Oil Innumeracy

[roberte]

Natural Born Drillers
Paul Krugman

To be a modern Republican in good standing, you have to believe — or pretend to believe — in two miracle cures for whatever ails the economy: more tax cuts for the rich and more drilling for oil. And with prices at the pump on the rise, so is the chant of “Drill, baby, drill.” More and more, Republicans are telling us that gasoline would be cheap and jobs plentiful if only we would stop protecting the environment and let energy companies do whatever they want.

Thus Mitt Romney claims that gasoline prices are high not because of saber-rattling over Iran, but because President Obama won’t allow unrestricted drilling in the Gulf of Mexico and the Arctic National Wildlife Refuge. Meanwhile, Stephen Moore of The Wall Street Journal tells readers that America as a whole could have a jobs boom, just like North Dakota, if only the environmentalists would get out of the way.

The irony here is that these claims come just as events are confirming what everyone who did the math already knew, namely, that U.S. energy policy has very little effect either on oil prices or on overall U.S. employment. For the truth is that we’re already having a hydrocarbon boom, with U.S. oil and gas production rising and U.S. fuel imports dropping. If there were any truth to drill-here-drill-now, this boom should have yielded substantially lower gasoline prices and lots of new jobs. Predictably, however, it has done neither.

http://www.nytimes.com/2012/03/16/op...-drillers.html

[darwinslair]

<grin> sort of like Obama taking credit for the new drilling going on right now.

Except the new drilling is from permits granted by the last admin that are coming online now, and Obama has cut (depending on area) permits from 50-70%.

rather selective reading of the facts by Krugman. Gasoline is cheap compared to other commodities still. The printing press inflation means that gasoline should be about $5 a gallon just to bring it into balance with everything else in this world. Nothing has happened with Iran yet. Iran might cause speculative spikes, but not a gradual rise in prices.

Tom

[roberte]

Originally Posted by darwinslair

<grin> sort of like Obama ...

Might want to read the whole thing, but there are some pretty significant dates and figures in this section.

OIL AND GAS LEASING
Past Work Identifies Numerous Challenges with Interior’s Oversight

In October 2008, we reported that Interior could do more do encourage the development of existing oil and gas leases.12 Our review of Interior oil and gas leasing data from 1987 through 2006 found that the number of leases issued had generally increased toward the end of this period, but that offshore and onshore leasing had followed different historical patterns. Offshore leases issued peaked in 1988 and in 1997, and generally rose from 1999 through 2006. Onshore leases issued peaked in 1988, then rapidly declined until about 1992, and remained at a consistently low level until about 2003, when they began to increase moderately. We also analyzed 55,000 offshore and onshore leases issued from 1987 through 1996 to determine how development occurred on leases that had expired or been extended beyond their primary terms. Our analysis identified three key findings. First, a majority of leases expired without being drilled or reaching production. Second, shorter leases were generally developed more quickly than longer leases but not necessarily at comparable rates. Third, a substantial percentage of leases were drilled after the initial primary term following a lease extension or suspension.

http://www.gao.gov/assets/130/125795.pdf