Drilling the outer continental shelf for oil seems on the surface to be a simple, quick-fix approach to alleviating gasoline prices. According to this article from Forbes, it will not be quick and it is certainly not simple.
Both Senator McCain and President Bush this week have called for opening the outer continental shelf to drilling. It may be somewhat disingenuous at this point in the election cycle. It is unlikely that sufficient votes can be garnered to pass any comprehensive energy legislation prior to the election.
If the area was open for drilling, it would be good for the U.S. consumer. In the short-term, we could see a decline in oil prices due to a relaxing of speculative pressure. However, it is unlikely that any decline would be sustainable due to the longer term supply and demand issues faced. The big benefit to the U.S. consumer would be in the revenue generated from such leases. A large portion of it would find its way into government coffers -- either at the federal or state level. The big issue there is how will it be utilized. If it does become a reality, let's hope that it isn't just a new way for government to grow. Let's use it to offset other taxes or possibly to pay down debt. Reducing debt reduces the annual interest bill that we are paying on that debt. Either way, the taxpayer wins.
No comments:
Post a Comment