Got energy?

compiled & edited by Daniel Hagadorn

Considering the vast reserves possessed by the United States, energy should be exceedingly cheap (should be).

The U.S. Congress bears sole responsibility for artificially increasing oil prices since it is OUR oil that remains largely untapped beneath OUR deserts, OUR forests, OUR swamps and OUR oceans. These politicians that we have freely elected…and re-elected…and then re-elected [sigh] are preventing OUR oil from being drilled by us and sold to us.In 2005, Congress passed the Energy Policy Act which required the Department of Interior (DOI) to inventory oil resources that could be accessed both onshore and offshore in U.S. territory. In February of 2006, the DOI’s Minerals Management Service (MMS) published a report concerning offshore oil resources in the Outer Continental Shelf (OCS) and determined that there were 85.9 billion barrels of “undiscovered technically recoverable” oil waiting to be recovered from our coastal waters.

In “bureaucratese,” the phrase “undiscovered technically recoverable” means that oil companies can access these areas with off-the-shelf technology, but the government renders no judgment concerning the profitability of doing so. This oil, claims the government, is “in undiscovered accumulations analogous to those in existing fields producible with current recovery technology and efficiency, but without any consideration of economic viability.”

The United States remains [for now] a dominant world power in terms of energy reserves so why does the media continue trumpeting their “dependence on foreign oil” doomsday predictions. Just because America chooses to purchase oil from other countries, does NOT mean that we are actually reliant upon foreign oil.

Presently…[1] [2]

  • The United States has 139 billion barrels of proven oil reserves.
  • Iran has 136 billion barrels of proven oil reserves.
  • Iraq has 115 billion barrels of proven oil reserves.
  • Kuwait has 101.5 billion barrels of proven oil reserves.
  • The United Arab Emirates has 97.6 billion barrels of proven oil reserves.
  • Venezuela has 80 billion barrels of proven oil reserves.
  • Russia has 60 billion barrels of proven oil reserves.
  • Libya has 41.5 billion barrels of proven oil reserves.
  • Nigeria has 36.2 billion barrels of proven oil reserves.

So where is America’s 139 billion barrels of proven oil reserves located?[3] [4]

  • 86.2 billion barrels of proven oil reserves are located in the “Outer Continental Shelf.”
  • 29.2 billion barrels of proven oil reserves are located in “State waters and nonfederal onshore resources.”
  • 23.6 billion barrels of proven oil reserves are located in “Federal onshore oil resources.”

In fact, according to the May 2008 Bureau of Land Management Report, 279 million acres of federal land hold the “potential for oil or natural gas resources.”

Of that 279 million acres of federal lands…[5]

  • 62% of those acres are currently off-limits to exploration. [6]
  • 21% of those acres are currently open to leases with “restrictions.” [7]
  • 17% of those acres are currently open to oil drilling on nearly identical environmental terms as private land. [8]

The majority of rational people from both sides of the environmental debate largely agree that the obvious benefits of discovering and implementing a cost-effective, environmentally-friendly, fuel source should be actively pursued. Ironically, the voices who wail the loudest concerning our “dependence” on foreign oil are equally and inexplicably shrill in their opposition to domestic drilling, nuclear power, clean-coal, etc.

Of course Congress has devised a “solution” to this problem. “Fortunately” for Americans, the federal government possesses the wisdom to determine–for every individual and business in America–the optimum level of carbon-dioxide emissions. After government bureaucrats mandate the appropriate level of emissions, the public will then be allowed to “trade” on the remaining rights. The sponsors of this obscene federal power grab were Senator Joe Lieberman [I-CT] and the former poster child for term limits, Senator John Warner [R-VA].

The media attempted to portray this bill (as well as the updated “cap-and-trade” version) as an important legislative solution that absolutely every responsible citizen in America should support. Conspicuously absent from the discussion was the cost–to our financial future and, even more troubling, to our individual freedoms. If either of these costs had been included, it is certain that both the media and the federal government would have vastly underestimated them.

In fact, contrary to the partisan hysterics of the mainstream media, the potential economic devastation of the bill would be (as well as the updated “cap-and-trade” version) unimaginably catastrophic.

  • According to the Heritage Foundation’s analysis, the economic damage of the bill, adjusted for inflation, would equal the cost of “660 hurricanes—35 per year—for two decades.” [9]
  • According to the Congressional Budget Office (CBO), the Lieberman-Warner bill would effectively raise taxes on Americans by more than $1 trillion over the next 10 years and estimates that “most of that cost would ultimately be passed on to consumers.” [10] [11]

By implementing “un-guaranteed” assumptions–like a 150% increase in nuclear-power generation by 2050–the Environmental Protection Agency (EPA) concluded that the Lieberman-Warner bill would result in annual reductions of U.S. gross domestic product ranging from $238 billion to $983 billion in 2030, and from roughly $1 trillion to more than $2.8 trillion in 2050. [12] Gas prices would increase by $0.53 per gallon in 2030 to $1.40 per gallon in 2050; and electricity prices were projected to increase 44% in 2030 and 26% in 2050.

Perhaps our reflexively regulatory body of lawmakers should heed the words of Thomas Jefferson before seeking to transform our country into their personalized version of energy utopia.

“Laws are made for men of ordinary understanding and should, therefore, be construed by the ordinary rules of common sense. Their meaning is not to be sought for in metaphysical subtleties which may make anything mean everything or nothing at pleasure… On every question of construction carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates and instead of trying what meaning may be squeezed out of the text or invented against it, conform to the probable one in which it was passed.” [13]


[1] U.S. Energy Information Administration.

[2] U.S. Department of the Interior, Minerals Management Service Report (2006).

[3] U.S. Department of the Interior, Minerals Management Service Report (2006).

[4] U.S. Bureau of Land Management Report (May 2008).

[5] Bureau of Land Management Report (May 2008).

[6] Described as “All oil and gas leases on Federal lands, including those issued with only the standard lease terms, are subject to full compliance with all environmental laws and regulations. These laws include, but are not limited to, the National Environmental Policy Act, Clean Water Act, Clean Air Act, Endangered Species Act and National Historic Preservation Act. While compliance with these laws may delay, modify or prohibit oil and gas activities, these laws represent the values and bounds Congress believes appropriate to manage Federal lands.”

[7] Defined in part as “lands that can be leased but ground-disturbing oil and natural gas exploration and development activities are prohibited” and “lands that can be leased, but stipulations…limit the time of the year when oil and gas exploration and drilling can take place to less than 3 months.”

[8] Described as “All oil and gas leases on Federal lands, including those issued with only the standard lease terms, are subject to full compliance with all environmental laws and regulations. These laws include, but are not limited to, the National Environmental Policy Act, Clean Water Act, Clean Air Act, Endangered Species Act and National Historic Preservation Act. While compliance with these laws may delay, modify or prohibit oil and gas activities, these laws represent the values and bounds Congress believes appropriate to manage Federal lands.”

[9] Ken McIntyre, “Warning: Hurricane J.J. Closing In!”, Heritage Foundation (30 May 2008).

[10] Marc Gunther, “A $3 trillion climate change battle”, Fortune Magazine (15 May 2008).

[11] Review & Outlook, “Cap and Spend”, The Wall Street Journal (2 June 2008).

[12] Brent Bozell III, “Hurricane Lieberman-Warner,” Townhall.com (4 June 2008).

[13] Thomas Jefferson, The Jeffersonian Cyclopedia, John P. Foley, ed. (New York & London: Funk & Wagnalls Co., 1900), p. 844. Letter from Thomas Jefferson to William Johnson, 12 June 1823.

2 Responses

  1. Jay Din says:

    Thanks for another great post. If the US has such vast reserves, isn’t it smart to “rely” on foreign oil first and then begin tapping our own when those are either used up, or else become too expensive for the average consumer?

    • The United States also possesses vast reserves of coal and natural gas, in addition to the petroleum deposits, but through various coercive methods employed by the federal government, those resources remain either untapped or heavily restricted. I advocate using everything–hydrogen, solar, wind, natural gas, petroleum, coal, nuclear, etc. until one energy source becomes dominant (i.e. similar to the competition between HD and BlueRay technologies).

      When energy becomes cheaper it decreases the cost for every item that is transported by it–which improves everyone’s standard of living.

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