lyndon_h

There is a common misconception that oil drilled off our coast is going to make it into our pumps. But that oil is going to be absorbed in the global pool of oil. We may get a little of it, but the amount of oil that we will get will be minimal.

lyndon_h

It looks like something "good" may finally come out of the Iraq war; western oil companies are about to sign no bid contracts for leases to the Iraqi oil fields. I say "good" because it may help SLIGHTLY lower our gas prices, but it looks bad to all those (particularly Iraqis) who said that we went to war for oil.

triman54

I agree with you that there will be future disruptions.

The U.S. may even face the prospect of its relative position in the world economy changing, but that is not going to be the end of the world. Until 1600 A.D. or so, the majority of the world's GNP was produced in Asia. American economic hegemony is the exception, not the rule. That said, emerging Asian economies, I suspect, may have an even greater challenge in adapting their economies to the changed paradigm of scarce oil.

Much later in the century world economies will face an even greater challenge. By the middle of the century, based on current estimates in the rate of population growth, the world's population will grow to about 9.5 billion. By the end of the century, assuming no changes, the population will total almost 12.5 billion. Image what will happen when those people start competing for oil. Something needs to be done to stem demand, and the real solution is curtailing population growth, whether by cultural or economical means.

Slithr

1. We need to start moving away from an oil based economy as much as we can. It's already happening. There are segments that will be hard/impossible to deal with such as heavy trucks and aircraft. As far as I know, alternatives for these applications are not even on the drawing board. Personnal transportation will be easier to deal with and people are already making choices that are in line with the impact higher fuel prices are making in their budgets. We don't need to punish people with punitive taxes. They are already moving in the right direction. All increased taxes will do is enrich the government and lower peoples' standard of living. General price increases from the fuel cost pass through are already causing problems for a lot of folks. Additional taxes would be a real problem.

2. We need to drill. The arguement that we won't see results for 10 years is bogus as that is the same arguement that was made 10 years ago. There is more oil in the ocean from natural seeps than there is from off-shore drilling/production activity. No matter what we do, it will take at least 20 years to move a significant portion of our transportation fleet to something other than petroleum.

We will need a good source of oil for our national security needs if nothing else. We have a big fleet of weapons of various types that need petroleum fuel to work.

3. We need to stop burning oil for heating. Oil burning homes and businesses should be given incentives to switch to natural gas. This would allow diesel fuel to be priced more rationally.

4. Produce the shale oil. With lifting costs at $12/bbl, everyone was making money selling it for $20. They were making more at $30. If we can produce petroleum from oil shale for a $50 equivalent lift cost, then good money could be made at $75/bbl.

5. The worldwide demand for oil will probably never be any lower. At the current price it will pay to develop alternatives. The private sector, given the chance, will come up with the right answers. Massive government action (except to get out of the way) is not the answer. Your examples would be the beautiful job with corn based ethanol, the windfall profits tax of the 1980s, the banning of off-shore drilling, the refusal to allow significant use of the western oil shale, etc.

Axel6

Although that may be true, increasing the supply (admittedly with other favorable conditions such as a lower dollar) will eventually lead to lower crude prices.

marthafokker

Regardless if it will reduce oil prices... which I think it will not.

But it will certainly be a help in our trade deficit. And will help corn farmers from making fuel instead of food.

vtec9

What he said. There is NO REASON to open up more land for drilling.

Only 17% of leased off-shore terriroty is being drilled. Some 33 million acres of off-shore terrirory is already premitted for drilling that simply isn't being drilled. These unused lands contain an estimated 25 billion barrels of oil and 328 trillion cubic feet of natural gas (thats an 11 year supply). The Minerals Management Service tells us that about 80% of all estimated off-shore fossil fuels are currently available for development.. and as I just mentioned, most of it is sitting idle.

On all U.S. land (on and off-shore), 68 million acres leased for drilling are sitting idle. If all these lands were drilled, it's estimated we could double daily U.S. oil production, and increase daily natural gas production by 75%.

I support drilling. Drill it all.. but I'm all ears as to why we need to open up more land when so much is already available.

Slithr

Why would anyone pay to move that oil to Europe, or some other market, unless the price paid there was enough higher to cover the transportation costs? Oil found here will be used to offset purchases from elsewhere. The Middle East countries may lower their production when we increase ours to keep prices up, but at least we have the security of an increase home based supply.

lyndon_h

Absolutely, but the amount will be absorbed in the global pool. Many people think that all of the oil is going straight to the pump.

cdelena

The pool term is just a concept to show that all oil is fundamentally equivalent and that prices are global... obviously there is no physical pool. Normally a buyer would contract for the lowest delivered price and as a result we get most of our oil from domestic sources and Canada. If production increases here it is most likely the crude would be used here.