The New York Times has repeatedly asserted on its editorial page that lifting the bans on oil exploration in the Outer Continental Shelf and the Arctic National Wildlife Refuge should be resisted since they would “make only a modest difference, at best, to prices at the pump.” Well, the NYT’s editorial writers should really try reading NYT’s hard news where we learn today:
Oil production has failed to catch up with surging consumption in recent years, a disparity that propelled oil prices to records this year. Despite the recent decline, oil remains above $100 a barrel, unimaginable a few years ago, causing pain throughout the economy, like higher prices at the gas pump and automakers posting sizable losses.
The scope of the supply problem became more clear in the latest quarter when the five biggest publicly traded oil companies, including Exxon Mobil, said their oil output had declined by a total of 614,000 barrels a day, even as they posted $44 billion in profits. It was the steepest of five consecutive quarters of declines.
While that drop might not sound like much in a world that consumes 86 million barrels of oil each day, today’s markets are so tight that the slightest shortfalls can push up prices.
So the NYT is reporting that a supply drop of just 614,000 barrels a day has caused “pain throughout the economy” because “today’s markets are so tight that the slightest shortfalls can push up prices.” Well guess what? Everyone is predicting that oil markets will continue to remain tight for years to come. And the Energy Information Administration estimates that daily oil production from the OCS and ANWR would come to over one million barrels a day. Sounds like drilling is a great plan to ease consumer pain at the pump.