Daniel Eran Dilger
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You Know the Drill?

Us oil consumption
Daniel Eran Dilger
There’s a mantra being repeated in the US: “Drill here, drill now, get oil prices lower and then invest the money in alternative energy!” The problem: drilling in the US will have no meaningful impact on oil prices, and oil companies have no vested interest in changing anything.

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Investing in alternative energy is supposedly what the oil companies have been doing. They say they are. But in reality, they’re just looking for new places to drill, and as long as oil is priced high, they’ll profitably keep finding new ways to only nearly meet demand, never enabling oil prices to actually go down. Problematically, there’s also not enough new oil in the US to have any impact on oil prices, and not just immediately but well out into the future.

Do oil companies have any motivation to either lower prices or pursue alternative energy sources where they’d be exposed to competition? The US is addicted to oil. We don’t have enough to stay high at home, so we have to find shady dealers elsewhere. They have no interest in either lowering the price of each hit, or in weaning us off the dependance.

Drilling in the US sounds like an easy fix, but there’s not enough oil. Those who chant “drill drill!” as the solution are not looking at the reality that they might as well be demanding more crack on the corner. Just enough more to not have to make any changes in their lifestyle. And guess what? The dealers are raising the prices for the drug that we’ll have to pay any price to get.

It was a mistake to allow an oil-backed administration to disassemble promising alternative energy projects while parading around an impractical hydrogen plan as a diversion eight years ago, and it is a mistake to repeat those same failed strategies today with a new oil-backed administration that wants to provide massive tax breaks to its oil industry partners now reeling in insane profits on high oil prices.

Both sides are talking about change and alternative energy and using a variety of sources to diversify the nation’s energy needs, but only one side is profit-motivated to keep things exactly the way they are for another four years of the same.

Other articles on current events:

Imagine Steve Jobs for President
The Big Fannie Mae & Freddie Mac Attack
Osama Bin Laden’s Dream of US Economic Collapse
You Know the Drill?
Ten Striking Parallels Between Microsoft and John McCain
Obama’s Apple, McCain’s Microsoft: the Politics of Tech

  • gothgod

    @John Muir: Making everyone rich is quite hard (I was trying to be funny), however it is one of the better solutions to the problem and it can be done (if there were an interest for it).

    BBC seems to be morons, in the city of rome around 1000AD there were a million citizens… They didn’t have much oil (but cheap slave labour). Journalists always have a hidden motive of saying the things they do, its always interesting to think about those motives.

    I must say I think that over consumption is the root to all evil, but I really think that the only solution is to switch economical system. And I promise I let you know as soon as I have found a better one than what we have today!

    Overpopulation is not really a problem, as long as there are willingness to change behavior to lower our energy consumption.

    Its very easy to reduce our energy needs, for instance we can all become vegetarians, thats 90% more energy efficient. It will also give us up to 60 times more room to live on which will buy us time to deal with the overpopulation problem… But just as making the people in africa rich, who is interested in persuading the whole world to become vegetarians? (A world made of people like Kent, and journalists addicted to FUD).

  • GossamerG3

    This is Speaker Pelosi’s take on it: http://www.speaker.gov/newsroom/factcheck?id=00421

    I’m sure I’ve also heard Obama talk about easing speculation and closing the Enron Loophole, which McCain’s buddy Phil Gramm of Housing deregulation and S&L fame drafted: http://en.wikipedia.org/wiki/Enron_loophole

    Dan is right on this one.

  • lysander

    There is probably more oil in alaska, in the prudhoe bay area, and in ANWR than exists in Saudi Arabia. The “drilling won’t lower prices” mantra is more democrat BS (like bush’s “tax cuts for the rich” which actually cut taxes more for the poor, percentagewise than the rich)

    The amount of oil actually on the north slope is unknown and will not be known until exploration happens. Its totally disingenous to make claims about what the amount is (either high or low) until the exploration has happened. There’s reason to believe it may be massive– more than Saudi Arabia ever had. But it may not turn out that way.

    The democrats oppose exploration. They don’t make a distinction between exploration and production. Further, a small increase in supply can lower prices as the reason prices are high is demand is going up while supply is going down…. bringing this situation closer to equilibrium would dramatically affect prices.

    Finally, this whole talking point completely ignores the fact that half of the reason gas prices are high is not the high cost of oil, but the high cost of producing gasoline. This is due to regulation and government taxes.

    The government takes more money from each gallon sold at the pump in profits than any oil company (Which has to buy the oil it doesn’t produce on the open market) and refineries are charging a lot more for gasoline because a hodgepodge of illconcieved environemental regulations force the mto produce 60+ blends of gasoline for all the different states and regions that have passed regulations on the gas that is allowed to sell.

    It used to be they just produced three blends- regular, unleaded and premium.

    Dan, you’re much better talking about Apple- you have your facts straight (most of the time) then. When it comes to politics you’re giving us the same old leftist talking points as we get on Air America.

    You’re not really adding value here, and you’re advocating for a position that is just more of the same — big government trampling individual rights and creeping socialism.

  • lysander

    …. but it occurs to me that maybe Dan is pulling the Dvorak and goving after page views.

  • kent

    Dittoes to LYSANDER. A beacon of light.

  • sgw

    The problems is not those who advocate drilling, but those who oppose drilling. Those who oppose drilling often claim that it will have no affect on price, therefore we shouldn’t drill. But often they don’t want to talk about the advantages of drilling domestically. And while nobody opposes alternative energy, we still are dependent on oil and that is not going to change anytime soon. Even if we did have alternative today, it would take years before the infrastructure is in place (funny that time is one of the arguments that those who oppose drilling state). Its irresponsible not to be drilling domestically at least until we have a viable replacement. I would love to go into much detail, but here a some points.
    1) I don’t know how much more domestics drilling will affect prices, but for every extra barrel of oil that is acquired domestically means less money that go overseas. Thats less money to countries such as Venezuela who uses the revenues to help fund the terrorist organization FARC. Less money to Russia to help rebuild its military to attack its smaller democratic neighbor and less to Saudia Arabia for a host of reasons.
    2) Oil companies are in the business of oil, whether its to drill, acquire or refine. They are not required to come up with alternate energy. If fact, I don’t think they should.
    3) I rather my money support US Oil jobs then see those oil job go oversee to foreign countries/oil companies.
    4) For all the talk about how much money the oil companies make in profit, nobody ever talks about how much more money the government brings in taxes and the government contributes nothing to the drilling, acquiring or refining of oil.
    5) I would rather more of our oil come from domestic sources where we have tougher environmental regulation then from less environmentally friendly countries.

    We should have more politicians working help US Oil Companies not make it more difficult for them and demonizing them. But instead, we have politicians pledging higher taxes ( which we pay, not oil companies), restricting drilling, and making it difficult to expand refining while dragging oil executives before Congress to rant a rave and blame them and the administration when price go up when those same congressman are more to blame. And now will see the same thing with the current financial mess where democrats will blame the administration, but when you look past the rhetoric, those to blame will come back to the Democratics and a handful of Republicans on the Hill.

  • glenngrafton

    Ha, ha, ha – rolling on the floor laughing.

    Daniel – are you serious? Really? Please back off on the pain meds. It’s obviously having some serious impact on your logic.

    You have excellent insight on Macs and technology – your insights into economics however are lacking.

    So drilling here will not have an impact on oil prices? Do you really know how oil prices are set? It does not appear so.

    [the nugget you ignored is that too little additional supply as demand rises will have no meaningful impact on pump prices. Add in the cartel setting oil prices at its own whim, and you have reality. Next time you present an argument, use more facts and less arrogantly broad generalizations. ]

    Let me put in terms understandable. Supply and demand. Why do you think oil prices shoot up when there’s a storm in the gulf – at a time when the gas at the local gas stations was obviously produced weeks or months ago. It’s the thread of a disrupted supply of oil that drives the price up.

    Now suppose when there’s an announcement that oil drilling restrictions have been lifted and we’ll be opening new oil wells for production. Could it be that this would also have an impact on prices????? Duhhhhhh of course it will.

    I’m all for reducing our dependency on oil. We’re a long way off however from powering the jets with something other than jet fuel, trucks, etc.

    In the meantime we should expand production here, improve mileage and here’s something we don’t hear much of – build new nuclear power plants.

    Dan, please stick to Macs, it’s what you do well. When you drift into the democratic party “talking points” you deviate from your core abilities.

  • glenngrafton

    Daniel Wrote:

    “[the nugget you ignored is that too little additional supply as demand rises will have no meaningful impact on pump prices. Add in the cartel setting oil prices at its own whim, and you have reality. Next time you present an argument, use more facts and less arrogantly broad generalizations. ]:

    Daniel, do you have a point? If so please make it. Or at least attempt to make a point that a person with reasonable intelligence can think that it’s logical.

    What I think you mean to say is that if we were to authorize additional drilling in the US that it would not have any meaningful effect on oil prices. What you fail to articulate is how you arrive at that conclusion.

    http://useconomy.about.com/od/commoditiesmarketfaq/f/oil_prices.htm

    BTW, Daniel I’ve changed my mind. By all means keep posting more political articles. This is way to amusing to have you go back to just cheering Apple on.

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