I never cease to be amazed by what people will believe. So it is with the arguments some people make against energy development. One of the strangest arguments I have heard against drilling for oil is that we will not see any of the oil from new oil wells for 6 – 10 years. I do not understand how people can make such an argument with a straight face. Even if this generation will not enjoy the fruit of our work, that does not mean we should not think of the next. These very same people claim to be protecting the environment. Are we protecting the environment only for the present generations?
I was particularly amazed by these statements by a local blogger.
It’s also quite interesting to note that the Saudis say that the price is being driven up by selfish speculators and a weak US dollar. This view is opposed by the Bush administration, and voiced by Energy Secretary Samuel Bodman, who maintain that it’s supply and demand fundamentals. Which gets back to my previous point, that stations are not running dry, nor will drilling domestically help Americans.
Why don’t those calling for more drilling speak more about conservation that would actually help the situation today? My guess, it’s a transparent pander to the oil addicted. Wouldn’t it much more wise to look for a sustainable, long-term solution? (from here)
Conservation is an instant soluton? 
What “solution” that would actually work has not been take to court and blocked?
Let’s take a moment to address the hoopla on speculation. Speculation is a normal market function, but because of low margin requirements, some blame prices rises on speculators (see here and here). While margins may indeed be too low, the market is self correcting (see here). Even if low margin requirement allow speculators to temporarily drive price up, the bubble must eventually burst.
Consider what speculators do. Speculators look into the future and anticipate market demand and supply. If speculators guess right, they make money. If they guess wrong, they lose money. When you buy oil on the margin, and the price drops, you have to make up the difference between the price you bought the oil at and the price you sell it at. Only an idiot buys oil if they think the price will drop before they can sell it.
Some suggest that speculators are tying up lots of oil. Really? Just because speculators buy up oil does not mean producers stop producing. In fact, higher prices encourage producers to produce (and consumers to conserve). Higher prices also encourage so-called hoarders to sell before prices drop.
Unfortunately — and fortunately, there are real reasons to anticipate shortages (see here for example).
- Our government has discouraged efforts to produce and refine oil domestically, reducing supply.
- Demand from Asian nations is expected to continue increasing at a rapid clip.
Oil pollution is a real problem, but we cannot continue to pretend we do not need oil. Instead, we must make use of new, cleaner drilling technologies. If we let the pretense we do not need oil continue indefinitely, our economy will suffer, and people will go hungry. The mere fact that we will not experience immediate gratification is just a silly excuse. Consider the following quote and then the cartoons below (from here).
The best time to plant a tree was twenty years ago. The second best time is today. — Chinese Proverb
Other Views
The Shad Plank tells us about flaring tempers in Congress (here).
SWAC Girl records similar doings in the General Assembly (here).
Two Conservatives addresses another perverse Democratic Party argument against offshore oil drilling (here).
Delmarva Dealing quotes the no oil today Democrats (here).
Cobalt6 blames high oil prices on speculation (here).
And here is the post at Sun Versus Wind that inspired this one.
I hate the idea of more drilling, offshore or otherwise. Seems to be another distraction from the real problem–that we need alternative fuel NOW, not later. The more we buy into oil, the more everyone puts off what we really ought to be doing. I like Marshall’s idea of hastening technology for using pollution as a fuel source. We need to hurry up and just do it.
As you point out, though, high prices do cut down on consumption. Unfortunately, they also make us regular people poorer.
Everything has a down side. When my family and I lived in League City, Texas, we would occasionally visit the beach at Galveston. There were a lot of gummy-black deposits of tar. I expect most of this was due the Houston Ship Channel. Some mornings when I opened the front door the air reeked. I expect that was due to the oil refineries in area.
When we moved League City, we bought a house. So when the price of oil tanked, we had the misfortune to share a small part of the misery of the locals. Because I was in the military, we had to move, but we could not afford to sell the house. It was quite a few years before the price recovered, and we could afford to sell.
Petroleum powers our transportation systems and is integral to many of the products we make and use. Unfortunately, the use of petroleum often results in pollution, and there no quick and easy fix to get rid of it. Certainly, no politician has a solution. Does anybody expect John McCain to collect the $300,000,000 prize he has proposed?
Americans, not America’s government have to fix this problem, but too often the producers and users of petroleum products do not bear the direct costs of the pollution they produce. So they do not have an economic incentive to fix the problem. I think there is a most effective way incentitivize our industry. We could alter our tax system.
You have heard of Western Europe’s Value Added Tax (VAT)? I think America should scrap its income tax system and give our accountants some useful work. We should tax pollution with a Pollution Added Tax (PAT). The PAT would make clean energy sources far more competitive.
Consider our trash problem. When you go to the store, half of what you bring home is used to wrapp the other half. Your mailbox is loaded with junk mail. That trash litters the environment and is costly to dispose. The people responsible should pay the cost.
We could apply the PAT to anything that results in litter or any other form of pollution. If somebody insists on making a mess, that somebody should pay for the privilege.
Love Pollution Added Tax (PAT)! And by all means, let’s penalize the senders of junk mail. Even when you request companies don’t send you catalogs, they still do. These glossy-paged glories go right into the recycle bin. Talk about a waste of energy and resources!
I’m all for a “tree tax” as well. We could use one here in our area. Either you leave up the trees or you replace two for one, Mr./Mrs. Developer.