To paraphrase everyone’s favorite accidental philosopher Yogi Berra, it’s déjà vu all over again in America: Another summer approaches with gasoline prices high, injecting economic growth-chilling doubt into people’s vacation plans. Our leaders’ response is also regretfully familiar: rather than remove self-imposed impediments to domestic energy development, government remains asleep in the control tower, resorting to unproductive demagoguery and half-measures.
World-wide demand for oil has long been on the rise; instability in the Middle East is constant; and our deadly dependence on foreign oil controlled by oligarchs and despots is a decades-old reality. So why is America still the only oil-producing nation in the world that limits access to its own abundant energy resources?
The maze of government-laid traps which domestic energy producers must navigate just to find oil and prepare for its extraction has grown unabated. The recent offshore drilling moratorium is reducing domestic oil production by 13%. Specialized deep-water drilling rigs have been leaving the Gulf of Mexico since April, with at least one relocating to Brazilian waters. Why Brazil? The $2 billion loan the Obama Administration made to that country this spring for offshore drilling expansion might be one reason.
Government action or willful inaction has locked up thousands of acres of land and offshore territory, denying Americans billions more gallons of gas. The administration’s decision last December to cancel a five-year plan to allow exploration in parts of the Gulf of Mexico and the Atlantic has deprived us of 7.6 billion barrels of oil.
Hostility from regulators and activist groups has stifled progress towards recovering an estimated 800 billion barrels of oil and oil shale from a river formation running through Colorado, Utah, and Wyoming. That amount of oil exceeds Saudi Arabia’s reserves by a factor of three.
The government’s designation of 181,157 square miles of Alaska as a protected habitat for the polar bear leaves an area larger than the state of California off-limits for oil exploration. An Alaska oil and gas association has sued the Interior Department, seeking that the habitat decision be thrown out.
When regulators do grant energy development permits, litigious activist groups often swoop in with disruptive lawsuits. In March, activists convinced an EPA appeals board to deny drilling in the Arctic Sea due to the allegedly excessive carbon emissions of Shell Oil’s ice-breaking vessels. After spending five years and $3.7 billion on exploration and leases, Shell’s ability to pursue the potentially 27 billion barrels of available oil remains up in the air.
Once oil is recovered, even more government regulations ensnare oil refining. It’s been 30 years since a new refinery was built in the U.S., and old refineries struggle to keep up with increased demand. Additionally, EPA mandates force refiners to develop 50 different blends of gas for certain states, none of which can be used to relieve gas shortages in other states.
High gas prices and reduced oil supply have stifling collateral effects. The increased price of basic staples like food, and the heightened cost of simply driving to the store, falls hardest on those Americans with the least.
But government still seems to believe, as it has through numerous presidential administrations, that blame-shifting initiatives like investigating unlawful oil speculation and price fixing will solve the problem. In past years, federal agencies have dutifully spent taxpayers’ money to investigate these trumped-up allegations, returning each time with the same answer: no unlawful activity.
Our policy makers cannot continue down this reckless path of domestic energy disregard. Government is tilting at windmills if it tries to pursue the laudable goal of alternative energy development while skyrocketing oil prices are dragging down the economy. Only by putting Americans back to work tapping into the natural resources available now can we build an economy for the future and ensure our energy security.
Daniel J. Popeo is Chairman and General Counsel of the Washington Legal Foundation.