I recently caught a segment of the Kudlow Report in which the importation of foreign oil to offset demand not met by domestic production was presented as a new development to “explain” the current rise in gas prices.
John Hofmeister, former president/CEO of Shell Oil, said there wasn’t a shortage now; inventories were high and plenty of oil coming into the country. However, the underlying demand supply relationship was problematic.
Chris Edmonds, managing principal at Energy Research & Capital Partners, then said it was mostly fear over middle-east events and the long term reality of a thirst for oil we won’t be able to keep up with over time driving prices up.
Basically, nothing is actually happening right now to actually drive the prices up.
I guess this is another instance in which the rarely mentioned far-seeing oracles known as oil speculators have dragged fresh viscera across a clean boardroom table and divined there might be a problem with the supply sometime in the hazy future. Up go the prices now to offset the costs of buying oil later to charge us more for then, too.
The rest of the segment was a paid advertisement for throwing open the doors to all kinds of domestic drilling. I could tell because a graphic with the words “Drill, Drill, Drill!” were displayed under Kudlow’s desk.
I’m not against the idea of opening up America’s oil frontiers. I think it should be a highly regulated affair, however, and there are plenty of questions to ask.
First of all, is this all a lame political game? Hofmeister mentioned congress doing nothing to help the price of gas go down over the past four years. We all know Oil Men are Republicans and it has been a Democratic congress during those terms. He also mentioned the rising price of gas will drive Democrats right out of office. Convenient, then, that matters controlling the price tend to be a bit ethereal.
Will the price of gas actually go down for Americans if we draw more oil from our national soil? Hofmeister said the price wouldn’t go down right away, even if drilling started tomorrow, and he never actually said the price would go down at all, though he did say the prices would likely stay high or go even higher if we didn’t. I don’t care if it helps “relive the market” if it doesn’t relieve my wallet.
Would this oil be exported? I’ve heard the figures; we export half of what we use. Not exporting would seem like a good idea, but I’ve also heard the counter-argument; not exporting would break the oil circle-jerk and the cost of importing the difference to meet our oil needs would go up because countries relying on our exports to supplement their own would have a more valuable product. Sure. Whatever. How about we just keep the oil from these new developments; or will that make the price go up too because we’re not sharing the “extra”? Somehow I feel we’re f*cked both ways.
Tough environmental standards need to be put into place too. The shareholders don’t give two sh*ts about some coast in Alaska; they’re like a-hole kids at a classmates house while his mom and dad are gone for the weekend. Somebody needs to be the adult watching. I know oil disasters don’t happen very often, but when they do, the effects are forever.
I also think we should keep a bit around for the future; when the oil supply actually starts to dwindle. It would be nice to have a parachute to drift down from the lofty heights of our petroleum fueled lives into whatever way of life comes next when the sh*t does hit the fan.