The domestic oil production myth unwinds on a few key points that proponents of domestic resources often overlook. First is the amount of time between when a company receives its permit to begin production and the first drop of oil that is recovered.
According to the Energy Information Administration (EIA), it takes an average of about five years for an oil company that was just awarded a lease of reserve land to recover the first drop of oil. Why not ignore alternative sources for five more years and hope for more oil? To call this procrastination would be an understatement.
Second, America generally doesn’t come close in total reserves compared to the rest of the world. According to EIA, in 2009, the average amount of proven oil reserves within the U.S. was 21.7 billion barrels of oil. By comparison, Venezuela had 99.3 billion, Canada 178 billion, Europe 13.6 billion, Russia 60 billion, Africa 117 billion and the Middle East, collectively, is sitting on 745 billion.
On optimistic speculation by EIA’s analysis of “technically recoverable” amounts surveyed by geologists, it has been estimated that ANWR could produce about 876,000 barrels of oil each day. As of 2009, the U.S. produces 9 million barrels of oil a day, and consumes more than 18 million. With a world market that consumes a total of about 86 million barrels a day, according to data from 2007, ANWR’s recoverable amount accounts to more than 4 percent of our current domestic production, and barely 1 percent of world production. Proponents for domestic production seem to skip over how negligible a contribution that tapping the ANWR oil reserves would make.
Finally, and most important of all the reasons to reduce foreign oil dependency the public would support, domestic production suggests that gas prices would be lowered. Unfortunately, again, it wouldn’t fix this problem either.
In a 2009 report, EIA projected domestic crude oil production through 2030 based on historical and current data for production and reserve availability. The EIA projected that crude oil production in a conservative projection would be 6.83 million barrels per day by 2030, and gas prices would average $3.91 per gallon.
Now, for the optimistic case – examining the great potential of domestic oil production by furthering utilization of the OCS – the EIA estimates that by 2030, 7.37 million barrels of oil would be produced per day, bringing the price of gas to $3.88 per gallon.
Despite the major downsides, domestic production does one thing: create jobs. While environmental organizations dispute statistics handed out by petroleum-related coalitions, it makes sense that more rigs and transportation would create more jobs. On the other hand, the industry also has the power to destroy thousands of jobs, as seen in the BP oil spill.
Overall, the benefits of domestic production are negligible. “Drill, baby, drill” is a myth. The concept is unrealistic, unprofitable and misleading.
Armand Resto is a junior majoring in environmental science at Oregon State University.