Offshore Drilling Is NOT a Quick Fix

Don't believe me? Even Cramer knows it.

"Right now there are no available rigs until 2012, particularly deepwater rigs. There just aren't any."

The reason for the backlog on drilling rigs is because there's been huge demand by Brazil, West Africa and Southeast Asia. Why is Brazil is so consumed with drilling for oil? After all, don't ethanol proponents point to them as being the shiny beacon of oil-free supplier of automotive fuel? Brazil isn't stupid. Oil's been over a $100/barrel for several months now. They're just looking to cash in.

A funny thing that seems to be overlooked is that we're still drilling in the Gulf of Mexico off of Texas and Louisiana. "Later this month, the U.S. government is offering for lease, as part of a regularly scheduled sale, 18 million acres in the Gulf of Mexico that are open for oil and natural gas drilling. The tracts could potentially yield as much as 400 million barrels of oil. The lease auction is just one example of how much oil exploration is currently occurring in the Gulf of Mexico. But the sale also reveals the limits of new drilling, as 400 million barrels is barely enough to meet the nation's oil needs for 19 days (Source)." And it's far from being a stagnant enterprise.

"Today, the Gulf of Mexico, which produces more than a quarter of the country's domestic crude oil, is actually in the midst of a resurgence. New technology is allowing companies to push farther into deeper water, and oil production there is up.

A bidding war for rights to millions of acres in the Gulf is quietly building. In 2007, the number of leases issued to oil companies there jumped by about 25 percent, and the average bid price for a single tract has soared this year by 50 percent to nearly $6 million, according to GOMExplorer, which gathers data on the Gulf's oil and gas industry."

Surely, a compromise is in the works, though it's not like this Congress has been idle.

"In 2006, for example, Congress opened up several million acres in the Gulf of Mexico for new leasing and drilling, of which a large portion had been previously off-limits. Because of the necessary planning work, many of these tracts won't come up for bidding until next year. (And even if these tracts receive bids, and an oil company chooses to develop them, it usually takes about seven to ten years for oil to start flowing, according the Energy Information Administration.)"

Source.

In fact, a bipartisan group of ten senators has offered a plan that allows drilling in the eastern portion of the Gulf of Mexico and the Atlantic Ocean off of Georgia, Virginia and the Carolinas (source). In this proposal, state legislatures would have final say. Meanwhile, tourism dependent Florida has been buying up oil leases off its shores.

It might all be moot however. There's only an estimated 3.8 billion barrels predicted to be found along the eastern seaboard. California is suspected of having 10 billion. As of 2006, the US consumed an average 20.5 million barrels of oil per day. Put them together and that's roughly 2 years worth of oil. If combined with current domestic production, that could possibly make us energy independent for 4 years. Not exactly something to bank on.

As I mentioned earlier, a compromise is sure to happen and the Republicans will be there to cash in on it. They're having a field day with accusing Democrats of doing nothing while America suffers. And now that talk has arisen of a compromise, Republicans will make use of this election cycle to accuse Democrats of flip-flopping. Oh yes, it's already happened!

But first, a little background. My congressman is Chris Murphy. He won election in 2006, defeating Nancy Johnson, a long time moderate Republican, who went too negative with her campaign ads and was a bit too cozy with the more insidious members of her party. Anyway, Republicans want the seat back. Anyway, the Republican Party wants the seat back. They've drafted another moderate, and popular, state senator, David Cappiello. But they've transformed him from someone I respected into another mouthpiece for partisan politics.

"It has become clear that without a compromise on some increased, sensible offshore drilling, we will not be able to move forward on ideas that will make us truly energy independent," Murphy said. "We have to work together to negotiate a common-sense solution to help consumers, who can't afford the bickering."

He added expanded offshore drilling won't solve the energy crisis, but the issue shouldn't bar Congress from passing energy legislation.

State Sen. David Cappiello, R-Danbury, who is challenging Murphy for the 5th District congressional seat, issued his own press statement Thursday, calling out the congressman for flip flopping on the issue.

"Murphy's election-year conversion on offshore drilling is a day late, a dollar short, and totally disingenuous," Cappiello said. "His latest flip flop proves he cannot be trusted to address America's energy crisis unless he is dragged kicking and screaming to do so."

Democrats need to explain that compromise isn't flip-flopping and it's essential in getting things done. The "you're with us or against us" mentality of the last 8 years hasn't accomplished anything other than alienating allies and dividing the country. But they'll say anything to get elected now, won't they.

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