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Friday, March 16, 2012

Paul Krugman: Natural Born Drillers

Why are Republicans turning to "Drill, baby, drill"?:

Natural Born Drillers, by Paul Krugman, Commentary, NY Times: To be a modern Republican in good standing, you have to believe — or pretend to believe — in two miracle cures for whatever ails the economy: more tax cuts for the rich and more drilling for oil. And with prices at the pump on the rise, so is the chant of “Drill, baby, drill.” More and more, Republicans are telling us that gasoline would be cheap and jobs plentiful if only we would stop protecting the environment and let energy companies do whatever they want. ...
The irony here is that ... we’re already having a hydrocarbon boom... It’s all about the fracking... U.S. oil production has risen significantly over the past three years,... while natural gas production has exploded.
Given this expansion, it’s hard to claim that excessive regulation has crippled energy production. Indeed,... the environmental costs of fracking have been underplayed and ignored. ...
Strange to say, however, while natural gas prices have dropped, rising oil production and a sharp fall in import dependence haven’t stopped gasoline prices from rising toward $4 a gallon. Nor has the oil and gas boom given a noticeable boost to an economic recovery...
As I said, this was totally predictable.  ... Unlike natural gas, which is expensive to ship across oceans, oil is traded on a world market... Oil prices are up because of rising demand from China and other emerging economies, and more recently because of war scares in the Middle East; these forces easily outweigh any downward pressure on prices from rising U.S. production. And the same thing would happen if Republicans got their way...
Meanwhile, what about jobs? ... Put it this way: Employment in oil and gas extraction has risen more than 50 percent since the middle of the last decade, but that amounts to only 70,000 jobs, around one-twentieth of 1 percent of total U.S. employment. So the idea that drill, baby, drill can cure our jobs deficit is basically a joke.
Why, then, are Republicans pretending otherwise? Part of the answer is that the party is rewarding its benefactors: the oil and gas industry doesn’t create many jobs, but it does spend a lot of money on lobbying and campaign contributions. The rest of the answer is simply the fact that conservatives have no other job-creation ideas to offer.
And intellectual bankruptcy, I’m sorry to say, is a problem that no amount of drilling and fracking can solve.

    Posted by on Friday, March 16, 2012 at 02:07 AM in Economics, Oil, Politics | Permalink  Comments (107)



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