The Ad: (Narrator) Gas prices -- $4, $5, no end in sight, because some in Washington are still saying no to drilling in America. No to independence from foreign oil. Who can you thank for rising prices at the pump?(transcription of John McCain ad, via the WaPo)
(Chant) Obama! Obama!
(Narrator) One man knows we must now drill more in America and rescue our family budgets. Don't hope for more energy, vote for it. McCain.
Now, John McCain himself has opposed off-shore drilling and some of his Republican gubernatorial friends oppose it, like Arnold Schwarzenegger. It has only been recently that McCain has called for drilling offshore. He still supports a ban on drilling in ANWR.
You've all heard the reasons to debunk this trope: it will take no less than ten years for that oil offshore to reach American consumers, by then gas will be $15 a gallon anyway, and no one will be driving cars, and that means there will be windfall profits for oil...oh. Yea. That.
Hm. Offshore oil exploration, hell, ANY oil exploration, is a near-losing proposition when oil is cheap. You milk, errr, pump, the cash cow you have for all its worth when oil is around $20 a barrel, which means you have shortfalls when prices rise rapidly, as they have over the past ten years.
This is why, in 1998, you actually started to see advertisements on TV from ExxonMobil talking about how hard it is to find new oil, but they'll expend the money now to bring you more in the future. Their long-range forecasts had clearly shown that gas and heating oil prices would start a precipitous climb.
As early as 2001, I recall reading market analysts' reports that showed gasoline selling at $5 a barrel by 2009 (we're close), and $15 a gallon by 2015.
This was back when gas was $2 a gallon and that was consider inflationary. A barrel of oil in 2001 sold for $23 (in 2001 dollars). Now, it's $100 more expensive.
Forget that this is about oil companies continuing an unbroken string of profits that make Donald Trump green with envy. This is Big Oil's last hurrah in the US: "cheap" oil that will be a ready source when oil becomes almost as valuable as silver, ounce for ounce.
In other words, oil will be selling in "precious metal" commodities territory.
Naturally, none of this would help you today, tomorrow, this week, this month, this year, or this lifetime. To suggest otherwise is ludicrous. By the time this oil is extracted and refined, most of us will be riding bicycles to work like the Chinese, who will have our oil anyway!
Not a bad thing, in my opinion, since I just bought this little honey yesterday... :-)
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