So, Bush and McCain want to end the so-called ban on offshore oil drilling, in the name of lower gas prices and lessening our dependence on foreign oil. There’s at least one problem with that idea, though.
They’re lying to you — or at least misleading you.
There’s plenty of offshore drilling going on. Seen Armageddon? People are using those offshore rigs — they’ve never been banned. There are certain areas which have a moratorium on new drilling and new leases. There are other areas where offshore oil rigs are still operating. And according to the Associated Press, oil companies currently have 68 million acres in undeveloped oil leases outside the moratorium area, where they could still drill if they wanted to.
Under the moratorium, the government simply hasn’t been giving new leases to oil companies. That’s what Republicans want to give the oil companies — new offshore leases.
The oil companies don’t need them. They’re not fully using the leases they currently have! What the Republicans would do is give the oil companies additional “land” that they could then hold on to for the future. And in that future, when oil really has become scarce, they’ll be able to gouge us even more.
Speaking of gouging, ending the moratorium is highly unlikely to lower the price of gas at this time. Factcheck.org says that according to a government report, opening additional offshore drilling opportunites wouldn’t have any impact on oil supply or on gas prices until 2030. John McCain even recognized this in a speech on June 23. “Even though it may take some years, the fact that we are exploiting those reserves would have psychological impact that I think is beneficial.”
Holy smokes.
The hard truth is that gas prices are not going to go down; at least not significantly. The only way out of this is to CUT OUR OIL CONSUMPTION. We have to stop using the oil wherever we can. We need to develop alternative energy sources, and we need to walk, bike, and use public transportation.
Some people aren’t currently in a situation where these methods are affordable or even possible. Federal, state and local governments will need to act to make public/alternative transportation accessible and affordable for more people.
We need to face the facts and move forward, instead of holding on to an unsustainable way of life.
Yeah. Psychological benefit. I know I’ll feel better… eyeroll.
I’m struggling right now with not driving so fast, not jumping on the gas when the light turns green. Because even that helps. My commute with daycare and whatall is not conducive to bus-takin’, and the bus system here is totally loaded right now anyhoo. So, slower driving for me!
Move forward, indeed. Rest assured that my next vehicle will not be a Ford Explorer with a V8 engine.
I’m very, very glad I work at home now, because otherwise I don’t know how I’d make it… and I DON’T know what I’m going to do this winter, when the heating oil prices are even higher than last year. I can’t think and become hostile when I’m cold.
My sorry state’s governor says he’s all for offshore drilling. What his from-near-Hilton-Head a** means is “They can drill off Myrtle Beach, where the tacky tourists go, or they can drill off those poor counties going down toward Charleston, but they can’t drill where MY people live.” He’s trying his best to catch up to GWB on my Most Hated, I’ll give him that. He’s clearly not complacent with just making the Top 10.
Hmmmm….at this rate, by 2030 the U.S. economy will already have collapsed.
Instead of investing in fossil fuels, I’d like to see my tax dollars further develop this idea:
with a quick raise in prices, (as opposed to slow and steady) it definitly has made gas prices and our response to them a HUGE priority.
it’s pretty crazy.
I even heard, that your government want to give right to drill in some reservations. I think, that they mentioned that it was some protected reef ecosystem…
You even used them, but then the donations for were cancelled and low prices of oil made alternative sources too expensive compared to energy from oil…
And you are right. You should lower the consumption. And you Americans have the best opportunity to use alternative sources of energy. I know it, because I study them
Two ways to reduce price: decrease demand or increase supply.
Decreasing our demand, through other sources, less & better efficiency is good, but will not have much affect. Global demand keeps increasing.
Increasing out own supply will help. Currently about 40% of our oil needs is from domestic sources. ANWR can supposedly handle 5%; maybe we can get another 5% from offshore. So people don’t think if the oil mix is change to 50% domestic, that won’t help?
Domestic barrels are cheaper; their price is averaged with the global price.
Oil companies gouging? Please check the facts. Despite record profits, they are not exorbitant, with the average margin for all US oil companies being slightly less than 9% for last year.
[...] As I’ve said before, making new offshore oil leases available will accomplish exactly nothing — except to put more money in the oil companies’ pockets. [...]
The oil companies want the leases not to drill them, but to insure that nobody else does. There is a perverse incentive not to drill. Raising oil to the surface costs about $10-20/bbl; with the current price at $125/bbl, that a lot of profit. Why drill and increase the supply? Better to have control of the leases and not use them. The oil isn’t going anywhere, and they can drill them when their current fields play out, this keeping the supply low and the price high. This is also why they are always content to “lose” the ANWR debate; they don’t want to drill ANWR, they just don’t want anybody else to do so.
The solution is simple: allow the oil companies a lease anywhere they like, any time. But put a time limit on it. Say, “You must use this lease in five years, or it reverts back to the people, and you lose any lease payments.” You will find not one single taker for the leases under those conditions.
As for funkool’s claim of a mere 9% profit, that is indeed what the oil companies claim–to the general public. But they give a different story to their investors. Their total ROI for 2007 before taxes was 29%, and 17% after taxes. However, even that is not meaningful, because of the $29B charge for taxes, $23B is in “deferred” taxes (meaning they don’t actually pay them–tax accounting is weird.)
The “9%” is a return on sales, which is a meaningless number; an investor looks at return on investment (ROI). Even the 9% number is a gross understatement, a manipulated number. The stated return on revenues for 2007 is actually 10.5%. But even just adding back in the (infinitely) deferred taxes brings that to 16.4%. And then there is the outright looting of the company by higher-level executives who take enourmous salaries, expense accounts, and perks, money which comes from what rightfully belongs to the workers and the investors.
In any case, when you hear a company making claims like this, the best way to check it out is to see what they say in other contexts. If they really only earned 9%, they would be hard-put to get any investors, so they have to tell the investors something which comes a bit closer to the reality, even if there are still mythical elements.
Those taxes are not defferred ad infinitum. Defferred taxes appear on the balance sheet because of differences between the government’s depreciation schedule and the one the company reports to its shareholders. If the level of defferred taxes only increases, it is because the company is adding capital.