By Nicolas Loris and Calvin Frauenfelder ~
President Obama has made a couple of about-faces when it comes to offshore drilling in the Atlantic.
After coming under pressure from environmental activists, the Obama administration has denied access to energy resources and job creation by prohibiting offshore drilling in the Atlantic.
In 2010, the Obama administration lifted the ban on drilling on the East Coast only to reverse the decision after the Gulf oil spill. Then, in 2015, the administration released draft offshore drilling plans that would have opened up offshore drilling from Delaware down to Georgia.
Only 10 months away from the implementation of the 2017-2022 Outer Continental Shelf (OCS) drilling program, the Department of the Interior has reversed its stance and now plans to disallow any leases for offshore drilling on the Atlantic coast.
While President Barack Obama has often claimed he is supportive of an “All of the Above” strategy when it comes to developing America’s energy resources, the facts point otherwise. Just as he did with the coal industry, the president is restricting access to affordable reliable energy. In the statement released by the Department of Interior, the agency cites “current market dynamics” as one reason it is not pursuing Atlantic coast drilling.
While Americans are currently enjoying cheap prices at the pump, the Department of Interior’s take is a very shortsighted one.
The average time from discovery to production of an offshore rig is eight years. In fact, opponents of energy production often argue that when prices are high, it takes too long to get the oil to market, and therefore the federal government shouldn’t open up these areas.
It is impossible to predict what the oil market will look like that far in advance, and using today’s prices for long-term planning could be a costly mistake. The private sector is in a much better position to make these decisions and plan for the future. The economic viability of a project is no reason for the government to close off opportunities for abundant energy resources.
Congress and the next administration should open all federal waters and federal lands that are not part of the national park system or congressionally designated areas to exploration and production for all of America’s natural resources. Congress should require the Department of Interior to conduct lease sales if a commercial interest exists—even for offshore oil or offshore wind, for that matter.
America is a global leader in oil and gas production, but government barriers still exist. Creating the right framework by opening markets will benefit Americans in the long run and create thousands of American jobs in the process. These jobs are not just limited to the oil and gas sector. Low and stable oil prices reverberate through the economy by reducing production costs across multiple market sectors. This reduction in capital cost can allow for higher wages and new jobs. Cumulatively, opening access to America’s federal lands and waters will generate hundreds of thousands of jobs and increase gross domestic product by hundreds of billions of dollars.
If the Obama administration were serious about an “All of the Above” strategy and job creation were a top priority, it would get behind Atlantic drilling and open access to all resource production.
These decisions should be made by individuals in the private sector, not bureaucrats in Washington. Instead, Washington seems insistent on picking what energy sectors survive and which Americans will have jobs.