?Americans are funny. We want our oil and yet damn that need at the same time. We hate oil and those who supply it, but we love the lifestyle that oil makes possible for us. What could be more fun than driving a Hummer, or hitting the gas on a 1960s muscle car? What is better than flying 1,000 miles to meet Grandma at Disney World, or driving to the Grand Canyon with the kids?
For years, it has been fashionable to bash the oil industry, but now, it appears we may be approaching a tipping point, forced by necessity to face the truth. More Americans are conceding we do need to produce more oil at home—even if that means (horror!) more drilling here. What a sea change this could be. It’s not a groundswell, but another few months of high oil prices just may cause the once-unthinkable: a public outcry to drill more wells in this country. Whether the government will allow it is a discussion for another day, say January 21, 2009.
Recent remarks by President Bush show just how much this country is conflicted about oil—and why it will evidently take more pain at the pump before we get serious about making meaningful changes.
Two years ago in his State of the Union speech, Bush warned of America’s addiction to oil and said that we must reduce our use of it. Then last month in the Rose Garden, he said the U.S. must drill for more of it. He favors lifting the ban on drilling in certain offshore areas. In Houston a day earlier, Senator John McCain also called for this.
But even industry people argue for and against more drilling. Some say we cannot drill our way out of our dilemma of high prices, expensive imports and tight supplies. Others say we can, that it is just a matter of time and technology before we open undrilled areas where geologists know there is oil and gas.
“Two years ago, we put forward a comprehensive plan to improve America’s energy security,” Frederick W. Smith, chairman, president and chief executive of FedEx Corp., said after Bush’s remarks. Smith spoke as a major user of jet fuel, and as a co-founder of Securing America’s Future Energy (SAFE).
“Last year, Republicans and Democrats joined together to enact...the first improvements in fuel-economy standards in three decades. Now, with Americans facing record high gas prices and with oil imports accounting for an astonishing 40% of our trade deficit, both Republicans and Democrats are facing a moment of opportunity. It is time to again come together to support another major piece of the energy-security puzzle: increasing domestic production in an environmentally sound way.”
Gen. P.X. Kelley (Ret.), 28th Commandant of the Marine Corps and co-chairman, with Smith, of SAFE’s Energy Security Leadership Council, agreed. He said, “We cannot drill our way out of oil dependence, but we can alleviate some of the consequences while we move toward more permanent, longer-term solutions, and we can do it in a responsible manner.”
SAFE cites information from the Energy Information Administration. “In 2007 (before today’s record prices), the United States imported 65% of the crude oil and refined products it consumed, at a cost of nearly $300 billion. Net petroleum imports represented 41% of the total 2007 U.S. trade deficit.
“Producing an extra 1 million barrels per day of domestic crude oil would have reduced America’s import costs by $26.4 billion in 2007.”
The U.S. Minerals Management Service estimates that the 85% of U.S. continental shelf acreage that is now off limits contains up to 20 billion barrels of oil and 83.5 trillion of cubic feet of gas.
As it stands, the dilemma of finding enough production is very real. I’ve done some sobering math in recent days. The U.S. consumes about 20 million barrels of oil a day. That is 833,333 barrels per hour.
Production of 3.3 million barrels per year on the part of a typical small producer is the equivalent of about four hours of U.S. supply.
If someone made a monster discovery in the U.S. of 500 million barrels recoverable, it would attract big headlines and be cause for a grateful celebration—and probably, relief. But if by some miracle this could be produced flat out at the rate of our consumption of 20 million barrels per day, this monster would only last 25 days.
In this context, then yes, we sure do need to be drilling more—lots more.
At press time, the U.S. rig count topped 1,900 for the first time in decades. And the annual Lehman Brothers midyear spending survey showed that operators do intend to ramp up spending this year in the U.S., well beyond what they had projected last December.

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