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Wednesday, April 7, 2010 as of 11:14 AM ET

Natural Disaster

Brian Wilson

Washington, DC

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Gulf Wells: Risk vs. Reward

July 9, 2010 - 11:15 AM | by: Brian Wilson

The BP spill in the Gulf may well be the worst ecological disaster in the history of the United States. When you see pictures of slimed beaches and oily birds, it’s easy to wonder about the wisdom of off-shore drilling. Is it really worth the risk?

We’ve been drilling in the gulf since 1947. There are more than 50,000 well holes punched into the seabed just off the U.S. coast. And yet, in more than 60 years of drilling there, the BP spill is the first major spill to occur in the U.S. coastal waters of the Gulf of Mexico. According to Rayola Dougher of the American Petroleum Institute, “up until this accident, since 1947 the spill rate in the Gulf of Mexico is 1/1000 of 1% of all of the oil produced.” She believes the oil industry overall, has a “stellar” record. If her statistics are correct, oil producers in the gulf have, in the past, spilled less oil than naturally seeps from the seabed.

The Gulf of Mexico provides 10.6% of the crude we use in America each day. That is roughly equal to the amount of crude we take in from Canada — our single largest provider of imported crude. From the gulf crude collected each day we produce roughly 31.2 million gallons of gasoline. That’s enough, on average, to drive every car registered in America roughly nine miles a day. That same gulf crude also provides 14.7 million gallons of diesel or heating oil, and 6.5 million gallons of jet fuel. That’s enough jet fuel to fly a fully loaded Boeing 737 to the moon…nine times. So, if you drove your car today, or bought goods that were delivered by a truck, or took a vacation flight to get away from it all — you likely benefited from the drilling that occurs in the Gulf of Mexico.

If starting tomorrow there were no oil being produced from the Gulf , our already shaky economy would take a huge hit. As Daniel Kish of the Institute for Energy Research put it, “if we want less prosperity then a great way to do it is to cut off oil.”

If you need evidence of the impact gulf crude oil has on our economy, just take note of the spikes we see in crude oil and gasoline prices each time a hurricane disrupts Gulf oil production for even a few days. If we had to replace the oil we take from the gulf tomorrow, it would mean that 3/4’s of the oil we use each day would have to be imported. We already import 64% of our crude – much of it from countries that do not have our best interests at heart.

And there is this: remember the oil crisis of the 1970’s? Remember the long gas lines and the way that skyrocketing gas prices hit our economy? That occurred when Organization of the Petroleum Exporting Countries (OPEC) withheld only 7% of the crude it had been sending us. Imagine the impact of losing 10.6% of the crude oil we use each day that comes from the Gulf of Mexico.

Clearly the BP spill is a disaster the likes we have never seen. But to stop — or dramatically curtail — drilling in the gulf experts say could create an economic disaster.

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