THE Obama administration’s decision to allow oil drilling off northern Alaska and the East Coast and in the eastern Gulf of Mexico is a bold political move that demonstrates a rational approach to energy policy. Yet, given the peculiarities of petroleum extraction, the public shouldn’t buy any arguments that it’s going to accomplish a lot in terms of energy independence or payback for taxpayers.
The administration is trying to deflect criticism from environmentalists by pointing out that the decision should help reduce our dependence on foreign oil, create thousands of high-paying jobs and generate much-needed tax revenue. But Mr. Obama is being careful not to offer any specifics, and for good reason: estimating undiscovered resources in areas with little previous drilling is as much art as science; even the most optimistic projections concede that the amount of petroleum we’re talking about here is relatively minor; and while some jobs may be created fairly quickly, profits (and tax revenues) are going to come slowly.
The best estimates of the federal Mineral Management Service suggest that the three new drilling areas combined have 4.5 billion to 22 billion barrels of potential oil, and 13 trillion to 95 trillion cubic feet of natural gas. Considering that our current total estimated domestic reserves are 20 billion barrels of oil and 250 trillion cubic feet of gas, this sounds significant.
But this estimate of potential resources is misleading in a number of ways. Most important, the term “potential resources” refers to the amount likely to be discovered over a very long time, while our current reserves are those that have already been found but not yet tapped. Think of potential resources as the estimated harvest from an unplanted orchard, and reserves as what’s on the trees right now.
http://www.nytimes.com/2010/04/05/opinion/05lynch.html?th&emc=th
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