Return of the ANWR bait and switch

Before leaving for Europe this morning, President Bush took the opportunity to claim that drilling in the Arctic National Wildlife Refuge (ANWR) would "give this country a chance to help us through this difficult period by finding more supplies of crude oil, which will take the pressure off the price of gasoline":

I'll also remind them, though, that the United States has an opportunity to help increase the supply of oil on the market, therefore, taking pressure off gasoline for hardworking Americans, and that I've proposed to the Congress that they open up ANWR, open up the Continental Shelf, and give this country a chance to help us through this difficult period by finding more supplies of crude oil, which will take the pressure off the price of gasoline.

However, it's unlikely that ANWR will "help us through this difficult period" by "[taking] the pressure off the price of gasoline." The reason is that it would take years to develop and the amount of oil it would produce represents only a small fraction of domestic oil consumption -- a quantity that is unlikely to have a significant impact on prices in the global oil market.

It's yet another example of the Bush administration using a crisis or problem to justify a pre-existing policy proposal that is unlikely to solve the problem (see: the tax cuts, the invasion of Iraq, etc.).

Update 6/11 9:07 AM: Here's more from Media Matters.

Comments

[David]

IMHO Brendan's two arguments are unpersuasive. Governmental laws and regulations commonly take a long time to be effective and typically solve only part of a problem. E.g., Lyndon Johnson's War on Poverty began 40 years ago and hasn't eliminated poverty yet. Affirmative action laws and school integration plans still haven't fully eradicated racial inequality.

A fair analysis would compare the actual costs and benfits. As I recall, a majority of Alaskans support ANWR drilling. Evidently the people who live there have concluded that the environmental cost is small enough to make drilling worthwhile.

P.S. Instapundit today pointed that Democrats are also preventing the development of domestic shale oil .

[David]

I would add that "bait and switch" is hardly an appropriate criticism. There's been no switch. Bush has consistently recommended ANWR drilling. Furthermore, the current oil price jump shows that he was right about our need for additional domestic oil production.

[john]

Another reason ANWR won't help bring oil relief to the USA, is that like most of the oil pumped out of Alaska now, it will probably be sold and shipped to Japan and other Asian countries. It is a lot cheaper to ship it to the orient, than through the Panama canal and on to most of the US refiners on the Gulf and Atlantic coasts.

Brendan and commenter john apparently do not understand the sensitivity and prospective nature of supply / demand relationships. Nor do they understand the fungibility of commodities such as oil.

Simply announcing that the US is going to develop ANWR and/or other sources such as offshore Florida for oil would bring crude prices down by a small amount. Once this new source oil hit the market, the effect could be significant.

Brendan's criticisms of Bush on this point are meritless. Bush has repeatedly stressed the importance of expanding US exploration and production.

Where Bush failed to deal with the coming (now here) crisis is by not pushing for higher taxes on crude oil. But Bush's failure is nothing compared to the Clinton / Gore failure to push for such taxes in the late 1990's when crude was $10 a barrel and our economy was strong.

It was a stunning error and one obvious at the time. Charles Krauthammer, Tom Friedman and many others urged the imposition of such taxes at the time.