Drilling's Not a Hoax

Apparently not content with Congressional approval ratings falling below 10%, House Speaker Nancy Pelosi (D-CA) recently called drilling a “hoax.” According to The Hill, Pelosi said that “this call for drilling in areas that are protected is a hoax, it’s an absolute hoax on the part of the Republicans and this administration [designed to] punt your attention away from the fact that their policies have produced $4-a-gallon gasoline.”

Pelosi’s statement is so full of absurdities that it’s difficult to know where to begin. Maybe it would just be best to look at the facts. Currently, federal moratoria have declared 85% of the Outer Continental Shelf “off-limits” to exploration and drilling. The lifting of these moratoria could free up proven reserves as high as 420 trillion cubic feet of natural gas and 86 billion barrels of oil. Hardly a hoax. Additionally, geologists estimate that the northern coastal plain of the Arctic National Wildlife Reserve (which comprises just a fraction of the 19 million acre sanctuary) contains about 10.4 billion barrels of crude oil. Again, does this sound like a hoax?

This is not to say that opening these areas is the “silver bullet” that will solve all our energy woes. However, lifting the moratoria on drilling in the OCS and ANWR will provide a much-needed supplement to U.S. oil supplies until a viable economic alternative can be found and put into production.

If anything is going to be called a “hoax” it should be the energy package currently being proposed by Speaker Pelosi. Her legislation would not only punish oil companies for their so-called “idle” leases, but would force them to drill those leases as well. The terminology Pelosi uses is brilliant because it suggests that the oil companies have been given land that contains enough oil to end the energy crisis, but have refused to drill it in order to drive up their profits (curse those wicked oil companies). There’s just one tiny problem – it’s not true. Any oil field that is not producing is labeled as “idle,” meaning that there is no oil coming out of the ground. The majority of these “idle” leases are either actively being explored or simply do not contain an economically viable quantity of oil. Pelosi’s energy package would essentially force oil companies to divine oil from dry rock. I’m not sure Moses could even pull that off.

The scariest thing is that it seems that the Speaker of the House has zero understanding of basic economics. If we force the oil companies to drill for oil that doesn’t exist, then their costs will go up without yielding a product that can offset those costs. Thus, these increased costs will be passed onto the consumers in the form of even higher prices at the pump. However, if we open up lands that we know contain economically viable reserves of oil, then we can actually provide some relief from high fuel prices until an alternative can be found.

Obviously, Speaker Pelosi would rather play politics than find real solutions. And she wonders why Congress’ approval ratings are so low.