July 11, 2008
Brian Kennedy (202) 434-8200

New Proposals Ignore the Obvious: Access to New Supplies

Washington, DC – As the head of the Organization of the Petroleum Exporting Countries (OPEC) warned of potential supply shortages and unlimited price increases should there be a military conflict that halts Iran’s oil production, leaders in Congress unveiled highlights of new legislation that slow dance around the issue of supply.  IER president Thomas Pyle issued the following statement:


“Congress should be required to buy carbon offsets for the smokescreens it is creating to avoid solving America’s energy crunch while the price at the pump continues to go up and up” Pyle said.  “Demand is increasing around the world while tensions in the Middle East threaten global supply shortages, yet this Congress continues to deny Americans access to their own energy supplies.  Access and domestic production are the elephants in the room that our leaders refuse to acknowledge. It’s time they did.”

Congress has yet to change the fact that 97% of the federal OCS acreage and 94% of onshore energy-rich government lands are not being leased for energy production.  Instead of opening new areas for domestic energy – including ANWR and the OCS, where massive energy resources exist – leaders in Congress have proposed the following:


Expedite the permitting process in the National Petroleum Reserve-Alaska (NPRA):

  • NPRA is already open for leasing, but land-use restrictions, lack of adequate infrastructure, and environmental lawsuits have stalled energy production.  Expediting permits is positive, but any genuine effort must involve stopping dilatory lawsuits by groups opposed to American energy production.  Otherwise, this is a hollow gesture.  Congress should address that issue nationwide.

Preventing shipments of domestic oil to foreign countries, such as Japan:

  • The United States imports roughly 13.7 million barrels of oil and finished petroleum product per day and exports roughly 1.75 million barrels of oil and finished petroleum product per day.  Net imports are 11.95 barrels per day.  The U.S. exports only 80,000 barrels of oil per day to Japan.
  • Banning exports of energy from the US is a ruse.  Most of the crude products exported are things our own laws keep us from using here at home, including high-sulfur diesel fuel (banned by environmental laws) and petroleum coke, which is a byproduct of refining processes that make our fuels cleaner.  In short, preventing the export of these products will render them useless here at home and would do nothing to increase the overall supply of crude.
  • Also, Americans should hope this won’t be seen as cutting off supplies to allies, as the Arab oil embargo did.  It also raises questions about the “NOPEC” proposals, which allow suits against governments that withhold supplies from world markets.  Since much of this can’t be used in the US, it might make the US liable to the same kind of suit.

Compelling the construction of  two oil and gas pipelines:

  • The same Congressional leaders who have opposed efforts to expedite energy production in the NPR-A, including efforts to repeal laws designed to make it easier to produce energy in Alaska’s north, are now pushing for expedited pipeline construction.  Better late than never.  Alaska has enormous energy resources that America needs.  Maybe they will consider extending it to the whole state, which is over twice the size of Texas but has less than 1% of the oil and gas wells.

Additional Resources from the Institute for Energy Research (IER):

The Institute for Energy Research is a not-for-profit public foundation that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets.  Founded in 1989, IER is funded entirely by tax deductible contribution from individuals, foundations and corporations.  No financial support is sought for or accepted from government (taxpayers).

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