Saturday, March 17, 2012

Drill baby drill?

A fried of mine posted this picture on facebook with the caption "we need drill in america fast!!"

I don't think drilling is the answer. Here are some things to consider:

1. the price of oil is set by international demand - the USA may use a lot, but we are no longer the overwhelming majority. Prices are this high all over the world.

2. Keystone oil wouldn't affect the international oil supply for at least a decade. In a decade, the populations of china and india will further dwarf that of the USA - they will have more say on the price of oil because they will be using the most

3. Keystone oil production will not increase supply by a significant amount. If keystone oil were here today, it would have the same impact on oil prices as a new wawa/7-11 opening across the street from a rural wal mart would have on the local price of food.

4. One of the reasons why oil is priced so high is because of speculation. Smart wall street regulation may be a solution

5. Another reason why oil is priced so high is corruption. There are reasonable measures that can be taken by governments all over the world to bring oil down to a price that is more closely aligned with cost - but oil companies exert a lot of influence on governments - and i'm willing to say that rarely is the influence they exert in the best interest of the regular people.

6. Iran is wilin out right now. We need some diplomatic and sanctified (that's right right word to describe something relating to sanctions, right? ;)) genius in our dealings with that country.

i think a more effective method to combat high gas prices is to subject gas to more competition and to demand that is more sparse.

More competition looks like alternative energy sources. Electric cars still use gas (because gas powers our power grid) - but if we upgrade how we source power for our power grids, then we'll use less gas.

Reducing demand looks like the greening of america. More efficient cars, more efficient buildings etc. I got $3.5k back from the government for installing energy efficient windows in my house in 2008. Now i use less heat-->less electricity to power my hvac unit-->less oil.

we gotta think big picture and long term. I don't think drilling is a long term solution to high energy prices. It will certainly create jobs and drive economic activity - but lower the price of oil - i do not think it will.

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