Offshore Drilling Will Have No Noticeable Impact on Oil Prices

The Post reported on President Obama's lifting of the moratorium on offshore drilling and the response to the decision. While the article noted the reactions of politicians and presented polling data, it neglected to mention the fact that the oil that can potentially be obtained from these areas will have no noticeable impact on oil prices. According to the Energy Information Agency, it will take two decades for the areas to reach peak production of 100,000 barrels a day, or 0.1 percent of world oil supply. In other words, the decision to open up drilling in these areas was entirely political. It had nothing to do with meeting the country's energy needs. This information probably would have been more useful to readers than accounts of the political reaction to President Obama's decision. The NYT did a bit better in providing some context, but not much. It told readers that offshore sites may provide enough oil to supply the country for 3 years. It later noted that the Gulf Coast area that is being opened for drilling may have as much as 3.5 billion barrels of recoverable oil. This is less than 6 months worth of demand.

--Dean Baker