This week in energy we have watched gas prices reach a new two-year high along with lots of concern, speculation and fear that prices are headed even higher.
We also got word, from Alaska, that oil production from Alaska’s North Slope this year is going to be lower than forecast. CEA has previously discussed this troubling decline in production from a key domestic source of oil. There are multiple reasons for the decline, but one major factor is the slow pace of approving leases to drill in federal lands and waters off the coast.
It is never a good thing when we fail to make the most of our natural resources, but at a time when reducing our dependence on oil imports is supposed to be a top economic priority, this failure to fully tap our oil in Alaska or other oil-rich parts of the country suggests we are only paying lip service to that longstanding goal. You may recall how President Obama recently traveled to Brazil, where he encouraged that country to expand its offshore drilling and even pledged that the U.S. would be a major customer of its oil. As this editorial notes, Obama, “does not share the same eagerness,” for oil production in the United States.
In the case of Alaska, a trend of declining production impacts not only our current supply of domestic oil but also the future viability of the state’s oil sector. Oil production in Alaska impacts the Trans Atlantic Pipeline System, the 800-mile-long feat of modern infrastructure, which today, after years of diminished flow, is now at risk of reaching a point where it can no longer function. Without a pipeline to transport Arctic oil, there would be little incentive to produce oil, and little means to ship what oil was produced to points south in the U.S. Without a pipeline, producers in Alaska could find it more economical to export the oil to the Far East.
Back in Washington, President Obama continues to insist he is serious about reducing our dependence on foreign oil, but as one lawmaker recently remarked, without a commitment to increase production in places like Alaska, this amounts to vague platitudes.