Drilling for a drop in the bucket

On Monday, President Bush lifted the executive ban on offshore drilling for oil in most U.S. coastal waters. The only barrier to exploiting these resources now is a congressional ban.

With crude topping $147 a barrel last Friday, politicians are grasping for a way to bring oil prices down and reduce the pain that U.S. citizens are feeling at the pump.

In his speech, Mr. Bush argued that drilling for oil off the U.S. coast would bring down domestic oil prices.

The problem with this assertion is that oil prices are set by global demand and global supply, not just U.S. supply.

How much oil, how long will it last?
Because of this global context, we need to think about the offshore supply in terms of global demand.

CNN reported Monday that there are 18 billion barrels of oil off the U.S. coast that are not currently available because of the congressional ban. 

A separate restriction on drilling in Alaska National Wildlife Refuge (ANWR) protects fragile lands that sit on 12 billion barrels of oil. 

All together, that's 30 billion barrels of oil.

That may sound like a large figure, but, as of 2005, the world used crude oil at a rate of 83.6 million barrels a day. We now use more than that. 

If every single barrel of U.S. oil in currently restricted offshore and ANWR regions were recovered and sold it would meet world energy demand for only one year.

But even if Congress were to act now and remove the ban, it would take years before the oil hits the market and is able to lower prices at the pump.

Real solutions
We need real energy solutions: ways to use less energy more productively, ways to better integrate energy provided to us by the sun and the wind into our energy system. 

If oil demand stayed constant (which it won't), we could save 61 billion barrels of oil -- more than double the amount available in ANWR and U.S. offshore sites -- during the next two decades, the time it would take to bring online all the fields President Bush wants to open.  

Using solutions laid out in Rocky Mountain Institute's book Winning the Oil Endgame, we can realize even greater savings profitably and quickly.

Proponents of drilling say that it's important to follow both paths: drilling and efficiency.  But both paths require investment and capital.  Given today's financial struggles it's unlikely that we can do both at the same time. 

And so we are left with a choice: Should we invest in energy efficiency and renewable sources of energy, or spend a fortune drilling for just 365 days of oil? 

We don't need Congress to enable drilling, we need congressional leadership and business leadership to enable these solutions and bring about a new energy economy.

Michael Ogburn is a senior consultant with Rocky Mountain Institute's transportation group, MOVE.