01 Aug 2000 Government Restrictions on Domestic Energy Development Contribute to U.S. Dependence on Foreign Oil, by John K. Carlisle

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.1

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.4

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.5 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.6

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.7 Other estimates show that ANWR probably contains as much as 16 billion barrels, making ANWR the single most important oil reserve in the nation.8 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.9

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.”10

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.

John K. Carlisle is director of The National Center for Public Policy Research’s Environmental Policy Task Force.

Footnotes:

1 “The 1995 National Assessment of the United States Oil and Gas Resources,” United States Geological Survey, Washington, DC, 1995.

2 “Why Access to Government Lands is Crucial,” American Petroleum Institute, Washington, DC, May 2000.

3 “Access to Government Lands,” American Petroleum Institute, Washington, DC, January 1997.

4 “Why Access to Government Lands is Crucial.”

5 “Access to Government Lands.”

6 “Why Access to Government Lands is Crucial.”

7 “The Arctic National Wildlife Refuge,” American Petroleum Institute, Washington, DC, May 2000.

8 Walter Williams, “Political Octane Performances,” The Washington Times, July 6, 2000.

9 U.S. Representative Don Young (R-AK), Chairman of the House Resources Committee, “Plight of Alaska Eskimos Forgotten in ANWR Debate,” Arctic National Wildlife Refuge web site, downloaded from http://www.anwr.org/features/eskimos.htm on March 18, 2000.

10 Daniel Yergin and Thomas Robinson, “A Quiet Energy Crisis,” The Washington Post, July 21, 2000.