I’m constantly frustrated with the knee-jerk “drill here, drill now” proposal for dealing with high gas prices. I know it seems pretty intuitive: Drill more oil, create more supply, prices go down. Unfortunately, the nuances of the international crude market don’t allow for such simple economics.
First off, the United States has only 2 percent of the world’s oil reserves. Even if we were to drill at full capacity in every known reserve on land and offshore, the impact on international markets would still be minimal.
Secondly, the fact is we’re producing more oil domestically right now than at any point since Bush’s first year in office. Despite several Sarah Palin-led attacks on President Obama’s “unwillingness” to drill offshore, in fact, domestic oil production has risen consistently since Obama took office. Because of events outside of our borders, however, prices of crude have spiked, giving us our nearly $4-per-gallon gasoline. (Which, it’s worth keeping in mind, is actually cheap in the grand, global scheme of things.)
A couple of weeks back, Representative Ed Markey (D-MA) did a pretty good job of isolating the ultimate problem with the “drill, baby, brill” mentality: It’s simply not sustainable, and thus it eventually leaves us even more dependent on foreign oil.
Markey’s staff made a chart based on the “burn rate” metric, which looks at the percent of a nation’s proven reserves being produced annually. In other words, it’s the annual rate of oil production compared to the total amount of oil we have in all known reserves.
As you can see, the United States has far and away the highest burn rate in the world, a rather disconcerting 15-plus percent, or a full 50 percent higher than Norway and Mexico, the second and third nations, respectively.
In a hearing in which Markey presented this chart, he laid out a few of the plain, inconvenient numbers that are tied together in this burn rate. The United States:
- Has 2 percent of the world’s oil reserves
- Produces 11 percent of world’s oil
- Consumes 25 percent of the world’s oil
No matter how much we produce domestically, it’s simply impossible to produce as much oil as we use, and any big gains in domestic productivity are, by the plain, hard facts, going to be awfully short lived.
“We’re burning through our savings … faster than any other nation in the world,” said Markey.
After presenting the chart, Markey asked some expert witnesses about the position in which such a high burn rate puts our country. None of the witnesses claimed that it is sustainble in the long run, and all agreed that the OPEC nations benefit the most from our staggering burn rate.
You hear the “drill, baby, drill” crowd crow on quite a bit about cutting ties with Petro-tyrants and reducing our dependence on foreign oil. Here’s the thing: the only possible way to reduce our dependence on foreign oil is to reduce our dependence on oil altogether. There is simply no difference.
Here’s video of the Markey hearing:
[youtube]https://www.youtube.com/watch?v=WQpnHlloK_U
