You might have heard (or heard about) President Bush announcing the end of the Presidential ban on offshore drilling today. If you caught the speech, you would have heard Bush talking about how energy prices are high because of the Democrats and environmentalists.
Well the latest Energy Information Administration (EIA) report on the issue ("Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf -- http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html) outlines the difference in output if the protected areas are opened up, and how, because of the cost and time needed to develop the infrastructure to exploit the reserves, there would be very little output until 2020. At this point, if the ban is lifted the report states that:
"...annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day... compared with 2.2 million barrels per day [if the protected areas are still protected]. Because oil prices are determined on the international market, however, any impact on... prices is expected to be insignificant. "
What does that mean?
Daily world oil production is currently 73 million barrels a day (http://www.eia.doe.gov/aer/txt/ptb1105.html), so opening the entire OCS would only increase daily world output by 3%, and not until 2030. Opening up the protected areas only adds 200,000 more barrels a day, which is only 1% of current US daily oil consumption (http://www.eia.doe.gov/basics/quickoil.html ) or 0.2% of daily global oil production.
The report also identifies 40 Billion barrels of crude oil that are currently available for exploitation in the OCS that are not in the protected areas but have not been developed. How much oil is that? 40 billion barrels divided by 2 million a day is about 20,000 days/54 years worth of production.
Perhaps I'm missing something crucial in Bush's plan or not reading the report correctly but I don't understand what drilling in protected areas has to do with any of this. There is plenty of oil in the available areas, and it would seem that there is so much they can't even develop it all at the moment.
Personally I'd rather Bush acted in the short term, and did something like addressing the poor state of the US dollar (If the dollar was stronger, gas would be much cheaper), and acted to help in the long term by increasing the CAFE standards so that we catch up with the rest of the world and save us all hundreds a year. In 2012 European cars will need to get 52 MPG, but we won't see an increase to 35 MPG until 2020 (it's 25 MPG at the moment), even China requires 43 MPG now!
I'd also prefer that Bush spend more money locally on developing OUR infrastructure (which the EIA report states is the biggest limitation on how much oil we can produce in the OCS) rather than in a certain Middle Eastern country, but that's another issue.
What do others think about this?




