RSS
Home
George Bush hands offshore drilling to Barack Obama
Print
Email
RSS
Subscribe
In this Monday Dec. 15, 2008 file photo,
President-elect Barack Obama listens as his
Energy Secretary nominee Steven Chu
addresses the media at a news conference
in Chicago. Chu, the Nobel Prize-winning
physicis, faces questioning Tuesday before
a Senate committee that is expected to
endorse his selection. (AP Photo)
Last week the interior department issued a detailed proposal for widespread oil and gas drilling off both the East and West coasts of the United States. It has been almost three decades since these areas were closed to drilling by Congress.
George Bush got Congress to remove the restriction last fall as part of the continuing resolution to fund the government. George Bush developed a five year leasing plan. It is now up to Barack Obama to implement the plan. He can revise the plan or even scrap the plan.
I think that President Obama should continue with offshore drilling. The current low oil prices are the result of a world-wide recession (depression) that has cut the demand for oil. Oil demand might be down as much as 10%. This is a short term reduction. But the current low prices could be setting us up for very large price increases when the global economy recovers and oil demand returns to previous levels.
The short term reduction in price is causing the industry to scale back oil development plans. These plans have very long lead times. Cutting back on development now will lead to less supply later as the world economy is recovering.
One of the economic problems that the United States suffered with and was a contributing factor in our current economic situation was the huge trade deficits one year ago. Imports of foreign oil were costing us over $1.6 billion per day. This is money paid to foreigners that acted like a huge tax on our economy. It slowed our economy and was a headwind against job creation in this country.
President Obama has stated his intention to create millions of new jobs in this country. Developing our offshore oil will create a lot of good paying jobs in this country. Any oil produced will reduce our future trade deficits thus supporting the value of the dollar and our economy. Revenue sharing with the states could be very beneficial, especially for states with huge, chronic budget deficits like California.
Does drilling for offshore oil hurt our environment? No and No! The industry has become very safety conscious about offshore drilling. By using equipment like blowout preventers, they have had a very good record of eliminating or minimizing oil spills since the oil spills in the late 1960s. In California, drilling for oil may actually clean up the environment since it could relieve pressure in fields that currently seep hundreds of barrels of oil each day naturally.
We are not going to be able to reduce our dependence on oil for many decades. Drilling for domestic oil will not appreciably affect the world supply or increase global warming. It may lower the price of oil in dollar terms because domestic drilling lowers our trade deficit. It may actually decrease global warming since it may displace some of the marginal oil resources that require much more money and energy to develop. It may also decrease the development of very unhealthy technologies like coal to oil processes that consume huge amounts of energy and release more carbon into our atmosphere.
Increasing our domestic supply of oil in the intermediate term will keep our trade deficits down. A lot of the money generated from domestic oil sources could be used to fund green energy projects. This would help create the millions of jobs President Obama has promised.
President Obama’s choice for Energy Secretary, Steven Chu, supported new nuclear plants, clean coal technology and some new oil drilling as part of a comprehensive energy plan to fight climate change and speed the nation’s transition to renewable energy. Ken Salazar, President Obama’s choice for Interior Secretary said at his confirmation hearing that he will consider offshore oil drilling and even limited oil shale development to achieve energy independence.
A good global warming policy is to keep our economy healthy, develop alternative green energy sources, and start restricting our most carbon intensive energy sources like coal and oil shale.
