Anthony Scholefield: America must start drilling for oil
Anthony Scholefield is the Director of Futurus, a think tank specializing in EU and immigration matters and is also a member of the Global Vision Academic Council. His latest booklet, published by the Social Affairs Unit in 2007, is 'Warning: Immigration Can Seriously Damage Your Wealth'. In this extended Platform he argues that America must scrap restrictions on drilling for oil.
As the American economy crashes into what is becoming more than a recession and more like a slump, some of the political class’ most cherished beliefs are coming under attack. These are fixed beliefs that are harmful to ordinary voters and are based on illusions, self-deception and lack of reasoning, but which have an ideological stranglehold over the political class and the media.
There are plenty of hallucinatory ideological strangleholds among the British political class, among which the alleged benefits of the EU membership, mass immigration and public spending stand out as the most damaging.
In the USA, many forecast that illegal immigration would be the first policy area where some reality would take hold of the political class but, in the event, it now looks as though a hallucination peculiar to the USA, the influence of extreme environmentalists in preventing drilling for oil in the USA itself, will be the first casualty and awakening from this hallucination may determine the election.
It is certainly a peculiar fact that the United States, far and away the biggest oil consumer, has, for the last twenty-five years, been the only country in the world with a restrictive policy on oil exploration – restrictive to such an extent that 97% of Federal offshore areas are not available, one way or another, for exploration and 94% of federal onshore areas are not available for exploration.
In the meantime, the 12 million barrels of oil imported by the USA at, say, $120 a barrel, is costing 1.5 billion dollars a day. This in turn has knock-on effects on the trade deficit and the increased unwillingness of foreign investors to trust the dollar.
There has been a one-way orientation of the political class on the question of restricting oil and gas drilling in the United States and concentration on green and conservation issues. After all, it was the first President Bush who signed the Presidential ban on offshore exploration (in most of the US except the western Gulf of Mexico and parts of Alaska), Governor Jeb Bush, who stopped exploration in Florida territorial waters ‘permanently’ and Bill Clinton who banned exploration throughout the Arctic Natural Wildlife Refuge (ANWR) in Alaska. There were two bans on drilling, one by the President and one, renewed annually, by Congress.
But this political class monoculture is disintegrating and will likely bust wide open with enormous political effects.
What appears to have triggered off the policy reversal were hearings in the US House of Representatives on 21st May 2008 where US legislators made a big effort to show they could outdo the European Parliament in breaking the laws of supply and demand and those of common sense.
They passed a bill to make it ‘a violation of this Act to limit the production or distribution of oil, natural gas or any other petroleum product etc’ – called in short the NOPEC bill as it was aimed at the OPEC oil exporters.
Certainly oil prices are high and maybe there is even a shortage of supply but who is limiting the supply of ‘the production and distribution of oil’. It is the US Congress, the President and some of the states who have blocked any drilling for oil in most of the Gulf of Mexico, the entire Atlantic and Pacific continental shelves and nearly all of the Alaska offshore shelves as well as onshore Federal lands. Altogether there are over 4 million square miles in offshore US economic waters.
Subsequent to the passing of the NOPEC bill, the Judiciary Committee of the US Senate held hearings on 21st May at which the leaders of all the major US oil companies were lined up and expected to be ceremonially tarred and feathered.
Instead, the Senators were devastated by some forthright testimony, which mightily impressed outsiders, including this by John Hofmeister, President of Shell Oil Company:
“According to the Department of the Interior 62 per cent of all onshore federal lands are off limits to oil and gas developments (much of the rest has crippling restrictions), with restrictions applying to 92 per cent of all federal lands. We have an outer continental shelf moratorium in the Atlantic Ocean, an outer continental shelf moratorium on the Pacific Ocean, an outer continental shelf moratorium in the eastern Gulf of Mexico, congressional bans on on-shore oil and gas activities in specific areas of the Rockies (massive oil shale deposits) and Alaska and even a congressional ban on doing an analysis of the resource potential for oil and gas in the Atlantic, Pacific and eastern Gulf of Mexico.”
“The problem of access can be solved in this country by the same government that has prohibited it. Congress could have chosen to lift some or all of the current restrictions on exploitation and production of oil and gas.”
There really was not much else to be said, apart from noting that Congress had prevented any new oil refineries being built for 30 years via its Clean Air legislation, while the US population increased by 100 million.
Hofmeister also agreed that up to 2 trillion barrels of oil could be available if drilling was allowed in the oil shales in the western US.
The final farce is being played out off in the waters off Florida where the US and Cuba both have territorial waters and the Cuban zone extends to within 45 miles of the Florida coastline. Not to be outdone by the US Congress, the Florida legislature bans drilling within its own territorial waters and is buying out and preventing oil drilling in most onshore areas. Yet the Cubans allowed oil drilling concessions to Venezuela and China in its territorial waters and the Chinese made a big find just 50 miles from Florida. The Republican administration in Florida trumpets its elimination of offshore drilling in 2005 as “The state’s continual commitment to improve environmental quality means Florida’s coastal waters and natural reserves are permanently protected from the threat of offshore development”.
Radical environmentalism appeals to the elite but is seriously harming ordinary Americans. The Republican bien pensant Schwarzenegger has said, “As Governor of California, I will do everything in my power to fight the federal government on this issue and prevent any new offshore drilling.” (18/6/08) The Schwarzenegger thesis is babyish and irresponsible. As long as Californians use oil, he is quite happy for it to come from elsewhere.
Events after the May Hearings became fast moving. Vice President Cheney called for drilling for oil to be allowed in restricted areas and President Bush lifted the Presidential ban on the Continental Shelves on 15th July. Senator McCain also supported this but is still trapped in opposing drilling in the Arctic which he calls a ‘pristine area’. Yet the USA is begging other countries to increase energy supplies, often from more attractive areas than the uninhabited Alaskan Tundra.
The Democrats, and Barack Obama in particular, are still in favour of the oil drilling bans – for now.
Nancy Pelosi, even on 10.7/08, said “The call for drilling in areas that are protected is a hoax, its an absolute hoax on the part of the Republicans and this administration”.
But some Democrats are waking up and even Senate Majority Leader, Harry Reid, has said, “I’m not knee-jerk opposed to drilling” and is talking about more surveys and quicker oil leases. Other Democrats are responding to their constituents and moving against the elite environment radicals.
So it is an issue that is fluid although it is inevitable the drilling ban must go. The dollar cannot take much more stress. The Republicans have been handed a winning campaign issue and can still make it their campaign winner with Obama still stranded among the wind farmers and the environmentalists.
Opinion polls show voters are 2-1 in favour of drilling in the US. The critical electoral fact is that support is highest in the swing states of the mid-West, far from the oceans and less influenced by radical environmentalists.
Congressional Republicans and President Bush are now trying to help with bills to allow drilling. President Bush has urged Congress not to leave Washington until it lifts its own drilling ban. John Boehner, minority House Leader, said about the leading Democrats, “They worship at the altar of radical environmentalists”. Nancy Pelosi, the Speaker, said “I am trying to save the planet”, although it is difficult to square this with the NOPEC bill.
The economic crisis is now the central political issue in the USA and is slowly morphing into an oil price crisis. It is reported that the Democrats’ private polls show the details of the drilling bans are breaking through to the electorate. Rush Limbaugh has said, “It is a fabulous issue”.
Hanging over the heads of the Democrats is the need to renew the Congressional ban on drilling in September.
The political fact is that, when all political parties are in the grip of the same hallucination, the one that wakes up first is likely to get the advantage, while its opponents are still shaking off the effects of the intoxication. But, as McCain must demonstrate, that political party needs to be fast and to be radical. He needs to jettison the whole of the unique restrictive drilling legislation of the last 30 years.