Petroleum, or oil, is arguably the world's most important commodity. It is used in almost every facet of in modern life, from the energy to power vehicles to the plastics which make up consumer goods. As a fossil fuel, oil is a finite resource and a major contributor to carbon dioxide in the environment, so many believe that we must develop renewable energy sources to replace oil. For now, however, the United States depends on oil to fuel its economy and way of life. Given the large amounts of oil which America consumes and imports, much consideration has been given to increasing oil production on US land and in US waters.
Less Imports, More Jobs
Proponents of oil drilling within the United States argue that by producing more oil domestically, America relies less on foreign oil imports, resulting in both economic and political benefits. According to the US Energy Information Administration (EIA), the US relies on imports for approximately 57 percent of its petroleum needs, producing about 1.8 billion barrels of crude oil per year, while importing 3.6 billion barrels. Much of the United States' untapped oil reserves exist in offshore or remote regions, a major one being northeastern Alaska's Arctic National Wildlife Refuge (ANWR), which the EIA estimates could produce between 1.9 and 4.3 billion barrels of oil. Arctic Power, an organization which advocates drilling in ANWR, claims that exploiting ANWR's oil reserves could save the United States $14 billion per year in oil imports and create between 250,000 and 735,000 jobs. The Gulf of Mexico's oil industry is also important to the US job market--the US government estimates that 2010's four-month moratorium on drilling in the Gulf cost the U.S. economy approximately 23,000 jobs.
The 2010 BP oil spill is an example of the environmental damages which can result from the technological challenges associated with offshore drilling of US oil reserves, particularly those in the deepwater reserves in the Gulf of Mexico. Newsweek states that the BP oil spill is "the worst oil spill in US waters" since the Exxon Valdez spill, noting that the environmental and economic impact of the BP spill will likely be "catastrophic." Furthermore, even without accidents, oil exploration and drilling can pose a significant threat to wildlife. One example of the environmental damages caused by drilling sensitive habitats, including the ocean, is the impact of oil exploration on marine life. LiveScience reports that to find potential oil reserves, researchers send seismic waves into the ground, which disorientates whales and leads to mass beachings.
Limited Impact on US Oil Prices
Despite the heavy environmental and financial costs of expanding oil drilling within US borders, these undertakings may impact oil prices paid by US consumers only negligibly, due to the relatively small amount of US proved oil reserves and the financial structure of the international oil market. According to the EIA, total US proved reserves of crude oil amount to only 21.3 billion--less than 10 percent world proved reserves. Furthermore, US oil is drilled solely by investor-owned corporations, whose allegiance is to shareholders, not US consumers. Oil produced in the US is sold by these multinational corporations on the open international market for the best price, and therefore, US oil prices are not directly impacted by any increase in domestic drilling. Moreover, developing infrastructure and permits for new drilling takes many years. Increasing offshore drilling as of 2008 would not impact overall domestic oil production or prices until at least 2030, according to the EIA.