Someone needs to remind a certain someone that CO2 doesn't make us sick.

We happen to have it in our bloodstream at all times just from metabolizing.

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"It is extremely difficult for our contemporaries to conceive of the conditions of free banking because they take government interference with banking for granted and as necessary"

-- Ludwig von Mises

From what I have heard, they are blocking oil drilling because they want to fund alternative energy sources to ween us off oil. Basically to get off an addiction you don't go looking for more sources to stop being addicted, you try to find something else that works.

Now the fact that they haven't done much to support alternative energy sources is a different matter.

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I voted yes but it's not so black and white. They block oil drilling because they feel that it's environmentally friendly, not because they think it's leading to a warming of the planet.

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Somewhere, something incredible is waiting to be known.
-Dr. Carl Sagan

Its hard to look for new energy when the lack of oil supply is destroying our economy. Why can we use our known resources as we look for these technologys? That wont hurt a thing! We allready know that there is a market for new technologys! Do you think that we wont develop them if we drill for more oil? Thats rediculous! Seems like more liberal excuses to me!

And that's why we should drill. There would be no harm to the environment.

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"It is extremely difficult for our contemporaries to conceive of the conditions of free banking because they take government interference with banking for granted and as necessary"

-- Ludwig von Mises

Democrats are blocking off-shore drilling because they know it is just pandering. It will take 10, count em, TEN years before ANY new oil comes out of any offshore rigs put into planning today. Think about that for a minute. Ok now that you're done thinking, that would put us at 2018. 2018!!! What sense does it make for anyone (in this case it happens to be republicans) to put forth a long term project that isn't a solution to anything (which in this case happens to be high gas prices) as a short term solution. Oh, that's right, because it sounds good, which is great in the year leading up to an election. Kinda like the memorial day-labor day gas tax holiday, which was exactly what this is, PANDERING.

I hate to do this to noobs..........not


One commonly heard remark about domestic drilling is that it would have little effect on world supply and therefore have little affect on the price of gasoline for American consumers.

However increasing the domestic supply of oil affects the price in more ways than the simple supply and demand graphs that you are most likely familiar with. These effects reach much farther in the economy than the price consumers see at the pump.

First, domestic production increases the profits gained by domestic companies, and in turn creates jobs not only for their employees, but also all the people whose industries are even related to products used by the companies who are drilling (for example, steel production and drilling equipment). Oil companies also invest in alternative forms of energy, even if the proportion of what they invest is low compared to what they invest in furthering their oil production. This brings wealth to the US instead of to the Saudis and the rest of the Middle East.


Second, domestic drilling would have a positive effect on the US trade deficit. Oil makes up a large part of the US trade deficit, and that trade deficit is in turn the direct factor affecting the value of the dollar. In other words, the more domestic oil we produce, the more valuable the dollar will become, even if that still means that the value of the dollar is falling, it wouldn't be falling as fast as it would without domestic production. Domestic oil would also be unaffected by the cost of shipping foreign oil to the US, as it would be closer to American consumers.

Here are some statistics:

The midpoint of estimated recoverable reserves of oil in the US stands at about 800 billion barrels of oil. http://rand.org/pubs/monographs/2005/RAND_MG414.pdf

In comparison, the total proven reserves of the entire Middle East is only 685 billion barrels and its total estimated reserves stand at 899 billion barrels. http://www.runet.edu/~wkovarik/oil/oilcharts.html

The US trade deficit in 2005 was $60.9 billion per month. Oil was $34.5 billion of that, more than half, 56.65%. http://www.presstv.ir/detail.aspx?id...tionid=3510213

The number of barrels imported per year is about 4 billion barrels (3.66 in 2007) http://www.dailykos.com/story/2008/6...628/766/538262

Here's an all-round article: http://www.frbsf.org/publications/ec...el2006-24.html


Third, increasing domestic production would decrease the power of OPEC and its level of control on price that it has due to its control over a large portion of the world's oil supply. It is, in a way, an international monopoly, controlling 41% of world supply (2004).

http://www.eia.doe.gov/oiaf/ieo/oil.html

By producing our own oil, we would strike at this monopoly and force them to reduce their prices due to increased competition.

Fourth, drilling for domestic oil would strike at the heart of the speculators currently driving up the price of oil. Speculators rely on the fact that the price of oil continues to go up. They then buy into the market to make a profit but further drive up the price of oil. When many speculators enter the market, the price can be driven up much farther than the market value. By drilling for domestic oil, and even by saying that we will drill for domestic oil, we can puncture the speculatory bubble, driving the price back down to the market value. The new production could also be coupled with a large release of oil from the Strategic Petroleum Reserve to further hurt the speculators. All would drastically reduce the price of oil.


Questions:

"Why not use government subsidies for renewable energy to lower the demand for oil instead. Wouldn't that be money better spent?"

Well, it's not money better spent if your primary concern is the cost of energy. Subsidizing the renewables market would cost more money to reduce demand than it would cost to simply buy the more expensive oil. It's a simple economic statement to say that the only industries that are given subsidies are those that are not as economically efficient as the existing ones. That always holds true so long as the market is free or mostly free (as we have in the US). Even if you are to look to the future and talk about investing in future renewables, the private sector would still invest by itself and not need subsidies to invest in renewables if they were economically viable. The bottom line is, in the purely economic sense, subsidies are never money well spent.

"Wouldn't the price of domestic oil still be set by the international market if the government didn't control the price?"
This is true, so long as the government allows oil companies to sell their products freely, as it should. However, this ignores the fact that domestic oil would be slightly cheaper than imported oil through the cost of physically importing the oil. It also ignores the fact that the American oil companies would be able to make money by exporting, further helping our economy and helping consumers to buy oil, whether expensive in pure dollar amounts or not. Oil companies would also benefit from selling this way, giving them the incentive to be in the business and encouraging competition.

"Why won't oil companies simply get the leases to the land and hold them to keep down supply so that they can reap the most profit?"
The answer to this is simple. In a free market, suppliers of goods cannot purposely hold down production to artificially raise prices in order to make profit. If they tried, then a competitor would take advantage of the artificial price and introduce their own supply, making a large profit at the expense of the company or companies that tried to monopolize the market. However, one might point out the cost of starting an oil company and say that the start-up cost is too large to allow competitors to enter the market. The answer to that is easy: record profits in the industry are there for the taking, and would cover the cost of getting in the market. Another person might ask why we don't see more new oil companies. Unfortunately, government regulation in the business, and even the threats of nationalization heard from some on the left make it somewhat more undesirable to get into the business. The government would need to stop this if it wanted the greatest benefit economically.

But there's still one big question remaining....

WHY WOULD THE GOVERNMENT PREVENT DRILLING IN THE FIRST PLACE?

To that, I have no answer....

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"It is extremely difficult for our contemporaries to conceive of the conditions of free banking because they take government interference with banking for granted and as necessary"

-- Ludwig von Mises