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Robert Reich on Offshore Exploration

One of my disappointments in John McCain is the amount of pandering he has done to various people. I regard his vacation from gas taxes as simple pandering. It solves no problems. It potentially creates many more. The only reason to favor it is that some people who don’t think beyond the next paycheck.

Now before someone accuses me of elitism, I should note that I have been hit badly by the high gas prices. They hurt. But sometime, I expect within my lifetime, we’re going to have to bite the bullet, change the way we use energy, reconstruct some of our infrastructure (public transportation), and use less energy. I’m not one of those who think we will have to give up huge chunks of lifestyle to do this. I think there’s a very good chance technology will allow us to do very well whilst using much less energy. But there will be a cost. Developing, and more importantly implementing new technology will cost money.

Which leads me to the actual topic. I think McCain is pandering on offshore drilling. It’s the wrong way to solve our problems. I would say it’s a short term solution, but it’s really a solution that will take a long time to provide a short term result.

Robert Reich has a post today on this that says it succinctly, titled No To Further Offshore Drilling. When Reich was labor secretary in the Clinton administration I didn’t think much of his opinions, but I have now become a regular reader of his blog. He has been providing very wise advice on things like infrastructure spending, and now on oil drilling.

It’s worth reading and considering.

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  1. I’m afraid I disagree with you on this one. Reich’s focus seems to be incessantly on whether expanded offshore drilling is a fix to our current dilemna and since it isn’t then it’s a bad idea.

    No matter how much we conserve and implement new energy technologies, there will still be a strong demand for petroleum based energy for a very long time. It is short sighted in my opinion to not pave the way to access known resources for easily predictable future needs. I do think it’s a tad silly to use the current price situation with gas to gin up support for expanding drilling, but it still seems to me to be prudent to prepare to extract the oil now because we (or somebody) will need it later.

    And one would assume that with the oil companies flush with cash due to the pricing situation as it stands, there will be plenty of capital to invest in expanded drilling.

    In my opinion, the alternative energy solutions are in the honeymoon stage right now and a lot of attention and capital is moving it’s way. So it looks (in the short term) like it’s the best thing to do. The problem is we still can’t afford the real cost of converting to these technologies even if oil continues to rocket upward. And you have to consider that a lot of these alternative energy solutions are being financed by venture capitalists who no doubt won’t be quite so charitable when it comes to getting their return on investment back. I don’t expect clean tech can be made cheap for a long time to come because it’s racking up bills from it’s engorgement on venture capital.

    Al Gore proved that when he joined up with a venture capital firm to fund green technologies. He stands to profit quite handsomely from expensive technologies that are being moved forward, no doubt in no small part due to his prophesying on global warming.

  2. Henry:

    Thanks for the post.

    As one who favors more drilling, including in ANWR, I also know that we must continue to develop alternative fuels. Of course, drilling more is not a short-term solution, but people were citing that reason five, ten and twenty years ago. Had we pursued it then, we would find ourselves in a better situation today, although it would only partially help us, to be sure.

    What we truly need are courageous people in both parties to step forward and make some tough decisions in order to impliment a comprehensive energy policy. That has not happened thus far and both parties must take the blame for it.

  3. Henry,

    Not that I want to pile it on, but I agree with the other commentors. Wanting to keep the ban on off-shore drilling is a reasonable political position, so I’m not going to go off on a rant, but of course it requires the tradeoff of keeping oil supplies tighter than they would otherwise be for the future.

    Of course the higher prices will spur investment in alternative technologies, but given the potential for a political turnabout in which we do start drilling, I would expect that there’s less such investment than if that possibility wasn’t there.

    I agree that drilling is not a short term solution, nor is it a long term solution, but it is a medium term partial solution.

    On the other hand, most of the advocates of drilling seem to think all the oil produced that way would be sold in the U.S., providing price relief here. In reality it would be sold to the highest bidders and the price would be set by the world market, so how much price relief it would provide would depend on how much it boosts world supply–and I’ve yet to see a thoughtful answer to that question.

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