United States offshore drilling debate

The United States offshore drilling debate is an ongoing debate in the United States on whether or not offshore drilling for new wells off the coast of the U.S. should be allowed.

Oil drilling platform about two miles off the coast of California, near Santa Barbara.

The issue saw increased coverage as president George W. Bush in July 2008 lifted a 1990 executive order by George H. W. Bush banning offshore drilling, while at the same time calling for drilling in the Arctic National Wildlife Refuge.

The issue of offshore drilling became central in the 2008 presidential election, not least because of the oil price increases since 2003. It is also being debated in terms of both environmental issues and U.S. energy independence. As of September 2008, President Barack Obama is for limited offshore drilling as part of an extensive energy independence overhaul.

Bush's energy policy was named "drill and veto" by U.S. House Speaker Nancy Pelosi. The Drill Responsibly in Leased Lands (DRILL) Act (H.R. 6515) is one of the bills discussed in the Congress about drilling. In Florida, many counties, cities, chambers of commerce, and other local agencies have passed resolutions against oil drilling in Florida waters.

On March 31, 2010, President Obama announced that he was opening new areas in U.S. coastal waters to offshore drilling for gas and oil. This was in stark contrast to his reaction only a few weeks later to the Deepwater Horizon oil spill in the Gulf of Mexico that has become the largest offshore oil spill in United States history.

Background

As interpreted by the federal courts, the Commerce Clause of the United States Constitution gives the federal government certain regulatory power over "navigable waters" of the United States. The Submerged Lands Act of 1953 and Continental Shelf Lands Act of 1953, along with the 1960 Supreme Court decision in United States v. States of Louisiana, Texas, Mississippi, Alabama, and Florida, divided ownership of the tidelands of the United States between state and federal governments. States own the sea and seabed out to 3.5 miles, except Texas and Florida which own out to 10.5 miles. The federal government owns the remainder of the territorial waters.

The 28 January 1969 blowout at a Unocal rig, which spilled 3 million U.S. gallons (11 million liters) of petroleum off the coast of Santa Barbara, California, resulted in drilling bans in offshore California and Florida.

Offshore drilling has continued uninterrupted in offshore Texas and Louisiana. In 2006, an 8,300,000-acre (34,000 km²) area in the Gulf of Mexico known as lease 181 was opened for exploration. The existing moratorium on leasing on the Outer Continental Shelf expires in 2012, and the debate is on whether or not to extend it.

Energy independence argument

Main articles: United States energy independence and North American energy independence

Imported crude oil as a percent of U.S. consumption.

The chief argument in favor of lifting the ban is that offshore drilling helps the United States become less dependent on imported oil. Geopolitically, the U.S. would be less vulnerable to sanctions by oil-producing countries hostile to the United States. It would also make the United States less vulnerable to a stop in a country's oil exports, due to, for example, a civil war or an invasion of that country. Economically, if a larger share of the oil being consumed were produced in the United States, it would lessen the U.S. trade deficit with the rest of the world. The debate often makes references to the 1973 oil crisis and 1979 energy crisis

Fuel price argument

The issue came to the forefront in the middle of a steep rise in gasoline prices, so an underlying motivation was to reduce the current gasoline prices. The Energy Information Administration at the U.S. Dep. of Energy analyzed the effect of lifting the moratorium. With leasing beginning in 2012, production of oil would not be expected to start before 2017. The EIA estimated how much of the oil could be extracted both technically and in an economically viable fashion. The EIA found that access to the Pacific, Atlantic, and eastern Gulf of Mexico regions would increase domestic oil production by 1.6 percent between 2012 and 2030. Oil prices are today governed by demand and supply in the global market, and a 1.6 percent increase in the U.S. production would have little or no impact on price. The Natural Resources Defense Council estimated that the price of oil would only drop about 3–4 cents in 15 to 20 years.

Enough leases argument

Oil companies already hold places to drill in the United States, as well as 5,500 offshore leases that are not being used. House Speaker Nancy Pelosi, stated, “It's time to tell the oil industry: ‘You already have millions of acres to drill. Use it or lose it.’“ The Department of the Interior estimates 68 billion barrels of oil lie in areas already accessible to drilling in the Gulf of Mexico and Alaska. However, Republicans noted that companies were doing exploration in these areas and that current law already mandates that companies must look for oil in their leases.

Military training argument

In 2005 U.S. Defense Secretary Donald Rumsfeld stated that offshore drilling would disrupt military training and weapons testing, if done in the Gulf of Mexico along the coast of Florida.

Oil spills argument

Drilling in the Gulf of Mexico and Atlantic Ocean is subject to oil spills due to damage from hurricanes. However, the Coast Guard reported that of the more than 7 million gallons of oil spilled during Hurricane Katrina from various sources, no spills were reported from offshore facilities. Offshore facilities and the transport of crude from them do however pose a environmental risk during normal conditions, as exemplified by numerous oil spills worldwide. On April 20, 2010, an underwater blowout and subsequent explosion and fire destroyed the Deepwater Horizon rig owned by Transocean Ltd. and operating in the Gulf of Mexico under lease to energy giant BP, resulting in the largest oil spill in United States history.

Endangered species

The federal Minerals Management Service gave permission to BP and dozens of other oil companies to drill in the Gulf of Mexico without first getting required permits that assesses threats to endangered species.

Alternative investments argument

Global warming activists have warned that offshore drilling distracts the United States from finding alternative sources of energy which would improve the economy. Developing future alternative energy sources is seen as crucial for the U.S. economy, by both Democrats and Republicans. This is reflected in both statements by the Obama administration and the 2006 Addicted to oil speech by George W. Bush. However, these massive investments will be funded by the present economy, which ties the alternative energy debate into debates on how to manage the economy, especially the mitigation of peak oil. In light of this, some may defend both new oil fields in the Gulf of Mexico and the extraction of unconventional oil such as oil sands in Canada on the grounds that it mitigates peak oil and keeps the economy afloat until it transitions to other energy sources. Others call for shifting existing energy subsidies away from oil towards renewables. The offshore drilling is only a small part of this larger debate.

Relations with Cuba

Although offshore drilling has long been banned in federal waters off the state of Florida, Cuba has been preparing to explore its own offshore area near Florida. The subject became an issue in the 2008 presidential race, with assertions and denials of the reality of Cuban offshore drilling. On 31 October 2008, Brazilian and Cuban presidents Luiz Inácio Lula da Silva and Raul Castro attended a ceremony at which the Brazilian oil company Petrobras agreed to drill for oil in Cuban offshore waters near Florida.