Wednesday, June 18, 2008

Oil Geopolitics Part I: U.S. Reserves

A big political question now is whether or not to drill for oil in regions previously declared off limits by congress. John McCain has switched sides in the debate, now favoring drilling, while Barack Obama remains against drilling in prohibited spots.

The major prohibited regions are the West Coast, the Eastern Coast plus western Florida, and ANWAR. Both Republicans and Democrats from the coastal states prefer having the no-drilling zones because it protects the local environmental and helps out tourism. Most Alaskans on the other hand favor drilling in ANWAR because much of it is frozen tundra and only a portion of it is the beautiful part shown on television. They counter the environmental damage claims by showing how the Alaskan Oil pipeline has helped caribou rather than hurt it. Environmentalist claim drilling and having a pipeline are different.

The lack of new drilling zones has hampered U.S. domestic production. The amount of environment saved is debatable with foreign countries like Spain, China, and Cuba drilling in international waters nearby. Currently American oil policy is clearly helping competitor countries.
Right now Brazil is drilling in its new found off shore reserves. A different culture, one of government ownership and economic interests is propelling the drive. However, Brazil is also famous for its ethanol law mandating fuel integration. Brazil has found a balance needed to transition from purely oil to more sustainable resources while lessening the blow of oil withdrawal. The United States must learn this lesson too if it wishes to be more environmentally friendly and stop funding hostel (or nominally friendly) oil regimes.
America needs new drilling, new refineries (South Dakota is building the first one in thirty years!), along with new fuel technology to steam the rising price of energy. Putting most of the eggs in the oil basket is bad policy.
Next Post: Part II: The Rise of the State Oil Firm and the Downfall of the Multinational
Maps courtesy of Gateway Pundit


Goethe said...

This posting gives more information than anything to be found in the newspapers. Again, the Internet wins! Still, I am in favor of going nuclear.

Anonymous said...

I would support drilling if it can be environmentally friendly and if it will truly make a difference for the common man. Unfortunately neither will happen. Environmentally friendly oil drilling in Alaska, although possible is highly unlikely in my opinion. Second, even if congress approved drilling, it will take between 5-10 years to actually start producing oil for our needs. It is not going to help us in the immediate time when oil prices average $4/gallon. Even when we get this oil 5-10 years from now, it might shave off a few cents per gallon at best. So for most Americans, that difference is nominal. To save that money, the average American family just needs to stop eating outside once a month.

I think we should be promoting a better lifestyle rather than promoting the problems that come from high fuel prices. We Americans are so used to our splurging lifestyle that we have a hard time changing. I would like to see both McCain and Obama and all politicians preach about how we need to change our ridiculous lifestyles rather than complain about high gas prices. Demand is partly what drives the prices up so we can reduce prices by consuming less oil.

I am a hypocrite to a certain extent.....but that is changing. I am actively changing my lifestyle to use less of many things and I have stopped complaining about high oil prices. It can be done by most people if they put their mind to it.

I for one would love to see oil prices skyrocket. I am an average American, not rich by any stretch of the imagination, but not poor either, just like most others. The only way our thinking and lifestyles will change is when there is radical need. Until then we will live the way we always have.....wasting the crap out of everything.

TheSpyofCyberpunk said...

I am full support of drilling and Barack Obama is writing his own political obituary by opposing it.

Anonymous said...

FYI, China is not drilling off of Cuba. Vice President Cheney backed off his claim ( George Will posted a retraction. I don't know if Gateway Pundit will follow suit, and I'm not sure what Senator Craig's map represents since it doesn't have a legend.

Goethe said...

To the first Anonymous (who sounds like Jimmy Carter Redux): As soon as the futures market learns there will be drilling, the price of oil will go down, even before the results come in.

Goethe said...

Update 7/16. Note my original prediction (first comment): the President lifted the ban on drilling, and the price of oil went down, even before there is a drop of oil drawn from the ground.