Drill team

Energy | High prices at the pump are changing the politics of domestic oil extraction and handing Republicans a potentially hot issue for the fall campaign

Issue: "Left behind," June 28, 2008

With every upward tick of the gas pump price gauge, American consumers grow more desperate for relief and less enamored with environmental causes. Dropping $70 for a tank of fuel that cost $35 less than two years ago has proved a powerful agent for change in the political winds. Many Republicans believe the nation is now ready to reconsider a 27-year-old blockade to offshore oil drilling.

GOP presidential candidate John McCain stands among that lot, throwing his weight behind ending the drilling ban in a speech to Houston oil executives this month. McCain's reversal of his long-standing opposition to offshore exploration mirrors the progression of many U.S. voters and could prove politically expedient.

Nevertheless, Democratic presidential contender Barack Obama blasted the Arizona senator for not taking the long view: "It's another example of short-term political posturing from Washington, not the long-term leadership we need to solve our dependence on oil." Obama favors a windfall profits tax on oil companies and greater federal investment in renewable energy sources, a strategy more in line with public opinion from two years ago when gas prices first began their historic climb.

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New polls suggest changing attitudes. Gallup reports that 57 percent of Americans support opening up more domestic areas for drilling, and a new Rasmussen survey finds two-thirds of voters favor drilling off the coasts of California, Florida, and other states.

What's more, in the midst of an international food shortage partially resulting from the recent biofuel fad, some environmentalists have stepped off the alternative fuel soapbox. Turns out, converting food to fuel carries unintended consequences-like starvation in Third World countries.

Even among those still opposed to new drilling sites, the combination of pain at the pump and in the grocery aisle has at least offered a stiff reminder that economic consequences of environmental policy are no trifle. High gas prices might well explain the failure of a cap-and-trade carbon emissions bill to gain any significant traction in the Senate earlier this month.

But following Obama's lead, Democrats remain unwavering in their opposition to offshore drilling. An amendment to a House spending bill that would have allowed new drilling sites 50-200 miles from the country's shores has twice failed at the subcommittee level along party lines this month. Rep. John E. Peterson, R-Pa., the amendment's author, is surprised that Democrats remain unwilling to budge on an initiative with increasing public support: "The American people understand we now have chosen not to use our energy. The Democrats will have to tell us why."

The majority party's explanation is three-fold: First, compromise legislation from 2006 opened 8.3 million acres to oil exploration in the Gulf of Mexico, which has yet to yield returns. And the federal government has leased some 91 million additional acres for domestic production, much of which is going unused. Second, they say, potential domestic oil reserves amount to just 3 percent of the world's supply and could not solve our foreign dependency or significantly reduce prices. Lastly, they fear environmental degradation from the threat of coastal oil spills.

Sen. Bill Nelson, D-Fla., a leading critic of drilling off the Florida coast, condemns McCain's new position on the issue and has instead introduced a bill to ban unregulated trading of oil on the commodities market, which some analysts blame for rising costs. "There isn't enough oil in the U.S. to make even the smallest dent in world oil prices," he said. "To curb prices in the short run, we need to regulate oil traders. For the long term, we need to break America's oil addiction."

According to government reports, the nation uses about 20 million barrels of oil per day. The federal Minerals Management Service estimates that Peterson's amendment would open access to 86 billion barrels, enough to supply national needs for more than a decade, though not all of that oil may be immediately accessible.

Oil companies contend that the areas currently open for drilling do not contain sufficient reserves to make production commercially viable. They say Democrats' assertions that federally leased lands remain untapped reflect naiveté about the nature of oil extraction. Companies must purchase and explore large blocks of land in hopes that a small area will yield enough oil to justify the initial purchase. Once reserves are discovered, mapping, construction, and drilling can take years, during which time the land appears to remain untapped in statistical analyses.

Rex Tillerson, chief executive of Exxon, told The Wall Street Journal that "anybody who's got a commercial discovery today in the United States has got it under development."


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