Above is a new video from the Institute for Energy Research, making the case for offshore drilling. Atlas’s senior fellow Deroy Murdock also has been making waves recently on this topic. His Audacity of Nope piece recently was distributed throughout the U.S. Congress via a “Dear Colleague” letter by Republican Whip Roy Blunt. The piece ran two weeks after President Bush announced his Executive Order, lifting a presidential moratorium on drilling for oil and natural gas on the Outer Continental Shelf. It is interesting to revisit quotes from that week, when oil peaked at $147 a barrel. According to The New York Times:
Senator Dianne Feinstein (D-CA) said the president was deluding the American public into believing that new offshore drilling is a quick fix to $4 per gallon gasoline. Nothing could be further from the truth, she said.
Two months later, the price of oil is down by about $55 from that high — near $92/barrel as of yesterday. Certainly, there are many factors at work and the quick declines in the price of crude is not being immediately reflected at the pump, but no doubt there is a lesson here about how markets do anticipate future changes in supply (and demand).
On a related note (involving Hurricane Ike and gas prices in Houston), our friend Don Boudreaux has a good post on the Cafe Hayek blog, “Markets Anticipate the Future.”
I’ll close with two more plugs related to the above. If you want more material by Deroy on this topic, see also “Offshore Drilling: Cleaner Than Mother Earth” (in which he takes on another Dianne Feinstein quote). And if you want to see more video on public policy topics like the IER video at the top of this post, remember to visit AtlasNetwork.TV.
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A veritable tour de force of Atlas links and policy references! Great post!
You have to be seriously deluded to post this video to explain the merits of drilling. You have not dispelled the compelling reason that increased drilling will actually increase enough production to make any impact on the prices.
You think the price of oil dropped because of “anticipated” drop in demand? Price of oil dropped $50 bucks because real demand dropped due to slowing economy and because speculators stopped buying futures in oil.
The true permanent solution is to convert our economy to a greener energy economy which will drive oil prices down as we change our habit of driving gas guzzling cars to newer clean green cars. Even GM is finally coming around to this reality and will be introducing the Chevy VOLT which is a electric car with a range of 40 miles on electricity alone and supplemented by gasoline engine which will recharge the batter if the trip is greater than 40 miles per gallon.
Real drop in demand is the true path to lower oil prices. You cannot produce enough oil or produce it fast enough to make a dent in the price of oil for at least the next 10 years. It may never happen. We currently produce 3% of world’s oil. Even if you can double our current production which none of the experts believe we can actually double our production anytime soon. It would still be a tiny 6% of the world’s production in oil.
If you want a real solution check out. One of your oil guys has woken up to reality
http://www.pickensplan.com/index.php
- Permits for drilling on public lands are up 361% since 2000. If more drilling was going to work, why has the oil price nearly tripled during that same period.
- Of the oil and gas reserves on public lands (both On and Offshore), 83% of gas reserves and 79% of oil reserves are ALREADY AVAILABLE FOR DRILLING. Do you imagine that less than 20% of the US’s rather small reserves is going to turn around the price of oil GLOBALLY?
- Of the area CURRENTLY, ALREADY AVAILABLE for oil and gas development, only 26% is in production. If the oil companies need more access to oil so badly, why aren’t they producing off the 74% of leasable lands they ALREADY have access to?
- Additionally, the Minerals Management Service (the organization charged with, ya know, managing minerals on federal lands) says that even if 100% of reserves were put into production, starting tomorrow, by the time they were at peak output (sometime in the 2020s), we could expect a 75 cent reduction in the cost of a barrel of oil. In today’s price, that means we’d pay $107.25 rather than $108 a barrel. You think that’s going to save the middle class? Get real.
resourcescommittee.house.gov/images/stor
ies/Documents/truth_about_americas_energ
y.pdf
Wake up, people. We started trying to drill our way out of this probelm 8 years ago. How’s that working for you so far? Horribly. The reason oil is dropping right now is because speculators are no longer willing to bet on worldwide demand in the face of a recession. The US demands more oil per dollar of GDP created than any other rich country economy. We’re more addicted than anyone. The MOMENT oil hits a lower tipping point, consumption will renew, the economy will rebound for a couple months, then be buffeted by high oil prices again.
Welcome to the new energy reality. If the US economy rebounds due to cheap oil powered by slack demand, we will go back to buying Chinese products and Indian services. Those economies will also rebound and follow our consumptive example. Demand will spike again, and we’re back in the same vicious cycle.
WAKE UP! Drilling more will NOT WORK.