Drill, Baby, Drill
Drill, Baby, Drill.
Do you remember this term?
It was made famous in 2008 when a barrel of oil reached $147 in July of that year. Those high energy costs may have not created the great financial crisis but it certainly didn’t help.
I recently was driving to an appointment in a part of town I don’t generally visit. As usual, I spent more time looking at the housing stock and neighborhood characteristics than driving my car. It was a modest neighborhood. The vehicles in the driveways were not new by any means and most had 2-3 vehicles in front. When I pulled up to my appointment, this house was greatly bigger and nicer than the homes all around it. There was a Tesla electric vehicle on the side of the house hooked up to a charging cord. The stark contrast was not lost on me.
There is a lot of talk about the “electrification” of the automobile industry and the reduction of oil production needed to power our economy in the future. Our government has put tremendous resources and tax incentives to spur a radical change in what we drive now with vehicles that, as of now, have limited driving range. It is also trying to put major restrictions on gas consumption engines in the “not so distant future”.
I can see a market for EVs and their attraction. Most are beautiful and have amazing acceleration. But they are not for average Americans or at least not yet. A new “EV” average cost is over $61,000, not including the charging equipment you need to buy and install at your residence.
But there is way more to the oil story than just filling up with gas to power your personal life. Only 46% of a barrel of oil is used to make gasoline. 26% is used for diesel fuel that moves most all goods we consume and 15% percent is needed for plastic and production of thousands of consumer products. Think of all the items you use each day that are made from petroleum products.
Source: https://petroleumservicecompany.com/blog/oil-barrel-42-gallon-breakdown/
Did you know that 1/3 of your car (including an EV) is also made of plastic?
I’m not sure our leaders have thought this idea through. It has been an expensive experiment for sure. You, the taxpayer, have paid a lot for the few that have benefited so far.
Like it or not, we are going to need oil for a long, long time and plenty of it.
Drill, Baby, Drill.