What is the Effect of the Current Middle East Turmoil on U.S. Domestic Oil Drilling?

Political instability in the Middle East in recent months has captured the world’s attention but it has also agitated oil markets. Governments across the globe are worried that sustained unrest will escalate oil prices past $100 per barrel, choking the struggling economic recovery in the United States, Europe, and elsewhere.

Instability in nations with oil reserves threatens the production, transportation, and deliveries of oil. Since oil prices are set on the world market, such events affect the world oil price. Therefore, it matters very little that the United States imports minimal amounts of crude from Libya and Algeria and none at all from Iran. Unrest in these nations will raise prices and slacken our economic recovery. Meanwhile, higher prices will mean pain at the pump for families and higher profits for the Big Five oil companies.

Democrats are calling for a short-term, immediate fix — tapping into America’s oil reserves. They also urged the president to do more to encourage the development of “clean-energy alternatives.”

Republicans, on the other end, used the Libya crisis as another example of why the United States should expand domestic drilling.

“Americans are feeling the pain at the pump as gasoline prices climb …. Tapping the [Strategic PetroleumReserve] may provide some temporary relief but we must consider America’s long-term energy security,” said Republican Representativ. Doc Hastings of-Washington, chairman of the House Natural Resources Committee.”Short-term releases of oil from our strategic reserves does not replace the 300,000 barrels a day this administration has squandered due to inaction on offshore drilling permits, nor will it put the thousands of people in the Gulf back to work.”

Alaska Republican Sen. Lisa Murkowski is pushing to allow drilling in the Arctic National Wildlife Refuge, citing the unrest in the Middle East. A ranking member of the Senate Energy and Natural Resources Committee, Murkowski has said, “For the sake of our national security, for the sake of our economy, and for the sake of our world’s environment, America should produce as much of the oil that it uses as possible.”

The Obama administration has shown little interest in expanding domestic drilling since the April 2010 oil spill in the Gulf of Mexico. A deepwater drilling ban put in place after the spill has been lifted, but the Interior Department also announced it would ban any new drilling in the eastern Gulf and off the East Coast for at least seven years.

Democrats say better fuel economy and alternative-energy investment will insulate the market from foreign oil disruptions.

Lawmakers aren’t the only ones calling for pro-oil and gas policies out of Washington. The Independent Petroleum Association of America (IPAA) said in a statement, “These messages from Washington and beyond underscore the need for increased domestic energy production. Rather than wait for stability to come out of an inherently unstable region of the world, Congress should look for ways to enhance America’s own energy resources, beginning with an improved oil and gas leasing process.”

Daniel Weiss, a director of climate strategy at the liberal Center for American Progress, wrote in a USA Today column that “drill, baby, drill” will not suffice. He said new drilling would take years to yield anything from the Gulf.

White House Press Secretary Jay Carney has said that the administration has “the capacity to act” but is currently just monitoring the situation.