Gulf Oil and the Price of Gas
if we started today, it would be two years before we resume Gulf oil drilling
Eric LaMont Gregory
It is often stated that conservation, increased use of renewable energy, and energy efficiency measures would make our dependence on foreign sources of energy, especially oil, simply go away.
It is further claimed that the use of these alternative and efficiency measures would provide cheaper and more reliable sources of energy, and now.
This is the same logic that says because there is one accident related to offshore drilling in the gulf in thirty-one years, there should be a ban on all off shore drilling, full stop.
Perhaps, there are alternative energy sources that do have potential in the near term, and those should be investigated and when evaluated in the clear light of day, and the facts and figures associated with the claims are peer-reviewed, so that a modicum of confidence can be placed in the data offered, the public should have an opportunity to evaluate and decide.
Perhaps, there are drilling operations operating on the frontiers of known science that pose an unacceptable risk, and these should only be granted rights to continue operating when further data supports there ability to be operated safely.
However, to ban all drilling, leaves one to believe that all drilling in the gulf is operating at the frontiers of known science and engineering, and all drilling poses unacceptable risks, and this is not true.
The ability to restart drilling in the Gulf is now complicated by other factors, including federal regulations which prevent wells from pumping oil that have not operated for more than 90 to 120 days. Now in order for these operations to begin again there is a not insignificant set of new regulations, inspections and paperwork to be settled. There is work to be done to ready the wells and drilling operations for inspection and re-start but most of the companies that perform these tasks are no longer in business, bankrupted by the decision to stop all drilling and pumping in the entire Gulf.
Given these circumstances, estimates are that if we started today, which is a big if, it will be two years or more before we begin Gulf oil drilling operations.
One decision by government, will effect our economy for years to come. $3.50 to $4.00 a gallon gasoline prices are not compatible with an economic recovery.
The American people have grown accustomed to rises in the price of oil associated with world events, and there are a lot of events around the world that will effect the price of oil, and it is also common for those in the market to take advantage of market trends to increase their positions in one market or in relation to one commodity or another.
The price of oil reflects a myriad of influences, including which resources are and are not being exploited, and yet in a free enterprise system it thought better to let the market operate than to ban the market because of one mistake.