New Proposal To Drill for Oil in the Arctic National Wildlife Refuge

Hey Folks,

Here's the latest proposal from Sen Ted Bundy, uhhm, I mean Ted Stevens:

Article.

"Hoping to capitalize on the concerns of ordinary consumers at the gas pump, Sens. Lisa Murkowski and Ted Stevens introduced legislation Thursday that would allow drilling in the Arctic National Wildlife Refuge if the price of oil hits $125 a barrel."

So, what this simply does is provide an incentive for oil and gas companies to restrict supply, increasing price, and presto, by late summer oil hits $125.00 a barrel.

Cheers

Carl

If I understand correctly, the $125 a barrel is the price of crude-oil. Isn't this price set by the OPEC or some such committe? How can oil and gas companies affect this price by restricting supply? Can you kindly explain.

Thanks.

No, it's not set by OPEC, its the market that dictates it (including fear!) So, restrciting supply (which OPEC or the gas companies can chose to do) most definitely can affect price.

Carl, unfortunately, it doesn't work like that. The market determines the price, and if the oil companies arbitrarily set the price, they would be forced to push it down sooner than later.

About the $125 price - it's the price at which drilling in the ANRC will bring economic benefits (read profits above and over marginal cost).

Hey Anil

OPEC set a base rice for crude oil. Market price is a function of supply and demand. A 2005 study by the IMF said "Market fundamentals, together with expectations of continued tightness, have been the primary influence on crude oil prices during the past two years." Remember how quickly the price you pay at the pump rose after Hurricane Katrina hit New Orleans?

Market fundamentals referred to supply and demand.

Ashutosh, a simple tightening of supply drastically affects oil price - demand appears, so far, to be relatively price inelastic. Oil is bought and sold on the stock market, and speculation over supply is a huge factor in the price it reaches.

$125.00 per barrel has nothing to do with the ROI for drilling in the Arctic National Wildlife Refuge - these same people have been trying to open the refuge to drilling for years and years, when the price of crude was less than half what it is today.

Cheers

Carl

You can sign a petition against this plan here:

http://www.thepetitionsite.com/takeaction/567728305.

For those who doubt the damage the drilling could do, or if you just want to know more about the area, please read Karsten Heuer's "Being Caribou". One quote from the book:

""There is nothing real about an economic system that measures prosperity in dollars and material goods when the real wealth -clean air, pure water, abundant wildlife, and the freedom to move- is further compromised with each and every dollar made."

Anil: Carl is right. It's far more expensive to extract oil from Alberta's oil sands than drilling in Alaska, and the oil sands have been making money faster than it can be counted. The $125 tripwire is purely a gimmick.

Carl: maybe you can remind Bundy, er, Stevens how few barrels of oil are under that north slope soil.

How is that idiot still in office anyhow?

Hey Michael,

I'm reasonably sure he already knows .. and he's aware of how much $$$ it's worth. :)

I have no idea why he's still in office.

Cheers

Carl

if i am not mistaken, the stevens clan is all under some sort of investigation, and some convicted but not to be deterred, the present governer up there is all for the opening of the new areas as well,,,, she is also fixing to add to her current litter of 4 children to make 5. One more snowmobile needed in a couple of years!! , (referring of course to the overpopulation thread and use of resources)..

C'mon, Carl, how else are we going to maintain our lifestyle.....

uh oh, Petes back on the forums and on the loose