Drill Here, Drill Now

Critics of drilling here in the United States can often be heard to say, "It will take 10 years to get the oil and therefore won't decrease the price of oil".

A couple of points:

--They made the same claims 13 years ago when drilling in ANWR was being considered--we would have that oil now if it wasn't for them.

--The price of oil is somewhat based on expectations of what the future price will be. If you are holding oil and you expect the price to go down then you will sell as much as you can now. If you expect the price to rise, you may hold onto you stocks until the price has risen.

--Any production within the United States will decrease our trade deficit and thus strengthen the dollar. Hence, the price of all imported items will decrease, including oil.

--Finally, if the price of oil is expected to remain strong even if we drill for more; isn't that an argument for drilling? Doesn't that assure profitability? The biggest threat to a project is that after the money has been sunk into it the price will fall and prevent investors from recouping their expenses. Do critics of increasing our oil supply think that the future price will be so low that these projects won't pay for themselves? I don't think so, they are the ones saying the price will stay high no matter what. They unknowingly give the best argument for drilling here now. Just an added thought: Couldn't a prospective producer of oil (say a company building a shale-oil plant) sell the oil to be produced on a futures market? This would take away the risk of oil prices falling in the couple of years it would take to build the plant. Of course it limits the up-side as well.