So, I'm sitting at yet another traffic light and notice the car in front me has a bumper sticker that says:
"Drill Here. Drill Now. Pay Less."
So, I have to ask the obvious dumbass question: What makes anyone think, for one second, that getting oil in our own backyard will translate into cheaper prices at the pump? What is that idiotic bullshit "logic" based on?
Don't get me wrong, I'm not one of those environmentalist wackos. I’m not chaining myself to the pier to protest drilling off of our shores. Based on the trash I see flying from car windows every day I think most of you aren't either. This has nothing to do with fighting offshore drilling or any of that. It’s really about focusing on understanding the insanity behind making such an enormous leap of rationale.
Bored yet? Try this:
Drop some *OFFICIAL* statistical numbers into a spreadsheet and then make a chart to show the overlapping relationship between each of the series. Include the following series for 2007-2008:
- Unemployment rate
- DJI market numbers
- Housing starts and sales
- GDP vs CPI
- Average gasoline price
Go ahead, I'll wait... (finger's tapping... Hmmm mmmm mmmm...)
Ok, done? Good. Notice anything? Do you see any *consistent* relation between the economic data and the price of gas yet? Exactly my point. Consistency is my point. In fact, take a look at the peak profit points for Exxon-Mobil with respect to the concurrent economy. When we were suffering, the oil companies were posting record profits. And I mean "record".
That’s right. When you and I were shelling out $4.00+ for a gallon of gas at the pumps, Exxon-Mobil posted not just their largest profit ever, they posted the largest profit of ANY COMPANY IN AMERICAN HISTORY. This is all public information. Go find it yourself, like maybe here.
So, getting back to my original point: There is absolutley ZERO historical basis on which to draw a conclusion that oil companies will pass along big savings, hell: ANY savings, to consumers. They will almost certainly pocket the difference as profit and shareholder dividends.
What’ll happen is this:
Like OPEC did when the U.S. tried to jump-start oil production in the Gulf of Mexico: they dropped barrel prices drastically, making it impractical to continue pumping it from the gulf. Anyone who was around in the 1980’s remembers this. Shit, almost everyone in my region who hails from Texas either came here as a result of shutting down the oil rigs down in the Gulf or from being in the military. But in the early 1990’s it was mostly from a downed oil market. As soon as OPEC gets a whiff of U.S. domestic drilling, they’ll drop the price and we’ll run back to mama again. The only wildcard here is offset demand from China, maybe. We’ll see.
They may get to drill, and have a few accidents (oops!? sorry about that) and destroy our beaches, but who cares. We have that dream of cheap gas to keep us happy as we drive past roped-off beach areas and mansions owned by families of big oil companies. It’s what we want, right? I mean, after all, it’s not like oil facilities have ever had any accidents or harmed anything. That’s all fluff. Right?
So, let them drill and suck in some additional “domestic oil” to offset their coffers. But don’t expect to see American gas prices drop as a direct result.