Oil Drilling California Out Of Debt?

By Loren Faulkner | September 28, 2010

Drilling for oil off the pristine California coast is a topic that generally polarizes people. One side argues for not even considering the minimal risk of an oil leak ruining – even temporarily – the coastline’s natural beauty and habitat. The other asks for a reasoned approach toward balancing the reality of a now dangerous dependence on foreign oil sources with an environmental risk – and the bold fact that California’s $40-billion deficit and cash crunch is reaching the tipping point.

The state’s legislators are like the Hatfields and the McCoys. They are deeply divided between the low-tax Republicans vs. the raise-tax Democrats. Maybe there is a balance that can be reached, but as of this writing, it is not happening.

I was just reading an interesting editorial from Investors Business Daily (www.ibdeditorials.com) – “Drill, Arnie, Drill.” Here are some of the highlights:

  • California’s revenues have weakened more than expected, thanks to a protracted housing slump and sinking retail sales. Rising unemployment is also adding to budget woes. Schwarzenegger wants to raise the state’s sales tax to help make up the shortfall.
  • But there’s a better way to drum up revenues, one that won’t cost California taxpayers a dime. The state could generate huge royalties by allowing offshore oil drilling.
  • The Interior Department estimates that those bicoastal waters contain at least 18 billion barrels of oil — more than half of it off the California coast.
  • Drilling in those waters could generate almost $1 trillion in new energy revenue, pumping potentially billions into California and other state coffers in the form of royalties and other income.
  • Drilling technologies and the industry’s track record in the Gulf of Mexico – 99.999 percent clean drilling since 1975 – show that offshore drilling for oil is safer than ever.

Question: Are you an oil advocate or a “don’t even think about it” type of person? What are your thoughts about off-coast oil drilling as one answer to California’s continual budget dilemmas?