Trade deficit underscores need for Drill Here, Drill Now

posted at 1:30 pm on December 12, 2008 by Ed Morrissey

Investors got surprised this week by the news that the American trade deficit expanded in October by seven percent while the economy began to slow overall.  Almost half of that deficit came from oil imports, an increase from the previous month, even though demand slowed.  Investors Business Daily advises the incoming Obama administration and 111th Congress that the best recipe for reviving the American economy would be to reduce that deficit and create jobs by drilling here for oil:

It seems funny to talk about a $1 trillion taxpayer- and debt-funded “stimulus” plan when there’s something we could do right away to boost the economy, create hundreds of thousands of jobs, shrink our trade gap and secure our energy independence: Drill for oil here, and drill for it now.

October’s trade data tell why. Despite a record plunge in oil prices from the late summer and into fall, the actual volume of oil we imported went up. Oil still accounts for nearly half our trade deficit (see chart) compared with less than 30% two years ago.

We still spend hundreds of billions each year to buy oil from abroad because we produce less and less of our own energy with each passing day. That leaves us vulnerable to petrotyrants — including Russia’s Vladimir Putin, Iran’s Mahmoud Ahmadinejad and Venezuela’s Hugo Chavez — who would do us ill, using their oil wealth as a weapon against the U.S. and the West.

We’ve talked about this all year, although now the impetus comes from the financial crisis and not high oil prices.  IBD reviews the numbers, including estimates that up to 86 billion barrels of oil lie in the outer continental shelf (OCS).  That alone would amount to ten years of oil imports, and it doesn’t count oil in ANWR (another 10 billion barrels) and in the shale formations of the interior US (up to 2 trillion barrels of oil).

Instead of spending hundreds of billions in inefficient public-works programs and trillions in bailouts, the Obama administration could create hundreds of thousands of high-paying private sector jobs and generate over $1.7 trillion in government receipts over the next few years.  It could use that money to pay down federal debt, or it could use part of it to fund the green alternatives championed by Barack Obama.  This solution puts America on a growth solution to the economy rather than a redistributive solution that assumes shortage and decline.

As IBD’s chart shows, a massive production increase would have several salutary effects on our international position.  It would greatly reduce our trade deficit, for one thing, which has American capital flying overseas.  That would strengthen the dollar and improve energy prices even further.  We would also kick the struts out from under petro-fueled hostile governments in Iran, Russia, Venezuela, and other nations.  That would reduce the funding they have to sponsor terrorism and build WMDs.

In fact, unleashing American oil production is such a no-brainer that only a Democratic-run government would miss it.  Republicans need to press this issue hard over the next few months.


Related Posts:

Breaking on Hot Air

Blowback

Trackbacks/Pings

Trackback URL

Comments

do you really think the obama admin wants to improve the economy? they’re fine with a sinking economy, it makes more people dependent upon the government, and gives them more power.

and thats all they care about.

right4life on December 12, 2008 at 1:32 PM

Palin- here’s another opening to hit the Dems over the head with energy.

cs89 on December 12, 2008 at 1:32 PM

First order of business in the next congress will be to reinstate the ban. Trust me on this.

Vashta.Nerada on December 12, 2008 at 1:33 PM

The Republicans will have to remind the voters how fast oil prices can rise. Otherwise, the shortsightedness of the masses will cause this issue to fall off the radar now that gas is cheap.

thirteen28 on December 12, 2008 at 1:34 PM

Drill Here, Drill Now

A battery powered car in every garage and a nuclear power plant in every county.

MB4 on December 12, 2008 at 1:36 PM

Like putting a man on the moon…we start a program to become energy independent.
Starting with drill here, drill now, and nuclear energy…that is all money spent in the U.S. for research, labor, materials, developing, building, maintaining…

right2bright on December 12, 2008 at 1:37 PM

Are you kidding? Our population has the attention span of gnats.

Entelechy on December 12, 2008 at 1:38 PM

this also hurts the dollar,

jp on December 12, 2008 at 1:39 PM

In my former life, I was a geologist looking for oil. In about 1986, the bottom dropped out and nobody cared. I suspect the response, if oil prices keep falling, will be the same this time. It was short sighted in 1986 and it is stil short sighted. The only oil I care to see now is in quart cans at the filling station.

bopbottle on December 12, 2008 at 1:40 PM

Like putting a man on the moon…we start a program to become energy independent.
Starting with drill here, drill now, and nuclear energy…that is all money spent in the U.S. for research, labor, materials, developing, building, maintaining…

right2bright on December 12, 2008 at 1:37 PM

Won’t happen.

Too logical.

cs89 on December 12, 2008 at 1:40 PM

we should atleast produce half the oil we consume, atleast

jp on December 12, 2008 at 1:42 PM

You know it would make sense though. We could drill for more oil, basically ensure gas stayed in the $1.50-2.50 range, people could afford to buy the cars they wanted & Detroit can build, and the capitalistic/free enterprise system could help us get out of this mess and build for prosperity.

I wish this would happen.

cs89 on December 12, 2008 at 1:43 PM

Trade deficits are in-and-of themselves not bad. In fact, they are usually an indication of a strong economy (growth produces a greater demand for goods than can be supplied domestically). If our deficit rose, that may mean that our economy isn’t as badly hit as the world economy (their demand shrank faster than ours).

The last streak of trade surpluses (9 years in a row I believe) was during the Great Depression. Our economy produced very little demand.

With that said, an increase in revenues from oil is obviously a good thing (as is an increase in domestic employment). Drilling here makes so much sense on every level, you’d have to be a traitor to oppose it… wait a second

mankai on December 12, 2008 at 1:45 PM

I agree. Another way to reduce our deficit would be to let the Defense contractors sell to whoever they wanted to. Just think how many jobs would be created if Lockheed could sell the F-22 around the world instead of just to the US

lodge on December 12, 2008 at 1:46 PM

Will the inevitable catastrophe waiting to happen surrounding the Iranian nukes push gas prices up enough for people to buck the environmental lobby again?

Count to 10 on December 12, 2008 at 1:46 PM

Won’t happen. Too logical.
cs89 on December 12, 2008 at 1:40 PM

You sir, are correct. This is the government we’re talking about. Logic and common sense do not enter into their thought process.

meltenn on December 12, 2008 at 1:46 PM

we should atleast produce half the oil we consume, atleast

jp on December 12, 2008 at 1:42 PM

Can’t do it, we use too much. If you count Canada and Mexico, we could, though. As long as we tap Colorado and Utah shales and Williston Basin, while drilling O/S Florida and California. Doesn’t matter – the dems will shut down as much drilling as possible next year in the name of global warming. The industry is preparing for this already.

Vashta.Nerada on December 12, 2008 at 1:46 PM

I agree. Another way to reduce our deficit would be to let the Defense contractors sell to whoever they wanted to. Just think how many jobs would be created if Lockheed could sell the F-22 around the world instead of just to the US

lodge on December 12, 2008 at 1:46 PM

Oh, I’m sure people would love to get the technology in them and find a way to counter them, but I don’t think anyone but the US can afford to actually field them.

Count to 10 on December 12, 2008 at 1:48 PM

Trade deficits are in-and-of themselves not bad. In fact, they are usually an indication of a strong economy

They’re OK if you’re borrowing to build factories, or build railroads like we were in the 19th century

They’re not OK if you’re just borrowing to consume. That’s why our national debt and current account debt is so monstrous.

It’s no coincidence that the nations with a trade surplus: japan, china, singapore, hong kong, germany, thailand, indonesia, australia, new zealand are better positioned to weather this crisis as they have less debt.

lodge on December 12, 2008 at 1:48 PM

We should be drilling off shore everywhere. We should be building nuclear power plants everywhere. And we should be working on renewal energy plans too. Think of the jobs we could create here — jobs that would never leave. But instead Obama wants to spend billions on road projects because FDR did. (Road projects, btw, which will create jobs primarily for illegal migrant construction workers.)

Here’s a newsflash, idiot: when FDR was president the country didn’t have an interstate highway system. We do now. What we don’t have is an national energy plan. If you’re going to throw money at Keynesian economic experiments, then why not build something we need?!

ramrocks on December 12, 2008 at 1:49 PM

I say this all the time, but it’s true. WE WILL BE USING FOR FOREIGN OIL IN 2012 THAN WE ARE TODAY.

This is why I think Palin is best positioned for 2012.

BadgerHawk on December 12, 2008 at 1:49 PM

Oh, I’m sure people would love to get the technology in them and find a way to counter them, but I don’t think anyone but the US can afford to actually field them.

Well, I know Australia, Israel and Japan want to buy them but Fedzilla won’t let them

lodge on December 12, 2008 at 1:50 PM

for = more, naturally.

BadgerHawk on December 12, 2008 at 1:50 PM

A battery powered car in every garage and a nuclear power plant in every county.

MB4 on December 12, 2008 at 1:36 PM

Hee!
It’s sleeting at my house…I blame global warming.

meltenn on December 12, 2008 at 1:50 PM

mankai on December 12, 2008 at 1:45 PM

The driving force behind trade deficits is foreign investment, the inertia is in the exchange rate.
A trad deficit is a pejorative way to refer to an investment surplus.

Count to 10 on December 12, 2008 at 1:51 PM

Well, I know Australia, Israel and Japan want to buy them but Fedzilla won’t let them

lodge on December 12, 2008 at 1:50 PM

Really? Interesting.
I’m suspicious, though. Do they want an air force of them, or just a few for stealth missions?

Count to 10 on December 12, 2008 at 1:54 PM

With that said, an increase in revenues from oil is obviously a good thing (as is an increase in domestic employment). Drilling here makes so much sense on every level, you’d have to be a traitor to oppose it… wait a second…

mankai on December 12, 2008 at 1:45 PM

Most of the current one is okay, I think for every dollar we send to China or Japan we get back on average like a $1.50 in Foreign Investment, though some don’t like foreigners owning things in America. Real Estate is one of them, some of our large banks have had a lot of foreign money pumped into them.

anyway, the Oil side of the trade defeceit is whats bad, and when the price of Oil skyrockets it doesn’t lead to that same equation happening, and makes the dollar go down. Plus do we really want Foreign Investment coming back to us from some of those countries?

jp on December 12, 2008 at 1:57 PM

#1 The oil has to come from somewhere
#2 US has the most stringent eco laws about drilling
*
So, we can drill our own and protect the environment more
*
So, what’s Pelosi’s agenda?

marklmail on December 12, 2008 at 1:57 PM

So, what’s Pelosi’s agenda?

marklmail on December 12, 2008 at 1:57 PM

Control of the plebes, plus a bad economy traditionally benefits dems, and what better way than to destroy our energy industry?

Vashta.Nerada on December 12, 2008 at 1:59 PM

India just opened(or about to) the largest Oil Refinary in the world. Right along or in Mumbai(not shocking terrorist attacked here).

the purpose of it is to take Middle Eastern OIl, Refine and and ship it to the United States. We don’t just import Oil any longer, we are importing Gasoline as well because we don’t have enough refinaries.

We needed the Democrats running things right now like we need a bullet in the head. I’d say move to Hong Kong but who is going to protect them if the US falls?

jp on December 12, 2008 at 2:00 PM

Sorry to burst the “drill, baby drill” bubble but there’s a nasty little fact to consider here, namely the much higher costs involved in getting far-offshore oil:

What Affects Production Costs?

Reservoir characteristics (such as pressure) and physical characteristics of the crude oil are important factors that affect the cost of producing oil. Because these characteristics vary substantially among different geographic locations, the cost of producing oil also varies substantially. In 2006, average production costs (or “lifting” costs, the cost to bring a barrel of oil to the surface) ranged from about $4 per barrel (excluding taxes) in Africa to about $8.30 per barrel in Canada; the average for the U.S. was $6.83/barrel (an increase of 23% over the $5.56/barrel cost in 2005). Besides the direct costs associated with removing the oil from the ground, substantial costs are incurred to explore for and develop oil fields (called “finding” costs), and these also vary substantially by region. Averaged over 2004, 2005 and 2006, finding costs ranged from about $5.26/barrel in the Middle East1 to $63.71/barrel for U.S. offshore. While technological advances in finding and producing oil have made it possible to bring oil to the surface from more and more remote reservoirs at ever increasing depths, such as in the deepwater Gulf of Mexico, the total finding and lifting costs have increased sharply in recent years.

starfleet_dude on December 12, 2008 at 2:02 PM

With oil at a unstable under 40 a BBL. No oil company in their right mind will start exploration and producing. It is not exactly all int heir best interest.

The smaller guys are also at a stand still. Large companies will explore but cap the wells that show any signs.

They have done it like this for years.

upinak on December 12, 2008 at 2:02 PM

I think once most of America gets used to the low oil prices and the cheap gas… they’ll clamor… but will BO listen? I hope so….

CynicalOptimist on December 12, 2008 at 2:04 PM

We can’t afford to indulge environmental hand-wringers anymore. UAW workers and execs in non-competitive businesses can’t keep collecting exorbitant compensation either. The government can’t keep cutting checks with money it does not have either.

Would you lend money to the US government right now? I wouldn’t.

The days of people getting paid more than they are worth and buying foreign stuff that we have right here are over.

It’s over. Time to start acting like grown-ups again.

forest on December 12, 2008 at 2:08 PM

Why would they do something that makes sense? The goal in case you have forgotten with the financial crisis is for crude oil to go well above $200. Say what? Over $200 all their dreams about alternative energy, collapsing usage, suburbia in the pits, global warming laws, everything they have scammed for these last 30 years can possibly come true.

It’s not out of the question that this collapse has saved us from the Goracles of the world, at least for a while.

patrick neid on December 12, 2008 at 2:08 PM

The One will know what to do. He really didn’t mind $5 a gallon gas or “skyrocketing electric bills” — suffering is fine unless it is on TV every night. The media did not let us children hear those thoughts of The One and Juan would not bother Him about it since he knew the power and untouchability of Hope and Change. Any upsetting comments are racism, negativity and possibly a hate crime! The commandment is to call the Justice Department at once for hateful remarks!

We must not complain. We are just His children. We will do as He says throught His loving servant, the media.

All praise to The One for saving us from the evil Republicans and power plants, derricks, and an expanding economy and too many personal choices!

IlikedAUH2O on December 12, 2008 at 2:09 PM

Anyone who thinks that NONE of what I wrote has substantial truth in it, is much happier than I.

IlikedAUH2O on December 12, 2008 at 2:12 PM

upinak on December 12, 2008 at 2:02 PM

Larger companies will be forward thinking with low prices. It takes years to evaluate and set production for deep water discoveries. They will not stop with low prices
because they know that what they find now will be online much later. No one has a crystal ball but it’s in their best interest to keep active and drilling.

Smaller companies have a tougher time when prices get low. They don’t have the deep pockets to wait it out. I’ve been thru this several times and it is never fun.

Aggie85 on December 12, 2008 at 2:18 PM

This solution puts America on a growth solution to the economy rather than a redistributive solution that assumes shortage and decline.

That’s why it’s not going to happen.

petefrt on December 12, 2008 at 2:20 PM

I think many have said this here and said it a thousand times.
What is needed to pull us out of this slump is to get
an agressive energy plan that includes what we know how
to do and to do it now. This would increase job growth and do it
in months – not years.

izoneguy on December 12, 2008 at 2:21 PM

Palin- here’s another opening to hit the Dems over the head with energy.

cs89 on December 12, 2008 at 1:32 PM

She’s been telling it to anyone that liked to here it, long before the VP pick.
But the crazy moosehunter isn’t smart , they tell us.

the_nile on December 12, 2008 at 2:25 PM

They’re OK if you’re borrowing to build factories, or build railroads like we were in the 19th century

lodge on December 12, 2008 at 1:48 PM

Trade deficits have nothing to do with borrowing.
They are nothing more than currency transactions. We send them dollars in exchange for their stuff. Eventually they send those dollars back to us in exchange for some of our stuff.

MarkTheGreat on December 12, 2008 at 2:30 PM

Ed Morrissey, economic wizard and soothsayer.

Grow Fins on December 12, 2008 at 2:31 PM

Have you noticed the anti-coal ads that have been running on Fox News? I’m glad that they are taking their money, but those people are reprehensible. This is just right out of Biden’s playbook.

cjs1943 on December 12, 2008 at 2:31 PM

Larger companies will be forward thinking with low prices. It takes years to evaluate and set production for deep water discoveries. They will not stop with low prices
because they know that what they find now will be online much later. No one has a crystal ball but it’s in their best interest to keep active and drilling.

Smaller companies have a tougher time when prices get low. They don’t have the deep pockets to wait it out. I’ve been thru this several times and it is never fun.

Aggie85 on December 12, 2008 at 2:18 PM

Right. Large Comp (Exxon, Chevron, BP, Cocno ect) are still going to look into exploration, BUT if they come up with a producing well.. they will cap it. They have already started here in Alaska on operational shut downs on many wells and when the price goes back up they will open the new wells up.

As for OCS Wells, many are also going with shut down operations. It costs 5 to 10 times more to run a Rig on a Platform or a man made island due to the cost of flying in supplies and such.

I doubt that Oil Companies will develope more OCS type wells other then for exploration and to know a location and cap it for later use.

upinak on December 12, 2008 at 2:32 PM

When too many dollars flow overseas, the price of the dollar starts to fall (supply exceeds demand). This causes the price of things we buy from overseas to increase. On the other hand it causes the price of things that we sell to foreigners to fall.

The net result is that we buy less, they buy more, until trade balances out again.

A deficit of dollars overseas has exactly the opposite affect.

In years past, foreigners liked to have a stack of dollars on hand because they had little faith in the ability of their politicians to maintain the value of their currency. In recent decades as the dollar weakened and other currencies strengthened, many people stopped using the dollar as their fall back currency.

Over the last 6 months this trend seems to have reversed.

MarkTheGreat on December 12, 2008 at 2:35 PM

Republicans need to press this issue hard over the next few months.

This is the one and only way the Republicans can reclaim any power. The people just do not want two Democrat parties, both of whom spend like shopaholics.

PattyJ on December 12, 2008 at 2:35 PM

starfleet_dude on December 12, 2008 at 2:02 PM

What matters is not so much the distance from shore, but the depth of the water.

And big suprise, most of us were aware of this already.

MarkTheGreat on December 12, 2008 at 2:36 PM

upinak on December 12, 2008 at 2:02 PM

Very few people expect the price of oil to stay this low for long. As soon as the world’s economies start picking up, it should pop back up to the 60-80 dollar range.

MarkTheGreat on December 12, 2008 at 2:38 PM

upinak on December 12, 2008 at 2:32 PM

That’s fine–we don’t really need them right this second. The price of oil is going to go up again, and, when that happens, the most important thing is not to have dumb red tape getting in the way of things.

I wonder, what would be the consequences of putting a tariff on foreign oil? It seems like exactly the kind of thing the dems might do.

Count to 10 on December 12, 2008 at 2:44 PM

What matters is not so much the distance from shore, but the depth of the water.

And big suprise, most of us were aware of this already.

The much higher costs of producing said offshore oil are why it’s a mirage to think that drilling for it will actually lower the cost of gas at the pump.

starfleet_dude on December 12, 2008 at 2:45 PM

Very few people expect the price of oil to stay this low for long. As soon as the world’s economies start picking up, it should pop back up to the 60-80 dollar range.

MarkTheGreat on December 12, 2008 at 2:38 PM

The economies don’t even have to pick up–the huge price shock we’ve seen is all about too much coming down the pipeline. Once that gets sorted out, the price will bounce back, marginal demand levels not withstanding.

Count to 10 on December 12, 2008 at 2:46 PM

The much higher costs of producing said offshore oil are why it’s a mirage to think that drilling for it will actually lower the cost of gas at the pump.

starfleet_dude on December 12, 2008 at 2:45 PM

Well, not at these prices. But that doesn’t hold when prices go back over $100/b.

Count to 10 on December 12, 2008 at 2:48 PM

MarkTheGreat on December 12, 2008 at 2:38 PM
Count to 10 on December 12, 2008 at 2:44 PM

it is just something oil companies do. Mostly CEO’s and economists concerning the long term effects.

ConocoPhillips is actually thinking about laying off people up here already due to such low prices. BP has cut back on many items.

upinak on December 12, 2008 at 3:03 PM

Besides the direct costs associated with removing the oil from the ground, substantial costs are incurred to explore for and develop oil fields (called “finding” costs), and these also vary substantially by region. Averaged over 2004, 2005 and 2006, finding costs ranged from about $5.26/barrel in the Middle East to $63.71/barrel for U.S. offshore.

Seek and ye shall find. With most of the more promising US offshore fields off-limits for the last 30 years, we’ve only been drilling mostly dry holes. If the geologically favorable areas are drilled, with more barrels to find, the finding cost per barrel will decrease.

Have you noticed the anti-coal ads that have been running on Fox News? I’m glad that they are taking their money, but those people are reprehensible. This is just right out of Biden’s playbook.

I’ve seen those anti-coal ads–they’re completely idiotic. Coal companies have been spending billions of dollars on REAL clean-coal technology, which pollutes MUCH less, and I’ve worked on getting permits for some of them!!! The United States has more coal than any other country on the planet (about a 400-year supply), and these morons don’t want to use it, for fear it might get half a degree warmer!

The elephant in the room that everyone seems to ignore is SHALE OIL. According to a 2005 Rand report, there are between 500 billion and 1.1 trillion barrels of shale oil in the Rockies, and it’s possible to process it for $30 per barrel. Develop THAT resource, and we could CONTROL THE OIL MARKET for over 100 years, and tell the Saudi princes to pound sand.

Don’t tell the Democrats, but there’s also “shale gas” ALREADY being developed in places like Virginia, Pennsylvania, and even southern New York state. Most of the electricity in New England is generated from natural gas, so that could come in mighty handy. Don’t tell the Democrats, because once they find a goose that lays golden eggs, they’re guaranteed to kill it.

Steve Z on December 12, 2008 at 3:24 PM

The much higher costs of producing said offshore oil are why it’s a mirage to think that drilling for it will actually lower the cost of gas at the pump.

starfleet_dude on December 12, 2008 at 2:45 PM

I’m trying to decide if you really are this stupid.

If the price of extracting any oil, is less than the current price of oil, then extracting it will lower the price at the pump.

If the price of extracting any oil is greater than the current price of oil, then it won’t be extracted.

That’s basic econ 101. You should try learning some before you spout off and make yourself sound ignorant again.

The mere threat of bringing more oil online is enough to dampen down speculation, which also lowers the price at the pump as we saw this summer when the expiration of the OCS ban caused an immediate drop in the spot market.

MarkTheGreat on December 12, 2008 at 3:33 PM

lodge on December 12, 2008 at 1:50 PM

Whoa there, guy. Right idea, but wrong program.

F-22 represents the crown jewels of US fighter aircraft development, on several fronts. No one who understands this fact wants anyone outside the US to buy/operate this plane at any time in the near future.

F-35, however, was designed to be “export capable” from the beginning (just as was the F-16 before it), with several nations participating in its development.

Therefore if you want to get “Fedzilla” to sell aircraft for export, make them stop pissing around with funding delays to the F-35 program.

Bonus: eventually the power take-off clutch and shaft arrangement built for the STOVL version of the F-35 can be used to turn a generator powerful enough to equip this bird with a laser. And no, you won’t want anyone else to be able to buy THAT toy either.

Meanwhile, also encourage more drilling in the US, for when prices rebound. We need about three times more F-22’s than we currently have.

Wanderlust on December 12, 2008 at 3:46 PM

If the price of extracting any oil, is less than the current price of oil, then extracting it will lower the price at the pump.

Why should an oil company do it then? Your argument is lacking because you’re not taking the oil producer’s interest in making a profit into account. The only thing that’s going to make drilling for offshore oil profitable is the drawing down of current supply in existing fields where it’s far cheaper to produce oil. There are precious few, if any, easy to get at oil fields now, and certainly not enough to put off world oil production’s peak any longer.

BTW, what caused the further drop in oil prices? It certainly wasn’t the distant and uncertain prospect of offshore oil production. There are more logical reasons why the oil speculation bubble burst than the specious claim that it was the expiration of the OCS ban.

starfleet_dude on December 12, 2008 at 3:57 PM

Why should an oil company do it then?
starfleet_dude on December 12, 2008 at 3:57 PM

Because they can? There is reportedly more oil and gas offshore then previously thought and deeper then recorded.

http://www.chevron.com/news/press/Release/?id=2006-09-05

BTW, what caused the further drop in oil prices? It certainly wasn’t the distant and uncertain prospect of offshore oil production. There are more logical reasons why the oil speculation bubble burst than the specious claim that it was the expiration of the OCS ban.

Day Traders come to mind. Many of them and the stock holders on small companies bailed out. Speculation is a deadly game of cat and mouse… but it is the mouse chasing the cat. You can specualte on Stock and Goods that it will reach a certain level, and people CAN and WILL buy into the notion hoping it comes true. When in all actuality the real price of oil was actually around 80 or so. But when people began to realize that the value of what they bought was actually not making money … they paniced and dumped it. Which is actually illegal.

Madoff could have possibly been part of the speculation of oil prices having people believe, making the stock rise including the bbl cost and convinced others. No one will know why since the cost and demand are still pretty high on oil and gas, but the lack of wanting it and getting it have slowed down right now. We have no clue as to who is holding what volues in other countries as the U.S. has tight restriction unlike other countries.

Oil will rise again… but slowly.

upinak on December 12, 2008 at 4:08 PM

In fact, unleashing American oil production is such a no-brainer that only a Democratic-run government would miss it. Republicans need to press this issue hard over the next few months.

Hey Ed, which party ran gov’t from 2002 to 2006?
Republicans

What did they do to expand domestic oil production?
Nada

Let’s not blame the Boogeyman for recent squishy Republican failures.

omnipotent on December 12, 2008 at 4:24 PM

all good points ed but good luck. the driver needed to spur domestic drilling were the high prices at the pump. with that gone it’ll be hard to get repubs, no less dems, to push for drilling.

anna on December 12, 2008 at 4:37 PM

Upniak & omnipotent you both seem bright enough to understand me even if you disagree:

We have always had Republicans that act like Dems. and oil prices were somewhat acceptable in 2000.

Remember ANWAR? Juan watches Caribou films at least once a week right after the film showing the horrible effects of Poland trying to eject illegals in 1939. Not to mention the epic film with Rome and the European helpers they suddenly didn’t like!

And omnipotent, if you knew squat about oil supply and politics you would know that President Bush’s energy plan called for an incrrease in drilling, refineries and production generally in 2000. He spent more than any other admistration on alternative fuels. He favored increases in production but nobody wants to recall any sound policies of President Bush!
Please see Bush Energy Policy: Overview of Major Proposals and Legislative Action
August 22, 2001 to start your review.

The Dems blocked the programs just like The One will have to scuttle drilling as a sop to the left wing ‘let’s live in dark caves’ gang.

The One was sounding like a Republican by the end of the fight with Juan. Before that, he was ready to arrest the speculators and President Bush for the high prices at the pump. Of course this all followed the “no blood for oil!” mantra in protesting the Iraq war before we started winning it.

The Dems change political footballs about five times as often as they research or actually read anything!

Let us hope you aren’t one of them or that you can change.

IlikedAUH2O on December 12, 2008 at 5:10 PM

I also recommend the film, A Crude Awakening: The Oil Crash(2006) for information about oil supplies and the blogs and reviews by insiders are excellent.

IlikedAUH2O on December 12, 2008 at 5:19 PM

Why bother? We do not seem to care about American industry do we? After all, OPEC can drill it for less. And that is all that matters. Oil is just one more industry we have abandoned.

Terrye on December 12, 2008 at 5:21 PM

IlikedAUH2O on December 12, 2008 at 5:10 PM

Proposing something is entirely different than getting things done. (see Social Security debate)

Also, Rebublicans controlled congress from 2002 to 2006. (as well as the White House, obviously).

Therefore, Republicans controlled the Legislative as well as the Executive branches of gov’t and didn’t increase domestic oil production by 1 barrel/year.

So you’re saying Bush isn’t dumb, he’s just a horrible, ineffectual leader?

I agree with that entirely.

See, wasn’t that easy???

omnipotent on December 12, 2008 at 5:22 PM

Why should an oil company do it then?

starfleet_dude on December 12, 2008 at 3:57 PM

I shouldn’t be surprised. You really are this stupid.

It’s in his interest because he makes more money.
Remember he doesn’t have a monopoly. Other oil companies are also searching for more oil sources. If companies A’s discoveries don’t drive down the price, comapany B’s will.

The only way to make the most money is to be the guy who brings in the gusher first.

MarkTheGreat on December 12, 2008 at 5:28 PM

What did they do to expand domestic oil production?
Nada

Let’s not blame the Boogeyman for recent squishy Republican failures.

omnipotent on December 12, 2008 at 4:24 PM

They tried, over and over again. There were never enough Republicans to stop the Democrat filibusters.

MarkTheGreat on December 12, 2008 at 5:29 PM

They tried, over and over again. There were never enough Republicans to stop the Democrat filibusters.

MarkTheGreat on December 12, 2008 at 5:29 PM

They accomplished nothing. They tried and FAILED. Not somthing I would brag about at work, “All my attempts to find a suitable solution failed. But keep me on for another 4 years and I promise the same results”

omnipotent on December 12, 2008 at 5:36 PM

Oh come on. The American oil industry lost the race back in the 70’s when they could not compete with OPEC. It costs a lot less to get that oil out from under that sand than it does to drill for oil here. For one thing roughnecks do not work cheap. It is dangerous..no doubt there are all sorts of pundits who think oil workers would be more than willing to compete with Nigherians or whatever, but the truth is it costs money for American oil companies to drill.

This is common. People do not like the idea of seeing American industry go by the wayside, but they don’t want to pay people either.

Unless they are college professors. I like Glenn Reynolds over at Instapundit but I have to admit that the other day I was struck by the irony of a tenured professor vacationing in the Cayman Islands complaining about how people are just too dependent on government. Where would universities be without grants, and tax dollars and government secured financial aid for students? There is no way they could charge the kind of tuition they do if regular people really had to write a check for that education. No way. And tenure? Well, it is a lot easier to get rid of the UAW than it is a tenured professor.

So unless Americans are willing to sustain domestic energy, then it will be just one more thing we cede to the foreigners. Sad but true. But then again, the doctors and lawyers and college professors and the like will not have to worry about foreign competition. They are more protected by their status than any working person will ever be.

Terrye on December 12, 2008 at 5:46 PM

This makes too much sense. The “centrist” Obama administration will tell us that this solution would kill the planet and instead of producing our own energy, we have to tax, tax, tax the little we have, humans be damned.

Buy Danish on December 12, 2008 at 5:54 PM

The Bush administration’s energy policy was as halfhearted as just about everything else they’ve tried.

Now we’ve got Obama – as predicted – pitching ‘global warming’ as a national-security issue. Nonsense. He’s attempting to conflate ‘global warming’, which is psuedoscience, with energy security, which is a national security issue.

I am, henceforth, a single-issue voter. I vote against climate fraud. I refuse to vote for anyone who gives more than lip service to anthropogenic-global-warming nonsense.

Want to fix the automakers? Let’s try this: allow 5yr straight-line depreciation on all new car purchases in the next three months, private or business. Okay, we’ll cap it at $50K per purchase, and three per return for private buyers.

JEM on December 12, 2008 at 5:56 PM

Did I spell that ‘psuedoscience’? Okay, fat-fingers today…’pseudoscience’.

JEM on December 12, 2008 at 5:59 PM

Remember ANWAR?

LMFAO! You mean ANWR.. Alaska National Wildlife Refuge… there is no war on the Tundra.

IlikedAUH2O on December 12, 2008 at 5:10 PM

So after reading your little diatribe on crap that is irrelevant to Alaska’s ANWR issue… what was your point again.. on Poland?

upinak on December 12, 2008 at 6:21 PM

Didn’t you guys get the memo? When WW3 breaks out we’re going to power our industrial complex and war machine with propellors and batteries so we dont disturb the environment.

raybojabo on December 12, 2008 at 7:25 PM

The only times our economy runs a trade surplus is during periods of economic hardship. Trade deficits are actually a good thing. This paper should give you some background.

Trade deficits are not a bad thing at all, in reality, though to a person who doesn’t understand economics they can seem like a problem. Without knowing the real impact, one could jump to the conclusion that any kind of a “deficit” is bad just from the sound of the term. I would MUCH rather be running a trade deficit than a surplus. If we were running a trade surplus, we would probably be in a huge depression, nobody in the US could afford to buy anything, the dollar would be down considerable and our stuff would be so cheap even the Chinese would be buying it. No thanks.

crosspatch on December 12, 2008 at 7:46 PM

It’s like a juicy fastball to a 1989 Jose Canseco who knows it is coming.

Leave it to the Dems + Messiah to completely miss the biggest thing they could do to get re-elected and up their numbers in both the House and Senate in 2010.

Not only are they totalitarians, but stupid totalitarians.

Sapwolf on December 12, 2008 at 9:30 PM

I would have no problem with a short run increase in domestic drilling if it were part of a long run plan to reduce energy consumption. But that strategy is nowhere near where the people who reply here are. You all really believe that we don’t have to change anything. All we need to do is increase drilling and ecology destruction and everything will be ok.
Given all the changes in human history, it’s simply amazing to imagine just return to the 1950’s–that we can just keep acting like we’ve been acting. It’s so deeply religious to believe that Robert Moses let our people go to the Holy Land of the suburbs and that is how things should remain forever. Amen.

We could pause for a second to remember that after the original Moses lead the children of Israel to the Holy Land, there were exiles, wars, and change. The car-suburb Holy Land is unlikely to be the last word on human existence unless whatever secular or religious apocalypse comes soon. And then you people turn around and attack climate change as “unproven”? It makes the leftist moonbats look sane.

Forgive me for ranting above. Let me put this simply. It’s perfectly sane to say that we need to do more domestic drilling as a short run energy strategy. But it’s crazy to believe that we don’t need to make any long run changes in our live style.

thuja on December 12, 2008 at 10:18 PM

Why is reducing energy consumption so important to you, thuja?

You can not grow an economy and reduce the absolute energy consumption. It is simply impossible. What we HAVE done is become the most energy efficient economy on the face of the earth.

In 1949 the United States consumed 19,570 BTU for each dollar of economic output. By 1960 that had declined to 18,020 BTU per dollar. In 1980 we had managed to consume only 15,130 BTU of energy per dollar of GDP. As of 2007 we were down to 8,780 BTU per dollar.

In 1980 we produced 917 tons of CO2 per million dollars of GDP, in 2006 we produced 520 tons per million dollars. And these figures are in constant year 2000 dollars.

We are the most energy efficient economy on the planet. Nobody else even comes close to producing so much with so little waste as we do. Sure, we do use a lot of energy, but we are still by far the most productive, in addition to the most efficient, economy on the planet.

crosspatch on December 13, 2008 at 2:11 AM

If the Americans made Saudi Arabia a U.S. Territory, they would no longer be buying foreign oil. Really, I’m surprised I have to explain these things.

Kralizec on December 13, 2008 at 2:52 AM

If the US, Canada and Mexico merged their economic accounting, the result would be the world’s largest oil producer.

crosspatch on December 13, 2008 at 3:09 AM

In fact, unleashing American oil production is such a no-brainer that only a Democratic-run government would miss it. Republicans need to press this issue hard over the next few months.

In twenty of the last twenty-eight years Republican administrations as well as most conservative blogers over a shorter time span have missed it.

burt on December 13, 2008 at 7:55 AM

A battery powered car in every garage and a nuclear power plant in every county.

MB4 on December 12, 2008 at 1:36 PM

The GoBernment could buy those for us via the bailout cash that would otherwise be wasted, but O. Hussein Obama has promised to curb the technologies that make Nuclear Power Plants an option. Best to get a windmill built on your rooftop. /sarc

Are you kidding? Our population has the attention span of gnats.

Entelechy on December 12, 2008 at 1:38 PM

In addition, they are so lazy that America has fallen dependant on the work ethic of Illegal Aliens guest visitors.

DannoJyd on December 13, 2008 at 8:50 AM