RWB

Speculators Continue to Drive Oil Higher at Risk of Global Recession

Good grief. Do you guys get your blog-comment ideas straight from the RNC? According to the EIA, ANWR has about 11 billion bbl of oil. According BP, in 2007, the U.S. consumed about 20.6 million bbls per day. So ANWR has 531 days worth of oil. Let's say this number is tripled if we add in offshore drilling on the East and West Coast. That's four years worth of oil (assuming we could pull it out of the ground that quickly). And keep in mind that oil is a in international commodity, so any oil we produce and consume here will be priced at the same price as oil from anywhere else (minus differences in price for the quality of the oil--sulfur content, etc.--and transportation costs). We consume about 29% of the world's oil, so adding this much oil into the world supply would drop the price--a little bit. But considering that our share of the world's oil consumption is dropping due to the growth of other economies, that savings is likely to be pretty negligible.

I say this as someone who works in the E&P business and would like to see ANWR and the continental shelf open to more E&P. But I think people need to get some perspective on just how little a difference ANWR would make. Maybe ANWR combined with bringing back the 55 mph speed limit combined with much stricter CAFE standards would make a significant difference. But we can't control how much oil is consumed by other countries, so I doubt if there is anything the U.S. alone can do to significantly change the price of oil.