Offshore Drilling Guarantees Nothing
August 18, 2008
One thing that has baffled me about the political climate lately is has become dominated by debates over offshore drilling in the United States. Even more baffling is the bogus logic that undermines most of these debates. For instance, it seems to be assumed that if we drill for oil off the coast in the United States, that we as Americans are entitled to all of that oil at a low cost. This just plain isn't the case. Cenk Uygur explained in the Huffington Post last month that whichever company extracts the oil will simply sell it on the world market to the highest bidder.
The issue goes even deeper, however. Think of the oil market as a giant bucket. Right now companies extract oil and then pour it into this giant bucket. The logic follows that once the US starts drilling that more oil will end up in the bucket. But wait... this is based on the flawed assumption that all other producers will continue pouring their oil into the bucket at a fixed pace. What guarantees that if the US ramps up its oil production that OPEC simply won't scale back theirs?
The guys running OPEC are pretty darn smart, and right now they are holding all the cards. American politicians, looking for a "quick fix" to energy prices, want us to believe that dumping more oil into the bucket means there will be more supply available to dip our little hands into; which is exactly why the debates over offshore drilling is nothing but a waste of hot air, and why offshore drilling is not a solution at all to energy prices. I'm willing to bet the guys over at OPEC can't help but look at our petty fights over offshore drilling and chuckle a little.
The issue goes even deeper, however. Think of the oil market as a giant bucket. Right now companies extract oil and then pour it into this giant bucket. The logic follows that once the US starts drilling that more oil will end up in the bucket. But wait... this is based on the flawed assumption that all other producers will continue pouring their oil into the bucket at a fixed pace. What guarantees that if the US ramps up its oil production that OPEC simply won't scale back theirs?
The guys running OPEC are pretty darn smart, and right now they are holding all the cards. American politicians, looking for a "quick fix" to energy prices, want us to believe that dumping more oil into the bucket means there will be more supply available to dip our little hands into; which is exactly why the debates over offshore drilling is nothing but a waste of hot air, and why offshore drilling is not a solution at all to energy prices. I'm willing to bet the guys over at OPEC can't help but look at our petty fights over offshore drilling and chuckle a little.
let them vote for McCain, realize that it doesn't change nothing, and watch McCain blame it on Hurricanes and terrorists.But then again in another 4 years they will have forget everything...again.
I live in Edmonton, Alberta. We are the #1 supplier of oil and crude to the US , yet Condoleza Rice don't know where we are, yet they invade Iraq to secure Oil reserve even if there plenty of untap oil up here that doesn't require lifting any ban. Oil companies like Diamond companies don't want low prices we have diamond mining in Canada as well. Back to your subject the timeline to start drilling (offshore on top of that!) require a lot of preparation building, scouting, exploration testing blah blah blah Just tell your fellow American the price of a offshore platform and the time it take to put in service from the ground up.You'll see the realization in theirs eyes. Drilling doesn't come alone, you need refining power behind that to support all that. A refinery cost more or less 20 billions, I know they want to build a new one here but Big Oil are not sure they want to invest that kind of money ! Most of my friends and part of my family are working on rigs and/or in the Oil Industries here, in the States (Texas & Oklahoma) and over sea in Africa (where new wells are opening everyday) and when they hear about drilling more to lower the cost they are pissing on the wall laughing.