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Oil Spills and Oil Nonsense

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Sunday, 02 May 2010 07:19

In discussing the oil spill off the coast of Loiusiana the NYT told readers: "the country needs the oil — and the jobs." The basis for this assertion is not clear.

What is presumably at issue is the prospect of further drilling in currently protected areas. According to the Energy Information Agency, the potential yield from these areas is in the range of 200,000 barrels a day. This is equal to about 1 percent of U.S. oil consumption and around 0.2 percent of world oil consumption.

This amount of oil would have no notable impact on U.S. energy independence. (Actually, in a world where we can freely buy oil on world markets, from the standpoint of concerns about energy indepedence, it would make more sense to leave the oil in the ground so that it can be used if we actually are cut off from world markets.)

This amount of oil would have a trivial impact on oil prices, meaning that no one will notice a lower price at the pump because we open these areas to oil drilling. The jobs created directly by the drilling would also be trivial and would be dwarfed by a few days' job growth in a healthy economy. (The jobs would only come years down the road, since much exploration would have to precede major drilling.)

So, there is no apparent basis for the NYT's assertion about the need for drilling.

Comments (12)Add Comment
Why do so many people want to use up all our oil first?
written by jm, May 02, 2010 9:07
"... it would make more sense to leave the oil in the ground so that it can be used if we actually are cut off from world markets"

Exactly.

That so few people can see this is seriously disconcerting evidence of the stupidity of the populace.
...
written by izzatzo, May 02, 2010 9:53
Take a spill chill pill, enviro mob activists,
Robbing jobs of oil, by eco terro hacktivists.

Embargo that, boycott this,
Trade with the terrorists is a socialist fist.

We're Independocrats, of the highest order,
A North Korean solution, make it all yourself.

Food, clothing, shelter, not to mention health,
Trickled up with oil from toil,
Off the Continental Shelf.
...
written by diesel, May 02, 2010 1:13
Fragments of one of Plato's heretofore unpublished manuscripts has come to light.

Palin "Don't you know that some economies are ruled by an agricultural, some by a manufacturing, and some by an energy elite?"

Socrates "Of course."

Palin "And each makes laws to its own advantage...and they declare what they have made to be economic commonsense to their subjects, and they punish anyone who goes against this as clueless and unprofitable. This, then, is what I say economic commonsense is, the same in all nations, the advantage of the ruling economic elite. Since the established economic elite is surely stronger, anyone who reasons correctly will conclude that economic commonsense is the same everywhere, namely, the advantage of the stronger."

Socrates "Now I see what you mean. Whether it's true or not, I'll try to find out....I agree that economic commonsense is some kind of advantage, but you add that it's of the stronger. I don't know about that. We'll have to look into it."

Palin "Go ahead and look."

Socrates "We will. Tell me, don't you also say that it is economic commonsense to permit offshore drilling through laws passed by Congress in response to oil corporate lobbying?"

Palin "I do."

S "And are Congressmen infallible, or are they liable to error, as when, for example, offshore drilling has catastrophic unintended consequences?"

P "No doubt they are liable to error."

S When they undertake to make laws, therefore, they make some correctly, others incorrectly?

P I suppose so.

S And a law is correct if it prescribes what is to the oil corporations' own advantage and incorrect if it prescribes what is to their disadvantage? Is that what you mean?

P It is.

S And whatever laws Congress makes must be obeyed by their subjects and this is economic commonsense?

P Of course

S Then, according to your account, it is economic commonsense to do not only what is to the advantage of the oil companies, but also the opposite, what is not to their advantage.

P What are you saying?

S The same as you. By not having anticipated the disastrous effects of an accident, Congress has erred in enabling an oil company to act in a manner disadvantageous to itself, exposing itself to lawsuits and loss of reputation. It follows that your notion "economic commonsense is the same everywhere, namely, the advantage of the stronger" is mistaken.

P Huh?

...
written by vorpal, May 02, 2010 3:43
Sophmoric. Yet another egomaniac journalist that thinks he knows a subject in which he demonstrates complete ignorance.

Then again, he has a deadline to make and learning takes time, ignorance is instantaneous.

...
written by Queen of Sheba, May 02, 2010 5:20
There has to be some reason that these newspapers are not spending a few paragraphs worth of ink in educating, instead of indoctrinating, their readers. It would take less space in the paper to explain what Dean just did, the way Dean just did, than to write a wholly disingenuous article pushing a particular point of view.

NYT readers are not stupid - they're ignorant. They are called upon by public discourse to reach an opinion regarding a subject with which they have limited knowledge (e.g., oil markets), but no one bothers to educate them enough about the subject so that they are able to reach a coherent viewpoint. So why not spend a few paragraphs explaining and educating?

Can the NYT actually make a profit by keeping their readers ignorant?
Enough already
written by bob fisher, May 03, 2010 11:20
This spill should dispoil the idea that the only way to energy independence it to "drill-baby-drill." It is like we are on the wrong end of a CDS: BP pays a small fee to drill off our coast and we get to bear the environmaental cost of their 6-sigma event. And the real irony is that we are still buying oil from a non-US company; why are we calling this domestic oil production? Maybe it is time to rethink the benefits of oil spills in the Middle East.
What few jobs may not even be American jobs
written by Melissa, May 03, 2010 5:29
What paltry few jobs are created may not even be American jobs. I have a cousin-in-law who is Indian (South Asian) who works for one of the big intl oil companies (visa, not green card) and he works in Texas right now, but a few years ago, he was one of those guys on one of those off-shore rigs just like the one that's leaking. Try getting Congress to pay a law saying that all workers involved in the new offshore drilling must be US citizens, and see how that goes.
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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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