Will drilling offshore in Florida help to drastically lower gas prices?

President George W. Bush urged Congress to overturn a 26-year ban on offshore oil drilling in the U.S. (West Florida – Gulf of Mexico) to petroleum exploration and explained that these moves would "take pressure off gas prices over time by expanding the amount of American-made oil and gasoline." John McCain made a similar appeal to enhance domestic oil exploration.

But will this actually lower gases prices by a significant amount?
NOTE: The Energy Information Administration (EIA) has a chart that shows US Petroleum Products Consumption has gone "DOWN" by about 600,000 barrels per day – so why isn’t the price of gas going down drastically since demand since 2007 (people using/buying LESS gas)?

For those making comments about "more supply means lower prices" please see chart showing "demand" in down for 2008 at:

http://www.eia.doe.gov/emeu/steo/pub/gifs/Fig14.gif

18 Responses to “Will drilling offshore in Florida help to drastically lower gas prices?”

  1. Florida Citizen Says:

    NO! There’s a flaw in the logic that more US oil drilling will lower US gas prices: even if tomorrow we opened up every square mile of the outer continental shelf to offshore rigs, even if we drilled the entire state of Alaska and pulled new refineries out of thin air, the impact on gas prices would be minimal and delayed at best.

    A 2004 study by the government’s Energy Information Administration (EIA) found that drilling in ANWR would trim the price of gas by 3.5 cents a gallon by 2027. (If oil prices continue to skyrocket, the savings would be greater, but not by much.) Opening up offshore areas to oil exploration — currently all coastal areas save a section of the Gulf of Mexico are off-limits, thanks to a congressional ban enacted in 1982 and supplemented by an executive order from the first President Bush — might cut the price of gas by 3 to 4 cents a gallon at most, according to the Natural Resources Defense Council.

    And the relief at the pump, such as it is, wouldn’t be immediate — it would take several years, at least, for the oil to begin to flow, which is time enough for increased demand from China, India and the rest of the world to outpace those relatively meager savings. "Right now the price of oil is set on the global market," says Kevin Lindemer, executive managing director of the energy markets group for the research firm Global Insight. President Bush’s move "would not have an impact."

    The reason is simple: the U.S. has an estimated 3% of global petroleum reserves but consumes 24% of the world’s oil. Offshore territories and public lands like ANWR that don’t allow drilling may contain up to 75 billion barrels of oil, according to the EIA. That may sound like a lot, but it’s not enough to make a significant difference in a world where global oil demand is expected to rise 30% by 2030, to nearly 120 million barrels a day. At best, greatly expanding domestic drilling might eventually lower the proportion of oil the U.S. imports — currently about 60% of its total supply — but petroleum is a global commodity, and the world market would soak up any additional American production. "This is a drop in the bucket," says Gernot Wagner, an economist with the Environmental Defense Fund.

  2. mrniceguy1456 Says:

    They wont start getting oil out of them for 10 years.

  3. Morganie III Says:

    Liberals… increased supply lowers prices. Even speculation of a future increase in supply affects the market.

  4. tiny_lil_hottie Says:

    not really, not at first. right now we have oil, more than they claim and the price per barrel has gone down in the last few months, yet the prices at the pump keep going up. so maybe over time they will come back down but you will never see the 98 cent gas pump again. maybe it will drop back to 3 one day, but it won’t be soon.

  5. IceT Says:

    Yes. This is basic high school economics. The more supply the lower the price!

    Just talking about it caused it to go down. Imagine how much it would go down if we actually produce all our own gas!

  6. Incarcerated Bert Says:

    No, because this is not a supply problem like it was in the 1970’s, it is an expensive oil problem.
    Not all pricing issues can be solved with high school economics.

  7. OSU_Pokes89 Says:

    Not at all. The amount of oil that can be gained will not supply enough to let the country to become "energy independent," and and would only work for a few years of oil. We all know that the big oil companies do not allow lower prices at the pump even if they are receiving it at a lower price. How else does ExxonMobil make $40billion in profits a year?

  8. Sky Says:

    Drilling for WHAT???

    Oil?!?

    I didn’t even know that Florida had them! lol

    Are you SURE that your reading the Bush propaganda right?

    Because last I checked, we still hold 3% of the world’s total reserves–insufficient to wean us off foreign oil or lower gas prices by a significant amount.

    Whatever we do get out of the ground, ocean, or federally protected wild lifelife preserves–won’t be seen in the US for 10 years at the most.

    And whatever we *do* get, won’t shave more than a few pennies from the actual price by 2030.

    (PS: Gas prices have been dropping lately because the ‘oil speculation’ bubble popped back in July, and because demand has finally dropped for the first time in 11 years.)

  9. Liberal AssKicker Says:

    Yes.

    What exactly are you confused about? Doesn’t a higher supply take care of the current shortages?

  10. LadySnowbird Says:

    It take up to 7yrs just to build one of those oil platforms in the gulf. They don’t throw those up over night. SO … 7-10 yrs is realistic before we will see any oil from them. It isn’t going to be a quick fix to our problem.

  11. nobull54 Says:

    No, the oil industry has million of acres of oil lease areas they can drill in and don’t. This is just another republican distraction from Iraq, health care, economy, and the environment. If you want to lower the price use a lot less. The fastest way to do that is raise fuel efficiency standards for autos and trucks. Moving quickly to CNG fueled cars and electric cars would do more faster and be better for our country in numerous ways. (edit) Drilling will not increase gas supply due to limited refinery capacity so most of the above supply comments are simplistic and incorrect.

  12. FairTaxAdvocate Says:

    yes, the mere threat will bring down oil prices. Odd how oil spiked up after Jan 1 2007 the same time Pelosi took control.

    http://futures.tradingcharts.com/chart/CO/M

    oil is about to go up again as short sellers have to cover their behind for October contracts and November contracts go on sale

  13. mysteryseeker Says:

    No. Even if found it would be years before it reached market…

    it would be controlled by the same oil companies that are gouging
    us now

    it would not be just for the us market, but sold to whomever would
    pay the most

  14. otto2294 Says:

    considering any oil would be sold on the world market no it wouldnt have the slightest bit of impact. opec have stated they want oil at 100 a barrel. if any country suddenly found a heap of oil and started pumping it out opec would just reduce their production to keep the price at what they want. so it would be a waste of money to drill everywhere and damaging to the envoironment for no gain whatsoever.

    money would be better spent in actually properly developing alternative clean energy

  15. maxim Says:

    "nobull54"

    You are a true moron and none of your answers make any sense.

    Read a book.

  16. Average Joe Says:

    The effect that lifting the offshore drilling ban today wouldn’t lower gas prices for ten years.

    Obviously we would need oil rigs and platforms to be set up first – how long will that take. That isn’t a weekend home improvement type of job AND it will cost millions to set up who will pay for that?

    The oil companies? The oil consumers.

    ALSO where the oil is — is "not" exacly known — that’s why George W. Bush said, "Petroleum Exploration" as opposed to known oil locations.

    Exploration can mean disrupting sea life but "not" absolutely finding oil.

  17. DisInformation Dissenter Says:

    Texas, Alaska, and California have the most oil production in the US.

    So why don’t they have drastically CHEAP gas in their own state?

    Ironically Alaska and California gas prices are among the HIGHEST!

    The reality in Texas, Alaska, California and in the US is, the oil they get from drilling goes out to the global market and has little effect on the gas prices in the US. It’s just not enough!

    Do you notice how nobody is proposing a bill to keep US oil in the US for US Citizens?

    Just check out US gas prices from present to 6 years back at:
    http://www.texasgasprices.com/

  18. Libertarian Green Says:

    Actually gas prices/usage would be less of an issue if GM didn’t kill it’s own working electric car.

    Who Killed the Electric Car? is a 2006 documentary film that explores the birth, underpromoted availabilitiy negative efforts toward commercialization, and subsequent death of the battery electric vehicle in the United States, specifically the General Motors EV1 created in the mid 1990’s.

    The film explores the roles of automobile manufacturers, the oil industry, the US government, batteries, hydrogen vehicles, and consumers in limiting the development and adoption of this technology.

    It was released on DVD to the home video market on November 14, 2006 by Sony Pictures Home Entertainment.
    http://www.sonyclassics.com/whokilledthe

    SEE PREVIEW/RENT IT
    http://www.netflix.com/Movie/Who_Killed_
    trkid=188469

    The film deals with the history of the electric car, its development and commercialization, mostly focusing on the General Motors EV1, which was made available for lease (about $299-$500 month) in Southern California, after the California Air Resources Board passed the ZEV mandate in 1990.

    A large part of the film accounts for GM’s efforts to demonstrate to California that there was no demand for their product, and then to take back every perfectly running EV1 and dispose of them.

    A few were disabled and given to museums and universities, but almost all were found to have been crushed; GM never responded to the EV drivers’ offer to pay the residual lease value ($1.9 million was offered for the remaining 78 cars in Burbank before they were crushed).

    Several activists are shown being arrested in the protest that attempted to block the GM car carriers taking the remaining EV1s off to be crushed.

    The film explores some of the reasons that the auto and oil industries worked to kill off the electric car.

    Wally Rippel is shown explaining that the oil companies were afraid of losing out on trillions in potential profit from their transportation fuel monopoly over the coming decades, while the auto companies were afraid of losses over the next six months of EV production. Others explained the killing differently.

    GM spokesman Dave Barthmuss argued it was lack of consumer interest due to the maximum range of 80–100 miles per charge

    (NOTE most car drivers actually drive about 30 miles or less a day), and the relatively high price ($20,000-$30,000 to buy or $299-$500 to lease). (NOTE: Hummers cost $40,000-$60,000)

    ———————————–
    NOTE
    According to GM, 4000 prospective EV1 customers on waitlists were contacted in 2001 about leasing an EV1, and only "allegedly" 50 were willing to sign a lease. EV1 supporters argue that GM discouraged prospects from signing up with the EV1 program. [33] You had to fill out a crazy amount of paperwork, it was difficult to get information about the car, and even Mel Gibson was required to submit a resume to lease his EV1.

    The claim that there was no consumer demand for this car is false. We interviewed John Dabels, who headed up GM’s marketing team when the EV1 was still the Impact, and he said that the sort of consumer enthusiasm for that car was something he had never seen before—thousands of people, literally from around the world, were lining up to get information about this innovative new electric car.

    After losing millions due to declining gas guzzling car sales, in 2008, GM finally is bringing back an electric/fuel car — the Volt.