The conservative periodical American Spectator has published a piece by Andrew Cline, editorial page editor of the Manchester Union Leader, which argues that lifting the offshore drilling moratorium would “lower oil company profits“:
But Republicans have a golden opportunity here to turn the tables back on the Democrats. All they have to do is give a basic economics lesson every chance they get. The American people aren’t stupid; they will get it. The lesson is this:
If the Democrats really wanted to cut the profits of Big Oil, they would vote to…increase the supply of oil! Oil company profits are so high because the price of oil is so high. The price is so high because demand is so much higher than supply. Allowing oil companies to drill for more oil will increase supply, which will lower prices, which will lower oil company profits!
By this logic, the CEOs of oil companies should be fired for violating their fiduciary duty to their shareholders, since they are the ones leading the call for expanded drilling:
Exxon Mobil CEO Rex Tillerson said it’s “nonsensical” to oppose lifting domestic drilling moratoria.
Shell CEO John Hofmeister said the offshore moratorium “has denied U.S. oil companies the opportunity to produce more hydrocarbons.”
ConocoPhillips CEO James Mulva called for lifting the offshore moratorium, saying, “We cannot just wish fossil fuels away.”
Chevron CEO David O’Reilly said Bush should have “lifted the moratorium with a presidential order.”
Cline’s argument is embarrassingly nonsensical. If we pretended for a minute that proven U.S. oil reserves could magically be multiplied overnight by ten times to match U.S. demand, the money flowing into the coffers of oil companies wouldn’t change, since their profits are a product of both price and production. The decrease in price would be balanced by the increase in production. That’s the “basic economics lesson.”
Of course, even if the moratoria were lifted today, and even if oil companies could fast-track exploration and drilling, the oil found would only change U.S. production by a few percent — not 100, 1,000 or 10,000 percent — and would have little to no impact on oil prices.
The oil companies and those paid to promote their agenda are the only ones who would benefit from lifting the moratoria. Big Oil will use the additional leases to pad their inventories, and in decades sell the oil on the global market. And the oil-fueled right wing will continue to peddle their propaganda.
UPDATE: Newt Gingrich (ASWF) also thinks oil CEOs should be fired: