The Obama administration has proposed banning new offshore oil drilling on the East Coast, including the eastern Gulf of Mexico, for the next seven years. Forbes magazine reports it was a reversal of earlier proposals. New drilling will still be allowed in Alaska, but with tighter restrictions.
An earlier plan this year would have allowed drilling from Delaware to central Florida. Three weeks after the original announcement in March, the massive BP oil spill happened and a moratorium on deep water drilling was announced. Current oil platforms and drill sites are not affected.
This new moratorium may cause some changes in the way Americans think about consuming gasoline. Here’s what I think will happen in my situation
My Commuting Status
I commute to work, and my family as a whole drives about 20,000 miles per year. It’s only about three miles from my house in Branson, Missouri, to my place of employment. My wife works at home, as do I on a part-time basis.
However, many of our driving miles are spent going between Branson and Springfield, which are about 40 miles apart. Plus there are sports practices, extracurricular activities, and visiting relatives in St. Louis on a seasonal basis. Plus, we have one major family vacation in the summer where we drive somewhere and stay for around two weeks.
We already have fuel-efficient cars in our family, so the impact on our fuel bills will hopefully be minimal when the moratorium is imposed. A combination of better gas mileage, hybrid and electric vehicles, and a reduction in gas consumption over the next seven years should offset some of the possible gas price increases.
What worries me about gas prices will be when the economy picks up and moves forward. Right before the recession two years ago, USA Today reported gas prices spiked at about $4 a gallon. Then people drove less and took more public transportation. When the recession hit, prices went back down.
When the economy rebounds in the next few years, we should see gas prices going back up anyway. By then, cars on the road should be more fuel-efficient and will use less gas. If supply decreases but demand goes down as well, then the two should stabilize each other to keep gasoline prices from fluctuating too much.
For my family, it should be no big deal. If we have to make fewer trips to Springfield or cut out a vacation or two in the future, we can easily adapt our lifestyle to more expensive gas prices.
Daly, Matthew, and Brendan Farrington, “Obama: No offshore drilling in East Coast waters,” Forbes.com.
Keen, Judy and Paul Overberg, “Gas prices rattle Americans,”USA Today.