Domestic Drilling or International: Is there really a difference?

For those who proclaim themselves to be patriots and lovers of America, the idea of domestic oil drilling sounds like something right up their alley.  What is unfortunate is how short sighted this initiative is. We, as a nation, have characterized ourselves as pioneers, trailblazers, inventors, and entrepreneurs. Domestic drilling will only encourage the continued use of antiquated technology of over 150 years old.  Just like many of the inventions of the 20^th and 21^st century, we didn't invent it until we saw a need for it.   Did the United States government keep throwing money into steam locomotive research after the combustion engine or the airplane was invented?  Did passenger train ticket prices go up after the invention of more efficient means of public transportation?  No!  However, we are now so focused on the false economics of domestic drilling that we don’t see the opportunities that could be created by lessening demand on total world oil and utilizing our pioneering spirit to invent efficient uses of our renewable resources.  We instead focus on the myths that eliminating foreign competition will increase jobs, lessen our dependency, and in some way boost our economy when, in fact, free trade economics says different.

Drilling for oil isn't even half the problem when it comes to production and supply for the US consumer.  The refining of that oil is a huge factor and what many don’t know is that the operable capacity of our refineries in the United States at almost 18 million barrels a day already.  That’s almost even with our usage of about 18.89 million barrels a day.   According to the drill domestic logic, if we were to drill domestically, that would decrease our imports of oil and we would create more jobs when the truth is that our refineries would maintain the same staff and just receive oil that came from a different place on this planet.

It is short sighted to think that domestic drilling will decrease our economic dependency on other countries. First of all, this doesn't have anything to do with dependency.  This is a world market with several different companies and hundreds of subsidiaries all fighting for a dollar.  A free market company always charges what the demand is no matter where the oil comes from.  The oil won’t spoil if kept in a warehouse, nor will the demand suddenly decrease because there is more oil domestically.  If we want to decrease dependency we must decrease consumption.  

The goal of any company, even big oil, is to drive the competition out of business.  The USA is the top consumer of oil in the world so the demand will continue to be high no matter where the competition is located.  One other interesting fact that most “Drill here, Drill now” supporters fail to notice is that the USA is actually exporting crude oil.  That’s right!  9% of our refining capacity is exported.  With all the demand for domestic oil, why would these companies be sending oil out of this country?  That is because these “free” companies are “free” to keep the prices as high as they want.  The real question is, why does anyone think these companies in the business of making money will try to find a way to demand less of it from you?  Our own department of energy has said after evaluating potential increases in domestic oil due to proposals on domestic drilling that “Because oil prices are determined on the international market, however, any impact on average… prices is expected to be insignificant.”  So if the changes are going to be insignificant then it certainly can't be considered a great boost to our economy.

It’s safe to say that the economy will not be suddenly revived by some black stuff coming out of the ground.  According to the US department of energy, even if the USA was at peak production in Arctic National Wildlife Refuge, the Outer Continental Shelf, and the Rocky Mountain states, that’s only about 1.2 million barrels a day.  Which, when tallied out, amounts for a 3 cent saving a gallon that wouldn't be seen by the consumer for about 10 years.  That’s a number we can all understand.  3 cents!  We have already established that the job growth wouldn't be highly effected by domestic drilling, so why continue to push the subject?

The myths will certainly survive but the truth will to. Domestic drilling does not increase jobs, lessen our dependency and boost our economy.  Any oil exec will tell you that with the speed in which the oil can be extracted, moved, refined, and distributed, it makes little difference on where the oil is dug up.  With the USA now at its lowest dependency rate of foreign oil since 1985, if we were to see some amazing drop in gas prices along with economic benefits, it would have happened already.  The truth is that the only way to decrease dependency on oil is by eliminating the need for it.  The quantity of the food in my home does not decrease my bodies need for it, much in the way the quantity of oil produced in our country doesn't decrease our demand for it.  

Bejing protest - Mediated Communication Assignment

While sitting in a model home in Stone Cliff, where I practice real estate, I had a short conversation with an associate of mine who, while talking of some recent travels to the wall of China, mentioned current pro-democracy protests.  I was taken aback because I, being the newshound that I am, generally learn about such things before anyone else.  After the conversation, I quickly pulled up a news article from Reuters.   Reuters is, in my opinion, less biased than other sites that claim to be news outlets, however as I read the article and tried to be critical, I noticed a few things.

                If I were neutral in the fact that I favored neither a communist or democratic government, I would have at least mentioned why the current communist government had placed in the restrictions to the upcoming elections.  In its second paragraph, the article paints the police as ruthless in the next the protesters are singing songs and chanting slogans.  Rationally, I can’t think why police would charge peaceful protests and the article failed to mention if there was destruction of property or other issues of violence by the protesters.  In such large groups there are seldom times when they are free of violent instigators. 

                I have opinions on Chinese censorship, but from a neutral position it seems odd that an article would not state reasons for police aggression.  Contrasting this article to the recent protests in Ferguson, a Reuters article indicated that the police used tear gas and stun grenades but the article quickly pointed out that the reaction by the police was a response to violent action from the protestors.  Reuters and those who it employees are largely from countries with high emphasis on democracy and freedom of the press.  This fact certainly could influence the truth that if they were to publish such a story in China, it would be immediately censored.  In other words free press is the enemy of Chinese government, does it make sense for the enemy to try to do a neutral reporting on something occurring in that country that could ultimately benefit the press itself? 

                I personally believe the Chinese government be way over restrictive and believe that although the protests must have some aggressive elements in them, the police response is over reactive.  I think it’s interesting however to see this kind of argument from another angle even if subscribe to a different point of view.

Climate Change - Stop the Spending

The United States is spending more and more on climate change regulations.  With the debate still raging between different parties and groups, halting the spending on regulations and allowing more 3rd party research to take place would allow leveled debate and permit the US public to arrive at a democratic consensus (a vote).  With the United States own accountability office reporting that we have spent well over 110 billion dollars in the last ten years on climate change it is time that the spending is stopped.

Larry Bell, a contributor with Forbes Magazine, wrote an article and stated within that we should “Consider that current policies are costing hundreds of billions we can’t afford along with millions of lost employment opportunities; all based extensively on a bogus, politically manufactured climate crisis devoid of any supportable scientific evidence.”  The fact that such a claim exists merits the need for a debate.  Is climate change spending really in the public interest?

This particular item, public interest, has always been a politically volatile phrase.  President Obama in Executive Order 13563, mandated that while agencies institute regulations, they “must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation....It must allow for public participation and an open exchange of ideas.  It must promote predictability and reduce uncertainty.”  With 61% of the US public polling skeptic or still in the middle, this is hardly an indication that the public is participating or has an open exchange of ideas with those implementing these policies.

With outrageous statements like some from climate change proponent, Al Gore, saying that there was a 75% chance that the polar ice caps could be ice free by 2014.  There is now clear evidence that some of these scares are nothing but scares.  With the northern polar ice cap at its minimum extent for 2014 of 5.02 million square kilometers  and with the southern ice cap with a record breaking 20 million square kilometers, it is clear that there are some discrepancies in the claims that hurried our nation into implementing very cost full policies.

The reason we must stop these policies is to protect our country from future debt.  If these policies are necessary, they should be established as factual needs after some carefully scrutinized hypothesis and results.  If these were medical lab experiments and the predictions made by some of the pharmacist and chemists turned out to be drastically off, would we start distributing the pill?  Of course not!  The fact that there is still a large portion of Americans unsure if climate change exists, the fact that many predictions are failing, and the fact that we are spending billions of dollars based on these claims, merits the need for a pause in the implementation of policy and spending.  If there is, in fact, a climate change danger, we are certainly jumping the gun.