04 AUG 08 / "Drill. Drill. Drill."

The American economy has been teetering on the brink of recession for almost a year, but it has remained surprisingly resilient despite the collapse of the housing market, turmoil in the financial markets, a depreciating dollar, and skyrocketing oil prices. Economists define a recession as two consecutive quarters of negative GDP growth. And, while we’re not technically there yet, most Americans are feeling the pinch in a big way. Energy is essential to our lives and standard of living, so the high price of oil is once again at the center of our economic trouble. It adversely affects every one of us because almost all goods and services cost more.  

Congress can act now to help bring the price of oil down to a more reasonable level by lifting its moratorium on offshore drilling. Critics claim more drilling would only make a difference of a few cents per gallon of gasoline, but President Bush’s recent lifting of his father’s moratorium has already contributed to a 20 percent drop in the price of oil from its peak of a few weeks ago – and that alone translates into more than a few cents at the pump. 

If Congress follows suit, the subsequent price drop would be even more dramatic. If lifting a moratorium can directly impact the price of oil, imagine what actually increasing the supply can do. Maximizing our domestic output will continue to put downward pressure on price due to the law of supply and demand. And lower energy costs will help revive the American economy. 

The Senate was debating the issue of last week, but no action was taken. The United States imports 70 percent of its oil from foreign countries at a cost of $700 billion per year. Those figures represent a national security risk and an enormous transfer of wealth, but action was blocked by a group of senators who believe it doesn’t make sense to access our own oil reserves. Congress did not lift its moratorium and left Capitol Hill for the August recess. 

The Democratic energy plan seems to be to make oil so expensive no one can afford it. The Democrats support the windfall profits tax and price controls. Repeating the mistakes of the 1970’s will only make matters worse. Punishing oil producers will not help consumers. The windfall profits tax led to the reduction of domestic production and increased imports. Price controls (known today as gas gouging legislation) led to fuel shortages.

Beyond lifting the moratorium on offshore drilling, Congress must formulate a bipartisan, comprehensive energy bill and get it on the president’s desk. It is said that politics is the art of compromise, and that is definitely true in this case. Most Democrats want conservation and alternative fuels. Most Republicans want increased drilling. We must meet somewhere in the middle. There is no silver bullet to solve our energy problem, so the plan Congress adopts for energy self-reliance must be aggressive, broad, and multi-pronged and strive toward the following goals: 

• Reducing overall demand through conservation.
• Adopting alternative fuels such as nuclear, geothermal, hydroelectric, clean coal, wind, solar, and tidal.
• Encouraging the use of electric, hybrid, bio-fuel, and hydrogen fuel cell powered vehicles.
• Maximizing North American oil production by drilling offshore and in ANWAR and extracting oil from shale in the Western states and the tar sands in Alberta, Canada.
• Increasing our refining capacity. (There has not been a new refinery in the United States in more than 30 years.)
• Retooling our manufacturing base to produce the equipment needed to build alternative fuel generating devices such as wind turbines, nuclear reactors, solar panels, etc.

As we transition to alternative sources of energy, we will still need oil. Our economy, particularly surface transportation, still runs on oil. Many homes in the Northeast and Mid-West are still heated by oil. And we need to ensure that we are increasing our domestic supply. A conflict with Iran that disrupts the flow of oil through the Straight of Hormuz would have catastrophic economic consequences since upwards of 40 percent of the world’s oil flows through the 21-mile wide passage.