Last July, President Bush rescinded the longstanding executive
moratorium on offshore drilling for oil and natural gas, and
Congress followed suit by allowing its own restrictions to lapse on
October 1. Now, the Department of the Interior (DOI), which handles
offshore energy leasing, has taken the first step toward making
this energy available by publishing its proposal for a five-year
leasing plan for 2010--2015. The Obama Administration should
continue with this important effort to expand domestic production
of oil and gas.
For many years, 85 percent of America's territorial
waters--including most of the Pacific, Atlantic, and eastern Gulf
of Mexico--were off limits to oil and natural gas exploration and
drilling. The U.S. is the only nation in the world
that has restricted its own energy supply to such an extent. An
estimated 19 billion barrels of oil--nearly 30 years of current
imports from Saudi Arabia--as well as substantial natural gas
reserves are estimated to lie beneath these restricted areas. And it
should be noted that these initial estimates tend to be on the low
Most of these restrictions were put in place at the behest of
environmentalists and other drilling opponents in the late 1980s
and 1990s, a time when gasoline was cheap and the need for
additional supplies was not seen as great. But they have remained
in place in recent years, even as gasoline hit $2.00 and then $3.00
a gallon, and even though state-of-the-art drilling technology has
amassed a proven record of reducing the environmental impacts and
risk of spills.
However, when prices hit $4.00 a gallon last summer, a fed-up
public clamored for action, and polls showed more than 2 to 1
support for offshore drilling. The President and Congress finally
listened and belatedly removed the legal restrictions. The next
step in the process is for DOI's Minerals Management Service (MMS)
to offer these areas for lease. MMS took this step on January 16,
when it announced its 2010--2015 Draft Proposed Program and
published it on January 21.
A Pro-Energy Opportunity for the Obama
Though this proposal was crafted by the outgoing Bush
Administration, the Obama Administration would do well to continue
with it. It sets out a sensible plan for moving expeditiously but
not recklessly toward leasing new areas, including some in the
Pacific, Atlantic, offshore Alaska, and the Gulf of Mexico.
Unfortunately, some in Congress have suggested that they may
re-impose all or part of the moratorium, and past statements
suggest that President Obama may want to do the same. Further, even
without a change in the law, new Secretary of the Interior Ken
Salazar has the discretion to issue just a relative handful of new
leases or simply drag out the leasing process indefinitely.
However, such restrictions or delays would be a mistake.
The days of $4.00 a gallon gas are gone for now, but this is no
time for complacency. The only reason for the sharp drop in oil and
pump prices is a decline in demand due to the recession. But
recessions do not last forever. Unless this nation begins to take
action to increase supplies, prices will go right back up as soon
as the economy turns around and demand picks up. Further, the
process by which energy companies obtain a lease, explore for oil
and gas, and then produce it takes a number of years to unfold, so
the time to start the process is now.
Expanded offshore drilling would also create jobs, and
unlike the taxpayer-funded jobs in the proposed stimulus package,
the jobs created by a reinvigorated domestic energy industry would
be well-paying and long-term and funded entirely by the private
sector. And since the extra energy produced would help bring down
future oil and natural gas prices, it would truly be a win-win for
both producers and consumers.
Where To Go from Here
The comment period for the proposal lasts 60 days, after which
DOI will move to the next steps, which involve a formal proposal by
mid-summer and a final leasing program by as early as spring 2010.
It would benefit all Americans if these steps lead expeditiously
toward substantially expanded domestic offshore energy production
in the years ahead.
Ben Lieberman is Senior
Policy Analyst in Energy and the Environment in the Thomas A. Roe
Institute for Economic Policy Studies at The Heritage