Coastal Drilling & Alternative Energy

Yesterday I wrote about the potentially negative effects of removing the ban on offshore oil exploration in federal waters. Essentially, I wondered whether this “newfound” production would so distract us from the greater issue of reducing our dependence on petroleum that we would hurt ourselves in the long run. Today’s Wall Street Journal article titled “Benefits of Tapping Coastal Reserves Would Take Years to Surface” seems to dispel that notion. The article points out the many challenges that this new production would face. To begin, the government needs to study the now-banned areas to identify where the oil is. This needs to occur before the government can begin considering lease applications. If leases were sold, there would then be environmental impact studies and challenges from environmental groups on myriad fronts, followed by years of infrastructure planning, review, and development. Since many of these areas have been off limits for more than 30 years, there is currently no way to get the oil to refiners if it could be removed from the seabed.

The Energy Information Administration, part of the US Department of Energy, has acknowledged the limited impact that drilling in the outer shelf will have on the petroleum market. The EIA said, in part, that drilling in “Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030” (2007 Annual Energy Outlook Analysis).

The biggest takeaway from this article is this: drilling in the outer shelf is neither or short- or long-term solution. It is one of many ways that the US can cope with and respond to higher oil prices, just like alternative fuel sources. Politicans and the American public shouldn’t think for one minute that the possibility of drilling in the outer shelf has changed the rules of the current energy game at all. Alternative energy is still as hot a topic and industry as it was last week.