19 June 2008

Drill!

From the NYT:
White House press secretary [and noted liar], Dana Perino, said Mr. Bush would urge Congress to “pass legislation lifting the Congressional ban on safe, environmentally friendly offshore oil drilling,” adding, “The president believes Congress shouldn’t waste any more time.”
I'm glad that Ms. Perino and Mr. Bush are trying to get the Congress to move on safe and friendly drilling. I was worried that the Congress would start another war in the Middle East, fail to resolve the situation in Israel, and continue to antagonize Iran. Luckily, the Prez is ready to step in with his wisdom. Better yet, he's got lots of friends in Texas who are going to make piles of money with nice and clean drilling, unlike those Exxon bastards who spilled oil in Alaska.

Bottom Line: Offshore drilling is a dumb idea that will not lower prices by much (remember ethanol), but it will bring ecological damage nice towers to US coasts AND benefit US corporate donors citizens. The fish must be excited.

7 comments:

  1. Offshore drilling is a dumb idea that will not lower prices by much (remember ethanol), but it will bring ecological damage nice towers to US coasts AND benefit US corporate donors citizens.

    Hold on a second... The environmental economists are (rightly) emphasizing that demand curves slope downward (in the context of people needing to drive less, the ability of carbon taxes to reduce CO2 emissions, etc.). But now it seems you are saying more oil won't lower prices much?

    I agree with your disgust at the politics of it; I think George Bush probably cares about gasoline prices as much as Al Gore cares about polar bears.

    So my only objection here is your assertion that allowing offshore drilling will bring down prices by a large amount. A lot of industry people say crude prices are really high because of very thin excess capacity margins. So wouldn't even a few hundred thousand barrels per day extra, have a surprisingly big impact on prices?

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  2. Sorry, should have said "...your assertion that allowing offshore drilling WON'T bring prices down..."

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  3. Nope -- tiny impact on prices ($0.03/gal). Check this

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  4. David,

    Well, I have major problems with the EIA analysis on this issue; just doing an idiot check, ANWR (when it's up and running) could be adding an extra million bbls/day, when right now excess world capacity is something like 1.4 m bbls/day. So I think EIA's model is crazy, but until we publish our own studies (at IER) I understand if you don't take my word for it. :)

    Let me ask you this: Do you think that the decision to stop filling the SPR will have absolutely no effect on gas prices?

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  5. Dana Perino!

    http://imageanon.com/static/7e8955af59bd8b5ccff428cf98af7a6a.jpg

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  6. @Bob -- "Do you think that the decision to stop filling the SPR will have absolutely no effect on gas prices?"

    You know that it *will* have an effect in theory. In realty, I doubt it will have any effect. I always thought the SPR was just another gov't boondoggle...but it may have some use in the case of severe disruptions (e.g., 1991 Gulf War).

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  7. David,

    OK fair enough. (BTW I wasn't defending the existence of the SPR.) I just get annoyed when some people (not you) dismiss ANWR as useless but then castigate the Bush Administration for holding up oil prices by filling the SPR. If a million barrels a day won't change world oil prices, then obviously 70,000 per day (to fill SPR) is really insignificant.

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