Donuts And Politics

In the last two days, John McCain and President Bush have come out in favor of opening up coastal areas now under a moratorium for oil and gas drilling. This includes most of the Florida coast. To put this in perspective, even his brother, Jeb Bush, governor of Florida for 8 years until 2006, opposed coastal drilling. This is being sold as some sort of fix for high gas prices, as if it would help anytime soon and come at no risk to the environment. I think it was not only a bad policy idea, but a terirble political decision. I don’t think most voters in FL would favor this since the whole economy there is basically based on tourism and one oil spill and boom! Wiped out.

However, as noted in the study below, the effect of drilling

The U.S. Energy Information Administration (EIA) recently did a detailed study of the likely outcome of offshore drilling for their Annual Energy Outlook 2007, “Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf (OCS).” The sobering conclusion:

The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.

And the impact of the projected 7% (!) increase in lower-48 oil production that might result in 2030 thanks to opening the OCS is … wait for it …

… any impact on average wellhead prices is expected to be insignificant.

 

 

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