August 04, 2008

Americans, please read

Poll:

The poll, which surveyed more than 500 adults by phone in July, found that 69% of respondents support the idea of offshore drilling, while 30% opposed it. In June, 73% were in favor of offshore drilling.

US Department of Energy Annual Energy Outlook 2007:

The projections in the OCS [Outer Continental Shelf] access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017.

My fellow Americans, please let facts rule your judgments, not your experience at the gas pump.

Posted by Linkmeister at August 4, 2008 10:44 AM | TrackBack
Comments

Well, damn, Bubba. I ain't no rocket scientist er nuthin', but if them oil companies are a-chargin' me a lotta money fer somethin' and they tells me they needs more of it to sell, it just don't make no sense to tell 'em "no" do it?

My brother, Cletus, he's one of them whatchacall "economist" types, and he says when supplies are up and demand is down, the price ought to go down, too. But that don't make no sense, 'cuz the President and Vice President know a thing or three about oil--being big shot oil tycoons and whatnot--and they say their buddies need more drillin' to make things right. You ain't tellin' me the President's a liar, are you?

Posted by: Solonor at August 4, 2008 04:50 PM

The counter argument is that we might be using less, but everyone else in the world is using more (true), so of course the price should go up, because demand is outpacing supply.... WRONG!

EIA figures for Total World Production / Total World Demand / US Supply / US Demand (mill. bbls/day):

2004 - 83.12 / 82.33 / 8.70 / 20.73
2005 - 84.63 / 83.65 / 8.32 / 20.80
2006 - 84.60 / 84.71 / 8.33 / 20.69
2007 - 84.56 / 85.54 / 8.49 / 20.70
2008 - 86.48 / 86.40 / 8.70 / 20.30

Yes, world demand has gone up, but world supply has also increased to keep pace. Demand even outpaced supply in 2006, and the price didn't skyrocket like this year when we're keeping up. U.S. supplies are at 2004 levels while U.S. demand is quite a bit down.

The price has little to do with supply and demand, and increasing the supply won't help much (if at all)...especially not in the U.S. alone, because our supply/demand doesn't affect world crude prices much, and we don't live in our own little bubble anymore.

And that's the end of my knowitall crap. Sorry.

Posted by: Solonor at August 4, 2008 05:38 PM

I wonder what allowing more offshore drilling now would do for prices of oil futures. So much commodities trading is done on futures markets, which affects current prices in ways that financial idiots like me have not investigated and do not understand.
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Posted by: Peter at August 4, 2008 08:26 PM

Peter, that's the claim that Bush and McCain make: the mere suggestion that the US would do it will drive futures prices down.

Personally, I think the average futures trader can read the same EIA report that I posted and determine that 2017 is nine years off and thus should have little or no impact on his trading contracts which are often as short as 90 days.

Posted by: Linkmeister at August 4, 2008 08:33 PM

Advocates of one energy preference or another (drilling, alternative, nuclear, etc) are quick to suggest that the other alternatives will not achieve their impact for many years and, therefore, should not be considered because of the long lead times.

The sad fact is that we have no national consensus, and the special interest groups, whether they be oil producers, conservationists, or those advocating alternatives work to block anything that might favor their opponents.

I wonder if a national effort on the scale of the Manhatten project, whatever the option(s) chosen, might be able to deliver results far faster than what the conventional wisdom suggests.

Meanwhile, the politicos expound on the need for gas tax holidays, or spilling some drops from the SPR.

Posted by: pixelshim at August 5, 2008 03:28 AM

Pix, it seems evident that GM, Ford and Chrysler should have embarked on a project of that magnitude a while back, and that the country as a whole should now.

In fact, if we'd begun a project like that in 2001 (maybe if Al Gore's inauguration had taken place rather than SCOTUS's chosen one) we'd be in a lot better place. We even had a projected surplus to work with back then.

Posted by: Linkmeister at August 5, 2008 08:38 AM