President Bush is pushing offshore drilling as a way to increase production and cut oil prices. Robert Siegel talks to Henry Lee, director of the Environment and Natural Resources Program at Harvard University, who says offshore drilling may not have an immediate impact.
NPR: Offshore Drilling May Have Little Effect on Oil Prices
Posted in * Economics, Politics, Energy, Natural Resources
[i]”…offshore drilling may not have an immediate impact.”[/i]
Well, duh. But one must believe that it would have an impact in three to five years. Thank you, NPR, for doing your best to prop up the Democrat “Don’t Drill, Don’t Tell” talking points.
Of course it won’t be “immediate.” The Democratic proposals — more taxes on oil companies and suing OPEC — will have a negative effect (the first) or no effect at all (the second).
If we penalize oil companies with “wind fall” profit taxes, caps on prices etc what happens when the oil companies quite producing gas because it isn’t profitable? Nixon put price caps on “rolled” steel (tubing, pipe type steel products) when I was drilling water wells. We could not buy pipe or steel cable at any price. We need to be very care ful that we don’t kill the goose!
I don’t know if the American people are locked into demanding instant gratification, but the American media sure is. One gets the impression that unless oil is found only by shooting at some food and up from the ground comes bubblin’ crude, then it just isn’t worthwhile.
Actually the Beverly Hillbillies theme song would explain a lot about the media’s expectations about life and the economy. Apparently so long as our reporters aren’t living in Beverly Hills with a cement pond in the back and banker living next door, they are not convinced that the country is doing okay. Are they getting their information about how war ought to be fought from Rat Patrol or M.A.S.H.? Does Car 54 or Andy Griffth explain why our crime reporting is so horrible?
“..says offshore drilling may not have an immediate impact.”
What would?
The questions should be, “Should we strangle developing country’s economies – keeping them in starving poverty, or are we going to help provide the cheap crude oil for them to devlope into a powerful enough economy where they can be strong enough to develop their alternative energy sources?
That, my friends is the question, and the Liberals seem to be saying, “Starve them. Don’t drill.”
A very non-christian thing to do.
Don
#5 Agreed. The debate to shelve drilling in ANWAR was that we would not see any oil from it until 2007 or 2008. Well here we are, and we really could use this oil right now!
The way out is going to take using all alternatives, conservation, better public transit in many cities, alternative energies (but not biofuels that burn food that could be used to feed starving people) and… yes… DRILLING! Only by using every means at our disposal will we get energy at a cost that’s sustainable… to people.
Every means at our disposal – Yes!! So why does this President only get excitied on drilling off-shore. We have needed his bully pulpit for off-shore wind development; solar development and overturning repressive HOA laws against solar on homes; plug-in hybrids and various alternative energy sceanrios as well. Frankly, this Administration has been weak on a balanced across the board energy-policy push.
The global political-military reality of the 21st Century is that world-demand for oil is increasing at a rate the will result in (1) the price of oil rising and (2) international situations regarding the availability of oil, may I say confrontations, that might well result in major wars in which many thousands of American lives and huge quantities of American treasure may be lost/expended.
If we have our own domestic sources of untapped-oil then it behooves us to develop them as soon as possible in order to avert avoidable American losses in future oil-wars.
From a global perspective, the United States must be in a position to disengage from international confrontations in which vital American strategic interests are not at stake.
Developing our domestic oil resources will decouple us from much of the coming world furore over oil.
#7, the President has power to overrule HOA rules? This is news to me.
Saving for retirement won’t help right now, so why bother?
Changing my diet and exercise habits won’t get that 30 pounds right now, so why bother?
Witnessing to my neighbors is unlikely to change them right now, so why bother?
Courting that pretty girl won’t get me married right now, so why bother?
Drilling for new oil won’t lower prices right now, but it will be part of the solution–along with conversation measures, speculation curbs, refining capacity, etc.–for the medium term
Katherine:
The President has the power to use the Bully Pulpit to ask Congress to make a law prohibiting HOA’s from passing ordinances denying the right of citizens to pur solar PV on their roofs, especially for national security purposes. This is a real problem in Georgia.
The reality is that there is no short term solution to high energy prices. Excess profit taxes may not be a solution, but it will not render oil exploration, drilling and pumping unprofitable. Currently, anything above $80/barrel for the [b]most difficult[/b] oil well will be profitable.
There are a number of reasons for the high price of petroleum including the weak dollar (due to federal borrowing and the exploding trade deficit) and speculation on oil futures. The price of petroleum fuels is also influenced by limited refining capacity in the U.S.
Opening the Atlantic and Pacific coasts to drilling might have a very small impact on speculators. It would be 5-10 years before such wells actually started producing. And, in the meantime, we would have to develop pipelines, etc. and also increase refining capacity.
Any solution must decrease demand. Some of that could be short term — like immediately reinstating the 55 mph speed limit and enforcing it (which has the added benefit of saving lives). The U.S. is way behind the rest of the world in developing an efficient system of mass transit. Insisting on more fuel efficient motor vehicles is another. And we need to be developing alternative energy sources — such as solar, wind and nuclear. We should have been doing this over the past 30 years, but better late than never. The impact (like drilling in the Alaskan wildlife preserves and east and west coasts) will not begin to have an impact for a decade.
Is that an HOA ordinance or a local ordinance? In Florida we have no such restrictions, in fact, State laws protects the right to have them:
[blockquote]No deed restrictions, covenants, or similar binding agreements running with the land shall prohibit or have the effect of prohibiting solar collectors, clotheslines, or other energy devices based on renewable resources from being installed on buildings erected on the lots or parcels covered by the deed restrictions, covenants, or binding agreements. A property owner may not be denied permission to install solar collectors or other energy devices based on renewable resources by any entity granted the power or right in any deed restriction, covenant, or similar binding agreement to approve, forbid, control, or direct alteration of property with respect to residential dwellings not exceeding three stories in height. For purposes of this subsection, such entity may determine the specific location where solar collectors may be installed on the roof within an orientation to the south or within 45 ° east or west of due south provided that such determination does not impair the effective operation of the solar collectors.
–Florida Statute, Section 163.04 [/blockquote]
Right, libraryjim, this is a state matter. We had a solar hot water heater in Arizona in 1977; terrific system, great idea. If this is a problem in Georgia, the legislature is the right place to fix it.
[blockquote] —like immediately reinstating the 55 mph speed limit and enforcing it (which has the added benefit of saving lives).[/blockquote]
Bad idea and not true. Everyone was surprised to find that statisticaly 65-70 mph is safer. I drove 55 in the 70’s and on long trips it was a real pain. If you want to do fine.
I said two things (1) a 55 mph speed limit and (2) [b]enforced[/b]. While I’d like to drive 55 (it’s a lot less stressful) I don’t want you ramming into me at 80.
If you find 55 on long trips a pain, how about high speed rail. That works fine in other countries. Why not here? I probably would even join you.
The economics of high speed rail just don’t work out. It works in Japan because you have a lot of people on very little land and the populated areas are stretched out long and narrow. In France it works because it is heavily subsidized, both directly and indirectly by the French government.
As far as the 55 mph speed limit, most people drive what makes sense. While 55 may make sense for the crowded Northeast, it makes little to no sense in the West.
If gasoline prices are high, over time people will conform their behaviour to match the high prices. I know it’s hard for a large segment of the population to believe this, but the necessity of governmental action in response to an economic problem is not especially great.
If prices are high, then demand will decline, over time, or new supplies will be introduced.
Rail certainly makes more sense in the crowded Northeast than 60+ mph.
And let’s face it, your individual motor vehicle is heavily subsidized by the federal, state and local governments.
Ken ride the train then. No one is stopping you. But 17 is right. Rail works in Europe because of the density. Put the same amount of rail in the UK in a state like Florida and it might work. Add the same density per state and you might recreate the rail system we used to have. Of course you will have to buy rail right of way etc.
You may like 55, but I’ve been there and done that.
But it would help us get off the OPEC dependency, and become self-sufficient while we are developing other means of energy. AS one commentator said: Why should we continue to insist that other countries (some of whom would be our bitter enemies if we weren’t pouring dollars into their economy) supply our needs when we have the means to do so ourselves? Plus at $150 a barrel, we could also sell and increase the tax revenues going to the US.
drill here, drill now, increase supply, lower prices, become energy independent.
Jim E.
Libraryjim, the reality is that we could remove the bans on drilling in the U.S. tomorrow and not one drop of oil would reach a refinery before 2015 and probably not until after 2020. And even then, the increased domestic production would amount at most to 2% of our consumption unless that consumption is drastically reduced between now and then. In other words, opening banned reserves cannot be an interim solution while we figure out how to reduce consumption.
It seems that $4/gallon gasoline (and more expensive diesel and jet fuel) is having a slight impact on demand and consumption. Probably $5/gal gas would be even more helpful in reducing consumption. In other words, high energy costs is the short term solution. And they will most likely remain high and higher even in the long term, although more economical alternatives may be developed long term.
It is true that for people living in Junction, Texas, were I once lived, mass transit isn’t a viable alternative. But it is also true that for Dallas, Texas, where I now live, it is viable. The problem is that in Dallas the DART buses are not terribly useful, light rail is in its infancy and intra-city rail is terribly limited. (At present day costs, it is actually cheaper to take a train to Austin — but it takes a car to get to the train station and a car to get around in Austin and, because of the limited schedule, one would end up having to spend two nights in a hotel if one had a morning business meeting.) We should have been addressing these kinds of issues 30 years ago when the dependence on OPEC first became painfully clear.
We will never be “energy independent” as long as we rely on petroleum. We need to drasticly cut consumption and increase our use of alternatives including solar, wind, nuclear, methane from sewage and garbage. And at the same time we must reduce our dependance on the automobile for personal transportation.
P.S. At a worst case extraction cost of $80 per barrel, $136.85 per barrel oil is extremely profitable for American oil companies — yet there are huge leases of untapped reserves that are not being developed by them. Why?
23, if it takes that long then we should start drilling now. No, it’s not a panacea, but it’s part of the solution. Or of course we could scale back our economy and return to a 19th century agrairan life. We could use horses again and live like the Amish.
Quite frankly as long as both parties can make political points by being against what the other proposes nothing will happen.
Br. Michael, it does take that long; no “if” about it.
I don’t know that anyone is proposing that we return to 19th century agrarian life. For example, what I have suggested is mass urban transit, light rail and high speed intra-urban train service as alternatives to passenger cars. No mention of horses was made.
I did recognize that in rural areas there will continue to be a need for individual cars and trucks. Mass transit won’t work in west Texas. On the other hand it will work in population centers such as Houston, Dallas/Fort Worth, Austin and San Antonio. A high speed trains will work between major population centers (e.g., along the I-35 corridor). And since it is in the major population centers where most Americans live (and drive) mass transit is a major part of the solution to high energy demands.
Furthermore, what is proposed is the development of alternative energy sources. I have mentioned solar, wind, nuclear and use of waste. I would add the non-food based ethanol and clean burning coal technologies. None of this is retrograde sentimentality for the good old 19th century or agrarian life.
And while we are talking about alternatives, how about the “virtual conferencing” ability now available instead of flying business executives (and bishops) around the country for meetings? Or maybe even a virtual General Convention?
And on the subject of flying, I understand that there is a tremendous and costly waste of jet fuel for planes waiting on the runways for takeoff or circling airports waiting to land. Apparently there is a need to look at how we manage air traffic to make the use of fuel more efficient.
P.S. One alternative I have not mentioned for urban transportation is the human powered vehicle — i.e., bicycle. We need to make our city streets safe for bicycles which do not require petroleum based fuels and do not pollute. Other things which would promote bicycle use would be bicycle lockers at light rail stops and employers providing showers and storage at the work place.
It also would help another major problem in this country — obesity.
(Sign me a regular bicycle commuter for years before I retired.)