Drill, 'Bama Drill!

I make no secret of the fact that the policy goal of this blog is to find the set of incentives that will lead to a sustainable economy that provides a minimum level comfort to as many people as possible. As such, the opinions expressed here are generally opposed to activities that encourage greater use of fossil fuels. For the moment, however, I'm all for this: Recharging Debate, Obama Expands Offshore Drilling

I do not, however, believe that it will make a noticeable difference in US oil imports. I don't expect there to be any real impact on the price of oil, given the cost of extracting deep-water reserves and the years of work required to bring this stuff to market. This will do very little, if anything, for US employment. In other words, I doubt there will be any significant positive benefit from this decision, and it will likely be regarded by history as mistake.

That is precisely what I hope to see. History suggests that energy extraction is extremely bad for the local community, bringing environmental degradation (and loss of tourism dollars). It draws corruption like flies, the only thing worse is foreign aid or Federal pork-barrel spending. If the money doesn't get siphoned off, its effect on civil society is about what one would expect from people spending money they didn't earn and don't have to (or can't) maintain.

Nothing will defang the argument that "we're not exploiting our national resources" in the energy debate like actually exploiting them. Nothing will hurt oil's image in the public mind quite like a big spill, or even unsightly oil rigs, off formerly beautiful beaches. The political fight over issuing permits, arguments over subsidies will become political footballs that will increase uncertainty and make everyone involved look bad.

In short, this is likely to be a Pyrrhic victory for the extraction industry. Inshoring the problems of energy extraction over the objections of a large number stakeholders will highlight those problems. The only way this decision will impact energy security is if it is matched with enormous efficiency improvements and little regard is paid to environmental concerns. According to the CSIS, we're looking at a period of stagnating energy demand, meaning it may never be profitable to use a rig off the coast of Florida or Virginia.

If this move provides the political cover to pass a climate bill that creates a stable regulatory environment, it will be an unqualified success. If it changes the tone of the debate away from simply rehashing old arguments, it will be moderately successful. Alone it will do as much for energy security as Diet Coke has for obesity.