If you have been under a rock for the last 6 months, chances are you’d still know there’s a national push to solve our energy problems. The price of a barrel of oil has shot to record numbers and the average US driver is cutting back on miles driven while the prices of shipping and delivered goods are shooting upwards.
On the campaign trail, Senator McCain has been pushing for the immediate opening of the nation’s coasts for drilling. According to McCain, “Our petrodollars are underwriting tyranny, anti-Semitism, the brutal repression of women in the Middle East, and dictators and criminal syndicates in our own hemisphere.”[1] His energy plan focuses on the US finding ways to produce more of its own oil. Republicans will say “There is more oil to be drilled in this world, and more supply will undoubtedly have some effect on prices. Even just the prospect of more supply will likely make a difference.” [2]
Senator Obama denies the usefulness of drilling by saying that oil would not start flowing to consumers for 20 years according to the Energy Information Administration. Additionally he adds that oil companies already own leases to 60 million acres of federal land but have failed to utilize those resources. Democrats say “There will be oil spills off the coasts of Florida and California, fouling beaches, killing wildlife, and harming tourism. Unrestrained burning of fossil fuels will continue to raise global temperatures and contribute to rising sea levels and devastating extreme weather events. A plunge in the price of oil will derail the current pressing economic incentives to improve energy efficiency and channel investment into research and development of alternative energy technologies.”
Reportedly, there are about 18 billion barrels of oil off the US shores. In 2008, the US consumes 20.20 million barrels of oil a day, which means if we are able to extract every bit of oil out there, we’d have about two and a half years of oil, assuming of course, we’d have the infrastructure to pump it out, transport it and refine it. All the refineries in the US currently can refine about 17.5 million barrels of oil a day[3] and they’re already operating at 86%-89% of capacity[4].
It seems to me, for as little as we’d actually get, at the financial cost we’d have to get it (not to mention environmental costs), and in the time frame required to get there, it just doesn’t seem to be worth the reduction of about $0.75 per barrel.
Despite McCain’s admonition to drill here and now or Obama’s overly optimistic transition to alternative energy, the answer to our energy woes is not going to be drilling.
References and everything! I’m impressed. Well, actually, I was impressed until I followed the first reference to an MTV.com article. The other ones were better, though. I have to say, you’ve made me look at the numbers more carefully, but in looking at your references I came across a couple things:
1. You may have (perhaps unknowingly) skewed the facts that you yourself have referenced. The $0.75 per barrel reduction is only a report on drilling in ANWR alone. Not only is ANWR just one slice of the oil pie (mmmmm, oil pie), but the same report estimates twice that from ANWR alone by 2027 — and a $1.44 reduction per barrel times 20 million barrels a day…
2. That same EIA report (#4 above) shows a cumulative savings of up to $327 billion in foreign oil expenditures. Why would we not want that money? This is technology that creates more jobs, and money that stays at home and strengthens our dollar rather than being handed over to violent, abusive dictators.
No one is saying that drilling alone is the answer. But it will get us through the transition to alternative energy sources. And I just can’t get past the absurdity of the idea that we should just “not bother.”
I’ll let John McCain (that is, John McCain of three weeks ago before he flip flopped) respond for me:
“With those resources, which would take years to develop, you would only postpone or temporarily relieve our dependency on fossil fuels,” McCain said when asked about offshore drilling. “We are going to have to go to alternative energy, and the exploitation of existing reserves of oil, natural gas, even coal, and we can develop clean coal technology, are all great things. But we also have to devote our efforts, in my view, to alternative energy sources, which is the ultimate answer to our long-term energy needs, and we need it sooner rather than later.”
quote taken from the Huffington Post
You accused McCain of flip-flopping and went to the Huffington Post for your research? We need to have a talk about a little thing called “political spin” — this is worse than I thought…
In any case, “temporarily relieve our dependency on fossil fuels” is exactly the point. We need to buy some time to get the other fuel sources off the ground. Why not save a few hundred billion bucks in the meantime?
Seriously… that’s all you got?
Do you like these sources for the same quote by the same person?
Wall Street Journal
http://blogs.wsj.com/washwire/2008/06/19/mccain-open-to-new-information-on-anwr/
CNN
http://politicalticker.blogs.cnn.com/2008/06/22/obama-wants-energy-speculator-crackdown/
And let me explain simple economics to you. It’s not enough to look at what we can call Gross Savings… the simple math of Previous Foreign Expenditures – New Domestic Production.
You’ve got to look at the more complete Net Savings/(Loss) equation of Old Foreign Expenditures – New Domestic Production – Investment in Infrastructure – Oil Company Profits – New Refinery Building Costs – Incidental damage to the Environment and damage to animal habitats (a few that are threatened species).
It’s simple. You don’t get something new without paying for it.
I agreed with McCain’s quote — “temporarily relieve our dependency on fossil fuels.” I was just amused that you ran to Huffington Post (and MTV.com) to look up your facts. That’s all. I wouldn’t get too flustered over it.
The production and infrastructure costs you mention would be advantageous to our economy…that is, unless you actually view increased jobs and domestic production as negatives. No matter how you try to spin it, the money stays home — we’re paying ourselves instead of the bad guys. Pretty straightforward here.
Points for trying to muddy up the waters with your economics lesson, but in doing so you accidentally demonstrated my point for me. In flailing for a downside to domestic oil production (“Umm, we’ll have to pay Americans to work production and design and build infrastructure!! — oh, oh, and oil companies will make money!!”), I think you’ve nicely illustrated the several upsides to oil production.
Here’s my economics lesson for you (with a little moral component for you to consider):
Paying hundreds of billions of dollars to Americans — good
Paying hundreds of billions of dollars to abusive dictatorial regimes who hate the western world and scoff at human rights — bad
Are we talking about Canada, Mexico, the Virgin Islands and Russia and the other Non Opec countries where we get 73% of our crude oil imports? I have a lot of things to say about the Canadians, but abusive and scoffers are not part of that description.
Sadly, you don’t seem to understand my point, you just keep repeating yours over and over. We’re not paying hundreds of billions of dollars to Americans. We’re paying lots of money to oil companies, who will profit off the infrastructure and oil and either keep the money or send it on to their own shareholders. This is not a general economic stimulus, this is a continued enrichment of a few and elite. And even with the increased inventory, the actual decrease in the per gallon price of gasoline for the average consumer will be negligible. And so our energy woes continue for the everyday American.
Your 73% figure is off. According to your own report, we imported about 2.2 billion barrels from OPEC countries last year and about 2.7 billion from non-OPEC. I may need another economy lesson, but I think that comes to about 55%, not 73%.
But let me hasten to the part that you think I don’t get: “We’re not paying hundreds of billions of dollars to Americans. We’re paying lots of money to oil companies…”
So, what nationality are the oil companies? If I understand right, you’d rather keep paying those hundreds of billions a year to OPEC countries — Saudi Princes, Chavez’ Venezuela, oppressive Libya — rather than oil companies (who aren’t Americans?) who employ American workers and benefit American shareholders, thus improving our economy and helping “the everyday American,” not to mention depriving corrupt countries of our money. I’m not sure why you’d rather the money go overseas, let alone to the countries it’s going to.
As an example, you mentioned innocent non-OPEC Russia, so I’ll throw this out: wonder why they think they can bomb countries they don’t like (e.g. Georgia)? It’s because they’re selling oil to the world and they know we won’t stand up to them. I’d call that a human rights issue and a major problem.
Again, drilling is not the solution. It’s a part of the solution. We’ve got to find a way out of our dependency. And if Obama is saying no drilling, no nuclear plants, and no coal, then we have secured our dependence for decades to come.
What I am saying is that American Oil is not the American People. And if we’re moving from Foreign Oil to American Oil…. the American People are no better off.
And you’re right about Russia. But what major power’s hands are not clean (including the US’s)? I wasn’t trying to say (as you seem to think) that Russia was innocent , rather I was saying Russia was not one of the “abusive dictatorial regimes who hate the western world and scoff at human rights” like you had mentioned.
I hereby recant and concede. The issue in this post is whether drilling would reduce the price of gas. All other benefits of drilling and domestic production are off topic (and, let’s be honest, boring to read).
Sorry for the distraction.
wow you finally beat that guy in one of these debates
Are those crickets I hear in the background? It appears you’ve won this debate.
Thanks Cor and Steve…
By the way, here’s another opinion on the subject by someone we all know:
Schwarzenegger Still Opposes Offshore Drilling
California governor declines to join McCain’s call to lift ban
By Justin Ewers
Posted June 18, 2008
SAN FRANCISCO—California Gov. Arnold Schwarzenegger today stood his ground on offshore drilling, declining to join a call by fellow Republicans, including President Bush and John McCain, the GOP’s presumptive presidential nominee, to lift a moratorium on drilling off the coast of California and other coastal states. McCain said this week that he supports allowing states to determine whether they want to tap into the oil reserves beneath their coastal waters. In California, at least, there appear to be powerful political forces against the idea.
“California’s coastline is an international treasure,” Schwarzenegger said in a statement today. “I do not support lifting this moratorium on new drilling off our coast.”
Schwarzenegger was quick to acknowledge that the high cost of gasoline, which is selling for an average of $4.58 a gallon in the state, is taking a toll on California even more than other states. Recent national polls show as many as 67 percent of voters believe offshore drilling is a good solution. But Schwarzenegger today threw his support behind conservation and alternative fuels, instead. “We are in this situation because of our dependence on traditional petroleum-based oil,” Schwarzenegger said. “The direction our nation needs to go in, and where California is already headed, is toward greater innovation in new technologies and new fuel choices for consumers. That is the way we will ultimately reduce fuel costs and also protect our environment.”
Wait, where was I when Russia was changing from one of the “abusive dictatorial regimes who hate the western world and scoff at human rights”? Maybe they don’t hate the western world enough to blow up our buildings one by one, but c’mon….