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Calls Renewed For Friendlier Sources Of Oil

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Calls Renewed For Friendlier Sources Of Oil

Energy

Calls Renewed For Friendlier Sources Of Oil

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STEVE INSKEEP, host:

OK, there's turmoil in the Middle East. World-wide demand for oil is up and gas prices are rising in the United States. Americans have seen this scenario over and over again. As NPR's Christopher Joyce reports, the scenario has put the subject of energy independence back into the political spotlight.

CHRISTOPHER JOYCE: When oil oligarchies teeter, people who buy oil get jittery and bid up the price. But demand for oil is up, too. Places like China and Brazil are growing, and the U.S. economy is shaking off its recession. Richard Newell, who heads the government's Energy Information Administration, says it's a one-two punch to the oil market.

Mr. RICHARD NEWELL (Energy Information Administration): Even before the last several weeks, we had seen increases in oil prices, which have moved into and affected increases in gasoline prices.

JOYCE: Pumping more oil out of the ground could lower prices. But who's got extra oil?

Mr. NEWELL: Spare production capacity for crude oil is located in OPEC countries, predominantly in Saudi Arabia.

JOYCE: Once again, OPEC and a Middle Eastern kingdom have their hands on the spigot, so American politicians and the oil industry are renewing their campaign to drill more here. Republican Senator Lisa Murkowski of Alaska is among the first to chime in. The Arctic National Wildlife Refuge, known as ANWR, is her solution. It sits on a big pool of oil, but its environmental value has kept it from being developed.

Senator LISA MURKOWSKI (Republican, Alaska): Our resolve to produce energy from ANWAR remains as strong as ever. World events are once again reminding Americans that we must do more to produce our own energy.

JOYCE: Speaking to the Alaska State Legislature, Murkowski pointed out that Alaska's oil production is dropping as wells run dry. In fact, North Dakota could soon pump more oil than Alaska.

The oil industry is also calling for more drilling. American refineries that turn oil into gasoline and diesel and heating oil want reliable sources of crude oil. Charles Drevna, who runs the National Petrochemical and Refiners Association, sees salvation closer to home.

Mr. CHARLES DREVNA (National Petrochemical and Refiners Association): The way to do it is to look around in our own backyard and look around to our neighbors to north in Canada and say: How can we somehow assure energy security?

JOYCE: Canada has huge reserves of oil trapped in oil sands. And Drevna says U.S. refineries are among the world's best at dealing with the crude that comes from these sands.

Environmental groups object, however. Squeezing oil out of these sands uses a lot of energy and creates air and water pollution. And getting that oil to the biggest U.S. refineries will require a new and expensive pipeline.

And there's oil, of course, in the Gulf of Mexico. After the BP oil spill last April, though, the White House stopped deep-water drilling there. This week, the Gulf is open again for deep-water business. Michael Bromwich, who runs the Bureau of Ocean Energy Management, Regulation and Enforcement, says he is satisfied that it's safe to go back in the water.

Mr. MICHAEL BROMWICH (Bureau of Ocean Energy Management): The major difference between last April and today is that for the first time, we are requiring that operators demonstrate in advance that they have a plan and the equipment necessary to respond effectively in the event of another blowout.

JOYCE: The drawback in all these cases, however, is that it'll take years to get much more oil flowing. Some experts say you've got to start sometime. But others, like Michael Lynch of Strategic Energy and Economic Research, say even though oil kingdoms may be unreliable, they still have to sell all that oil.

Mr. MICHAEL LYNCH (Strategic Energy and Economic Research): Even the richest of them still worries about their unemployed youth, their long-term pensions, liabilities. Everybody needs money.

JOYCE: Especially governments that have nothing else to sell.�

Christopher Joyce, NPR News.

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