Stephen Poss has trotted out a myth to debunk a myth in his letter of July 9. His myth (based on the usual government studies) claims that producing more potential oil reserves will not affect gas prices anytime soon.
How could an increase in the potential supply of oil NOT affect the speculative energy market which directly affects the daily price of oil? Do educators graduate without taking economics these days?
Poss rails about politicians wanting to drill in the Arctic National Wildlife Refuge (in reality they would be drilling on a minuscule portion of an enormous region) and claims that pricing advantages would not be apparent for many years.
How could an increasing commitment to produce oil for the global market not have an effect on prices immediately?
With the rapid and dynamic capital markets that exist, prices have quickly risen because of Libya. It’s an immediate production problem but is only a price problem because of speculation.
If things such as Libya were balanced with commitments to produce more domestic oil, markets would respond favorably. It’s economic common sense, and one does not need a study to see it.
We spend billions to drill in Brazil. We decrease exploration in the Gulf of Mexico. We block new processes to extract shale oil which may exist in North America in vast reserves greater than that of Saudi Arabia.
We (and by “we” I mean the government) are attacking coal production, nuclear power, natural gas and anything other than forms of energy production that are not yet cost-effective.
Furthermore, Poss complains that oil companies lease 68 million acres for the potential to produce energy. So what? Do they have to drill for oil on land that will produce only at a high cost to placate those such as Mr. Poss?
Incidentally, the federal government owns the ANWR, which is part of the 30 percent of U.S. land owned by the feds.
So ultimately, the U.S. government is in the energy business and represents a kind of monopoly.
By the way, why do the feds own 30 percent of the United States?
Is it because they are looking out for our mythical best interests?