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U.S. Grapples with Oil Pressures

Prepared by: Robert McMahon, Editor
Updated: August 8, 2006

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It wasn’t a war or a hurricane but the more mundane matter of a corroded Alaska pipeline that produced the latest oil tremors for U.S. consumers (WashPost). The pipeline run by oil giant BP carries 400,000 barrels a day from the largest field in the United States. Its disruption, which could last months, comes with prices at the pumps already averaging three dollars per gallon during peak summer driving season, at a time when parts of the country face “unparalleled problems” (AP) meeting energy demands. Oil industry experts disagree on the impact of the Alaska pipeline problem but the news spurred further talk of improving the country’s energy options (ChiTrib).

The U.S. House and Senate gave it a shot before their recess, approving legislation vastly expanding the areas open to offshore drilling. But the Senate bill, passed last week (Reuters), differs substantially from a House measure passed in June, raising doubts about the prospects for new energy legislation this year.

The House measure would lift 25-year-old bans on leases for drilling over 100 miles from the U.S. coast, and permit leasing closer to shore pending state approval. The Senate would keep much of the moratorium on drilling in place but lift it in 8.3 million acres in the Gulf of Mexico. The legislative debate, touching on coastal tourism, environmental protection, and energy security, has created some strange bedfellows in both houses of Congress, as the Washington Post points out. The more ambitious House measure enjoys most support among majority Republicans, who cite the prospect of weaning the country off foreign fuel dependence by the vast quantities believed in off-limits areas of U.S. territorial waters. The Interior Department's Minerals Management Service says the Outer Continental Shelf, for example, holds about 420 trillion cubic feet of undiscovered natural gas, which industry officials say could heat every home in the United States for decades. But environmentalists cast doubt on the impact of such drilling, adding that, among other things, it maintains the country's addiction to fossil fuels (CNNMoney.com). The Independent takes a look at oil drilling’s environmental impact.

Both bills involve large royalty statements to affected states but some analysts view the Senate version as having a better chance of making it into law. The chairman of the Senate's Energy and Natural Resources Committee, Senator Pete Domenici (R-NM), says it's only a first step, adding "I will in due course argue for opening more (Sarasota Herald Tribune), and then more, and then more, and then more."

From other quarters comes a rising call for more energy efficiency. The Center for American Progress, composed of many former Clinton administration officials, has proposed a new plan calling for at least one-quarter of the liquid fuels consumed by the United States to come from renewable energy sources by 2025 (PDF). This follows Bush administration moves to invest more in renewable fuels amid signs that so-called "cellulosic ethanol" has the potential to displace up to 30 percent of the country's current fuel use.

Independent of federal moves, at least twenty-two U.S. states now support separate initiatives for renewable energy, says the Pew Center on Global Climate Change. Alternate and renewable fuel sources can also ease climate change concerns. Princeton University energy experts Stephen Pacala and Robert Socolow propose a stabilization wedge model of seven equal "wedge" activities—either technologies or lifestyle changes—to reduce carbon emissions.

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