The Bush administration and Congressional Republicans are now selling us the oil industry line that allowing greater domestic crude oil production in ANWR and on the OCS will effect a swift reduction of gas prices. Never mind the reality that not one drop of this production will show up for years since they first need to --

• Bid out the leases
• Do some exploratory drilling
• Hire crews
• Build the infrastructure

But now there's this stunt: <link> ! Yup, the oil industry increased exports of gasoline and diesel by 33% over last year!

Oops! So much for the claim that this new production would help the US consumer.

Revrick, we pretty much only export refined products, or emergency aid. In one case, we buy more crude with the profits from the sale of refined products, in another case, it is a gift from the kindness of someone's heart.

I think it's great we export refined products to mexico and canada, both suppliers of crude to us. It means those refinery jobs are here in the US, when they could just as easily be on the other other side of the border.

Meanwhile, Revrick, the reason why increased access to drilling sites will immediately lower prices is because speculators have bid up the price. It is rather easy to speculate in oil these days- there is an ETF, USO.

I think we should open up ANWR. We could use some short term relief, and it will buy us time to ramp up alternative energy.

I would be willing to consider opening the off-shore sites if the contracts stipulated that the oil companies would pay the US government the same price commanded by OPEC for all oil extracted and that there would be no give-backs in the form of depletion allowances, tax credits, or other such subterfuges. Since the government would be hiring companies in the oil industry, possibly including those which would receive the oil, to actually extract it, the fees paid for that would also have to equal those paid by OPEC for similar work.

The same financial rules would be acceptable to me for drilling in ANWR, but there would still be the issue of rigid environmental regulations.

Madai,

Then how come Brazil's announcement of a huge find near their Tupi offshore field has had zero effect on oil prices... and ditto for the Saudi field due to add 500,000/day later this year?

So, why would our decision to allow drilling in the OCS and/or ANWR have any different result?

If the oil prices were speculation driven, don't you think some sharp operator would have figured out how to short sell and taken the speculators shirts in the process?

The supply fundamentals are driving this market and will push it on up to $200, $300 or whatever price it takes to break demand. And since China and the oil producers subsidize the price for their domestic markets, the crushing of demand must come from US and Europe.

By the time oil from OCS or ANWR comes to market, much of the US economy, I suspect, will be in smoking ruins. Far better for us to slap an immediate 55 mph speed limit back on and start work on upgrading our railroads.

Phil,

While I'd love to capture some of the revenue, I don't know how much work any oil company does for OPEC, since they're all natioanlized.

Whatever the mix between speculative contribution and supply/demand contribution, one would have expected the discovery of massive new oil sources to drive oil prices down somewhat. The fact that this hasn't happened does indeed show that opening OCS or ANWR to drilling won't reduce prices. The most we could accomplish by allowing this drilling is to gather profits into the government coffers.

"Far better for us to slap an immediate 55 mph speed limit back on and start work on upgrading our railroads."

The last time we had a 55 mph speed limit, I decided that it would be interesting to see if I could drive in the truck lane and "make patriots". After a while, I realized that all I was succeeding in making was potential killers, so I gave up. However, I think more car drivers would go along with it now, even if the truckdrivers keep up their redneck ways.

I favor upgrading the railroads, although I think a lot of that should be electrification. It seems to me that the predominant diesel-electric locomotives could be relatively easily converted to electro-diesels (kind of the analog of the plug-rechargeable hybrid car) so that they could operate either with diesel power driving a generator/motor drivetrain, or with the motor driven by electric power from a third rail or catenary.

I have a feeling that conventional passenger trains, with their expansive accomodations for long trips may not be terribly fuel efficient compared with traveling in a car and sleeping in a motel. Shorter passenger trips which could be accomodated with the commuter configurations currently used would seem to be more competitive energywise. This would probably be especially true if individual cars were equipped with traction motors and ran off a third-rail or catenary with no separate locomotive required. This is the configuration common to subways, which have great flexibility in the number of cars in a given train, down to one. Obviously, the technology is already in place for this mode of transportation.

The OPEC countries seem to employ foreign oil companies to operate the wells. That is not surprising and, in itself, not threatening. Technology is not equally distributed throughout the world.

The short reason why finds in Saudi Arabia and Brazil do not give us relief is, they are not in the US!

Keep in mind, if US keeps importing more and more oil, the dollar keeps tanking.

"If the oil prices were speculation driven, don't you think some sharp operator would have figured out how to short sell and taken the speculators shirts in the process?"

Shorting could only work if the speculators pushing oil up were excessively leveraged, and were forced to do margin calls. I don't think the people driving oil up are especially leveraged. More than likely, the person doing the shorting will have it backfire on them.

Just like how Cornelius Vanderbuilt buttfucked Daniel Drew for trying to short the Harlem.

The right time to short oil would be when news plausibly warrants it... like the news ANWR was going to be opened up.

"The supply fundamentals are driving this market"

Only partially. Dollar weakness and anticipation of future demand are also playing a part. Also, there's security issues, government stockpiling, etc. ANWR would address the dollar weakness slightly.

"By the time oil from OCS or ANWR comes to market, much of the US economy, I suspect, will be in smoking ruins."

In 2007, the US economy over 2 million foreclosures. 2008 will be much the same. We are in smoking ruins NOW. 2009 is not looking good either, but by 2010, the recovery will be underway. By the time ANWR actually comes online, we'll be in better shape. In the meantime, the jobs created with exploration with serve a nice purpose, as will the breaking of the public's resistance to ANWR. It will be very symbolic when we open ANWR.

"In the meantime, the jobs created with exploration with serve a nice purpose, as will the breaking of the public's resistance to ANWR. It will be very symbolic when we open ANWR"

All the drill rigs and exploration equipment are already booked for something like the next five years. The only jobs that might be created in the next few years are in the industry that manufactures that equipment, and I don't even know that it would be made in the US.

Oh, and symbolism gets no respect from me. It is, essentially, an excuse for ignoring reality. Of course, that is what makes it so popular, isn't it?

Symbolism itself may be fake, but it can have real results. Consider the completely symbolic Danish cartoons, which led to the deaths of real Muslims.

You may not change you behavior in an economically significant fashion when a symbol occurs, but a sizable portion of the US population probably would.

is actually just a bet. Does betting on Iowa basketball games change the outcome?

Check out theoildrum.com and scroll down to the charts of what's going to happen to world supply from the megaprojects and what might happen to our supply from drilling in the OCS. By the time OCS comes online, world supply will be in decline and OCS will only add a shoulder plateau to shrinking US supply. Hence my conclusion about our economy in smoking ruins.

I suspect necessity will change our behavior.

"Does betting on Iowa basketball games change the outcome?"

If the basketball players were the ones doing the betting, it could very well change the outcome!

And oil is a rigged game, if you'll pardon the pun. If people are betting oil will hit $180 the oil companies will drill for harder-to-recover oil. If they are only betting it will be $30, some oil is left in the ground as too costly.

The article stated that one of the four top destinations of exported gasoline is Singapore. We're a tiny country about the size of Rhode Island and having a population of only 4million.

Moreover we have 4 very large refineries operating here supplying fuel all over the world (including America sometimes).

I wonder if the US market is playing some numbers games with their import/exports? Our fuel is currently around $2.50/litre or $9.50/gallon. If we played the Enron game I suppose we could be importing your cheaper gasoline and selling it back to you at something closer to our price. Since the gasoline eventually arrives back at its starting point then in theory it doesn't actually need to leave in the first place.