Monday, July 28, 2008

Why Drilling Works

By Chris McClure
Executive Director, North Carolina Republican Party

It's not exactly rocket science, but it is worthy of explanation why drilling for oil now can reduce prices at the pump right away. The reason for this is that even though the oil will not be available right away, the impact on future markets will be felt right away. Right now, foreign oil producers are not pumping oil at maximum rates because they would prefer to sell oil at an even higher price as oil continues on an upward pricing trend. Why sell oil now at $150 a barrel when next year that same oil may be worth $200 a barrel? However, if an oil producer knows the market will soon be transformed by an increased supply of oil due to expanded drilling in the United States, then the decision to hold back oil from the market is no longer as lucrative. As oil producing countries begin to pump more oil to sell at the current market price, the overall supply of oil goes up while demand remains basically static. This causes prices to drop right away and lowers the burden for North Carolina families. That is the argument that Republicans are making. We can reduce gas prices in the short term and work toward cleaner, more efficient energy in the future. As we work toward ending our dependence on foreign oil forever through the use of new technologies and transitioning to alternative sources of energy, why not give hardworking North Carolinians a little help at the pump? Democrats need to answer that question instead of continuing to stand in the way of progress. North Carolinians will welcome debate on how best to end our dependency on foreign oil in the years to come. Right now, they just want a little relief at the pump.