The Senate voted yes on drilling in ANWR:
The provision would allow oil companies to drill in a coastal plain that covers about 1.5 million acres of the wildlife refuge, which encompasses a total of about 19 million acres in northeastern Alaska. More than 10 billion barrels of crude oil are estimated to lie under the refuge, and President Bush today urged that they be tapped to help ease high fuel prices and reduce U.S. dependence on foreign oil.
Big whoop. Let's suppose drilling in ANWR happens. Will it really reduce U.S. dependence on foreign oil?
Uhh... no?
Think about this for a bit.
Global companies will extract the oil. The oil will be refined at locations that can be any place in the world. It may be refined in the U.S. or it may be refined outside of the U.S. But that still doesn't matter.
The global companies will then send the refined products to where ever the market dictates that it go.
There is no guarantee that the refined product will go to the U.S. for further refining (turning into plastic products) or consumption (fuel).
Thus the opening of ANWR and reducing U.S. dependency on foreign oil can't be determined because the oil will go where the market determines it needs to go.
Some believe that China will be the place that it goes because of the growing demand and the growing economy.
It's more oil on the market, but ANWR doesn't appear to be a big enough reserve to make a difference on the global market.
I'm not saying it's a bad idea to drill in ANWR, I'm just saying people are being given vaporware.
Hat tips: Ramblings Journal
Posted by at March 16, 2005 09:15 PM | TrackBack