America is in the middle of an energy revolution — but to the consternation of many, it’s not the one they dreamed about.
Yes, we must continue to search for ways to reduce our oil consumption, but we also should be looking to produce more energy that is more affordable for consumers and less harmful to the environment. Simultaneously, new breakthroughs in oil and natural-gas technology, and development on private and state lands are rewriting the energy outlook for the United States.
Like every other commodity, gas prices are subject to the laws of supply and demand. Gas prices are down for the moment, mainly because the poor economy has reduced demand and there’s a momentary lull in concerns about OPEC interruptions. Relying on the recession and calm in the Middle East, however, is really bad strategy.
Any comprehensive energy plan must address both supply and demand. America can reduce the percentage of oil in our overall energy mix through efficiency and alternative fuels, but we need to get serious about increasing access to our domestic oil supplies.
Oil production, and therefore gas prices, is a long-term issue. Decisions made today will make a difference when we fill our cars a decade from now.
In 2008, Jay Leno joked on “The Tonight Show” about the Democrats voting to block drilling in the Arctic National Wildlife Refuge (ANWR) because it wouldn’t help gas prices for 10 years. “You know,” Leno said, “the same thing they said 10 years ago.”
Production is up at the moment, thanks to leasing done during the previous administration, and the efforts of states and private landowners, where there are fewer federal hoops to delay development. But, how long can that trend continue if the areas most likely to contain the best resources remain off-limits?
The Obama administration’s response to high gas prices has largely been to use the nation’s Strategic Petroleum Reserve (SPR) to put more oil on the market.
The SPR was designed as an emergency stockpile to be used only in times of extreme supply disruptions. It has only been tapped three times in its existence — during the 1990s, when the Middle East conflicts caused a disruption in supplies from OPEC nations; following Hurricane Katrina, when many refineries were taken offline; and last June, when the current administration sold 30 million barrels in an attempt to lower oil prices for political purposes.
Tapping the SPR demonstrates the importance of supply on prices, but it’s a Band-Aid approach at best. Drawing down the SPR for political purposes leaves us vulnerable if there is a real supply disruption. A more permanent solution is to increase domestic oil production — a policy that has the added benefits of creating jobs and pumping badly needed investment into the U.S. economy.
What can be done over the long term to escape the trap of yo-yoing prices?
In recent years, private landowners and state governments across our nation have stepped up and helped revolutionize America’s ability to produce energy. Thanks in large part to their efforts, the United States has become the world’s third-largest oil producer. The federal government, though, controls literally millions of oil-rich acres, both onshore and offshore, that it keeps off-limits to drilling.
We could easily become the world’s top producer by allowing the most promising of areas — the non-wilderness coastal plain of ANWR, new acreage in the Mountain West, and offshore areas beyond the Gulf of Mexico, including off the coast of Virginia — to be explored and developed.
Unfortunately, the leasing plan recently unveiled by the administration excludes almost any new areas, guaranteeing — if it’s allowed to stand — that production will remain insufficient in the future to meet our needs. This shortsighted policy is compounded by the president’s refusal to deal with the Keystone pipeline until after the election.
It’s within the power of Congress and the president to solve the puzzle of energy security.
World forces will always affect the price of commodities traded on a global scale, but the more control we have over our own energy supplies, the more we can insulate ourselves from price shocks and from attempts to disrupt our energy security.
For true emergencies, we have the strategic reserve. For everything else, we have America’s vast resources. With both at our disposal, true strategic advantage and long-term progress on gas prices is within reach.
Murkowski is the ranking member of the Senate Energy and Natural Resources Committee.