One of the mainstays of John McCain's campaign is that we need to increase domestic oil production by drilling more. I think this is a terrible idea, and this post is my attempt to gather all my arguments against increased offshore oil drilling in America(Genius points), as well as to counter many of the traditional arguments for more drilling(Idiot points).
Genius point: Burning fossil fuels is not a good long term energy solution, and we should not do more to encourage it.
I firmly believe that the future of planetary energy production is in renewables, not in the difficult, expensive, and pollutive extraction and burning of fossil fuels from the earth's crust. Already the construction of the world's largest thermal-solar plant is beginning in my home state of Arizona (albeit by a Spanish-owned company), and even larger wind farms are being planned for the northeast. MIT recently discovered a breakthrough in photovoltaics that could produce solar energy from window-pane glass.
As much as I'd like to believe that these developments are born of altruistic, planet-saving intentions, in reality they exist because of the potential of profitability. Money is the biggest driving factor in a capitalism like America, and I don't have a problem with that. However, now that the facts regarding climate change have become (more or less) universally accepted, I feel like continuing our old path of burning fossil fuels is anachronistic and should be discouraged. I don't think that taxing all the money away from big oil is the answer, but certainly we shouldn't do anything to promote more use of oil. The price of gas in the US is at an all time high, and as any 1st year economics student knows, there are really 2 basic factors that influence the price of a commodity. I think we should concentrate on lowering demand instead of increasing supply.
Idiot point: Offshore drilling will provide short-term relief for cash-strapped Americans at the pump.
I don't really even like to acknowledge arguments that are this far off base. Someone please reply with something other than rhetroic that disprove the fact that new offshore oil drilling would take years to come to market. If you have some link-overload from that last sentence, I apologize. The one you should click is this one: a DOE report on drilling in ANWR that is favorable to the idea. Even this report states that new drilling in Alaska could lead to a decrease in global oil prices of as much as "$1.44 per barrel in 2027." In case you're not paying attention, that about a 1% price decrease, which, if translated directly to gas prices is about 4 cents per gallon. By 2027. And that's their best (worst?) case projection. So all the expense and time of building new rigs, drills, and pipelines just to save me a few cents per gallon in 20 years? Seriously?
Genius point: The oil companies should explore the millions of acres of land they already lease before opening new areas.
While not quite as idle as many democrats would have us believe, the oil companies do have millions of acres of land available for drilling that are currently "non-producing" for one reason or another. It would certainly be faster and cheaper to start production on that land (where they have already partially explored, and are in the process of drilling holes as I write this article) than to start from scratch on off-shore land which holds an unknown amount of oil that will be expensive and time consuming to explore as well as more and more environmentally damaging.
Idiot point: China is drilling off our coast, so why can't we?
This simply isn't true, and Cheney even rescinded his comments to that effect.
In Conclusion:
I'm sure I missed a few points from either side on this one, and I'm sure that my esteemed college will hop aboard to help with that. I hope he will concentrate on my first point which I feel is almost air-tight. Consider this final fact: The Solana solar plant I talked about early on will generate 280 MegaWatts, enough to power 70,000 homes at the cost of about a billion dollars to build. Exxon Mobile announced their once-again record-breaking profits of $11.67 billion. The amount they spent last quarter on more oil exploration was upwards of $7 billion. If they had spent even half of that on the actual construction of similar solar plants in Texas, the could have built solars plants that could power over 200,000 homes for the lifetime of those plants.
I'm not saying the government should tell a company how to spend it's profits; but the government also should not go out of its way to make it easier to do something we shouldn't want to do in the first place. This is a complex issue with a complex solution, but I firmly believe that encouraging the drilling and use of more oil will at best postpone the problem and at worst seriously aggravate the problem in the long term.
Subscribe to:
Post Comments (Atom)
4 comments:
Chonch --
I agree for the most part. I agree with you because alternative energy sources are essential to weening our economy off oil, and mending environmental damage (not warming --speaking of idiotic terms)that has to be done when you pump toxins into the atmosphere. It always takes a certain amount of pain to get humans to do anything. Being a top-flight salesman, I know that where there is pain -- there is motivation. The mindset is: Gas prices get too hot to handle, people start looking for alternatives. Drilling for more oil is not going to magically bring us back to $1/gal. gas. BUT -your price per gallon of gas also needs to be broken into a pie graph. Mmmmm Pie. Lets see how much of what we pay is government-induced (taxes -- sales, fuel, production, property, EPA regulation, licenses etc etc.) We will do this on another post.
My problem is the political use of this issue to pander to voters.
Exxon Mobil makes huge REVENUE. But rarely do people understand something called Profit MARGIN. (don't you love public schools?) Exxons pie is much smaller once you take out all the dues they pay to Uncle Sam's legion of taxing politicians. The funny thing is, politicians (especially Democrats) love to gripe and complain to their constiuency about "windfall oil profits" yet never seem to disclose how much of that pie they eagerly take--or what that pie looks like after they are done. After taxes and expenses Exxon Mobil is just an ordinary looking Fortune 500 company. This could also be quite the work-wasting study.
In conclusion -- yes Chonch. You are correct. Drilling for more oil is counter-productive and frivilous. But the last thing we need is more government interference with our market system.
HOW ABOUT THIS: Massive tax breaks to energy companies that spend a certain percentage of their "windfall profits" to explore and develop alt. energy. Less regulation/interference, more results.
Maybe it's the libertarian in me, but I feel banning consumer goods, especially the production of consumer goods, is always a bad idea. I don't care what product you are talking about, but anytime you ban a form of production, the government is inherently making the price of the product more expensive. Bans always reduce supply which always increases price. My point is this: regardless of how long it would take for the market to see a price change, we are immediately better off because our markets are that much more efficient. I am for lifting the ban, simply for the sake of lifting the ban. (Also, EVEN IF it took 20 years to see an effect, 20 years is not a long time, it is only a long time to our generation because we are a bunch instant gratification-demanding a-holes, myself included)
I also believe the author has confused the powers of the government, specifically: control (ban-see above) & influence (incentives-see below), by assuming that both will have the same effect (they don’t) over the market place. While I agree, only more options can reduce the demand for oil, the only thing the government can do is, as suggested, provide incentives for companies to enter the market of alternative energies. Essentially, subsidizing an industry that nobody has yet to deem profitable (because it isn't). Conclusion: the negative affect created by the ban is far greater than the positive affect created by incentives.
My proposal would be to do both: lift the ban and put an incentive on alternative fuels. That way, we have an opportunity to supply to be increased and demand to be decreased which sounds like a good thing for consumers.
Finally the author states that more oil is a bad long term solution. I believe judgment of people's consumption is arrogant, biased, and fails to meet logical standards. How could a product that helps so many people do so many things be a bad thing? Sure, there are spill over costs (pollution), but those are immediately offset by any gains made by the consumption of oil. Just because you care more for the earth than I do, doesn't mean oil consumption is a bad thing. It is a neutral decision that should go without judgment.
Welcome to the blog, JF.
First of all, while I appreciate your libertarianism, you must admit that some bans have provided positive outcomes. Lead in paint, CFCs, assault weapons, and most drugs(prescription and non-prescription) are all mostly good examples. Plus we're not talking about additional bans here, merely not repealing bans that were put in place decades ago because of a few short-sighted politicians.
I would argue against subsidization of the entire energy industry. If everyone could compete at the same level we would surely have more options. By that I don't mean the government selectively inviting more and more industries to the subsidized dance, but remove all subsidies from oil and corn/ethanol energy production and let the market sort it out within the confines of existing environmental limitations. If the government needs to subsidize energy it should concentrate on distribution infrastructure (power lines, pipelines) rather than direct payments.
As for your last point, there are more reasons than purely environmental for opposing a long-term dependency on oil. Terrorism is the obvious one. Oil also has a limited supply which proves beyond doubt that it can never be a long-term energy solution, especially as global energy demand continues to rise.
Is "destroying the landscape and burning more toxins into the atmosphere" actually a position some people take?
Is this position based, in the most abstract sense, on a desire for more "disposable income?"
Socrates out.
Post a Comment