Posted by
Stemster on Wednesday, June 25, 2008 6:30:24 AM
There is a big to-do in the press this week about oil and gas prices, and drilling the Outer Continental Shelf. People are angry about $4 gas and letting politicians know about it. Here are some thoughts.
First up the battle lines are drawn between the Republicans, who will finally advocate energy exploration and development, and the democrats, flush with environmentalist money, who are holding fast against anything other than green energy development.
Lets start with some arguments The first dem argument against drilling ANWAR is that it would only produce about 2.5 years of oil, and that it would not move prices.
Wow, what a concentrated load of fertilizer. We, the US, currently use 28 million barrels per day. If all 28 million barrels per day came out of ANWAR, maybe it would only last a few years. That is a blatant distortion though. ANWAR is expected to produce 1 million bpd, not 28. At 1 million bpd, the estimated 3-10 billion barrels in ANWAR oil reserves would last 8-27 years, not one or two.
As far as increasing domestic supplies by a million barrels per day not moving the market, again the Democrats resort to distortions. Fifth grade economics teaches that when supply rises, prices fall. When you add 3.6% to the domestic oil supply, markets and prices will move on that. Put it this way..We import 1.5 million bpd from Saudi Arabia. If they shut off our supply, would the market move? Sure it would, it would blast right through $200 a barrel. Remember 1978? Anwar alone can produce 2/3 of what we get from Saudi Arabia (1.5 million bpd), and no honest person can maintain that it would not make a difference.
It should also be noted that at current import levels of 9 million bpd, 1 million bpd brings us 1/9th closer to being energy independent. That is based on the proposed 2,500 acre drilling site. There is a lot more oil around Alaska than just ANWAR, all off limits due to an unchecked 30 year reign of environmentalists effectively stopping any energy production.
The next argument is that you can't drill your way out of this. Sorry folks, more bull plop.
First of all, let it be said that the crisis that we are in is the direct result of 30 years of failed environmentalist policy. But, still, yes we can drill our way out of this. Contrary to (dem) house leader Harry Reid's outright lie that the US only has 3% of the world's oil, we have more than enough to be energy independent for generations to come.
Including oil resources from Alaska and the Outer Continental Shelf, we have 125,000,000,000 (billion)barrels of known oil reserves. We need 9-14 million barrels per day of domestic production to make up the half of our oil that we import. If we get that from our 125 billion barrel reserves, it is 24 years of energy independence.
But wait, it gets better.. Under Colorado and Wyoming lies one of the biggest, if not the biggest, oil reserve in the world in the form of oil shale. There is new technology has the potential to tap an estimated three trillion barrels of oil in the Green River Valley. That is trillion with a capitol T and 12 zeros. That alone is over a century of current rate consumption. Guess what. Mmm mmm mmm, nope, can't explore there either. It is off limits due to environmental stupidity recently passed by democrats.
The truth is that we have more oil than the middle east. They just don't have environmentalists crippling their country.
The next fraudulent dem argument is that there are many lease areas that are not being used now. There are, but most are unprofitable. By the time you deal with endless permitting harassment and enviro lawsuits, and 300-500 million to develop a single oil rig, it better test out as a big deposit. Most do not. By design, the best drilling areas have the strongest eco protections and are not leased. Unused leases revert to the feds after 10 years under current law. Roughly 93% of known reserves are off limits.
So as the dems hold strong, what is this costing us?
Well first up, we are buying at least 9 million barrels per day off shore. At 136 a barrel, that sends 1.2 billion dollars in American wealth overseas every day, $1,460 per year for each of our 300 million Americans. That half trillion dollar per year outflow of wealth is virtually crippling to our economy, and a lot of why the dollar has gone worthless.
The next lie propagated by Democrats is that the effect of drilling at home in ANWAR would take 10 years. There is some truth to that in that the physical oil will take 10 years to see. That would figure in 3-5 years to develop it, and 5-7 years of fighting endless environmentalist lawsuits and democrat obstruction and regulation. Get the idiots out of the way and we are looking at gas in our tank in 3-5 years. This is also an argument that the demviros have made for over 10 years, and if they had acted otherwise, they could be happily pumping ANWAR fuel into their Volvos and Gulfstream jets as we speak.
The very premise of the argument is faulty as well. Enviros are always saving something, presumably for the future. Suddenly 10 years is too far to look ahead? If so, we might as well abandon all enviro efforts, especially endangered species, since most are on the list for over 10 years.
There is also this retarded premise that if gas goes to 8 or 10 dollars a gallon, we will suddenly have new sources of clean energy popping up out of the lawn. That is ridiculous. People have been trying to find the next energy innovation since time began. It has been very focused since the Carter era and the gas shortages then. We looked at ethanol and a whole series of alternatives, and they were impractical. Thirty years later the answer is still not obvious.
Somehow dems and enviros think that at $8 a gallon Santa will come down the chimney and will bestow upon us energy so clean that cars fart bunny rabbits when they start. More likely it will cause a lot of economic damage, pain to consumers, and the guarantee of more substandard substitutes and empty promises like ethanol and cold fusion. Until we see a proven energy source that is clean and viable in the marketplace, it is stupid to stop using the energy that we have now. It is a lot like writing checks before you apply for a job.
As far as more production moving prices, in the short term, any extra oil production would move the price of the oil markets significantly. The futures market is emotion and news driven as much as it is by supply and demand. News that the ANWAR field will be opened will move the market down. For 3-10 years each positive news release about progress developing it will move the market down. Finally the extra oil will move the market down when it is developed and hits the supply.
The next thing I have heard from the dems is if repubs are so bent on energy production, why didn't they move on it when they had both houses and the white house in power. That is an easy one. John McCain and the gang of 14 sold out the republican majority and rendered it toothless. After McCain and the other RINOs sold out the repubs, they no longer had the 60 votes needed to pass bold legislation like the opening of ANWAR or the OCS. It also wasn't as much of a crisis back then, gas has gone up over $2 a gallon since '06 when the Pelosi/Reed and the dirty democrats took control of the house and senate.
The dem bashing gets worse.
Now they are trying pass windfall profit taxes ( a proven failed policy under Carter) that quickly pass through to consumers, along with horrendously expensive cap 'n trade carbon limiting legislation. Soon only the very wealthy will drive or fly or use more energy needed to sustain a third world lifestyle. This has been stopped this year under threat of veto by Bush, but has been introduced repeatedly, and will be back if the dems come out in power in November. If Barak wins, watch out.
In the short term, consumer angst over $4 gas is causing an emergency in the environmental community. As consumers feel the effects of 30 years of failed enviro-centric policy and failed promises of new energy sources and efficiency improvements, they are pissed. At risk is 30 years of stifling environmental legislation that the sierra club, NRDC, et ilk fought for with millions in democrat graft money and hundreds of thousands of lawsuits against the government.
There is now an emergency campaign on with the major environmental groups to classify the walrus and/or seals as endangered to block energy exploration in the Arctic. If they get endangered listing, the enviros can sue and harass energy companies right out of Alaska and the entire Arctic. This may not sound believable, but wake up.
They just tried to get the polar bear on the endangered list via the great global warming hoax so that they could sue to control/limit/permit/regulate/harass/tax virtually any source of carbon output, virtually any energy usage. If nothing else, they are ambitious. They do not even have an accurate count of the polar bear population, but locals say populations are for the most part up, and that they are anything but scarce. They failed in that one, but only partially. They settled for endangered status with much caterwauling. Compared to that campaign, getting the seals and walruses listed should be a breeze.
Environmentalists like high gas prices. They have a publicly stated goal of reducing consumption and encouraging new technology via 8-10 dollar a gallon gas. Their bought and paid for sphincter in the government, the democrat party, is right on board and holding fast in that goal. They got half way there before the consumers started sounding off in a meaningful way.
I don't think that the consumers will win this one. The environmental movement has a 30 year head start, they have trillions of dollars, thousands of lawyers, and they own the democrat majority in congress's souls outright. The only way the consumer will come out on top is if the gas prices keep rising, and the populace subsequently expresses their anger in the form of a total rout of democrats in the 08 elections.
If the dems get into power, look forward to $8-10 gas, crippling energy prices, more failed environmental policy, and a fast downhill slide in our economy. We will eventually return to third world status as their anti human, anti energy schemes deprive people of freedoms, and the horrendous cost of hyper regulated energy takes away from the population's ability to afford nutrition, medical care, and prosperity in general. As the left makes the lifeblood of our country, energy, only affordable for the elite, the other 95% will suffer for it and suffer greatly.
You can get a head start on their plan and be ultra green.. Join the human extinction project today.