Posted on 06/19/2008 9:49:46 AM PDT by Josh Painter
You must have seen or heard it. It's been repeated ad nauseum by Democrats on floors of both houses of Congress, before TV cameras and radio microphones and at recent campaign events. "We can't drill our way out of this." The donkey party's latest mantra has been hammered home by the usual suspects from Nancy Pelosi and Harry Reid to Barack Obama. Like most Democrat talking points, it's a falsehood.
Yes we CAN drill our way out of this. Just the announcement of our intention to drill in any one of the Big Three Forbidden Zones (off the Continental Shelf, in the Baaken or in ANWR) would have a considerable impact on the speculators who have been driving the price of oil ever skyward for the past several months. Hugh Hewitt makes the point:
No one wants to get caught holding the contract for high priced oil when new reserves are discovered.In fact, the speculation which has driven up the price of oil is only made possible because we have allowed the environmental lobbyists to tie our hands, thus preventing ourselves from exploiting our own considerable domestic supplies:
In the current oil market unreasonable speculation is simply a symptom of the problem. That problem being the lack of a stable supply of crude oil.But no one that I know of is claiming that all we should do is drill for oil to try to make ourselves more energy independent. Most advocates for increased domestic drilling see it as just one tactic in a compresehsive strategic energy policy which also encourages building more nuclear reactors, synthesizing liquid fuels from coal and waste celluloic stock, continuing the refinement of hybrid electric vehicles and developing hydrogen as a motor fuel, just for starters. We think that it's really cool that used cooking oil can be easily made into something that diesel engines can burn. We see clean burning natural gas and propane as the logical alternative fuels for buses and fleet vehicles.Current oil production levels are virtually identical to demand with very little excess capacity available in the event of an interruption. Political instability, weather hazards, refinery breakdowns, terror attacks, kidnapping/attacks on oil platforms and hostage taking, and other interruptions in production increase the risk that oil supply will not be able to meet the demand in the future.
That is where the market comes in. If you are a large consumer of oil you purchase futures contracts, offering to buy oil in the future, at a set price that the seller has to deliver at that price -- no matter what interruptions occur between now and then. In order to make a profit traders have to build in a premium in the cost of oil to offset that ever increasing risk.
Increasing domestic production -- Drill Here, Drill Now, Pay Less -- would greatly reduce much of the speculation by mitigating many of the uncertainties. From the list above, if you developed domestic supply in various regions of the US (Both coasts, Rocky Mountains, Alaska, Plains) you would mitigate the major effects of weather, political instability, terror attacks, attacks on platforms, and many other interruptions because there would be additional supplies from the remaining stable US regions. Increasing refining capacity would help mitigate the effects of refinery breakdowns.
This fundamental misunderstanding of the oil markets and the refusal of the Democrats to allow increased energy production has empowered the speculators in ways not seen since the markets began trading, resulting in a direct increase in the price of gasoline. The Democrat's tactic of deflecting blame to the oil companies only serves to increase the speculation as additional restrictions and increased taxes on domestic oil producers historically leads to reduced domestic production.
Nor are we only talking about the supply side here. Many of us have little or no problem with increasing the fuel efficiency of our vehicles, our homes and our workplaces. As conservatives, we have long argued that higher prices will help to drive down demand, and we are seeing that happen in the real world right here and right now.
The truth is that Democrats are so beholden to the environmental special interests that they've painted themselves into a corner on energy matters. The donkeys are trying to swim against an increasing tide:
Most voters favor the resumption of offshore drilling in the United States and expect it to lower prices at the pump, even as John McCain has announced his support for states that want to explore for oil and gas off their coasts.Yes, it's still "the economy, stupid" and especially pump prices for gasoline and diesel, not to mention the high costs the airlines are incurring for jet fuel. The GOP seems to be waking up to what conservatives already knew. Make energy your number one issue and offer doable solutions to the problems of energy security and high prices.A new Rasmussen Reports telephone survey—conducted before McCain announced his intentions on the issue--finds that 67% of voters believe that drilling should be allowed off the coasts of California, Florida and other states. Only 18% disagree and 15% are undecided. Conservative and moderate voters strongly support this approach, while liberals are more evenly divided (46% of liberals favor drilling, 37% oppose).
Sixty-four percent (64%) of voters believe it is at least somewhat likely that gas prices will go down if offshore oil drilling is allowed, although 27% don’t believe it. Seventy-eight percent (78%) of conservatives say offshore drilling is at least somewhat likely to drive prices down. That view is shared by 57% of moderates and 50% of liberal voters.
Nearly all voters are worried about rising gas and energy prices, with 79% very concerned and 16% somewhat concerned.
The Democrats, meanwhile, have sentenced themselves to doing hard time in Al Gore's lockbox, and they've entrusted the key to the Sierra Club. Couldn't happen to a more deserving bunch of people, a group which has consistently put its own selfish political interests ahead of America's security and her citizens' bank accounts.
- JP
In all these arguments about opening up domestic production there as been one issue that has been completely absent.
Increased domestic production will decrease oil imports which in turn will decrease the trade deficit. A decreased trade deficit will strengthen the dollar and a stronger dollar will reduce the world wide price of oil.
Also, increased domestic production will create high paying jobs, jobs, jobs, jobs, for AMERICANS!
Si se puede!
Or, are the bashers shills and plants from DNC?
Yes we can.
Yes we can.
Yes we can.
Yes we can.
Yes we can.
Yes we can.
Saying: “We can’t drill our way out of this.”, is the ultimate in thinking like a loser.
You can’t become buff with one workout, so why exercize at all?
You can’t get rich saving $1, so why save?
You can’t get to be an expert reading one book, so why read at all?
Friggin’ loser left is actively destroying this country. It’s very painful to watch, but the majority of Americans are signed up for it.
Yeah, but what about the windfall profits tax? Isn’t that a great idea?
Good Lord, how come those people up on The Hill aren’t talking about a windfall profits tax on fertilizer and potash, etc., etc.?
I like your post. Good thinking!
(And they certainly will.)
The democrat mantra now is that milions of acres of leases have yet to be drilled so why let new ones?
I suggest the energy company start boring test wells on any lease within sight of any self-righteous democrat’s mansion, the estates and mansions of major democrat political sugar daddies/mamas, and within sight of any pet democrat earmark projects.
” ... Increased domestic production will decrease oil imports which in turn will decrease the trade deficit. ...”
Excellent point. I hadn’t read or thought of that angle. Very true, and very compelling.
That’s why you’ll never hear it in the MSM.
If you think we are so off base that we cannot drill our way out of this, I propose that we drill and you prove us wrong, when it does not work. OK?
Also, increased domestic production will create high paying jobs, jobs, jobs, jobs, for AMERICANS!Oh, you can't be right about that.
The Democrats are completely against drilling.
And yet they tell us they want more jobs for Americans.
So you must be mistaken.
Yep, we've heard the Democrats' top 40 hits over and over.
- The war is lost
- The surge is not working
Only losers vote for the loser Democrats.
We certainly can help ourselves a great deal in the short term if we drill here, drill now. Granted, we should continue to research new energy sources. But since oil isn’t just used to make our cars go, we’re always going to need it. Unfortunately, people don’t seem to realize that.
“Only losers vote for the loser Democrats.”
I agree! I don’t know one single soul that votes straight Democrat that I don’t consider damaged.
It will also greatly enhance our national security.
Right now we are at the mercy of the Arabs who are dealing secretly and making big investments in China's infrastructure.
There are some who honestly think trying to teach the Republicans a lesson is a good idea. They're wrong, of course, but they are sincere in their belief.
I am sick of hearing about the “speculators”. Once the prices start to turn south the “speculators” will be driving the price down. That’s how markets work.
The democrat mantra now is that milions of acres of leases have yet to be drilled so why let new ones?That's such a straw-man argument, as I'm sure you well know.
The way it works is this: the government lets out some leases, the oil companies bid on them, take hold of them for awhile, explore them and determine their viability of oil sites and then let go of them when they expire if they are not viable. In between the time they've explored them to determine their viability, and the time the lease is set to expire the oil company still "holds" the lease, but it's already been looked at and passed on, regardless of the technical fact of the expiration date.
It's not like they KNOW IN ADVANCE which site is viable and which isn't. Somebody has to EXPLORE it and DETERMINE its viability. Most of the time they're not viable and they are passed on. The lease is allowed to expire. During that time, while the lease is expiring, the oil company technically still "holds" the lease.
The Democrats all know this. They are blatant and total liars. And the spineless press (the great Tim Russert included) NEVER calls them on any of these easily demonstrable lies.
It's really disgusting.
Comment:
Could be but I think of them as nothing more than ignorant Shiite Democrat wannabes.
These people are nothing in my estimation, sort of like a Turd with all the Shiite scraped off.
Maybe it won’t help. I can’t prove that it will, although this pesky thing called the law of supply and demand says it will. But one thing I can promise the Dems in Congress is simply this: THEIR plan of action the last two years, which basically calls on America to sit on its ass and do nothing (except pay higher taxes, the Dem solution to everything) WON’T work. That I can guarantee.
Yes we can.
Love it
I think that the propaganda benefit of suggesting that we will drill is probably the most valuable part of this.
Unfortunately, from reports I’ve heard, it will take 5 to 10 years before the well would be drilled and producing. Also there is only enough for 3 or 4 years of supply for us. There also are apparently areas where the majors have leases where they are permitted to drill where they have not and could if they wanted to. So, what is that all about?
Two useful things from the potential price perspective. China has just increased their price of gas by about 18% which will slow down China’s demand. Also Congress having held the oil companies’ feet to the fire is now looking hard at commodity speculation. Since oil company profits are about 15%, and the supersized oil futures being bought by institutional investors like pension funds, university foundations and the like are causing more than 20% of the gas price increase, this may also have a positive effect.
Before long people in the know will realize that if their pension funds and alumni contributions are being invested to a large extent in food and fuel, this is going to hurt other forms of investment and they will let their pension funds and universities to start making more useful investments. Buying commodities is easy if you can tell a hedge fund to do it. Really learning the market and selecting good investment opportunities that develop our economy is harder.
The libs are killing us at the pumps.
From Okla and it should be called the "show-me" state as their people generally aren't stupid, Doc.
Thank you for the information about the leases which I did not know when I made my post.
Here is an interesting link and discussion about the commodity situation: http://www.freerepublic.com/focus/f-news/2020588/posts
"No, Columbus, you can't get to the East by sailing West."
"No, Wilbur and Orville, you can't fly a heavier-then-air machine."
"No, Groves, everyone knows you can't fission your way in to winning the war with an a-bomb."
"Sorry, Goddard, this liquid-fuel rocket of yours will never be able to fly men to the moon."
Guess if you say "we can't" often enough, it comes true, and we never do anything. Fortunately, there have always been people too smart (or dumb) to listen to those who say "you can't", and go ahead anyway and do the thing.
If only the sheeple had the eyes to see and the brains to understand the differences between the two parties on this issue when it comes to going to the polls.
We've been doing so for at least a hundred years even though they've been predicting the impending end of oil the whole time.
Comment:
SAY WHAT!!!!You sure know how to throw a low blow to hurt a guy.
Vote for Obama, evidently you have not read any of my prior posts.
I think if you will reread my original post you will see that I was agreeing with you about many of the basher's being shills and plants.
I will now add the former post for your edification.
To: kcm.org
Or, are the basher's shills and plants from DNC?
Comment:
Could be but I think of them as nothing more than ignorant Shiite Democrat wannabes.
These people are nothing in my estimation, sort of like a Turd with all the Shiite scraped off
Comment:
Them being, basher's, shills and plants.
The are several ways that domestic production can be made to satisfy domestic demand before any excess goes on the world market.
One way would be to reneotiate federal government land leases with the oil companies with such a provision included.
In exchange for tax credits or easing of some of the more restrictive regulations, the oil companies would not object.
Yes, the libs ARE killing us at the pumps. And at the grocery checkout registers. And in many other ways...
Much cheaper if you don't have to SHIP that domestic oil too far.. and more, PAY domestic workers and use domestic pipelines and refine in domestic refinerys.. all of which need workers.. Each dollar earned from domestic oil and natural gas and oil shale and coal will be compounded many times going from hand to hand..
OR.... we could just send all the bucks to Canada or the mideast.. taking those bucks right out of the loop..
We can't drill our way out of the problem
That's true, but we can drill and PUMP (produce the oil) our way out of it.
Drilling new wells is essential, but pumping from the wells that have been shut down by liberals with their moratoriums, etc is key.
Many wells that were not very productive when oil was 10 to $60 a bbl can be brought back on line with acid and frac jobs, and numerous other methods to up production.
Also there were many producing wells that were stopped from pumping across the years by those that used environmental scare tactics to get legislation passed, etc to stop the production.
Many of these locations just need a little revamping and upgrading to be in full production again.
I used to work in Texas on jobs like these.
Let me help you up from my low blow; but, I'm looking out for your high blow, FReeper!
You can’t reduce your hunger by eating, now can you?
The U.S. government can stop that from happening just as they do not allow current oil from Alaska to be sold on the open market.
Where did you find that?
Just as OPEC has manipulated the price for decades by raising and lowering relatively small amounts of production (2~500,000 compared to 85,000,000 total) additional supply by the US will lower prices.
However, the largest importer of oil will be the closest market. Transportation cost come out of the sellers pocket. The oil produced off our coast will be used on our soil.
It would be more correct to ask will we ever see $1.50/gal gas again, not $35 oil.
Why? We the public will never see gas prices much lower in spite of oil dropping (and my 35 years of working in oil companies tell me it most certainly will, only a matter of time) as the politicians who are always ont he junt for more revenue will see an opportunity to step up the gasoline taxes in the name of “conservation”.
You can take that to the bank. We will have our pockets picked by the unscrupulous pols.
That is one of the lamest excuses the liberals come up with. Stop listening to them
From the same liberals who tell him that it would take 10 years to get the oil out and produce gas. Remember they have been saying that since 1981
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