More dumb stuff from the NYTimes

Jeez...they get the first 2 paragraphs right...then fall apart with their socialism. I swear you could offer a million bucks for just ONE sensible economics writer over there, and no one could collect the money!

Editorial

Lessons From Prudhoe Bay

Published: August 9, 2006

No sooner did BP announce that a corrosion problem was forcing a shutdown of its pipelines serving Alaska’s Prudhoe Bay than prices again shot up, with oil temporarily gaining more than $2 a barrel, to nearly $77, and gasoline rising five cents a gallon in some cities. Consumers are understandably rankled. But there’s nothing necessarily predatory about what’s going on — this time.

Refineries and gas stations that are not well stocked rush to buy when there’s a sudden shortage, provoking an immediate price increase. Meanwhile, BP and the other oil companies that share in the Prudhoe Bay oil field stand to lose more from the shutdown than they will reap from a spike in prices.

What is predatory is some politicians’ attempt to use the shutdown to realize their drilling dreams. Pete Domenici, the Senate Energy Committee chairman, was quick off the mark pronouncing BP’s travails as yet another reason to drill more at home.

That’s backward, for two reasons.

First, even all-out drilling won’t vaccinate the market from unexpected shortages because there simply isn’t enough potential domestic supply to dent Americans’ demand. The United States holds only 3 percent of global oil reserves, yet uses 25 percent of the world’s oil.

Until we have marketable alternatives to oil, the only thing that will truly reduce Americans’ vulnerability to oil shocks is reduced demand. According to the nonprofit National Environmental Trust, if Americans had started a 10-year phase-in of 40-mile-a-gallon driving standards in 2001, they would already be saving 267 million barrels of oil a year. That’s nearly twice the amount produced annually at the Prudhoe Bay field.

No matter what Mr. Domenici and other oil company cheerleaders say, the BP fiasco also reminds us why we should not put the fate of America’s wilderness in the hands of the oil companies.

BP has a lot of explaining to do, starting with why the ragged condition of its pipelines went undetected for so long. But it has already reinforced one lesson: True energy security does not entail more drilling, especially in Alaska.