Monday, July 14, 2008

Alaska's 'Frustrated' Governor on Nonsensical Policy

IBD: Alaska was bought by the U.S. from Russia in 1867 specifically to ensure a supply of natural resources. How do Alaskans feel about the opposition from politicians representing the lower 48 to drilling for oil there?

Alaska Governor Sarah Palin: Alaskans are frustrated because there is opposition in Congress to developing our vast amount of natural resources. We want to contribute more to the rest of the United States. We want to help secure the United States, and help us get off this reliance of foreign sources of energy.

It's a very nonsensical position we're in right now. We send President Bush and Energy Secretary Bodman overseas to ask the Saudis to ramp up production of crude oil so that hungry markets in America can be fed, (and) your sister state in Alaska has those resources. But these lands are locked up by Congress, and we are not allowed to drill to the degree America needs the development.

When we became a state 50 years ago, we struck a deal with the federal government where we said, "Let us in a union where we will be as self-sufficient as possible." And the federal government said, "Come in, you'll be our 49th state, and you'll do it by developing your God-given resources."

Fifty years later . . . we're living up to our end of the bargain, and now we need the rest of the U.S. to live up to their end of the bargain, to lead America toward energy independence. Alaska should be the leader of an energy policy that gets us there.

Link.

23 Comments:

At 7/14/2008 9:08 AM, Blogger Denovich said...

Alaska gets the most (or nearly the most) federal aid per capita, and has done so for years...

 
At 7/14/2008 9:24 AM, Anonymous GWU South said...

Check this out -

http://www.foxnews.com/story/0,2933,381761,00.html

Yet undoubtedly, the myth that high gas prices are the Republicans fault will continue.

 
At 7/14/2008 10:48 AM, Anonymous Anonymous said...

She says, "But you have to consider that if we'd started this five years ago, then we wouldn't be in this position right now." This is so absurdly false, I can't believe a reporter did not question this. If we had started drilling on ANWR five years ago and it exceed all expectations of how much there is up there, it would make no difference to the price of oil.

Just more Republicans wanting to make sure that the Fed government subsidizes oil production so that her state can get more revenue and she can increase its size.

 
At 7/14/2008 11:48 AM, Blogger juandos said...

"This is so absurdly false, I can't believe a reporter did not question this"...

So anon @ 10:48 AM, what is this alledged absurdity you are refering to?

"Just more Republicans wanting to make sure that the Fed government subsidizes oil production"...

Hmmm, so you think that since 1977, governments collected more than $1.34 trillion, after adjusting for inflation, in gasoline tax revenues—more than twice the amount of domestic profits earned by major U.S. oil companies during the same period is somehow a federal government subsidy?

 
At 7/14/2008 11:59 AM, Blogger briefs said...

Governor Sarah Palin is my choice for VP for John McCain. She is strongly conservative and wants to increase our energy supply. As suggested on this site many times before, a future increase in energy supply will decrease current price ... Now.

 
At 7/14/2008 12:50 PM, Blogger bobble said...

juandos;"what is this alledged absurdity you are refering to?"

i believe he's referring to the delusion that drilling in ANWR, whether it was 5 years ago or today would make much differance in the price of crude oil.

from the White House's own Energy Information Agency:

ANWR "Additional oil production resulting from the opening of ANWR would be only be a small portion of
total world oil production, and would likely be offset inpart by somewhat lower production outside the United States. The opening of ANWR is projected [to reduce the world price of oil by]$1.44 per barrel

offshore "any impact on average wellhead prices is expected to beinsignificant"

 
At 7/14/2008 1:56 PM, Blogger juandos said...

Well bobble I note the following from you: "offshore "any impact on average wellhead prices is expected to beinsignificant"" has data from 2003...

I note that the same agency you linked to has updated its estimates in the Gulf of Mexico...

"The opening of ANWR is projected [to reduce the world price of oil by]$1.44 per barrel"...

So any price reduction is a bad thing?

You might want to look at the May 2008 ANWR estimates of crude...

BTW as an aside bobble the Bismark Tribune ran the following back in April of '08: N.D. study estimates 167 billion barrels of oil in Bakken...

 
At 7/14/2008 2:07 PM, Blogger Colin said...

I don't care if drilling in ANWR doesn't reduce oil by one cent -- we should still drill there. For one thing it means less money in the hands of the Sauis. Regardless, it is hundreds of millions of dollars just sitting there waiting to be exploited. Why not take it? The proposed oil field in ANWR constitutes only a small fraction of the total refuge. Even if a few mooses die, so what? Are these things made of gold. How much is a moose worth anyhow? The cost/benefit analysis here is completely out of whack.

 
At 7/14/2008 2:08 PM, Blogger Sophist said...

Some people live in a world packed of illusions. their logical arguments (if such at all) are valid but unsound.

The first fundamental principle of logic is the independence of truth and validity.


Thus, the Sophist says, you can make all the valid arguments in the world with false premises but still live in an illussion.

You drill for oil in Alaska or elsewhere, OPEC lowers supply. You drill for more elsewhere, OPEC lowers more. They have warned.

They end up making the same money while you sweat drilling.

The only sensible time to drill is when they are out of oil and you will sell to then at your price. NOT when they determine price.

The solution with global minima is one and only one... Guess...

I invite guesses

 
At 7/14/2008 3:52 PM, Blogger bobble said...

colin:" we should still drill there. For one thing it means less money in the hands of the Sauis. Regardless, it is hundreds of millions of dollars just sitting there waiting to be exploited. Why not take it?"

i agree. we should have been drilling there 5 years ago.

my *only* point is that people keep saying that not drilling in ANWR/offshore is the reason the price of oil is so high, when it clearly is not.

 
At 7/14/2008 4:06 PM, Blogger bobble said...

juandos":"So any price reduction is a bad thing?"

nope. we might even find more than we think is there. let's drill! but let's be realistic about what will be accomplished.

" N.D. study estimates 167 billion barrels of oil in Bakken..."

yeah, i saw that. why isn't that being developed more rapidly?

 
At 7/14/2008 9:25 PM, Blogger Matt S said...

gwu south - the returns on offshore drilling won't come back for at least 10 years or so, and the ban he's lifting was put in place by his Dad.
bush's little pander won't work.

 
At 7/14/2008 9:27 PM, Blogger Matt S said...

colin - placing humanity 100% before the rest of the world is an attitude and an action which to me speaks the truth that humans don't deserve to even inhabit this planet or survive as a species. Our willingness to destroy everything in our rapacious and shortsided quests for more is the reason we're in this mess in the first place.

 
At 7/14/2008 9:28 PM, Blogger Matt S said...

finally, Mr. Perry,
here's a recent Harper's magazine that makes the claim that the economy isn't quite as bright as you claim it to be:
http://www.harpers.org/archive/2008/05/0082023

 
At 7/14/2008 9:48 PM, Blogger Matt S said...

This comment has been removed by the author.

 
At 7/14/2008 9:50 PM, Blogger Matt S said...

I guess here's one more comment, an excerpt from a Nation article talking about "disaster capitalism":
Disaster Capitalism: State of Extortion

Disaster Capitalism

Oil Price Shock: Give Us the Arctic or Never Drive Again

Iraq isn't the only country in the midst of an oil-related stickup. The Bush Administration is busily using a related crisis--the soaring price of fuel--to revive its dream of drilling in the Arctic National Wildlife Refuge (ANWR). And of drilling offshore. And in the rock-solid shale of the Green River Basin. "Congress must face a hard reality," said George W. Bush on June 18. "Unless members are willing to accept gas prices at today's painful levels--or even higher--our nation must produce more oil."

This is the President as Extortionist in Chief, with gas nozzle pointed to the head of his hostage--which happens to be the entire country. Give me ANWR, or everyone has to spend their summer vacations in the backyard. A final stickup from the cowboy President.

Despite the Drill Here. Drill Now. Pay Less bumper stickers, drilling in ANWR would have little discernible impact on actual global oil supplies, as its advocates well know. The argument that it could nonetheless bring down oil prices is based not on hard economics but on market psychoanalysis: drilling would "send a message" to the oil traders that more oil is on the way, which would cause them to start betting down the price.

Two points follow from this approach. First, trying to psych out hyperactive commodity traders is what passes for governing in the Bush era, even in the midst of a national emergency. Second, it will never work. If there is one thing we can predict from the oil market's recent behavior, it is that the price is going to keep going up regardless of what new supplies are announced.

Take the massive oil boom under way in Alberta's notorious tar sands. The tar sands (sometimes called the oil sands) have the same things going for them as Bush's proposed drill sites: they are nearby and perfectly secure, since the North American Free Trade Agreement contains a provision barring Canada from cutting off supply to the United States. And with little fanfare, oil from this largely untapped source has been pouring into the market, so much so that Canada is now the largest supplier of oil to the United States, surpassing Saudi Arabia. Between 2005 and 2007, Canada increased its exports to the States by almost 100 million barrels. Yet despite this significant increase in secure supplies, oil prices have been going up the entire time.

What is driving the ANWR push is not facts but pure shock doctrine strategy--the oil crisis has created the conditions in which it is possible to sell a previously unsellable (but highly profitable) policy.

 
At 7/15/2008 2:12 AM, Anonymous Fred said...

The Nation? Harpers?

That stuff will rot your mind if it's all you read.

 
At 7/15/2008 2:12 AM, Anonymous Fred said...

"Thus, the Sophist says, you can make all the valid arguments in the world with false premises but still live in an illussion."

Irony is dead.

 
At 7/15/2008 1:05 PM, Anonymous Anonymous said...

sophist,

Wouldn't it make sense for OPEC to increase supply thereby making the ANWR project uneconomic? Doesn't OPEC want a stranglehold on controlling this resource.

If a missile test or a remark by an OPEC minister cause a jump in the price of oil, it is reasonable to assume that announcing expansion of drilling in ANWR & on both coast of the U.S. would have a similar effect. Obviously it does not increase supply immediately, but then neither how does an Iranian missile test or a few words about future oil prices decrease supply.

Geopolitical anxiety and the decline in the USD have also driven up the price of oil.

 
At 7/15/2008 2:04 PM, Anonymous Anonymous said...

http://network.nationalpost.com/np/blogs/fpcomment/archive/2008/04/26/the-real-drivers-of-food-and-oil-prices-corcoran.aspx

sophist,

90% of the world's oil supply is controlled by government. I have to agree with your assessment that there are price manipulators at work, namely:

government

 
At 7/16/2008 7:41 AM, Blogger Sophist said...

Anon asked: "Wouldn't it make sense for OPEC to increase supply thereby making the ANWR project uneconomic? "

Yep, they have done this for a long time. Remember oil at $15?

But the situation is now more complicated. The dynamics have changed. Dynamic programming often dictates taking a temporary big loss in ordere to maximize future returns. That's what OPEC had done in the early 90s.

Now, the objective function will not be maximized if they take another huge loss by lowering prices. The game has reached a point that drilling in US is inevitable. So, maximization dictates OPEC raising prices as much as possible for sustaining a future loss.

I'm saying in other words, the situatiuon is now reversed.

 
At 7/16/2008 7:44 AM, Blogger Sophist said...

Anon said: "there are price manipulators at work, namely:

government"

I agree. But governments that do that, usually hire private groups to affect the manipulation.

Often, these groups, like large funds, are front operations of governments.

 
At 7/16/2008 10:00 AM, Blogger Matt S said...

Fred:
Just because you disagree with them doesn't mean that they're wrong. That's why I read this blog. If you come into a discussion with that kind of "oh the nation will rot your mind" attitude, I can only assume that whatever opinions you hold are probably not completely filled in or justified

 

Post a Comment

<< Home