GAs Prices: Unbearable

[mountainfront]

Today, President Bush requested congress to commence off-shore drilling, and explore drilling around Green River oil schoal located within Utah and Colorado. This request came about because of the increasing gas prices which affect the livelihood of the American People. Is this action by president Bush a long overdue? I wonder why we stopped drilling around the coast of Florida and Mexico to begin with. In the 1970's we were doing off-shore drilling around the coast of Florida and Mexico. Then, some politicians placed a big wall on that coast. Now, the American people are suffering, and economy is not getting any better. Do you think it's a good idea to drill now? What are the consequences of drilling now? Are we going to damage the environment if we drill now? I don't really know the answer to that, maybe some of you know.

[nsabalones]

President Bush and Republican presidential candidate John McCain have called this week for lifting a federal moratorium on offshore oil exploration, arguing that taking action to increase domestic oil supplies will help drive down prices.

But analysts say that renewed offshore drilling would have little impact on gas prices anytime soon.

It would take at least a decade for oil companies to obtain permits, procure equipment, and do the exploration necessary to get the oil out of the ground, most industry analysts say. And even then, they add, the amount of new oil produced would probably be too small to significantly affect world oil prices.

Some analysts point out that the wells the United States now depends on are being depleted, and that new exploration could at least help offset that decline in supply from existing wells.

Expanded offshore exploration also carries with it some environmental risks, from oil spills to destruction of habitat to vibrations that damage sea life, which environmentalists say could have catastrophic consequences that far outweigh any potential benefit from further offshore drilling. But other analysts say that improved technology means the risks are much smaller than a generation ago. In this view, a sensible compromise approach would be to make decisions on potential drilling sites on a case-by-case basis.

Americans' anger over $4-a-gallon gasoline apparently has prompted greater public support for renewed offshore drilling. A Gallup poll last month found that 57 percent of respondents favored such drilling while 41 percent were opposed. Democratic candidate Barack Obama supports the moratorium.

The debate over expanded oil exploration has always been polarizing - recall the ferocity of the fight over whether to drill in the Arctic National Wildlife Refuge - but some analysts are calling for a more moderate tone.

"Clearly, drilling is not the solution to our oil dependence, but any serious energy proposal has to be comprehensive and include more oil supply and production off the outer continental shelf," said Robbie Diamond, president and founder of Securing America's Future Energy, a nonpartisan group committed to reducing the nation's dependence on oil.

In the short term, oil prices could go down slightly if Congress lifts its moratorium on new offshore drilling, which has been in place since 1981, because the market would factor in the prospect of additional oil supplies later on. But the actual oil would not be produced for 10 to 12 years.

And in any case, increased American production from offshore drilling would not necessarily mean lower prices for American consumers because oil is a global commodity whose price is set by global supply and demand.

"Suppose the US produced all its oil domestically," said Robert Kaufmann, director of the Center for Energy and Environmental Studies at Boston University. "Do you think oil companies would sell oil to US consumers for one cent less than they could get from French consumers? No. Where oil comes from has no effect on price."