The Relief Report ®


A newsletter covering regulatory reform efforts in Washington and across America, published by The National Center for Public Policy Research

501 Capitol Court, N.E.
Washington, D.C. 20002
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Issue #81 * October 3, 2000 * David A. Ridenour, Editor

Contents:

Government Policies Contribute to High Gasoline Prices

Clean Air Regulations Decrease Minorities' Standard of Living

 

Government Policies Contribute to High Gasoline Prices

Frustrated consumers, angry over rising gasoline prices, should ask the federal government why it is fostering U.S. dependence on foreign oil by waging war against development of our nation's domestic energy industry.

A major reason the United States imports more than half of its oil from foreign sources is the federal government's policy of barring oil exploration and production on most federally-owned land. This is a tragedy given that there are potentially huge amounts of oil that can be recovered.

Although the U.S. has about 20 billion barrels of proved reserves, most Americans would be pleasantly surprised to learn that experts believe the nation probably has more than 110 billion barrels of recoverable oil, five times the estimated current supply. A 1995 National Assessment of U.S. Oil and Gas Resources prepared by the U.S. Geological Survey (USGS) concluded that, in addition to the 20 billion barrels of proved reserves, there are another 30 billion barrels of undiscovered oil that could be recovered using conventional drilling and exploration technology. There are at least 60 billion barrels of inferred reserves which can be recovered with new technology. Including the oil that can be extracted from shale and other unconventional sources, the USGS believes the U.S. has 112.3 billion barrels of oil.

Full exploitation of this potential supply would not make the U.S. energy independent, but it would help decrease our dependence on the whims of the OPEC cartel. There is one problem, however. The federal government will not get out of the way.

Since 1983, federal land available for oil and gas exploration in the western U.S. - where 67% of the nation's onshore oil reserves and 40% of natural gas reserves are located - has decreased by more than 60%.2 In total, more than 300 million onshore acres of federal land have been effectively removed from the market for oil exploration.3 The Clinton Administration's proposal to prohibit new road construction on 43 million acres of federal land will further reduce oil development as the roadless ban will affect areas where oil and gas exploration is being conducted.

The numbers are similarly disturbing for offshore oil development. Over the years, Congress has prohibited exploration and production on more than 460 million offshore acres, which includes virtually all of the best prospects for major new offshore discoveries outside the Western and Central Gulf of Mexico. This relatively narrow portion of the Gulf of Mexico produces the majority of current offshore oil and gas, but new reserves are increasingly short-lived. The U.S. Department of Energy estimates that the federal portion of offshore drilling, which currently comprises 18% of U.S. production, will rise to nearly a third of domestic oil and gas supply within a decade. Failure to relax federal restrictions in the Eastern Gulf of Mexico, the Atlantic Ocean and on the Pacific coast would amount to a de facto strangulation of domestic oil production capacity.

By far, the most dramatic example of the federal government's war against domestic oil production is the prohibition on development of the oil-rich Arctic National Wildlife Refuge (ANWR). The American Association of Petroleum Geologists estimates that ANWR contains at least 9.2 billion barrels of oil. Other estimates show that ANWR probably contains as much as 16 billion barrels, making ANWR the single most important oil reserve in the nation. But environmentalists, citing ecological concerns, have successfully stopped drilling in ANWR even though oil drilling equipment would cover just 2,000 of ANWR's 19 million acres.

Oil isn't the only casualty of the federal government's wrongheaded land-use policy. Access to the nation's vast reserves of natural gas is also imperiled. This is of special concern because natural gas is projected to be the primary energy source to fulfill the nation's huge need for electricity. Energy experts Daniel Yergin, Chairman of Cambridge Energy Research Associates, and Thomas Robinson, author of a new study on natural gas, note that "just 15% of our current electric generating capacity is fired by natural gas. But an extraordinary 95% of the new proposed generating capacity is gas-fired!" Yergin and Robinson also say that "it will be up to exploration and production in areas such as the Rocky Mountains... to stave off a more serious gas supply shortfall."

However, that will be difficult because the federal government has barred energy development on huge amounts of western land.

Decreasing dependence on foreign oil can only be accomplished by aggressive development of the nation's considerable energy resources. But as long as the federal government continues to shut off its land to oil and natural gas production, Americans can only look forward to a bleak future of decreasing energy independence.

By John Carlisle

 

Clean Air Regulations Decrease Minorities' Standard of Living

At a cost of somewhere between $25 and $35 billion in taxpayer dollars, Congress passed the Clean Air Act Amendments in 1990. It is the mother of hundreds of regulatory laws across America that are supposed to address air pollution. Environmentalists are extremely protective of them, even if it means hurting poor and minority Americans in the process.

Sadly, for those who are harmed by its provisions, these regulations may not be needed at all. Scientists have found that many of them go beyond merely failing to achieve their goal of cleaning the air; many of them actually hurt the environment. Economists also point out that these regulations cost businesses and consumers millions upon millions of dollars every year. While almost every group of Americans feels the effects of these flawed regulations, no group hurt more by Clean Air regulations more than those living in poor and minority communities.

Big businesses forced to pay for increased environmental regulations pass along the costs to consumers. And which consumers are affected most? It's the ones with the least amount of money to start with, and who can sometimes barely afford their bills as it is: the poor and minorities. Since Clean Air regulations affect almost every industry, from dry cleaning to gasoline, it means that the prices of hundreds of consumer goods are on the rise because of them. These regulations make the meager budgets that many families survive on even tighter. At a time when black families in particular are finally beginning to earn enough to be able to put money away to pay for their children's education or ensure their own retirement security, it would be a shame to have precious funds wasted on unnecessary and harmful regulations instead.

Clean Air regulations strike the most vulnerable segments of the population outside of their pocketbooks, too. In Washington, D.C., the city government may purchase new buses fueled by alternative fuels under the notion that they will run cleaner than its existing fleet. According to the Washington Times, however, studies link the chemicals found in these alternative fuels to increased asthma and other respiratory problems. These buses and the facilities to maintain them are found more often in the inner city than in the more affluent and less racially diverse suburbs. Thus, Washington's efforts to achieve cleaner air will, in fact, subject the predominantly minority residents of the city to increased risks associated with poor air quality.

An argument used to support Clean Air regulation is that increased air pollution has led to an increase in asthma among residents of the inner city. What is not mentioned is that studies indicate that the poor state of government housing may also contribute to the rise in respiratory ailments. While Clean Air restrictions focus on decreasing automobile and industrial emissions, no conclusive evidence exists that these emission levels are dangerous. Evidence indicates that levels are improving in spite of federal regulations due to better emission-control technologies. What's not being considered are assertions from some experts that cockroaches may be as much or more of a factor in rising asthma rates as car exhaust. People inhaling the dust and debris in the air caused by the decomposing bodies of cockroaches is thought to be a major reason for increased instances of inner-city breathing disorders. Neglected and dirty public housing projects could actually be the cause of respiratory problems, yet there is nothing in the Clean Air Act or other regulations or programs to address this problem.

While extreme environmentalists want to outlaw the engines that power our cars, they say nothing about cleaning up our public housing. Neither do the politicians who push their policies. Minorities who are trapped in sub-standard public housing in dilapidated, dirty neighborhoods are finding themselves at the short end of ill-focused government programs once again.

Clean Air regulations are not just costly and flawed; they are also unfair. Rather than blindly burdening businesses with excessive regulations, a true government policy of environmental justice would consider the eventual effects imposed by all regulations on minorities, and compensate for them. Current Clean Air regulations do not dispense this sort of environmental justice. Their net effect is not even a healthier environment. Instead, it is an ignored decrease in the standard of living for members of the minority and poor community.

by Syd Gernstein




Editorial correspondence to The Relief Report should be directed to: The National Center for Public Policy Research * 501 Capitol Ct., N.E. * Washington, D.C. 20002 * (202) 543-4110 * Fax (202) 543-5975 * E-mail [email protected] * Web http://www.nationalcenter.org. Copyright 2000, The National Center for Public Policy Research. Coverage of meetings, activities or statements in the Relief Report does not imply endorsement by The National Center for Public Policy Research. Reprints of material in the Relief Report permitted provided source is credited. To receive all National Center newsletters free by e-mail, visit http://www.nationalcenter.org or send an e-mail to: mailing [email protected].


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