What Happened to the Offshore Drilling Debate?
With the BP oil rig disaster in the gulf and the introduction of new hybrid and electric cars from major manufacturers, the cries for more U.S. offshore drilling have quieted.
The next two years will be an interesting time for the oil industry in the United States and for American consumers in general. We're at the very infancy of a shift away from a massive dependence on gasoline at the consumer level - and we're probably about a decade away from seeing any real impact on the industry as a whole. But everyone knows what's coming, except perhaps most American consumers, so it should be a pretty wild ride.
With the BP oil disaster now a rapidly fading memory - except of course for those who are still dealing with its impact - it would stand to reason that the folks who had been pushing so hard for more offshore drilling would be ready to jump back on that horse. But a funny thing has been happening recently. Oil and gas prices have been slowly and steadily making their climb back up to around $3 per gallon at most U.S. pumps. The clamor from the media and elected officials has been minimal, if they've said anything at all.
Several major automotive manufacturers, including General Motors and Nissan, are going to be introducing all-electric or plug-in hybrid models in the coming months and they will probably bring huge demand from consumers. With various tax incentives and a public perception that gas prices have nowhere to go but up, people are going to be waiting in line to buy Volt's and Leaf's, in much the same way that the Toyota Prius became such a huge seller a few years ago. But the difference now is that we're talking about the potential for a much greater shift in terms of gasoline demand at the level of the American consumer. An owner of an all-electric vehicle is going to decrease his or her dependence on gas nearly 100% - in terms of gas used for transportation, not to heat a home, produce the plastics they buy, etc. This is strictly an automotive-based rant.
As these vehicles begin to take hold - and it's safe to assume that they'll be in demand even beyond the demographics for which they were originally envisioned - we'll see that, regardless of the world economic climate, gas prices at the pump are going to stay high. One of the determinations made during the last run-up in gas prices a few years ago was that people are going to continue to buy gas, almost regardless of the price they have to pay at the pump. Moving the cost per gallon to $3, $4 or even $5 is probably not going to slow down consumption a significant amount. The fact of the matter is that people in the U.S. "must" drive in order for them to get to and from work, maintain their social lives, etc. They'll make sacrifices in other areas to ensure that they can fill their tank.
At a certain level, sure, people will make adjustments. They will carpool. They will find ways of incorporating public transportation into their commute. But given the suburban sprawl landscape of much of the U.S., there is very little infrastructure in place that can provide a level of transportation that would eliminate the need for a personal automobile for "most" people. But with the lingering taste of the BP debacle and the new technologies on the horizon, I think we're going to hear very little about the need to produce more oil and gas domestically. I think, as has been debated for years, we're going to a much more earnest focus on the technologies that will free us from our reliance on foreign oil and gas. Of course, the powers that be are going to have to develop new ways of controlling the masses and ensuring their reliance on "something" of limited quantity that is controlled by the ruling classes of the world. They probably already know what that "something" is and we'll all find out in due time. But for now, the silence surrounding the need to drill offshore for domestic oil tells me that we're moving in a new direction - even if no one is really talking about it yet.
With the BP oil disaster now a rapidly fading memory - except of course for those who are still dealing with its impact - it would stand to reason that the folks who had been pushing so hard for more offshore drilling would be ready to jump back on that horse. But a funny thing has been happening recently. Oil and gas prices have been slowly and steadily making their climb back up to around $3 per gallon at most U.S. pumps. The clamor from the media and elected officials has been minimal, if they've said anything at all.
Several major automotive manufacturers, including General Motors and Nissan, are going to be introducing all-electric or plug-in hybrid models in the coming months and they will probably bring huge demand from consumers. With various tax incentives and a public perception that gas prices have nowhere to go but up, people are going to be waiting in line to buy Volt's and Leaf's, in much the same way that the Toyota Prius became such a huge seller a few years ago. But the difference now is that we're talking about the potential for a much greater shift in terms of gasoline demand at the level of the American consumer. An owner of an all-electric vehicle is going to decrease his or her dependence on gas nearly 100% - in terms of gas used for transportation, not to heat a home, produce the plastics they buy, etc. This is strictly an automotive-based rant.
As these vehicles begin to take hold - and it's safe to assume that they'll be in demand even beyond the demographics for which they were originally envisioned - we'll see that, regardless of the world economic climate, gas prices at the pump are going to stay high. One of the determinations made during the last run-up in gas prices a few years ago was that people are going to continue to buy gas, almost regardless of the price they have to pay at the pump. Moving the cost per gallon to $3, $4 or even $5 is probably not going to slow down consumption a significant amount. The fact of the matter is that people in the U.S. "must" drive in order for them to get to and from work, maintain their social lives, etc. They'll make sacrifices in other areas to ensure that they can fill their tank.
At a certain level, sure, people will make adjustments. They will carpool. They will find ways of incorporating public transportation into their commute. But given the suburban sprawl landscape of much of the U.S., there is very little infrastructure in place that can provide a level of transportation that would eliminate the need for a personal automobile for "most" people. But with the lingering taste of the BP debacle and the new technologies on the horizon, I think we're going to hear very little about the need to produce more oil and gas domestically. I think, as has been debated for years, we're going to a much more earnest focus on the technologies that will free us from our reliance on foreign oil and gas. Of course, the powers that be are going to have to develop new ways of controlling the masses and ensuring their reliance on "something" of limited quantity that is controlled by the ruling classes of the world. They probably already know what that "something" is and we'll all find out in due time. But for now, the silence surrounding the need to drill offshore for domestic oil tells me that we're moving in a new direction - even if no one is really talking about it yet.
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