Tap oil and gas resources

Expanded use of biofuels is a worthwhile goal. But as production of ethanol and biodiesel ramps up, we should be mindful of serious dangers from the keep-it-locked-up approach to America’s oil and natural gas resources advocated by some members of Congress and the environmental community. Not the least of these is the fact that roughly 50 billion barrels of oil and 200 trillion cubic feet of natural gas – a decade’s worth at current consumption rates and less costly than biofuels – is off-limits to exploration and development.

Despite all the hoopla over biofuels, there are serious drawbacks. Under a mandate from Congress, ethanol production is slated to rise from the current level of 1.7 billion gallons this year to 5 billion gallons by 2012. But this scale-up will almost certainly lead to higher pump prices for motorists, especially those on the East Coast and West Coast. Almost all of the ethanol production plants are located in the Midwest. Because ethanol cannot be transported by pipeline, it will have to be shipped by rail, at no small expense. And this will keep upward pressure on fuel prices.

Arbitrary energy mandates are incompatible with genuinely free markets, which presuppose a level playing field. On the one hand, Congress champions the use of ethanol as a clean-burning alternative to oil. On the other hand, it sharply restricts access to potentially vast reserves of domestic oil and natural gas.

Given the danger of higher energy costs to our nation’s economy, the United States needs to expand its production of oil and gas, both onshore and offshore. While U.S. production of crude oil has declined from 9.6 million barrels per day to 5.5 million since 1970, consumption has jumped from 14.7 million barrels to over 20 million. To make up for the shortfall, we are importing more oil from foreign countries.

And we are also importing more natural gas, in the form of liquefied natural gas, because domestic gas production has been essentially flat for the last decade, despite rising demand.

Stepped-up conservation and improvements in energy efficient are important, but they can’t close the supply gap. That means that we need to reverse the decline in U.S. oil and gas production.

A moratorium banning exploration and production in coastal waters of the Atlantic and Pacific as well as large parts of the Eastern Gulf of Mexico should be lifted. Some remarkable breakthroughs in technology now permit pipelines to bring oil and gas from miles out to sea, where the water is as much as 10,000 feet deep. Three-dimensional seismology for mapping and horizontal drilling allows for exploration and production in deep waters with little if any damage to the marine environment. Rigs are smaller and less intrusive. Data collected by the U.S. Coast Guard shows that in recent years the amount of oil spilled during offshore production has been negligible – even less than the amount of oil that naturally seeps from the ocean floor.

Simple realities argue for eliminating the regulatory barriers that discourage oil and gas development on federal lands in the lower 48 states that hold an estimated 7 billion barrels of oil and 146 trillion cubic feet of natural gas. Alaska alone has another 18 billion barrels of oil and 69 trillion cubic feet of gas, but potentially rich deposits in the Arctic National Wildlife Refuge are still closed to drilling.

But we won’t get our energy policy right so long as a drag exists on domestic energy development. Opening up oil and gas resources in the United States that are still off-limits to drilling – and making access easier in other areas – has the potential to reduce reliance on imports, rectify the supply imbalance, stimulate new industry and preserve the environment. Why not start now?

Donald A. Grant is the R.C. Hill Professor and chair of the mechanical engineering department at the University of Maine.