Steve G.

Press Release: Christopher Cole on effect of future oil supply on current gas prices

In Libertarian on August 4, 2008 at 10:17 am

From the campaign of Christopher Cole, Libertarian nominee for US Senate

Elizabth Dole recently changed her position on offshore drilling. In response Democrat Kay Hagan complains that production from new fields offshore or in ANWR won’t come in to the market for approximately ten years. Dole was right in changing her position, and Hagan is right about the time lag for new gasoline at the pump.

But where Hagan is wrong and Dole is silent is about the impact of such a policy change on CURRENT prices at the gas pump. Only Libertarian Christopher Cole explains how that FUTURE production can
lower CURRENT prices, prices which are dragging down our economy and strangling the family budget.

What Hagan ignores is the role of expected FUTURE supply on current price. Due to OPEC intransigence and possible interruptions due to Bush policy against Iran, speculators fear interruptions to oil supply for years to come. They have therefore bid up prices on present shipments, in order to assure their future inventory. With that future supply assured by increased access at home, that price pressure will be removed, resulting in immediate easing of pump prices.

Cole supports open access to offshore oil and natural gas deposits, as well as those under federal lands, such as the Alaska National Wildlife Reserve. Not only would that assure future oil supply, but
it will provide economic growth and high-wage jobs in such regions as North Carolina’s coastal plain. Cole also disputes the alarmist response of some on the left who complain of ecological risks,
pointing out that major spills, such as the Exxon Valdez in Alaska, have always come from tankers, not rigs or modern land-based pumps.

For further information, Cole recommends this article from the Ludwig von Mises Institute, a free-market economics think tank, based at Auburn University:

Christopher Cole
Libertarian nominee, US Senate
Huntersville, NC

“The left has a massive agenda for the state at home, and yet complains bitterly, with shock and dismay, that the same tools are used to start wars and build imperial structures abroad. The right claims to want to restrain government at home (at least in some ways) while whooping it up for war and global reconstruction abroad.”
— Llewellyn Rockwell

  1. Someone else may wish to check me on this, but as I recall there was a major spill, or blowout on a rig off Santa Barbara, California in 1968 or 1969. That lead to the enactment of legislation to close off shore drilling in a number of places. Shortly after that the industry used what is known as a blowout preventer to avoid such problems.


  2. Agreed Mike, there was a problem off the CA coast in the late 60’s – however that was relatively early in the history of offshore drilling and they were pushing the technology limits of the day while working in a seismically unstable area (I’ve heard there were some earthquake issues that contributed to the spill…)

    The technology has improved tremendously since then, and I believe the claim of few or no spills from platforms in modern days is accurate.

    Incidentally it is quite possible to drill in eco-sensitive areas and wildlife preserves without having a significant impact… If you look at the Louisiana coast you will see one of the worlds largest privately own nature preserves, the Audobon Society’s “Rainey Wildlife Sanctuary”, which at approximately 30,000 acres covers essentially the area where the Achafalaya basin drains into the Gulf of Mexico… This area is home to several endangered species, including the Whooping Crane, and is a major winter migration stopping point for many birds.

    What the eco-nazi’s don’t want to talk about, is that one of the major oil companies (IIRC, it’s Shell) owns the extraction rights to the sanctuary, and has at least 37 producing wells in it, with the royalties from that production being a MAJOR source of income for the Audobon Soc…. By negotiation, the oil company has done special efforts to minimize their impact, such as more bridges on their roadways so as not to restrict water flow, better containment dikes around the wells, and super muffled generator sheds to minimize noise… Everybody seems happy, including the scientists that get easier access to the interior of the sanctuary by using the oil company roads…

    Another instance of human activity having minimal impact on nature is Cape Canaveral – the space center is in the middle of a major nature reserve (the gators and snakes do help discourage tresspassers… 😉 ) that is home to many critters including several families of Bald Eagles – who don’t seem the least bit upset by rocket launches…


  3. @ Arthur Torrey – “Econazi?”

    Do you honestly believe that using a Limbaugh ad hominem adds credence to a post on a libertarian blog? If it does, then libertarianism has truly advanced into the mainstream with the acquisition of adherents incapable of thinking for themselves. A broad brush can be used to paint in both directions…dittohead.

    The Greenies are not “Nazis”; just as George Bush is not “Hitler”, nor are radical Islamicists “Fascists”. These derogations are ignorant, polarising, and an insult to anyone who fought, was injured or died in WWII.

    With your use of Santa Barbara as an example, I am wondering if you live in in the county, or even in California. If you do not, are you not attempting to coerce your politics upon a foreign locale illegitimately?

    As to the original post; it represents a very ill-informed free-market argument. What was behind the spike in oil prices was not any real or even perceived current shortages in the supply. It was instead largely caused by a belief in the futures market that the burgeoning Asian economies, most specifically China and India, would remain so ravenous for extra oil, and so strong, that the market would bear the added costs. That bubble’s ceiling seems to presently be at about $140/bbl.

    As to drilling for oil in coastal waters: no matter how one feels about public ownership of property, the fact remains that oil rights within a state’s coastal waters are indeed public property, and should not just be given away freely, nor should the Federal government be able to dictate whether or not this property is divested by individual states. In the first case, it is dereliction of responsibility to not assure that the transfer of ownership from the people at large to a collectivist business entity returns the highest possible revenue for the public treasury. In the latter, it is an illegitimate Federal overreach.

    There is an underlying belief in this thread, that California’s coastal areas would be best developed economically with leasing oil drilling rights to corporations. Many Californians disagree, and point to evidence that places the current value of their coast as an economic engine which adds tens of billions into their economy annually, with undeveloped oil reserves, as tourist destinations.

    Some assert that a Santa Barbara oil spill event cannot occur again, and they may be right about that, but history has shown, time and time again, that corporations will not allow themselves to be held fully accountable for the environmental damages their business activities cause on public lands. It is cheaper for them to use astro-turf think-tank shills and to pocket federal politicians. Bring the market fully to bear upon the potential corporate liabilities that should rightfully flow as cause from their actions, and much of the resistance to coastal drilling will disappear.

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