The Case (Almost) for DrillingKooky ideas abound, but there is a nearly rational argument for new offshore oil exploration.

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Sounds good. But wouldn't any increase of U.S. production simply get eaten up by rising demand in the global market? "You would expect demand to grow in the developing world. But based on energy investments being made today, there will be increased international supplies," he said. Ultimately, he believes, the rest of the world will follow the U.S. lead in biofuels and demand destruction.

What about the opposition? If expanding drilling can't gain traction with gas at $4 per gallon, the cause would seem to be hopeless. Hofmeister believes opposition to more drilling comes from peak oil enthusiasts, who believe the U.S. has essentially run out of hydrocarbons and thus should abandon hope of finding more; from environmentalists, who believe the negatives of carbon emissions and possible environmental damage from spills outweigh any possible positives, and thus want to shift away from hydrocarbons altogether; and from politicians and landowners in coastal states like Florida and California, who fear that their views and property values would be hurt. "Those numbers of people are large, and influential, and politically active," Hofmeister said.

But Hofmeister believes that data and reason will bring them around. "The phenomenon of the roundness of the earth means that at a certain point away from the shoreline you can't see operations offshore," he said. He believes the industry's safety record—there hasn't been a devastating spill since the 1969 Santa Barbara debacle—should inspire confidence. "You'd have to say the industry has performed very well." (Exxon, cough, Valdez, cough.)

Hofmeister agrees with the environmentalists that petroleum has a finite future as a transportation fuel. "The internal combustion is a great invention that has served us well for a century, but it is time for us to move on," he said. Ultimately, cars will be powered by hydrogen or electricity. So why not go whole hog and use today's high prices as an excuse to proceed more rapidly to the next big thing starting now? "The reason I advocate more hydrocarbons now is the social disequilibrium that is being caused by the shortage of domestic hydrocarbon production," he said. High gas prices are "a national problem of excruciating social pain." And the pain is widespread. Hofmeister is cutting back the miles he runs up on his Volkswagen Phaeton. "I wince when I pull in to a gas station."

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Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at and follow him on Twitter. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published in paperback.

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