|
|
||
|
Future motorists of China and India: Yes, drill off the Florida coast, please |
||
With first John McCain and then Charlie Crist scooting down the offshore oil drilling hole, let’s hope they get some gratitude from the biggest potential beneficiaries: Chinese and Indian motorists in the year 2025, who might save a few yuan or rupees when they fill up. How so? Simple math, and supply and demand. First, let’s assume that this new political awareness of gas-price outrage somehow leads to a doubling of offshore oil production in U.S. waters. Sure, that’s wildly optimistic, and would require oil to be found in more places and in larger quantities than is currently known to exist. The point is: Even if you could double the amount of oil coming in from offshore wells, that would put into world production an additional 700 million barrels a year. Which would amount to all of a 2.3 percent increase against the current world production of more than 30 billion barrels a year. Which might cut the current price of $4-a-gallon gas by a dime. It’s necessary to compare it to world production, of course, because oil, unlike, say, the Plant City strawberry harvest, is sold on the global market. Which gets us to a decade and a half hence, the earliest all this new oil could probably become available, given all the regulatory, geological and equipment hurdles. Today, the United States accounts for just under a quarter of global oil consumption. But is that likely to be the case in 17 years? Together, China and India have more than a third of the whole world’s population and two of the faster growing economies. Does anyone doubt that in two decades, they won’t be among the top customers of petroleum products? So as they stew in the traffic of Mumbai or Shanghai, let’s hope
they at least appreciate that a presidential campaign half a world
away has let them stew for a little bit less. |
||
June
20,
2008