Re: Samuelson on OIl Drilling

"John Galt" <whoisjohngalt@[EMAIL PROTECTED]
> wrote in message 
news:AgWRj.123983$Tj3.106837@[EMAIL PROTECTED]
> http://www.realclearpolitics.com/articles/2008/04/start_drilling.html
>
> Article Highlights (well, almost all of it is a "highlight"):
>
> (...) The truth is that we're almost powerless to influence today's 
> prices. We are because we didn't take sensible actions 10 or 20 years
ago. 
> If we persist, we will be even worse off in a decade or two. The first 
> thing to do: Start drilling.
> It may surprise Americans to discover that the United States is the 
> third-largest oil producer, behind Saudi Arabia and Russia. We could be 
> producing more, but Congress has put large areas of potential supply 
> off-limits. These include the Atlantic and Pacific coasts and parts of 
> Alaska and the Gulf of Mexico. By government estimates, these areas may 
> contain 25-30 billion barrels of oil (against about 30 billion of proven

> U.S. reserves today) and 80 trillion cubic feet or more of natural gas 
> (compared with about 200 tcf of proven reserves).
>
> What keeps these areas closed are exaggerated environmental fears,
strong 
> prejudice against oil companies, and sheer stupidity. Americans favor
both 
> "energy independence" and cheap fuel. They deplore imports -- who wants
to 
> pay foreigners? -- but oppose more production in the United States. Got 
> it? The result is a "no-pain energy agenda that sounds appealing but has

> no basis in reality," writes Robert Bryce in "Gusher of Lies: The 
> Dangerous Delusions of 'Energy Independence.'"
>
> Unsurprisingly, all three major presidential candidates tout "energy 
> independence." This reflects either ignorance (unlikely) or pandering 
> (probable). The United States now imports about 60 percent of its oil,
up 
> from 42 percent in 1990. We'll import lots more for the foreseeable 
> future. The world uses 86 million barrels of oil a day, up from 67 mbd
in 
> 1990. (...)
>
> The best we can do is to try to influence the global balance of supply
and 
> demand. Increase our supply. Restrain our demand. (...)
>
> Increasing production also is important. Output from older fields, 
> including Alaska's North Slope, is declining. Although production from 
> restricted areas won't make the U.S. self-sufficient, it might stabilize

> output or even reduce imports. No one knows exactly what's in these
areas, 
> because the exploratory work is old. Estimates indicate that production 
> from the Arctic National Wildlife Refuge might equal almost 5 percent of

> present U.S. oil use.
>
> Members of Congress complain loudly about high oil profits ($40.6
billion 
> for ExxonMobil last year) but frustrate those companies from using those

> profits to explore and produce in the United States. Getting access to
oil 
> elsewhere is increasingly difficult. Governments own three-quarters or 
> more of proven reserves. Higher prices perversely discourage other 
> countries from approving new projects. Flush with oil revenues,
countries 
> have less need to expand production. Undersupply and high prices then
feed 
> on each other.
>
> But it's hard for the United States to complain that other countries
limit 
> access to their reserves when we're doing the same. If higher U.S. 
> production reduced world prices, other countries might expand
production. 
> What they couldn't get from prices they'd try to get from greater sales.
>
> On environmental grounds, the alternatives to more drilling are usually 
> worse. Subsidies to ethanol made from corn have increased food prices
and 
> used scarce water, with few benefits. If oil is imported, it's
vulnerable 
> to tanker spills. By contrast, local production is probably safer. There

> were 4,000 platforms operating in the Gulf of Mexico when hurricanes 
> Katrina and Rita hit. Despite extensive damage, there were no major 
> spills, says Robbie Diamond of Securing America's Future Energy, an 
> advocacy group.
>
> Perhaps oil prices will drop when some long-delayed projects begin 
> production or if demand slackens. But the basic problem will remain. 
> Though dependent on foreign oil, we might conceivably curb the power of 
> foreign producers. But this is not a task of a month or a year. It is a 
> task of decades; new production projects take that long. If we don't
start 
> now, our future dependence and its dangers will grow. Count on it.
>
>
>

Conservation, alternative energy sources
to reduce America's dependence on imported
oil will have a greater affect on energy supply
than more drilling.

Unfortunately, the opportunity was lost 27
years ago when Reagan became president
and reversed Carter's energy policies to the
current "Let the good times roll"

Now we pay for Republican short sightedness.