Update1: Off-Shore Drilling Is Back In the Pictureby Tim Manni
Update1: While the motive behind the president’s proposal to drill for oil off the East Coast and around Alaska may have been part of a larger strategy to pass a sweeping energy and climate bill down the road, rising oil prices may (once again) provide another reason to begin drilling in U.S. waters:
Crude prices inched 25 cents higher to $86.87 a barrel. Prices are up over 5% since last week and over 70% since April 2009. That’s their highest level since Oct. 8, 2008, when crude settled at $88.95.
Click here to continue reading a very-informative, yet easy to understand article from CNNMoney.com; it breaks down why and by how much prices are rising, what the analysts are saying and it gives some indications of what lies ahead.
Original Post (published on 03/31/10): It has been over a year since we last wrote a post on off-shore drilling. While we have been primarily housing and mortgage focused for many months now, I felt our long-time readers — as well as our newer readers — would appreciate an update and some insight into why President Obama has re-introduced this concept.
The president detailed his proposal today to begin drilling for oil and natural gas off the East Coast (from Delaware to central Florida), the eastern Gulf Coast as well as areas around Alaska.
Certainly, the president’s proposal may come as a shock and disappointment to many Democrats, east-coast governors and environmentalists, but the president says there are several reasons why he is taking up the idea:
The proposal is intended to reduce dependence on oil imports, generate revenue from the sale of offshore leases and help win political support for comprehensive energy and climate legislation.
Below is a timeline of the recent events and the discussions in Washington that have led up to and perhaps influenced this latest proposal:
June, 2008: President Bush proposed ending the nearly 30-year-old ban on off-shore drilling to help lower gas prices. After his proposal was rejected, Bush blamed Democrats for stalling efforts to increase oil production.
August 2008: House Speaker Nancy Pelosi proposed incorporating off-shore drilling into an energy bill. Both Pelosi and then Senator and presidential candidate Barack Obama showed a willingness to ease staunch Democratic resistance to expanded offshore drilling in order to compromise and pass a bill on the hot-button topic of energy.
February 2009: The recession is the reason behind the rekindled conversation this time around. Oil executives testified before the House Natural Resources Committee, claiming that off-shore drilling could create an estimated 76,000 jobs.
Click here for a visual representation of where the proposed drilling would take place.
I can certainly understand and sympathize with the arguments for each side of the off-shore-drilling debate. While I can comprehend the motives of those for and against the proposal, it’s essential that we understand just how fruitful this endeavor can be before we move forward.
John Broder of The New York Times writes that, “It is not known how much potential fuel lies in the areas opened to exploration, although according to Interior Department estimates there could be as much as a three-year supply of recoverable oil and more than two years’ worth of natural gas, at current rates of consumption. But those estimates are based on seismic data that is, in some cases, more than 30 years old.”
Readers: Let us know your opinion on off-shore drilling, leave us a comment below. Is a three-year supply of oil even worth it?