David Sandalow, a Brookings Institution energy expert, said of offshore drilling, "It's like walking an extra 20 feet a day to lose weight. It's just not enough to make a difference."
As for ANWR? Bush's own Department of Energy estimated that drilling in the Arctic refuge would cut oil prices by only about 75 cents a barrel. What's more, even if the refuge were opened this year, its extracted oil would not reach the market for 10 years.
Bush blamed "Democrats on Capitol Hill" who he said "have rejected virtually every proposal" to increase oil production, adding "now Americans are paying the price at the pump for this obstruction." Congress is not blocking domestic drilling. In fact, the number of drilling permits both on- and off-shore has exploded from 3,802 five years ago to 7,561 in 2007. Congress and the Bush administration have opened up so much land to drilling that oil companies can't keep up: In the last four years, the government has issued 28,776 permits to drill on public land, yet only 18,954 wells were actually drilled. Congressional obstruction is just one of the false arguments conservatives are peddling.
Another is the idea that we can drill and still "ensure that our environment is protected." McCain declared drilling is so "safe" that "not even Hurricane Katrina and Rita could cause significant spillage from battered rigs off the coasts of New Orleans and Houston." This is patently false. Hurricane Katrina caused 44 oil spills, resulting in more than seven million gallons of oil spilled, according to the Coast Guard., nearing the nine million gallons spilled in the 1989 Exxon-Valdez disaster.
Big Oil has also vigorously backed McCain's campaign. McCain ranks second in the Senate for donations from the energy industry and has raised over $700,000 from oil and gas this election season alone.
There are three things that are driving up the price of oil: the falling dollar, speculation and buying on margin.
The dollar is tanking because of the Federal Reserve's low interest monetary policies have kept interest rates below the rate of inflation for most of the last decade. Add that to the $700 billion current account deficit and a National Debt that has increased from $5.8 trillion when Bush first took office to over $9 trillion today (TPJ: In large part too because of the Iraq war) and it's a wonder the dollar hasn't gone “Poof” already.
According to a January 4 editorial in the Wall Street Journal: “If the dollar had remained 'as good as gold' since 2001, oil today would be selling at about $30 per barrel, not $99. (today $126 per barrel) The decline of the dollar against gold and oil suggests a US monetary that is supplying too many dollars.” Wall Street Journal 1-4-08
The price of oil has more than quadrupled since 2001, from roughly $30 per barrel to $126, WITHOUT ANY DISRUPTIONS TO SUPPLY. There's no shortage; it's just gibberish.
As far as “buying on margin” consider this summary from author William Engdahl:
“A conservative calculation is that at least 60% of today’s $128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.”
The rest of this write up is well worth reading and helpful in understanding the energy crisis. However, for purposes of brevity in this post I am just going to give you the link to the rest of it.
TPJ: There are no quick fixes folks. We aren't going to get instant gratification on this one anymore. Our gas filled utopia is coming to an end and we need to face some hard facts about our lifestyles.
The bottom line I think is that people will only change once it starts hitting their pocket books so maybe high prices are a good thing?
Spurring on quicker investment and development of alternative energies. We might have to really tighten the belt, conserve and sacrifice for a time but that's the only way. We Americans are so use to quick fixes and aren't use to sacrificing but we are going to have to get use to it for a time.
Nothing new comes without a price but in the long-term is will make our country all the more stronger. It's like the Phoenix rising from the ashes. All great civilizations have to reinvent themselves along the way to survive.