Intro: "With the country again facing $4-a-gallon gasoline, the time would seem ripe for a grown-up conversation on energy. What we are getting instead is a mindless rerun of the drill-baby-drill operatics of the 2008 campaign, when gas was also at $4 a gallon. Then, as now, opportunistic politicians insisted that vastly expanded oil drilling would bring relief at the pump and reduced dependence on foreign oil. Then, as now, these arguments were bogus."
An oil slick from the BP Gulf of Mexico DeepWater Horizon blowout, 05/25/10. (photo: Gazmo)
The Return of 'Drill, Baby, Drill'
07 May 11
ith the country again facing $4-a-gallon gasoline, the time would seem ripe for a grown-up conversation on energy. What we are getting instead is a mindless rerun of the drill-baby-drill operatics of the 2008 campaign, when gas was also at $4 a gallon. Then, as now, opportunistic politicians insisted that vastly expanded oil drilling would bring relief at the pump and reduced dependence on foreign oil. Then, as now, these arguments were bogus.
As President Obama observed in a March 30 address on energy issues, drilling alone cannot possibly ensure energy independence in a country that uses one-quarter of the world's oil while owning only 2 percent of its reserves. Nor can it lower prices, except at the margins. Only coordinated measures - greater auto efficiency, alternative fuels, improved mass transit - can address these issues.
Still the oil industry and its political allies persist in their fantasies. On Thursday, the House passed the first of three bills that will require the Interior Department to accelerate drilling permits without proper environmental or engineering reviews, reinstate lease sales off the Virginia coast that were canceled after the BP blowout, and open up protected coastal waters - East, West and in Alaska - to drilling.
The bills would make regulation of offshore drilling even weaker than it was before the spill. They would also do almost nothing to solve the problems of $4-a-gallon gas.
Here's the hard truth: Prices are set on the world market by the major producers, OPEC in particular. Even countries that produce more oil than they need, like Canada, have little leverage. Canada's prices track ours.
The Energy Information Agency recently projected what would happen if the nation tripled production on the outer continental shelf. There would be no price impact at all until 2020 and only 3 cents to 5 cents a gallon in 2030.
By contrast, the agency found, raising the fuel efficiency of America's cars would do real good. Increasing the fleetwide average from roughly 30 mpg today to 60 mpg in the next 15 years, an ambitious but not implausible goal, could bring prices down by 20 percent.
Some politicians get it. Senator Max Baucus, a Montana Democrat, is drafting a bill that seeks to repeal $4 billion in annual taxpayer subsidies to the oil industry and use the proceeds to develop more efficient cars and alternative fuel sources. Mr. Obama has tried twice, without success, to get rid of those subsidies, and the House voted in March to preserve them in the current budget.
The tax breaks - fast write-offs for drilling expenses, generous depletion allowances, and the like - may have been useful years ago but are wholly unnecessary when oil prices and industry profits are reaching new highs.
Even John Boehner, the Republican leader, conceded in a recent ABC News interview that oil companies "ought to be paying their fair share." When horrified aides reminded him that ending the subsidies would amount to a tax increase - anathema among Republicans - he backed off.
Repealing these breaks would reduce the deficit and yield revenues to be invested in cleaner fuels, while having no real impact on prices. Mr. Obama may not be able to persuade the House of these simple truths. But he can and must seize whatever opportunities are offered in the Senate, involving himself, not just rhetorically, in the hard but necessary struggle for a sane energy policy.
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Comments
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1)NO MATTER HOW MUCH WE DRILL, OPEC can turn down their spigot to decrease supply and keep prices stable &HI.
2)If we drilled ALL our domestic supplies it would have less than a 8% influence on world supply and market price.
3)Oil companies don't necessarily send domestic oil to US. They send it to where the market will get them highest return when shipping is taken into account. What makes anyone think that all or even most of Alaskan oil comes to continental US and not Japan or China?
4)Something that I haven't heard anyone talk about. If oil is scarce today why not CONSERVE domestic supply & concentrate on using foreign supply. The longer we save our domestic supply the more valuable it becomes. All that domestic oil we didn't drill in the 80's,90's, &'00's are worth much more today. IF Drill Baby Drill makes sense, the longer we hold off the more sense it makes.
Sorry, this is a hard lie. Oil producers don't set the prices for oil. Rather prices are set by commodities speculators buying and selling oil futures on the world's commodity exchanges, most importantly in NY and Chicago. Sometimes oil producers also speculate in oil commodities but they don't have nearly the influence that big banks do.
The NYTImes is idiotic on this subject. Oil and gas prices are set by the "Free Market" that the neo-cons trained by Milton Friedman dreamed of. The Commodity Exchanges are the classic free market where all prices are set by the mechanism of the market itself and the moods of the speculators.
The solution to ever increasing commodity prices is to cut out the speculators. Close all commodity markets. Make commodity speculation illegal as it is really just gambling.
The other problem is that the FED is pumping money into banks at near 0% interest. They don't have anything to do with this money, so they are pushing it into commodities and creating a bubble there. The FED only wants the banks to make a lot of profits and it is working. They are making more profits now than ever. Meanwhile we are all paying $4 a gallon for gas. The Free Market is broken. Time to dump it.
The surging price of food grains that was largely responsible for the Egyptian revolution was caused primarily by speculators and market manipulations, not by supply problems or distribution.
These gamblers are no better than the gamblers in the derivatives markets that led to our current nightmare. They spend a lot of money to make sure they will never be adequately regulated.
The crucial argument in world energy use is conservation. Every gallon of gas or oil "not used" is equivalent to a gallon of new production. Why isn't the US on a course to achieve an average of 80 miles per gallon for its entire automobile fleet. That is 4 times better fuel mileage than the US now gets. It would cut the US consumption of gas to 1/4 of what it now is. That's the solution, not more production.
We need to shout conservation as loudly as the NYTimes shouts production. Conservation also would mean lots of jobs in retro-fitting houses and other buildings with energy efficient technology.
CONSERVATION - CONSERVATION. Let's all say it as loud as we can.
Very significant national transport strategy shift includes vast capacity expansion of railway mains and rebuild of rail branch line network to relink most of USA to the continental rail matrix, growing renewable along with the railways. This concept is from Barry Commoner's 1979 book: "The Politics of Energy".
We would be more in tune with the needs of the younger generation with inclusion of any and every possible ways and means of preserving as much of the oil endowment as possible.
Instead of behaving like pigs at the world oil troughs, we should hunker down and rebuild transport systems allowing renewable links to prime mover as much as possible. Railway's rolling efficiency offers indisputable rationale to replicate the railway footprint of mid-twentieth century and prior- when America was a lending not a borrowing nation.
"ELECTRIC WATER" (New Society Press, 2007) by Christopher Swan offers overview of the renewable energy/transport policy subject. See Richard Heinberg books on full panorama of energy sources & comparisons
Corporations are not individuals -- the Stupremes had no right to give corporations 1st amendment rights to "buy our government" ---- Dems can try each Stupreme for voting on party lines -- and impeach those who did: Roberts, Scalia, Thomas are all whores for the Koch brothers. Google the connections.
True conservatives, that is, those who wish to conserve and secure our available resources, ought to jump to the fore of leadership on this issue, instead of living on in the fantasy of unlimited resources from which only the government is blocking exploitation. Exploitationist and extactionist politicians need to be identified and properly labeled. They constitute a clear and present danger to the world's long-term economic security.
That explains everything. doesn't it? We are fighting for survival of our plastic consumer way of life.
We use 25% of the World's fuel, and only have two percent of oil reserves?
What about this picture don't people understand? It is about blood and oil. There will be blood. First in the first Gulf War, and now this War based on our need for oil. Blair got England involved (latest memos) because his advisors told him that England would be shut out of the spoils of oil in Iraq if he didn't commit troops to the war effort. He did. England uses trains to transport goods. They use oil. Simple math here and now the Brits hate him for it. No good deed goes unpunished.
Simple rule: When it comes down to basic survival, all rules are off. (Tannenbaum's Law)
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