Kevin Hassett has an interesting take on the recent announcement by President Obama that his administration would promote more offshore drilling in an effort to gain our energy independence: Poppycock. “We will never get energy policy right if our leaders continue to traffic in such silly misconceptions,” Hassett writes.
He points out firstly that no one ever talks about independence from other products like automobiles or bottled water.
Then he destroys the arguments for domestic drilling like fluctuating prices (if we find oil here the global price of oil will still fluctuate), and a possible embargo (doesn’t that mean we should be stockpiling as much foreign oil now as possible?). And he doesn’t think much of those who argue that “bad” governments make money off of our oil purchases, because he says if we don’t buy it someone else will.
He concludes that it serves us well to know why Obama favors drilling at this time and recognize the pluses and minuses: “This doesn’t mean that Obama’s idea to allow drilling offshore is necessarily a bad idea. But the benefits and costs need to be weighed rationally. The benefit is that an oil discovery increases our collective wealth, which is a good thing. Once we know that we have a proven reserve, we can choose to let it appreciate in the ground, or tap it and generate current income. In either case, we are better off.” But that benefit, he adds, “must be weighed against the costs, the biggest of which is environmental.”