Offshore Drilling in the Eyes of Presidential Hopefuls 6 comments
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Brianna writes:
I enjoy your wry looks at politics. What's the nuttiest thing you've heard in the presidential campaign so far?
That the solution to high oil prices is offshore drilling. This is inane in several ways:
- The reason we're damaged by high oil prices is that we're dependent on oil. We need to get rid of that dependence, not find a way to extend it.
- As if you needed it, the ability of this solution to find any support among citizens provides more evidence that the preponderance of people are idiots. Offshore drilling will have no measurable impact on gasoline prices for at least 10 years. Even then, the amount of oil added to the nation's intake would be so small that the price per gallon would drop somewhere on the order of 5 cents.
- For such a small -- come on, meaningless -- benefit, we're going to further damage the already reeling environment?
- The only lesson anybody should take from high oil prices is that it's high time we move beyond the carbon age. I've written to subscribers extensively on this issue, and how we've had the ability to drive nothing but all-electric vehicles (not halfway hybrids) for the past fifty years. What do you think all vehicles inside warehouses run on? The only reason you're pumping expensive, dirty, terrorist-funding gasoline into your car is that oil companies want you to do so and have paid all the right people to be sure that you must. Understand that. Exxon Mobil (XOM) earned $11.7 billion in profits last quarter alone, a 14% increase and the largest single quarter profit in U.S. history.
I never overtly endorse Democrats or Republicans on this site. Whenever I report facts, however, I'm accused of being a Democrat because the facts tend to make Democratic positions look most sensible. That's for the past eight years at least. Back in the 1980s, the opposite was true.
With that caveat duly noted, let's look at what each of our current presidential candidates says about our energy situation.
Here's John McCain:
We need to off-shore drill for oil and natural gas, and anybody who says we can achieve energy independence without using and increasing these existing energy resources either doesn't have the experience to understand the challenge we face or isn't giving the American people some straight talk. -- ABC News
The current federal moratorium on drilling in the Outer Continental Shelf stands in the way of energy exploration and production. John McCain believes it is time for the federal government to lift these restrictions and to put our own reserves to use. There is no easier or more direct way to prove to the world that we will no longer be subject to the whims of others than to expand our production capabilities. -- John McCain for President website
Here's Barack Obama:
You won't hear me say this too often, but I couldn't agree more with the explanation that Senator McCain offered a few weeks ago. He said, "Our dangerous dependence on foreign oil has been thirty years in the making, and was caused by the failure of politicians in Washington to think long-term about the future of the country."
What Senator McCain neglected to mention was that during those thirty years, he was in Washington for twenty-six of them. And in all that time, he did little to reduce our dependence on foreign oil. He voted against increased fuel efficiency standards and opposed legislation that included tax credits for more efficient cars. He voted against renewable sources of energy. Against clean biofuels. Against solar power. Against wind power. Against an energy bill that -- while far from perfect -- represented the largest investment in renewable sources of energy in the history of this country. So when Senator McCain talks about the failure of politicians in Washington to do anything about our energy crisis, it's important to remember that he's been a part of that failure. Now, after years of inaction, and in the face of public frustration over rising gas prices, the only energy proposal he's really promoting is more offshore drilling -- a position he recently adopted that has become the centerpiece of his plan, and one that will not make a real dent in current gas prices or meet the long-term challenge of energy independence.
George Bush's own Energy Department has said that if we opened up new areas to drilling today, we wouldn't see a single drop of oil for seven years. Seven years. And Senator McCain knows that, which is why he admitted that his plan would only provide "psychological" relief to consumers. He also knows that if we opened up and drilled on every single square inch of our land and our shores, we would still find only three percent of the world's oil reserves. Three percent for a country that uses 25% of the world's oil. Even Texas oilman Boone Pickens, who's calling for major new investments in alternative energy, has said, "this is one emergency we can't drill our way out of." -- Lansing, Michigan speech
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This article has 6 comments:
> jack
"We need to get rid of that dependence, not find a way to extend it."
If you see a solution that would remove our dependency on oil within the next ten years then you should inform us. This is, after all, an investment website, and you will be making us all very, very rich. In the meantime, oil is still a vital commodity in the global economy, and it is utterly foolish to neglect our own resources because, in the future, we'd like to be able to stop using it.
"Offshore drilling will have no measurable impact on gasoline prices for at least 10 years."
The current price of oil considers its current scarcity, so even if the first oil from this plan will come to market in ten years, the price will be reflected in the market well before that. This is simple, Jason.
"Even then, the amount of oil added to the nation's intake would be so small that the price per gallon would drop somewhere on the order of 5 cents."
What evidence do you have of this? Since you are just "reporting the facts," presenting ample evidence for this statement should be quick and easy. In my estimation, the extremely high short-term price elasticity of demand of oil would cause a large decrease in price in response to relatively small marginal increases in supply. But you apparently know future prices and market responses, so I guess I shouldn't be arguing.
"For such a small -- come on, meaningless -- benefit, we're going to further damage the already reeling environment?"
First, I said earlier, the benefit is not meaningless. But more importantly, what damage will offshore drilling do on the environment? There has not been an oil spill from an offshore rig since 1969, and safety, environmental and technological standards have improved mightily since then. If offshore drilling is so bad for the environment, we should stop it in the Western Gulf of Mexico. Oh, that would be irresponsible and cause a tremendous increase in oil prices...but I thought offshore drilling would have minimal effect on prices?
"I've written to subscribers extensively on this issue, and how we've had the ability to drive nothing but all-electric vehicles (not halfway hybrids) for the past fifty years."
Do you know how electricity is made, Jason? Do you expect that the enormous increases in electricity demand caused by this electric car culture of yours could be supported by renewable energy? In case you are unclear, natural gas is an important component of clean energy, and there is an abundance of natural gas off our coasts. So offshore drilling could be a key component in your fantasy fro the future...care to reconsider?
Aug 06 12:52 PM
T. Boone for President.
Even tho he's half right by wanting to replace NG electrical power generation with WIND POWER and half wrong by wanting to burn NG in vehicles instead of biofuels, he understands the real problems; the real causes; and addresses the real actions that change the causes of the problems.
His head is where the sun shines and wind blows, as contrasted to ALL THE LEADERSHIP IN WASHINGTON.
no one can estimate how quickly oil will be available from drilling where we KNOW oil is in abundance..
Wow.. we only have 3% of the worlds oil but use 25%..another BS fact from nowhere... it was thought that Canada only had a small amount of oil.. but oh my.. they discovered an entire wealth of oil in Alberta,,, how about the recent finds in ND & SD.. YOU don't have a clue how much oil is really in and around the US.. govt has prevented the exploration... Jason.. I could care less if you are a demo or Rep.. your stating as facts things no one knows for sure is pure BS! Give the oil companies a chance to drill and watch the world sweat as we supply our own needs and they lose the market..
Another thought you oil haters forget is how much of it we use for everyday manufacturing.. you have not a clue the impact of no oil.. its not just used for cars! Get a grip .. we need to change the availability not just the demand.. we will still need oil in the next 10 years while you figure out how to replace coal and oil as sources of manufacturing and energy.. wind is only a piece.. solar is only a piece.. do we just keep buying oil at economy ruining prices for next 10 to 15 years while oil is available on our own shores? Obama's favorite phrase... " Yes there will be some pain " . you idiot.. the pain will be 10 times worse in 5 years if we don't drill...
If it takes 5 years.. I cannot believe it will given no govt or state interference, we will have abundant oil for years while we switch over to whatever new process will save our planet.. while India and China drill offshore 70 miles to take the oil we are too stupid to get ourselves...
About T Boone Pickens.. he has invested his money in wind.. of course he does not care at all about the money.. he has a lifetime behind him where he was not for anything but himself..now he has the country's interest at heart??? I do like the fact he is pressing for long term solutions.. but don't kid yourself about his motives...
Additional carbon emissions has had and will have little affect on global warming. Human caused global warming is just trumped up hysteria by Al Gore and friends. (And yes I am in the pocket of the Oil companies... I cash those dividend checks from my oil stocks and trusts just fine thanks.)
I'd also like to note if additional drilling won't have any impact on price why is oil down so much today? When did the fall from the peak in oil price first start? It was mid July... the day President Bush suspended the Executive Moratorium on drilling, oil has gone into a free fall. If removing just one barrier to additional oil production has had this much effect, just think of what will happen 5 years (not 20 as you suggest) once the additional oil production comes online. In short the additional drilling only having $.05 affect on price is WRONG.
I'd also like to address the Exxon earning 11.6 Billion lamentation with pointing out it would have been close to 20 Billion but they had to pay over 8 Billion in taxes. Exxon is just another example of free market capitalism at it's finest!