Thread: Drilling To Save The Economy

Drilling To Save The Economy

Today the U.S. has about 22 billion barrels of proven oil reserves that can be legally developed. Yesterday, President Bush lifted just one of the many roadblocks that stand between American consumers and the estimated 19.1 billion barrels of oil in the Outer Continental Shelf that are currently off-limits from production. Bush’s recension of his father’s 1990 presidential directive restricting all new offshore exploration and drilling could almost double proven U.S. oil reserves. The next step is getting Congress on board.

Beginning in 1982, Congress restricted more and more offshore areas through annual Department of Interior appropriations. Each year since then, Congress has denied Interior the funding necessary to conduct leasing of new offshore areas. If Congress passes legislation making it clear to world markets that the U.S. is serious about doubling its proven oil reserves, then that can lower prices today. As former former Reagan chief economic adviser Martin Feldstein explains:

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. … [I]ncreasing the expected future supply of oil would also reduce today’s price. That fall in the current price would induce an immediate rise in oil consumption that would be matched by an increase in supply from the OPEC producers and others with some current excess capacity or available inventories.

The problem is that liberals in Congress do not want lower gas prices, increased consumption or increased production. As the Sierra Club’s Carl Pope told the Washington Post: “People who tell us the solution to our problem is drilling offshore are peddling our addiction. The drug is oil, and they don’t want us to get rid of it.â€

Big oil is in the drivers seat, their war, high fuel prices, record profits. Now it looks like they're going to drill all the places they been wanting to for years, no surprise here. The media is 100% behind it looks like a snow job to me.