It should be obvious, but in Washington it is often not: A big
part of the solution to America's energy challenges involves making
better use of the resources available beneath American soil and
Unfortunately, the federal government has either locked up much
of these oil and natural gas reserves or tied them up with
insurmountable red tape. While the current Congress and
Administration's idea of smart energy policy is to add to this
already-daunting regulatory burden, the recently introduced
American Energy Act strikes a blow for fewer constraints and more
domestic energy in the years and decades ahead.
No other nation on earth has placed as much of its domestic
energy potential off-limits as has the U.S. This includes America's
offshore areas, 85 percent of which cannot be touched, as well as
vast onshore areas that are off-limits as well. Even in those areas
where drilling for oil and natural gas is not prohibited outright,
it is subject to onerous regulatory requirements that effectively
make it so.
The Department of Energy estimates that nearly 20 billion
barrels of recoverable oil lie beneath restricted waters, the
equivalent to nearly 30 years worth of current imports from Saudi
Arabia. Substantial offshore natural gas reserves are also
restricted. An equivalent amount of oil and gas lies beneath
off-limits onshore areas.
Most notably, America's single greatest concentration of
untapped oil--an estimated 10 billion barrels--lies beneath several
thousand acres near the edge of Alaska's 19.6 million-acre Arctic
National Wildlife Refuge. Recent U.S. Geological Survey reports
suggest even more oil in Alaska and in the Arctic waters to the
It should be noted that, precisely because these areas have been
off-limits to thorough exploration using modern techniques, these
estimates of energy potential are preliminary. And such initial
estimates often prove to be on the low side.
The only reason not to drill--environmental concerns--has been
greatly reduced with technological advances in exploration and
drilling that have substantially decreased the above-ground
footprint as well as the risk of spills. The oil and gas industry's
track record--even through such challenges as Hurricane Katrina
roaring through the one offshore area where there are many rigs and
doing so without a single significant spill--attests to this
Rather than move ahead with producing this energy, the current
Congress and Administration seem intent on keeping it locked up.
Last year, in the wake of $4 a gallon gas, President Bush and
Congress rescinded the longstanding restrictions on offshore energy
production. But the process of actually leasing these new areas is
the responsibility of the Department of the Interior.
Unfortunately, new Secretary of the Interior Ken Salazar has
taken a paralysis-by-analysis approach, dredging up every excuse
not to produce energy in these areas. He has also sought to block
progress on oil shale, a promising source of oil trapped in rock
under parts of Colorado, Utah, and Wyoming. Interior has even
cancelled some existing oil and gas leases.
Congress is no better, with several pending bills that would
impose new requirements further restricting domestic energy
production or at least making it prohibitively expensive.
The American Energy Act: A Big Step in
the Right Direction
The American Energy Act would sweep away enough of the
restrictions and regulatory delays to foster an increase in
domestic drilling in the years ahead, but it would still leave
plenty of environmental protections in place.
Specifically, it unambiguously opens up new offshore areas and
expedites the process of new lease sales. It also incentivizes
coastal states to be partners in offshore energy by giving them a
share of the revenues. In addition to maintaining sufficient
environmental protections, the bill adds provisions preventing
offshore wells from marring coastal views.
Onshore, the bill provides for expeditious leasing of ANWR
subject to extensive (perhaps too extensive) environmental
protections. It also streamlines the regulatory and litigation
process that can otherwise slow or stop energy production. The bill
also contains provisions for continued oil shale development.
Stopping new impediments is as important as cutting through old
red tape and restrictions. Consequently, the bill seeks to prevent
new anti-energy regulations from being imposed. In particular, it
precludes the Environmental Protection Agency from misusing the
Clean Air Act to regulate carbon dioxide emissions from fossil
fuels and also stops the Department of the Interior from doing the
same using the Endangered Species Act.
Otherwise, these costly and unnecessary measures would greatly
hamper domestic energy production and drive up energy prices in
pursuit of an ineffective strategy to fight an overstated global
The bill has some ill-advised provisions, such as those
providing tax incentives for politically correct alternative energy
sources like wind and solar energy. To the extent these
alternatives hold any real promise, they would not need such
The bill also directs some of the new oil and gas revenues
toward federal programs to develop alternatives, although such
government efforts have a poor track record. While such provisions
do squander resources and undercut the free-market theme of the
bill, the good in the American Energy Act easily outweighs the
A Positive Step
Overall, the American Energy Act seeks to undo many of the
mistakes in current U.S. domestic energy policy and allow the free
market to provide more of the energy America needs. This bill would
mean more supplies of domestic oil and natural gas, creating
thousands of energy industry jobs and lowering prices for consumers
and businesses. It is a positive step toward addressing the
nation's future energy demands.
Ben Lieberman is Senior Policy
Analyst in Energy and the Environment in the Thomas A. Roe
Institute for Economic Policy Studies at The Heritage