Bush to Lift Executive Ban on Offshore Drilling
In another push to deal with soaring gas prices, President Bush on Monday will lift an executive ban on offshore drilling that his stood since his father was president. But the move, by itself, will do nothing unless Congress acts as well.
The president plans to officially lift the ban and then explain his actions in a Rose Garden statement, White House press secretary Dana Perino said.
There are two prohibitions on offshore drilling, one imposed by Congress and another by executive order signed by former President Bush in 1990. The current president, trying to ease market tensions and boost supply, called last month for Congress to lift its prohibition before he did so himself.
But Perino said Bush no longer wants to wait. She pinned blame on the leaders of the Democratic Congress, noting that no action has been taken on this issue.
Sounds like BS to me. People seem to believe that domestic oil drilling companies are just standing around saying “if ONLY we had more places to drill, then we could help!” The truth is, they’re not even drilling in all the places they already have permission to. I’m not certain of the number, but I’ve read that 70% of already-permissible offshore drilling areas are sitting idle today. So what good does it do us to open up more? Especially the environmentally sensitive ones. Someone explain this to me.
Posted by scott on July 14, 2008 at 1326 hrsCompanies drill where they anticpate finding economically extractable oil.
Posted by on July 14, 2008 at 1332 hrsSupposedly the areas that the oil companies leased were explored, and have no oil.
Posted by on July 14, 2008 at 1333 hrsYou know I was watching B.Obama’s TV commercial where the narrator pejoratively states “Bush and McCain’s plan won’t produce a drop of oil for 7 years”
And the hypocrisy here just makes me shake my head. In 7 years if we do nothing now you know there would be those monday-morning-quarterbacks (you know, the ones that never have a solution, but take the pathetic easy swing at criticising everyone else in hindsight) to chastise the current administration for not starting the exploration process in these banned areas.
So now we are going forward and making a plan for the future and B.Obama is poo-poo’ing it because it doesn’t pay off tomorrow?
Such bullshit.
In case B.Obama doesn’t realize, the demand for oil and the viscosity of trading of paper barrels which is driving up the price of oil is based on perceived future supply, not just todays supply.
Just the willingness of our government to open up these areas to exploration will change the market dynamic long before the first drop of oil hits the open market.
Meanwhile B.Obama’s plan involves “increasing mileage stadards”. What a typical ignorant liberal to think that just passing a law will change the realities of technology and supply and demand.
And people are going to hear those commercials and eat that shit up.
Its time for america to stop voting on what “sounds good” and start educating themselves and thinking.
Its too bad an understanding of economics takes intelligent formative thought, and emotive reaction to promises and false hope requires the intellect of a 3 year old.
Posted by on July 14, 2008 at 1345 hrsScott can you point me to the data that shows they aren’t drilling the areas they can today?
Posted by on July 14, 2008 at 1353 hrsWhat pisses me off is the Dem leaders who scream and cry giving Scott this line of thought are either full of shit or incompatent. They SHOULD know comments 2 and 3 explain it clearly, quickly and correctly. But still they scream and cry seemingly deliberatly misleading everyone foolish enough to listen. I was a proud Dem for 31 years, now my default position is that they are lieing..........about everything, untill prooven otherwise. It seems to work much better this way.
Posted by on July 14, 2008 at 1353 hrsC’mon, xx, you can’t have it both ways. If you’re going to excoriate Obama for saying that new drilling won’t produce any new oil for seven years (a. it won’t, and b. seven years is optimistic), but it will immediately “change the market dynamic,” then you can’t equally rip him for something will also add to the stability of our oil needs in the long term, which is higher mileage standards.
Had higher CAFE standards been enacted a long time ago, admittedly opposed by a long line of short-sighted Michigan Democrats as well as practically every Republican in Congress, maybe we’re not so dependent on foreign oil. Maybe GM is making economical cars and not closing plants all over the country.
False hope is the year or two’s worth of oil, at best, that lies under ANWR. Emotive reaction to the idea that gas will somehow drop back to 2.50 a gallon when permission is given to drill whenever and wherever the oil companies want--that’s false hope.
Posted by on July 15, 2008 at 0947 hrsAPC, maybe you’ll answer me a question that neither you nor scott or any other seems to want to answer here.
The market demand for the most fuel efficient vehicles is already playing out. Why do we need government to put standards in place?
Second. Please explain to me how a government mandate is going to have any effect on the technology that is going to power semi-trucks, delivery vans, tow-trucks, dump-trucks, contractors pickup trucks, vehicles capable of pulling a camper, boat, whatever?
Its not. The market forces are already at play to make the opportunity for research and development of those technologies a huge potential gold-mine. But until that technology evolves. Just waving the heavy hand of government and making a mandate is just going to cost the consumer more by placing demands on companies and the ability of companies to bring products to market at lower costs.
If the government has to get involved, Then you can be assured they are just bucking the realities with feel-good legislation that is going to cost the consumer BIG-TIME.
It doesn’t solve any problem to make buildings more energy efficient if the cost of making them more energy efficient outweights the energy savings!
If the savings exists, companies and people will do it. To save money. If its going to cost more to be more efficient than the savings, what is the point?
I’m sure my friend who is a contractor and pulls around a 20 foot cargo trailer with his tools and materials would run out TOMORROW and buy a truck that could haul his equipment and got 50 miles a gallon. But that technology doesn’t exist and B.Obama’s plan to mandate fuel efficiency standards worries my friend because he is dependant on vehicles that aren’t capable of doing the job and getting higher fuel economy.
Government mandates are just going to cost the consumer.
Posted by on July 15, 2008 at 1048 hrsDateline:
7/14/08 - Bush lifts ban on OCS drilling.
Democrat response. Even if we authorize drilling it will be 5, no 7 years until it has any effect. Bla, bla, bla…Dateline:
Posted by on July 15, 2008 at 1108 hrs
7/15/08 - Market price of crude oil drop significantly icompared with where it’s been headed over the last several months. $10 drop at one point.
Democrat response???The government mandate is simply to push to market in the right direction. Most companies look to the next few quarters, not several years down the road. This is a gross oversimplification, but it seems that capitalism has evolved in this country to the point where next quarter’s profit is much more important than long-term viability.
Making SUVs satisfied the bottom line “right now”, even though everybody knew damn good and well that gas-guzzling, monster-sized vehicles were an unsustainable model for the long term. Every CAFE standard bill introduced over the last 20 years allowed for a 10 or even 15-year phase-in period. That would have been more than enough time for the free market to develop different technologies and find the best ways to reduce mileage. Of course just passing a law wouldn’t make it any better. That’s ridiculous.
And you’re right. Market demand for the most fuel efficient vehicles is playing out. And because we Americans were so short-sighted, we’re getting our asses kicked. Maybe if American manufacturers had listened to the government, they might be in a better position right now.
It’s not about the government taking over business, it’s about government nudging and steering. Government isn’t automatically stupid and wrong, just because Ronald Reagan said so. Sometimes the people we elect have good ideas, you know.
Posted by on July 15, 2008 at 1139 hrsThe Dems are too busy calling for oil to be released from the strategic reserve… hmmmm - so adding more supply by drilling isn’t going to help (according to the dems) by adding more supply by depleting the strategic reserve WILL help.
Boy - those guys sure are smart…
Posted by on July 15, 2008 at 1226 hrsbut it seems that capitalism has evolved in this country to the point where next quarter’s profit is much more important than long-term viability.
Pure conjecture.
I sit in plenty of board meetings and sustainability is always a priority.
I understand this is your perception, but I can tell you that its not the case. Have I watched companies make dumb choices. Sure. Have they paid for it? Yes. There is always a balance of return and sustainability.
Making SUVs satisfied the bottom line “right now”, even though everybody knew damn good and well that gas-guzzling, monster-sized vehicles were an unsustainable model for the long term.
When gas was a buck a gallon they provided people with everything they wanted.
As market dynamics change, the market adjusts.
In addition knowing the role that speculation is playing in the world oil market, saying that SUV’s aren’t sustainable is a little reactionary. Kinda like saying that a house is a bad investment because of the current situation.
The run-up of oil prices has not been a steady rise based on demand presures (though the media has pointed to the most easily explained reasons)
A declining dollar, speculation and BILLIONS of dollars being pumped into “paper barrels” as a hedge against the declining dollar would more explain this parabolic shaped curve of oil prices than increased usage.
So it remains to be seen just how “unrealistic” SUV’s were. The world oil markets have definitely not shaken out the speculators, and the prices we see for oil now are based on many factors not related to usage.
I was reading that historically there was an average of 2 ownership changes of a “paper barrel” (a paper barrel is one that is sold as a commodity to someone who is not a user of oil and therefore intends only to resell it on the commodities market) Now that average is up to 8 changes in ownership of a barrel between being extracted and used or something like that.
Billions and Billions of barrels of oil being bought and sold by people who have no intention of using the oil, they are just profiting off the price spikes.
And you’re right. Market demand for the most fuel efficient vehicles is playing out. And because we Americans were so short-sighted, we’re getting our asses kicked. Maybe if American manufacturers had listened to the government, they might be in a better position right now.
Sure… and while oil was cheap we could have placed lots more hindrances on progress and growth here and let the world use the cheap oil why we burden ourselves with mandates and government interference.
Are you the same guy that complains about all the things going off-shore? You want to see the rest of the world take advantage of the cheap energy while we stagnated our economy with products that don’t serve the needs of business and reduced standards of living because people are forced by government to use things not by choice but by regulation?
Get real.
The market reacts more quickly and more efficiently than government ever will. Are there spikes and blips and out-liers in the history of our economy where things get out of wack. Yes… and business and consumers adjust to them, learn from them, and life goes on.
Government mandates are going to handcuff industry to follow rules, not providing the best product at the best cost, which is what works now.
As I said before. That evil
Posted by on July 15, 2008 at 1236 hrs
“profit” motive is the only things thats going to solve the oil problem. Manufacturers did listen to the government apc. The reason large SUVs became popular was that the government granted them the tax status of trucks and thus businesses were allowed to depreciate them faster than passenger cars. Given that businesses have to compete with one another this was in essence a mandate to buy large SUVs.
Posted by on July 15, 2008 at 1244 hrsThe reason large SUVs became popular was that the government granted them the tax status of trucks and thus businesses were allowed to depreciate them faster than passenger cars.
Large SUV were popular for many other reasons besides and before the tax changes were made.
Posted by on July 15, 2008 at 1304 hrs1997 was the year the big break occured and it predates the big SUVs like the Excursion and the Escalade. It most certainly was the reason these vehicles were built and bought. I know all sorts of people and companies that bought large vehicles specifically because of the tax consequences. Why wouldn’t you.
Posted by on July 15, 2008 at 1335 hrsThe Expedition was introduced in 1996. Which means it was in development stages long before even a hint of the section 179 deduction existed.
And the Expedition was a great seller. The full size Blazer had been a popular vehicle for YEARS also as had the Chevy Suburban.
I’m not disgreeing that after the Sec. 179 deduction it provided even more incentive. Hell truck dealers promoted it in on-air advertising as “a virtually free vehicle” especially when the 2003 change extended it to 100,000.
It most certainly was the reason these vehicles were built and bought.
I agree it was a contributor, but “the reason”. How do you explain the success of the Suburban Full size Blazer, Full size Bronco, and Expedition, all developed and very successful before the tax-code change.
And lastly, for every business that I know bought one of those “heavy” vehicles to take advantage of sec. 179 i watched my gym parking lot become populated with escalades, navigators, and H2’s and I can ASSURE you that the people driving them were not business owners and were not deducting them.
Posted by on July 15, 2008 at 1435 hrsI suspect many of those people were driving their big SUV as a perk from their company. Even prior to 1997 you still got faster depreciation on vehicles over 6000 lbs, which is the reason these vehicles were designed to specifically be over 6000 lbs.
Posted by on July 15, 2008 at 1502 hrsSure… and while oil was cheap we could have placed lots more hindrances on progress and growth here and let the world use the cheap oil why we burden ourselves with mandates and government interference.
I fail to see how a 10-15 year period to phase in better fuel efficiency is some kind of major “hindrance on progress and growth.” We’re also using the cheap oil while this is going on, aren’t we?
And yes, I know that speculation is playing a big role in the price of oil right now, but so is the fact that demand is skyrocketing as China and India are making huge demands on the supply. I have to say, though, in all honesty, that I’m a little out of my depth discussing the ups and downs of the price of oil on the world market, so any lengthy argument you might be tempted to make is going to be wasted on me.
I’m glad the companiess on whose boards you sit pay attention to long term prospects. That’s not the case in every situation, with GM being only the most obvious example. We’re all better served if the health of the next decade, not the next quarter is the foremost thought.
And the government forcing people to use things “not by choice but by regulation?” I think you’re the one that needs to get real. What product has the government forced people to use? And your assumption that liberals think that profit is somehow evil? Please. Right back at you with that condescending eye roll.
BVBB, good point about the tax status thing. They also got it where they didn’t have to add any kind of pollution controls to SUVs for the same reason, even though they were clearly passenger vehicles. That’s a really good example of industry lobbyists run wild. Those were by far the most profitable vehicles they had, so anything to make them cheaper to build and easier to sell…
Posted by on July 15, 2008 at 1538 hrs"Scott can you point me to the data that shows they aren’t drilling the areas they can today? “
Scott,
Did you have any luck finding documentation, or is this just another day, another meaningless post..
Posted by on July 15, 2008 at 1555 hrsThe news story
http://www.msnbc.msn.com/id/5111184
The government’s list of unused acreage.
http://wid.ap.org/oilgas/oilgas.html
Posted by on July 15, 2008 at 1610 hrsHere’s a government site with the info about possible offshore oil and natural gass resources:
http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html
The money quote--The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.
Posted by on July 15, 2008 at 1625 hrsapc,
I disagree with the analysis. While the actual outflow of additional oil on the market may nor have an effect until 2030 (although that is dubious since the exploration, discovery, and production of a new well does not take that long), the impact of prices would be much more immediate. The price of oil is based on the futures market and it would be immediately impacted by the knowledge that billions of barrels of additional oil would be hitting the market within a few years.
Posted by Owen on July 15, 2008 at 1700 hrsFood for thought:
The ‘Idle’ Oil Field Fallacy
Posted by on July 15, 2008 at 1745 hrs
http://online.wsj.com/article/SB121391719487790187.htmlSorry, I haven’t had much time to play with you guys lately. Family crisis--hospitalization and everything! And I’ve started too many threads to actually participate in.
Documentation about how much leased land isn’t being drilled? I wasn’t aware that was even a contentious thing. This should summarize it pretty well.
Posted by scott on July 16, 2008 at 0756 hrsOwen, I’m not enough of an expert to make an informed rebuttal to your comment, other than to say billions of barrels sounds awfully optimistic, and any instant impact wouldn’t be that significant, given the pressures of the demand from China and India and other emerging markets.
Posted by on July 16, 2008 at 0838 hrsOh, and Scott, I hope everything’s OK at home.
Posted by on July 16, 2008 at 0840 hrsYou’re documentation is perfect, Scott. It specifically says leased land isn’t being drilled because it isn’t anticipated to result in economically extractable oil.
Posted by on July 16, 2008 at 0900 hrsIt says a lot of things, Bro. It quotes the Oppenheimer analyst as saying that, while hoarding isn’t necessarily going on, the oil companies should use what they have before going for more areas. He also says he’d like to see “revised” leasing terms to make the already available areas more attractive.
Posted by scott on July 16, 2008 at 0910 hrsoops, sorry, I was misremembering my own info. Billions it is. I stand corrected.
Posted by on July 16, 2008 at 0936 hrs
And “use what they have” is an economically illiterate position. It is the price of oil, or it more specifically it’s expected price, that determines whether oil can be used.
Posted by on July 16, 2008 at 0951 hrsHow much exploration has occurred on the nearly 30 million acres of non-producing public land leases is difficult to say. BLM officials could provide no details on the number of exploratory wells drilled on those leases, despite repeated requests for that information over the past two months.
Now that is the question that needs to be answered to take the discussion past the usual partisan baiting.
Anybody got that info?
How about temporary exploratory leases that have a finite and relatively short term shelf life?
Posted by on July 16, 2008 at 1019 hrsKnowing how much drilling has taken place won’t answer much. Actual drilling for oil only takes place after less invasive investigations have been done, and I doubt BLM can determine that.
Posted by on July 16, 2008 at 1047 hrsIt quotes the Oppenheimer analyst as saying that, while hoarding isn’t necessarily going on, the oil companies should use what they have before going for more areas.
I’m not too impressed with this guy. Here’s what he said about how offshore drilling would impact prices..
http://www.cnn.com/2008/POLITICS/06/18/bush.offshore/“If we were to drill today, realistically speaking, we should not expect a barrel of oil coming out of this new resource for three years, maybe even five years, so let’s not kid ourselves,” said Fadel Gheit, oil and gas analyst with Oppenheimer & Co. Equity Capital Markets Division.
Here’s why I’m not impressed....
http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lC JGHBB-tAD91V4HL00
Headline is “Oil tumbles again; prices fall over $10 in 2 days” And that’s just on the announcement of dropping one of the two restrictions on drilling. Think what would happen if the other restriction dropped. Sorry scott, your “expert” is plainly wrong.
Posted by on July 16, 2008 at 1708 hrshttp://ap.google.com/article/ALeqM5i5TtajgUpSm7K Y5jf-lCJGHBB-tAD91VIM580
Clearly GM should reconsider closing the Suburban plant in Janesville.
Jason are you selling gold and shorting the Euro along with Owen?
Posted by on July 17, 2008 at 0756 hrsAnalysts are unsure whether the drop represents a long-term shift in sentiment or simply a correction to crude’s bull rally.
And there’s the quote of the day.
There’s a couple things I’ve learned over the years as I’ve gotten in and out of the markets.
People who REALLY know are out making money trading, not talking to the news media nor working as pundits and analysts.
By the time something hits the news, its REALLY old news to the people in the know.
The news media doesn’t know shit, but they’ll claim they do.
The media is pretty good about telling you what happened. But as soon as they start trying to tell you “why” they are floudering in the sand.
The people who are really in the know in the world financial markets must just laugh at the media and laugh at plain old folk who buy that shit.
I’m certainly not “in the know” but I at least know enough to know what I don’t know.
Posted by on July 17, 2008 at 1145 hrsThere was a great study not long ago which concluded that financial, economic and political pundits are worse than chance at predicting the future in their respective areas of expertise. In fact, the author noted that the more famous the pundit is, the worse their predictions get.
Therefore, I keep my own counsel.
Posted by scott on July 17, 2008 at 1206 hrsJason are you selling gold and shorting the Euro along with Owen?
Hey, I’m just showing scott that there’s not much value in the opinion of his “expert”. Saying on the day of the announcement that DRILLING won’t have much if any impact on price, and then seeing the price drop by $10 in two days based just on removing one obstacle to drilling shows that this “expert” has a lot of opinion and not much fact. Hell, it’s still not possible to drill, but Bush’s statement sure did seem to have a large impact on price already. Just wait until drilling starts, this guy is going to be in for an awakening.
Posted by on July 17, 2008 at 1207 hrsTherefore, I keep my own counsel.
Wow…
Scott and I agree on something I think…
I think the financial markets pretty much make suckers out of retail investors. Mutual funds are the big players tool to make billions while they offer out a 10% roi for retail investors.
While investing and stocks and mutual funds are better than keeping your money in a matress, I think people would be far better served by using their excess funds to find small businesses and home businesses to start and invest in rather than giving their monies to the big players who leverage it to manipulate the market and make 300% returns on the volatility and the spikes while the retail guy makes 10% (if they are lucky)
I think people would see far better returns starting their own businesses and looking for those types of ventures rather than retail investing…
...now where did I put my American Funds statements…
Posted by on July 17, 2008 at 1243 hrs
Ol' Army
