Dems: we object to off-shore drilling, even if gas is $10/gallon

Looks like even some Democrats, including Nick Lampson (D-22 out in Stafford), are going against Pelosi on this one


http://www.politickerme.com/marcos/...mments-tom-allen-s-vote-adjourn-august-recess

 

drilling for tons of oil offshore is pointless if you can't refine it, they can pump all the oil they want out of the gulf, but if it is just sitting in barrels in front of the refinery, how is that gonna reduce prices?

 

Announce tomorrow that America will start drilling off-shore and in ANWAR (supposed 90 Billion Barrels). Even if the time-frame were 5-10 years the speculators would retreat. Look at the markets, no one wants to be left holding the bag. Exxon recorded 11 billion dollars in one quarter its stock lost 5% because of expectations.

The other effect is that it would scare the Middle East into production, they WILL protect their investment. They realize that our opinions will swing in the wind, as soon as a threat of major change is made here they will do what it takes to keep the population at bay and their minds off of gas prices.

 

Speculators aren't stupid. If you are talking about increases 10-20 years down the line, and you have a 12, 24, or 48 month futures contract, would that cause you to alter how you estimate the value of that contract? The production won't come on line until years after your contract expires. It is a non-factor.

The only people who will retreat are the weak-minded who buy when the price is high and sell when the price drops. There are tons of those, granted, but not so much in commodities markets. You get a short term dip from irrational panic, then logic takes over and unless the panic becomes so severe as to be self-sustaining, people understand it doesn't matter.

 

No. The goal is a solution to our oil dependence, but any serious energy proposal has to be comprehensive and include more oil supply and production off the outer continental shelf...at least this is in agreement with Robbie Diamond, president and founder of Securing America's Future Energy, a nonpartisan group committed to reducing the nation's dependence on oil.

Where is he wrong?...He seems more the expert on this, in addition to being non-partisan...

 

A significant increase would be.

Of course, even that would have significant drawbacks (such as a greater contribution to global warming).

I think it's mainly a distraction from the much more important necessity to conserve. There will ultimately have to be major changes in the way people live in this country, and there's not going to be an easy solution.

 

Are you going to prove this or should we take it as gospel?

 

Just so we are clear, you are admitting that the short term gas price fix argument is a red herring and are now switching to energy independence as the reason to drill offshore?

I already said that that is a more legitimate reason to think about it than making up some BS about cutting the price of gas at the pump in time for rush hour tomorrow.

 

Hurting the economy is not a great tactic to create change unless you believe in collateral damage for the greater good...We need to conserve, we need to alter energy consumption, but enabling relief is not a distraction to conserve...enabling relief in a troubled economy makes sense!...

We should all know by now oil dependence sucks,...and I'll say that to anyone no matter affiliation of politics...certainly in 10 to 15 years we will be much closer to the solution of oil dependence....

Till then,...help those who need the relief...Most Americans (including a good portion of those who align political alligence towards Democrats) are on board...The only ones who aren't feel this is a political god-send mission from the left,...and more, and more and jumping the shark on this issue...Give in to the dark side...

 

Maybe a little of both to some extent in agreement. Sig vs. Glock...Both.

 

I think we differ primarily in our estimates about how much difference offshore drilling will make in prices. From what I've read, I'm led to believe the difference won't be much.

 

look guys stop looking for the quick fix/Alleviation of the problem… That’s the same crap the government dished out recently with the tax rebate bull****. And what good did that do us? Further exacerbate our problems with increased deficits, weaker dollar, etc, etc…. What we need to do is buckle down and realize that not all problems can be solved with our line of thinking. We need to realize that THINGS CHANGE! Our way of life is changing, we can fight it all we want but it won’t help. We need to move away from oil not increase investment in it! I know it will hurt in the short to medium term but there is no other solution. Drilling for more may help with speculator built-in factors for a week or two, but it will go right back up once the market gets smart to supply and demand. Everyone needs to come to grips with the fact that the world is changing right before our eyes. All of these developing nations continue to develop! And they too have the AMERICAN DREAM, to own a car, own a home with A/C and heaters…We need to invest further in alternatives. Our government needs to grow a pair and realize that pandering to the desires of the uninformed majority will only tear down this great country.

/end rant

 

Don't you know that nobel prize winners, economists, and all these experts don't know anything?

The people who know are folks like John McCain - if he says off shore drilling will drop prices today than he must be right. If they say Obama is raising gas prices - they must be right.

Only fools are those who study the markets and are experts. What do they know compared to McCain - the man who once declared he doesn't know anything about economics.

 

Very respectful response. good enough.

 

I guess everyone agrees offshore drilling won't change anything in short term, and it certainly won't drop the price of oil dramatically, even in long term.

But one thing is clear, less dependency on foreign oil makes you less vulnerable. Before alternative energy dominates, a long term plan for secured oil resource is definitely needed. And some people are against that, because ...?

 

What I (and I assume others) take issue with is the gospel that any oil drilled from ANWR or offshore rigs is going to become our "America-only" oil that will make us less dependent on foreign oil, when the oil drilled from those sources is going to end up on the global market just like every other barrel of oil. The only way that said oil is going to stay in the US is if the government decrees it so, and I doubt that will fly with free-market advocates.

 

More from those "evil" Harvard professors,...er..BUT wait,..this time underlining my contention:...

Ultimately, markets are driven by supply and demand. But economists and scientists have known for years (centuries, even) that severe market swings, both upwards and downwards, have a life somewhat independent of supply and demand. At their core, human beings, their emotions, and their subconscious behavior patterns primarily drive those severe swings. Call it "panic", refer to it as "jumping on the bandwagon" -- it exists, it is a component of today's oil prices, and it can be addressed.


For evidence of this "psychological component" of the markets we can look way back to books like "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay published in 1841, or to more mid 20th Century works such as this article from 1962 in Time Magazine, Emotions & the Market. More recently, we have "Manias, Panics, and Crashes: A History of Financial Crises" from 2005, written by Charles P. Kindleberger. Kindleberger does a wonderful job of describing the various stages surrounding a financial crisis, boom, or bust - stages which inevitably lead to first mania, then panic.


Would the mere opening of new domestic oil exploration create an immediate downward pressure on oil prices?


For that we turn to an op-ed in the Wall Street Journal by Martin Feldstein, We Can Lower Oil Prices Now. Mr. Feldstein was the Chairman of the Council of Economic Advisers under President Ronald Reagan, is currently a professor at Harvard, and is also the President of the National Bureau of Economic Research.


In his editorial, Mr. Feldstein quickly dismisses the idea, proffered by Democrats, that pure financial speculation explains the current dramatic rise in energy and food prices worldwide. He first discusses perishable agricultural commodities (specifically corn), noting that demand has greatly increased from China, India, other third world countries, and also from the need for ethanol as a fuel additive. This increase in demand all happened rather quickly, and the supply sector has yet to catch up. But since corn is a food staple for billions of people, supply will catch up (people will plant more) and prices will stabilize.


Feldstein then tackles oil, a more complicated subject because of the politics involved. He offers a simple and concise explanation on how oil suppliers choose to increase supply (and therefore reduce price). It's based on several factors, not the least of which is the expected future demand and supply from the countries that control their own oil production. Unlike corn, with oil we're caught in a political struggle that limits production within the United States. The rules of supply and demand still hold, but one particular political party intentionally and artificially limits domestic supply. That takes control of prices literally out of our hands, and when that is coupled with future predictions of demand outpacing supply worldwide, we have what we see today in escalating oil prices. The obvious solution to counter the rising prices -- do something domestically ourselves, and now. We might not see a drop of new oil for a year, three years, or five years -- but we will again control our energy future, and the price of oil and gasoline. From Feldstein's piece:


The relationship between future and current oil prices implies that an expected change in the future price of oil will have an immediate impact on the current price of oil.


...Once this relation is understood, it is easy to see how news stories, rumors and industry reports can cause substantial fluctuations in current prices - all without anything happening to current demand or supply.


By actively letting the world markets know that we are resolved to take care of our own future energy needs, we are directly combating the rise in oil prices. Such a message isn't (and shouldn't be) limited to just pumping more oil. To be most effective, the message should include the fact that we are actively developing methods to reduce our consumption of oil, while at the same time increasing our domestic supply of oil. More from Feldstein:


Now here is the good news. Any policy that causes the expected future oil price to fall can cause the current price to fall, or to rise less than it would otherwise do. In other words, it is possible to bring down today's price of oil with policies that will have their physical impact on oil demand or supply only in the future.

WOW!.....

http://www.americanthinker.com/2008/07/how_to_lower_oil_prices_now_an.html

 

Also, we currently produce like 2% of the worlds oil, even if we can double that with offshore drilling it's still a tiny drop in the bucket when you take into account that we use about 25% of the global supply.

 

ok dude, I think we all agree that the speculator built in premium will drop temporarliy...but, for how long? probably a week or two and it wont be the huge drop that you think...I say it would drop around 10-15 dollars in a week and eventually it will increase back to pre-policy change price within a month or two