Gas prices in Arizona are hovering around $3.50 per gallon, up 75 cents from this time last year. It’s only March, but we are already seeing the spike in gas prices that we typically associate with the summer months.
Energy prices have a significant effect on our quality of life. After all, many of us have to use our cars to drive to work, drop the kids off at school, or run errands. There are indirect effects as well. High gas prices raise the cost of food since producers and distributors have to bear the increased costs of transporting goods across the country.
In order to prevent energy costs from lowering our standard of living, we need a national policy in support of affordable energy.
New domestic supply, for instance, can have a very positive impact on gasoline prices, and developing that supply would create many jobs. Although we import 63 percent of our oil, America has abundant supplies of both oil and natural gas here at home.
New energy development projects, however, have not been able to move forward. After the Deepwater Horizon oil spill in the Gulf in 2010,
the Obama administration imposed a new moratorium that all but halted deep-water exploration and development in the area.
Despite federal court orders, it was not until the end of February 2011 that the Interior Department finally issued the first permit to allow the resumption of energy exploration and development. Unfortunately, the permit was for just a single project. The delays have caused six deepwater rigs to depart the Gulf for other countries, taking valuable jobs, revenue, and income with them.
Just as we should reopen the deep waters of the Gulf of Mexico to prudent exploration and development, so too should we lift the moratorium preventing job-creating development of resource-rich areas such as Alaska’s Outer Continental Shelf, as well as oil shale in various western states.
The federal government estimates that Alaska’s Outer Continental Shelf holds 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Another resource-rich area in Alaska is ANWR. Despite being one of the largest resources of oil and gas in the United States, Alaska’s ANWR is off limits for energy development. Tapping oil and gas supplies in ANWR would require opening just 2,000 acres of the 19-million-acre Arctic Plain to such development.
Using directional drilling with a small environmental footprint, at least 1 million barrels of oil a day could be obtained from just this one area for the next 20 years. The U.S. Geological Survey has estimated that the area could have up to 16 billion barrels of recoverable oil, an amount that is equivalent to 30 years of Saudi oil imports.
Finally, in recent days, some of my colleagues have called for tapping into the Strategic Petroleum Reserve (SPR) to bring down gas prices. But the SPR is a national security tool to guard against an economically threatening disruption in oil supplies. It was never intended to be used to temporarily lower gas prices.
Since its creation in 1995, a presidentially directed release from SPR has occurred only twice — in 1995, at the beginning of Operation Desert Storm, and in 2005, after the devastation Hurricane Katrina caused in the Gulf of Mexico. The current SPR inventory is 720 million barrels, which equates to about 34 days of oil at current daily U.S. consumption. Tapping the reserve would be nothing more than a short-term political solution to a problem largely of the administration’s own making — its continued refusal to allow access to America’s plentiful resources.
The benefits of increasing domestic energy production are unquestionable, especially at a time when gas prices are soaring and good jobs are needed by many Americans.