Monday July 7th, 2008
by: Ed Mayberry, July 6, 2008 7:07:07 pm
Some 85 percent of offshore acreage is currently off-limits to development. Congress is also wrestling with the question of opening up the ANWR region of Alaska. American Petroleum Institute chief economist John Felmy says the industry has proven it can safely develop resources in all areas, including federal lands.
"Well, there's no question that the technology has improved dramatically over the last several decades so that the footprint that we actually take up of the area for exploration is much, much, much smaller. And that's because you can now do directional drilling miles out and you can cover much larger fields, and so you disturb less. And also the technology is really dramatic in terms of how efficient it is."
Polls show that 57 percent of Americans are in favor of expanded drilling.
"We are seeing a shift to more willingness to entertain offshore drilling. You know, when we've got very low oil prices as we had not long ago, of course people ask the question, 'well, why?' But when you reach $130 to $140 per barrel of oil and $4 for gasoline, I think most people would recognize you need to have more supply or reduce demand and in order to produce more, you're going to have to have these areas opened up."
Felmy says public opinion about expanding domestic drilling is changing.
"Well, I think that clearly the higher prices have let people understand that, you know, there's no free lunch--that if you're going to have a softer market, you're going to have to have increased supplies at a reduced demand. And it's really difficult for individual consumers to reduce their use of gasoline because of all the things that are required to do, from jobs and daycare and houses and their fixed assets that they've developed and the vehicles. And so then you have to say, 'well, couldn't we add some more supplies?'"
The API believes the country needs a balanced energy policy, looking at all possibilities.
"We need to be able to produce more energy of all types, whether it'd be oil or coal or nuclear power and so on. We also need more energy efficiency, in terms of using it wisely and reducing wherever you can. And we need infrastructure. So those are the key aspects. It's also a case where we don't want to see bad things of the past repeated, and right now the Congress is debating things like taxing the oil industry for alternatives and repeating the mistakes of the Windfall Profits Tax. They also are debating things like price-gouging, which could be de-facto price controls, and so on. And so what we would urge is caution. Let's first of all do no harm, and not repeat the mistakes of the past."
Ed Mayberry, KUHF Houston Public Radio News.