Offshore drilling refers to the extraction of hydrocarbons from the seabed. It involves the use of expensive and technical machines such as the drilling rigs, submersible rigs and jack up rigs among others to penetrate the seabed. It could be the extraction of oil or gases, which are useful to the economy. Due to the increasing demand for petroleum products, the prices of oil have been increasing, making it an important natural resource to any economy. Petroleum products are essential for both industrial and domestic activities. Many countries depend on exported oil, which is expensive, and on the supply since some of the oil producing countries experience political wrangles and are prone to fluctuations in the supply. The debate on offshore drilling in America is based on the discovery of oil deposits in the Atlantic and Pacific oceans. After the lifting of the ban on offshore drilling in 2008 by President Bush, America is free to explore these deposits. President Obama plans to use the Atlantic coastline, the Eastern Gulf of Mexico and the northern Coast of Alaska for the extraction of oil and gas products. Although the accurate amount of oil and gas to be extracted is not known since the discovery was made thirty years ago, it is estimated that this will help reduce the amount of money, spent on importing the oil products and reduce the prices of these products in the country. This will boost the economy but will not ensure complete independence of America on the oil it produces, since the economy requires about eight billion barrels of oil per year, while the extraction is estimated to contain eighteen billion barrels in total, which is not adequate to make U.S.A completely independent.
This research paper focuses on whether it will be worthwhile for U.S.A to engage in offshore drilling. It presents the advantages and disadvantages of offshore drilling and gives the conclusion on whether U.S.A should engage in offshore drilling.
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Research asserts that offshore drilling will improve the economy of America since it will reduce the dependence on imports from the Middle East countries that are expensive and are affected by fluctuation of supplies due to the rapid political instability. United States Congress House (2011) affirms that most of these countries are always in war and their interest rates and inflation keep on fluctuating; hence, affecting the countries that rely on them for the supply of petroleum products. The fluctuations of prices also affect the budget of the country and may inconvenience most of the industries. A reduction in the production level due to lack of petroleum to run the engines leads to stock out costs. Since the rise in prices of oil in the year 2003, a lot of money has been spent on the purchase of products. Apart from using the oil internally, America could export some of it to other countries and earn foreign exchange to the Government. The availability of oil in the country will reduce the prices of gasoline in the country by a small margin. This will improve the living standards and purchasing power of Americans, since the huge amounts of money that were spent on gasoline products will be directed to the purchase of other products, hence, boosting the economy. In case the quantity of the oil and gas extracted is adequate, enough to export, then the Government will earn a lot of revenue through exporting these products to other countries. This will bring in foreign exchange, which will be used to reduce the balance of trade deficits.
Research analysis asserts that offshore drilling will create employment opportunities for many of the citizens. Since the extraction will involve the hands of people to operate the machines that dig under the seabed, increased production in the industries will lead to the employment of many people. This helps to boost the economy as employment reduces the poverty level and increases the revenue to the Government through taxes. The purchase of these machines from the producers in the country helps to improve their businesses. Technicians to repair the machines and spare parts vendors are boosted since their source of market will have increased. It will help reduce brain drain from the country since most of the people who have the technical skills in the country may move to other countries in search of employment and better working conditions. United States Congress House of Representatives (2010) asserts that creation of employment will encourage most of workers to go back to America and help build the country. People will also need training on the process of drilling and the handling of the machines, and this will create employment among the teachers and other learning institutions. Offshore drilling will create employment directly and indirectly among the citizens.
Research analysis affirms that the economy of America has not attained its full potential. The available resources have not been fully utilized. In order for the Government to utilize the resources of the country, it is wise to embark on the exploitation of the oil deposits in the sea. Thomas (2002) confirms that since America consumes around 25% of the world oil but only produces 10%, it needs to utilize the 1.76 billion acres out of the continental shelf. It has been estimated that fifteen billion barrels of oil can be extracted from Louisiana. This represents the underutilized resources that the country needs to exploit. It has been observed that the country gets about $ 1.5 billion annually from oil and gas. This revenue could be increased if the country engages in offshore drilling. The industries, the armed forces, the households and the motorists all need to use these petroleum products to get their affairs running. In some instances, it was proposed that the country should introduce vehicles that use bio fuel in the military because of the problem of inadequate supply of fuel and the expenses involved. Although it is cheaper and easier to produce, it may not have the same energy that is produced by petroleum products. Thielen (2010) asserts that many countries have not reached their full potential due to lack of technology, and skills to exploit their raw materials. For instance, countries in the third world, such as Africa, have the sources but cannot fully exploit them due to inadequate resources. America has the resources, and the technical skills to exploit the oil and gas products; therefore, it should utilize these resources to achieve optimum production.
Research analysis asserts that by engaging in offshore drilling, the Government will increase the source of revenue from royalties and leasing of oil plants. The amount of taxes, acquired from the citizens, industries and foreign exchange from exportation of the oil and gas products will help in solving the balance of trade and balance of payments deficits. Samuel (2007) confirms that through the creation of employment by the offshore activities, the number of people employed will increase, hence, increasing their living standards. The direct and indirect taxes levied on them will increase the income to the Government, which will help it to improve the other sectors of the economy. This money may be used by the Government to construct other development projects such as schools, hospitals and improvement of infrastructure. By improving infrastructure, businesses and industries will be able to transport their raw materials and finished goods to the industry and market. Improvement of communication by the Government through establishing good trade links with neighboring countries and reducing taxes and tariffs will encourage free trade among countries. This will help to increase the source of market for the oil companies, as they will be able to communicate with their customers on time and plan on the level of production that will suit the demand in the market. The Government will also earn revenue from royalties. This refers to the revenue earned by allowing another person to operate and run the offshore drilling. National Research Council (U.S.) Committee on Assessment of Safety of OCS Activities (1981) asserts that the Government can offer licenses to individuals and companies to run the drilling and, in turn, get the royalty interest. Leasing of the firms to individuals and companies for a definite period will help the Government earn revenue through the lease charges. This will be better than letting private individuals own the plants, as they may monopolize the business and raise the prices of the products. The Government through leasing will have control over the production and the prices of the products.
Research analysis asserts that offshore drilling, if not characterized by oil spills, is beneficial to the environment and sea animals. Offshore rigs in the ocean attract a variety of fish and other sea animals since it acts as a reef, which is used by the animals as breeding grounds. These rigs provide a home to these animals as they find it more secure and appealing. These places could be used as tourist attractions to both citizens and foreigners of the country as they are beautiful and appealing. This will increase revenue in the form of foreign exchange from the foreigners and dollars from the citizens. They could also provide sites for research by scientists and researchers. The researchers will save a lot of money since they will not have to go to other countries to do the research. It will also boost the economy, as anglers will be able to get a wide variety of sea creatures to sell, hence, earning income. Through this, there will be a steady supply of food. In case the fishes trapped are too many, they could be exported to other countries and earn the country foreign exchange. Plunkett & Plunkett Research, Ltd. (2007) affirms that the Government will have the opportunity of increasing its revenue through the tourist attractions, but this may not be long as the certainty of the oil spills cannot be ascertained, hence, this does not provide a stable source of income as anything could happen during the drilling process.
Research analysis confirms that apart from the benefits of offshore drilling, it also has its cons. Environmental degradation is a major factor that is associated with oil spills. This may occur either while transporting the oil to the shore or in the sea through the shafts. These oil spills are long lasting and affect the environment for a long period. The release of hydrocarbons in the air is also fatal to the ozone layer. These hydrocarbons corrode the ozone layer, leading to global warming. This is harmful to the people, since it corrodes the skin and may cause diseases such as skin cancer. Oil spillage may also cause an explosion killing both the workers and the sea animals. For instance, in 2001, the Petrobas 36 oil platform exploded, killing many people who were on the platform and the sea creatures in the water. In 1980, the Alexander Kielland, which was an oil platform, collapsed killing 123 people. Since oil does not mix with water, it forms a layer that covers the ocean and prevents the free circulation of oxygen in the ocean. This causes suffocation of most of the animals in the ocean. International Debate Education Association & Robert Trapp (2009) assert that continuous drilling leads to the disposal of harmful substances into the water such as mercury and lead, which are used in the lubrication of drills. Lead has long-term effects on the body of fishes and other sea creatures. For instance, lead in the human body causes cancer and complications in the digestive system of the human beings. Mercury is also harmful to the survival of animals in the sea. This will kill most of the fishes affecting the benefits that accrue to a country due to the sea animals.
Research analysis asserts that before any drilling is done on the seabed, research must be done on the area to extract the oil. This is done by explosives, which kill the sea animals due to the loud sounds emitted by the explosions. These explosions may also have an effect on the people, living near the sea, and cause pollution to the environment. The killing of these fishes and the effects on the people, living around the shores, are harmful to their survival and may have long-term effects. These explosives also leave radioactive waves in the sea, which pollute the ocean waters making it unfavorable for consumption and inhabitance. Haerens (2010) confirms that the noise, produced by these explosives, cannot be controlled since it takes place inside the ocean. In some instances, some of the species that were few in the ocean may be lost, leaving the ecosystem with a few varieties of fishes in the ocean. To the people, living around the ocean, this may cause some genetic problems in case of a pregnant woman who experienced the blast. These explosions may also leave some harmful substances in the water such as lead, which affects the fishes and other sea creatures.
Research analysis affirms that drilling negatively affects the tourism sector in case of the occurrence of an accident or an explosion. Due to the effects of pollution and the danger of accidents, many people will move to other places of attraction that are considered more peaceful. Gray (2011) asserts that most of the animals will also relocate to other areas for their survival and will take a longer time before they go back to their original habitats. For instance, in the occurrence of an oil spillage, most of the fishes will move to other places in search of fresh air. Since tourism is one of the vital income, generating sectors in the economy, the economy will be affected due to lack of revenue in form of foreign exchange. It will also lead to the loss of jobs by many of the people involved in the tourism sector, hence, affecting their living standards. An example is the explosion that took place in 2001, leaving most of the people dead. The oil spillage in 1980 killed 123 people. These events have threatened people from engaging in activities near drilling areas. Most people also fear being employed in these platforms due to the uncertainty of their security.
Research analysis states that offshore drilling will not guarantee the reduction in prices of gas since this depends on other vital factors. These factors include production costs, processing, the forces of demand and supply and the rates of inflation in a particular country. The discovered oil will not also guarantee America complete dependence on the oil it produces since the amount is too little compared to the level of demand in the country. The Government will have to import some in order to meet the increasing demand. This will make it expensive in the end, since the Government will have to spend more producing and importing. This will negatively affect the budget of the country, leading to balance of trade deficits. It has been established that America needs 25% of the oil, produced in the world, while it only produces 10% of the total amount. This gap shows the 15% gap that needs to be filled in order for the country to be independent (Haerens, 2010). However, it is not certain for how long this oil will be extracted since the exact amount of the deposits has not been established.
Research affirms that the costs, involved in offshore drilling, are too high. Both initial costs and the subsequent costs put into consideration will require the Government to spend a lot of money. This is because the machines, involved in drilling, are expensive and require experts to handle them. Machines, such as sub-sea system, tension leg platforms, floating production systems, sea star platforms and compliant towers, are too expensive. Money used to purchase these items could be put to more useful operations, which will help the economy grow faster. The Government will have to introduce budget cuts in some sectors of the economy or borrow externally in order to meet the costs of offshore drilling. The increased debts may put the country in a financial crisis in case the oil produced does not earn enough revenue to repay the debts. This means that the Government will have to look for alternative sources of funds to finance both the drilling projects and to repay the loans. Gramling (1994) asserts that although U.S.A is among the first world countries, it needs that money to develop other sectors of the economy, which are more vital and do not present a risk to the health and lives of the individuals.
Research shows that offshore drilling will lead to the improvement of technology in the country. The Government will strive to minimize the incidents of oil spillage and explosions. This can be achieved by purchasing machines, which are less prone to accidents and have preventive measures in case of an accident. It can also involve the expertise of other people both in the country and out of the country to advice on ways of reducing oil spillage and in the repair of the pipelines and oil tankers that transport the oil from the sea to the shore. The Government will also initiate recovery measures in case of an oil spillage. This will ensure that massive loss of lives and destruction of the environment are minimized. The introduction of technology will encourage creativity and innovation among the citizens, which will make drilling easier and safe. However, the introduction of technology comes with a cost. The Government will have to spend a lot of money on these machines that, in turn, may only yield benefits for a short period since the amount of oil to be extracted is not known with certainty.
Research analysis asserts that drilling platforms negatively affect the ecosystem of the oceans attracting nonnative species. Chakrabarti (2005) confirms that the construction of the platform displaces most of the creatures that live below the seabed. Since this construction involves the use of explosives and other noisy activities, the fishes and other sea creatures cannot reside in this environment. In most cases, these platforms cover a wide space above the ocean, and this affects most of the animals. The fact that these platforms form an umbrella like surface on the ocean waters makes the sea animals lack the necessary sunlight that enables them live comfortably; thus, they will opt to move to other regions that have fresh circulation of air and light. This means that there will be regular migration of the fishes and other sea creatures each time a platform is constructed.
Research asserts that the Government will also face resistance from the inhabitants of areas around the oceans such as Louisiana. These people will not like to be affected by the negative effects associated with the drilling of oil. These complications include the destruction of the ozone layer that plays a major role of preventing people from the hot rays of the sun. Since the people understand that the emission of hydrocarbons during the extraction of oil and gases destroys the ozone layer, they will either demand for the relocation to other regions or resist the construction of these machines. Some of the emissions into the air are also harmful to the peoples’ health that they may cause cancer or may even lead to partial blindness among the people due to exposure of harmful chemicals. Billitteri (2010) asserts that the use of explosives during the research by the scientists will affect young children, the old and the sick such that their health may be negatively affected. Relocating these people will cost the Government a lot of money, which may not be realized by the benefits of extracted oil. Wrangles from other countries may also arise since the routes used for transportation near the drills will have to be closed. The Government will also have a rough time with the environment regulators, as they will require assurance that the project will not pollute the environment and that adequate measures have been put in place to take care of any accidents.
In conclusion, United States of America should not engage in offshore drilling since there are more disadvantages than the advantages. The fact that the real amount of oil and gas to be extracted is not known, and the research, regarding the presence of the oil, was done thirty years ago, it is not wise for the Government to get into a project that involves huge amounts of capital outlay. The disadvantages of offshore drilling include the massive loss of lives and the destruction of the ecosystem in the ocean due to oil spills. Since oil is transported from the ocean by oil tankers and from underground using pipelines, which are prone to wear and tear, the oil may be spilled to the water. The spilt oil forms a layer on top of the water that is rapidly spread by the waves preventing the free circulation of air into the water; this causes suffocation of the fishes and other animals. Continuous drilling leads to the deposition of lead and mercury into the water. These are used for lubricating the rigs. Lead and mercury are harmful to the sea animals and human beings as they cause cancer. Before the process of extraction begins, the researchers have to establish the amount of deposits of oil that is available. This is done by the use of explosives that are too noisy and may lead to the death of most of the sea creatures. Drilling also affects the tourism sector. In case of an accident in the sea, the oil spilt will cause most of the sea creatures to migrate to other places. It may take a long time before they relocate back to their original habitat. During this period, the country loses the foreign exchange it was earning from the tourists. It will also cost the Government a lot of money to purchase the necessary equipment and getting the skilled labor to operate these machines. It will also involve maintenance costs to ensure that the supply of the oil is regular and not interrupted by spillages. I would propose the Government to invest in bio fuels that are cheaper and safer to handle as compared to the drilling of oil.
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