A Sanford C. Bernstein & Co. analyst said in a report there is a lot of offshore crude that can be produced relatively quickly. The problem: It is located off California, where politicians have built careers opposing new drilling.
The Minerals Management Service said that of the estimated 18 billion barrels of oil in off-limits coastal areas, almost 10 billion are off the coast of California.
“California could actually start producing new oil within a year if the moratorium were lifted,” the Sanford C. Bernstein report said, because the oil is under shallow water, has been explored and drilling platforms have been there since before the moratoria.
A company named Plains Exploration is engaged in efforts to develop these fields and recently reached a deal with environmentalists that would facilitate this effort. A bit of trivia-UNOCAL-bought years ago for many billions of dollars by Chevron-had its start as the Union Oil Company of California. The oil pumps that dot the landscape at the end of the movie L.A. Confidential are a legacy of the oil boom that propelled-at one time-California into a top spot as an oil producing state.
The oil prices we see in the futures market today represent the current reality that Democrats in Congress will not allow new drilling. When the president announced an end to the executive order banning new offshore drilling oil prices tumbled $6 a barrel almost immediately. If Congress were to do their part to remove restrictions a much more dramatic fall-off in prices would occur because new oil supplies in the future would become a sure thing. If nothing else the psychological effect on the markets of a United States coming to their senses on oil production couldn't help but drive futures prices down. The market would probably get a good scare.
San Fran Nan and her gang of fools need to pay a price for continued obstruction. The GOP and John McCain should make this a daily refrain in the fall campaign.
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