rssMcCain to Propose Lifting Off-Shore Drilling Moratorium
Monday, June 16, 2008 at 2:53 pm
- 4 Comments
With Americans struggling under $4 per gallon gas and the oil industry increasing its pressure on Congress to allow more oil and natural gas exploration and production on federal lands, Sen. John McCain said at a press conference today that he will propose lifting the federally-imposed moratorium on off-shore oil exploration. McCain will give a speech on energy policy tomorrow in Houston.
"I think that this, and perhaps providing additional incentives for states to permit exploration off their coasts, would be very helpful in the short term in resolving our energy crisis. We’ve seen the impact of it in the form of food prices, the form of gasoline, and the form of threats of inflation, and indeed indications of inflation. We must embark on a national mission to eliminate our dependence on foreign oil and reduce greenhouse gases through the development of alternative energy sources. And, as I said, exploration is a step toward the longer term goal. And, I will repeat my advocacy of a gas tax holiday, which is impacting low-income Americans on a fixed income who are driving automobiles that consume gasoline at a greater rate, and they’re driving further, and I think that they deserve a break."
Despite his willingness to open off-shore areas to drilling, the McCain campaign has reaffirmed the Arizona senator’s commitment not to allow drilling in Alaska’s Arctic National Wildlife Refuge — long a target for Congressional Republicans eager to increase America’s oil production — as recently as last week. While lifting the moratorium may be a small step toward energy independence in the long-term, it’s hard to see how it will provide much relief to American consumers in the short-term, as McCain claims. As The Wall Street Journal notes, once an oil field is discovered, it frequently takes "years of mapping, testing, drilling and construction" to bring it online and begin production. Of course, in an election year, the appearance of taking swift action on an issue over which the government really has little control is more an important than results.
4 Comments
Comment posted July 4, 2008 @ 11:38 am
We will use oil and gas for many years to come, even if wind, solar, etc. are wildly successful. So, drilling will happen on our planet. Isn’t it better to emphasize drilling activity within the regulatory reach of the US Government? Would we rather have our planet’s environment protected by China, Nigeria, Cuba or Iran?
Let’s also consider the demonized Wall Street speculators. Those speculators don’t care about where prices move. They just want to “bet long” when prices rise and “bet short” when prices fall. The benefit of speculators is something we should have learned in Economics 101. Markets are efficient when there are many buyers, many sellers and easy entrance into the market. Speculators keep the market efficient. You can become a speculatory for dramatically less capital than it takes to start-up an oil & gas company. That’s easy entrance into the market. If you remove speculators from the market, you reduce market efficiency and increase the market power of the remaining players — oil and gas companies.
Consider also a capitalist that would like to create jobs and develop an alternative energy product or technology. As he studies the market and his development costs, he should determine that his new technolgy can succeed so long as oil is at least “X” per barrel, but if oil falls below “X” he’ll go broke and his effort to develop alternative energy will fail. The economic success of his new venture can be insured if he uses the futures market (trades with the evil speculators) for protection against a maket below “X” per barrel. Otherwise development of new technology is just a gamble.
Consider the evil oil company CEOs. I’d like to see one of these guys tell congress that when oil goes to $135 per barrel, he’d have to work very hard to prevent his company from making record profits. Then, if he actually did work to restrain his company’s profits, he wouldn’t be testifying before congress. The FTC would lead him out in handcuffs, and he’d be testifying at his own criminal trial.
Comment posted June 16, 2008 @ 4:19 pm
drilling helps prices immediately!
1. it sends signals to markets
2. it brings in money to gov’t. even before drilling by lease sale
3. it brings more money to gov’t after lease sale if oil or gas are produced through royalties and severance taxes.
4. every gallon produced domestically is one not imported which reduces our foreign trade deficit of which oil is greatest part
5. it creates American jobs reducing unemployment taxes we pay
All of the above help my price of government immediately
Comment posted June 16, 2008 @ 11:19 am
drilling helps prices immediately!
1. it sends signals to markets
2. it brings in money to gov't. even before drilling by lease sale
3. it brings more money to gov't after lease sale if oil or gas are produced through royalties and severance taxes.
4. every gallon produced domestically is one not imported which reduces our foreign trade deficit of which oil is greatest part
5. it creates American jobs reducing unemployment taxes we pay
All of the above help my price of government immediately
Comment posted July 4, 2008 @ 6:38 am
We will use oil and gas for many years to come, even if wind, solar, etc. are wildly successful. So, drilling will happen on our planet. Isn't it better to emphasize drilling activity within the regulatory reach of the US Government? Would we rather have our planet's environment protected by China, Nigeria, Cuba or Iran?
Let's also consider the demonized Wall Street speculators. Those speculators don't care about where prices move. They just want to “bet long” when prices rise and “bet short” when prices fall. The benefit of speculators is something we should have learned in Economics 101. Markets are efficient when there are many buyers, many sellers and easy entrance into the market. Speculators keep the market efficient. You can become a speculatory for dramatically less capital than it takes to start-up an oil & gas company. That's easy entrance into the market. If you remove speculators from the market, you reduce market efficiency and increase the market power of the remaining players — oil and gas companies.
Consider also a capitalist that would like to create jobs and develop an alternative energy product or technology. As he studies the market and his development costs, he should determine that his new technolgy can succeed so long as oil is at least “X” per barrel, but if oil falls below “X” he'll go broke and his effort to develop alternative energy will fail. The economic success of his new venture can be insured if he uses the futures market (trades with the evil speculators) for protection against a maket below “X” per barrel. Otherwise development of new technology is just a gamble.
Consider the evil oil company CEOs. I'd like to see one of these guys tell congress that when oil goes to $135 per barrel, he'd have to work very hard to prevent his company from making record profits. Then, if he actually did work to restrain his company's profits, he wouldn't be testifying before congress. The FTC would lead him out in handcuffs, and he'd be testifying at his own criminal trial.
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