Oil Increased Access to Offshore

Oil

Increased Access to Offshore Oil Exploration

Offshore Oil Exploration

Increased Access to Offshore Oil Exploration

The term offshore drilling refers to the "… extracting of oil from fields that lie beneath the ocean floor, anywhere from a few hundred feet to 200 miles off the coast" (Connors, 2009). The first offshore well was drilled n 1887 off the coast of California and at present there are approximately four -- thousand offshore platforms in U.S. Federal waters (Connors, 2009).

The issue of offshore oil exploration has a number of problematic consequences. In the first instance the question arises as to whether it is cost effective and worthwhile to expend large amounts of money to establish offshore oil sources. Another issue that will also form the fulcrum of this paper is that access to offshore oil exploration has various environmental consequences that have to be taken into consideration -- especially in this age of climate change and global warming. For example, the oil spill from the Exxon Valdez tanker caused extensive damage to ecosystems and alerted environmental authorities to the danger that the oil industry could pose to the environment and, by extension, to the economies of those countries affected.

The central thesis that will be explored in this paper is that offshore oil exploration is problematic in terms of two central concerns. The first is that oil poses a significant threat to the international community and the United States in terms of environmental concerns. This is compounded by the reality of globalization. Secondly, the question arises as to the cost effectiveness and practicality of offshore oil exploration.

This issue is also related to two different perspectives on this issue. The one perspective views offshore oil exploration as essential to the continued smooth running of the economy. This view suggests that any adverse effects that may result from offshore oil exploration are outweighed by the necessity and long-term positive consequences of exploration. From an opposing point-of-view the environmental costs of offshore drilling are excessive and that such exploration will have a serious and even critical impact on the environment, leading to a myriad of problem and issues that will impact negatively on the world. This perspective also questions the actual cost effectiveness of offshore drilling.

Certain challenges are therefore posed by these views and perspectives that the governments of developed and developing counties have to face. First is the challenge to the environment that offshore drilling poses and the second is the problem of diminishing oil resources. The contention and thesis that will be examined in this paper is that the environmental factors outweigh the possible gains that can be gained from offshore exploration.

The Context of the Debate

The issue of oil and oil exploration in any context has to be understood against the background of the international petroleum market. This is also related to an understanding of the contemporary importance of oil as an energy source. In essence, oil as an energy source drives the economies of the world and is essential for almost every industry and economic activity. This does not only refer to the need for fuel for transport in modern economies but also to the myriad ways in which oil usage and consumption impacts on particular countries and economies. If one takes into account the contemporary reality of globalization, then the impact of oil becomes more evident.

Put very simply, globalization refers to the reality of our modern technologized and communications dependent world where every economy in different regions is affected and impacted by the global economic situation -- and this is intimately connected to oil. The effect of an increase in the oil price is therefore widespread and invasive and impacts on every country in relation to that countries dependence on oil. This is a reality that is central to the way that the oil industry impacts on the global economy.

This reality is also central to the positive perspective or argument for offshore oil exploration; namely that in light of the necessity of oil for commerce and industry, and taking into account the decline in availability and access of this resource, offshore exploration is essential for the continuance and stability of the global economy. In addition, this perspective emphasizes that a stable global economy is also important with regard to social stability.

This perspective is emphasized by numerous studies on the economic importance of oil. The importance of oil for the international economy and industry can be seen for the following figures. In terms of world production oil averaged about 83.02 million barrels per day in 2004 compared to about 74 million barrels per day 2002. (Some interesting oil industry statistics, 2009). This aspect is cardinal in the understanding of the relationship between oil production and contemporary economic factors. This refers essentially to the fact that, "…Consumption is increasing at a faster rate than the increase in production. And at the end of 2005, world demand… exceeded world refinery capacity for the first time - demand of 84 million barrels per day vs. 83.5 million barrels per day refinery capacity" (Some interesting oil industry statistics, 2009). This has a number of economic implications internationally and tends to bolster the case for offshore oil exploration.

This has resulted in an ongoing search for new oil resources and reserves. The Alaskan oil fields and the oil fields in the North Sea, for example, have emerged as a new and contentious possible source. This emphasizes the need for oil exploration and the possibly that offshore oil can augment oil supplies and help to remedy the energy dilemma that faces the world economy today.

Perspectives on Access to Offshore Oil

Baird ( 2008) summarizes the background to the policy changes and public opinion regarding offshore oil exploration, in relation to the contemporary economic climate.

Skyrocketing fuel prices, unprecedented home foreclosures, rising unemployment, escalating food prices, increasing climate disasters, and the continued war on two fronts have prompted greater public support for renewed offshore drilling for oil. A Gallup poll conducted in May of 2008 found that 57% of respondents favored such drilling, while 41% were opposed… (Baird, 2008. P.13).

Recent economic factors and the downturn in the economy have promoted a mood shift from the previous disinclination towards allowing offshore oil exploration. This has led to pressure from certain quarters to allow more access to offshore oil in order to be less dependent on foreign resourced. This change in mood is reflected in governmental policy changes as well. As Baird states;

The political landscape is also being changed in favor of offshore drilling, with the results of a Zogby poll & #8230; showing that three in four likely voters -- 74% -- support offshore drilling for oil in U.S. coastal waters, and more than half (59%) also favor drilling for oil in the Alaska National Wildlife Refuge ." (Baird, 2008. P.13)

One can also refer to the executive order issued by President George W. Bush in 2008 which lifted a 1990 executive order by the first President Bush banning offshore drilling (Baird, 2008. P.13).

However, there is another view of the proposed increased access to offshore exploration. This refers to the views put forward by environmentalists. This dichotomy of opinion has led to a heated debate that has resulted in the present situation regarding this issue. However, the environmentalist viewpoint is under increasing attack in today's economic climate. "The energy stalemate between environmentalists and industry that has inhibited U.S. offshore oil production since the late 1960s is being broken, environmental arguments no longer add up, and working Americans are now taking energy policy inaction personally" (Baird, 2008. P.13).

This has led to a divisive situation where, from one perspective, economic concerns are seen to be more important than the environmental implications of offshore exploration. On the other hand there is a growing and voluble environmental lobby against offshore exploration. " the debate on offshore drilling has captured headlines in newspapers, stirred debate on talk radio, and has been at the forefront on the nightly news" (Baird, 2008, p.13)

There are a number of issues and challenges that should be noted about this complex and contentious debate. One question that has affected policy and created confusion is the question of how much oil could be retrieved from offshore exploration. This has to be determined against aspects such as the costs and time involved to extract and transport the oil. It is clear from many sources however that there is no possibility that offshore oil will rid the United States of dependence on overseas oil supplies. This is a factor that has led many people to question the value of offshore oil exploration, especially in relation to the possible environmental consequences of such explorations.

Environmental issues

Environmental concerns represent the greatest challenge to governments regarding offshore oil drilling. The positive view of the offshore oil drilling received a setback in 1969 when Union Oil began exploring for oil off the coast of Santa Barbara, California. What happened was that, "The boring breached a high-pressure oil pocket, causing an explosion at the site and led to oil "congealing into a chocolate mousse mat a foot thick" (Rothbach, 2007, p. 283). This led to the National Environmental Policy Act of 1969 (NEPA). This Act acknowledged the fact that there was a lack of knowledge about the ocean ecosystem. This was an important insight and "At its core, NEPA requires federal agencies to produce an environmental impact statement (EIS) whenever they propose a major federal action" but " it was unclear from the original language of the statute whether the lease of oil exploration rights was covered" (Rothbach, 2007, p. 283). However, in 1978 Congress amended this Act with regard to the current state of the law governing the leasing of offshore oil exploration rights. The 1978 amendments "…specifically state that if a plan for development and exploration of offshore oil resources is a major federal action, then an EIS must be produced" (Rothbach, 2007, p. 283). These events were to contribute to the growing concern about the environmental impact of offshore oil exploration

It is also significant to note other events in the past that indicates the negative consequences of offshore oil exploration. Kaplan (1982) refers to the leasing for oil and gas off Santa Barbara in 1967. It was felt that a moratorium on this lease was needed as, "…oil spill containment and cleanup technology was still primitive, and the abundant populations of birds, marine mammals, and fish could be at considerable risk" (Kaplan, 1982, p. 4).

This has led to a history of environmental and other objections to offshore explorations. It is perhaps appropriate to reiterate the central aspects of this debate at this point. The controversy about offshore oil can be summarized as follows. There is dissension in the first place about the value of offshore drilling in terms of both the environment and the economic outcomes. Those who advocate greater access to oil exploration are of the opinion that this would reduce oil and gas prices, as well as reducing dependence on overseas oil. They also assert that this will have only as minimal impact on the environment.

On the other side of the debate are those who advocate the view that greater oil exploration off the coast will have little if any impact on the price of oil and, more importantly, it would have extreme and negative consequences on the environment. There are also other dimensions to this debate, which include accusations of vested interest from both sides.

In essence this leads to the central theme and thesis of this paper -- that the international community faces an extremely serious environmental challenge as a result of continued offshore oil drilling. An example of the consequences to the environment of offshore oil drilling is as follows:

Whenever oil is recovered from the ocean floor, other chemicals and toxic substances come up too -- things like mercury, lead and arsenic that are often released back into the ocean. In addition, seismic waves used to locate oil can harm sea mammals and disorient whales. ExxonMobil recently had to suspend exploration efforts near Madagascar after more than 100 whales beached themselves.

(Horton)

Boesch et al. ( 1987) distinguish ten categories of potential long-term environmental effects of offshore oil and gas development activities these include;

chronic biological effects resulting from the persistence of medium and high molecular weight aromatic hydrocarbons and heterocyclics and their degradation products in sediments and cold environments;

the residual damage from oil spills to biogenically structured communities;

effects of physical fouling by oil of aggregations of birds, mammals and turtles;