Dyre Comments on Drilling in ANWR (Updated)

In a good post on the limits of what could be expected from opening the ANWR to oil exploration Dyre42 notes:

The one real benefit of drilling in ANWR would be significantly decreasing the amount of foreign oil we consume thereby decreasing the amount of money we pay to oil producing nations that support terrorism. That alone makes it an idea worth discussing

I don’t think that’s the greatest benefit that would result. Right now futures prices are increasing, i.e. expectations of increased oil production in the future are down. Opening the ANWR to exploration would constitute a powerful signal that could have implications disproportionately greater than the actual amount of oil involved.

The ANWR isn’t the only place we should be looking for more domestic oil. We should be doing more off-shore exploration and drilling. Right now the Cubans are pumping oil closer to our shores than we are in places. Oil fields being what they are that means that they’re pumping oil that we could be pumping ourselves. Somebody’s going to pump it and we might as well be the ones to get the revenues and the benefits.

Don’t get me wrong. I don’t think the federal government should subsidize oil exploration or production. As a general rule I don’t believe in corporate welfare. Regulate it; tax it; use the revenues to ameliorate negative externalities. Don’t ban it.

Update

McClatchy hastens to deny that the Chinese are involved in Cuba’s oil exploration and production:

Why, ask some Republicans, should the United States be thwarted from drilling in its own territory when just 50 miles off the Florida coastline the Chinese government is drilling for oil under Cuban leases?

Yet no one can prove that the Chinese are drilling anywhere off Cuba’s shoreline. The China-Cuba connection is “akin to urban legend,” said Sen. Mel Martinez, a Republican from Florida who opposes drilling off the coast of his state but who backs exploration in ANWR.

“China is not drilling in Cuba’s Gulf of Mexico waters, period,” said Jorge Pinon, an energy fellow with the Center for Hemispheric Policy at the University of Miami and an expert in oil exploration in the Gulf of Mexico. Martinez cited Pinon’s research when he took to the Senate floor Wednesday to set the record straight.

Just for the record I’m not a Republican and I’ve never made the claim that the Chinese are drilling off Cuba’s shoreline. I don’t much care who is drilling in the shared U. S.-Cuban territorial waters. I just think that we are highly imprudent if we don’t do it, too.

9 comments… add one
  • I commented at TMV about Dyre’s post–I think he definitely misses some things.

    CNN and Forbes and Granma and Havana Journal all confirm that Cuba has signed oil deals with the Chinese oil exploration company Sinopec, and that Spain’s Repsol-YPF is leasing their Cuban-exploration equipment from Sinopec. Google Sinopec and Cubapetroleo and you’ll find they reportedly signed their joint-exploration deal for NORTH SHORE off-coast exploration on January 31, 2005. That’s according to Cuba, not the GOP. Whether or not they are actually drilling today, “60 miles off of the Florida coast” (which seems to be measured from Key West, not the coast), I don’t know.

    I would take anything coming out of McClatchy with a bushel of salt. Any news agency that uses the phrase “Truth to Power” in their masthead should be viewed with suspicion. 😉

  • It really doesn’t matter if it’s the Chinese drilling for oil off the coast of Florida. Oil is a commodity after all.

    Incidentally, in recent months there has been a growing sentiment down here in Florida to allow drilling off our coasts. The hurricane seasons of 2004 and 2005 have convinced many people that the oil rigs are reasonably safe after all. Those that are pushing the idea still want the platforms far enough out to sea that they won’t be visable from shore, but this is a rather sudden change. (Note, not everyone down here has changed their minds on this issue. Personally I’m willing to listen to arguments and can be convinced either way.)

  • It’s pretty obvious (to me anyway) that China is mentioned so prominently because they’re easier to demonize in certain spheres than Spain, India, or (horrors!) Canada, all of whom are also exploring those waters under agreements with Cuba.

  • Larry Link

    Who actually has rights to the oil off our coast, in ANWR, the shale oil or anyother oil source located on public lands or territories?

    Could we not as a nation drill, pump, retrieve such resources and by-passing the private sector, If of course, it is deemed necessary to do so?

    Do we actually need the private sector to do this on public lands/territories?

  • PD Shaw Link

    It kind of sounds Dyre42 would like the moral balm of allowing China to purchase oil that the U.S. currently buys from terrorist-supporting countries. Dave likes the symbolic aspects of drilling.

    On the flip side, opponents of drilling in ANWR value the moral and symbolic features of the Wilderness Act — the idea that there are some places in this country to be left undisturbed for future generations.

    In addition many (most?) coastal states have examined the cost/benefits of drilling and have banned it and petitioned the federal government to do the same. They appear to favor the economic (and aesthetic) benefits to property values and tourism. (Michigan has also banned drilling in the Lakes, but I don’t think there is any federal involvement) At what point should the most impacted states get to direct policy?

    I’m left pretty ambivalent about the choices.

  • Who actually has rights to the oil off our coast, in ANWR, the shale oil or anyother oil source located on public lands or territories?

    For the most part, the federal government. In a few cases, state governments. But mostly the feds.

    Could we not as a nation drill, pump, retrieve such resources and by-passing the private sector, If of course, it is deemed necessary to do so?

    Yes, technically–but the private sector has all the infrastructure and expertise and equipment.

    Do we actually need the private sector to do this on public lands/territories?

    See above.

  • In addition many (most?) coastal states have examined the cost/benefits of drilling and have banned it and petitioned the federal government to do the same.

    Generally speaking STATE territorial waters run three nautical miles out from shore, and that’s the limit of the state’s jurisdiction. National territorial waters run twelve nautical miles out, but the “exclusive economic zone” runs two hundred nautical miles out. Both of the latter are under federal control, not state. Once you’re past the three-mile limit, it’s a federal issue.

  • It seems to me that the cost/benefit calculus changes under the situation that exists now in Florida. The Cubans are drilling and they’re drilling rather close to the Florida coast. Whether drilling will go on or not is not within the state’s or the federal government’s control. If there’s some serious problem Florida might well bear the costs and reap none of the benefits.

  • Yep. And the two-hundred-mile EEZ doesn’t apply–the limit there is the halfway point between the US and Cuba.

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