Energy Journal Study (and rejection letter) proves allowing more drilling will lead to price drops NOW

Energy Journal Study (and rejection letter) proves allowing more drilling will lead to price drops NOW

The Left has offered all sorts of arguments for why they oppose drilling, including reasons why producing more American oil will not lower gas prices. These arguments are bunk, and the American people know it.

There is an Economic Study submitted to The Energy Journal which proves this, see here for the study.

This study argued allowing drilling in ANWR would produce an immediate drop in oil prices even if the oil did not enter refineries for several years. The study was rejected for publication in The Energy Journal, not because the editors disagreed with their findings, but because they considered the study's conclusion so obvious that it was not worth publishing.

As the rejection letter (see here) states:

"Basically, your main result (the present impact of an anticipated future supply change) is already known to economists (although perhaps not to the Democratic Policy Committee)."[emphasis added]

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By Ijahru @ Thursday, August 21, 2008 3:00 PM

could someone explain to me how opening drilling in ANWR and offshore will lower oil prices if we don't know if there is even oil there because the process of finding oil takes years and there may not even be oil in the leased land. It seems to me that there is some other force in play manipulating oil prices. Perhaps we need to look at the speculators. I have no problem drilling offshore or in ANWR but I think there is something fishy going on if just saying we are going to start drilling will lower prices immediately.

By jmkoerner@ocamericans.org @ Wednesday, August 20, 2008 1:57 PM

DRILL, DRILL, DRILL, DRILL. The words Nancy Pelosi is starting to really hate. Get that oil drilled now!

Organization of Conservative Americans
http://www.ocamericans.org

By runcorun @ Monday, August 11, 2008 1:45 AM

In an address by the API President and CEO Red Cavaney, Cavaney claims himself that, quote, "A company bids for and buys a lease because it believes it may yield enough oil or natural gas to make the cost of the lease, and the costs of exploration and production, commercially viable. However, until the actual exploration is complete, a company does not know whether the lease will be productive. If, through exploration, it finds there is no oil or natural gas underneath the lease -- or that there is not enough to justify the tremendous investment required to bring it to the surface -- the company cuts its losses by moving on to more promising leases... Exploration is time consuming, very costly and involves a great deal of risk. Importantly, you see neither a drop of usable oil nor a cubic foot of natural gas, while it is going on."

The API does not claim that the available federal lands to explore for "energy development under standard lease terms" has already, or is close to being fully exhausted.

If these statements for the amount of federal land already available for energy development are true, how would opening up more land for drilling, such as the ANWR, benefit energy development and the price at the gas pump?

Oil companies have plenty of land to explore, and they can be given more time to drill as part of a comprehensive energy plan. However, giving them more land to explore is no longer necessary since technological advancements offer cleaner, renewable sources of energy that can be produced in a similar time frame as boosting land exploration and drilling efforts.

http://www.api.org/Newsroom/upload/RED_CAVANEY_SPEECH_TO_USEA_ENERGY_SUPPLY_FORUM.pdf

By 42long @ Friday, August 08, 2008 3:54 AM

Unfortunately the Democratic Party has moved to the extreme left and their partners in crime are the nutbag Ecologists or Radical Enviro's as I like to call them. They play on the Uninformed American's which actually is a label that is fading fast because of the ever increasing ownership of personal computers.

Americans now have access to the truth unlike the pre-internet days when the untruths and spin were coming from the Associated Press and the NY Times. These organizations were said to be the last word on reporting.

The news monopoly is no longer and we now have amazing access to information with just a few keyboard strokes and mouse clicks. If it weren't for the power of the Internet, we would not have easy access to the Economic Study. Imagine.

Amazingly they still try to pull the wool over our eyes. Tsk, tsk, tsk. Silly Democrats tricks are for kids.

By Henry Davis @ Thursday, August 07, 2008 1:37 PM

Anticipated supply changes impact current pricing - this used to be learned in Econ 101. If there is any doubt, consider if today's actual pricing isn't a result of the same. Oil prices have been dropping, not because of actual supply changes, but because of anticipated changes. This price move started immediately following the President's lifting of the offshore drilling ban. It was only a suggestion that moved the price. Combine this with action and the oil market will move even quicker.

Only questionable motivations or ignorance could reject the certainty of this rule. This rule impacts all of us, regardless of party or status. If we act upon it, we could see oil prices drop very quickly indeed.

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