First Impressions on this Offshore Drilling Political Issue

It's interesting that I had no idea that America had a ban on drilling off it's shores.  Must not matter in Alaska because there is a lot of drilling going on up there and in fact there's some major debates going on about where the continental shelves begin and end up there because the Arctic has a lot of oil in it yet to be tapped.  


Now to set the record straight I really do not think that Drilling for oil off of mainland America will tangibly effect the price of gas at the pump, sorry to burst that bubble for anyone who thought otherwise.  I sit on drilling rigs day in and day out and I still pay around $4.00 a gallon.  Vicinity has nothing to do with it, Oil is a commodity that is bought and sold globally because it has value anywhere in the world, and the reason why the price is so high is because of speculation by traders and consumption by emerging superpowers such as China and India which are consuming much more gas than ever before.  

The reason why American politicians, most notably the Republicans are pushing now for drilling to happen off American shores is because THERES A LOT OF MONEY TO BE MADE NOW!  There is a certain threshold where it becomes profitable for an energy company to pursue oil fields in wealthy nations.  You see, rich countries like America and Canada expect a much higher wage than one in Africa or Brazil, they also have stricter environmental and safety standards than poorer nations.  This means that the company cannot drill with old or sub-standard equipment either.  There is a major overhead when it comes to keeping up with environmental and safety regulations, I know this because I'm part of that overhead, and I do pretty well for myself.  What this all means is that when prices are below that threshold it is better to drill in undeveloped nations where the cost of production is lower.  When the price is high it becomes worthwhile to explore near richer nations with higher overhead costs.  

Overall I don't really see why Americans wouldn't want offshore drilling occurring near their country.  Offshore drilling means more jobs and more domestic revenues.  Environmentalism is a concern, but being a developed nation the regulations will be much higher than a third world nation, and since we know that demand is not going down is it not better to have oil companies operating where they have to be more accountable for their actions?

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About Helmsman

Importing a Vox Blog.
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