Drilling not the solution

Wyoming Business Report :

By Brodie Farquhar


"October 3, 2008 -- CASPER - Headwaters Economics, a Montana-based, independent think tank, is casting doubt on the conventional wisdom that more drilling will result in lower prices at the gas pump for consumers.

The non-profit research group kicked off Energy and the West in late August - an ambitious, nine-part series of economic analysis and case studies that consider the impact of energy development on states, counties, and communities, from the perspectives of economic performance and fiscal health. The series, on the Internet at www.headwaterseconomics.org, is emerging once a week.

"Rather than generate a giant report, we broke it up into nine pieces," said Ray Rasker, executive director of the group. Rasker said economic research and government data indicates that while the country is largely self-sufficient in natural gas and coal, petroleum, however, is another matter entirely.

"The U.S. has 2.4 percent of the world's known oil reserves," said Rasker. Even if there was a magic straw that could withdraw all that oil overnight, he said, it isn't enough to make the U.S. into a price center or price influencer on the world stage.

"And yet, according to national polls, the average citizen believes that drilling more will lower prices at the pump," he mused.

The price of oil isn't based so much on geology, he said, but on a complex mix of politics, policy, world demand and events."...

..."Local impact varies

Rasker's group also looked at how the energy boom impacts state and local economies (U.S. Energy Needs and the Role of Western Public Lands ), noting that "In the five energy-producing states of the West, energy is a relatively small portion of the economy, with the exception of Wyoming. The percent of total personal income from people employed in energy development is as follows: Colorado (2.2 percent), Montana (2.6percent), New Mexico (3.1 percent), and Utah (1.4 percent). The state the most focused on energy development is Wyoming (13.7 percent of total personal income). It is also the least economically diverse state in the nation (the most reliant on a single industry), and therefore the most vulnerable to change."'

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