Markey open to some offshore drilling

The chair of the House Select Committee on Energy Independence and Global Warming said he thought drilling was appropriate in some parts of the outer continental shelf but not all of it, and he declined to specify what areas could see a drill bit in the coming years.

US Representative Ed Markey, told reporters during a briefing at the Cambridge Energy Research Associates Week in Houston today that drilling the outer continental shelf could be one part the nation’s comprehensive energy policy.

“We can find areas of the outer continental shelf that are appropriate for drilling,” Markey said.

When pressed about where those areas may be, Markey deflected, saying they would have “to emerge as part of a comprehensive reevaluation of all the areas off our coasts.”

The only spot Markey singled out by name was Georges Bank, which he said should be off limits to exploration.

When asked about a possible timeline to address a plan for the outer continental shelf, Markey cautioned that it could be a lengthy process, saying the US Department of the Interior needed to hire personnel and do “site characterization” before potential leasing could move forward.

Despite his endorsement of some offshore access, Markey repeatedly pointed out that the US imports 13 million barrels of oil per day, and stressed that offshore drilling needed to be part of a bigger energy plan for the nation.

“We can’t drill ourselves out of this crisis,” he said.

Markey did not give a timetable for Congress or the Obama administration to present a new energy plan for consideration but said it was at the top of the list of priorities for both President Barack Obama and Speaker of the House Nancy Pelosi.

“Over the next several months you will see an evolving dynamic energy policy unfold,” he said.

In addition to heading the select committee, Markey sits on the House Energy and Commerce Committee, chairing that committee’s Subcommittee on Energy and the Environment and the House Natural Resources Committee.

Last week, Republican lawmakers, led by House Republican Leader Representative John Boehner, asked Obama to move forward a 5-year plan proposed by the Bush administration that would have led to leasing on the OCS.

The preliminary plan would authorize 31 energy exploration lease sales between 2010 and 2015 for tracts along the Atlantic coast and off the coasts of Alaska and California.

New Secretary of the Interior Ken Salazar echoed many of Markey’s words at a press conference last week after members of the administration received the Republicans’ letter, saying that there were areas that may be appropriate for drilling, but promising changes to the Bush plan.

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Most Coveted Offshore Petroleum Reserves

by Robert Lamb

If you could gaze back thro­ugh 500 million years of history, you'd find the oceans of pr­ehistory swarming with microscopic life. Tiny floating plant and animal life drifted through the seas, spurred on by cooling ocean temperatures and an atmosphere that was r­apidly reaching the levels of breathable oxygen we can't live without. Ironically, the humans that eventually evolved out of these primordial waters now depend on another byproduct of this early era: petroleum.

­For milli­ons­ of years, these vast clouds of plankton burned through their brief live­s, littering the ocean floors with their dead. In time, mud and sediment covered these plains of decaying organic matter. Sealed off from oxygen, heat and pressure very slowly cooked this dead matter into subterranean reservoirs of petroleum in the form of liquid oil, natural gas and oil shale.

­Today, Earth's petroleum reservoirs are buried under massive layers of rock. And on a planet that's 71 percent water, much of that petroleum is also underwater. Humans have spent the last centur­y developing better ways to extract these precious deposits, but we're still discovering new offshore petroleum reserves. ­Plus, environmental laws, treaties and the limits of human technology continue to keep some of these reservoirs just out of the reach of the global oil industry. But, in a world that consumes more than 80 million barrels a day, you can rest assured no one has forgotten what riches these off-limits regions may contain [source: CIA].

­

Under the United Nations' Law of the Sea treaty, a coastal country can lay claim to coastal waters extending up to 200 nautical miles off its shoreline. A country can request up to 350 nautical miles if officials can prove the area is part of the country's continental shelf by May 2009. The continental shelf is the sloping undersea plain that runs from dry land to the deep, open ocean.

­Oil companies are frothing at the mouth to sink their drills into the ocean's untapped fossil fuel riches. In this article, we'll look at the five offshore petroleum reserves they'd most like to drain dry.

­Offshore Petroleum Reserve 5: Protected U.S. Coasts

The United States consumes more oil than any other nation on Earth -- more than 20 million barrels per day [source: CIA]. Fluctuations in the global petroleum market have led to nationwide panic and taken center stage in political races. Many people charge that concern over oil supply resulted in the U.S. military's presence in Iraq. As a result, it may seem ironic that some of the most coveted petroleum reserves on the planet are on U.S. coastlines.

­The U.S. Department of the Interior estimates there may be 18 billion barrels of recoverable, undiscovered oil and 76 trillion cubic feet of natural gas underneath the country's outer continental shelf (OCS). The U.S. federal government defines this shelf as the area that begins 3 to 9 nautical miles from shore and terminates 200 nautical miles out, or farther, depending on how far the continental shelf extends. The 3 to 9 miles closest to the shore, however, remain the property of the individual states.

Why can't oil companies lower their drills into these potentially fertile seabeds? Well, for starters, some coastal waters are national marine sanctuaries set aside for marine sea life. Much of the remaining OCS territory currently falls under the protection of a federal law against offshore drilling. A number of coastal states, such as Florida, also ban drilling in state waters due to environmental and tourism concerns.

But there's definitely offshore drilling in U.S. waters. Petroleum companies currently lease 68 million acres of offshore real estate. Some of the most successful drill sites are situated in the eastern Gulf of Mexico and the coastal areas of Alaska -- both rich areas of oil exploration. A number of these leases exist in prohibited areas, but predate the federal ban.

Due to rising gas prices, many politicians are currently pushing Congress to lift the 1981 federal ban on offshore drilling. During the summer of 2008, President George W. Bush lifted the executive order banning offshore drilling, an order his father, President George H. W. Bush reinforced in 1990 and President Bill Clinton extended until 2012.

If Congress agrees, petroleum companies might get their hands on the goods, but don't expect a sudden drop in prices. The U.S. Department of Energy estimates that new drilling wouldn't have an impact on the economy until 2030. After all, you can't just find a promising drill site and throw an oil rig on top of it overnight. Even after decades of production, experts warn that the economic impact might be minimal.

­Not all th­e world's coveted petroleum reserves have been kept tantalizingly behind protective laws for decades. In the case of Brazil, a prime oil field just popped up on the radar.

Offshore Petroleum Reserve 4: Brazilian Coasts

Finding new offshore petroleum isn't a simple task. Most of the world's oil and natural gas is trapped between 500 and 25,000 feet (150 and 7,620 meters) under dirt and rock. In some cases, petroleum leaks through the ocean floor and can be detected with special sniffer detectors. Most of the time, however, survey teams have to depend on special seismic and magnetic survey equipment to detect telltale disturbances in the Earth's crust. These efforts cost the oil industry billions of dollars, and even then it takes some exploratory drilling to determine how profitable a production well might be.

­But when these eff­orts pay off in the form of a rich offshore reserve of oil, the impact can be immense. Brazil's national oil company Petrobras made just such a discovery in 2007, when the company found an estimated 5 to 8 billion barrels worth of oil and gas in the Tupi field [source: BBC News]. The discovery earned Brazil the fourth spot on our list.

Tupi field is located around 155 miles (250 km) off the southern coast of Brazil in the Santos geological basin, which, in turn, is part of a larger complex that includes the Campos and Espirito Santo seafloor basins. Various officials predict these reservoirs may hold anywhere between 50 and 100 billion barrels of petroleum [source: IPS News].

Combined with the country's existing reserves of 13.8 billion barrels, these discoveries have the potential to elevate Brazil to one of the top 10 oil producers in the world, alongside the likes of Kuwait and Venezuela [source: IPS News].

But to move up in the global oil market, Brazil first has to establish enough platforms in the region to permit full-scale production -- a project that will cost billions, especially given the depth and weight of the petroleum deposits.

Ownership of the Santos, Campos and Espirito Santo basins is a clear-cut issue. After all, the areas fall within the limits permitted by the U.N.'s Law of the Sea treaty. But what happens when potential oil fields pop up in more contested waters?

In the next section, we'll travel all the way to the North Pole.

Offshore Petroleum Reserve 3: The Arctic

For the first time in recorded history, ships can now circumnavigate the frozen Arctic. In a little more than a century, humans have managed to burn enough fossil fuels to raise greenhouse gases and, in turn, elevate global temperatures. As Arctic ice melts, more areas open up for possible exploration and oil production.

According to a recent United States Geological Survey, as much as one-fifth of the planet's undiscovered petroleum reserves may reside in the Arctic. That's roughly 90 billion barrels of oil and 1,670 trillion cubic feet of natural gas [source: New York Times]. Who owns all these potential resources? Well, it's not as straightforward as you might think.

Under the 17th century Freedom of the Seas doctrine, the Arctic belonged to no one, but under the United Nations' Law of the Sea treaty, Canada, Denmark, Norway, Russia and the United States all have a legal claim to valuable seafloor territory. The treaty gives countries exclusive economic rights to the 200 nautical miles extending from their coastlines. This lands large portions of the Arctic's petroleum riches firmly in U.S. and Russian hands.

However, the U.N. treaty also allows Canada, Denmark, Norway, Russia and the United States to file claims for more territory if they can prove their continental shelves extended into the Arctic seabed. As a result, the five contenders for northern oil riches have all launched vigorous campaigns to survey the ocean floor. By this, they hope to convince the U.N. to give them as big a slice of the Arctic oil pie as possible.

In particular, a great deal of controversy surrounds the Lomonosov Ridge, which crosses the Arctic between Greenland and Russia. Russia claims the area is an extension of the Asian continental shelf, while Canada and Denmark argue it's an extension of North America. In August of 2007, a Russian expedition boldly planted a flag on the seafloor beneath the North Pole -- a region Russia could legally own if the U.N. sides with its claims. Russia's Institute of Ocean Geology plans to present its full findings in 2010. Until then, the region will continue to be a contested space.

­Feel le­ft out of the race to plunder Arctic oil? Don't worry. There's another thawing, frozen wilderness to drool over on the other end of the globe.

Offshore Petroleum Reserve 2: Antarctica

The southernmost continent of Antarctica presents one of the harshest environments on the planet. The region has no native population, and it's only been in the last century that humans have taken enough interest in the continent to set up research stations and stake claims of ownership.

Currently, seven­ nations ­have formal territorial claims in Antarctica: Argentina, Australia, Chile, France, Great Britain, New Zealand and Norway. Some of these claims overlap. Most of Great Britain's stake, for instance, is also spoken for by either Argentina or Chile. Meanwhile, the United States, Russia and a number of other countries neither recognize these territorial claims nor make any of their own. Under the terms of the Antarctic Treaty of 1959, how­ever, the entire continent is reserved purely for scientific research.

During the energy crisis of the 1970s, several oil companies argued in favor of perusing Antarctic petroleum and, in the early 1980s, scientists discovered large offshore oil reserves surrounding the continent. Specifically, geologists suspect the Weddell and Ross Sea areas may hold 50 billion barrels of oil [source: DOE: EIA]. To protect these resources from exploitation that might result in political and environmental instability, several nations signed the 1991 Madrid Protocol. The protocol, which went into effect in 1998, placed a moratorium on mining and drilling for petroleum for a minimum of 50 years. Even if mineral resources are accidentally uncovered through scientific research, no one can legally exploit them.

While the Madrid Protocol doesn't expire until 2048, some nations are already looking ahead. Great Britain is currently preparing a "claim in name only" under the U.N. Law of the Sea treaty for coastal waters off its existing Antarctic claim. British officials insist the measure is only to safeguard the country's interests in the area, in the event that the ban on mineral and petroleum exploitation changes. If accepted, this claim would cover more than 360,000 square miles (932,396 square km) of undersea territory.

­But treaties aren't the only thing keeping drills out of tempting petroleum deposits. Sometimes, we just lack the technology.

Offshore Petroleum Reserve 1: Ultra-Deep Waters

Oil rigs currently can reach about 10,000 feet (3,048 meters) into the ocean. To what depths will future platforms sink?

The first offshore drilling platform was constructed in 1897 at the end of a wharf. In less than a century, oil rigs evolved to operate in waters beyond sight of land and plunge to depths that 19th-century man had only dared to dream of. Today, technology continues to improve, but so many potential oil riches rest well beyond human grasp.

Currently, deep-sea spar platforms can reach down through 10,000 feet (3,048 meters) and Transocean drill ships are capable of reaching depths of 12,000 feet (3,658 meters) [source: USA Today]. To put that in perspective, the deepest surveyed point in Earth's oceans is Challenger Deep. At 35,840 feet (10,924 meters) below sea level, this portion of the Pacific Mariana Trench is more than a mile (1.6 km) deeper than Mount Everest is tall.

Even at depths of 10,000 feet or less, deep-sea drilling presents a host of problems. Cut off from the sun, these waters reach nearly freezing temperatures, contain pressures great enough to crack iron casings and are subject to rough, deep-sea currents. Engineers have to design equipment that can stand up to these conditions, as well as those presented by the oil itself.

Drill down thousands of feet below the ocean floor, and you'll encounter 400-degree F (204-degree C) petroleum reservoirs at pressures as high as 20,000 pounds per square inch [source: USA Today]. When this hot surge hits the sudden temperature change of a seafloor environment, it can cool to solid form in seconds, rupturing pipes in the process. While antifreeze has played an important part in preventing this ­so far, more advanced methods are under development [source: Wired].

Regardless of the challenges involved, these ultra-deepwater fields contain the kind of riches petroleum companies would love to claim. One particularly popular area is the Lower Tertiary in the Gulf of Mexico, where geologists have detected potentially lucrative drill sites at depths of 15,000 to 30,000 feet (4,572 to 9,144 meters). Chevron's Tahiti field in this region contains an estimated 400 to 500 million barrels of oil [source: USA Today]. The entire Lower Tertiary region may hold as much as 15 billion barrels total [source: Wired].

­Explore the links on the next page to learn more about offshore drilling and our growing appetite for sweet, sweet crude.

­Mention offshore drilling at a casual get-together­ and watch the excitement in the room dry up like an exhausted oil well. Despite the fact that more than 40 million acres are already available for development along the outer continental shelf (OCS) of the United States, talk of opening up the remaining protected coastline to energy exploration has become about as risky as the no-no topics of religion and politics. What is it about increasing access to the OCS that gets people so worked up?


A large part of the controversy stems from differing estimates of what increased offshore drilling would actually mean -- to both the economy and the environment. Proponents of drilling insist that increasing domestic production along the coasts would lower gas prices and diminish the country's reliance on foreign oil with little negative impact on the environment. Detractors argue­ just as strongly that any oil found would have a minimal impact on prices and domestic supply, and would devastate surrounding ecosystems.

Facts aside, the controversy is also fueled by closely held personal priorities. While the anti-drilling side might accuse the other of valuing its pocketbook over the environment, the pro-drilling faction might say the greenies are more interested in saving coral than saving the country.

But while priorities do play a large role in the topic's sensitivity, cut-and-dry facts would go a long way toward lessening the tension. Unfortunately, although the argument lacks nothing in the way of emotion, substantial facts are in short supply.

To start with, the two sides can't agree on how much oil the OCS might hold. The Energy Information Administration (EIA) estimates that the current off-limits portion of the shelf in the lower 48 likely holds about 18 billion barrels of recoverable crude oil, but no one really knows for sure because comprehensive assessments haven't been made in years [source: EIA]. People can't say with certainty if the estimates are on target until they drill a well, and even then, what will come up isn't a sure bet.

Since the United States consumes about 7.5 billion barrels of oil each year, the untapped sea floor could conceivably supply the country's energy needs for a little more than two years -- that is, if the estimates are right [source: EIA]. Opponents of drilling think the recoverable amount could be lower and not even supply much. Proponents think the potential resources could keep the country going for even longer than two years.

Offshore Drilling: Pumping, Prices and Promises

With gas prices hitting record highs, people are looking high and low -- and offshore -- for a way to bring the costs down. But according to a study by the Energy Information Association (EIA), they may want to look elsewhere. Even if the outer continental shelf (OCS) were opened to drilling, the study found, it would be several years before the country saw any oil. Even then, the amount of oil probably wouldn't be enough to influence the global market [source: EIA].

The EIA gathered its data by preparing a test case to see what would happen if the current ban on offshore drilling was allowed to expire in 2012. Historically, the ban on drilling the OCS in the Pacific, Atlantic and most of the eastern Gulf of Mexico has been reinstated each time it expires, but the EIA wanted to see what might happen if it weren't.

On July 14, 2008, President George W. Bush lifted the executive ban on offshore drilling. He urged the U.S. Congress to do the same in an effort to reduce oil prices.

What the group determined contrasts sharply with the assertions coming from many politicians and oil executives about increased domestic supply bringing prices down. Instead, the EIA found that the increased drilling would have little impact before 2030. In fact, because of the technicalities involved in leasing wells, pinpointing where the oil is and actually getting that oil to the surface, production probably wouldn't even start until 2017. And according to the EIA study, even once the oil is flowing, the increased access would bring only 0.2 million barrels per day more than if the ban were still in place [source: EIA].

Despite the time lag, proponents of drilling say there's no time like the present. If the government hadn't banned offshore drilling back in 1982, they argue, much of that oil would already be on the world market. Some also argue that the simple act of legalizing offshore drilling might influence the market to lower prices. Even if the effects aren't immediate, they continue, drilling should begin now if Americans don't want to see their gas prices climb higher.

Not to burst their oil bubble, but many economists counter that since oil prices are determined on a global market, a country has to make some serious additions for its actions to make any appreciable difference. To really affect prices, the United States would have to add significantly to the worldwide production of oil. Considering that the world produces 82.5 million barrels of oil each day, adding 0.2 million barrels isn't really going to have much of an impact [source: EIA].

Not to mention the fact that accessing oil reserves thousands of feet underwater and an additional thousands of feet under the seafloor takes considerable time and money. According to the EIA's report, much of the oil that's currently off limits wouldn't even be economically worth developing at current prices [source: EIA].

Fuel Efficiency vs. Offshore Drilling

According to the Center for Economic and Policy Research, the U.S. might do better to focus on raising fuel efficiency standards rather than sinking more wells into the ground.

While the government increased the efficiency standards an average of 1.1 mpg a year from 1980 to 1985 -- to 27.5 mpg for cars and 19.5 mpg for light trucks -- it did little until 2007.

If, instead, the government had continued raising the standards at a rate of 0.4 mpg each year, cars would be at least 50 percent more fuel efficient.

The savings add up to approximately 3.3 million barrels per day -- quite an improvement over offshore drilling's estimated 0.2 million [source: Baker and Szembrot].