Domestic drilling advocates warn of increased global demand for oil, dwindling supply

close

Video

Cost of waiting to drill for oil

Should U.S. increase domestic drilling now?

All over the world, more people are buying cars and using gas as growth in the global economy increases the demand for fuel. Likewise, oil supplies are projected to get tighter and tighter.

"China was at 5 million barrels a day in 2005. Today, they are at 10 (million). By 2015, they are going to be at 15-million-barrels-a-day demand," said John Hofmeister, former president of Shell Oil and founder of Citizens for Affordable Energy. "That's 10 million new barrels over 10 years. India is going from 4 to 7 (million) in the next three to four years."

President Obama recognizes the coming explosion in demand.

"China and India, they're growing. China added 10 million cars in 2010 -- 10 million cars just in this one country," Obama said last week. "And they're just going to keep on going, which means they're going to use more and more oil."

The president, however, argues that more drilling is not the way to protect the U.S. Instead, he wants to wean the U.S. off oil by turning to alternatives, such as electric cars.

"If we want to stabilize energy prices for the long term and the medium term, if we want America to grow, we're going to have look past what we've been doing and put ourselves on the path to a real, sustainable energy future," he said.

The problem is, most analysts say, the transition to alternatives takes far longer than more drilling would.

"And we have a capital stock of hundreds of million of vehicles," Guy Caruso of the Center for Strategic and International Studies said. "So these types of transformations take decades and maybe even 50 to 60 years."

Though the president talks about drilling, official government figures show he is issuing far fewer permits on federal land than his predecessor.

At the end of the Bush years, 6,000 to 7,000 permits a year were issued, but under Obama the numbers have dropped significantly to a range of 4,000 to almost 4,500 a year.

Since it can take seven to 10 years for a permit to turn into a producing well, that means less oil coming off federal lands in the years to come, even as global demand is rising.

Advocates of more domestic drilling say we know a crunch is coming, so we should be drilling more now -- otherwise, the result could be ugly.

"The reality of the situation, with respect to global supply is that Americans can find themselves in gasoline lines, with gas rationing by 2015 or 2016 by us not producing more of our own oil," Hofmeister said.

Even with alternatives, the Energy Department predicts that in 2035 we'll still be relying on oil for 83 percent of our transportation needs.