Offshore drilling: policy, politics, pragmatism, and moving forward

Once again, an ideological battle is confronting us on the left.  President Obama this morning announced that as part of a comprehensive energy and climate change policy, he and his administration, lead by Interior Secretary Ken Salazar, will open up large swaths of the Arctic and Atlantic coasts to offshore oil drilling.



Not a minute later, right on queue, started what the President warned against in his speech - the old ideological battles from the left and the right - from those who believe drilling is the entire answer and those who believe drilling has no place. John Boehner doesn't think it's enough. The Sierra Club thinks it's too much. But for the sake of policy, let's consider the President's speech in the broader context of a comprehensive energy and climate strategy in this country.

Major change in fuel efficiency standards: The President reminded us that tomorrow, new fuel efficiency standards for cars and trucksget finalized. If the rules look anything like what was announced last May, it will look like this:
The new policy, which was worked out between Washington, state governments and the auto industry, will require automakers to meet a minimum fuel-efficiency standard of 35.5 miles a gallon by model year 2016 — four years earlier than Congress currently requires.
Over its lifetime, this policy alone will save 1.8 billion barrels of oil - akin taking 58 million cars off the road for an entire year.  When you look at the greenhouse gas impact of this policy, it is even more impressive:
All cars will need to get an average of 39 m.p.g., and trucks will need to get 30 m.p.g. — roughly 30% more fuel-efficiency than they get today. [...]

Between now and 2016 the new rules will save 900 million metric tons of greenhouse gases — the equivalent of taking 170 million cars off the road. "This is a win-win because it reduces global-warming pollution and will reduce costs for consumers because they will have to buy less gasoline," says Daniel Weiss, the director of climate strategy at the Center for American Progress, a left-leaning think tank. "This is unprecedented and historic."
Yes, the President is giving the green light to do some offshore drilling, but he's doing so while making real tangible progress on reducing greenhouse gas emissions.  The long term goal is to really reduce the demand of oil and gas, which will automatically lead to lowered productions - new oil leases or no new oil leases.

Other federal initiatives: The President is also leading by example in the federal government, having already doubled the number of hybrid vehicles in the federal fleet.  The first military aircraft that travels faster than sound and runs on bio-fuels is set to make its debut on earth day.  The Department of Defense alone has invested $2.7 billion in the last year on energy efficiency.

US Energy Consumption Patterns and Potential Reserves: We have less than 2% of the world's oil and gas reserves, and we consume more than a fifth of the world's oil.  Hence, we import most of our energy.  Much of that comes from countries which pose a national security danger for the United States or are politically unstable.  That hurts not only our trade deficit but also our national security.

We must extricate ourselves from fossil fuels, but the transition is going to take a while.  It would be great if we can do it in a day, but we can't.  Right now, here are the sources we get our energy from (according to the Department of Energy):

US energy consumption 2008

As you can see, oil and natural gas account for over 60% of our energy.  It's not all going to end in one day.  The way to move away from is to focus on efficiency, investment in clean fuels, and conservation - all of which are part of the administration's plan.  In the mean time, if we can import less and produce more in an environmentally sound manner, why not?  So how much production capacity is out there in the areas that the administration proposes? According to the Times report, granted, the data is almost 30 years old, but
It is not known how much potential fuel lies in the areas opened to exploration, although according to Interior Department estimates there could be as much as a three-year supply of recoverable oil and more than two years’ worth of natural gas, at current rates of consumption.
So yes, 2% of the supply isn't enough to sustain a 20% consumption economy in the long run.  But in the shorter term, it can provide some relief from us having to send money to vulnerable and politically unstable regions of the world.  There can of course be a question of how safely we can drill, but on that, I will defer to the Department of the Interior.  The President's plan also protects existing industries like fisheries and tourism along the coast lines, assuring that drilling won't be done within 125 miles off the coastlines of Florida and Alabama.

Responsible and Scientifically Sound Drilling: In addition, drilling doesn't start in the vast majority of the proposed areas right away.  Environmental impact and geological studies will precede the drilling to ensure safety and environmental soundness.
But as a result of the Obama decision, the Interior Department will spend several years conducting geologic and environmental studies along the rest of the southern and central Atlantic Seaboard. If a tract is deemed suitable for development, it is listed for sale in a competitive bidding system. The next lease sales — if any are authorized by the Interior Department — would not be held before 2012.
One thing I think we can all agree to do is to wait and see the results of those studies and evaluate them first.  The President has made some tough decisions on oil and gas development, as he said he would in his State of the Union address, but he is doing this the responsible way.  As the President said today, the bottom line is that given our energy needs, in order to sustain growth, we are going need to harness traditional sources of fuel even as we ramp up renewable energy.  We are going to need both short term growth and long term sustainability.

Policy, Politics, Pragmatism and Moving Forward: That brings us to the big deal on energy policy.  Congress must pass a comprehensive energy bill that will help us move away from fossil fuel and foreign oil to home grown fuel and clean energy in the long run.  And the passage of such legislation depends on us being able to get some Republican votes in the Senate.  This is where thoughtful policy also becomes good politics.  Republicans have, for a while, been screaming about an "all of the above" approach - trying to position themselves as people who want everything when it comes to energy policy.  The President has just stolen the wind from under their sale by embracing domestic gas, oil and nuclear production but also charging a rapid movement to renewable fuels.  The President has challenged the Republicans to meet him in the middle and get something done for the country on energy and climate policy.

Honestly, I believe it is less important to stop drilling that may happen in a few years than it is to invest in and ramp up the production of renewable and clean energy sources.  If we have to make some drilling concessions in order to get some votes for comprehensive energy legislation to make those investments in renewable energy, so be it.  If we pass nothing, the impact on our environment will be far worse than the feared effects of drilling.

Another side-car of the policy debate here is this: Republicans are continuously trying to present the American people with a false choice: environmentalism vs. economic growth.  With today's announcement, President Obama has shattered that choice - not just in rhetoric but in policy.  He has moved pragmatically to gain ground, spur economic growth, and move us to a clean energy economy.  In the transition period, he is making an attempt to move us away from our dependence on foreign oil.  We need to move beyond the status quo in energy.  Because if we don't, and don't pass major energy and climate legislation, in time, we will be stuck in a much worse situation.

Is this a middle-of-the-road, pragmatic stance for the administration?  It absolutely is.  But the overall plan leaves much to like for progressives - such as the conservation, fuel efficiency, and renewable energy investment measures.  And there is some for domestic drilling advocates to like as well.  If this forges an alliance needed to push through major energy reform, the President, and Americans will have come out winners.