CNN.com has an articledetailing both sides of the argument about whether America should drill for oil in the Arctic National Wildlife Refuge (ANWR):
No one really knows how much oil the coastal plain might contain - no one has ever actually drilled there.
But based on the region’s geological features, and its proximity to the oil rich Prudhoe Bay region, the government’s Energy Information Agency said drilling in the reserve might eventually yield nearly 800,000 barrels of crude oil a day.
That’s about 16% of the country’s total crude oil production of about 5 million barrels a day. (Those crude oil numbers exclude barrels from other oil liquids - like natural gas liquids and refinery gains - which eventually bring the nation’s total oil production to over 8 million barrels a day)
That sounds great, doesn’t it? Except:
But 800,000 barrels a day is only about 1% of the world’s daily crude oil output of 73 million barrels per day (again, not including other oil liquids).
Which means adding 800,000 barrels of oil a day to domestic production will do nothing to bring down the price of oil since it makes such little impact on the worldwide supply.
Nonetheless, the pro-drillers have this to say:
Arguing in favor of drilling in the refuge, James Cordier, founder of the investment brokerage OptionSellers.com, said oil prices may immediately fall by as much as $30 a barrel.
“It would change the psychology,” said Cordier. “It would lead people to believe we’re going to start drilling everywhere.”
This strikes me as only temporary (and somewhat whimsical if we’re going to base our domestic energy policy on playing mind games with worldwide energy producers). Once others around the world realize we’re only playing head games, the price of oil will start creeping up, plus with the growing rate of worldwide demand for oil, any potential savings would be gobbled up as developing nations like India and China grab for more of the world’s supply.
Cordier, though, with his statement inadvertently strikes at what those who oppose drilling in ANWR fear the most. If America reversed itself and allowed oil drilling where it currently is not allowed, where’s the next place? Yellowstone? Glacier? Everglades? Sure, most Americans including environmentalists will never visit ANWR, but that’s not the point. Put an oil derrick up in ANWR, what’s to prevent one a little closer to home, western Colorado, for instance?
And drilling for more oil does nothing to stop what President Bush accurately referred to as America’s “addiction” to oil. We have a homogenous system to fuel our transportation needs. If American auto makers and consumers would put more plug-in cars or hybrids on the road, the price of gasoline would plummet because demand would go down. Lower American demand means larger worldwide supplies since we’re the large consumers of oil-based products like gasoline, and that means lower gasoline prices. And besides, even if gasoline prices would rise, owners of plug-ins or hybrids would be insulated from such inflation. For example, everyone who currently walks to work hasn’t felt the pinch at the pump as those who commute 20 miles, 30 miles, or 50 miles a day in their gas guzzlers.
Diversify our energy consumption when it comes to transportation and America is better prepared for bad economic times brought on when one of our energy sources (in this case, oil) suffers from inflation.
