These accusations have gained currency because America consumes huge amounts of imported oil. The real problem, however, lies in dependence on foreign oil and continued refusal to ease restrictions on domestic production. While America relies on foreign oil, it remains hesitant to tap into its own bounties of oil along the Gulf of Mexico and the West Coast into Alaska. This unwillingness impairs economic growth and job creation. It also encourages the argument that U.S. involvement in the Middle East is solely for the sake of oil.
As a Nigerian, I have seen firsthand just how much potential the oil and natural-gas industries hold for economic growth. Nigeria is now the largest producer of oil in Africa, with crude oil accounting for 40 percent of the country’s gross domestic product.
By making the most of this natural resource, Nigeria saw 7.6 percent average annual economic growth from 2003 to 2010. Loosening restrictions on domestic oil exploration and development offers economic stimulus in job creation and increased government revenue.
A study by the American Petroleum Institute says that increasing access to U.S. oil could create 530,000 American jobs badly needed in the aftermath of the global economic meltdown and consequently deliver $150 billion more in revenue to the government by 2025. Estimates of oilfield potential are now far more accurate, and many places previously deemed unworthy of exploration are proving to be rich in resources. Older technology was used to estimate that Alaska’s Prudhoe Bay oilfield contained a total of 9 billion barrels. It has already produced over 15 billion.
Seismic technology allows the industry a more precise understanding of where the best opportunities for drilling lie, while subsea technology lets producers use a single platform for development of oil up to 40 miles away.
Together these technologies reduce the number of wells needed for exploration and production, prevent drilling eyesores in oil regions and protect the environment. Despite the potential of this technology, the government is hesitant to issue permits that would let companies move forward with crucial seismic studies of the Atlantic Ocean.
Making fuller use of America’s natural-gas and oil potential would not only spur domestic economic growth, but would benefit the global market as well. For instance, if America were to begin production in accordance with its potential, the increased supply would bring prices down worldwide, unfreeze resources for consumers that could be used for other household items and in turn force producers everywhere to become more competitive.
A move in this direction would also speak volumes to American motives in the Middle East. If instead of consuming excessive amounts of foreign oil and hoarding its own rich supplies, the U.S. contributed to the global oil market, it would quiet arguments that interventionist policies are driven by oil.
When considering whether or not to drill for oil, the U.S. must also consider what the world would be like if every other major oil-producing country took a similar stance and restricted their oil production as severely.
It is time for America to take on its share of global oil production, spurring economic growth through lower oil prices both at home and abroad.
About the Author: Thompson Ayodele is executive director of Initiative for Public Policy Analysis ( http://www.ippanigeria.org/), a policy think tank based in Lagos.