Drill it. We have to start somewhere. Let's reduce our dependancy on foreign oil while our inventors get moving on non-oil energy sources.
Coastal Drilling - For or Against?
- Thread starter Miss Critter
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Based on the facts, reports, and statistics posted on this thread thus far, I would rather they just started inventing, that's going to happen a lot faster than drilling is going to start producing and bringing prices down.
It will take 20 YEARS to get that drilling going or have an effect on prices. They keep forgetting to mention that when they offer up ANWR and Gulf drilling as solutions to our current high gas prices.
Regarding my post SoWal Beaches Forum - View Single Post - Coastal Drilling - For or Against? in reference to the Bookman's editorial in the AJC on 6/22, we contacted a good friend who has a Ph.D. in economics, an M.B.A., and an undergrad degree in history. Here's his very thought-provoking response:
"The AJC Editorial was interesting. I think he has some very good points but I also thinks he missed some crucial ones. My thoughts are:
1. There is a very real long-term problem in that global demand will continue to grow faster than supply. But there is nothing new here. It does not explain such a rapid escalation in prices nor does it explain why were not seeing this years ago. He missed the fact that there has been a significant short-term interruption in supply due to the extreme political turmoil in Nigeria; a significant exporter of sweet light crude that is preferred by US gasoline refiners. This comes on top of steadily decreasing production in Mexico (caused by crumbling infrastructure and a very corrupt PEMEX). That volume is not easily replaced in the short-term.
2. He recognizes the part that the fall of the dollar has had in the "crisis", but not nearly enough. The dollar has been in free-fall against almost every major currency not only because of our surging imports but also the risk that loose credit policies by the Fed to pump up the economy has increased. What petroleum exporter in his right mind would want to help make up the shortfall by signing deals that leaves him holding more dollars?
3. The sort of conditions above lead to expanded speculating by the financial markets. I do not think he recognized how large a part that has played in the current jump. Unlike the crisis of the seventies where shortages caused rationing of various kinds, no one is going without because they can't get it, only because they don't want to pay for it. For the price to keep rising in the face of falling demand is a clear sign that the price is artificially high. But it is not purely speculation, there are some very real reasons for a portion of the increase. I predict there will be a crash at some point but it is not going back to the price it was for any extended time.
4. He is right and wrong about the drilling. Oil is "fungible" so it would be sold at the world market price, but anything that would help our balance of payments would strengthen the dollar, lowering the price on anything we have to import. Energy independence is not desirable because of what it will do to the price, but rather what it will do to resolve our balance of payment problems (imported oils is fully half our imports) and keep our currency from going lower. We should have been taxing oil imports all along to encourage more production from marginal wells in the US and encourage conservation. One way or the other that is not a short-term solution. Conservation is the only short-term solution. It will force the speculation bubble to burst sooner than it would otherwise.
5. He misses the point on refineries. Environmental regulation has not forbid new facilities, but it has made the economics so poor they would rather either expand existing facilities or more importantly locate them elsewhere. Once again we are sending value creating activities that create US jobs to foreign producers.
6. Alternative energies are the only long-term solution; and that does not mean subsidizing ethanol at the expense of food supplies. But the good news is that $4.00/gallon gas brings a lot of technologies into play that were not economically viable before. Technology would still have to be considered one of our strengths. The problem is that when the speculation bubble bursts, the price will temporarily go below where it should be and investors tend to bail out willy-nilly again. It also underestimates the tremendous rigidity in the market that is caused by all the existing infrastructure that we have built around the internal combustion engine (that's what made ethanol so misleading, it is easily substituted).
7. I have absolutely no faith in the ability of either political party to resolve this problem. This is not a simple problem so it does not lend itself well to a politically appealing solution. Our electorate has no discipline as witnessed by our rush to export our manufacturing base to China. My fear is that we are on our way to becoming Imperial Rome -- producing nothing but an army and weapons systems so we can take what we need from our colonies to give our citizens bread & circuses (fast food, reality TV, & cheap gas)."
"The AJC Editorial was interesting. I think he has some very good points but I also thinks he missed some crucial ones. My thoughts are:
1. There is a very real long-term problem in that global demand will continue to grow faster than supply. But there is nothing new here. It does not explain such a rapid escalation in prices nor does it explain why were not seeing this years ago. He missed the fact that there has been a significant short-term interruption in supply due to the extreme political turmoil in Nigeria; a significant exporter of sweet light crude that is preferred by US gasoline refiners. This comes on top of steadily decreasing production in Mexico (caused by crumbling infrastructure and a very corrupt PEMEX). That volume is not easily replaced in the short-term.
2. He recognizes the part that the fall of the dollar has had in the "crisis", but not nearly enough. The dollar has been in free-fall against almost every major currency not only because of our surging imports but also the risk that loose credit policies by the Fed to pump up the economy has increased. What petroleum exporter in his right mind would want to help make up the shortfall by signing deals that leaves him holding more dollars?
3. The sort of conditions above lead to expanded speculating by the financial markets. I do not think he recognized how large a part that has played in the current jump. Unlike the crisis of the seventies where shortages caused rationing of various kinds, no one is going without because they can't get it, only because they don't want to pay for it. For the price to keep rising in the face of falling demand is a clear sign that the price is artificially high. But it is not purely speculation, there are some very real reasons for a portion of the increase. I predict there will be a crash at some point but it is not going back to the price it was for any extended time.
4. He is right and wrong about the drilling. Oil is "fungible" so it would be sold at the world market price, but anything that would help our balance of payments would strengthen the dollar, lowering the price on anything we have to import. Energy independence is not desirable because of what it will do to the price, but rather what it will do to resolve our balance of payment problems (imported oils is fully half our imports) and keep our currency from going lower. We should have been taxing oil imports all along to encourage more production from marginal wells in the US and encourage conservation. One way or the other that is not a short-term solution. Conservation is the only short-term solution. It will force the speculation bubble to burst sooner than it would otherwise.
5. He misses the point on refineries. Environmental regulation has not forbid new facilities, but it has made the economics so poor they would rather either expand existing facilities or more importantly locate them elsewhere. Once again we are sending value creating activities that create US jobs to foreign producers.
6. Alternative energies are the only long-term solution; and that does not mean subsidizing ethanol at the expense of food supplies. But the good news is that $4.00/gallon gas brings a lot of technologies into play that were not economically viable before. Technology would still have to be considered one of our strengths. The problem is that when the speculation bubble bursts, the price will temporarily go below where it should be and investors tend to bail out willy-nilly again. It also underestimates the tremendous rigidity in the market that is caused by all the existing infrastructure that we have built around the internal combustion engine (that's what made ethanol so misleading, it is easily substituted).
7. I have absolutely no faith in the ability of either political party to resolve this problem. This is not a simple problem so it does not lend itself well to a politically appealing solution. Our electorate has no discipline as witnessed by our rush to export our manufacturing base to China. My fear is that we are on our way to becoming Imperial Rome -- producing nothing but an army and weapons systems so we can take what we need from our colonies to give our citizens bread & circuses (fast food, reality TV, & cheap gas)."
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Anyone know what the latest is?
It's in Washington's hands, apparently:
Gulf drilling measure would put rigs 45 miles from coast - St. Petersburg Times
Quote:
It would also be nice if everyone emailed Nelson and Martinez, encouraging them to keep fighting this.
Gulf drilling measure would put rigs 45 miles from coast - St. Petersburg Times
Quote:
WASHINGTON ? The Senate energy committee has approved a measure to allow oil and gas drilling just 45 miles off Florida's west coast, and even closer in the "Destin Dome" area of the Gulf of Mexico, off the Panhandle.
Our senator Nelson has sworn to filibuster to keep it from passing in the Senate. It would be nice if perhaps the local papers might cover something that can have such an effect on our local economy.
It would also be nice if everyone emailed Nelson and Martinez, encouraging them to keep fighting this.