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Where Was Offshore Oil Drilling Ten Years Ago?

As is sadly the case in politics, philosophy and generally any intellectual sphere of human activity, there is a tendency to think of things in extremes. Today we are considering the two widely divergent positions of Democrats and Republicans when it comes to what to do about the high price of oil. Are these extreme positions really considering basic proven facts about oil in America?


Can this rig survive a direct hit from a
hurricane?

Some politicians (typically Democrats) think there should be no oil drilling in currently protected areas. Democrats take this position because they a) feel that the additional oil supply will not affect its price, b) the ecosystems in this area of the world are too crucial and endangered to allow corporate access, and c) investing in alternative energy technologies holds greater potential for shifting America away from a dependence on foreign oil importation.

Other politicians (mostly Republicans) believe that all the protected areas should be opened up for oil prospectors. Republicans argue that oil drilling is needed because a) new oil rigs equal more jobs and a positive economic impact, b) technology advances in mining and resource extraction have improved environmental safety standards to the point where environmental damage is unlikely at best, and c) new domestic oil resources would lower the price of gas.

The positions above have basically been in place for the last thirty years, but the debate during that time has not been as ferocious as it has been in recent months. Why the sudden public spotlight? The answer probably lies in the fact that gasoline prices are exorbitant in an election year. Since the debate about how to lower these prices currently focuses on creating more domestically produced energy (specifically oil) in America, one must consider where to find all the raw materials for this fuel industry.


Drilling In Frozen Alaskan Land

If all of these supposed “oil reserves” exist and are ready to be drilled, and their exploitation can benefit Americans by lowering the price of fuel, then why weren’t oil companies getting to this oil 10 or 20 years ago? The answer is in the relatively small amount of oil and the difficulty and expense in extracting it. Recent statistics indicate that approximately 3% of the world’s oil reserves can be found in American territories. This number includes some areas that are already being drilled now. The remaining reserves in the continental shelf, in Alaska, and in oil shale [en.wikipedia.org], are all locations that require a more expensive process of extraction. Sucking oil out of shale is expensive. Drilling through frozen earth in inhospitable arctic environments is expensive. Maintaining oil drilling platforms in the ocean is expensive when you consider the costs of environmental safety standards and insurance (you may remember the Exxon Valdez accident, but what about the Piper Alpha oil rig[/rl]? Or the [url=http://en.wikipedia.org/wiki/Alexander_Kielland_(Platform)]Alexander Kielland [news.bbc.co.uk]?).

These reserves were not profitable to extract when oil was priced at $40-$60 per barrel. The profit potential only exists now because the price of oil is so high. If the price of oil dropped again to historical levels (and it is dropping at the time of this writing), drilling the three aforementioned sources of oil would become progressively less profitable.


Some spots where oil companies could suck oil out of porous rock

Therefore, why would these for-profit businesses push so hard to drill these resources if they believed doing so would lower the price of oil? Are we to believe that oil companies would sabotage their profits simply out of charity? It’s possible that the oil companies know that drilling these resources will not affect the price of oil much (as stated in the official report from the Department of Energy), and that they will continue to be profitable given rising world demand. It is important to seek a solution for the high energy prices in America, because the prices do squeeze people out of their livelihoods and force other people to choose between housing and food. Nonetheless, the current tragedy of high oil prices would only become more pronounced if Americans sacrificed delicate protected habitats for a solution which does not end up lowering the price of oil enough to make a real economic difference.

Thanks for coming to THE GREEN Blog and we hope that you discuss the ideas presented in this post or add your own revisions. If you want to check out another post about an alternative to gas guzzling cars, check out the DIY Green: Electric Vehicles Post [www.sundance.tv].