Samuelson on Energy: Start Drilling

By April 30, 2008Energy

Washington Post columnist and Newsweek editor Robert Samuelson’s dispassionate economic analysis leads him to a clear conclusion in today’s paper, a column entitled, “Start Drilling.”

What to do about oil? First it went from $60 to $80 a barrel, then from $80 to $100 and now to $120. Perhaps we can persuade OPEC to raise production, as some senators suggest; but this seems unlikely. The truth is that we’re almost powerless to influence today’s prices. We are because we didn’t take sensible actions 10 or 20 years ago. If we persist, we will be even worse off in a decade or two. The first thing to do: Start drilling.

It may surprise Americans to discover that the United States is the third-largest oil producer, behind Saudi Arabia and Russia. We could be producing more, but Congress has put large areas of potential supply off-limits. These include the Atlantic and Pacific coasts and parts of Alaska and the Gulf of Mexico. By government estimates, these areas may contain 25 billion to 30 billion barrels of oil (against about 30 billion barrels of proven U.S. reserves today) and 80 trillion cubic feet or more of natural gas (compared with about 200 tcf of proven reserves).

What keeps these areas closed are exaggerated environmental fears, strong prejudice against oil companies and sheer stupidity. Americans favor both “energy independence” and cheap fuel. They deplore imports — who wants to pay foreigners? — but oppose more production in the United States. Got it? The result is a “no-pain energy agenda that sounds appealing but has no basis in reality,” writes Robert Bryce in “Gusher of Lies: The Dangerous Delusions of ‘Energy Independence.’ ”

Thinking more about the Reuters analysis yesterday that reprised the old argument, drilling in ANWR brings no immediate benefits, etc. (and remember, President Clinton vetoed ANWR legislation in 1995), we speculate about the future:

(Washington, D.C., April 30, 2022) — Opening the Alaska’s North Slope to energy development will do nothing to ease $16 a gallon gasoline, analysts agree, calling for increased conservation and smaller vehicles to help control fuel costs.

“True, the years of additional energy costs has hurt America,” said Clich E. Thinking. “The manufacturing sector is down to Pete in Virginia and that little company in Texas. Turns out the green jobs went abroad with everybody else. But with conservation, we can at least spare the pain at the pump.”

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