March 31, 2010

What's a little oil between presidents anyway...

Let me start with some news that hasn't exactly hit the mainstream yet: According to Reuters, "The Obama administration is expected to announce by Wednesday its updated plan for oil and natural gas drilling in U.S. waters, including whether to allow exploration for the first time along the U.S. East Coast," (

Now let me provide a bit of a flashback, for perspective; "Obama Administration Halts Bush Expansion of Offshore Drilling." A title can be telling I suppose, (

Further, to provide a context for this discussion, journalist Matt Drudge revealed,
"Administration sets 'embargo' on press leaks detailing oil plan; 11 PM ET release," ( Surely this must bear some resemblance to the "transparency" we were all promised?

In a stunning reversal of course, the Obama Administration, it has appeared, will be pushing forward with Bush's offshore drilling agenda. Just over a year after former U.S. Senator Ken Salazar promised "'a new way forward' in offshore energy development including new windprojects." The notion that this administration would therefore push forward with the predecessor's plans is very interesting indeed, as the past year has been filled with semantics hoping to move
away from such a connection. Of course, actions will speak louder than words.

Let me say, too, that I am not wholly opposed to the idea of offshore drilling in the slightest. On a personal note, I feel that it is an excellent temporary solution while realistic alternative energy solutions can be formulated. The problem here is not that Obama is allowing a move like this, but moreso the underlying principle that has created it. I wonder if those that so adamantly opposed the plan when it was pushed by Bush will have the same feelings today when it is announced to the media. It is interesting, indeed, to note that this is not the first continuation of Bush policy that Obama has embraced; the stimulus package was quite complementary to the bailout, and the health care bill, while dwarving the latter in comparison, has further enabled dependency on federal government that president Bush was himself not terrified of. The social trends that got Obama elected prove that the masses who voted for him had a miniscule grasp of where he was coming from.

Anyways, I digress with such social commentary. The importance of this move here holds many economic ramifications to the country. It is no doubt that the process of offshore drilling is tedious and requires patience. That being said, it is a sure manner in which to guarantee positive step forward in greater economic independence for the United States. That being said, however, we are left with a very interesting predicament. How does this particular maneuver tie in with other notable moves by the president, and what are the implications of such?

This move is both perplexing and unsurprising. Strange in the fact that it is a blatant contradiction to the Obama policy of 2009, but unoriginal in the sense that, as previously aforementioned, Obama has not shied away from the Bush comparisons since his election, when scrutinized objectively. The onset of offshore drilling will, in time, allow a great amount of oil to be utilized domestically in the hopes of keeping prices down for Americans. Frankly, this could have come much sooner but I suppose it IS better late than never. The economic dynamic that comes into play at this point, though, is how this might fare in the shadow of the enormous spending that will be caused by the health care bill. The economic impact can not possibly offset the behemoth of the recent health bill, and I think that might be the intended reaction.

The announcement of this in such proximity to the recent bill passed does not seem coincidental to me. I have to think that the reasoning is as mechanical as the politics that caused it. The concept of offshore drilling will no doubt strike at the tightwad strings of Americans, in a desperate effort to win over the hearts and minds of those of us who just don't like big government spending. That, ultimately, is the reason for the timely manner of this announcement.

Anyways. The idea of offshore drilling has appealed to me for some time now, so I won't bash it simply to bash the president's doing. However, I believe this is something that must be put into context. In the long run it will serve very little. The presumption here being that alternative fuel technologies will, in our lifetime, replace petroleum fossil fuels and more importantly that the allowance of offshore drilling in the foreground of stimulus bills and health care is minuscule at best.

Ultimately, what can we do in the face of such economic events? Capitalism has been wonderful for its uncanny ability to provide relatively so much to so many people and naturally work things out through the failures of government and firms. With the onset of such increased government power, however, we are surely moving away from capitalism as a form of economy in our country and towards socialism. It is difficult for contemporaries to pinpoint with accuracy how far along then we are along the captialism-to-socialism scale, but it is certainly not boding well for a tried economic system that has remained true for over two hundred years now.

What can we do? Well for starters, we might as well allow offshore drilling to continue... At the very worst it won't hurt, and it has plenty of economic promise for our country. The point here is that it exists as a form of reference to where we are now, versus where we were two years ago, before bailouts and "change." The impact of offshore drilling will come and go, but it's hard to say how long it will take to recover from the trillions of dollars spent in the last 18 months, and if we will ever recover at all from the monster of a health care bill recently passed. All we can do is take from the lessons we have learned, as Americans have continually strived to do historically and vote based on this. Ultimately, great change can truly be wrought from such difficult situations and these times are no different.

I have no doubt that the re admittance of offshore drilling will help to affirm this in our society.

Sources: The Drudge Report, Reuters, and the Huffington Post

1 comment:

Larry Eubanks said...

In the context of Austrian school economic analysis perhaps there are some issues to consider. Here are a couple of suggestions. Follow Mises and assume the purpose of government is primarily to enforce private property rights and provide for the national defense. We are discussing leasing off shore oil lands because the national government is the entity which "owns" these off shore oil lands. Is such property ownership by government consistent with the assumed purpose? Would Mises or another Austrian economist explore government's decision to lease or not to lease by assuming there was a specific goal for leasing the land it owns?