House GOP Continues Sit-in
August 5, 2008 by Cato
Filed under Conservatism, Energy, National Politics, Republican Campaigns
Welcome to the Revolution! House conservatives, led by Rep. Mike Pence (R-IN) and Rep. Jeb Hensarling (R-TX) vow to continue their 1960′s style sit-in to protest the Democrat-led adjournment of the House without acting to combat the rising cost of energy.
We’re starting to see some of the fire that ignited the Reagan, then Gingrich revolutions. My only hope is that when we return to the majority, a new group of leaders won’t forget WHAT we fight for and WHY!
thanks to Worcester Right for the link
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I’d like someone to explain to me how drilling for oil off our shores is going to reduce gasoline prices in this country. Won’t the oil we get from this drilling just be put on the global market at a price set by said market? I don’t understand how it’s going to “stay in this country” to make us less dependent on foreign oil. I can see how it would lower the price of oil because there would be more “supply” to meet demand but that would take years (from what I understand).
So tell me what your thoughts are about why this sit-in is occuring. Is it to get off-shore drilling approved and if so, who would benefit from that both now and in the future? I hear what both sides are saying and I’m asking both sides the question because somewhere in the middle (the eye of the hurricane if you will) lies the truth.
Offshore drilling is definitely the current cause celebre.
As for lowering the price of oil – think about it. The free market does work. If the outer shelf is opened up to drilling and there is a fair patch of oil out there it will have an effect on the price of oil. It’s the supply side of the equation.
It is true that any oil pumped out of the outer shelf will go on the world market. It would probably come here because transportation would be cheaper. However, the price would still be set by the world market.
The last time I checked, a fair percentage of the oil being pumped out of Alaska is being shipped to Asia. So what? Oil, like money, is fungible. It doesn’t matter WHERE the oil comes from that made the particular 20 gallons of gas going into your tank. What matters is:
What percentage of the world supply is from the US?
What percentage of the world demand is from the US?
It also matters because if we increase supply the price of oil will drop on a static demand curve (or be lower than it would otherwise be given growing demand).
Will opening the outer shelf to drilling cause the price to drop immediately? Believe it or not, it could. The speculative portion of the market will certainly recognize that more supply will be coming in the out years and react accordingly.
Regardless, increasing supply (even if it takes 7 – 10 years) will have a much greater impact on cost than the proposals being put forward by Obama, et al. That doesn’t mean we shouldn’t conserve and look for alternatives. It just means that we are still an oil-based economy and we need to recognize that fact.