According to the NY Times (May 24), Shell’s, seemingly, successful effort to secure a permit to drill was very costly and took many years. It was replete with often acrimonious dialogue. On one side, were native villagers, who feared the impact of drilling on their ability to whale hunt, and environmentalists who worried about the effect of drilling on the natural landscape and the biology of the ocean; on the other side, were advocates of economic growth in Alaska who argued the need for jobs and development. Lending support to the pro drilling crowd were other oil companies who were and remain waiting in line for the same drilling privileges sought and now apparently received or soon to be received by Shell.
Many years ago, I had the good fortune to spend time in the area in question as an advisor on native housing for HUD. It is an amazingly beautiful site with an equally amazing resilient native population. For me to grant a drilling permit would require significant analyses and intense opportunity costing concerning the public interest(s). I know Secretary Ken Salazar, as a friend from my days as Dean of the School of Public Policy in Colorado. He is a person of great integrity and intelligence. I am assuming that he and his Department of Interior will satisfy environmental concerns before, according to the NY Times, they, soon, grant the final permit to Shell.
Over the Barrel realizes that drilling for increased domestic supplies of oil is a legitimate policy option to consider, given the need to reduce dependency on imported oil and respond to the still relatively high costs of gas at the pump and the overall economy. But, America’s leaders should recognize that because of rising world demand, drilling for oil will not eliminate the need to import significant amounts of oil. Supply will not catch up with demand. A return to world economic health combined with high extraction costs for increasingly hard to get at oil, like Alaskan oil, will result in higher oil and, therefore, gasoline costs.
America should be looking hard at other cheaper and more environmentally friendly energy sources to compete with oil and to fuel its vehicles. For a nation, whose leaders often speak of the values inherent in a free market, why are we limiting the market for energy to power automobiles to oil and its derivative gasoline? Until battery powered cars are competitive with the internal combustion engine, why must we be stuck with an oil monopoly. With flex fuel vehicles, natural gas can provide Americans with a less expensive, safe and environmental friendlier fuel than gasoline. It’s called methanol. Let the better fuel win!