Catch 22 on Drilling

Our Democratic friends, led by Sen. Barack Obama (D-IL), insist that we can’t drill our way out of high energy prices. The reason changes from moment to moment, of course. Sometimes it’s because of the “peak oil” argument, the notion that we have already passed the peak of oil production because there just isn’t that much oil left to find.

Alternatively, they argue that drilling at ANWR won’t put a dent in oil prices because it will take seven years to get the first drop of oil out. Or that the amount of oil won’t be that much so it isn’t worth drilling. You get the point.

Imagine the surprise of young intern Joel Alicea when he found an article entitled “The Effect of Opening Up ANWR to Drilling on the Current Price of Oil” by Morris Coats et al.

Guess what the article says.

If an amount of newly discovered oil is significant enough to reduce prices in the future . . . [this indirectly] reduces the current price of oil just as if there were a reduction in the marginal costs of extracting oil now.

Well, that happens to be exactly what Republicans are saying. Conservatives are claiming that the reason that oil prices have taken a dive lately is that President Bush has rescinded the federal ban on offshore drilling, so speculators must take into account the odds that oil supplies will increase in the future. This could really contribute to the debate, couldn’t it?

But here’s the twist. The article was rejected by The Energy Journal. Not orignal research, old boy.

It’s a Catch 22. Democrats go on and on about how the law of supply and demand doesn’t work when it comes to energy. But you can’t get an article refuting them into a scholarly journal because it’s not original research. Here’s what the rejection letter said to Coats et al.:

Basically, your main result (the present impact of an anticipated future supply change) is already known to economists (although perhaps not to the Democratic Policy Committee) . . . It is our policy to publish only original research that adds significantly to the body of received knowledge regarding energy markets and policy.

These days, the American people really do need to be rocket scientists. Because they only get one chance to read about important economic findings. After that, it’s too late. Vieu jeu old chap. Old news. Can’t print that sort of thing.

But it sure is convenient for economic fabulists like Al Gore and Barack Obama.