Let's Drill

Let's Drill
There's oil in them thar hills.
by Fred Barnes 05/26/2008, Volume 013, Issue 35

Senate Democratic leader Harry Reid, the Mr. Magoo of American politics, stumbled onto the truth last week. He discovered the law of supply and demand. "We want to put [more oil] on the market to increase supply and lower prices," Reid said. "With oil and gas prices continuing to break record highs every day, much more needs to be done."

Indeed it does. But Reid won't allow it. His understanding of economics only extends to matters in which he might embarrass President Bush. The oil he wants on the market is the oil the administration is buying for the Strategic Petroleum Reserve (SPR), now nearly full. Reid got his way. The administration now plans to stop oil shipments to the SPR next month.

Beyond that, Reid and his party are committed to suppressing increased oil production in this country, as they wait for that magical day when fossil fuels are no longer needed to supply the nation's energy needs.

That day may come in 50, 60, 70 years--or never. In the meantime, America needs oil, and the good news is we're awash in the stuff. If the oil reserves miles off the Atlantic and Pacific coasts, in the eastern Gulf of Mexico, and in federally owned lands in the West and Alaska were tapped, our dependence on foreign oil could begin to be reversed. In 10 years, half of America's oil could be produced at home (up from 40 percent), with more coming from increased exports from Canada.

We wouldn't achieve energy independence. That's a pipedream, and anyway it isn't necessary in a global economy with multiple producers. But America would be taking a big step toward energy security and reducing the flow of dollars to unstable countries--notably Iran and Venezuela--that do not wish us well.

So more oil production would strengthen America's national security. By increasing the supply of oil, it would reduce the price, or at least ease the pressure on price from rising world demand. And the mere commitment to boosting production would have a soothing effect on a world market easily spooked by threats to supply.

But there's a problem: Eighty-five percent of the untapped domestic sources of oil have been put off-limits. There's a federally mandated moratorium on drilling offshore, and huge roadblocks to exploiting the oil on the vast federal lands have been erected.

"What keeps these areas closed are exaggerated environmental fears, strong prejudice against oil companies and sheer stupidity," wrote Robert Samuelson recently. Lifting the moratorium requires action by Congress and the White House. So don't hold your breath. The Democratic Congress is a wholly owned subsidiary of the environmental lobby, which regards oil exploration, much less drilling, as a sin against nature.

Advances in technology, however, make serious offshore oil spills a thing of the past. One hundred eight platforms were destroyed and hundreds more damaged in the Gulf of Mexico by hurricanes Rita and Katrina without a single major spill. Californians may remember the damaging spill off Santa Barbara, but that was 40 years ago and was the result of ancient technology.

New technology also means the coastlines would not be marred by unsightly oil platforms. Drilling now goes miles deeper to capture oil once out of reach--and much farther offshore. The moratorium doesn't take this into account. It blindly bars drilling for 200 miles off the Atlantic and Pacific shores.

The United States is virtually alone in treating offshore production as taboo. Great Britain and Norway drill off their coasts without polluting the North Sea. Brazil has achieved energy independence not only by ethanol use but also by expanded offshore oil production. China is now drilling at Cuba's behest in waters halfway to the coast of Florida.

There's another compelling reason to boost domestic production. Oil from current sites is gradually being depleted. Unless new sources come on line in the next few years, America will produce less oil at home and become even more dependent on oil from abroad, the Middle East in particular.

Reid and Democrats, OPEC's best friends, aren't noticeably concerned. Their next step is to remove tax incentives to explore and drill for more oil. And Senator Hillary Clinton is eager to impose a new windfall profits tax on oil revenues. These measures have no purpose other than to punish oil companies. They are counterproductive.

When you remove incentives to produce something and when you slap higher taxes on its producers, one thing happens: You get less of the product. In the case of oil, we need more of it and will for the foreseeable future. The oil is there for the getting. But it won't come out of the ground on its own.

--Fred Barnes, for the Editors
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