Obamas Outer Continental Shelf Strategy Moves Forward

Can this nation afford years of debate on whether to open the OCS and Alaskan frontier to oil and gas development?

OP-ED by Tony Munoz, Editor-in-Chief, Maritime Executive Magazine

We have for too long ignored the dangers of overdependence on foreign oil and its impact on the economy. Each year the US sends billions of dollars overseas to fuel cars, homes, and the economy. Today, the science and technology used in exploring, drilling and producing hydrocarbons is extremely sophisticated and safe. Moreover, the oil industry has proven its ability to leave only a small environmental footprint behind.

Based on estimates from the US Minerals Management Service the Outer Continental Shelf (OCS) has recoverable resources of about 39 to 62 billion barrels of oil and 168 to 294 trillion cubic feet of gas, which represents as much as 80 percent of the anticipated production. The Obama administration’s OCS plan will effectively reduce the cost of energy in the long-term while stimulating industries, spurring economic growth, and strengthening national security.

The Atlantic seaboard has not had seismic data accumulated since the 1980s. However, the industry has made tremendous advances in seismic imaging technologies over the past few decades and the data collected can be obtained quickly in order to make comprehensive decisions about where to drill. Unfortunately, the administration must allow every point of view to be heard before making a final decision. But, the administration should allow significant lead time to acquire and process new information and it can do so by allowing the MMS to grant small scale and limited permits during its arduous preparation of environmental impact statements.

If the truth be known, at this place in time, the reality of the Obama’s five year OCS plan is more about what might be done after many years of studies and analysis. Meanwhile, the Milken Institute recently reported that an investment of $46.5 billion would create 195,000 jobs and 3.5 million jobs in other industries. Now, that’s a stimulus package that will absolutely create jobs and fill governmental coffers and, thank you very much, all done by businesses.

The 1973 Arab Oil Embargo was almost 40 years ago and, yet, the US has not developed one single plan to lessen the stranglehold by dictators and militant nations sending foreign oil to our shores. As the American forum enters the debate on whether to explore for oil in the OCS and along the Alaskan frontier, it is hard to ignore the tradeoffs.

This country no longer tolerates belching industrial smokestacks or commercial waste dumped into rivers and waterways. So, why would Environmentalists and anti-drilling groups believe the oil industry, which is tightly regulated by the onerous caveats of unlimited and criminal liability within the Oil Pollution Act of 1990, would simply race into the OCS and Alaskan frontier with reckless abandon and begin punching holes and erecting platforms?

The US has been the largest oil consumer in the world and we’ve had it our way since FDR secretly met King Saud on a ship in the Mediterranean Sea 65 years ago. But, it’s not only about dictators and hostile governments controlling our energy policies, it’s about the forces of the market that are also in play and, as every good capitalist should freely acknowledge, there are some other big players on the block, namely China and India, and they need their share of oil to run the engines of their economies.

Surely, emissions cap-and-trade and GHG regulations by the EPA are agenda busters too, but the time and place is now for the Obama administration to address the Achilles Heel of this nation and open the OCS and Alaskan frontier.