U.S. President Barack Obama generated a lot of hubbub with his decision to open up parts of the Atlantic Ocean and Gulf of Mexico to oil drilling.
We've all heard the criticisms that some of the geological surveys are as much as 30 years old, and the arguments that the ecological impact of drilling off the U.S. East Coast isn't worth the accessible oil, which some critics estimate could play out in as little as six months at current demand levels.
But even after more than a day of debate over the motivations for - and possible results from - President Obama's apparent energy policy about-face, one thing is very clear: This announcement has nothing to do with oil.
It's all about the U.S. dollar.
The Greenback Blues
As we've been explaining for several years now, there's a global struggle under way to undermine the U.S. dollar as the world's reserve currency. Because most oil is priced in U.S. dollars, the United States bears no exchange-rate risk when it comes to the country meeting its energy needs. However, thanks to the weak-dollar policy of the U.S. Federal Reserve, oil has become a proxy for stored value - which means that anybody who wants to hedge against the greenback's eventual decline and the $14 trillion in debt we've amassed must own the currency.
That's why, as we suggested at the very onset of the global financial crisis, that countries such as China, Russia, Venezuela and a long list of others have scoured the globe to lock up supplies since this mess first unfolded.
So it only makes sense that Washington would seek ways to boost its own oil holdings. Unfortunately, with all these other global players already having made their moves, the Inside-the-Beltway gang is more than a day late and a dollar short when it comes to staking claims around the world. Not only that, but - with U.S. debt climbing - we can't exactly walk in and strike favorable deals with a world that thinks our currency is a liability at this point.
A Lesson From History
If we look at how the world has changed since the U.S. drilling moratorium was put into effect in the first place decades ago, one thing becomes clear: The drilling ban has become too expensive to keep in place for much longer.
And it's not just because of oil prices, which are destined to rise - by substantial amounts - over time. It also has to do with the opportunity cost of not opening the fields. In fact, everyday we don't open them up increases the risk of a protracted U.S. decline - much like the one that England experienced during the 1900s.
At the end of World War I, England was the most powerful nation on earth, boasting both a solid economy and a healthy currency. Money flowed freely and the pound sterling was the world's chief reserve currency.
By 1939, however, that had all changed. England had spent itself into oblivion and the pound sterling was being abandoned en masse by the international banking community - not to mention by the Crown's own subjects. To prevent a complete breakdown in global markets, the government made it an act of treason to use anything but the pound sterling to settle debts, while simultaneously implementing strict exchange-rate controls designed to prevent an all-out currency collapse.
By the start of the 1970s, Britain was all but bankrupt and unable to sell long-term government bonds, which may be a harbinger of things to come for this country, given our current trajectory.
So what saved Great Britain from oblivion? Many historians attribute this rebirth to the leadership of the dynamic Margaret Thatcher, and the proliferation of "Thatcherism." But the truth is that the catalyst for the United Kingdom's turnabout was the North Sea oil fields, which began pumping in earnest in the latter part of the 1970s - producing a trade surplus that helped engender new support for the pound in international markets.
As global-investing icon Jim Rogers observed when I interviewed him in August 2008: "Even if Mother Teresa had come in [as prime minister] in '79, or Joseph Stalin, or whomever - ... you know, Jimmy Carter, George Bush, whomever - it still would've been great. You give me the largest oil field in the world and I'll show you a good time, too. That's what happened."
I hope you're beginning to see a common thread, here.
I'm not projecting the U.S. economy to undergo a decades-long decline like the one that Britain experienced - though it is entirely possible. What I am saying is that the cracking open of huge-and-captive oil reserves may be a means of preventing such a scenario - or at least slowing it down.
The bottom line, then, is that President Obama's apparently sudden policy reversal has nothing to do with energy security, or even environmental concerns, but is instead an attempt to offset the massive increase in U.S. debt with the only lubricant on the planet capable of offsetting the inflationary friction that the Team Bernanke Fed is creating - oil.
We've been saying for some time that oil prices are destined to head higher. This is just additional proof. Buy it while you can.
[Editor's Note: As this analysis so clearly demonstrates, Money Morning's Keith Fitz-Gerald has a gift. A veteran trader, skilled analyst and noted market tactician, Fitz-Gerald is able to see through the confusing haze of today's quickly changing markets to visualize and understand what the market really holds. This ability to see into the future, predicting looming changes - while also divining the profit opportunities those changes will create - is one of Fitz-Gerald's greatest strengths. It's a big reason that he's a perfect 22 for 22 with his Geiger Index advisory service. If you would like more information about the Geiger Index, please click here.]
News and Related Story Links:
- MSNBC:
Obama backs drilling in Atlantic, Gulf; President's move aimed at reducing reliance on foreign oil. - MSNBC:
The impact of more offshore drilling;It could take years for oil to flow, affect prices at the pump - Money Morning Market Commentary:
China Seeks to Dethrone the Dollar, Transforming the Yuan into the Dominant Global Currency. - Money Morning Market Commentary:
The Dethroning of the U.S. Dollar Will Happen Sooner Than You Think. - InvestorWords.com:
Exchange-Rate Risk. - Money Morning News Analysis:
United States Lifts Oil Drilling Ban to Reduce Foreign Energy Dependence. - Wikipedia:
World War I. - Wikipedia:
The Pound Sterling. - Wikipedia:
North Sea Oil. - Spartacus.Schoolnet:
Margaret Thatcher. - Money Morning Q&A:
Despite the Near-Record Run in U.S. Stocks, Oil, Commodities and China Will be the Long-Term Winners.
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About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.
The decline of "England" — actually, the whole of Britain — wasn't really so evident in the 1900s, it was really something that became clear after the first world war and even more so after the US finally entered the second world war after the attack on Pearl Harbor.
I very much enjoy what Keith writes. But could he please, please be more precise in his use of terminology. Frequently, his articles are peppered with innacuracies. In this case, in just one article, he has referred to "England", "Great Britain" and the "United Kingdom" as if they were all interchangeable. Many non-Brits get confused, but it is inexcusable that an educated man such as Keith not know the difference. Just in case he does not, Great Britain is not actually a state, but merely the aggregation of England, Scotland and Wales but, unlike the term "United Kingdom", does not include Northern Island. George Bush used always to refer to Great Britain but then again that probably says more about him. Since the act of union in 1707, the nation has been known as the United Kingdom, although it is fair to say that the adjective "British" is often losely used to represent the UK, .e.g. for forces or parliament etc.
Obama's effort to seed Electric bullet train networks in Florida and his renewal in interest in Nuclear reactors both support the notions expressed here in and indirect sort of way. Burgeoning Asia demands a larger share of this finite world resource and they bid against the Yankee Dollar with an ever stronger Yuan – even tempting OPEC to "jump ship" and trade in other than U.S.Dollars – running the printing presses in the U.S.A. to support an unsustainable lifestyle and a fiat dollar was not wise and will also bring astounding inflation to the American population – this has already started – gasoline prices at the pumps up again and rising in lock-step with the funny money printers. The U.S.A. is about to convulse in paradigm shift from a foreign liquid fuel based economy to a Nuclear based electric economy and nothing can stop it. France, that "other" Republic had greater foresight and less oil addiction and is now 80% nuclear powered and in survival mode for the oil crunch to come. Germany has worked flat out to reduce oil dependency and is close to a survival level, Denmark has managed to reach the survival level, but America forged on in the old ways -even keeping 'Imperial Measure" and finds herself alone in the world today – no growing Nuclear development, no electric bullet trains, fewer trams, subways and less public transportation, and with a floundering Automotive industry, disintegrating highway infrastructure. Time for "Manhattan Project" style change – a switch from foreign liquid energy based economy to Solar, Wind, Wave, Tidal, Hydro, Geothermal, Nuclear, generated electric based, home sourced economy and massive cultural changes that implies! Even the best efforts of our military cannot change the facts: oil on earth is scarcer, Asian demands are enormous, powerful, and growing exponentially!
Obama has no plans to open up drilling. It will be liitigated for years and he KNOWS this. Meanwhile, he can say he trying his best to reach across that aisle and compromise on his "cap and trade" and other energy proposals.
We have enough oil reserves to bridge us to alternatives. The alternatives are well known. The issue is are we an America who believes in liberty or are we an America destined for tyranny where only those in power do not have to worry where there next gallon of gas is coming from.
And if Obama is worried about the dollar, please explain his previous policies on bailouts and healthcare. I think that Keith is hoping it is about the dollar. Me too – but I seriously doubt it.
Out of everything I have read to this article, this is the most accurate response, bravo for telling the truth. America wouldn't have to rely on foreign oil for it's economy if it had been allowed to develop it's own resources over the years. We are the cause of our own problems. If you want to claim a villian for this situation look no further than our own congress and environmental activitists for the demise of our capabilities to function on our own. How is that hope and change working for everyone?
The other obvious reason for the announcement is politics. Why not sound like a more middle of the road President and support off shore drilling, something that is pure poison to those of the liberal persuasion. What was not announced was an expedited permitting process for any company actually wanting to drill. The EPA is making it harder and harder to drill on land in this country, how quickly do you think they will approve an off shore permit on the East Coast?
Uncle B is right about about the paradigm shift in the USA toward nuclear / renewable electic power but it will take 40 years. Hey – we have built no nuclear reactors in the USA for the last 30 years. All those electric cars we expect will meanwhile run on coal and natural gas powered electricity generating plants. So much of our infrastructure for future power is so far out of phase with nations like France that gave their energy needs serious thought.
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Great article. I was convinced this move was all about greasing the skids with oil drilling proponents so that Cap and Trade vat taxes would go down easier.
Hello, Its true that we should make this transiition to other sources of biofuels and green technology. Our Nation should have been working on this transfer about thirty years ago. Sometimes, they say we don't make changes until we're forced into them. Change is difficult but necessary in order to stay in touch with modern times and the new energy needs of tomorrow. Discoveries such as, CNG, LNG , Clean Coal, Windpower, Solar, Geothermal, Even clean Nuclear with the reduction of nuclear waste. Our Natural resources are there. We need to find was to harness this power and energy in large abundance. Especially, at a time when unemployment is tremendously high in our Country. Being reasonable about the facts is what we need to address. Green Technology not only preserves the environment but enable us to create needed jobs and technology at a time that our Nation needs these vital improvements. Lets urge our Congressmen and women to implement these needed changes and solve two problems with one solution. Creating jobs and restoring our revitalization of our economy as well. Salvation will come by turning over the right stones and implementation of those God given resources. Its no mistake that we've been given this technology especially at this day and time. Remember, This Country was founded by not only our Founding Fathers with the Constitution but "IN GOD WE TRUST". Lets put our trust in God and the Resources he has bestowed upon our Country. We must remove our dependency on oil, especially foreign oil. Remaining in the perspective we've been following not only makes us weak but is transfering an incredible amount of our Nations wealth abroad. Lets recapture our economy and utilize this new lift on the ban for offshore drilling to give us the necessary time to make this needed transition to cleaner, greener energy and job creation. Sincerely, Dean Nelson.
Every 'green' tech you've mentioned has been around for quite some time … they have proven to less economical than fossil fuels, period end of story. 'Transitioning 30 years' ago exposes a grand naivete on your part … 30 years ago fields were still being discovered, as they are today, with new technologies and techniques there is still a lot of fossil fuel available. Tech wasn't any where near where it is right now. You didn't have micro-chip controlled systems as you do now, or software as you do now. Old fields are being re-tapped with horizontal drilling techniques and computer modelling of underground sub-strates, didn't exist 30 years ago. The only sensible solution is an 'all of the above' approach … there is no single magic bullet as the ECO whack-jobs would have you believe. Ever notice how the ECOs are all academics, never had a real job, never been an engineer, never solved a problem, just real good at officially 'bitching'. Everything you mentioned is already in use, and btw: you forgot HYDRO … a huge percentage of the electric grid in the U.S. is Hydro driven as compared to other nations. The only thing stopping the 'greening' of America is in fact the very environmentalists who purport to be so damn concerned, hence they 'rail' against nuclear for 40 years, then all of a sudden nuclear become 'fashionable' because the far-left prez wants it suddenly … I've been screaming for nuclear for 25 years or more. Solar WILL eventually be a god-send when the cost of solar panels comes down some more, and power can actually be fed into the grid from each and every building, but that will take time. If everyone would get off their damn high-horse and stop demonizing one energy while falling in love with another, we'd make more progress.
Where are we?:
Ethanol – total fraud, govt. supported, meaningless should go away.
Wind – We already have wind, just go to Palm Springs and look at the ugly on the way.
Hydro – got it, use it, no one talks about it.
GeoThermal – pipedream … very limited use.
Solar – massive potential, we need a cheap consumer system, self-installable, no 'crats
Nuclear – THIS IS WHAT WE SHOULD HAVE STARTED 30 YEARS AGO.
Transmission – reducing loss via transmission, this has gotten little attention.
CNG/LNG – Seems like this could be used WAY more in public vehicles and fleets.
OIL – we should drill our own and stop purchasing from enemies of the nation
Keith,
I read and respect your views but . . .
Like every American, you have been exposed all your life to Hollywood-hypocrisy, propaganda that is the more powerful for being a facet of your culture rather than government deceit. This carefully avoids mentioning that the America HAD to intervene in both world wars, or face alone a Eurasia – not just Europe – dominated by a militaristic Germany. You fought to the last pound, franc, Tommy and poilu before you entered the fray, then squeezed Britain bloodless in the aftermaths while, demonstrably deliberately, undermining our empire. I'm not saying you were wrong – global politics is rough and ruthless – but you'll wait forever for my approbation.
This matters here because the Pax Britannica didn't collapse, it was subverted. And the same is becoming ever more true of the Pax Americana. The US, Washington especially, has long been full of self-serving, short-sighted idiots, but they didn't, they couldn't, destroy your dominance by themselves. You had to have an enemy, once the Soviet Union, now China.
Don't expect help, not unless China is helped more, the only moves that can confidently be predicted are those that shift the balance in its favour. Rather, expect your weaknesses to be exploited, your reliance on imported oil – Obama is right to try to reduce this – and even more the insane profligacy that is reflected in your astronomic deficits and debts.
It may be true that Obama has made a good decision to open these areas up for oil exploration, but we shouldn't give anyone too much credit for a decision that is ten years too late and not enough to make a difference. It will take at least a decade before a drop of oil is produced. There will be a bidding process for the leases, exploration to identify the best prospects, exploratory drilling and finally building production facilities and producing oil. Ten years minimum.
If this decision was for oil, why not open up the whole country; Alaska, the northern California coast, etc. Unfortunately, this decision was made for entire political reasons to get enough votes to pass another huge economy killer and tax increase — the cap and trade bill.
You are correct in noting the real issue of the dollar as a reserve currency. Nothing ever changes until it has to because a lot of interests are very happy with things the way they are. When the oil producers start to demand payment in gold, not paper dollars, you'll see the world change.
Without flowering, the scenario plays out like this. The U.S. is a disintegrating on several levels. Financially, there isn't a country on earth that trusts the U.S. dollar, and they are right to think so. The most dangerous mechanical devise in the U.S. is not military in nature, it is the gov't printing press. The members of Congress are simply too dumb to act in our interests. Power, and maintaining that power are all that their small brains have room for.
The pride of liberalism, the Great Society. also known as Multiculturalism, has created dozens of societies within a society, each more intent on maintaining their identity than joining the One.
Politically, loyalty to party has overshadowed and almost obliterated loyalty to country.
I was always a kind of "glass is half full" guy, but I have news to share, the glass is nearly empty, and within my generation (I'm 65),and certainly within my children's, the glass will be empty.
If you're not thinking "Peak Oil" in everything you do by now, then you aren't paying attention to what makes our country go, and what makes us able to project operations in the future.
Creating bailouts and other debt-based government programs sounds great if you drive by looking out the back window of your car, but planning to pay off those debts requires lots of energy and production and activity, which is declining because people can't afford to buy both gas and 'stuff' to fill up their expanding houses and waistlines.
Food is going to be the new currency before those debts are paid with an oil-based economy.
"Alternative" energy is a drop of sweat on a hot sidewalk. Nuclear power takes as much oil to build as it produces in electricity (exaggeration license applied here).
Our food takes 10 calories for every one we eat (and then some-not exaggerating). Obama was up against the Peak Oil wall before he was sworn in.
While currency plays into this, this is fundamentally the oil age end game. Drilling will be only a drop in the bucket toward our energy needs, the US is almost 40 years past domestic peak production. Offshore oil will likely give us less than one years worth of domestic oil consumption.
Someone in the US government has finally woken up to the situation "in the ground" the graph above shows a huge widening gap in supply vs. demand. Obama is pulling out all the stops trying to fill it. Contrary to GOP propaganda domestic oil production can never come close to filling the gap, but every bit counts. Most will have to be made up with electric cars, mass transit, etc. Unlike oil we have many domestic options for electricity production, natural gas, wind, solar, hydro, nuclear, (sadly coal), etc. luckily lithium battery technology has advanced rapidly as have solar and wind.
Due to ignoring the problem so long, we will be buying our solar cells, wind mills, rail vehicles and electric cars from over seas. Europe was producing utility scale wind mills while our money was going toward producing SUVs, Hummers and empty homes for "investors" to flip in a game of financial hot potato. Sadly while everyone was "rich" from temporary home value wealth, the true wealth of our country was shipped overseas. Try to find a made in America stamp on anything at all any more. Personally I welcome a weak dollar, it will speed our switch off of petroleum and bring back domestic production of goods. A strong dollar and artificially weak Yuan has been our undoing.
My money is where my mouth is, I'm heavily invested in alternative energy stocks. They are still cheap, just as with the housing bubble, the oil situation will be ignored by the media until it simply cannot be ($6/gallon gas). At that point I expect to see a great return on my investment.
Madame Thatcher was indeed lucky to get the oil in the right moment, But now it is on the decline and will the Brits have yet another bullet in the gun ? Hopefully so. But how about a change of mind and elbow grease?
But lady Thatcher did indeed clean up a lot of Union dominance, that made English industry sail the seven seas to its own destruction and she deserves a favorable comment here. Take the car industry for example. British cars became completely unreliable thanks to the socialists, who always demands but rarely delivers, and after having had infinite problems with a Morris 850 mini and a Jaguar S type, I swore, that I would never ever invest in British industry products again. And Gandhi simply undermined them with a primitive spinning wheel.
Obama has been in perpetual campaign mode ever since he emerged in the body politic. I wouldn't credit his administration with any deep thought economic strategy behind the move to open offshore drilling in the US. Rather I would believe that it is simply a political move to garner more support from the middle in this election year.
Some people just refuse to be happy or acknowledge when someone does something right.
During his campaign, the President stated we needed find a balance between energy sources as we continue to transition from a heavy reliance on fossil fuels to something “different” in the future. This phased transition will take decades and needs to be comprehensive. The process will require compromise on everyone’s part.
That was a very realistic approach and it’s one he is following through on. Give the man his due!
It’s not politics, it’s not saying one thing and doing something different – it’s an incremental and pragmatic step in the process. BUT it’s still a step in the most appropriate direction of balancing short term needs and demand with long term demand and transitioning energy sources.
Regarding "Presidential-Easing" for offshore oil exploration, I can't believe that this necessarily makes any sense! FIRST: With all the years that US companies (primarily, Exxon Mobile) have been scowering the globe for oil, and the further fact that "EM" is a leader in deep sea recovery, it seems to me (not an "insider") that it must have engaged in numerous "Cap & Save" activities regarding same. More explicitly, US companies, such as "EM"(or EXX) and our oil industry seemingly would have been wiser to access the easiest/larger oil supply first (such as Mideastern or Saudi) and save the remaining supplies for later. On the other hand, this risks that such oil will be significantly replaced by other energy sources, to include nuclear,solar and natural gas! With recent giant strides being realized with the U.S. Bakken (oil) and Eastcoast (natural gas) sources, one can only speculate why easing offshore oil access for continental US is even being promoted!
Right on. obama drilling is only a political sales pitch, and he's surely aware that it is20 years
late, and can (and will) be stalled by EPA. We KNOW where it is, it was studied years ago, now
he wants to "study" it. B S — It does one thing – indicates to the rest of the world that we're
getting tired of squandering a billion dollars a month on oil to support the terrorist nations.
He hopes it will boster the declining dollar (doubtful, but a nice idea) -Re the declining oil –
Ii've been in science, and oil for most of my 90 years, -and since 1908 our govt has reported
we're running out of it in 10 years.- – Question – WHAT IS ITS SOURCE?? how can say we're
srunning out when we dont understand its source?? Sure, it is deeper and more expensive, -why
are the tar-balls from 6 miles deep in the rim of fire area,- all hydrocarbons. Why are we
finding pressures and temperathres as theyare at 33,000 feet deep in the gulf. I begin to
suspect that the new theory about the source will uitimately be found in the magma
please lets vote out the bolshevick agenda out of the government next elections.
Perhaps no one is aware of the breakthrough from the University of Texas where they have a process to convert coal to oil that may be as cheap as $30 a barrel.
Larry, I hate to rain on your parade but the oil reserves in the USA are some of the largest in the world. Our bonehead government just won't allow development. The oil embargo during the Carter administration should have been a wakeup call to become energy independent but someone in this country just ain't going to let that happen.
Keith makes a sound argument. It's not about the oil.
For me all the above is excellent. i hope we can wean ourselves before we have it done to us. We need to break this type of drug habit. There will be some, or even many out of work. The change from oil to nuclear will at least keep some employed.
As for this being Obama in campaign mode, he is in continual campaign mode. Yesterday, I saw his speech. The camera was 100% on him. There were no shots that panned the crowd. Someone supposedly called from off camera. We never saw that person.
I don't think there were any more people than what we were allowed to see. I think this is how he is. It is too artificial for me.
Obama and USA have to act fast for obvious reasons. They are no more in control of supplies of Middle Eastern oil, or for that matter any oil from any source. Whatever accessible oil that is left outside of USA will go to the highest bidder. Americans have been used to cheap oil and gas for far too long. In days gone by, when your currency could stand up to muster in the international arena, you could cherry pick whom and how you want to buy your oil from. But your credit is eroding. Your mountainous bills are unpaid. And you are relentlessly incurring even more debt by the second. Your burgeoning health care costs lend no increase to your productivity, but drives you further down into the quagmire. Like the writer correctly surmised, the North Sea oil gave UK a fresh lease of life (albeit not for long because the Brits never learned their lessons), hopefully, USA may still have a second chance at getting a once great nation resuscitated if they can really find oil within their own territories and know how to put their budgetory house in order..
Twentyfive or so years and 1/2 Trillion dollars since the Dept. of Energy was created with the goal of getting America off the oil dependency, and we are not any further ahead. My tax money at work….again.
Dissolve the DOE, and lets give grants to private industry to get us independent from foreign influence. In the mean time, we have oil on our own land, protected by environmentalists; it is time that ends. Oh yeah, there is gas, coal, and shale too. Lets make the technology to burn them all cleanly while we work on nuclear power and other alternatives.
Better yet, give them a "sundown incentive." Get us free of foreign imports or lose your job in three years. Dissolve the entire DOE as ineffective if they can't meet their mandate after over 30 years.
Ken Davies mentions another American self-delusion, that 'the US finally entered the second world war after the attack on Pearl Harbor'.
You didn't. WW2 is recognised as the struggle against the Axis powers, Japan certainly but, also, mainly and critically, against Nazi Germany.
Hitler (insanely!) declared war on America on 11 December 1941; Congress did no more than reciprocrate; if he hadn't . . . why fight a war you had been avoiding with one nation because another, ten thousand miles distant from it, had attacked you?
ROYAL POLICY SCREW-UP IN SACRAMENTO, CALIF.
Sounds good, superficially. Remember, Obama is largely about "show and tell", not do and execute. While his domestic oil development policy reversal is a step in the right direction, he still has a ways to go. Problem is the ENTIRE WEST COAST is still off limits to any new drilling or oil exploration, as far as I know. The immediate coastal area off the Santa Barbara coast is a prime example of how much the state, and country, is missing out on.
When I was a kid, you could walk on the beach there and elsewhere in Southern Calif. and get gobs of oil tar on your feet. You had to rub it off with acetone or paint thinner. Oil was oozing out of the ocean floor back then, so it is plentiful and relatively economical to extract. Even so, the moratorium remains in effect off the entire West (Left) coast.
Keep in mind California is still deep in red ink, as the economy has not turned around this year (unemployment remains a stubborn 12.5%- currently the highest in the U.S.A.) Bill O'Reilly keeps saying "California is Bankrupt". All the state government (legislature) has to do is liquidate some oil resources and use it to pay down debt, like Alaska does with its annual royality payments to residents). In addition, they might consider legalizing POT and start to tax it.
Wouldn't we benefit more by using natural gas for our Government fleet and then convert the civilian automobile fleet to run on natural gas and gasoline in the next 10 years. We have a hundred plus year supply of natural gas in the union. This would cut our dependence by on foreign oil.
Keith's article just scratches the surface. For starters, Obama has allowed drilling on only a very limited amount of offshore waters. He ignores Alaska, West Coast and even most of the East Coast. So this is no real commitment to drilling, is it? Without a doubt environmental groups will sue, making this moot anyway. The real tragedy here is that there is NO U.S. government strategy to make us energy self-sufficient. The solar, wind and geo credits have not changed since the previous administration. There is only a token movement toward nuclear; no movement for the plentiful and cleaner LNG. Having a headline a week to make it appear that we are moving in the right direction is absurd. We need a comprehensive energy plan… we don't have one and with the political mess in Washington, we will not get one any time soon.
Natural gas, in the civilian fleet, is the only answer.Would someone please tell the U.S.Senate. Oh, I forgot Then, they could only afford three or four houses.
EDUCATION (or lack of it) is one of the main problems. If the majority would be better informed, there would be better people in the congress. If there would be more people in the congress who are interested in being AMERICANS instead of Democrats and Republicans we would be in better shape. As long as the Oil companies, the big banks and the SUPER RICH have nothing in mind but the bottom line, there will be no changes. This is not just an American problem, this is world wide. Governments don't run their countries, the decisions which are money related (which is just about everything) is being done by a bunch of Internationals who's name one does not see advertised. This observation is oversimplified, but in general hits the nail right on the head.
W.