Even Democrats Should Support Offshore Drilling

This is an editorial - and a confession.  

I’ve become a Bush Democrat.  I’m so convinced, thanks particularly to the Bush years, that the Republican party is on the wrong track fiscally, internationally, environmentally, and socially in terms of judicial appointments that I would vote for a broomstick if it were a Democrat against any Republican for any office.  That even includes Charlie Christ and a few other Republicans whom I respect greatly.  I just don’t want that party in power any more.

But (you knew there was a “but”) I think the Democrats and the environmentalists are wrong about a key aspect of energy policy, drilling for oil.   I think the U.S.  needs to drill, drill, drill - everywhere.  That is, assuming control by each state of the final decision regarding their respective shores.  And in a safe way, to be sure.  And only as part of a broader energy policy that includes strong incentives to transition to electric vehicles and produce electricity in clean and renewable ways.  And I would add a windfall profits tax on excess oil company profits too, as I discussed a few days ago.

The main reason the Democrats are wrong about drilling is actually the central argument that they themselves make: that it will not produce oil for ten years.   But, hey guys and gals, that’s exactly when we are REALLY going to need it.  Maybe a little earlier.  But believe me in ten years oil will be well over $500 a barrel - maybe $1,000 a barrel - and scarcer than you can imagine.  We will have stopped driving not only Hummers but even light pick-up trucks, except when totally necessary.  We will no longer be profligate users of oil.  We’ll be driving small cars and electric cars, taking public transportation, car-pooling, and adopting all sorts of good habits.  

And still the price of oil will be sky high because the Chinese and Indians and Russians and Saudis will all have six times as many cars on their roads as they do now.   And the Mexicans will not be exporting any oil - in fact they will need to import it.  Only the Russians, the Canadians, and some OPECers (like the Saudis but not the Iranians) will be exporting oil, and not nearly as much as they do now.  (And the Brazilians will be a bright spot too). 

If oil could be delivered in just a few years from newly authorized U.S. drilling offshore and in ANWR (where only very wealthy people could ever afford to visit- although hardly anyone ever does), I’d be opposed to it.  We do not need another “hit” of oil while we are still addicted to it, as Tom Friedman argued in Sunday’s New York Times.  But in ten years the addiction will be over.  We will have made the transition to an electric economy.  And we will never go back because renewable electricity from wind and concentrating solar thermal plants and other sources will be so much safer, cleaner and cheaper than the oil to which we are now addicted.

This suggests that Tom Friedman was wrong to say that drilling now will feed our oil addiction.  But his central point was right, that Congress needs to re-authorize incentives for producing alternatives to oil.   His drilling point was wrong only because he apparently does not understand enough about the timing of peak oil, the rapid transition, and the availability of the oil we would get if we began now to authorize more off-shore and ANWR drilling now.  But Friedman is no more wrong on drilling than the Democrats who actually know it will be ten years before the oil flows and still oppose it. 

What a really smart Democratic party would do at this point is trade off new drilling rights for a windfall tax on the unnecessarily high part of oil profits and then re-distribute the tax revenue to consumers and thereby save our economy from the consumer meltdown that is now in progress.   Just like the Berlusconi government is doing in Italy.

I’ve been an Obama fan from the start because I think brains and judgement matter and I think he’s got more of both than anyone else.  Of course, you can’t use your brains too much during an election campaign other than to get elected. (Can you imagine if Bill Clinton had campaigned on welfare reform in 1992?  He’d have been murdered by his own party!)  But I am hoping that if Obama can get elected, he’ll manage to push the Democrats toward more rational energy policies - like increased drilling for oil off the Outer Continental Shelf and ANWR - that might actually help the country.  When we need it.  Not now, but ten years from now.

Comments

[Mmarrkk]

Glad you are almost there on energy. But God help us all for your other thoughts! While smart, Obama is a marxist. His fiscal policies will basically involve tax the rich, give away all funds to those who support him and screw those who don't. Throw in a lot of wasteful government spending and some basic Illinois graft, corruption and pay backs, and you have a fitting picture of good ol' Barry! Is it a coincidence that he purchased a home at well-below market value from a well-connceted politico? Is it a coincidence that he is good friends with a convicted felon and someone who bombed the Pentagon? Or that he went to church and claims as a mentor a racist? Sorry, his type of brains we don't need. His type of fiscal policy we don't need. His type of social change we don't need. While I'm not enthralled with McCain, I'll hold my nose and vote for him rather than try out the tired old Democratic party policies.

Change? Hope? yeah right. With good ol' Barry all there will be will be "hope" that I have any "change" left in my pocket to pay for my groceries. Or will he have a government program designed to force people to use a government program to give out groceries? Much like his medical insurance plan?

[RWB]

I wish people actually knew what the word Marxist means. You know--putting the proletariat in control of the means of production and all that? Because there is no U.S. politician (who actually has hope of getting elected to any position more powerful than the Madison city council) who is a Marxist. Sheesh. You just look like an idiot when you throw absurd scare words like that around.

[The wizardof Wallstreet]

RWB - just becasue you dont label yourself a "marxist" does not mean that you dont practice "marxist" policy. It is not a "scare" word, had you read the "manifesto" you would see that the same principles are being applied by modern day democrats. Obama has talked about the "distrubution of wealth" --wealth is not distrubuted, it is earned. (except for those pesky 2% who are born millionares) the other 98% of us work for our money. A "windfall" profits tax will only increase the burden on consumers, however it will hurt the "poor" more than the wealthy. (Maybe we should have a windfall profits tax on professional sports too..if we allow this, where will it end?) If the govt really wants to help our society, they should allow 100% deduction of tuition or free education for those less fortunate, which would ensure that only those who are willing to work for it, will benefit from the system.

America is not a democracy - it is a Constitutional republic, designed to protect the rights of the individual - The reason we had the revolution is rearing its ugly head in current day america -

1.) The tyrrany of the majority

2.) Taxation without representation

If Obama gets elected you might as well call it the USSA (the extra "S" for socialist)

[User 202445]

RWB, the Marxist label fits Obama just like so many pejoratives fit Bush and Cheney.

Very surprising Kingsdale has no faith in McCain.

[AlexS]

Hoping? Why would you hope that someone goes against everything he's said publically, everything he's voted for? Because that's a rational thing to do and you're convinced that Obama has brains and judgement? Why? On what basis? Certainly not from his position on energy. Not from his voting record. Mr. Kingsdale, it sounds to me like you read too many newspapers. I wonder if we could try on the "it won't matter immediately anyway" arguement to other areas. Here's a thought. We don't need to be concerned about elementary education. I mean, it's not going to matter for another 10-20 years anyway. Just like drilling for oil. Why bother? So what would we do if a party would make that assertion, that elementary education doesn't matter? Would we take that seriously?

[NLFEnergy]

Jim, I'm shocked you endorse Obama. The only logical reason I can think of for an energy man like yourself to endorse Obama would be because he may let a few of the majors have a few more leases. (This is evident as his Exxon-is-evil ads were pulled off T.V. the day after Exxon gave him a huge sum of money as a campaign contribution. I find it funny that Obama repeatedly boasts of not taking money from major corporations or the oil companies but no one seemed to notice when the Exxon ads were pulled from T.V. immediately as oppose to being run 46 times a day on CNBC and other major news networks.) You cannot actually believe he will let anyone drill in ANWR, can you? You should know that his idea to tax the majors more heavily will only increase the prices of energy for all of us consumers. (Corporate income taxes do not exist, they are just passed on to consumers almost in full.) On top of all that he is completely against nuke energy which will be an impossible hurdle to overcome if we were to move more towards a national electrical grid, something I know you are a huge fan of. Obama would be the worst thing that could happen to energy consumers in this country short of the strategic petroleum reserve catching on fire.

[Investor612]

Mmarrkk, I disagree. Obama is glib or rather he can deliver a canned speech flawlessly in his melodious modulated voice. Smart? perhaps, but he's quite ignorant of economics and history as his repeated gaffes on both subjects reveal.
Like Mr.Kingsdale, I'm also disgusted by the Republicans, though apparantly he prefers expansive legislation from the bench as opposed to following The Constitution when it comes to judges, judicial appointments being one of the things the Bush administration has gotten right.

But as bad as the Republicans are and currently they're terrible, the Democrats are even worse making Mr. Kingsdale's position of voting against those Republicans he likes nonsensical:
The Republicans have spent money like drunken sailors-apologies to the sailors for the comparison. The Democrats want to spend even more money. The Republicans screwed up the occupation of Iraq. The Democrats want to salvage defeat from victory after the Republicans finally got it right. McCain is against ANWR, but at least wants to open up coastal drilling. The Democrats oppose it all and on it goes.
As for Obama's supposed great intellect and judgement, Mr. Kingsdale seems to be doing what voters in my former state did when they elected Jesse Ventura: He's projecting onto a relatively unknown candidate all the qualities he'd like him to have.
One of my favorite Obama virtual reality history moments came when he pronounced that we must talk to our enemies the way Roosevelt did. I've searched and searched and still can't find a single discussion between FDR and either Hitler,Mussolini, or Tojo. And the official communications with Japan that did take place? They served as a diversion from the preparations for the attack on Pearl Harbor.
Apparantly Obama's role model is Neville Chamberlain. He'd be better served by reading Will Rogers:

"Diplomacy is the art of saying "nice doggie" until you find a rock."

or better yet, Clauswitz:

"Those who would avoid war at all costs ensure that they will have it."

[pachanguero]

I think Jim is a liar. He would never support anyone but a Democrat. You can hear the truth is his boot licking speech about the MARXIST Obama.
I would swear it was written by one of the "Obama Girls". I am an Independent who never voted for Bush but will be voting for McCain this fall.

The choice is easy.

[BrianPursley]

Jim: Less politics and more alpha imo.

"the Chinese and Indians and Russians and Saudis will all have six times as many cars on their roads as they do now"

Link please. If true, that would be extremely bullish for auto parts manufacturers.

[degreenodal]

The comments of Marxism are off on both accounts. Marxism is principally a theory concerned with history and hirstorical change. Marx' view on capitalism and communism are well known, but they are subsets to his overarching ideas.

1) Obama is not a Marxist, has never espoused Marxism, there is no indication at all that he subscribes to Marxist theory, so the first commentator is wrong. 2) classic Marxian ideology calls for a dictatorship of the proletariat by a ruling party, so the second commentator is wrong.

[TruePatriot]

First McCain shovels some populist poop by promoting a Holiday Tax Credit, then he scoffs at Obama’s reference to proper tire pressure, and now he is the Drill Shill. As if it isn’t simple minded enough to believe drilling will solve our energy problems, conservatives believe Pelosi is the sole obstacle to our energy solutions (though both she and Obama are willing to make compromises on drilling). And Obama does support nuclear power, just not in asking Nevada to store the entire nation’s nuclear waste.

Let’s please review this all a little more before we get ourselves in a tizzy and make an election mistake (or re-elect the wrong candidate like we did after 9-11). First, a good energy plan is an important part of improving our economy, but it’s just one factor. In regard to the economy as a whole, what candidate will represent the best interest of the people rather than big business, including big oil? I will also ask what candidate is more likely to continue the war in Iraq, and possibly engage in new wars? Because the price at the gas pump doesn’t compare to the price we are paying for the Iraq war, which will cost $3 trillion plus -- now that’s economic crazy talk!

But back to the issue of energy, will more domestic drilling help us? People need to stick to the facts if they really want answers to this question. To begin, I encourage people to do the homework for themselves – and more importantly, know the guidelines for determining what a reliable source is when they do it (hint, Rush Limbaugh is not considered a credible source).

Here are the questions I’ve had:

1) How much of a factor is speculation in setting the price of oil?
2) If we drill more oil, how soon can we expect any relief in prices at the pump?
3) When oil is drilled in U.S. territory, is it slated for domestic use, or is it sold on the global market?
4) How much known reserves are there in U.S. territories?
5) If we produced more oil, including lower grade crude, do we have refineries that can handle the larger quantity and/or lower grade of crude?
6) How much public land is already approved for drilling that isn’t being utilized, and if not, why not?
7) Are there legitimate environmental concerns, for example, how much are the refineries and off-shore platforms in the Gulf of Mexico at risk during hurricane season?
8) Is it short-term thinking to remain addicted to fossil fuel rather than focusing on new alternative forms of energy?

Here is some information I’ve found so far:

1) While there are many factors affecting the price of oil (global demand, value of US$, inventories, etc.) supply and demand is NOT the only factor. Speculation has contributed to the soaring prices for oil. Congress seems to think so too. “Lawmakers are threatening to get tough on traders and have introduced 9 different bills.” – on CNN Money (money.cnn.com/2008/06/...) Though supply hasn’t changed and demand continues to increase, why the swings in price including the recent drop in price? Interestingly, when lawmakers began to make these regulatory threats, traders backed off and prices dropped.

2) The time frame for if/when more drilling would bring relief at the pump has been all over the map. Once again, here is what the EIA reports:

“But there's a flaw in that logic: even if tomorrow we opened up every square mile of the outer continental shelf to offshore rigs, even if we drilled the entire state of Alaska and pulled new refineries out of thin air, the impact on gas prices would be minimal and delayed at best. A 2004 study by the government's Energy Information Administration (EIA) found that drilling in ANWR would trim the price of gas by 3.5 cents a gallon by 2027. (If oil prices continue to skyrocket, the savings would be greater, but not by much.)” - www.time.com/time/busi...

By 2027 is hardly in a year or two as claimed by Republicans/FOX News. Also, see: “Arctic Drilling Wouldn’t Cool High Oil Prices – Federal energy analysts say it would take 10 years for production to begin, and its impact could be very modest” -
www.usnews.com/article...

3) Finding information on how U.S. oil is sold is difficult. It appears that most may be slated for domestic consumption, but not all. More importantly, it appears U.S. oil is nonetheless sold in the U.S. according to global pricing. So it remains questionable in my mind whether drilling more oil in the U.S. will significantly reduce the price of gas in the U.S. regardless of how quickly it could be produced.

4) Reserves are also difficult to determine, because even the experts have different numbers, but it was reported on MSNBC that the U.S. has only about 6% of the world’s known reserves. Here is information from Wikipedia:

“United States proven oil reserves were 21 billion barrels (3.3×109 m3) in 2006 according to the Energy Information Administration. [49] This represents a decline of 46%, or 18 billion barrels (2.9×109 m3) from 39 billion barrels (6.2×109 m3) in 1970. U.S. crude production peaked in 1970 at 9.6 million barrels per day (1.53×106 m3/d), and had declined 47% to 5.1 million barrels per day (810×103 m3/d) by 2006. [50] United States crude oil production has been declining since reaching a smaller secondary production peak in 1988 (caused by Alaskan production). Total production of crude oil from 1970 through 2006 was 102 billion barrels (16.2×109 m3), or roughly five and a half times the decline in proved reserves.[51]”
en.wikipedia.org/wiki/...

Based on these numbers from the EIA, this calculates to about 11 years of supply, though I’ve heard it as being as high as 60 years supply (at current consumption) from oil company advertisement. Okay, so let’s say there are more reserves to be tapped than indicated by the EIA, or that there is a 60-year supply rather than 11 years. That still means drilling is a temporary strategy. And this kind of short-term, instant-gratification consumer mentality is why the Middle East is now a thorn in our side, and why countries like China will soon kick our bums as well.

Further to this topic, and in regard to reserves such as oil shale, these reserves are expensive to extract. I recently read an article in the financial section of MSN that discussed Exxon/Mobil and their requirement for a minimum ROI in order to drill. As such, government tax credit subsidies have not been an incentive for them in regard to land already approved for exploration/drilling (or for alternative energy). Unless there is low-hanging fruit to be picked with large profits, they won’t go after it. -money.cnn.com/magazine...

5) This financial article is a good overview on refineries - “Behind high gas prices: The refinery crunch” money.cnn.com/2007/04/.... “So why hasn’t a new refinery been built since 1976?” I live near one, and it isn’t pleasant. As with nuclear waste, no one wants it in their backyard. Sure, there are environmental laws that make it more expensive to build a refinery now, but with the large profits oil companies are raking in, what’s their excuse? Let’s face it. A just-in-time delivery method controls for risk and is more profitable for oil companies. So in the meantime we are stuck with limited refineries, not only in regard to quantity, but also in regard to capability to refine lower-quality crude. -www.businessweek.com/m...

6) This is a great article in regard to the topic of U.S. reserves in general, but this is what is said specifically about leased land:

“But for all this activity, the Wilderness Society says, in a state like Colorado, where 4.9 million acres are leased out, just 1.4 million acres are under production. And of 7,124 drilling permits approved on public lands in fiscal year 2007, only 5,343 wells were drilled. Whether the cause of the lag time between leasing federal lands and producing oil and natural gas is due to environmental restrictions or strategy by energy companies, the delays mean that “opening protected areas of the coasts or public lands to new leasing is not going to lower the price of gasoline,” said David Alberswerth, a senior policy adviser at the Wilderness Society.”
www.nytimes.com/2008/0...

Once again, it is difficult to find reliable articles on this topic (which makes me more wary of what people like Rush are claiming). But it appears that the Rockies consist mostly of natural gas reserves, so that leaves extreme and expensive areas like Alaska, and risky areas like off-shore platforms in the Gulf of Mexico.

7) How risky is it to increase drilling in the Gulf, and in regard to refineries in the same area? Remembering Katrina, we know there is some risk. Apparently speculators think so too.
“And given that the hurricane season is not even halfway over, traders remain nervous about the possibility of storms striking oil facilities in the Gulf of Mexico.” - www.msnbc.msn.com/id/1.../

If the burning of fossil fuel is contributing to global warming, and ice caps continue to melt causing sea levels to rise, areas in the Gulf such as New Orleans will be at even more risk.

8) The answer to this last question is a no-brainer so doesn’t even warrant Googling. Even if one doesn’t believe in global warming (or the more acceptable term “climate change”), people do believe that pollution is a real problem. But what if a focus on alternative energy could also create jobs and possibly exports? More drilling won’t do any of this in improving our economy.

Pelosi told CNN's Larry King late Monday: "Well, we can do that [drill in protected areas]. We can have a vote on that. But it has to be part of something that says we want to bring immediate relief to the public and not just a hoax on them." transcripts.cnn.com/TR...

Yes, our oil, as well as coal and gas resources will need to be part of our energy plan in the interim. But fellow Americans – please take off your “happy ears,” and don’t be so gullible during this election year. Please use the Rule of Reason when you go to the polls.