Samuelson: The Case for Increased Oil Drilling | Newsweek Newsweek - Robert J. Samuelson

Drilling for Answers

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Members of Congress complain loudly about high oil profits ($40.6 billion for Exxon Mobil last year) but frustrate those companies' desire to use those profits to explore and produce in the United States. Getting access to oil elsewhere is increasingly difficult. Governments own three quarters or more of proven reserves. Perversely, higher prices discourage other countries from approving new projects. Flush with oil revenue, countries have less need to expand production. Undersupply and high prices then feed on each other.

But it's hard for the United States to complain that other countries limit access to their reserves when we're doing the same. If higher U.S. production reduced world prices, other countries might expand production. What they couldn't get from prices they'd try to get from greater sales.

On environmental grounds, the alternatives to more drilling are usually worse. Subsidies for ethanol made from corn have increased food prices and used scarce water, with few benefits. If oil is imported, it's vulnerable to tanker spills. By contrast, local production is probably safer. There were 4,000 platforms operating in the Gulf of Mexico when hurricanes Katrina and Rita hit. Despite extensive damage, there were no major spills, says Robbie Diamond of Securing America's Future Energy, an advocacy group.

Perhaps oil prices will drop when some long-delayed projects begin production or if demand slackens. But the basic problem will remain. Though dependent on foreign oil, we might conceivably curb the power of foreign producers. But this is not a task of a month or a year. It is a task of decades; new production projects take that long. If we don't start now, our future dependence and its dangers will grow. Count on it.

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Its clear that "big oil" - no matter what the country of origin - plans to squeeze us mercilessly. Various announcements of oil reserves in Brazil or wherever are years away from providing any relief to the average consumer who just wants to be able to drive to work without putting the family in debt. We consumers need the quickest solution now to bridge the gap to the future when all the promises of more plentiful gasoline are promised. We can't all go out and buy hybrids overnight. And if we did, a very large number of condo and apartment dwellers would be hard-pressed to throw an electrical extension cord from their homes out to their cars to charge up batteries overnight. We need a liquid fuel that we can put in the tanks of our current cars thats cheaper than gasoline. The only two alternatives in that category are: liquid fuel from coal produced by the Fischer-Tropisch process and ethanol from non-food biomass. The Fischer-Tropisch process allows harmful pollutents such as sulphur to be easily stipped out in the refining process and non-food biomass can be exploited without impacting the price of food commodities. This a much easier road to travel than drilling in the arctic or buying oil from Brazil ten years in the future which may simply join the OPEC conspiracy whenever it pleases.

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Posted By: hoot123 @ 05/24/2008 10:48:44 AM

I am sick of hearing we need to stop our "addiction to oil" our county requires mobility to have a strong economy. It's memorial day week end and some hard working families are trapped at home because the hard working american is "addicted to oil" No our politician are addicted to control and our out of touch with reality!
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Posted By: smokey_joe @ 05/07/2008 6:19:12 PM

Its clear that "big oil" - no matter what the country of origin - plans to squeeze us mercilessly. Various announcements of oil reserves in Brazil or wherever are years away from providing any relief to the average consumer who just wants to be able to drive to work without putting the family in debt. We consumers need the quickest solution now to bridge the gap to the future when all the promises of more plentiful gasoline are promised. We can't all go out and buy hybrids overnight. And if we did, a very large number of condo and apartment dwellers would be hard-pressed to throw an electrical extension cord from their homes out to their cars to charge up batteries overnight. We need a liquid fuel that we can put in the tanks of our current cars thats cheaper than gasoline. The only two alternatives in that category are: liquid fuel from coal produced by the Fischer-Tropisch process and ethanol from non-food biomass. The Fischer-Tropisch process allows harmful pollutents such as sulphur to be easily stipped out in the refining process and non-food biomass can be exploited without impacting the price of food commodities. This a much easier road to travel than drilling in the arctic or buying oil from Brazil ten years in the future which may simply join the OPEC conspiracy whenever it pleases.
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Posted By: concernedcitizenry @ 05/05/2008 4:59:44 PM

We must rally against enivonmentalists to do the sane thing...Drill! The quiet voices need to speak up on some of these issues that minority voices seem to have a stranglehold on.