Tuesday, July 15, 2008

Can we drill our way to lower oil prices?

Can we drill our way to lower oil prices?

Let's see.

a) If the oil companies drill enough to significantly lower prices, it'll cause their profits to fall - remember, supply *is* still ahead of demand!

b) The oil companies like their profits.

Therefore:

No.

So why the bullshit push to open new drilling areas?

The more places the oil companies *can* drill, the greater the likelihood they have of finding oil that's cheaper to bring up. Cheaper oil means higher profits (reference b), above). Plus, every lease they hold is an asset on their balance sheets.

So, yes, Bush is lying, and simply pushing hard to pander to his buddies in the oil business. Is this a surprise?

Comments:
Also, given as it would take so long actually to establish the drilling hardware and get down there, this isn't "get us our own oil now," it's "make places for oil companies to sit on and hold dibs, so they can drill later if they want." They already have places they just sit on -- not gazillions of gallons of oil, but they do just sit on their leases after they get them cheap, and I can't see why they wouldn't do it again.
 
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