Don’t blame Big Oil or Arabs for high gas prices
posted at 10:00 am on May 29, 2008 by Ed Morrissey
If any one entity should take the blame for high gas prices in the US, Mackubin Thomas Owens writes in today’s Wall Street Journal, it should be Congress. Instead of loosening restrictions on domestic supplies when increased future demand from Asia was easily predicted, Congress tightened them instead. They also increased the tax burden on producers at a time when prices had already begun to rise, amplifying the increase and adding to its inflationary effect:
Gasoline prices are through the roof and Americans are angry. Someone must be to blame and the obvious villain is “Big Oil” with its alleged ability to gouge consumers and achieve unconscionable, “windfall” profits. Congress is in a vile mood, and has dragged oil industry executives before its committees for show trials, issuing predictable threats of punishment, e.g. a “windfall profits tax.”
But if there is a villain in all of this, it is Congress itself. That venerable body has made it impossible for U.S. producers of crude oil to tap significant domestic reserves of oil and gas, and it has foreclosed economically viable alternative sources of energy in favor of unfeasible alternatives such as wind and solar. In addition, Congress has slapped substantial taxes on gasoline. Indeed, as oil industry executives reiterated in their appearance before the Senate Judiciary Committee on May 21, 15% of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits.
To understand the depth of congressional complicity in the high price of gasoline, one must understand that crude oil prices explain 97% of the variation in the pretax price of gasoline. That price, which has risen to record levels, is set by the intersection of supply and demand. On the one hand, world-wide demand has accelerated mainly due to the rapid growth of China and India.
On the other hand, supply has been curtailed by the cartel-like behavior of foreign national oil companies, which control nearly 80% of world petroleum reserves. Faced with little competition in the production of crude oil, the members of this cartel benefit from keeping the commodity in the ground, confident that increasing demand will make it more valuable in the future. Despite its pious denunciations of the behavior of U.S. investor-owned oil companies (IOCs), Congress by its actions over the years has ensured the economic viability of the national oil company cartel.
We’ve talked about this many times at Hot Air, but basic economics applies. If demand increases and supply doesn’t, then prices go up. In this case, demand has increased tremendously over the last few years as India and China accelerate their industrialization. The Bush administration’s treaty with India on nuclear power wasn’t a coincidence; the White House wants India more reliant on non-petroleum energy to both cut emissions and to relieve pressure on crude markets worldwide.
Congress can act in several ways to alleviate the price increases, but not by blaming everyone else but themselves. The shameful performance by Maxine Waters last week may have momentarily taken the steam out of Congress’ blameshifting, but that won’t last long. Voter outrage over fuel prices and inflation will eventually force Congress to take some kind of action. The question will be what policies they will enact, and whether they will solve the problem or increase the damage.
If Congress follows Barack Obama and Hillary Clinton, get ready for more damage. The Jimmy Carter policy of windfall-profits taxation will only pass along the burden to consumers while forcing domestic oil producers to cut investments in new production. Instead, just as in the Carter era, oil companies will grow even more reliant on imports, and we can all await the next round of rationing at the pump.
Instead, Owens urges Congress to learn from history and follow the example of Ronald Reagan. Deregulation led to an economic boom and low energy prices for a generation. But we need to go farther than that. Congress needs to promote a shift to nuclear power for domestic electricity, along with a boost for coal solutions. We need to stop being hypocrites and demanding that foreign nations pump more of their oil while we sit on ours to suit our tender sensitivities on the environment. This nation needs to grow up and take responsibility for its energy needs. Congress needs to lead the way.
Drill now. Build nuclear plants. Invest in alternatives for the future, but start taking care of the needs of the present. It’s really not brain surgery or rocket science. Even Maxine Waters should be able to understand it, even if she willfully ignores the reality.
Blowback
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I just laugh out loud everytime I see Ms. Waters make such an ass out of herself. Californians must be so proud.
ctmom on May 29, 2008 at 10:05 AM
Remember ED, when 10 years ago, they said, “It’ll take 10 years before any well they start digging RIGHT NOW, will produce? HELLO?!? Ya think we could use that RIGHT NOW? Morons.
CONGRESS has done the American people a disservice on this issue. But, with global warming a POSSIBLE calamity 1,000 years from now, let’s get right on that.
originalpechanga on May 29, 2008 at 10:05 AM
The government makes more profit on gasoline sales than the so called “big oil”. And states like california make even MORE with their sales tax that they charge us even on the Federal tax.
originalpechanga on May 29, 2008 at 10:07 AM
Folks, we need to call/write/fax our congressmen and women and tell them the gig is up. We want action!
Oink on May 29, 2008 at 10:08 AM
Does anyone else remember back to about 1998 or so, when the Asian markets went in the tank, their demand for oil also fell, and gas prices were back under $1.00? For a while in South Carolina I was paying about $0.70 per gallon. That’s about when the whole SUV craze really took off.
It is simple supply and demand. Right now there is a huge increase in demand (China and India especially) and the supply is staying constant.
rbj on May 29, 2008 at 10:10 AM
Drill now. Drill here. Pay less. It ain’t rocket surgery.
Akzed on May 29, 2008 at 10:10 AM
Oh, there’s plenty of blame for all of them to share. “Big oil” is sitting back waiting for the government to build their refineries for them on “national security” grounds, is my guess. The Sauds have cut their production over the last year. And congress is a bunch of dorks.
funky chicken on May 29, 2008 at 10:10 AM
Democracy at its worst – stupid people representing stupid people.
Onager on May 29, 2008 at 10:11 AM
Agreed that Congress holds everything up and windfall tax is nothing more than communism. . . but what people don’t see here is what is actually happening.
The reason demand is up so high in Asia is because most Asian countries are keeping oil at an artificially low price for their citizens through government subsidies. These subsidies have gotten more and more expensive as the price of oil has increased. As a result, the Asian countries have begun to eliminate their subsidies (big news as of the end of last week in global financial news).
The end of the Asian subsidies will dramatically reduce their demand. . . as the rise in price due to the falling dollar (and speculators in the market) have caused demand in America to fall.
Just yesterday OPEC met and said that a ‘fair’ price for oil is between 60 and 70 dollars a barrel. I still think that is too high. OPEC is scared that demand will wane when Asia eliminates its subsidies – and it will. I think the high range for oil should be at 40 even with ‘increasing demand’.
Once oil subsidies are completely removed from Asian countries, Asian demand will fall and oil will go back to 10 dollars a barrel like 1998.
ThackerAgency on May 29, 2008 at 10:12 AM
Funny how so many didn’t like McCain’s summer gas tax holiday idea, but want to come back and talk about how high gas taxes are….
funky chicken on May 29, 2008 at 10:12 AM
Mackubin Thomas Owens, glad to hear you join in the chorus!
GOP BLAIM DNC FOR STRANGLING AMERICA THROUGH LEGISLATION THAT FORCES US EITHER TO OUR KNEES OR TO KICK THEIR ASS.
There is no doubt that an ass kicking is in order and will take place. Point being: kick out the damn Democrats for what they did then TO US and what they failed to do now FOR US. The Democrats got elected into office because the GOP majority blew it. Well, duh, the Democrat majority blew it again.
Meanwhile, if ever there were windfall profits now with oil, it would be in the pockets of TRADERS, not producers.
The whole misconception of “windfall profits” was conjured to denote hundreds of dollars profit per dollar invested, not cents on the dollar. Tell it to the judge, right?
maverick muse on May 29, 2008 at 10:14 AM
But Ed, that would be… pro-business!
Carl in Jerusalem on May 29, 2008 at 10:16 AM
funky, what’s the point of arguing over $40.? Wasted effort when there’s drilling to do.
maverick muse on May 29, 2008 at 10:17 AM
Jobs, jobs, jobs.
Drill, produce, refine.
GOP LABEL:
PROUDLY MADE IN THE USA.
maverick muse on May 29, 2008 at 10:19 AM
You have far more faith in Maxine Waters cognitive abilities than I do!
highhopes on May 29, 2008 at 10:20 AM
I like that.
wise_man on May 29, 2008 at 10:21 AM
I remember. Oil was $8 a barrel then. I live in an oil producing area. 1998 was terrible, people were losing their jobs, cars, and homes. Now prices are high and things are good here but the rest of the country is crying about it.
One thing that I can promise you is that oil prices will not stay high. There will be a price correction soon and the price of oil will drop.
Ars Moriendi on May 29, 2008 at 10:22 AM
We have met the enemy, and he is US (in the form of Congress).
landlines on May 29, 2008 at 10:22 AM
While laughing at Maxine Waters, let’s also remember that John McCain may not want to gouge the oil companies quite as much but he is just as “green” as all the rest of the liberal Congressional Democrats. McCain is against measures that would supply more domestic oil and he wants to resurrect the Kyoto protocols. Bottom line, we are screwed on oil prices no matter which Democrat wins in November.
highhopes on May 29, 2008 at 10:23 AM
She is the poster child for so many ills in our country. Affirmative Action, racism, socialism, ignorance of our economy, ignorance of the methods and effects of government structures.
What a nitwit.
Illinois is governed at all levels by people just as ill-informed as Waters, who are controlled by the same idiotic impulses.
Jaibones on May 29, 2008 at 10:23 AM
IIRC, you do that sort of thing for a living, so have a better handle on it than the average joe. Any time projections as to when all Asian subsidies will be gone and we can anticipate some relief?
a capella on May 29, 2008 at 10:24 AM
Fifty bucks to fill up the Honda. A Ben Franklin to fill up the F-150. A mortgage payment to fill up a Kenworth.
Wait until Dinnerjacket politely tells Barak he is closing the Straits of Hormuz for renovation.
Limerick on May 29, 2008 at 10:25 AM
And quit putting Corn Flakes in the gas tank.
Wade on May 29, 2008 at 10:26 AM
I once dreamed of heading west to California. No more. Nightmarish scenes like this will keep me away.
Travis1 on May 29, 2008 at 10:27 AM
Notice the story today is that gasoline prices are increasing while oil prices are decreasing.
What’s left to blame – karma?
corona on May 29, 2008 at 10:27 AM
Excellent point! Has anyone calculated how much the government took in in 2007 vs the oil companies? I imagine Congress would not want us to know. Is there a report out there that shows federal and state revenues compared to oil company profit?
Terri on May 29, 2008 at 10:31 AM
Unless you have some brilliant idea, it needs to be refined.
How much is crude down from the high?
Wade on May 29, 2008 at 10:31 AM
.
India is already facing serious budgetary problems with their subsidies – they tried to cut them recently, and were faced with near riots. I would suspect that in late summer or early fall, we will see some dropping. I wish I could say the same about cement and steel….. BTW, congress is not about helping the consumer, they are about restricting the citizen, hence the calls for mass transit even where it makes no sense, ethanol subsidies which take from your plate and put it in the tank, etc. I wouldn’t hold my breath waiting on congress to open up the US to drilling….
Think_b4_speaking on May 29, 2008 at 10:34 AM
And to back up your promise are you going to pay the difference if they do remain high? Lets see some money in the mouth.
Wade on May 29, 2008 at 10:35 AM
So, when called to testify before a Congressional Committee, with all due respect, the buck stops at Capitol Hill. No sense in taking flack for big bully government, with all due respect. Lay on the propaganda for increased drilling that pays homage to nature. Bring along the video showing “then, now” of old sights no longer used and returned to natural setting now. Politicians never answer a question, but spiel out whatever their talking point is. So do the same with them. Hand out the written documentation they desire to answer whatever questions they could possibly have, but spend discussion time on business at hand. Legislators are literate, and if not, it is not the job of business to teach puppets to read.
maverick muse on May 29, 2008 at 10:36 AM
You’re reading Enviro-Wacko propaganda, and you couldn’t be more wrong!! Read the annual report of any of the big oil companies to see how much they are spending (many, many billions) to build and maintain refineries, and the extreme measures they must go to in order to keep up with demand because of government interference.
Refining margins are slim due to the less-than-optimal raw product they must use (even at $130/barrel) and the scores of boutique blends they have to produce: each time shutting down to purge and prepare the refining equipment for the next product (and shutdowns are enormously expensive).
Oil companies would make a lot more money if they could process our own oil here in the USA instead of shipping product in from Mexico, Canada, Venuzuela, and the Middle East! And each refinery could produce much more useful product if we got rid of useless, government-mandated boutique blends which have absolutely no effect on the environment yet add enormous costs because they cause unnecessary refinery shutdowns.
Drill Here, Drill Now, Pay Less!!!
landlines on May 29, 2008 at 10:38 AM
Absolutely! If I am wrong and they do do remain high, we will all pay the difference, myself included.
Ars Moriendi on May 29, 2008 at 10:39 AM
Terri on May 29, 2008 at 10:31 AM
There would have to be the record.
Good luck locating it.
Try the government website for starters.
maverick muse on May 29, 2008 at 10:39 AM
I wish the gov’t would stop driving us nearly off a cliff before they begin to back-up. We’ve got other important things to do besides doing their job for them.
JiangxiDad on May 29, 2008 at 10:40 AM
A ten dollar donation will get you a Drill Here. Drill Now. Pay Less. bumper sticker and you can sign a petition that goes to Congress (who are indeed the guilty parties here, along with John McCain and Joe Lieberman, unfortunately).
Buy Danish on May 29, 2008 at 10:42 AM
.
Further to the point on boutique blends, keep in mind that there are 27 different blends of gasoline, X 3 for the three grades, so that gives you 80 different mixes the existing refineries have to produce. If we simply reduced the blends, we would have price savings. Why does Pennsylvania need a different blend than St Louis?
Think_b4_speaking on May 29, 2008 at 10:42 AM
The primary benefit of the gas tax holiday would be to educate the consumer … most people still don’t have a clue how high gas taxes are. And you can have people yell it from the rooftops, but until you have a concrete demonstration, like a 20 cent/gallon drop in price overnight, most consumers won’t get it.
And some states had said they would follow the federal example and have a gas tax holiday also. Imagine having your price per gallon drop 50 cents overnight. And then imagine how excited the voters will be when the holiday ends…in September. And imagine all those voters suddenly warming to conservatives who talk about cutting taxes VS Obama and his acolytes who want to talk about raising taxes and raising government payouts to bums.
I think we could be talking about saving the GOP’s ass, but all people want to do is criticize the idea because it came from McCain, and because it is only a “temporary” fix. I think it could turn into a more permanant solution if it snaps voters out of their Obamassiah trance.
funky chicken on May 29, 2008 at 10:42 AM
Write our legislators.
Meantime, GOP, put it in the platform!
PROUDLY MADE IN THE USA.
maverick muse on May 29, 2008 at 10:43 AM
If we could just bottle some of that gas eminating from the capitol dome we would have no energy crunch. Of course once Congress discovered that they were the source of so much untapped energy they would pass a law forbidding access to it because there’s a .00001% chance that one or two great horned spider monkeys might stop mating on a regular basis.
sdd on May 29, 2008 at 10:44 AM
That seems likely, however the Iranian situation keeps the prices unstable and volatile. I wouldn’t sell all your oil stocks just yet.
JiangxiDad on May 29, 2008 at 10:44 AM
It makes the PA state representatives feel more powerful. We all know that legislators need these little self esteem boosts now and then./
funky chicken on May 29, 2008 at 10:45 AM
Thacker:
OPEC, read Saudi Arabia, is concerned that sustained high oil prices will lead to the breakdown of Congressional resistance to increased US production. Their real fear isn’t ANWAR but the oil shale in Colorado and Utah. There is anywhere from 100 to 300 years of oil reserves imbedded in the shale. The initial investment requires a sustained price of over $70 a barrel to get it going. After the initial investment prices of $40 a barrel will keep it going. The selection of $60-$70 “fair” price is actually the monopolist’s limit price to keep out new entrants to the market. If we exploit the oil shale OPEC reserves lose a huge amount of their value and will result in a flood of production that the Saudis cannot control.
jerryofva on May 29, 2008 at 10:45 AM
Well, that might be good for some people in our country, but it will KILL the economy in Texas and Corpus Christi, where I live. 10$ a barrel? No thanks.
pullingmyhairout on May 29, 2008 at 10:46 AM
And we could take the extra money the country has in it’s passbook savings account to replace the loss in the tax received fund.
Wade on May 29, 2008 at 10:46 AM
And PAYING THEM to make us do their workload while wearing the shackles they lay on us.
maverick muse on May 29, 2008 at 10:46 AM
Lieberman-Warner climate change legislation (formerly Lieberman-McCain) comes up next week. Should get hot.
JiangxiDad on May 29, 2008 at 10:47 AM
Didn’t McCain say that he is willing to look at the Windfall Profits Tax? Wouldn’t a normal human being be railing against such foolish ideas? Why is he onboard with Maxine and others on this BS?
nottakingsides on May 29, 2008 at 10:47 AM
Drill in the U.S., build more refineries, (it’s only been about 40 years). Get on alternative energies as if it were the space program and we have a deadline. We can fix this problem for good and alleviate the immediate stress soon if we were serious about it.
Unfortunately, I’m not holding my breath.
Geronimo on May 29, 2008 at 10:47 AM
And to think that Gore’s Green Party wants to eliminate cattle because of their gas!
maverick muse on May 29, 2008 at 10:49 AM
.
It is coming, eventually. After all of the smoke and noise (say 20 years from now) this will be the future, along with Canadian tar sands. The combination of these two plays is appx twice what Saudi holds. All we need is to stop the greens.
Think_b4_speaking on May 29, 2008 at 10:49 AM
Yes. They seem clueless, the last to know anything. How infuriating! That’s the Repubs. I mean. The Dems of course leave me hopeless.
JiangxiDad on May 29, 2008 at 10:50 AM
Unfortunately, with oil shale the problem is it costs more to produce it at the moment than you get in the end so until they find a way to extract it using less energy, it’s a wash.
Geronimo on May 29, 2008 at 10:50 AM
Where are the Republicans on this?
What happened to our energy policy?
/crickets chirping
Valiant on May 29, 2008 at 10:50 AM
Folks, we need to call/write/fax our congressmen and women and tell them the gig is up. We want action!
Oink on May 29, 2008 at 10:08 AM
No, we just need them to quit and disappear (I was going to suggest a jump off a bridge).
It’s when these scumbags actually do something that we are all in danger.
TexasJew on May 29, 2008 at 10:52 AM
JiangxiDad on May 29, 2008 at 10:50 AM
It’s the air; they breathe their own fumes, brain dead.
maverick muse on May 29, 2008 at 10:52 AM
Other than defense, what are his pro’s?
JiangxiDad on May 29, 2008 at 10:52 AM
Where are the Republicans on this?
What happened to our energy policy?
/crickets chirping
Valiant on May 29, 2008 at 10:50 AM
It’s swimming around in McCain’s withered old nutsack.
TexasJew on May 29, 2008 at 10:53 AM
It had to be some place.
Valiant on May 29, 2008 at 10:54 AM
You are so right.
The only “do” is to rescind bail-outs, rescind entitlements and subsidies, rescind Marxist legislation, go home, and laisse faire long enough for the waves to finish clashing and finally settle down for business at hand. Yeah, it’s Jimminy Cricket’s solo, “When you wish upon a star” whistling the American Dream.
maverick muse on May 29, 2008 at 10:58 AM
Er, no, I don’t read environmentalist propaganda LOL I formed my idea that the oil companies aren’t going to build new refineries on my own, actually. I’ve watched them bitch for years about the environmental organizations and congress making it “too hard” and “too expensive” to build refineries. These guys have made tons of money the past few years … traditionally the way businesses stay on top of the sector is that they invest for the future during the “fat” years. The last few years have been very fat indeed for the oil companies. If they want to remain king, they need to build a couple of more refineries to help deliver their product more cheaply to the consumer. Otherwise folks will look elsewhere for their energy. Enough folks say “fuck it” and switch to electric cars or hybrids, and solar power, and all those other things, and the oil companies have screwed themselves out of a future with their short term thinking.
It’s stupid because the global supply of oil is high, more than high enough to meet global demand. But we have idiotic behavior on the part of the oil companies and congress driving prices through the roof. They are playing chicken, and we are the ones getting hosed.
Thus my original point….there is plenty of blame for congress, the arabs, and “big oil” to share.
funky chicken on May 29, 2008 at 10:59 AM
I signed the petition Drill Here. Drill Now. Pay Less. yesterday and the count was about 44,000. I see this morning the count is up to about 116,000. Let’s get those numbers up there.
bopbottle on May 29, 2008 at 11:03 AM
The enviros have been an issue, but I believe the largest issue has been that regular old crude is still more cost effective than extracting from the oil shale and sands, right?
Again, the Sauds have cut production considerably over the past year, from what I’ve seen. If they continue to do so, it will become economically feasible to use our own stuff. I’m actually OK with having $4 a gallon gas if it all comes from CONUS or offshore CONUS fields….Yeah, the Sauds will always have China and India, but as others have mentioned above, those government subsidies that line Saud pockets and keep prices low for asian consumers can’t go on forever.
funky chicken on May 29, 2008 at 11:04 AM
USA to Congress: DRILL!!!
Drill in ANWR. Drill in North Dakota. Drill off the California coast (there are some oil rigs there, and the fish love ‘em). Drill off the Florida coast (before Fidel gets all the oil). If we’re so worried about the beaches, let’s remember that in 2005 when Cat 5 hurricanes Katrina and Rita and Wilma roared through the Gulf of Mexico, there were ZERO oil spills!
Oh, and remember Shale Oil? There’s a huge deposit under parts of CO, UT, and WY, but the Sierra Club won’t let the oil companies go after it under Federal land. The oil companies say it would cost $60/barrel to extract it, but give them a $10/barrel profit and say hello to $2/gallon gasoline. Hey Congress, WAKE UP and get OUR oil!
Steve Z on May 29, 2008 at 11:06 AM
I believe Ronald Reagan would have suggested cutting government expenditures, but if that’s too conservative for you, I guess we’d better prepare to embrace Obama’s brilliant ideas for raising all kinds of taxes across the board.
I personally would like to see less government. The way you get there is to starve the beast, or so Reagan thought.
funky chicken on May 29, 2008 at 11:07 AM
And build more refineries! Lots of them, on both coasts! If NIMBY’s object, do it via Presidential Executive Order in defunct military bases!
piraticalbob on May 29, 2008 at 11:07 AM
The primary benefit of the gas tax holiday would be to educate the consumer … most people still don’t have a clue how high gas taxes are. And you can have people yell it from the rooftops, but until you have a concrete demonstration, like a 20 cent/gallon drop in price overnight, most consumers won’t get it.
And some states had said they would follow the federal example and have a gas tax holiday also. Imagine having your price per gallon drop 50 cents overnight. And then imagine how excited the voters will be when the holiday ends…in September. And imagine all those voters suddenly warming to conservatives who talk about cutting taxes VS Obama and his acolytes who want to talk about raising taxes and raising government payouts to bums.
I think we could be talking about saving the GOP’s ass, but all people want to do is criticize the idea because it came from McCain, and because it is only a “temporary” fix. I think it could turn into a more permanant solution if it snaps voters out of their Obamassiah trance.
funky chicken on May 29, 2008 at 10:42 AM
funky chicken on May 29, 2008 at 11:08 AM
Not on the taxpayer’s dime, not for a hugely profitable industry.
funky chicken on May 29, 2008 at 11:09 AM
still waiting for the answer to this riddle:
???????????
corona on May 29, 2008 at 11:09 AM
Why can’t Bush sign an executive order to open up drilling off ALL coasts in the US? He had a perfect opportunity to do this after 9/11 and squandered it. He could call it a National Emergency.
pullingmyhairout on May 29, 2008 at 11:10 AM
.
In terms of what my firm is doing there, Saudi is not cutting production, but just not getting as much as they used to for the same effort. There is work underway to do more interventions there, but their crude is beginning to take more effort to get out of the ground. Last I heard, oil sands break even in the $50/bbl range and shale more like $70, but those numbers are from a few years ago. Saudi has to decide to take money from their subsidies to the poor to invest in the fields, and are not doing much of that yet.
Think_b4_speaking on May 29, 2008 at 11:10 AM
No one entity is to blame. In addition to Bush’s suspension of oil shipments into the SPR, the following are worth considering.
Bring more Iraq capacity online
Encourage building of refineries
Encourage building of nuclear plants
End taxpayer subsidies for Ethanol
Signal a tightening of monetary policy
Drill domestically—Alaska, offshore
Work with Mexico to modernize oil infrastructure
Further subsidize advances in wind and solar
dedalus on May 29, 2008 at 11:11 AM
.
Because the service stations do not buy crude, much less on the futures market
Think_b4_speaking on May 29, 2008 at 11:12 AM
I had a letter in our local paper published last week on exactly this. Both the House and Senate, rather than ask traders who actually set the price of oil, sought to embarass and ridicule oil company execs for the sake of appearing to do something.
It could be argued that Democrats are acting as agents for Big Foreign Oil- for the Saudis. They are the ones stonewalling any increases in domestic supply and blaming everyone else for their own failures.
I think just about anyone running for office could beat anyone in office right now on this topic alone. It’s a great campaign issue for anyone not stupid enough to do exactly as the Democrats do.
drjohn on May 29, 2008 at 11:12 AM
If McCain really wants to become president (or any other Reublican who wants to win in November), his platform should be:
1. Increase domestic oil exploration, drilling, and refining to reduce oil prices and dependency on foreign oil.
2. Re-open nuclear option for generation of electricity.
3. SHUT THE BORDERS FIRST
4. Highlight importance of winning WOT and present recent successes in Iraq (take credit for surge and preparing to win.)
5. Cut, and make permanent, the tax cuts (eliminate death tax)
The media, democrats and RINOs will scream but the American people will vote for him. It will show an interest to defend/protect their families against terror and criminals while promoting their financial well-being.
He needs to say this loud, clear, and often every chance he has. The only real Democrat response is: we want to protect the terroists, raise taxes, and keep oil prices high (or ration it to keep you from using it).
I just do not know how serious he is about winning the presidency.
jerseyman on May 29, 2008 at 11:14 AM
I think a suitable spokesman for “Drill Here, Drill Now, Pay Less” would be OBVIOUSMAN.
Not sure he’s available – I think his creator is a Lib.
landlines on May 29, 2008 at 11:17 AM
Geronimo:
You are wrong. The cost to extract oil to shale is in the $70-$80 per barrel right now. Oil is selling at $120-$140 which allows an adequate profit margin to begin exploiting the resource. Why do you think that Saudi Arabia wants the price below $70 per barrel? They are very sophisticated in their exploitation of the consumer.
jerryofva on May 29, 2008 at 11:18 AM
For those not familiar with the character, here’s the scoop on OBVIOUSMAN.
landlines on May 29, 2008 at 11:22 AM
I’ll also agree that $10 crude barrels is a miserable idea. As awesome as $.749/gal 87 octane was when I was in college, it was bad for our country and helped the environmentalists’ attitude that plagues us today about making our land “purer.” It also created economic doom in oil producing areas of our country and took some supply permanently offline, supply that would be nice to have today.
I think that, given the current value of the dollar, $40 on the low end to $70 on the high end for a barrel of crude would be nice. That would put things back in the $20 to $35 range that we griped about a few years ago if our currency would correct itself.
Right now, I’d settle for $100 as a good start, and I agree about the ass-kicking that needs to happen. Sadly, I think we are so deluded nationally that it’ll be the donkeys doing the kicking, not getting kicked, in November. It may take $100 to fill up a Prius before enough people see common sense.
flutejpl on May 29, 2008 at 11:23 AM
That reminds me of an old joke I used to hear in these parts.
“Oil shale is the energy of the future…
…and always will be.”
Ars Moriendi on May 29, 2008 at 11:23 AM
Ahh, I see. I watched a documentary on it the other day but it must have been made just before the raping started. If there’s anyway to take the pain out of the pump, I’m all about it.
Geronimo on May 29, 2008 at 11:27 AM
Maxine Waters isn’t qualified to be a spell checker at an M&M factory. But, she’s good enough for her constituents.
pistolero on May 29, 2008 at 11:27 AM
Are you serious? You really want a lecture on the meaning of inventory, price volatility, and decimal fractions? You need help with arithmetic?
For the thread:
Drilling for Oil isn’t going to happen. The debate over carbon cap and trade is just beginning, and a majority of US voters ‘want the government to do something about the high price of oil’.
Do you understand that? They want THE GOVERNMENT to fix the problem when it is congress, and the liberal democrats who ARE the problem. Yet they keep voting democrat!
Michigan’s economy is going right down the toilet because of democrat governance, and the voters keep voting for democrat candidates It’s insane!
rockhauler on May 29, 2008 at 11:27 AM
Here is a bit of recent info on production, Feb numbers on all worldwide producers with > 2M bbls per day, ranked high to low:
Russia 9,760,000
Saudi 8,960,000
US 5,045,000
Iran 3,950,000
China 3,757,000
Mexico 2,929,000
UAE 2,650,000
Canada 2,586,000
Kuwait 2,580,000
Iraq 2,450,000
Norway 2,176,000
Nigeria 2,060,000
Note who is currently number three on that list. Our imports of crude are appx 9 M bbls per day. Opening ANWR, the coasts, offshore W Florida, etc could cut those imports by a substantial amount, but not all. Our big suppliers are Canada, Mexico, Nigeria, and still from Venezuela. Just some numbers to add perspective.
Think_b4_speaking on May 29, 2008 at 11:29 AM
I agree with all your proposed remedies to the situation; however, I am also beginning to feel that Congress will never act because the DC Gang doesn’t want to hamper their post-government access to Arab loot, as in Billy Jeff’s $10 million from the Dark Prince, Al-Gore’s $300,000 speech–and, yes, the Bushies’ and Republicans’ share too.
PattyJ on May 29, 2008 at 11:30 AM
You are correct. They should be investing their profits in drilling (offshore, ANWR), new refineries, and nuclear power plants. However, for the last 20 years congress has prevented these investments in the US. So where do they go ?Overseas where they are encouraged to invest in exploration, drilling, refineries, and power plants.
jerseyman on May 29, 2008 at 11:31 AM
Jeb Bush strongly opposed drilling offshore FL, just like the current (R) gov, Charlie Crist.
GW wasn’t gonna overrule Jebbie.
funky chicken on May 29, 2008 at 11:36 AM
Umm, maybe not.
Cicero43 on May 29, 2008 at 11:37 AM
But the oil companies would have to build large infrastructure to get this project going, which would raise the $$$/barrel price in the beginning, depending on their accounting anyway. They have lots of ready cash right now, and would make big money per barrel if they did it, so why the inaction? It appears that they prefer to take their (short term) cashout, and sit and whine that the meanie environmentalists make their jobs too hard.
funky chicken on May 29, 2008 at 11:38 AM
More frightening: are even the oil companies fooled by the “Global Warming” fraud?
funky chicken on May 29, 2008 at 11:42 AM
Even if the price of gas were to stay the same, the money would be going into OUR economy. Has anyone seen the viral email about what’s going on in Dubai? I want that kind of economy here.
melda on May 29, 2008 at 11:46 AM
Very true. But Jeb is gone and GWB is out of here in less than a year. At this point, he shouldn’t care what Crist wants or doesn’t want. It doesn’t make a hell of beans since Bush isn’t up for re-election and Bush can leave a “legacy” of opening up drilling in the U.S. I can promise that more people would be cheering than not.
pullingmyhairout on May 29, 2008 at 11:47 AM
Dubai and Russia. Check out the Million Dollar Bathroom in Moscow.
pullingmyhairout on May 29, 2008 at 11:51 AM
.
No you don’t. UAE dirham is pegged to the dollar, and inflation is at 20+%. The building going on there is huge, but is mostly Saudis, Iraninans, etc who are buying condos that stay empty, until the regional war starts, then they become safe houses.
Think_b4_speaking on May 29, 2008 at 11:52 AM
Funky:
The $70-$80 price included putting infrastructure. The sustainable price is $40-$50 range in today’s prices and technology.
Several weeks ago the House Democrats voted in committee to deny the Interior Department the authority to lease the oil shale lands.
The policy of the Democratic party is to raise the price of oil and other energy sources to “fight” global warming, a phenomenon that appears to have taken a holiday during the past decade. The green way has replaced the red way as the path to socialism.
jerryofva on May 29, 2008 at 11:53 AM
Get used to it. As long as we have the ICE and clunker car companies, we will pay big prices for energy.
Remember, the same investors invest in the car companies and oil companies. What part of this is confusing?
saved on May 29, 2008 at 11:54 AM
Those seven seconds of silence after she let the ‘s’ word out was priceless. If they can’t represent us then they must supply us with some free comedy. Maxine has another job waiting for her in case she has to retire from Congress.
Christine on May 29, 2008 at 11:59 AM
I hadn’t even heard that. THAT info should be in the headline of most of the energy related posts on hotair and other conservative blogs.
Yeah, as a friend of mine said 20 years ago “the roots of the green tree are red.”
funky chicken on May 29, 2008 at 12:00 PM
Please don’t tell that to John “Obscene Profits” McCain.
What a joke.
misterpeasea on May 29, 2008 at 12:01 PM
Because it is based on the cost of inventory, not the cost to replace it.
And the cost of inventory could be speculative costs, not actual costs.
right2bright on May 29, 2008 at 12:02 PM
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