Saturday, June 05, 2010

BP Disaster makes Contrarian case for more US Offshore Drilling

British Petroleum's (BP) environmental disaster off the Gulf Coast has dominated the news headlines for several weeks. Unfortunately, the media seems to have limited its focus on the oil spill and not on the ways it could have been prevented.

Since the disaster I have spoken to several energy industry leaders who have told me, on the basis of anonymity, that BP has a reputations of being slack in the way they drill oil and its safety standards do not compare to what US companies enjoy. In fact, a similar accident on the part of a company from the US would have led to an immediate shut off because of the technological and safety standards. I have been told that BP is "impatient" with US companies because in its view the latter "are" slow in their processes and are "obsessed" with safety.

The economic case for increased domestic drilling is simple and with our current economic crisis, it is more important than ever. It will quickly lower gas prices by increasing future supplies. What most opponents of domestic drilling fail to realize is that the mere threat of increased production can lower prices. A simple debate on the subject has had the power to lower the price per barrel by over $30. This is without a vote and without new exploration. This is merely due to rhetoric. Imagine the impact once we increased drilling.

The national security argument makes perfect sense too. In 1970 we imported 24 percent of our oil. Today it is nearly 70 percent, and that number continues to grow. If foreign countries decided to stop supplying us, we would be in a true crisis. Security, as well as prosperity, are wrapped up in our energy future. The shrinking US oil supply is not because of scarcity, but because of poor policies on the part of the US government.

The disaster off the coast provides the moral and environmental case for domestic drilling. Increased US drilling is the "green" thing to do. For years we have been told by environmentalists that this planet is little more than a "big blue marble." Simply put, environmental disasters on any part of the planet has an adverse impact on the entire planet. If that is the case, who better than the United States to increase drilling? Right now, Cuba and Venezuela are eying off shore drilling opportunities near the United States. Some of these are very close to where BP's disaster took place. Regardless of how backward BP is, it is generations ahead of Cuba in technology. Do we prefer their technology, safety standards, and labor over that of the US? Any time the United States can take the lead on drilling; people, animals, and pristine environments are better protected compared to the means of any other country.

International waters -- in the Atlantic, Pacific, and Gulf Coast -- are very close to the shores of the United States. Do we want the pursuit of energy that can be found there to be done by the leader in technology and safety or by countries like Cuba, Venezuela, or even Great Britain? Drilling will happen, but by which countries? The BP disaster makes an eloquent case for the US to take the lead.


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