- World oil production is 82,532,000/day. The US currently produces 5,102,000/day. The US alone consumes 20,687,000/day. World-wide consumption is 83,607,000/day.
Let's assume that we extract significantly more of than our current output, lets say we make it back to our peak oil production in 1986 of about 10.2 million barrels/day. Since oil would be sold on the open world market it would increase world oil production to 87,634,000/day or an increase of 6%. If you make the likely incorrect assumption that demand does not increase (doing simple math I know) you at best could expect a 6% decrease in oil prices. That would reduce today's price from $136 to $127/barrel. Unless my small government friends want to nationalize all remaining oil reserves and keep them in the country, this will only serve to help oil companies.
- Untapped reserves will take years to begin producing.
Even if we begin today it is likely that market forces will change the game before any of this oil comes on the market.
- Finally, we have picked the low hanging fruit world-wide as far as oil reserves are concerned. The remaining oil reserves are more expensive to extract. Increasing production costs lead to you guessed it, higher prices. It is not inconceivable that we could see the new oil reserves makes their way onto the market with a significant additional cost component (greater than say 6%?).
Want more info: go here and here
So, my Republican friends please spare me your non-sense. BTW -- if you want to advocate off shore drilling in the Gulf of Mexico, please do it before the election, so we can lock up the state in the Democratic column.
Update: I just ran across this timely article on Salon.com and this one from the NY Times.
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