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In defense of a moratorium on offshore oil drilling

Dan Gatti, an environmental policy analyst at Environment America, writes in to dispute Lisa Margonelli's argument that we should shy away from a domestic moratorium on offshore drilling because it'll push oil production to areas of the world where spills are more frequent and more dangerous. He writes:

1) An expansion of offshore drilling will not significantly reduce the amount of oil the United States imports, from Nigeria or Saudi Arabia or from anywhere else. The EIA estimates that domestic production will increase by only a trivial figure as a result of new drilling offshore -- a 1.6 percent increase between 2012 and 2030, topping out at .2 million barrels per day by 2030. By comparison, the United States currently consumes almost 20 million barrels per day, of which over 13 million barrels per day is imported. The difference in the amount the United States imports as a result of expanded offshore drilling essentially amounts to a rounding error.

2) Because oil is a global market, whether the United States is able to produce a marginal increase in our domestic production of oil will have zero impact on the incentives for Nigeria or Angola to continue drilling for oil without environmental safeguards. The global demand for oil is currently at 85 million barrels per day, and is expected to increase by over 22 million barrels per day over the next 20 years. Having slightly less a percentage of Nigerian oil imported to the United States, as opposed to China or India, will not make the waters of the Nigerian delta any cleaner, or make the air surrounding Nigerian oil drilling any easier to breathe. What may make a difference is for the United States to lead the world in developing clean energy alternatives to oil, as well as encouraging international environmental standards for oil production.

3) A moratorium on offshore drilling might, however, make a huge difference to the lives of millions of Americans who live on the coasts of California, South Carolina, Maryland, or Florida, who do not want to suffer the horrendous damage to the environment and local economy currently being experienced by the residents of Louisiana and Mississippi.


By Ezra Klein  |  May 4, 2010; 4:35 PM ET
Categories:  Climate Change , Energy  
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Comments

All those points are correct, and they are the important ones.

On the "of secondary importance" tier, I'd suggest:

1. The moratorium puts "drill, baby, drill" in a corner and puts pressure on us to come up with the REAL energy innovations that will end everyone's dependence on oil

2. The idea that oil drilling is too dangerous for America changes the calculus around oil drilling, strengthening the hand of every person in every country who argues it is too economically dangerous. Maybe that means somebody doesn't drill a well, maybe it means the well gets marginally safer, maybe it means nothing. But given the economic realities above, it hardly makes the situation MORE difficult for people who care about protecting their country.

Posted by: theorajones1 | May 4, 2010 5:47 PM | Report abuse

One thing Mr. Klein and most opponents to offshore drilling forget is the price of oil at the margins is determined by excess capacity to drill and refine. We should have learned this lesson in the summer of 2008 when gas prices spiked due to speculation and growth in Asia. The oil traders determined that there was no extra capacity for most non-opec nations to get oil to the market. By not opening off shore drilling areas here we remain at the mercy of OPEC when supplies get tight. Opening up areas here no matter how scant you may think these areas will yield gives oil consumers options. Every year engineers find new and better ways to get more oil and gas out of existing fields so rounding errors today maybe tomorrow's north slope.

Posted by: jlaneusmc | May 4, 2010 5:54 PM | Report abuse

So the right wingers who have been screaming about “less government regulation of private industry” are now all verklempt because private industry majorly screws up, and somehow it’s Pres Obama’s fault?


Color me NOT surprised!


So, the Repubs can’t won’t don’t make a connection between a thirty (or 130) year campaign of right wing deregulation and lax enforcement toward the fossil-fuel extraction industries, but the fact that Pres Obama hasn’t flown counter-clockwise around the spill to whip the oil up into a funnel that he can then deposit into a waiting vat made of Krypton crystals suggests that he is not really competent? Oh, that’s right, I’m a cultist who thinks Pres Obama is the Messiah.....nevermind.


I’ve been wondering since last week why Pres Obama didn’t just swim down there and clamp that oil pipe with his mighty Kenyan pincer-fingers.


Evidently, I’m not the only one.


Posted by: DrainYou | May 4, 2010 5:55 PM | Report abuse

@ jlaneusmc: By not opening off shore drilling areas here we remain at the mercy of OPEC when supplies get tight.

We will be at the mercy of OPEC until we get off the oil/fossil fuel based economy and on to a sustainable green energy technology. We are already at stage 3 in the peak oil scenario. All of the easy oil in relatively stable countries has been found and developed. Oil from politically unstable regimes has been tapped. Now we are at the point where all of the major new sources have huge technological challenges and dire environmental consequences. Tar sands use enormous amounts of water and create environmental devastation. We have our case study on how difficult and dangerous deep sea oil extraction is.

"Opening up areas here no matter how scant you may think these areas will yield gives oil consumers options."

This is just false. Consumers have no say on where the oil they use comes from. Most north slope oil is shipped to Japan.

Every year engineers find new and better ways to get more oil and gas out of existing fields so rounding errors today maybe tomorrow's north slope.

Dream on. No credible geologist thinks that we can get the kind of volume from existing fields we would need to match the north slope.

Posted by: srw3 | May 4, 2010 6:13 PM | Report abuse

"I’ve been wondering since last week why Pres Obama didn’t just swim down there and clamp that oil pipe with his mighty Kenyan pincer-fingers."

Mighty Kenyan Pincer-Fingers would make an excellent band name.

Also, this:

"The difference in the amount the United States imports as a result of expanded offshore drilling essentially amounts to a rounding error."

seems about right to me. As far as we know, we don't have enough oil offshore for drilling there to have a meaningful impact on our oil imports. I'm pretty sure there was a candidate during the presidential election who made a similar argument at one point in time. What was that dude's name again? I believe he now goes by the name Mighty Kenyan Pincer-Fingers.

Posted by: slag | May 4, 2010 6:16 PM | Report abuse

As far as we know, we don't have enough oil offshore for drilling there to have a meaningful impact on our oil imports.

But there is enough oil for multinational corporations to make a few billion dollars selling it to us.

Posted by: srw3 | May 4, 2010 7:10 PM | Report abuse

DrainYou:
I recommend "The Myth of the Oil Crisis" by Robin Mills. He is no right winger; he's a British Geologist who is convinced of global warming, but he also says that Peak Oil Theory is rubbish. He goes into great detail about the multitude of options that energy companies have to extract hydrocarbons. The aim here is to not limit the energy supply to one source or region. Where there is profit there will be innovation. Tarsands, shale, gas to liquids, and coal to liquids technology will improve, become safer and cheaper without government subsidies. If nuclear power is allowed to expand then plug in electric vehicles will proliferate. Most of these options won't require massive government programs and will supplement existing fuels and work with the existing infrastructure. Peak Oil is a hundred year old myth and petroleum products aren't going away anytime soon.

Posted by: jlaneusmc | May 4, 2010 9:21 PM | Report abuse

"Most north slope oil is shipped to Japan"

Easily refuted lies don't make your point any stronger.

Posted by: tl_houston | May 4, 2010 10:12 PM | Report abuse

This is a stupid argument. Let me summarize what Gatti is saying. "US offshore drilling potential is relatively small, thus NIMBY."

The benefits or harms of offshore drilling are equally proportional to the amount of potential oil. Demand for oil is inelastic. Which means that for every rig we build here another one doesn't get built somewhere else. This might only be a few drilling platforms, but the number of platforms doesn't bias the argument toward one side or the other.

These sort of NIMBY arguments always come down to an implicit assumption that our interests are more valuable than the interests of people in other countries. What Gatti is really trying to say without coming out and saying it explicitly is that the environments of oil-drilling countries are already so messed up that more drilling couldn't possibly make things any worse. But with that sort of logic, there is no reason to stop at NIMBY. Let's take the argument to its logical conclusion: "The quality of life is so bad in all those third world countries that we can start slicing them up for spare organs. For every life we take there we'll save a far more valuable life here."

Posted by: zosima | May 5, 2010 12:28 AM | Report abuse

According to the EIA, offshore oil production in the Gulf of Mexico had declined to about 23 million barrels/month between 1985 and 1990. Today, it is 53 million barrels/month, an increase of about 1 million barrels per day. That is all due to offshore drilling post 1990, and mostly due to deep water drilling. The incremental production from post-1990 drilling is actually well over 1 million per day, because the 1 million/day represents a net increase after decline of the previously existing wells.

http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFP3FM1&f=M

If Ezra had his way over the last 20 years, he'd have taken the equivalent of Indonesia off line, or half of Nigeria. Anybody want to explain again how that's insignificant?

Posted by: tl_houston | May 5, 2010 9:08 AM | Report abuse

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