Wednesday, May 7, 2008

Drilling In Alaska

Deroy Murdock writes a terrific piece at NRO about why we need to be drilling in Alaska.  It's a great article with lots of details, so if you want to understand this whole argument, check it out.  Here are some excerpts to give you the basic idea:

How much more pain must Americans endure before our masters in Washington let oil companies punch a few holes in the Alaskan tundra? Must we shiver pennilessly in the dark before we may extract new domestic petroleum deposits? Or shall we simply keep buying $114 barrels of oil from people who want us dead?

In case Congress missed the news, four U.S. airlines have gone broke during this month alone. Frontier declared bankruptcy, but will continue flying. Even worse, Aloha, ATA, and Skybus blamed unaffordable fuel as they grounded their jets. Aloha said sayonara to 1,900 employees, NBC News reports. ATA's demise destroyed 2,200 jobs, while Skybus sacked 450 workers, atop the 80,000 positions lost across the economy as unemployment spiked from 4.8 percent in February to 5.1 in March.

Independent truckers have staged work stoppages to showcase their plight. Typical big-rig drivers who spent $837 to fill 250-gallon fuel tanks a year ago pay $1,189 today — up 42 percent.

As of April 14, automobile drivers paid a record average of $3.39 per gallon for self-serve gasoline, up 51 cents in 12 months, according to the federal Energy Information Administration.

Here's the key paragraph in this article, and the huge, gaping hole in the argument of anyone who thinks they're being gouged by 'big oil' [emphasis mine]:

Politicians and journalists who obsess over "X-rated" oil profits leer at numerators, not denominators. Take industry giant Exxon/Mobil. Its profits are like a pair of size-22 shoes: Massive in isolation, but much more modest when parked beneath Shaquille O'Neal's 7'-1" frame.

Exxon's $40.6 billion profit for 2007 is dwarfed by its $404.5 billion revenue and $199.5 billion crude-oil expense. Of course Exxon's sales have swelled: Americans pay more for gasoline as OPEC charges record cartel prices for crude, and rising global demand exceeds stagnant supplies. While Exxon's 10-percent profit outpaces the oil industry's 8.3 percent average gain, Coca-Cola's 20.7-percent profit margin and Microsoft's 27.5 percent turnover should make Exxon's executives jealous. When will Congress denounce Coke and Microsoft's "corporate pillage?"

There it is!  That's the thing that NO ONE ever bothers to mention!  Sure, these oil companies achieve record-high dollar amounts for their quarterly revenues, but that's because of the sheer volume of business they do.  If you look at the more important number, profit margin, these oil companies have very average numbers.  This is critical to understand, and makes a world of difference!

Murdock goes on to talk about Alaskan drilling in particular [emphasis mine]:

The Arctic National Wildlife Refuge's pertinent parcel covers just 2,000 acres — a veritable raindrop in the Olympic swimming pool that is Alaska's 365-million-acre territory [by my calculator, that comes to about .000005% of the land there]. ANWR's estimated 10.4 billion barrels could match or replace for 19 years the 1.5 million barrels of Saudi oil that America imports daily.

ANWR also could equal or provide a substitute for American purchases of Venezuelan dictator Hugo Chavez's oil for 25 years. Interestingly enough, Rep. Ed Markey (D., Mass.), who presided over the House's late-March public dunking of top petroleum executives, applauds former Rep. Joe Kennedy's (D., Mass.) program to provide poor people with Venezuela's anti-American heating oil. One year's worth of Chavez's authoritarian charity equals just one day's worth of ANWR's all-American output.

New technology allows a very small footprint and very sophisticated drilling techniques that will keep environmental effects to an absolute minimum.  Remember the argument about harming wildlife?  Murdock points out that "[t]he allegedly fragile caribou seem quite aroused by [a nearby petroleum development area]; their Central Arctic Herd has quintupled from 6,000 in 1978 to 32,000 today."

Murdock also offers some suggestions for better energy production:

- Deregulate the construction of new oil refineries, something not seen since 1976.
- Halve the gas tax, making the average gallon 9.2 cents cheaper.
- To encourage new atomic-power plants, stop debating and start storing radioactive waste at Nevada's Yucca Mountain facility. In return, give Silver State residents free electricity.
- If it's too much to drill more offshore oil, at least withdraw more natural gas. At worst, natural gas leaks do not blanket beaches or smother seagulls.

His blistering conclusion is dead-on:

Will we finally grow up and harness our resources, or will we childishly weep over imaginary threats to wildlife, dispatch supertankers of cash to the Middle East, and watch our petrodollars sponsor bomb belts and exploding aircraft?

Merely asking this question illustrates how desperately this nation needs adult supervision.

Wham!  Murdock just knocked this one out of the park!  It is literally insane to continue refusing to develop ANWR.  Literally.  Drilling in ANWR would give us:
- cheaper gas prices at the pump
- more energy at lower cost
- more jobs (or at least fewer lost jobs)
- lower prices as an indirect result of lower energy costs
- less dependence on foreign oil (much of which comes from nations hostile to America)
- most likely a positive environmental impact

What's not to support, especially in this current time of economic and Middle Eastern tensions??

All of these things are being prevented because of ridiculous, insane, totally inaccurate misrepresentations by environmentalist wacko nitwits!

Now, can we please get back to some sanity, and start drilling already?

There's my two cents.

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