Offshore Oil and Gas Drilling

By now the American people know President Obama recently opened up and expanded offshore area's for drilling along the southern Atlantic Coastline, the Eastern Gulf of Mexico and part of Alaska. The news had a more positive response than negative, especially among state's that have had offshore drilling and share in that federal revenue. The news prompted the usual false information from those who are always saying "drill baby drill" and those who want to see wide open drilling with no regulations.

Those pro drilling anywhere people said the action would help America achieve energy independence and not have to rely on foreign oil. That is a blatant untruth and they know it. The oil and gas industry has had over 50 years to make the U.S. less dependent on foreign oil and they have failed despite the billions of dollars of government incentives during those years. The most recent by the Bush administration only a few years ago to the tune of billions of dollars.

The price of oil hit $150/barrel and gasoline $3.50/gallon during the Bush term in office. That was incentive enough to drill baby drill, however Gulf of Mexico drilling activity decreased 76% between 2000 and 2009. See note l. Eight of those years were under Bush and the activity decreased every year on his watch with the exception of 2008 where 3 more rigs were active than the previous year.

During the above period the oil and gas companies had much gulf acreage that was idle. For the U.S. to become independent from foreign oil the industry would have to start drilling and producing from all their lease acreage that has been idle and stockpile the oil and gas. They are not about to do that because large inventories reduces the price and they like to manipulate their inventory and reduce production for their own self interest. The oil and gas industry is also in bed with foreign producers and they are not going to change that no matter what.

The only way for the U.S. to become independent of foreign oil is alternate energy and fuel with a drastic decrease of oil and gas usage. Is it any real wonder why at the end of 2008 the U.S. was importing 70% of its oil needs. Oil billionaire T. Boone Pickens cried about that in his T.V. ads every day back then when he was pushing the use of natural gas for automobiles. He has since abandoned those ads when the price of natural gas started to fall in line with demand.

I wrote a post titled, "Innovation: Lost in America dated July 23, 2008 and published in politidose. The oil companies like to talk about their technology gains of drilling deeper, finding more oil and gas and etc. But they have lost the hunger to innovate any plan to really make the U.S. self reliant when it comes to oil and gas. Creating power and wealth uses up all their energy. That says it all.

Note 1: Source: Baker Hughes report as published in Times Picayune of 1/17/10.