Drill Offshore or Drill Detroit? Numbers Show the Way

The energy discussion took a great leap forward today with the release of a report by the Center for Economic and Policy Research.

Senator McCain and President Bush have recently called for oil drilling in offshore US waters as a solution to high gas prices. So the report examines whether drilling would make a difference at the pump and compares it to the impact of increasing the fuel economy of automobiles.

No surprise -- drilling for oil would have no effect on gas prices. That's according to the Energy Information Administration:

The Energy Information Agency (EIA) projects that Senator McCain's proposal would have no impact in the near-term since it will be close to a decade before the first oil can be extracted from the currently protected offshore areas.

The EIA projects that production will reach 200,000 barrels a day (0.2 percent of projected world production) at peak production in close to twenty years. It describes this amount as too small to have any significant effect on oil prices.

But what if US autos had become more fuel efficient over the last 20 years, slowly but steadily? A lot of savings at the pump and a whole lot of oil no longer needed -- about 3 million barrels a day less. The lost opportunity is astounding in magnitude, and points to a better way toward energy security.

More precisely, the authors of the report found that the US would be using 3.3 million fewer barrels of oil today if mileage standards had steadily increased 0.4 mpg per year since 1985. Here's their reasoning:

If, instead of holding them constant, the government had increased mileage standards after 1985 at the rate of 0.4 MPG per year for both cars and light trucks (a much slower pace of increase than in the period from 1980 to 1985), then the standard for cars in 2007 would have been 36.8 MPG and the standard for light trucks would have been 28.3 MPG. The average for the current fleet of cars on the road would be over 32 miles per gallon.

If fuel efficiency had improved at this rate, then the average car on the road would be more than 50 percent more fuel efficient than is currently the case (32 miles per gallon compared with 20.2 miles per gallon)......this would imply a reduction of more than one-third in the amount of oil used for the country's gasoline needs.

This savings would be equal to approximately 3,300,000 barrels per day.

That's about the level of efficiency US autos are expected to reach by 2020 -- 12 years from now. If the fuel economy standards are strengthened as California and many other states are still trying to do, daily US demand for oil would drop even further -- far more and far sooner than drilling for oil offshore.

Want relief at the pump? Don't look to offshore oil fields. Those are earmarked for flooding oil company coffers with more profits that won't ever trickle down to consumers.

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