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Week of August 3, 2008 - August 9, 2008

Does OCS oil belong to us?


"Offshore drilling" is the new "surge".  We have to "drill now" in the Outer Continental Shelf, says McCain, because gas is at $4 a gallon.

Well, shoot:  I would like to pay less for gas, myself.  I don't think that drilling in the OCS will get me cheaper gas, but if most of my fellow citizens disagree, well, that's democracy.  Americans, the teevee says, would accept oil drilling in their own back yards at this point.  What I do not get is this:

Suppose you and your family had geological research showing there's oil under your back yard.  You'd rather not ruin your back yard, but you need the oil.  You have at least two totally different options.
1) Hire a driller.  You pay the up-front costs, but the oil belongs to you.  So does the profit, if prices stay high.
2) Lease your back yard to an oil company.  You actually receive a small payment, up front, but then you have to buy the oil.
If your only goal is to make more oil available on the world market, you should be indifferent between these two approaches.  If your goal is to increase the profits of oil compaines, you will not even consider the first approach.

Why is nobody even talking about 'nationalizing' the OCS?

I get why McCain would never, ever, countenance the idea that off-shore oil belongs to "we the people":  where's the profit in that, for his Hess contributors?  But what's keeping the Democrats mum?

-- TP

Home | September 7, 2008 - September 13, 2008 »

Rethymniotis

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