Dragging Our Feet On Oil Production

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Dragging Our Feet On Oil Production
INVESTOR'S BUSINESS DAILY

Posted 8/20/2007

Diplomacy: Summits are often photo ops, but the NAFTA meeting in Quebec this week is different. Its focus on regional security and prosperity demands a close look at energy. And on this, the U.S. must do more.

For all the trouble President Bush faces around the world, it must be a relief to sit down with two rational, friendly neighbors like Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper.

The third annual "three amigos" summit under way in Montebello,Quebec, is a model for international cooperation on issues like winning the drug war, halting illegal immigration, securing the Arctic and preparing for hurricanes. But none quite matches energy as the key issue for this region's security and prosperity.

On this, it's not the neighbors who have to do better, but the U.S.

Higher energy prices in themselves threaten the economies of all three countries — one a European-style social democracy, one a high-grade emerging economy and the other the world's freest, and largest, economy.

High oil prices also foster the rise of petrotyrants, which threaten all three. Russia's petrotyranny is menacing Canada in the Arctic, and Venezuela's is undercutting the U.S. militarily and badly frightening Mexico. In the latter case, the appearance of violent radical leftist groups aligned with Venezuela's ally Cuba have already damaged Mexico's energy infrastructure. It could get worse.

Not wanting to confront these predators directly, Mexico's Calderon and Canada's Harper are both doing it indirectly, by quietly producing more oil. Canada is already the top supplier of oil to the U.S., and Mexico ranks No. 3.

More oil on the markets would be a boon. It would lower the global price and take money from petrotyrants' pockets.

But unlike the other two, the U.S. isn't focused on producing oil even though it has resource bases comparable to its neighbors'.

"We are the only country throwing up barriers to producing the energy we own. It's not happening anywhere else in the world," said Richard Ranger, an upstream manager for the American Petroleum Institute, in an interview.

Over half of all U.S. reserves of oil are off limits for drilling. Offshore, it is more than 80%. According to the Energy Information Administration, the U.S. possesses 4.5 billion barrels in proven oil reserves, and undiscovered technically recoverable crude oil reserves are estimated at 10 times that much — 44.5 billion barrels.

The U.S. is literally swimming in oil, yet it doesn't seem inclined to go after any of it. That is a big reason why oil prices remain high.

Just this weekend in Alaska, environmental groups halted a Shell drilling project through a series of nonstop court actions. Congressional legislation reveals a hostile climate for the production of more energy.

"Every time we turn around, it's something," Ranger said.

For example, the House energy bill, H.R. 3221, passed Aug. 4, contains no provision to encourage domestic production. Instead, it "restricts access to portions of the Roan plateau in Colorado, places additional delays in the commercial leasing program for shale oil, and increases costs on operators in the Gulf of Mexico," Ranger said.

Meanwhile, President Bush's recently unveiled "20 in 10" energy plan had lots of neat ideas on energy conservation. But none on producing more energy from the inexpensive sources we already have.

Mexico, by contrast, is busily revamping its tax structure to enable its state oil company, Pemex, to invest more of its oil revenues in new production. It has begun to open up to foreign contractors and has legislation to enable state partnerships with foreign investors.

Canada is moving full speed ahead on its tar sands projects in Alberta and producing more by other means as well.

There is little doubt that lower oil prices would do a great deal for the region. The U.S. needs to do more than just lean on its neighbors for energy supplies.

If Calderon and Harper could articulate the common need for the region to produce energy, it would send a sound message to the forces in Congress intent on allowing the U.S. to be the energy slacker among its close neighbors.

The implications of high energy prices go way beyond what is paid at the pump. To keep the neighborhood in decent shape, the soft center of the three-nation alliance — that is, us — needs to buck up on oil production.
 
Al Gore and company would have all of us living in mud huts while he jets around in his private jet. This has gone way past insanity.
 

drhunter1

Senior Member
Al Gore and company would have all of us living in mud huts while he jets around in his private jet. This has gone way past insanity.
Not just Algore, but all democrats are slaves to the eco-terrorists. :banginghe
 
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