Friday, August 1, 2008
Until the U.S. opens its offshore waters to oil drilling, it will be seen as the world’s worst energy hypocrite.
If you think that the issue of offshore drilling is only a matter of interest to American environmental groups and the U.S. Congress, think again. At last month’s World Petroleum Congress in Madrid, the blatant hypocrisy of U.S. energy policy—demanding that OPEC members expand their oil drilling efforts while restricting offshore drilling here at home—was a prominent topic of discussion. Indeed, the U.S. ban on drilling in the Outer Continental Shelf was mentioned by three of the most powerful people in the global energy business: the head of OPEC; the chief executive of Brazil’s national oil company, Petrobras; and the Saudi oil minister. All of them said the United States should start drilling in its offshore areas.
During a press conference in Madrid, Chakib Khelil, the Algerian oil minister and president of OPEC, was asked what the United States could do to lower oil prices. He mentioned three things: stabilize the value of the dollar, increase energy efficiency, and “open up your exploration. In Algeria, we have a bidding round going on. We are open. The U.S. also needs to open…offshore Florida, offshore Alaska, need to be opened to exploration.”
On the same day that Khelil brought up offshore drilling, Petrobras CEO Sergio Gabrielli also mentioned the issue. Over the past decade, Petrobras has been one of the world’s most successful oil firms. That success has been due almost entirely to its expertise at finding vast amounts of oil in Brazil’s offshore territory, often in water depths exceeding 5,000 feet. Responding to a question from an American reporter about oil prices, Gabrielli pointed out that Petrobras is actively drilling in the Gulf of Mexico. He then said that the offshore United States “is an area that may have large volumes of recoverable oil. We think that the Outer Continental Shelf will give access to new areas. We think that part of this constraint on supply right now comes from areas that you cannot go. And the U.S. is one area that is limited to increased exploration.”
During the final speech of the World Petroleum Congress, an event known as the Dewhurst Lecture, Saudi Arabian oil minister Ali Al Naimi said, “The limits to future petroleum supplies have more to do with politics than with geology and resource availability. For example, the most promising acreage remaining in the U.S. is located offshore, most of which is off limits to the industry.”
American politicians can denounce the Saudis and OPEC all they like. They can rage about the price of gasoline and the evils of Big Oil. But until the United States opens its offshore waters to oil drilling, it will be seen as the world’s worst energy hypocrite.
Robert Bryce is managing editor of Energy Tribune magazine. His latest book is “Gusher of Lies: The Dangerous Delusions of ‘Energy Independence.’”
Image by Getty Images/ Darren Wamboldt.