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Reality Check

March 17, 2005

A narrow majority of the Senate voted Wednesday to open the Arctic National Wildlife Refuge to oil drilling. New domestic production, proponents insist, will boost energy security and help keep a lid on oil prices.

The markets, however, were mightily unimpressed by the Senate's act of political self-indulgence. Crude oil futures prices rose above $57 per barrel the following day. One analyst with a trading firm said prices passing $60 per barrel is a matter of when, not if.

The markets see what the drilling proponents refuse to see. Soaring demand is driving oil prices upward, stretching the global oil market snare drum tight. China is growing like gangbusters, India is following on China's heels, and America's federal government refuses to take fuel efficiency seriously.

Opening the Arctic refuge to drilling sends a ludicrous message that boosting domestic supply is the magic wand that will meet our energy needs. The drilling proponents, however, never want to talk about the demand side of the equation, or if they do, they give oil demand reduction spurious lip service.

Absent a serious policy to improve fuel efficiency and to aggressively commercialize non-petroleum fuels, domestic oil demand will outrun domestic supply, and ever larger quantities of oil imports will be needed to close the gap, putting more pressure on the global oil market and sending prices ever higher.

By 2025, Department of Energy business-as-usual projections estimate that U.S. oil demand will be 8 million barrels per day higher than it is today. There is no prospect, none whatsoever, that the Arctic Refuge would come close to supplying the increased demand.

In short, as long as the U.S. is dependent on oil, the U.S. will be dependent on foreign oil. We will be vulnerable to economically damaging price spikes. We will keep sending money to dysfunctional regimes, the kleptocrats and autocrats sitting on the world's largest remaining oil reserves. We will sow the seeds of future conflict with China in a potentially deadly competition to grab the last pots of black gold.

Feeding the addiction and perpetuating our exposure to these dangers would be the sorry legacy of politicians fulfilling their obsession to drill for oil in America's Arctic National Wildlife Refuge.