Domestic Drilling Is Not The Answer

Posted: March 23, 2011 11:46 AM

Dean Baker, Huffington Post

The Imaginary World in Which Washington Lives

[Contrast this article to "Right-Wing View of U.S. Oil Reserves", posted on 18 March.  The left uses the smallest estimate of oil and gas available: proven reserves.  The right uses the largest estimate: estimated (and estimates vary wildly) technically recoverable (no matter what the cost) resources.]

It is a beautiful spring day in Washington. This is a nice respite from the horrors taking place in Japan and the ever-growing nuttiness of D.C. politics. Enjoying the weather provides a nice alternative to listening to the news or reading the newspaper.

The flood of nonsense in the traditional news outlets just continues to grow. At the top of the list is the steady stream of senators or members of Congress whose response to higher gas prices is to insist on drilling in every square inch of environmentally sensitive territory in the country. This is supposed to reduce our dependence on imported oil and lower the price of gas. Both sides of this assertion are absurd.

According to the Energy Information Agency, the United States has proven reserves of 22.3 billion barrels of oil. Given our current rate of consumption of 6.9 billion barrels a year, U.S. reserves could meet our demand for oil for less than 3.5 years. That means if we could somehow drill here, now, and everywhere, we could be energy independent until the middle of 2014 and then we would be 100 percent dependent on imported oil.

Of course, we cannot suddenly suck all the oil out of the ground at once, it takes time to explore and drill wells and then the oil must be drilled out over time. If we decided that we want to destroy every last national park and coastal region, we may be able to increase production by 1.0-1.5 million barrels a day in 5-10 years. At the high end, this would be a bit less than 2 percent of world supply.

Given normal assumptions about how demand responds to price, we would be very lucky to see a 6 percent decline in the price of oil. This means that in the most optimistic "drill everywhere" scenario we would save less than 20 cents from our $4 a gallon gas. More likely the savings would be less than half this size.

In other words, when a politician says that they want to end environmental restrictions on drilling in order to end U.S. dependence on foreign oil or bring the price of gas down, they are speaking utter nonsense. The correct response of a reporter to such assertions would be to say something like: "Senator, you know that the United States does not have nearly enough oil to be energy independent or to substantially reduce the price of gas."

However, you won't hear this response from outlets like National Public Radio or the Washington Post. Instead, they will just allow politicians to make absurd statements about energy independence and lower prices and treat them as though they are reasonable positions in the public debate. They will often add their own framing comments explaining to their audience that the issue is one between concerns over energy independence and concerns over the environment.

When major news outlets make wrong and damaging statements about a company like General Electric or Microsoft, they can count on angry and threatening phone calls from company lawyers. Unfortunately, there is no one in Washington with a comparable interest in protecting the environment, so these absurd statements get passed along in major news outlets unchallenged.

Politicians routinely make similarly absurd statements about Social Security, implying that the program and the country are about to go broke. Of course both claims are obviously untrue. According to the Social Security trustees, the program can pay all scheduled benefits for the next 26 years with no changes whatsoever and even after that date can always pay close to 80 percent of scheduled benefits. Instead of our children being broke, average wages are projected to be more than 40 percent higher in 2040 than they are today.

This means that when a politician whines about Social Security or the country going broke, the correct response from a reporter should be "Congressman, you know that the program is fine for more than a quarter century into the future," or "Congressman, you know that our children and grandchildren will on average be far richer than we are today."

Unfortunately, you won't hear reporters making these corrections either. Fortunately, there are groups like the Social Security Works, the Campaign for America's Future, and the Institute for Women's Policy Research that do correct bad reporting on Social Security, so there is at least some limit to how bad it can get.

However, the country is unlikely to see competent reporting on these and other topics that are central to national political debates until new media outlets, like Truthout, The Huffington Post and ProPublica, mature further and displace the traditional outlets. The latter still play far too large a role in setting the bounds for acceptable political discourse. The sooner we see the transformation of the media the better. Until then, maybe we can at least enjoy the weather.