Thursday, June 19, 2008

Drill, Baby, Drill?

It's widely documented that Representative Scott Garrett is the only member of our Congressional delegation to support drilling off the Jersey Shore (Record, Star Ledger, Forbes). Here are his thoughts as reported in the Star Ledger:
"Providing states the opportunity to choose deep sea exploration using 21st century technology would help increase American supplies and thereby lower gas prices," Garrett said.
Problem with Garrett's statement is a little thing most of us like to call reality.

The amount of known reserves off limits are vastly below what Garrett and others have claimed. It's also at least 10 years away from adding oil to the market. So basically, this falls into the ideological false promises category. Even if the ban is lifted, there will be no impact on prices.

Even if there were oil out there, as pointed out by fellow NJ Republican Representative Frank LoBiondo to the Star Ledger, there's plenty of supplies available that the oil companies have signed leases for and aren't doing anything with right now:
"With more than 68 million acres nationwide already leased though unexplored for oil and natural gas, we should be focusing on those areas before drilling in sensitive locations such as off the Jersey Shore," LoBiondo said.

We've given oil companies tax breaks, credits, and government funded research as to where and how to drill; however, we cannot make the oil companies drill. It's kind of like we can't make the Saudis open the spigots a little.

The companies and nationals know the price right now is based on wild speculation, their dividends and treasuries reflect it, and there is no motivation for them to increase supply regardless of how much we're hurting.

Maybe that's why Garrett is proposing nonsense solutions; because the market is working as a market will without intervention. The only problem with the current climate that Garrett sees is that the government is saying companies can't drill in certain spots. So, Garrett's trying to convince his base they're paying too much because of the government and not reality.

Problem with being an ideologue is that your statements often have no grounding in reality. Garrett has to know his "solution" won't do anything to lower gas prices, but he's still going after the ideological target instead of pushing for something that will actually help.

It's more of the same from Garrett: cheap talk and useless action.

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