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I Drink Your Milkshake! [8/28/2008 03:57:00 PM]:
Okay, not exactly; that's just what pops into my sugar-addled brain every time the topic of oil comes up (my daughter
now thinks it's hysterically funny to say, btw, particularly w/a silly accent). I'm getting a bit irked about all the pro-drilling stupidity going on, and, well, Daniel Day-Lewis's insane-yet-still-kinda-right declaration seems appropriate to the ridiculousness going on with the debate over whether or not we should open up more of the U.S., offshore and on, to drilling. So here's my own take on it -- those not wanting to hear the politics and/or my ranting, tune out now.
I'm going to put this in as blunt and straightforward a way as possible: if you think that letting oil companies drill in more places here in the States is going to lower the price you pay to fill your SUV, you've either been conned by the propaganda or you're just a flat-out moron.
For one thing, the traditional economics of supply-and-demand have little to do with the price U.S. oil companies are gouging us with at the pump -- they're just trying to make as big of a buck off of us as they can, raising prices as high as we're willing to stand. It's not that oil companies don't have enough oil for us, so therefore they're forced to raise their prices; from some pundits I've heard, you'd think the reason those po' widdle oil companies have raised prices so drastically in the past few years is because they just can't pull enough petroleum from our cherished U.S. soil, and so they're forced (forced, I tell you!) to go overseas for oil, where it's more expensive.
This is utter crap. We Americans consume 25% of the world's oil yet have only 2% of the world's proven reserves, including the areas where the Bush admin & their cronies want to open up drilling. So oil companies are going to have to go to overseas oil no matter what the hell we do, just like they have for years, even back when gas was below $2 a gallon. There's no way with the current demand for us to get all our oil from beneath U.S. soil. The only way to fix that problem is to lower the demand, but that's apparently something our government's not real concerned about (and, for obvious reasons, neither are the oil companies).
Plus, the rhetoric sure makes it sound like all those dastardly, America-hating environmentalists have somehow blocked 'merican oil companies from drilling in the dirt of their native-born home; I mean, they wouldn't be so hot to drill in new places if they already had places they could drill here at home, right? Not quite. Lookie here. From the looks of that map -- taken from Dept. of the Interior & Bureau of Land Management data -- oil companies can already stick a drill bit into most of the western United States and much of the Gulf of Mexico (apparently the eastern area's thought to be tapped out, since it's an extension of the western area, and, yes, I drink your milkshake! -- sorry, couldn't help it), plus most of northern Alaska, with just about all of Alaska's offshore areas wide-open. Roughly 80% of the country's offshore oil fields are open for leasing right now, and only 20% of the areas already leased are producing.
And, contrary to what Sean Hannity apparently thinks (or chooses to lie about, however you'd like to look at it), yes, there is oil in all those existing leases. In the offshore areas alone, there's an estimated four times more recoverable oil than the total amount the pro-drilling crew is saying we could get out of those untapped areas they're trying to get open. That's 86 (or so) billion barrels of oil in areas oil companies already lease. We think, anyway. Because it's all guesswork, on some level -- nobody's really got any clue for sure how much is out there, on either side.
If we did know for absolute certain, though, would that make a difference? Hell, there are apparently fewer oil rigs operating in North America now than in past years, despite the fact that these folks could drill in a ton of places. And drilling in ANWR, where right-wingers and business-firsters have been dying to drill for years? Yeah, that'd lower the price of gas by about a nickel, a decade or two from now. Assuming the oil companies even bother to exploit their newly-granted concessions. Which they might not do.
Why don't they drill where they already can? Got me. I'd guess it has to do with drilling being costly business; any oil company that tries to drill in too many places at once is going to run out of capital eventually. Plus, rigs themselves take time to build -- the hardware just doesn't currently exist to exploit every single possible oil field. Of course, there's also the reality that it's in some ways cheaper to drill overseas (since that's where the finished product's going to end up anyway, but I'll get to that), in places like Nigeria where oil companies can pay the government to look the other way and do whatever the fuck they want, consequences be damned.
Why bother drilling at home, with all those pesky "no-toxic-sludge!" regulations and oversight bodies, when you can drill somewhere nobody in your home country thinks twice about? And no, that's not likely to change if domestic drilling gets expanded, despite the promises of people like Charles Krauthammer, who somehow got temporary amnesia and forgot that yes, we did have spills when both Rita and Katrina hit the Gulf Coast. Barring a colossal shift in power in Nigeria and other oil-rich/cash-poor countries around the world, it's going to remain cheaper to drill there than here.
(Okay, so Nigeria's a bad example, since the Nigerians have taken matters into their own hands and are trying to make it too costly for companies to drill there; they've done enough damage that now they're not the biggest exporter in Africa. The new no. 1, though, Angola, isn't much better.)
As I hinted at above, by the way, even if we did let oil companies drill wherever the hell they wanted to, where's the guarantee that it's "our" oil? That's the point of an oil lease, after all -- you get to take the oil/gas out of the ground and sell it to whomever you want. Meaning, in this case, probably to China, which is our biggest competitor for petroleum world-wide.
Heard that myth about the Chinese drilling off the coast of Cuba? It's total bunk -- they haven't drilled a thing yet, although they've got an agreement with Cuba to drill on their land one of these days. But heck, they don't need to drill in American waters to get our oil. All they have to do is offer more per barrel than we're willing to pay. If we get oil out of newly-opened Atlantic or Gulf waters, a decade down the line, where's the oil going to go? To the highest bidder, folks. Think appealing to the oil companies' sense of patriotic duty is going to do a bit of good? Somehow I suspect the only color they're going to answer to is green...
The funny thing is that the oil companies' pump-side price-gouging appears to be shooting them in the foot; they've apparently pushed us Americans too dang far, to the point where we've taken matters into our own hands and -- gasp! -- quit using as much gas & oil as we used to. Seriously; according to the Energy Information Administration (part of the Dept. of Energy), when gas prices leapt up last summer, consumer demand started falling like a rock, with people cutting back pretty severely because they just couldn't afford the price of gas.
Oh, and they're flocking to smaller, more fuel-efficient vehicles, abandoning those monolithic Excursions in favor of Accords and Focuses (Foci?). And now that people aren't buying the gas, the oil companies are forecast to start dropping prices back to somewhat-saner levels very shortly, bringing demand back up, although the EIA's prognosis is that consumer demand won't get back up to what it was in early '07. Check out the graph (the vertical line is where we are now):
Now, to me this begs the question: how is it that the U.S. is supposedly so severely strapped for oil that we desperately need to drill in previously-protected areas, and yet when people go cold turkey and quit buying it, the price can magically drop back to what it was a year or so ago? Is the EIA projecting that the oil companies will miraculously find their old, sucked-dry oil leases happily refilled with Texas tea, with the likeness of Jesus's face mysteriously appearing on the derrick girders? Or is it just that the oil companies, their media lackeys, and the governmental shills they pay to smooth things out for 'em are all full of shit?
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