NYT: Drill, Baby, Drill

Edward Niedermeyer
by Edward Niedermeyer

From a crowd-pleasing chant at the Republican National Convention to op-eds at the New York Times, the refrain “Drill, Baby, Drill” is looming large in the American psyche. In the Gray Lady’s pages, Robert Hahn of the American Enterprise Institute and Peter Passel of the Milkin Institute (motto: Milkin’ The Issues) investigate the idea of penetrating mother Earth for more of that sweet, sweet dino juice. Opponents of drilling offshore and oil extraction in the Arctic National Wildlife Preserve (ANWR) argue that the benefits would be marginal. Hahn and Passel don’t necessarily disagree. They reckon 7b barrels could be pulled from ANWR, with another 11b available offshore, Hahn and Passel estimate the U.S. could thusly increase output by six percent, resulting in a 1.3 percent drop in worldwide prices. Meh. But the two argue that at $100/barrel, that oil would be worth nearly $2t not including the benefits of reduced pump prices for consumers. Development costs including environmental clean-ups would cost only $400b, making drilling an “economic no-brainer.” Hahn and Passel estimate the “non-use value” of ANWR at “only” $11b. The authors could “imagine a political bargain in which several hundred billion dollars went into a fund with a charter to preserve wilderness in the United States, or climate-stabilizing rainforests in Africa and Latin America.” In short, to protect the environment we must defile the environment. In reality, drlling is one of those idealism vs. pragmatism issues where win-win is a no-no. As long as the “Drill, Baby, Drill” refrain is still echoing out of St Paul, this kind of compromise is a long way off.

Edward Niedermeyer
Edward Niedermeyer

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  • Joeaverage Joeaverage on Sep 16, 2008

    We're going to do whatever is cheapest and easiest. If it means screwing up the earth then we'll do that. Every person I mention EVs to sooner or later talks about the cost. Everyone that I talk about PV (solar) with eventually talks about the cost. Doesn't matter what the RIGHT answer is - cost is a major factor. Now conversely if I suggest free Linux over $200 Microsoft Windows - then the conversation shifts to easy... (Linux is easier I think). So there you have it - whatever America will choose - will be max profits or easy. I'd agree with Mr. Goolsbee but I am concerned with how many American dollars are going out of the USA already. Potentially that would enable those foreign countries to come back and buy things with their American dollars but I'm not so sure that this is what is going on. Tell me why a trade deficit is a good thing. Our county is our state's largest recycler of household waste. I heard a fellow argue against recycling b/c of the cost (i.e. not a profit). Still, even if there is a cost, isn't it the right thing to do?

  • Alex Rodriguez Alex Rodriguez on Sep 16, 2008

    All of the "peak oil" geniuses are having the hats handed to them. Oil is at $91 and falling. Why? Exactly for the reasons I've said for months: $150 oil was a fantasy world built on the backs of hundreds of billions of dollars from the Lehman's and Goldman's Sachs of the world. Now that those banks are fleeing commodities, there is no one left to buy oil except the natural oil producers and consumers. $150 had absolutely ZERO to do with Supply and Demand. It had everything to do with speculation from people who had no intention of ever taking delivery. I called this plunge months ago, if I had time, I'd cut and go and find my exact statements here on TTAC (I will if challenged.) It is the Dot Com, the Enron bust all over again. Peak oil. What a friggin joke.

  • Alex Rodriguez Alex Rodriguez on Sep 16, 2008

    Found one from July 31, where I predicted Oil below $100 in 60 days. "Alex Rodriguez : July 31st, 2008 at 4:40 pm "Gas prices plummet in Oklahoma City" I’ve said repeatedly on this site that Oil Prices as constituted two weeks ago were not based in any type of reality, but based purely on hundreds of billions of dollars in long positions taken by the Goldman Sachs of the world. People here were telling me how I was crazy, that the angels in the oil commodities markets were simply bulwarks of supply and demand. Just like I’ve said all along. Oil will go back beneath $100 in the next 60 days if not sooner. I would not be shocked if it gets back under $70 by the end of the year."

  • Mdf Mdf on Sep 16, 2008

    blindfaith: The small amount of Lithium Nevada has is not worth mentioning let alone mining. http://lithiumabundance.blogspot.com/ The web-page lists a number of sources of lithium within the confines of the USA. The eye-ball total is about 6 million tonnes -- a third of that in Nevada -- or about 15% of your claimed 35 million tonnes world-wide. http://www.daughtersoftiresias.org/greenwiki/Peak_lithium "[at] 10x the [current] price, [...] you can easily afford to extract it even from seawater." What this means is that in a future lithium economy, if Argentina and Chile was captured by Hugo Chavez and refused to sell you lithium, you could simply give him the finger while you make your own. Now let's contrast that to another imagined future: John McCain is elected, and he puts a collective gun to the heads of 300 million Americans, forcing them all onto oil platforms in the Gulf, into the taiga of Alaska -- without mosquito or black fly netting -- or the semi-arid deserts of western Colorado, Utah and Wyoming, or to the iron mines or steel smelters to build all the pipes and decking, there is no possible way you could make more than a minuscule dent in oil production for a significant period of time. You just don't have enough of the stuff, even if production cost was exactly $0 and the sale price of oil was $1000/bbl, and everyone would pay it cheerfully. (As www.daughtersoftiresias.org notes in another page on the wiki, past $300/bbl or so, you'd do better to just synthesize the oil from raw carbon, hydrogen or other feedstocks. If oil made any sense at all at that point...)