Earth Policy Institute
News Release
For Immediate Release
September 18, 2008

DRILLING FOR OIL IS NOT THE ANSWER

With attention turning to the second round of the energy debate in the U.S. Senate, the Earth Policy Institute thought you might find useful a brief summary of the facts behind drilling, gasoline prices and America’s energy future.

Geological and economic realities make clear that drilling for oil cannot make the U.S. energy independent or reduce gasoline prices. Drilling is an expensive and dangerous red herring, especially because far better options exist. A new Earth Policy Institute analysis finds that powering a plug-in hybrid electric vehicle fleet with clean, renewable energy sources like wind and solar would have a seismic price impact: instead of paying $4 per gallon at the gasoline pump, we could plug in at home for the wind-generated-electricity equivalent of less than $1 per gallon. The U.S. Department of Energy reports that the wind resources in just three states--North Dakota, Kansas, and Texas--are sufficient to meet national electricity needs.

We hope you find the information below useful. It is also posted on-line with references at www.earthpolicy.org/Bulletins/2008/Bulletin3.htm.


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DRILLING FOR OIL IS NOT THE ANSWER

http://www.earthpolicy.org/Bulletins/2008/Bulletin3.htm

Jonathan G. Dorn

Background

• The United States consumes nearly 21 million barrels of petroleum per day (7.5 billion barrels per year), one fourth the world total.
• Of the crude oil consumed in the U.S., 66 percent is imported.
• The U.S. is on pace to spend over $500 billion on petroleum imports in 2008.
• U.S. oil production currently occurs onshore in the lower 48 states (2.9 million barrels per day (mbd)), offshore (1.4 mbd, primarily in the Gulf of Mexico), and in Alaska (0.7 mbd).

More Drilling Cannot Make the U.S. Energy Independent

• The U.S. Geological Survey estimates that 10.4 billion barrels of oil are technically recoverable in the Arctic National Wildlife Refuge (ANWR)--less than one and a half years of consumption.
• The U.S. Department of Energy (DOE) estimates that of the 59 billion barrels of technically recoverable oil in the Outer Continental Shelf (OCS) of the lower 48 states, only 18 billion are off limits under the federal moratorium.
• DOE projects that lifting the OCS moratorium would not increase production before 2017 and that by 2030 production would only amount to 0.2 million barrels per day--less than 1 percent of current consumption.
• Total U.S. proved oil reserves are estimated at 21 billion barrels--less than a 3 year supply at the current rate of consumption.
• Since peaking in 1970, U.S. crude oil production has declined 47 percent. World production could be peaking now.

More Drilling Will Not Reduce Oil or Gasoline Prices

• DOE projects that opening ANWR would lower gasoline prices at the pump by a mere 2 cents per gallon.
• Lifting the moratoria on drilling in ANWR and the OCS would reduce the price of a gallon of gasoline by at most 6 cents--and this would not be seen for at least another decade.
• Oil is traded as a global commodity and its price is set on the world market. The Organization of Petroleum Exporting Countries (OPEC) could simply reduce exports to negate even the nominal potential price reduction, a fact acknowledged by DOE.

We Can Move Beyond Oil

• The increase in U.S. automobile fuel economy standards to 35 miles per gallon of gasoline mandated by the Energy Independence and Security Act of 2007 is projected to save more than 1.1 million barrels of oil per day in 2020--roughly half of current U.S. imports from the Persian Gulf. Technology exists to raise standards higher faster.
• Electrifying the U.S. transportation system and restructuring urban transport could reduce petroleum consumption by over 50 percent, nearly eliminating the need for imports.
• Wind-generated electricity could power plug-in hybrid cars, such as GM’s prototype Chevy Volt, at the equivalent of less than $1 per gallon of gasoline.

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For information on Earth Policy Institute’s plan to restructure transportation systems and move away from oil, see Plan B 3.0: Mobilizing to Save Civilization, available at www.earthpolicy.org for free downloading.