Why Drill, Baby, Drill When There’s a Glut of Oil?
The Florida Legislature, which is dominated by Republicans, recently voted to allow drilling within three miles of the state’s beaches. Gov. Charlie Crist and leaders in the state Senate have so far refused to go along with the idea, but you can bet the fossil fuel companies aren’t about to give up their battle for offshore drilling in the Sunshine state.
I won’t go into all of the reasons for the 19-year-old ban on drilling near Florida’s beaches. I’ll just remind you that tourism is the state’s bread-and-butter, and caution you against swallowing the baloney (recently repeated on CNN) about how safe offshore oil rigs have become. Just close your eyes and picture one of those rigs in a hurricane, and I’m sure you will see why drilling off Florida’s coastline is a Bad Idea.
What puzzles me is why the oil (and gas) companies are so determined to overturn the ban on off-shore drilling. They have leases on thousands of inland acres that have yet to be explored, and there’s no short-term shortage of oil. Time Magazine has an interesting article (by Vivienne Walt) on the subject today, titled: “Oil Is Plentiful, Demand Weak. Why Are Gas Prices Going Up?”
Walt reports that global oil demand, which crashed with the onset of the economic crisis last year, is now “at its lowest level since about 1981, according to the Paris-based International Energy Agency.” And she says U.S. oil inventories this month reached their highest level since the 1980s. In fact, “about 2.6 billion barrels are currently stored in commercial tankers around the world,” waiting for demand to increase.
To me, the most enlightening information in Walt’s article is the fact that “investors and oil producers are betting that global demand will roar back, apparently hoping that the recession has already hit bottom.” She reports that:
Over the past two months, investors have plowed billions of dollars into oil futures. If the U.S. and other major industrial economies rebound, oil supplies could be depleted because the recession has prompted producer nations to freeze hundreds of projects to open new oil wells or upgrade existing ones.
The predators are lurking, waiting for a chance to prey upon us once again. And, meanwhile, their speculation is driving up gas prices. There must be a special hell for those “investors” – and the people in the fossil fuel industry.
But if we consumers let them manipulate the market yet again, we would get what we deserve. U.S. President Obama is working hard to develop alternative energy sources, and if he succeeds, the long-term effect would be a decline in demand for oil. In the meantime, we could all drive less, walk more, dust off that old bicycle… The exercise would be good for us.
When gas hit $4 a gallon in the U.S. last year, consumers developed more frugal practices – like using mass transit and carpooling. I am convinced that the recent spike in gas prices and the collapse of the economy will have lasting effects. Surely, at least some of those frugal habits forced upon us by circumstances will persist when good times return.
I’m betting against those “investors” who have bought up the oil and gas futures. I hope they lose their shirts.