Drilling for Oil Futures
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Discussing the drilling for oil futures in the united states.

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Greg Coy: We will talk about record-high gas prices and oil prices. They are becoming a huge Presidential campaign issue during this election. Presumptive Republican nominee John McCain has proposed some pretty drastic changes in American policy. For example, he wants to open up the coast to drilling and increase the use of nuclear energy; here is what he had to say. Carly Fiorina: He is calling for a lifting of the ban on offshore offcontinental shelf drilling. It will still be up to the states to decide whether they will permit such drilling, but, obviously, this is a time now where we need to tap all of our own reserves of oil, natural gas, and coal. He proposes basic research and to clean coal that we need sources of energy of our own. Greg Coy: So, a big question, really, this morning is, can his plan work? His ideas are dramatically different from many previous proposals that, of course, failed to pass in Congress, but let's put aside politics for a moment, shall we? If this plan was implemented then how much would gas prices drop and how would it really affect our dependence on foreign oil? With some answers we are going to turn to Christine Knapp of Penn Future, an environmental resources group, joining us this morning. Good morning to you. Christine Knapp: Good morning. Greg Coy: Let's talk about Senator McCain's controversial proposal to lift the ban on drilling on the United States or in the coast. First of all, how much oil is out there that is untapped. Christine Knapp: Well we know that the United States has about 3% of world's oil supply so that's pretty much what we are looking at, which is small amount when you think about our consumption is about 25% of the world's oil. Greg Coy: Where is it located? Where is this untapped oil located? Christine Knapp: The majority of it -- or the two places that are being talked about as the most likely sources are California and Florida and the problem there is that we know in the past both Republican Governors Schwarzenegger and Crist have opposed offshore drilling for various reasons. So there is a chance -- now that -- to clear his proposal would just lift the ban and allow states to decide for themselves whether to drill or not. So there is a chance that even if the ban were lifted drilling in those locations may not happen anyway. Greg Coy: Right, at least in the New Jersey they have talked about doing it before and the elected officials in the Garden State said no way. Christine Knapp: Right. Greg Coy: If they did that, and let's say for example, they have decided to refine off the coast of California or Florida, how long before that oil, if it is there, would make it to the shores and be refined and be put into our cars or our homes/ Christine Knapp: If we lifted the ban today, it would probably take close to ten years before we would see any of that hit our region. Greg Coy: A decade. Christine Knapp: A decade; really by the time you do the exploration you get the oil rigs and the infrastructure in to get it out of there, you are looking at close to ten years and just to point out as well on that there is no guarantee that anything that is found there, any oil that is found would be sold at lower prices as well and it is not guaranteed that it will be sold in US. So it may actually never even reach us at all. Greg Coy: So then -- which backs to my next question, would it affect the cost that I am paying right now at the pump? Oil speculators seeing and saying, Oh! my goodness there is more oil. Maybe I should drop my investment in there? Christine Knapp: It is not going to make a big drop in the bucket. Again, we have about 3% of the world's oil, we consume 25% and when you look at global demand, you know, our supply is going to be greatly outstripped by global demand especially with India and China rapidly growing and needing -- their energy resources as well. Greg Coy: Their appetite is growing real well. He also talked about using nuclear energy to reduce our dependence on oil. The big issue there is that no one has invested in a nuclear power plant in 25 years, it's too expensive; but is this a good alternative to think about? Christine Knapp: Well, nuclear energy is not going to solve our oil crises because we do not run cars on nuclear energy and that is really where the majority of our oil consumption is going and as you said it's an expensive option, but it's also really more of the same and I think that's the key here is that does these proposals are really, kind of, it's drilling, it's nuclear, it's more of the same stuff that's gotten us into this situation that we are in now. And I think we need to really be looking at new options and new solutions; we cannot keep doing the same thing and expecting a different outcome. Greg Coy: But, you know, the country is expecting something. Christine Knapp: Right and I think what really needs to happen is to kind of crash test, an Apollo Project, or a Manhattan Project in renewable energy. We need to do a lot of investment, a lot of time spent of that, doing renewables because we don't have to pay anything for the Sun or the Wind we just need to do the upfront work to get it and to convert it into energy. Greg Coy: Christine Knapp of Penn Future joining us now to talk about -- has been joining us now to talk about the McCain policy. Hey! You could see this story again. Check out our website http://www.CN8.tv/, click on Your Morning on YouTube and you can see our discussion and decide for yourself. It will be on later this morning about McCain's Energy Policies, 7:15.