barbara. Indeed, Karen Bass, the newly appointed speaker of the State Assembly, said, “The idea of increasing offshore drilling off the coast of California I think is absurd, and I can’t even imagine we would entertain that.” Why would they, given the risk to their beautiful coasts and their commitment to reduce statewide greenhouse gas emissions 80% by midcentury?
So that only leaves about 8 billion barrels, which is about what the world uses in three months. Not bloody much. And that assumes every other state, including Florida, goes aggressively with offshore drilling, which is exceedingly unlikely.
You may ask why big oil hasn’t gotten around to the 34 billion barrels already available to them offshore, given the staggering price for oil? The answer is pretty much the same reason why the EIA analyst told me that ending the federal moratorium is “certainly not going to make a difference in the next 10 years”: It ain’t easy being non-green off-shore.