If We Drill in the US, We Don't Get the Oil
One thing has been driving me crazy about this drilling debate -- everyone seems to assume that if we drill for oil in the US, that we will get the oil. And hence, we won't be dependent on foreign oil anymore. But we won't get anything, Exxon-Mobil will.
The oil that comes from that drilling will not be United States property (Republicans aren't suggesting we nationalize the oil companies, are they?). It will be the property of whichever oil company got the rights to that contract. They can then sell it to whoever they like -- and they will. They will sell it on the world market, so the Chinese will have just as much access to the oil that comes out of the coast of Florida as we will.
The Democrats have done a decent job of beating back the argument that this will effect prices in the short run, or even in the long run. But no one has addressed the point above. The Republicans make it seem like we won't be dependent on foreign oil -- and that prices will go down in the US -- if we have our own oil. But it won't be ours. And it will be sold on the world market, so its effect on global oil prices will be even smaller.
When we ask the question of whether there should be drilling off the coast of Florida or in the Arctic National Wildlife Refuge, we should ask the question this way -- would you be comfortable with the Chinese or the Germans or Russians or the Saudis drilling on American land? Because for all intents and purposes, they will be.
Large multi-national firms like Exxon-Mobil are not US property. They sell to the world and their allegiance is to corporate profits. So, when they drill, they drill for the whole world, not just us. Some might find that heart-warming, but it certainly has nothing to do with the US having more oil or lower prices.
Follow Cenk Uygur on Twitter: www.twitter.com/TheYoungTurks
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Why, whatever do you mean? Of course they will give the oil to Americans - they probably won't even charge full price.
They'll decide to forgo the extra profits as part of their "patriotic duty". After all, we've relaxed our laws to allow them to become more profitable, as demonstrated by the recent Supreme Court ruling limiting damages in the Exxon-Valdez case - saving thousands of American jobs (and a cool 4.5 billion for Exxon).
That being said, we have absolutely no right to criticize the oil companies if they do decide to sell the oil overseas. It's like the telecom immunity law - if we politicize the oil profits, the poor little struggling oil companies won't want to do business with the US in the future. Who will we turn to to pump our oil then?
Beautiful Cenk, I love it!
By the way, you were great hosting Meet The Bloggers last week (and Arianna was a cool guest, also looking forward to when Maddow comes on), I can't wait to see this Friday's show: http://mee
THANK YOU !!!!! People (partcularly those who support more drilling) seem to forget that the Oil Companies will be able to do whatever THEY want w/ whatever oil we allow them to drill for. If they want to leave it in the ground... they can do so because it will then be their "private" property. I swear we keep proving just why we are on the low end of the educational totem pole by continually supporting ideas that go AGAINST our own interests. We may as well just say we'll work for free and live off the generosity of big business (although I'm sure someone will think that's a good idea).
Maybe your hoped for new regime can do something like putting restrictions on the leases, allowing us to benefit from the new found oil. But, he will have a real tough time as long as Reid and Pelosi are in charge. You asked for them, and we warned you!
Left On!
PATina- You are mistaken. Federal leases are closely regulated and specifically require production in paying quantities to maintain a lease beyond the primary term. Every operation, every design ,every plan of development or exploration is closely examined and approved by the MMS. We operate subject to possible civil and criminal penalties for violations and operations in the OCS are conducted to a standard that is the best in the world. If we chose to "leave it in the ground" it is because we have either found nothing in the ground that will support development or we are unable using the most modern interpretation tools available to determine the possibility of a geological trap. Oil companies make money by drlg and producing hydrocarbons, we do not buy leases for grins and we certainly couldn't stay in business if we did.
Thanks, Cenk. That tidbit might never have come through my mind.
Just goes to show you that McCain and the right wing never think things out more than two steps when they need to make cheap political points for votes.
Look at this as a business venture...
Why should a citizen of the US that doesn't drive a car be forced to subsidize the people that do? And why should the citizens of the US that drive small cars get smaller subsidies from the US government than the drivers of the largest cars that use the most gas.
Why not just sell the leases in the way designed to get the most money for the US treasury. Every citizen then profits because the government is doing its best to get the most money for the oil that every citizen is part owner of, even the ones that don't drive cars.
It's called the Law. We have been drilling under the Outer Continental Land Act for 60 years. We have drilled over 50,000 wells in the GOM and we have have provided BILLIONS of dollars to the US Treasury. We do not have oil. We have the possibility of hydrocarbons, oil companies have the expertise and wherewithall to withstand the risk associated with finding the oil. When is is found then "we have oil". By then oil companies have spent millions $$ to find the oil then they spend millions more to bring it to market. Uncle Sam takes his cut off the top, takes none of the risk, provides none of the captial and is paid all along the way- it is a pretty sweet deal for the US. There are hundreds of companes that compete for the right to search for oil- its not just Exxon.
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