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Import arguments backfire against US oil producers

Bob Tippee
Editor

Arguments aimed at cutting US oil imports do producers more harm than good in Washington, DC. The industry should try a different approach.

Reducing oil imports is a legitimate goal. For the US economy, domestically produced oil—with all the incomes and tax payments it represents—surely beats the imported kind.

Import worry just doesn't work as an argument for policies essential to the expansion of US production.

In fact, it regularly succeeds as an argument to forget about expanding production and to quit using oil altogether—a popular fantasy with inexplicably strong influence over policy-making.

Consider the House Select Committee on Energy Independence and Global Warming.

The group's web site disparages oil imports for the usual reasons—funding of terrorists, profits for totalitarian regimes, intensifying competition for petroleum resources.

And, typically, it neglects to mention the economic goodness that the US forgoes with however much oil it imports instead of producing in off-limits areas such as 85% of the Outer Continental Shelf and the Arctic National Wildlife Refuge coastal plain.

If imports are so bad, why doesn't the US open the closed areas to boost domestic production?

According to the committee, it can't. The web site ludicrously compares US oil reserves (12th highest in the world) with total Middle Eastern reserves and implies that US production (third highest in the world) can't increase—although it did so last year.

The committee further characterizes the potential of ANWR—the coastal plain resource of which the US Geological Society estimates at 11.6-31.5 billion bbl of oil in place—as "a drop in the bucket in reducing the amount of imported oil."

It's no surprise that an outfit with this sense of proportion should think conservation and alternative energy by themselves can meet all US energy needs. They can't. Yet the view prevails. The US has a new energy law that boosts alternative energy sources and tinkers with consumption but says nothing about leasing of ANWR or locked-up expanses of the OCS.

The industry needs a new argument—maybe something that relates oil supply to a public concern less abstract than imports, like price.

(Online Jan. 11, 2008; author's e-mail: bobt@ogjonline.com)


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