I do not claim to be an expert either but I have seen no serious analysis that thinks “Drill!” is remotely a good answer. Even if all those new wells went online tomorrow they would have a negligible impact and they cannot come online for 10 years yet anyway. In short it is in no way a solution to our problems.
I would say you are overlooking serious items. Or rather you are not identifying them as serious items. McCain’s “Drill” and tax cuts are central and dramatic to this question.
For issues surround CAFE it is easiest to just point you to the Wiki that details some open debates. Not saying CAFE is “bad” but not a panacea either.
Yep 145 million employed. We don’t have a problem with unemployment at all. The economy is on solid repub ground. That is why the talking heads on the money channel are blanched white and terrified. That is why the fed is trying to bail out an even worse disaster. Huge banks and financial institutions going down. Tax payers getting looted to save the rich and powerful from their own excesses. All is well.
Innovation is a product of competition. Oligarchy does not foster competition.
Wow. That generated some response. I have to run, but here’s what I’m going to do in the interim. And I’ll come back later and be happy to go back-and-forth on where there are holes in it. Poke away at will.
A flat increase in consumption taxes on retail sales of gasoline. Let’s throw out $2/gallon as a starter. I haven’t even done the math on it, but let’s start there.
Assume a marginal elasticity of consumption of about -0.5 due to the price increase, with year 2000 as a baseline. Meaning, increased consumption over that baseline would have been only half of what it ended up being, due to the tax increase squelching demand. We can play around with the numbers later. I have no idea what they will actually be in practice.
Take the revenue from that. Use it to provide for the common defense, cover the expenses of an independent judiciary, and provide EITC-type credits for people on the lower rungs of the economic ladder. No idea if the numbers will pencil out to be high or low at this time.
Now you have a nice, even playing field across the US landscape for all car companies. You’ve taken a boatload of power away from Congresscritters to trade favors for Michigan, or Alabama or for the roughnecks up in Alaska. If GM and the other guys had any smarts, they would immediately start importing their diesels from Europe over here (I liked the Volvo S80) that get about 50mpg and are wonderfully large and comfortable. But we’ll save that micromanagement for the free market.
You may have given a whack to oil companies profits, that’s true. If any of you want to stand up and scream that’s unfair, we’re all here listening. But I think if the tax is permanent, predictable and not subject to a whole bunch of Congressional games, they’ll muddle through. What most of these business leaders want, and will settle for, is predictability and consistency.
You also start making a dent in whole global warming thing. We’ll save that discussion for another day.
Go back to say, 1998 for giggles. That’s ten years. Federal expenditures in current dollars were $1770 billion, in current dollars. That’s almost $800 billion less than today. Adjust a little for population growth in the interim (don’t know how much that is) and call it $1900 billion. So we’re at $650 billion less than we are today.
Admittedly, I haven’t dug into all of the second-order effects, stripped out outliers, and done a whole bunch of other things to sharpen the analysis.
But personal and corporate taxes were a shade over $1000 billion in that year. Let’s take the money from the gas tax, assume we could have kept the budget at $1900 billion, and see how much we can cut personal and corporate income taxes to stay whole. My bet: A lot.
Fire away. I’m sure there are a lot of holes in the analysis. Look forward to your feedback.
The only thing opening restricted off shore areas now will do is enrich the stockholders of oil companies. There is no evidence that the 200,000 barrels per day that those new areas will produce at their peak in 2030 will do anything to reduce prices of oil.
The Saudis, who have become accustomed to $100 a barrel oil, can easily reduce output by that amount to prop up the price. The only people who want to open new offshore drilling are the uninformed and those who stand to reap more obscene profits, and keep us addicted to oil for another two decades longer than we need to be.
Windfall profits taxes are just that - taxes on excessive profits. If the oil companies profits start falling, Og forbid, the tax goes away. No problem.
The reason for the oil companies profits now is that oil is a commodity, with a low but steady margin. If the oil companies make 1% profit on the oil they funnel from the producers to us, they make a bundle on raising prices, since their sunk costs are constant, pretty much. Gas stations on the other hand get a fixed markup, and are getting screwed.
So I doubt a windfall profits tax set reasonably is going to stop any exploration, or cause asset sales.
Now, you’re gas tax idea is a good one. (It got proposed by many left wing writers before the current crisis.) When gas was $2.50 people screamed that a $1 tax would cause the world to end. Well, we got that tax, but OPEC reaped the rewards. We’ve just seen how an increase changes behavior, which is good. (California gas consumption has been declining in real terms for several years due to our high gas prices.) I’d want to fund incentives for green and efficient vehicles and rooftop solar power collectors first with the money, but a tax cut (targeted to the low income people hurt most by the price increase) is good also. ’
But do you think your side, reflexive tax cutters, will go for it? Not a chance.
The financial experts on CNBC are saying prepare for huge tax raises to pay for these bailouts. Our repubs on this board must be weeping in anticipation. The fast and loose traders and financial experts crashed the system and of course will walk away rich and comfortable. The tax payers will have to pony up so the pros can start over and do it again. The function of regulation is to save the system and the people from the looters. They were all corrupted. Now can we do something about lobbyists and public financing of elections?
I thought someone might sink their own ship. You do not understand the EIA report! So your math is based on faulty assumptions.
Is 5 years starting in 2008. read the assumptions.
is based on 2007 prices. read the assumptions.
Does not include the Alaska OCS nor the ANWR nor the western US. read the assumptions. Opening up all lands and waters to drilling would eliminate dependence on on all imports except those from Canada and Mexico.
OCS is deep water and expensive does not include state waters, shallow water, inexpensive. 2 years to produce from close to shore, tomorrow if permitted in California waters.
There have been no seismic studies to know what lies off shore. Maybe more, maybe less. A lot more off California for sure.
America is willing to pay the high price as long as it is to other Americans, using American equipment, and American labor. All the money then stays in America. It is not the high price of oil, it is the fact that money is leaving America as a trade deficit.
Drilling is all about supplying American Industry not about filling someones gas tank. When America has to import oil to supply its industrial needs then American industry will go elsewhere, including possibly your job.
There is more natural gas than oil in the OCS. The US must convert vehicles to run on natural gas. Drill Here, Drill Now for natural gas mostly.
The wonderful Republican “fix” is to supply America’s industrial needs. And yes it is so wonderful.
I will not allow hatred to interfere with my objectivity and my specificity!
The peak according to the EIA and the underlying assumptions occurs in 2020. See the graphs. The peak can occur a lot sooner depending on price and depth and location and extraction technology.
The problem is not that America is adicted to oil. It is that the rest of the world is adicted to the American dollar. As evidenced by latest Valenzuela and Bolivia bro-ha-ha’s. Those inefficient socialist countries had gotten used to feeding at the trough of $143 per barrel in 4 short months and now at $90 they are already complaining and feeling the dollar addiction pain.
The objective is for the US and north America to isolate itself from the world oil market so that the US doesn’t care what the Saudis do. The US don’t care what the world natural gas price is because north America is pretty much self sufficient in natural gas and has relatively few means to import any.
Enrich those stock holders. Their putting their kids through collage enriches my business. Harvesting America’s resources enriches everyone in the US.
The mere fact that oil prices plummeted after Bush lifted the Presidential restrictions on off shore drilling is evidence that anything America does to reduce it export of dollars will entice reduction in oil prices by exporters of oil.
I practice discernment and research and finding out which way the wind is blowing lest I piss on my own shoe. An anti-stockholder, is an anti-capitalist and that is Marxist.
If stockholders want to enrich their own pockets, at least have the stones to say that up front. Just don’t pretend that drilling in restricted areas will in any way reduce the price of oil or gasoline
Why? I can think of a few ways that drilling in restricted areas MIGHT reduce the price of gas at the pump. I can also think of worse things than injecting more capital into our system…a.k.a. ‘stockholders want to enrich their own pockets’.
Well, I could take a guess. My guess would be because those areas haven’t been explored or ‘proved’ fully, or that they have but the reserves there aren’t worth drilling for in the current market. What has this got to do with my answer though? I can still think of ways that bringing new fields on stream COULD effect the price of gas at the pump. Also, that this would enrich more than stockholders if they were.
So you are suggesting they need leases to the new places because they KNOW oil is there and KNOW there is no oil in what they already have? They should say so then. If they claim that those 70 million acres are so much rock and nothing else and the oil is in those other places then why the secret?
No…I didn’t suggest that at all. They have the current leases in case they are proved to have oil there, or because they DO have oil there but that this oil is currently not economically feasible to spend the massive capital it would take to get it to market. It costs hundreds of millions of dollars to explore, prove, drill and bring oil to market after all.
What opening up some of the more promising areas in the reserves would do (initially) is open them up to the exploration phase to figure out what’s there and whether it’s worth going after. Some of those areas are more promising (from what I understand) than areas that are already open…which is, you know, why a lot of oil companies are agitating to open them up.
Well, first off, because they aren’t drilling there doesn’t mean it’s ‘so much rock and nothing else’…it simply means that either A) They haven’t fully explored it (because it’s not promising), or B) that they HAVE explored it but that it’s not economically feasible to bring the fields on stream or C) that there are other factors that preclude development at this time. Secondly you are assuming they have perfect knowledge of what all is out there…they don’t. Even if they have done a geological survey you don’t know what’s out there or how hard it is to get at until you drill test wells…lots of them. Lots of EXPENSIVE test wells that may cost hundreds of millions yet not have anything worth getting afterward.
I torpedoed myself because you moved the goal posts from a discussion on allowing off shore drilling to drilling in every possible place we can think of? :rolleyes:
If they have explored the areas they have access to and found them to be unworthy of exploiting fine. If they have explored the places they are discussing opening and know there is stuff there worth exploiting fine too.
But they should make that case. Even if they have not put down test wells (which I know is expensive) but have good, scientifically backed, reasons to think the currently leased areas are unworthy I’m ok with that. What I object to is handing them new leases just because they would love to have them before they have done their due diligence on places they can already exploit.
If they can make the case they need the new areas because the current ones suck I, for one, would be much more amenable to the possibility of handing them the new areas. So far I have not heard that case being made and it sounds like a money grab.
Just to be clear, I believe we’re pretty much in agreement. I do think that “Drill!” is just stupid, and tax cuts a la McCain (as of a few weeks ago; who knows what he supports right now) are dumb. But these things have gained prominence since I looked at their policies; thus I left them out of my consideration. As, I believe, has Obama’s advocacy for windfall profits (which I don’t particularly like).
Thanks for the link. I should be clear that I was referencing IdahoMauleMan’s outright “But not CAFE”, not your post. Sorry about the confusion.
About CAFE – IdahoMauleMan expressed unqualified distate for it, which I don’t quite understand. If phrased as a “too complex and arbitrary set of rules, bound to unintended consequences” objection, OK, I get that. I can even see just disagreeing with someone who does support it. But the adamancy with which it was dismissed made me wonder and ask for clarification. It’s not clear to me which arguments from the link would be pertinent to this thread, not knowing which in particular IdahoMauleMan would take up. Again, we could go into this in some depth, but I think it would be a digression from the thread.
I’m sorry, let me rephrase that…:p!!!