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CEO Note: The Real Economics of Offshore Drilling
Andy Sharpless is the CEO of Oceana.
If you watched this week’s State of the Union address, you may have heard President Obama announce that he was opening 75 percent of our “potential offshore oil and gas resources.”
The good news is that this isn’t news; it’s simply a reiteration of the administration’s current five-year drilling plan that fully protects the Atlantic and Pacific coasts, as well as much of the U.S. Arctic. The bad news, however, is that plan expands offshore drilling to include much more of the Gulf of Mexico than ever before – and worse yet, some of the Arctic. It’s as if the massive 2010 spill never happened.
In other good news, the President expressed his wish to reduce subsidies for oil companies. The oil companies receive about $10 billion a year in tax breaks, and the Obama administration has proposed cutting $4 billion.
I applaud the President’s commitment to reducing subsidies for the big oil companies, although I wish he would go further and eliminate them completely.
Unfortunately, the State of the Union address, as well as this week’s Republican primary debate in Florida, reiterated that our political leaders still fail to grasp a basic economic fact: that increasing our domestic supply of oil will not lower our prices at the gas pump.
Oil is a global commodity, and prices are set on a world market. Multinational companies who drill for oil – like Shell, B.P. and Exxon – will sell to the highest bidder. That may be the U.S. It may just as well be India or China.
As we learned during the 2010 Gulf of Mexico oil disaster, there’s more at stake. National Journal writer Beth Reinhard asked the right question at Monday’s Republican debate when she noted drilling in Florida will create at most 5,000 jobs, while an oil spill threatens the 1 million jobs that depend upon tourism, which contributes $40 billion each year to Florida’s economy.
That’s a high price to pay to help oil companies continue to make record profits. And yet Rick Santorum, on the receiving end of her question, reiterated his support for more domestic drilling.
Unfortunately, oil companies are powerful players in the election season. They dole out enormous contributions to the candidates, which may explain why we see misinformation on both sides of the political aisle.
Here at Oceana, we’ll stick to the facts. More offshore drilling won’t lower your price at the pump, and we’ll continue to fight to protect our beaches and seafood from dirty and dangerous drilling.
What the Oil Spill Commission Missed
Andy Sharpless is the CEO of Oceana.
Last week, the federal government released a report from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. In some ways, the Commission got it exactly right. After extensive study, the Commission concluded that:
• The Gulf of Mexico oil disaster was not an isolated incident, and
• It was the result of systemic failure in the oil industry and its government regulators.
But where the Commission failed was in its recommendations for the future of the oil industry in America. While acknowledging that offshore drilling can never be safe, the Commission declined to recommend removing the cap on liability for drilling disasters like the Deepwater Horizon. Explaining this decision on national television, Chairman Reilly said that some Commission members worried that removing liability limits for disasters would cause the international oil companies to transfer operations to countries that limited their risks from failures like the one this summer in the Gulf.
Oceana Prepares On-The-Water Gulf Expedition
A hundred days after the Deepwater Horizon oil rig exploded, it appears that BP has finally succeeded in controlling the blowout that spewed millions of gallons of oil a day into the Gulf of Mexico.
Yet to paraphrase Winston Churchill, this is just the end of the beginning. The creatures that live in, and the people that depend on the Gulf of Mexico will be affected by the oil spill for years, and we are just starting to comprehend the scope of this tragedy.
That’s why I am pleased to announce that Oceana is launching an ambitious, eight-week scientific expedition in the Gulf of Mexico. We will assess the effects of the oil spill on the marine environment, and we will trumpet the message that ocean oil drilling is too dangerous to be allowed to wreck any more of our oceans and our beaches.
This expedition team, led by Oceana’s Chief Scientist Mike Hirshfield and Oceana’s vice president for Europe, Xavier Pastor, will also include research by Dr. Jeff Short, Oceana’s Pacific science director and one of the world’s leading experts on Exxon Valdez and the effects of oil spills from his years as a government scientist at NOAA. The crew also includes scientists, divers and underwater photographers from our U.S., Chile and Spain offices, as well as academic scientists.
Working from the Latitude, a 167-foot ship capable of sailing in shallow and deep waters, the crew will test for underwater oil and study important seafloor habitats as well as the migratory marine life affected by the spill. This includes endangered sea turtles as well as the rare whale shark.
We are fortunate to have supporters who believe in Oceana’s targeted, science-based work and make this kind of original research possible. The facts uncovered by our on-the-water team will be critical in the fight to end dangerous offshore drilling.
You can give today to help us support the critical work of the expedition. Please help us protect the oceans today!
When the expedition launches in early August, we will post frequent updates on Oceana.org, and I’ll be sure to share the most exciting developments with you.
Andy Sharpless is the CEO of Oceana.
