Yes, Supply Matters

U.S. Sen. Chuck Schumer is worried about the impact of the potential loss of Iranian oil on the global crude market. Reuters reports:

The United States should do more to encourage Saudi Arabia to boost its oil production to make up for lost Iranian oil, Senator Charles Schumer said on Sunday, urging renewed diplomacy as a way to ease the run-up in oil prices. … A public promise from Saudi Arabia, the world's top oil exporter, to pump oil at its full capacity would calm oil markets as well as gasoline prices, Schumer, the third-ranking Democrat in the Senate, said in a letter to Secretary of State Hillary Clinton.

Without saying so directly, Schumer’s point is that, yeah, supply matters. Global markets respond positively and negatively to ups and downs in supply – hence Schumer’s push for the Saudis to boost output.

He’s not alone. The administration believes in the power of supply, too. That’s why it released oil from the Strategic Petroleum Reserve last year during the Libyan crisis. There’s talk of another SPR release now, Interior Secretary Ken Salazar says.

It would be great if the United States had its own oil supply options, if America could reach a point where our supply and our energy future were more secure. How about a future where we don’t have to ask others to boost their production, where we’re not presenting ourselves as eager customers for others’ oil – as the president did last year in Brazil:

“We want to work with you.  We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers.”

Wait! We do have supply options. They start with building the Keystone XL pipeline and strengthening the energy relationship we have with our friend and neighbor Canada. We can increase access to federal lands, onshore and offshore, and get permitting in the Gulf of Mexico back to where it was a couple of years ago. We can continue developing biofuels and other energy technologies.

Put them all together and we could see 100 percent of our liquid fuel needs met domestically and from Canada. Not 50 years from now or 25. By 2024. And research says we’ll see new jobs, economic growth and increased revenues to government along the way.

But it starts with ending the drill-anywhere-but-here mindset that is keeping our resources on the shelf and the United States beholden to global energy politics.

It includes rejecting the view that 1 million barrels of oil per day from the Arctic National Wildlife Refuge (ANWR) is irrelevant because it won’t come online for 10 years – which has helped block ANWR development for more than a decade.

It means discarding the false premise that the United States lacks the resources to exercise greater control over the supply equation.

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