I wish President Bush and the Republicans could solve today’s high oil prices by drilling. But that is not the case. Yesterday’s demands by President Bush to allow offshore drilling was not much more than a publicity stunt. It was an attempt to make the Dems look like they don’t care about high oil prices and to place the blame solely on their party for $4/gallon gasoline. And importantly, it was a fitting response for what the Democrats did last week by offering up the “windfall profits tax” legislation they knew the Republicans would reject so the Greedy Oil Party GOP would look like they don’t care about $4/gal. gasoline.
And around and around we go - it is an election year after all. This political energy isn’t about cheap oil, it’s about cheap votes. It’s about the emotions of voters and impossible promises of politicians.
Republicans are painted as greedy oilmen, haters of the environment and capitalists that don’t care about the Average Joe who needs to guzzle gas. Democrats are painted as tree hugging socialists who do nothing but block oil exploration and refining. We’ve been having this debate for as long as I can remember and where has it gotten us? Place the blame all you want - there are partial ugly truths to both political spins, but the whole truth is that oil/gasoline prices are rising and they are painful.
The time to solve today’s energy problems is NOT now… it was 30 years ago. If we had agreed to offshore drilling or in ANWR since the last time we had an oil crisis (1970’s), gas prices MIGHT be cheaper. But I am not sure by how much. If we had agreed to unlimited refinery construction, gas prices MIGHT be cheaper. But I am not sure by how much.
It is also possible that if we had cheaper oil and plentiful refining, we would have higher energy consumption and higher prices. That’s that pesky supply and demand thing again.
The reality is that drilling takes time. First - we don’t really know how much oil is in ANWR or off the continental shelf. The business and political interests that want drilling will try to convince all of us that it’s a sure thing… the mother load at some multiple of Saudi Arabian reserves. Environmentalists make sure to downplay the amount of oil and say it would only be less than a year of US consumption. Regardless of the size, geologic surveys are estimates and don’t always pan out (note the gold mining pun). Exploration takes time. Building the oil infrastructure takes time. Getting rigs in place takes time. It’s time we had in the past, and we didn’t make use of it.
Instead, the industry and politicians used the oil situation for political purposes for decades. Republicans vs. Democrats and the loser is always… the American citizen. The Dems pushed for windfall profits taxes last time and they got it passed from 1980 until 1988. During that time, the windfall profits tax generated a whopping $80 billion in gross revenues (according to the Congressional Research Service) and while that was less than the $320 billion they originally anticipated - let me ask you - what did the windfall profits tax supporters in Congress do with the billions they collected? What new alternative energy was developed with those billions? It seems to me that we have an oil crisis right now that was not solved by the previous windfall profits tax. Having a new one is another dangerous gimmick that may work to win elections, but it will not work to lower prices.
As for all this environmental fearmongering - what examples do we have that oil drilling will ruin our environment? The most overplayed example is Exxon Valdez and the impact on the beauty of Alaska 20 years ago. But that was not a drilling disaster - that was a transportation disaster caused by dangerous sea conditions and poor piloting. I suspect that most environmentalist, anti-drilling experts would struggle to come up with a specific example of actual drilling spills. That doesn’t stop them from exaggerating or fearmongering without a factual or relevant basis.
Without a doubt - oil equipment is not pretty and many of the places they want to drill are natural wonders of amazing beauty and uniqueness. Take ANWR for example - it’s pristine and yet, when the protected land was doubled in 1980, it came with a proviso that millions of acres (along the coast nonetheless) would be examined for petroleum potential. Environmentalists try to make it seem like ANWR never was intended for anything other than wildlife - that is not true. That doesn’t mean that we should or shouldn’t drill there but try to avoid the political spin.
The environmental wing has blocked energy exploration and production for decades. They are proud of their accomplishments and more determined than ever to prevail. These tactics have contributed to (not solely caused) the global energy crisis whether they want to admit it or not. On the other hand, the Republicans and pro-drilling groups have found it way too convenient to suggest that the Dems and environmentalists are solely to blame. This is nonsense. If the Dems opened up everything for exploration, we may not poison the planet but we may not find enough oil to make a difference.
Brazil supposedly discovered a huge new oil field in November 2007 - you might want to evaluate what has happened to oil prices since then. Why would anyone assume that US discoveries in ANWR or the continental shelf would have a special effect that Brazil’s oil field could not?
And here is a big question that I have yet to hear a good explanation for - by what mechanism will oil discovered in ANWR or the continental shelf be used to lower prices uniquely in the US? I know Representative Waters (D-CA) wants to Nationalize Oil but short of that ridiculous idea, how would ANWR oil be segregated from any other barrel of oil that is globally priced? If they would be able to pull oil out tomorrow, it would be priced at market levels of approximately $135/ barrel not the $80 per barrel that Senator Obama feels is the correct price. When and if oil gets drilled there, it will be priced at whatever price per barrel is prevailing then - whether that means $80, $135, or $200+ per barrel.
Nothing we do now with ANWR or the continental shelf will help us today. Sorry to be so negative realistic. According to the studies I’ve looked at, if drilling started in 2008, we would see the first increase in supplies by about 2018. That’s not to say it isn’t the right thing to do, but it will help 10-to-30 years from now - NOT today. If you want to blame someone about $4 gasoline, point to politicians from 30 years ago and the failure of oil companies to find supply under approved leases. Blame all you want - that will do you no good and will not solve our current dilemma.
One of the great things about this crisis is that we might actually do something now. We must and it will be painful for sure. But we need to be realistic and not expect that there are easy answers for today, or this year or next year. I know most Americans are angry and I know the politicians are using this to win votes, but nothing they can do today will solve our problems. High oil prices are likely here for a long time. We need fossil fuels until we can bridge to alternative energy and transportation technologies that are currently not capable of being economically viable or cheaper than $4/gallon gasoline.
President Bush’s plan to drill wherever he wants has minimal potential to lower prices in the short term. The Democrat plans to block drilling or refining will not lower prices. Neither will a windfall profits tax. The only thing these policies will accomplish is winning votes.
This article has 19 comments:
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semperpax
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6 Comments
Jun 20 10:35 AM-
mike/mn
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2 Comments
Jun 20 10:43 AM-
xerion
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1 Comment
Jun 20 11:03 AM-
Marcus Aurelius
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41 Comments
My Website
Jun 20 11:12 AMHowever, it seems a lot of "long-termers&quo... have very restricted ideas about what it means to fix the problem and it is my opinion many of them have an overly-optimistic attitude about our ability to come up with a long term and viable alternative to oil.
Remember too, oil is not just about energy.
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mike/mn
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2 Comments
Jun 20 11:19 AM-
UpstateNY
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1 Comment
Jun 20 12:15 PMWhen possible - line dry your laundry.
Turn down and insulate your hot water tank
Shorter showers
Collect rainwater for gardening uses
Limit red meat consumption and junk food - and really people - eat because your hungry - not because your bored, unhappy etc..,
Create a vegetable garden
Compost! Compost! Compost!
And if you MUST smoke (as I do) roll your own - the only tax (in NY) on bulk tobacco is the 8% sales tax - A pack of cigarettes costs me roughly $1.25!!!
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thedozer
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162 Comments
Jun 20 12:55 PMAs for changes, the market will work itself out. Just as prices of energy skyrocket needs of individuals change. THE MARKET ADJUSTS ACCORDINGLY
Years ago, auto makers searched for horsepower and size as oil was rather inexpensive. Today energy prices are rising and auto makers (in the interest of self preservation) are scrambling to create and market upcoming models as the most fuel efficient. **and it didn't even require government mandates!!!!***
As a bit of an optimist I find that this recent spike in oil prices has finally led the us (the consumer) to change our behavior thereby creating a new niche of energy efficient vehicles.
This is not the fault of auto makers for spending 10 years making profits off of SUVs... It's what WE wanted. Now things (demands) are changing and auto makers adjust accordingly.
the geo metro came out 15 years ago... and no one wanted it!
Don't give me articles laying blame. You simply sound like congress!
We need solutions.
Drill, conserve, seek alternative energy, become self sufficient
it all equals NATIONAL SECURITY
I just want peace of mind
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junkyarddog
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67 Comments
Jun 20 12:56 PMI don't know... just like betting on anything, which causes the odds to change? Like, I've said, I may be too ignorant to understand the dynamics of oil prices, but maybe there's a bit more than just supply and demand driving prices.
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Mmarrkk
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274 Comments
Jun 20 04:52 PM-
Itsonlymoney
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93 Comments
Jun 20 06:21 PM30 years ago Rodale Press, the publishers of Organic Gardening Magazine, published a study comparing farming methods between Amish farmers in Pennsylvania who used horse drawn equipment and fertilized their fields with manure, and conventionally grown corn using tractors and chemicals. While the chemical farming produced a higher yield than the traditional methods the Amish farmers actually produced a crop equal in value since their costs were lower. And the Amish had the advantage of fields that were actually alive.
My conclusion is that we should be careful with our assumptions. For too long we have assumed that our current petroleum driven society is better in every way. We might look forward to rethinking our wasteful ways, given this pricing impetus, and discover that slower may be better. In my travels to foreign countries where the average citizen can not afford a car, like Bali for example, I have observed and used unique and convenient forms of public transport. I look forward to the resourceful response of Americans when faced with a public challenge like this one. This too shall pass and we will be better off for it.
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sikarskie@hotmail.com
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25 Comments
Jun 21 09:20 AM-
Paul Killinger
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1025 Comments
Jun 21 10:59 AMDidn't Bill Clinton VETO opening up ANWR twelve years ago to oil exploration, which was the one time the R's actually managed to put together the 60 votes necessary to lift the ban on producing oil there in the U.S. Senate?
But I have to give you credit for one thing. You Liberals are GREAT at rewriting history to suit your current circumstances. So get ready, because you're going to have to rewrite ALOT OF IT some day if you get Obama elected president.
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pachanguero
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103 Comments
Jun 21 11:11 AMThey have restricted Nuke, clean coal and hydro power for THIRTY years.
That is why America is going to give OBAMA the boot.
He is up to his ass in special interests and voted for the farm bill like a good boy cause the Deomcrap party told him too.
I am voting for McCain because he may be our only hope.
Screw the greens and the environmental lobby.
DRIL DRIL DRIL
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Paul Killinger
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1025 Comments
Jun 21 12:07 PM-
John in Dallas
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6 Comments
Jun 21 12:50 PM-
Ronmac
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49 Comments
Jun 21 01:53 PMAnd to sikarskie@hotmail.com.... are a blithering partisan idiot and a prime example about why we have such difficulties in coming to a rational consensus to solve these problems...
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Loup-Garou
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24 Comments
Jun 21 02:43 PMPlease remember oil is not just fuel. It is feedstock for our petrochemical industry. There are multiple solutions for the "high price" of gasoline and oil. So far, America does not have the national will, the political will, to adopt and carry out the solutions.
There is no national will to fight terrorism either. If there were, Congress would have declared War. The terrorists, whose religion dare not be named, are planning and attacking the infrastructure that brings the oil supply to our economy. Weep for America. We were a great country once.
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Ronmac
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49 Comments
Jun 21 03:27 PM-
jhm47
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22 Comments
Jun 21 07:25 PM