Let’s Not Drill Now

Somehow, the “Drill, Baby, Drill” crowd, which also includes Democratic Senator Mary Landrieu, has responded to the disastrous oil spill in the Gulf by reiterating its stance that we must drill everywhere, starting yesterday. My stance on offshore drilling has basically been that the benefit to U.S. consumers is negligible, but if done safely, it’s a good bargaining chip to extract other concessions on carbon reducing energy policy. Of course, the Obama administration already preemptively conceded the point, but even that fact notwithstanding, is offshore drilling even a net positive at all? Annie Lowery quotes David Kotok of Cumberland Investors on the potential cost of the spill.

In the best case, he thinks:

Containment chambers are put in place and they catch the outflow from the three ruptures that are currently pouring 200,000 gallons of oil into the Gulf every day. If this works, it will take until June to complete. The chambers are 30-foot-high steel configurations that must be placed on the ocean floor at a depth of one mile. This has never been done before. If early containment is successful, the damages from this accident will be in the tens of billions. The cleanup will take years. The economic impact will be in the five states that have frontal coastline on the Gulf of Mexico: Texas, Louisiana, Mississippi, Alabama, and Florida.

And in the worst, he thinks:

This spew stoppage takes longer to reach a full closure; the subsequent cleanup may take a decade. The Gulf becomes a damaged sea for a generation. The oil slick leaks beyond the western Florida coast, enters the Gulfstream and reaches the eastern coast of the United States and beyond. Use your imagination for the rest of the damage. Monetary cost is now measured in the many hundreds of billions of dollars.

Holy shit — and that’s just the economic impact. There’s also environmental impact to consider. Now let’s look at the benefit, shall we? This graph from the EIA always makes the point nicely:

Basically, offshore drilling has almost no ability to reduce the cost of oil for U.S. consumers. What it does have the ability to do though is to continue the criminal (metaphor) growth of oil company profits, and by extension, replenish campaign coffers of politicians in states with offshore oil reserves.