Jackson Free Press

Republican presidential nominee John McCain has a shiny new vice presidential candidate but an old idea for dealing with the nation's gas crisis.

"We've got to drill now, and we've got to drill here," McCain told the congregation of Saddleback Church, in Lake Forest, Calif., Aug. 16. "... We've got to become independent of foreign oil. ... My friends, you know that this is a national security issue. We're sending $700 billion a year to countries that don't like us very much, that some of that money is ending up in the hands of terrorist organizations. We cannot allow this greatest transfer of wealth in our history when our national security will continue to be threatened."

Both McCain and outgoing president George W. Bush wholeheartedly support opening new offshore areas currently closed to oil and gas drilling by striking down a federal drilling moratorium that's been in place since 1981.

McCain's attitude is largely reflected in the Republican Party's 2008 platform, although the two part ways on drilling the largely restricted Arctic National Wildlife Refuge. Rigs already dot the refuge in places, but the industry has been calling for development in new spots that have no roads, claiming ANWR might contain millions of new untapped barrels of oil.

Republican delegates drafting their party platform late last month were split on the issue of adding new ANWR drilling, with half seeking new wells and half preferring loyalty to the party's Republican nominee.

Alaskan delegate David Boyle, knowing that oil sales comprise 85 percent of his state's income, wanted to target ANWR with everything oil companies have, but Boyle's amendment died with the party's lingering desire to keep close to McCain. Another Alaskan delegate, Kim Skipper, proposed a platform amendment opposing any efforts to "permanently block access to the coastal plain of the Arctic National Wildlife Refuge."

On a side note: The party did acknowledge the existence of global warming, and attributed it to human activity, although it didn't go so far as to call it bad—or do battle with it.

"The same human activity that has brought freedom and opportunity to billions has also increased the amount of carbon in the atmosphere. Increased atmospheric carbon has a warming effect on the earth," the platform states.

The platform carefully avoids the issue of capping carbon emissions—another issue McCain has supported in the past.

Then Came Palin
Though the 72-year-old McCain still opposed opening ANWR—at least he did on Aug. 29—he picked a vice presidential running mate who doesn't seem to believe human activity is responsible for global warming, and who fully endorses plowing up the refuge. Alaska Gov. Sarah Palin makes no bones about her desire to drill the area.

"Having a clean record on environmental regulation is critical to getting ANWR open and maintaining our fisheries, mining, timber, and tourism industries," she wrote in a November 2006 campaign statement.

Alaskan Greenpeace campaigner Melanie Duchin lamented that few people are more determined to destroy Alaska's pristine outback than Alaskans, particularly its governor.

"What worries me the most is her record on global warming. Alaska's on the frontlines in global warming. It's warming here faster than in the rest of the country. We're looking out the window and seeing the ice melt. Meanwhile Gov. Palin ... approved $2 million for a conference in Alaska to dispute the science supporting global warming, filled with junk science paid for by Exxon-Mobil," Duchin told the Jackson Free Press. "She's got to get her head out of the sand, and the only reason it's in the sand is because she knows the only way to deal with global warming is to curtail pollution by cutting back on the extraction and use of fossil fuels."

Climbing gas prices are fueling McCain's argument all over the nation, even in Mississippi, where the price of gas is lower than in many other parts of the country. The price of a gallon of gasoline in Jackson rose an average of 10 cents last week, two days after Gov. Haley Barbour declared a state of emergency in anticipation of Hurricane Gustav. The hurricane was already climbing over a devastated Cuba on its way to a projected date with the U.S. Gulf Coast, and gas stations were quickly raising prices in response.

The storm spike doesn't compare to the long-term increase in fuel prices that have been plaguing the U.S. for the last eight years, however. Auto industry monitor AAA's late August estimate of the national price of a gallon of regular gas is $3.66, down from an average of $3.94 a month ago. Last year, however, that price was $2.76. It's a harsh slap to drivers who recall 97-cent per-gallon gas in the early 1990s—and a particularly nasty reckoning for long-distance commuters streaming in from Jackson's suburbs and exurbs.

The pain of the pump is already having an impact on auto sales, with general sales slumping 8 percent in June. Sales of large cars and trucks toppled even further at 23 percent, according to information from J.D. Power & Associates. A car investment is a decision that will likely stick with you for at least five years, so the drop suggests that people are concluding that $4 gas is here to stay.

The gas issue is having an impact on more than just buyers' preferences in street travel. Outraged motorists are calling for quick fixes in a very timely election year.

A July CNN/Opinion Research Corp poll found that 69 percent of Americans favor expanding offshore drilling into previously unopened areas and 30 percent oppose it.

Dems Onboard
Republicans aren't the only ones jumping onboard the moratorium lift. Democratic Presidential candidate Barack Obama initially argued against opening the closed sea floor, but later retooled his opposition, saying he would consider some new drilling in off-limit areas, providing they are followed up with genuine developments in renewable energy technology.

"My interest is in making sure we've got the kind of comprehensive energy policy that can bring down gas prices," Obama told The Palm Beach Post in July. "If, in order to get that passed, we have to compromise in terms of a careful, well thought-out drilling strategy that was carefully circumscribed to avoid significant environmental damage—I don't want to be so rigid that we can't get something done."

At his Aug. 28 Democratic nomination acceptance speech, the Democratic nominee emphasized that new drilling "is a stop-gap measure, not a long-term solution," but declared no policy to outright oppose drilling.

Sen. Lindsey Graham, R-S.C., famously stated that he stood against drilling off the East Coast: "The worst thing we can do as a nation is take the easy way out," Graham told the Sun News, in 2005. "... If you start opening up offshore drilling, then you are buying time, and you are not addressing the fundamental problem with fossil fuels."

Voters generally favor easy answers, though, and their influence may have pushed Graham into his more recent quote in the South Carolina paper The Post and Courier: "[T]he coast of South Carolina is a cash cow. Out there in American-controlled waters is a lot of oil and gas. So let's go and get it," he said in August.

The crowning issue in any cow business, however, is separating the milk from the "moo," and according to a U.S. Energy Information Administration report, offshore drilling is disproportionately resplendent with moo.

The Truth
The 2007 EIA report "Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf," placed very low hopes on the results of expanding drilling.

The report took a frank look at America's oil production under current offshore drilling restrictions (the reference case), vs. oil production after the removal of such restrictions (the access case). The difference appears paltry.

"The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030," the report stated. "Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day."

Furthermore, EIA estimated that oil production via outer continental shelf drilling in the lower 48 states in 2030 would only increase 7 percent to 2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case.

The report also tackled the limited gains the country would stand to make in natural gas production, were the ban lifted.

"Lower 48 natural gas production is not projected to increase substantially by 2030 as a result of increased access to the OCS," the report's authors wrote, explaining that lower 48 natural gas production from 2012 through 2030 is projected to be only 1.8 percent higher in the lifted ban case over the intact ban case.

"Production levels in the OCS access case," it continued, "are projected at 19.0 trillion cubic feet in 2030, a 3-percent increase over the reference case projection of 18.4 trillion cubic feet. However, natural gas production from the lower 48 offshore in 2030 is projected to be 18 percent (590 billion cubic feet) higher in the OCS access case."

The report explained that despite the increase in production from previously restricted areas after 2012, EIA expects total natural gas production from the lower 48 OCS to decline after 2020.

"Although a significant volume of undiscovered, technically recoverable oil and natural gas resources is added in the OCS access case, conversion of those resources to production would require both time and money. In addition, the average field size in the Pacific and Atlantic regions tends to be smaller than the average in the Gulf of Mexico, implying that a significant portion of the additional resource would not be economically attractive to develop at the reference case prices," the report concluded.

The American public appears equally pessimistic about the actual results of new drilling—though seemingly still not enough to abandon the idea.

The same July CNN/Opinion Research Corp poll showing 69 percent of Americans favoring expanding offshore drilling also revealed that only 51 percent of those polled believed the drilling would actually lower gas prices next year. Forty-nine percent said they were not convinced it would make a difference.

Faced with the federal data, even McCain admitted to the unlikelihood of the move dropping prices by any discernible measure over the next presidential term, but nevertheless beats the drum for new drilling.

The Drill in Mississippi
Unlike offshore areas along the East and West Coasts, the Gulf Coast is already largely open to mineral exploration, and drill rigs currently dominate the horizon in many areas, especially south of Louisiana and Alabama.

Capt. Louis Skrmetta, who owns Ship Island Excursions, in Gulfport, points out that the rigs have upended the scenery in many areas near his route.

"Dauphin Island is just a damn mess, if you ask me," Skrmetta said. "They sold their shores to Exxon, and these rigs have popped up like rusty-looking mushrooms."

Skrmetta added that the rigs are connected by miles of pipe reaching to an onshore connection point, and fears what the next well-placed hurricane could do to the area.

"That's a lot of goop that could go into my ocean if it breaks, and business has been bad enough since Hurricane Katrina for me to take another hit on the scenery," he said.

Despite Gulf waters being a virtual free-for-all for development, some areas remain pristine—though the oil companies would like a chance to tap it.

Pro- and anti-drilling forces converged upon one another in Biloxi in 2005, as the Mississippi Development Authority contemplated drilling a restricted offshore national park, the Mississippi Barrier Islands.

Sen. Thad Cochran, a Republican, inserted language in an emergency military spending and tsunami relief bill ordering the Department of Interior to allow exploration in the park and directional drilling beneath it. It also gave energy companies like Exxon-Mobil the ability to seismically explore for oil and gas inside the park, which contains the state's largest population of bottlenose dolphins. Research shows sea mammals like dolphins, who use sonar for navigation and hunting, suffer injury from resultant shock waves.

Cochran's office wrote at the time that the language "removes the cloud of confusion over who owns the mineral rights to the Mississippi barrier islands," and assured it would allow "the National Park Service to continue its good work in preserving the natural and historic features of the Gulf Island National Seashore."

The inserted language followed a state law, approved by the Mississippi Legislature in 2004, allowing the state to shift the responsibility for regulating offshore exploration and seismic testing from the more regulated Mississippi Department of Environmental Quality to the anything-but-regulated Mississippi Development Authority—which is completely under the control of Republican Gov. Haley Barbour.

The timeliness of Cochran's insertion prompted many members of the state's environmental community to suspect Barbour had pushed Cochran into making the insertion. Barbour never responded to the accusation.

The powerful casino industry joined environmentalists at the time, arguing that oil wells within sight of shore would dampen the Coast's thriving tourism industry.

In the months before the arrival of Hurricane Katrina, casino advocates predicted more than $1 billion in tourism development underway and promised another $7 billion within the following three to five years. They didn't want to see any of that put to risk.

Then-MDA spokesman Scott Hamilton told reporters that the MDA was sensitive to the public outcry and the needs of the casino industry, and was putting the brakes on the process.

Two months later it didn't matter anymore. Hurricane Katrina hit the Coast, upending the chessboard entirely.

Mississippi Sierra Club state director Louie Miller, who joined casinos and the tourism industry in battling the island drilling, said the laws have not changed since the advent of Katrina. State law still allows the MDA to oversee oil and natural gas exploration off the coast, and Cochran's clandestine insertion has sealed the Department of Interior's decision allowing exploration in the public trust of the Barrier Islands. Miller is confident MDA may yet renew the endeavor.

"It's only a matter of time," Miller said. "The pieces are set to move, but they'll have to go through public hearings, and we'll sue him and tie their asses up again. Cochran got that amendment through that allows them to drill under the island, and I'm sure the fight will rear up again."

Hamilton has since left MDA. MDA Marketing and Communications Specialist Melissa Medley said she knows of no project brewing within MDA to further drill the coast at this time.

Why the Ban?
The U.S. is a minority in the Caribbean in terms of placing some coastal areas off limits. Cuba, for instance, has no such hesitation when it comes to putting down ocean taps. But the U.S. had a particularly nasty experience after mixing oil and water back in 1969.

The U.S. Geological Survey had given Union Oil's A Platform permission to go cheap and use platform parts below California standards. The rig sat about six miles off the coast of Summerland, Calif., beyond the state's three-mile coastal zone, and therefore did not have to comply with state regulations. That distance did nothing to insulate the state from what was coming.

Pressure built up while workers were replacing a drill bit and broke a well pipe in five different spots. Oil poured out of the earth like a severed artery for more than 10 days, spilling 200,000 gallons of gooey oil for 800 square miles. Even after they managed to cap the mess, residual oil and gas continued to escape from the hole for months.

Tar gummed sandy beaches as far as Santa Cruz and Santa Rosa, turning the coasts of California into a mausoleum of dead seals and dolphins.

Seabirds and shorebird populations took a dive. Almost 4,000 birds died due to the oil. The grebe population, once numbering in the thousands, dropped to only a few hundred.

The devastation ignited a passionate call for more regulation and environmentalism. The holiday known as Earth Day was born the following year. Federal and state governments passed stronger laws regulating offshore drilling, and the reputation of offshore oil rigs was stained for four decades.

Fred L. Hartley, president of Union Oil Company, played down the disaster, saying he was "amazed at the publicity over the loss of a few birds."

Oil companies and their advocates say the technology has improved since 1969, that rigs are more safe and secure than they once were.

Even McCain tried to use the two most devastating hurricanes of 2005, Katrina and Rita, as examples for how strong the rigs are back in July.

"I would remind you that off the coast of Louisiana and Texas, they both had hurricanes that did not cause any real difficulties. So the environmental side of it, I think is pretty well OK," he said at a recent campaign stop this year.

At another stop he said, "[O]ff the coast of Louisiana and Texas there are oil rigs, as we well know, and those rigs have survived very successfully the impacts of hurricanes, Hurricane Katrina as far as Louisiana is concerned."

But a May 8, 2006, report to the Senate Appropriations Committee from the U.S. Coast Guard claims plenty of oil hit the Gulf as a result of the two storms, even if they did not come from one massive source.

"It is estimated that over 9 million gallons of oil was (sic) released, and this total does not include oil released from the 5000 minor spills," the report stated.

The U.S. Minerals Management Service also claimed that the two storms completely destroyed a total of 113 offshore oil platforms. One rig even drifted 66 nautical miles before running aground on a beach in Alabama. That beach was Dauphin Island.

Birmingham News columnist David McGrath spoke of the intrepid Ocean Warwick Rig in a July 2008 column, saying that "various of its parts and toxic chemicals remained just off our beach," long after it was cleaned up.

Professor Steven Lohrenz, chairman of the Department of Marine Science at the University of Southern Mississippi, acknowledged that fish tend to congregate around the latticework of steel pipes and cables that underlie offshore rigs, despite the rigs leaking a small amount of poisonous materials into the ocean, including benzene and other chemicals.

"For normal operations, the rigs don't have a negative impact on living resources, but the key to that is the word 'normal operations,'" Lohrenz said. "There are occasional malfunctions that result in spills, but then you have the weather issue, especially these days, with the increase of the intensity of storms."

"You can't clean up an oil spill. Once it gets into the marine environment, it persists for decades," Duchin said, referring to the 1989 Exxon-Valdez tanker spill. "Many species of wildlife are still in decline up here in Alaska. The fishing industry is still suffering, and the company paid a mere pittance for it all by keeping the suit in court forever. If oil does decay, it takes a really long time and it does a lot of damage along the way."

"The thing that's so crazy about this push for more drilling," she added, "is that there's this false choice that people are being given. We're being told that they need to drill for oil, or gas prices will continue to go up, despite studies showing gas prices will not change significantly. It's all this oil drilling that's got us in this in the first place."

The Big Rush
Oil companies seem to know that pulling oil from the deep ocean is no easy feat, and are taking their time collecting it.

Miller said the companies currently use only a fraction of leases already available to them from the U.S. government, even as they scream for new areas to be opened. "The bottom line is we got 70 million acres out there that could be leased and they're not drilling it," he said.

Last month, the federal government held a lease sale for drilling rights to 1.8 million acres off the western Gulf of Mexico. But 90 percent of the new tracts made available never saw a bidder. In fact, the highest bidder in the lease sale was not even an American company, but Norwegian company Statoil.

Sierra Club Executive Director Carl Pope pounced on the ignored bid as testament to what he considered oil companies' overblown demands for new territory.

"The oil industry already has access to millions of acres of America's land and coasts, but that's not enough for them. They say they need our last protected places—pristine shorelines on the East and West coast and the Arctic National Wildlife Refuge—yet when given the opportunity today, 90 percent of the area available to them received no bids," Pope said in statement, adding that the business transaction also proved Americans wouldn't necessarily benefit from the sell-off of its pristine areas.

"This (sale) is a stark reminder that there's no guarantee that the oil from today's sale will directly benefit Americans," Pope said. "If we allow Big Oil to have its way, foreign oil companies may take possession of more of America's special places."

House Speaker Nancy Pelosi shares the Sierra Club's sentiment. She rejected holding a vote on drilling before the House adjourned for its five-week recess Aug. 1, vowing the issue would only be considered as part of a broader package that also includes new development in solar and wind technology.

"This comprehensive Democratic approach will ensure energy independence, which is essential to our national security, will create millions of good paying jobs here at home in a new green economy and will take major steps forward in addressing the global climate crisis," she said in the Democratic Party's weekly radio address. Obama echoed his desire for a similar package during his acceptance speech.

Pelosi's proposal would also remove taxpayer subsidies to oil companies, and she demands the companies pay back billions of dollars they owe in royalties to invest in clean energy resources, which she claims the companies forfeited.

House Minority Leader John Boehner, R-Ohio, criticized Pelosi's move, calling the Democrats "ineffective" during the nation's "historic rise in gas prices."

"[T]heir refusal to address this crisis has made matters even worse for American families, small businesses, seniors and schools," Boehner said.

Miller said the oil companies had no desire to wean the nation off foreign oil.

"Pelosi's coming out with this bill that's marked up for a floor vote on the 12th of September, and she's calling their bluff. The truth is they don't want to spend the money on new wells because they don't want to affect supply and demand. Like Entergy, they're putting all their money into stock buybacks so they can enrich themselves rather than spending their money on what it should be," Miller said. "This industry has proven that they're not responsible, and it's going to be up to Congress to regulate them again. If they don't do that then we're going to stay right where we are—right where the oil companies want us to be.

Drilling For New Oil: Myth vs. Reality

Myth: Drilling oil from ocean floor, currently restricted by a federal moratorium, will allay the country's rising gas prices.
Reality: The federal government estimates untapped areas to contain 18 billion barrels of crude oil, with total domestic crude oil production to be boosted a paltry 1.6 percent between 2012 and 2030. After 2030, when the rigs really dig their feet in and start drilling, the U.S. predicts the new output to boost domestic crude oil production by only 7 percent.

Myth: Natural gas is more prevalent. Drilling for natural gas in restricted areas will have a significant impact on U.S. natural gas production.
Reality: The U.S. government estimates that tapping restricted areas will increase the nation's total natural gas production by only 1.8 percent between 2012 and 2030, with a 3-percent increase in the year 2030. The government estimates that the new wells will generate 18 percent more after the year 2030, when the wells really start pumping. However, despite the increase in production from previously restricted areas after 2012, the U.S. predicts the total natural gas production from the lower 48 states will already be in decline after the year 2020.

Myth: Oil is right there waiting for us, like picking cherries.
Reality: The Department of Energy estimates that even though the restricted areas contain significant oil, getting to reserves in deeper, more treacherous areas is more expensive, time-consuming and dangerous. Also, the average field size in the restricted areas along the Pacific and Atlantic coasts is generally smaller than those already open in the Gulf of Mexico. The government estimates that the economic incentive for companies to go chasing after it, therefore, is small.

Previous Comments

ID

135135

Comment

Bump. This is so much more important of a read than the horse-race coverage. Don't miss it.

Author

DonnaLadd

Date

2008-09-04T10:02:53-06:00

ID

135242

Comment

During WJTV's report on Palin's speech, they got a nice close-up of this week's JFP. :-)

Author

LatashaWillis

Date

2008-09-04T16:05:00-06:00

ID

135251

Comment

Groovy. Hat-tip to WJTV. ;-) Now, I hope we see more of our state media outlets tell the truth about drilling, and what it will and will not do. Or when.

Author

DonnaLadd

Date

2008-09-04T17:46:00-06:00

ID

135341

Comment

Kudos to you, Adam, for a timely, informative piece. Kudos to you, Donna and Todd, for this forum for such a piece.

Author

J.T.

Date

2008-09-05T12:25:23-06:00

ID

135345

Comment

Thanks, J.T. We need more issue stories during this campaign, instead of all the horse-race crap. The Bush-McCain-Palin crowds benefit if they keep us focused on scandal. We have more issue stories on the way. Sure wish the rest of the state media would do more. It's not like it's hard to figure out that drilling would not, and could not happen easily. Thus, when McCain and Palin say it's an immediate answer, they are lying. Or extremely uneducated.

Author

DonnaLadd

Date

2008-09-05T12:31:04-06:00

ID

135353

Comment

Right on, Donna.

Author

J.T.

Date

2008-09-05T13:07:45-06:00

ID

135357

Comment

I support more domestic drilling, but it's not the answer to our current woes. It is a small, small piece of the puzzle among many in a badly needed comprehensive energy plan.

Author

Jeff Lucas

Date

2008-09-05T13:37:02-06:00

ID

135359

Comment

I agree, Jeff. More drilling is a Band-Aid. Renewable energy is a long-term solution. If T. Boone Pickens could wake up and smell the espresso, so can everyone else.

Author

LatashaWillis

Date

2008-09-05T13:46:02-06:00

ID

135388

Comment

Right on Jeff, it's actually an area where the Dem's are ahead of the curve. The Clinton-Obama-Biden group recognize the importance of renewables and my guys don't yet. First generation corn ethanol and methyl ester biodiesel are the "bag-phones" of the technological ladder. The second and third generation biofuels being developed now for the 2011-12 timeframe can make a huge dent in foriegn oil demand by America.

Author

Hayes

Date

2008-09-05T16:42:14-06:00

ID

135412

Comment

Right on Jeff, it's actually an area where the Dem's are ahead of the curve. Meh, barely. To be honest, both candidates really piss me off on the energy front. Obama has a better overall plan in terms of alternatives, but his lack of support for nuclear power and his pandering half-hearted BS talk about it irritates me. First generation corn ethanol and methyl ester biodiesel are the "bag-phones" of the technological ladder. Don't get me started on ethanol. We really need to move beyond that short-sighted idea.

Author

Jeff Lucas

Date

2008-09-05T20:11:23-06:00

ID

135472

Comment

Jeff, from what I've read, nuclear power is neither sustainable (limited uranium), renewable (like oil, once you use uranium, that's it) or green (because nuclear waste is dangerous for decades). It's also hideously expensive to build plants and inherently dangerous. I think we can do better.

Author

Ronni_Mott

Date

2008-09-08T14:07:34-06:00

ID

135569

Comment

Supporters of nuclear power should be willing to store nuclear waste of their own land, because you tell me whose back yard you are going to put it in.

Author

gwilly

Date

2008-09-10T12:23:47-06:00