momof1

Here in Alaska the economic impact of drilling is not seen as the decline in gas prices but the addition of jobs on "the slope." Also, the PFD is not based on oil pumped, but the lease monies that were earned and then put away so that the capital was preserved. The PFD is tied to the stock market, not our oil production.

So, in short, the benefit of oil production is, especially for Alaska, jobs. I would tend to think that the jobs would benefit any state, in spite of energy regulation.

Mr Payne

We should drill.

We should not expect it to lower prices at the pump.

We should also do nuclear power plants (and many of them).

We should also have tax breaks for alternative energy R&D.

razorsharp

I keep hearing idiots, (usually Democrats) saying that drilling will have no effect on the price of oil today. That is absolute nonsense. Todays price of oil includes the market's expectations for future supply and demand. For example, if the market learned that all of the oil in the world would evaporate on January 1st five years from now, the price today would go to $500 per barrel or some other high figure. Today's market sees that supplies are not increasing at the rate demand is increasing because supply is limited. If we begin drilling for oil today, the market would know that more oil would come on board four or five years from now. The effect of knowing that there is more oil in the supply chain will not only limit the price of oil five years from now when it is comes into the supply chain, but it will reduce the price of oil today by eliminating the risk premium resulting from the expectation that we are running out of oil.

If people want the price of oil to stop rising and start falling immedately, we need to drill here, drill now so we can pay less.

NewHope33

momof1 - In 1994 a jury awarded Alaska fishermen and others $5 Billion as compensation for lost income from the Exxon Valdez debacle. That $5 Billion represents approximately six weeks of PROFITS for Exxon-Mobil, so clearly the company can afford to pay the court judgement.

Alaskans seen any of that money yet?

razorsharp

FT.com / World - Shell delays Alaska offshore drilling

Part of the reason it is so hard to drill off shore is that you have to put up with endless frivolous law suits by environmental special interest groups. Sad.

parent2noles

I heard an interesting analysis from a commodities speculator who called into the Rush Limbaugh program (hold applause or jeers, please - this is serious).

She said that ANY (significant) effort to increase the supply of oil would be viewed by bidders as a signal, however slight, that the price of the commodity would decrease in the future. She said the speculators would race (not walk) for the lower priced futures contracts to avoid losing money. As a result, the push downward on prices would lower the actual cost of the product to more reasonable market values.

I believe, based on her comments, all that would be necessary to create the rush to the door is for Bush to rescind the Executive Order banning drilling in ANWAR or something like approval to drill off Florida. No actual drilling would be needed.

The Chinese saying they will raise fuel prices by 18% may also work.

momof1

New Hope,

From the Seattle Post-Intelligencer, May 6, 2006 available here UW helps on Exxon Valdez claim

Excerpt:

"Boudreaux said that in addition to the $1 billion paid in settlements to the state and federal governments, the company has spent $2.2 billion on cleanup and paid $300 million to Alaskans who could show that their livelihoods were damaged.

The company is contesting a $5 billion verdict for punitive damages that has twice been ruled unconstitutional by the 9th U.S. Circuit Court of Appeals.

Although plaintiffs in that case have cited Exxon's profit last year of $36 billion -- a record -- Boudreaux said the company is publicly owned and owes stockholders a duty not to pay an unconstitutional claim.

"Profits are irrelevant to this case," he said. "The case has to do with whether or not we should be punished any more than the $3.5 billion we've already paid for the spill that happened 17 years ago." "


Punitive damages are just that - punitive. As is stated in the article, this is a publicly held company and the punitive damages would be paid by shareholders. Pension funds, etc. It is moving through the courts and I am sure the company will exhaust the legal means necessary to protects its assets. It is working within the legal system.

So, no, Alaska has not seen money from that particular settlement, but has received money from Exxon as stated above.

Recently, the Supreme Court heard the case. McClatchy Washington Bureau | 06/01/2008 | Supreme Court expected to issue Exxon Valdez verdict this month

Should be ruled on any time, if it hasn't been yet. And the damages seem to have been reduced to $2.5 billion.

mini

Do you think THE STATE should be drilling for oil? What kind of pinko-commie are you?

Or is it that "we" should drill off the coast? Who is this "we", and to whom are "we" beholden?

LongPrime

Ya Betcha. The State should also sell Its oil to whom ever pays it the most. Doesn't the State owe its People to get the best deal possible? In fact they should be playing the option/future markets now and lock in the pricing. Never turn down a good thing.

LongPrime

The Chinese are not raising the prices, they are removing some of the subsidy they give to importers and producers.

parent2noles

Heck no - the government should stay OUT of competitive market enterprises. They can judge between bids, but not be the company doing the work.

jym626

Who has the rights to the offshore drilling in the gulf? There are already offshore drilling platforms owned by Shell, Chevron, etc in the gulf. True, thay cant be sen from the coast, but as for me, I wouldnt mind having a few dot the horizon if it makes us less dependent on external sources of oil. Drill away. I still support alternative energy and renewables, but its time to stop the unnecessary litigation and let us take care of ourselves to include both preserving natural resources and our economy. Surely there is some way to work this all out in a cooperative fashion.

sevenhills

Razorsharp, those special interest environmental groups exist so we don't have another Enron.

jym626, they would do more than dot the horizon. They would contribute to an even greater Katrina in the gulf.

jym626

^^ Thats a vague statement. Are you trying to say that the water temperatures would change and this could affect weather patterns? How can oil rigs contribute to "an even greater Katrina?". Can you back up such statements with fact?

Westcoastmon

Since foreign oil companies are already drilling less than 100 miles from Florida's shore with the permission of Cuba this discussion seems like a moot point.