Thursday, June 19, 2008

Offshore drilling will not reduce gasoline prices!

John McCain continues his embrace of pandering as an electoral strategy.

Only a few months ago, he suggested suspending the federal gas tax as a solution to rising crude oil and gas prices. The electorate rejected this proposal which at worst would have driven up prices by increasing demand and at best saved consumers only a few dollars over the 3 month moratorium.

Now Senator McCain has embraced drilling offshore for oil, suggesting that opening up the nation's coastal waters for oil exploration can produce sufficient quantities of oil to reduce prices.

McCain is simply pandering again.

We are 3% of the world's population and consume 25% of its oil. There is not enough oil off shore or in the Arctic National Wildlife Refuge (ANWR) to drill our way out of this problem.

Take President Bush's push to drill in the ANWR which has an an estimated 10 billion barrels of oil. According to the Energy Department ANWR would only reduce the price of crude oil per barrel by about 75 cents, 17 years from now.

The price of crude oil per barrel has jumped 100 dollars in the Bush Era and prices have doubled. Shaving the crude oil price 75 cents by 2025 amounts to no savings at the pump.
That's what we would get for ANWR's 10 billion barrels.

What about the moratorium areas off continental America's coastlines some of which McCain now supports eliminating?

McCain estimates that there 21 billion barrels in the moratorium areas. The Energy Department put it at 18 billion a few years ago. Popular Mechanics reports an estimate of 19 billion.
Whoever is right, it is only about double of what's estimated in ANWR.

So, if lifting the moratorium on most offshore drilling has double the impact on price as lifting the ANWR ban would, that's only $1.50 off the price of crude per barrel. Combined with ANWR, it's $2.25 by 2025.

Lifting the moratorium on drilling offshore would have no immediate or long term impact on the price at the pump! There is simply not enough oil.

1 comment:

Anonymous said...

Bush lifted the ban on offshore drilling and the price of oil went down almost $30. So telling me actually drilling would only lower prices $2.25 is just wrong. It would lower it another $30 at least.