Let’s not demagogue this. I’m talking about the sudden push by Bush/McCain to lift the offshore oil drilling ban. Riley and Sessions got in on the action, of course praising the idea (emphasis mine):
Riley, through a spokesman, also praised the proposal as a way to address rising gas prices and provide royalties to the states.
Opening up previously closed coastal waters for oil drilling will not address rising gas prices. Let’s just lay this one to bed right now.
The Energy Information Administration–a division of the Bush Administration’s Department of Energy–has already released their projections of how much additional oil could be produced from areas that are currently under moratoria.
Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day. For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case (Figure 20). Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.
The “reference case” is their projection excluding any new drilling in areas currently off limits. The “access case” is their projection if the current moratoria on offshore drilling are lifted. So lifting the ban would result in a U.S. production increase of 200,000 barrels of crude oil per day–a 3% increase. 18 years after drilling begins.
The access case was built around a scenario in which the moratoria were not renewed after they expire in 2012. Since we’re talking about the possibility of ending the ban as soon as possible, we can subtract 4 years from the dates above. 2026 instead of 2030.
Wait, it gets better. Compare this estimated additional 200,000 barrels of oil we can squeeze from new offshore drilling with the EIA’s analysis of the impact of opening up ANWR for drilling:
In the mean oil resource case, ANWR oil production peaks at 780,000 barrels per day in 2027.
…
Relative to the AEO2008 reference case, ANWR oil production is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light (LSL) crude oil18 prices of … $0.75 per barrel in 2025 in the mean oil resource case…
Do you see the pieces coming together here? The Bush Administration admits that opening ANWR to drilling would probably only reduce the price of oil by 75 cents a barrel… 17 years from now. And that’s assuming an increased production rate of 780,000 barrels per day.
Remember the off shore drilling projection above? 200,000 barrels a day? So that would mean what? A 20 cent drop in the price of a barrel of oil in 2026?
Come on people! Let’s get drilling RIGHT NOW. It might shave a penny off the price of a gallon of gas 20 years from now.
