Drill Baby Drill


Three words. Two if you don’t count ’em twice.

But they’re pretty powerful.

On each side, Left and Right, those words elicit emotion. On one, it brings to mind an independence. On an ability to depend on one’s self for the requisite needs.

On the other, it brings to mind ugly environmental dangers, global warming and corporate greed.

But the biggest argument against increasing our domestic output of oil is that it simply won’t impact the price of a gallon of gas. The incremental gains that we would see will take years to realize. And even then they won’t amount to any meaningful impact on the global supply of oil.

I have a thought experiment.

If the addition of oil to the market won’t lower the price, then the reduction of oil to the market shouldn’t raise the price.

Right?

Wrong.

Consider Libya. As chaos began to set in, the price of oil surged:

NEW YORK — Oil prices soared to the highest level in more than two years as Libyan leader Moammar Gadhafi urged his supporters to attack protesters who are violently challenging his 42-year rule.

Libya holds the most oil reserves in Africa …

February 18, 2011 saw the price of oil at $86.20 a barrel. By March 4th, it was at $104.42.

In two weeks, oil jumped nearly 20 bucks. That’s NEARLY 25% because the world was scared Libya’s oil would stop flowing.

How much, exactly, does Libya produce?

1,790,000 barrels a day.

That is a lot of oil. But, relative, how much is that?

Not much.

Libya represents just 2.9% of the top 18 oil producers in the world.

In other words, not much AT ALL.

Yet, the fact that we may, MAY, lose ALL -and no one thought we would-sent oil futures up.

If the thought of losing a fraction of 3% would send oil UP, why wouldn’t the thought of ADDING that same amount send oil down?

Liberals?

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2 comments
  1. nickgb said:

    And within the last year it’s been at $71, and right now it’s at $81 even though Libya is just as messed up as ever. Oil prices are erratic, over-responsive, and I’d say have a large margin of error. And I never, ever trust a reporter to explain why a price did something, they love to grab a narrative and run with it. The fact is, any time someone says the word “oil” in the news, the prices jump $10 and eventually settle down.

    And drill baby drill doesn’t bring to mind any of those thoughts you mentioned as much as it evokes the faux-macho, short-sighted, anti-intellectual bent of Sarah Palin. Who needs a debate when we can have an innuendo-laden slogan?

    • pino said:

      And within the last year it’s been at $71, and right now it’s at $81 even though Libya is just as messed up as ever. Oil prices are erratic, over-responsive, and I’d say have a large margin of error.

      I agree; oil is impacted by emotion as much as by fact. But in some kinda way, that makes my point.

      To a large extent, the Left claims that the impact of domestic drilling as it relates to the international supply is very small. But the emotional impact of having the US announce that we are going to aggressively begin harvesting our own resources would bring the price down.

      And that’s what we want.

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