Bush Says Drill, Drill, Drill — and Oil Drops $9!

National Review ^ | July 15, 2008 | Larry Kudlow

[rob777]

In a dramatic move yesterday President Bush removed the executive-branch moratorium on offshore drilling. Today, at a news conference, Bush repeated his new position, and slammed the Democratic Congress for not removing the congressional moratorium on the Outer Continental Shelf and elsewhere. Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.

Now isn’t this interesting?

Democrats keep saying that it will take 10 years or longer to produce oil from the offshore areas. And they say that oil prices won’t decline for at least that long. And they, along with Obama and McCain, bash so-called oil speculators. And today we had a real-world example as to why they are wrong. All of them. Reid, Pelosi, Obama, McCain — all of them.

Traders took a look at a feisty and aggressive George Bush and started selling the market well before a single new drop of oil has been lifted. What does this tell us? Well, if Congress moves to seal the deal, oil prices will probably keep on falling. That’s the way traders work. They discount the future. Psychology and expectations can turn on a dime.

The congressional ban on offshore drilling expires September 30, so that becomes a key date. A new report from Wall Street research house Sanford C. Bernstein says that California actually could start producing new oil within one year if the moratorium were lifted. The California oil is under shallow water and already has been explored. Drilling platforms have been in place since before the moratorium. They’re talking about 10 billion barrels worth off the coast of California.

There’s also a “gang of 10” in the Senate, five Republicans and five Democrats, that is trying to work a compromise deal on lifting the moratorium. So it’s possible a lot of action on this front could occur much sooner than people seem to think.

So I repeat: Drill, drill, drill. Deregulate, decontrol, and unleash the American energy industry. Those hated traders will then keep selling oil as the laws of supply and demand and free markets keep working.

Bravo for Bush. Bravo for the traders.

[Alia]

Cool! Very nice to meet you, WIJG!

[Old Professer]

"Gonna require a lot of oil to keep those puppies running, while erective alternative energy uses."

Translation???

[Who is John Galt?]

Ditto!

[Nuc1]

TBP is a sucker. Gas turbine generators are were intended to be base load plants but the cost of natural gas went up so fast that they are useless for that purpose. As I understand it most are used as peakers. That is, generators used to augment the grid during peak load periods. Wind mills fall under the load following section of grid suppliers. TBP will probably loose doing this unless the tax payers are forced to support him. Still, I think he has good intentions. I just don't think his experience helps him here.

[Alia]

lol!!!

In 1993, in the San Francisco Bay Area, of all places, I was sporting a "Who is John Galt? Ask Rush!" bumpersticker.

It caused me no end of interesting episodes, pro and con, in this adventure called "life". ;>

I was "bird" watching even when there were no actual birds in proximity.. botoh, people in near heart attacks would run to my car yelling "DITTO!!!"

[Nathan Zachary]

I don’t know, Heptane is rather explosive, 0 on the octane scale. But being a solvent, no doubt has it’s uses in the heavy oil industry.

[Alia]

I give you two choices, uh... I can explain “erective Alternative Energy Uses”, or explain that my fingers were too excited to type the word “erecting”. Erective sounded corrective? ha.

[Alia]

In fact, heptane is what they’ve been using; it’s far less volatile, and thereby controllable, than other gases.

[WalterSkinner]

[Alia]

But, having the auto industry actually gearing up to flood the market with electrics and hybrids is very powerful. Private industry can get it done.

Amen!

[PapaBear3625]

Thank you, I didn’t know this. And, I’ve wondered about the high price of diesel. Used to be, a mere 10 years ago, the diesel auto owners were the smug ones...

EPA's Ultra-low sulfur diesel regulations

[trojan_army]

I think that we established this way back, that we must drill... it is nothing knew to hear because, congress will just toss it out the door in order to further piss the American people off and pass their liberal thoughts of global warming and hoopla on to the next generation!

[kickonly88]

It’s time to get the namby pamby congress critters out of the way and let America lead the world, again! I’m tired of these schmucks apologizing for being Americans.Screw the rest of the world, we’re The United States of AMERICA!

[Alia]

Thank you for the link. I am much better informed now esp., in re what countries did what in what year. Sulfur. Hm, sulfur.

From Wiki: Ultra-low sulfur diesel was proposed by EPA as a new standard for the sulfur content in on-road diesel fuel sold in the United States since October 15, 2006,

September 21, 2006. CNN: Hugo Chavez: "The devil came here yesterday," Chavez said, referring to Bush, who addressed the world body during its annual meeting Tuesday. "And it smells of sulfur still today."

I knew more there had to be more to Chavez' comments, in specific "sulfur", than just what was presented at the time. Now, I understand it. Thank you.

[Teacher317]

Are any of those alternatives as cost-effective as the current methods? I’d bet heavily against it.

[rob777]

"Let’s be honest here... it was the Fed Chiefs sober economic outlook for the coming year that caused oil to drop. Market players saw diminished demand ahead."


An effect can, and often does, have more than one cause. Such is the case here.

[rob777]

"Crude falls $6.45 a barrel - 2nd largest price drop in dollar terms - as Fed chief indicates inflation and high fuel prices will cut into U.S. demand for oil."


I have heard these explanations and have no quarrel with them. I do have a problem with the notion that the above is the SOLE cause of this drop in prices. Neither am I claiming that the Bush decision on lifting an executive order banning domestic oil exploration was the sole cause. I am focused on the latter because it is tied to an issue which our political leaders have direct control over and can actually do something about.

[Scotswife]

please tell me that prices were actually dropping during pelosi’s ridiculous rant!

wouldn’t it be great to publish a graph of dropping prices alongside pelosi giving her speech?

[Scotswife]

“I just called Harry Reid’s office 202 224 3542 told the gal that answered the phone that I had just heard the Senator say Republicans need to do more and talk less!”

Did you ask Reid’s secretary how the high oil and gas prices affect business in Vegas?
What will he do when no one can afford to drive or fly to Vegas?
If no one has enough disposable income to blow on gambling or “legal” hookers in Nevada?

I don’t get Reid - does he not have any challengers?

[curiosity]

Looks like I won the bet.

Nope. Gasoline is still over $4 a gallon. You overreached. Yes, more domestic drilling will relieve some pressure on prices (which is why I support it, among other reasons), but no matter how much we drill, high gasoline prices are here to stay.

Part of being a conservative means accepting the world for what it is. We live in a world of scarcity, and oil is going to run out sooner or later. That's a fact, and part of being a true conservative means accepting unpleasant facts. Most oil that is cheap to extract is already gone. There is quite a bit of oil left, but most of it is very expensive to extract, limiting the ability of expanded drilling to reduce prices. So yes, more domestic drilling will help, and is sound policy, but it's no panacea, and we shouldn't pretend it is. If we do, we will destroy whatever credibility we have left.