But, but, I thought they needed more offshore oil leases

Christopher Palmeri and Stanley Reed report in How the Oil Industry Is Surviving $40 Oil Business Week Online 03/05/09:

The energy industry's response to the swift decline in commodities prices looks as subtle as a dull drill bit hitting hard rock. Across the oil patch, budgets are being slashed, wells closed, and long-term contracts torn up. The number of rigs drilling for oil and natural gas in the U.S. has fallen 40% in the past four months, a steeper decline than in any recent oil bust.

It was just last year that that bold Maverick McCain and Sarah Palin were saying that we needed to free up more offshore areas for oil leases so Big Oil could "drill, baby, drill". And that even Obama and the Democrats were willing to partially accommodate the policy.

The oil lobbyists always say that if can just get [less regulation, more favorable tax treatment, more access to protected areas, fewer environmental laws] that they can swiftly create floods of new oil. And at the same time - at least if you judge by the TV ads that ExxonMobil and Chevron run regularly in California - they've already reinvented themselves as green companies pioneering renewable energy sources.

The truth is that Big Oil has found it advantageous even after the Arab oil embargo of 1973 to rely heavily on foreign oil. They weren't even exploiting all the offshore areas on which they already had leases, which is a big reason why it was so silly of them to be demanding more last year. Not silly from their point of view, but from the standpoint of sound public policy.

But while they are cutting back on oil production, Palmeri and Reed report that the oil majors are pushing ahead with their green vision:

If there's a silver lining here, it's that the oil industry also seems to be focusing much more aggressively in this downturn on such things as energy efficiency, new technology, and even wind and solar power. "Typically, cost cutting has been laying off people," says Candida Scott, a consultant with Cambridge Energy Research Associates. "Now people are taking a much harder look at everything they do."

Which is great if that's what they are actually doing. But something tells me the oil lobbyists will still be pushing the same basic agenda they have for decades.

The real oil problem the United States faces is not foreign oil. It's our dependence on oil.

Tags: us economy