Reputable would be an economist.
Why you would buy into any Republican's ideas on the economy at this point is beyond me.
Show me the logic of how drilling for oil is going to lower gas prices (which is what you want right?). We're certainly not going to remove our dependence on foreign oil by drilling domestically. That would require, you guessed it, abstaining from the use of oil as much as possible.
Seriously, are we crack addicts when it comes to oil?
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Aug. 1 (Bloomberg) -- It's absurd to argue that ending the moratorium on drilling off parts of the U.S. coasts would quickly bring down the high price of gasoline.
This chimera is being touted by President George W. Bush and other Republican politicians, including the party's presumptive presidential nominee, Senator John McCain of Arizona, to deflect blame for what it's costing for a fill-up.
To get around the fact that it would be a decade or more before any oil would be likely to flow, a few partisan analysts have said that the cost of gasoline would fall right away. They argue that the prospect of additional oil supply in the future would lead oil companies to produce more oil immediately because they would expect prices for crude to be lower later on.
Well, wouldn't that depend on whether a producer had the capacity to pump more oil today, and whether it thought lifting the moratorium would add a significant amount of oil to future supply relative to future demand?
There are good reasons to question whether another 1 million or 2 million barrels of crude a day would make much difference in prices when world consumption is running at 85 million barrels a day.
About a fourth of all U.S. oil production is already coming from offshore wells, primarily in the central and western portions of the Gulf of Mexico that aren't covered by the moratorium.
In a May 2007 forecast, the Interior Department's Minerals Management Service, which oversees exploration and drilling on the outer continental shelf, said that oil production in the Gulf was likely to increase from 1.3 million barrels a day last year to about 2 million barrels by 2010.
Ignored Forecast
In other words, production was expected to rise by about 700,000 barrels a day over a three-year period. That would be a gain of about 14 percent over the 5.1 million barrels produced daily last year in the U.S.
Yet somehow that sort of forecast based on industry projections and announced discoveries had no discernable impact on world crude oil prices.
Why would anyone assume that opening other coastal areas -- which may or may not harbor large quantities of oil that might or might not be economic to produce sometime in the future -- will have an immediate impact on today's oil prices?
Nevertheless, the assertions continue: lift the moratorium and gasoline prices will fall. And since McCain's Democratic opponent, Senator Barack Obama of Illinois, is opposed to ending the moratorium, he therefore is responsible for high gasoline prices.
Dry Holes
Drilling proponents point to an estimate from the Minerals Management Service that there are probably about 76 billion barrels of oil waiting to be discovered offshore.
The problem is that little of that oil -- perhaps about 18 billion barrels -- lies in areas subject to the moratorium. A third of the total is off the coast of Alaska, where drilling is extraordinarily difficult and expensive, and most of the rest is in the Gulf of Mexico where drilling is permitted.
Some 3.5 billion barrels in the Minerals Management Service estimate are off the Atlantic coast in the Baltimore Canyon, an ideal geologic formation in which to find oil. It runs from east of Cape Cod all the way to North Carolina.
Beginning in the late 1970s, huge tracts were opened for exploration and oil companies jumped at the chance to drill. About 35 wells were sunk off Cape Cod, New York and New Jersey at a cost, including purchases of the leases, of almost $3 billion.
The result? Nothing. Neither oil nor gas was found.
Giving Up
Another ideal formation, the Destin Dome, in the eastern Gulf Coast area off Pensacola, Florida, was another major disappointment. Exxon Mobil Corp. spent heavily to acquire leases and found no commercial quantities of oil or gas in what became known as ``Dusty Dome.''
Years later, natural gas was found in the Dome. Yet, as a result of political pressure generated by environmental concerns, oil companies were paid to give up their leases. The gas has never been produced.
At a July 15 press conference, Bush said that he had lifted an executive order that had restricted offshore drilling since the early 1980s. Now, he said, ``the only thing standing between the American people and these vast oil resources is action from the U.S. Congress.''
Fooling the Public
Republicans are hoping that the public, believing their foolish claims that drilling will lower gasoline prices, will put enough pressure on Democratic opponents during the August congressional recess that begins today to pass legislation to end the moratorium this fall.
Meanwhile, both Bush and congressional Republicans have refused to take a step that really could reduce gasoline prices. That is to release a portion of the light, low-sulfur crude in the U.S. Strategic Petroleum Reserve.
In an earlier column I explained why that action might bring down prices in a way opening more environmentally fragile coastal waters to more drilling can't. Obviously Bush, McCain and their allies would prefer to mislead the American people and escape blame for effects of their past lack of action on the nation's energy problems.
