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
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2 3 Next »
I’m not sure myself if the gas tax holiday is such a great idea.
Don’t get me wrong, it is just a short term ‘holiday’ and I would like cheaper gas as much as the next guy.
But don’t think I wouldn’t have a mysterious hole in my back yard about the size of a 1000 gallon gas tank about a week before the ‘holiday’ ended.
…better return than an inside scoop on cattle futures…
cntrlfrk on May 29, 2008 at 12:02 PM
funky fowl 11:38 and oil company inaction. . .
Alberta
rockhauler on May 29, 2008 at 12:03 PM
We pay members of congress around $150k a year and with all the perks they give themselves it probably comes in at around $275k. Which I think they get paid even if they are in prison during their elected term. We don’t attach strings. The oil companies give many of them that much or more with strings attached. We’ve been out bid. That was just a bit of theatre to shut us up.
snaggletoothie on May 29, 2008 at 12:03 PM
The only way you get people to understand these numbers is McCain’s summer gas tax holiday. It’s damned sad, but it’s true.
And it boggles the mind to then watch conservatives cry that the government will lose money if gas taxes are cut.
funky chicken on May 29, 2008 at 12:04 PM
.
It is a bit of a gimmick, but it would be instructive to show the American consumer how much the gov’t is getting per tank……
Think_b4_speaking on May 29, 2008 at 12:05 PM
If congress (and they won’t, but if) made the announcement that drilling in Anwr and the coasts along with fast tracking the building of refineries, the speculation in oil would drop in 1/2, plus the added benefit of watching a few speculators jumping out of buildings.
If the dems were so “sure” that Bush is in the pocket of oil companies, wouldn’t this be the perfect revenge?
right2bright on May 29, 2008 at 12:06 PM
funky chicken on May 29, 2008 at 11:38 AM
the problem is that not one of the actors in the unfolding drama has the citizen interest at stake. Congress wants control and taxes, oil companies enjoy the price hikes as long as demand is not impacted to a large degree, environmentalist can’t stand oil and want to see it taxed out of existence. business as shown by DOW chemical YRC trucking, UPS, FEDEX etc can simply raise prices to recoup the costs (for awhile at least) It is the consumers of gas that have seen their wages stagnat due to illegal immigration, outsourcing, increase taxation that can not support it.
Like the game of musical chairs only one group will be the winner. Most of the lower classes in Amaerica today have already been kicked out of the game IRT to gasoline. Next is the middle class.
It is my firm belief that Wall Street and Washington have no idea of the damage that has been done to the economy over the last 16 years since NAFTA. We enjoyed the benefits of NAFTA over the last decade now we will experience the drawbackas of free trade as inflation is imported, new economies come on line and demand resources, and our ability to effect world economies/nations is lessened. The record tax revenues will dry up and Congress unable to cut spending will increase tax rates which will push the economy in the wrong direction.
Wall street is rallying at the moment while gas is hitting a new high. they have no idea of the demand destruction occurring on main street. The one saving grace is gasoline is still available for a price. As comsumers spend more of their money on energy the rest of the economy will contract. If it’s a choice between starbucks coffee and gas to get to work guess which will win?
the CEO of DUKE energy was on CNBC this morning and stated he saw an increase in the amount of people not paying their bills and having to be disconnected. This is a big warning sign flashing red. Now Congress wants to pass cap and trade due to “global warming” which could increase electric bills by 50% how will we pay of it? By doing without. Which will decrease spending, decrease economic activity etc. The Carter negative feedback loop is alive and well it seems. Washington learned nothing from the gipper it seems.
unseen on May 29, 2008 at 12:06 PM
http://tonto.eia.doe.gov/dnav/pet/hist/mcrfpus1a.htm
Shows that the US is NOT producing as much oil as it did in the 70,s and in fact we only produced 56% of the oil we produced in 1970.
Thanks Congress.
Romeo13 on May 29, 2008 at 12:07 PM
And it doesn’t boggle the mind to then watch
conservativesRINO’S cry that the government will lose money if gas taxes are cut.funky chicken on May 29, 2008 at 12:04 PM
fixed it.
unseen on May 29, 2008 at 12:08 PM
.
Exactly
Think_b4_speaking on May 29, 2008 at 12:09 PM
I share your cynicism.
unseen on May 29, 2008 at 12:08 PM
It’s often “True Conservatives” like Wade who bring it up when they argue that the temp gas tax holiday is a bad idea…
funky chicken on May 29, 2008 at 12:10 PM
I have two proposals that I think would be easy and cheap to implement.
1 – Issue a moratorium on “boutique” fuel mixes. If we must have a boutique fuel, choose one for the entire country.
2 – Give incentives to businesses to promote telecommuting.
krakatoa on May 29, 2008 at 12:12 PM
Thanks Congress.
Romeo13 on May 29, 2008 at 12:07 PM
there is a very easy way to payback Congress. Except for work just stop buying. the decrease in tax rev from lack of sales tax, lack of gasoline revs, lack of capital gains taxes etc should be a major wake up call for the government. hell last time we did it we got $600.00. Maybe if we just quit spending altogether for a month the next check might be $2,000
unseen on May 29, 2008 at 12:14 PM
Yep. Your NAFTA comment is spot on as well. I remember during the Clinton admin when textile companies were shutting down many of their factories in the US to send them overseas, and how thier stock prices shot up. The business reports were all crowing about what a great move it was for the economy.
Er, not long term fellas.
funky chicken on May 29, 2008 at 12:14 PM
Congress lives in an entitled ivory tower. Pragmatic solutions such as building refineries and drilling our own oil is way over their heads. The Dems need to blame the rich and the Republicans are all eunuchs that just want to live in the tower for life.
Really funny that gas prices are so high and Schummer is hiding under the dash of his Caddy now that the Dems are in charge.
This, more than any other issue, makes us look like idiots to the world. I could care less what the rest of the world thinks, but this is the issue…..not George Bush, Iraq, open borders or elected idiots in Congress. We can’t even manage our own freakin’ energy and are willing to pay bullies to keep us in fuel. Pathetic.
Hening on May 29, 2008 at 12:15 PM
Almost 123,000 signatures now… Drill Here. Drill Now. Pay Less. The pace seems about 500 sigs every 2 minutes.
Scroll down that page. It includes a few social networking features (though not as many as it should). You can post to Facebook, and Digg the story (31 Diggs so far). Work the social graph, Newt!
By the way, Newt really needs to do some Search Engine Optimization on those links. Whatever CMS he is using (Joomla, maybe?) there are ways to create external URLs that are way better than that.
blueguitarbob on May 29, 2008 at 12:16 PM
funky chicken on May 29, 2008 at 12:10 PM
No tax cut is a bad idea IMO. But i understand you point.
unseen on May 29, 2008 at 12:18 PM
The oil companies could fight back with one simple device. Design new electronic gas pumps to display the amount of state and federal taxes are included in the price per gallon.
RushBaby on May 29, 2008 at 12:18 PM
BTW, can someone explain to me how we got in the position of asking permission from congress to lease ‘our’ land, having no say in local government when they decide to mandate a particular blend of fuel, lose access to huge reserves of coal, oil, and shale due to executive order (not even discussed with said ‘representatives’,etc?
Think_b4_speaking on May 29, 2008 at 12:19 PM
In part the market has been doing well in part because discretionary consumer stocks that had been beaten senseless are reporting earnings that are better than expected. That might argue that that the Street had overestimated the impact of the bad economy on consumer behavior.
Food inflation strikes me as more of a concern then fuel prices since there are fewer alternatives to eating.
dedalus on May 29, 2008 at 12:20 PM
That’s the fault of individual states, not the federal gvmt
funky chicken on May 29, 2008 at 12:21 PM
I don’t believe believe she knows who Hugo Chavaz is.
Kini on May 29, 2008 at 12:21 PM
The people who know the state gas taxes that they are paying also know that they have to pay there or with their property taxes, or with tolls, or with their state income taxes.
dedalus on May 29, 2008 at 12:23 PM
The solution is simple which is why Congress/the government can’t deal with it.
SouthernGent on May 29, 2008 at 12:25 PM
Wasn’t Barbara Walters his mistress? Or was that Idi Amin? Either way, I’m pretty sure Maxine is up on gossip.
JiangxiDad on May 29, 2008 at 12:25 PM
I’m so damned tired of hearing friends/family complaining about ‘big oil’ profits. Hillary and Barack are pounding the message into the minds of their blind following. Yet, unlike the two of them, the numbers don’t lie.
If the Dems get the White House I think I’m moving the family to New Zealand.
cannonball on May 29, 2008 at 12:26 PM
.
That’s why I said local government. Did they ask you about it before they put in the mandates, or open it to public debate? They certainly didn’t ask me…..
Think_b4_speaking on May 29, 2008 at 12:28 PM
Start packing, because John McCain is also whining about obscene profits.
misterpeasea on May 29, 2008 at 12:29 PM
While a lot of good points have been made about the reasons for the current price of oil I think most of the conclusions would be plausible if the background facts were as described. Myself I subscribe to a whole other set of reasons.
When a fundamental story about something is so compelling it almost always leads to irrational pricing behavior. That story exist today in oil based on a few main drivers–peak oil, Chinese and Indian demand, a weak dollar and geopolitics. In fact because everyone believes these to be true the price appreciation has reached bubble proportions.
Below you will find links dispelling the supply/demand canard. Supply has kept up with demand. Personally I support drilling etc for a host of reasons chief among them, I would rather keep the trillions of dollars here rather than in other hands, notably the Saudi Wahabbists.
Previously, without reviewing them, this same perfect storm of fundamentals infected the tech boom of the 90’s and the real estate boom from 1998-2006. What all bubbles have in common are rates of change. They all appreciate at more or less the same amount vs time. It feeds its own psychology.
Right now crude is getting very near its pinnacle. $170ish per barrel would be just about right relative to previous bubbles.
Below you will find charts showing the dollar, which has declined about 40% since 2000. The crude oil chart meanwhile has gone up about 600% since 2000 when the bubble started going. Lastly is a chart showing the tech and real estate bubble superimposed on each other. Ultimately if I’m right crude oil will follow the same pattern. They all come down in about 1/3 the time they took to go up.
Bubbles always burst. When this one does we’ll be back at $50 a barrel and Chavez will be swinging from a lamp post. Now what’s better than that!
the Dollar chart
http://mrci.com/pdf/dxc.pdf
the oil chart
http://mrci.com/pdf/cl.pdf
internet/housing bubble comparison chart
http://www.investech.com/
Supply has kept up with demand:
http://www.reason.com/news/show/125414.html
http://www.star-telegram.com/ed_wallace/story/651928.html
And finally the most important, the nuts and bolts of the loop hole in the Futures Market and the massive institutional money involved exploiting it.
http://www.bloomberg.com/apps/news?pid=20601039&sid=aZBYblEmb.v0&refer=columnist_baum
patrick neid on May 29, 2008 at 12:32 PM
dedalus on May 29, 2008 at 12:20 PM
those results were before the recent jump in fuel prices. they are backward looking indicators. I understand the reasons for the rally. Alot of it was the fear being lifted by the FED saving Bear Streans. However, the gasoline price is a forward indicator. The demand destruction started last month. the mastercard report yesterday showed demand off almost 5% from a year ago. the miles driven in the USA fell for the first time since 1979. There will be some companies that do really well in this environmnet. Companies the play on cocooning like Atvivision, Gamestop. companies that have pricing power like WMT and COSTCO. Companies that don’t like Starbucks are in for a bad time.
the demand destruction is just starting. The longer the gas prices stay this higher the more of an impact it will be. I sold everything last Monday. don’t want to go short because the economy can rebound quickly if energy prices fall but I don’t want to be long either because the trend is down. We should retest the Mar lows soon most possibly by the end of the summer.
I agree with you on Food prices. i see a boom in home cooking occuring in the next year.
unseen on May 29, 2008 at 12:33 PM
This nation needs to grow up and take responsibility for its energy needs. Congress needs to lead the way.
LOL!
It would have been even funnier if you had said “Congress” and “responsibility” in the same sentence!
Seriously, there is no responsibility for almost every member of Congress and for most people in positions of power. The world is suffering from immense GREED. When it comes to money, too much is not enough. There is no long term strategic planning being conducted for this country when it comes to our government, and sadly the same is true for more and more corporations in America. The trend will continue until the suffering gets unbearable, and then there will be a change for the better. It’s a sad reality.
It took a Jimmy Carter to get a Ronald Reagan.
SwampRat on May 29, 2008 at 12:35 PM
Right. The knuckleheads on “Wall Street” surely are clueless about the impact of oil and gas prices on consumer economics. Because why would they bother themselves to think about that?
(s/off. unheard would be better.)
Jaibones on May 29, 2008 at 12:37 PM
There is nothing wrong about raising the issue of profits, from basically a cartel of oil companies. With the loss of competition, the lack of refining and inventories, it would be easy to take increased profits. There can’t be many industries with a more complex accounting system then oil companies. They have so much inventory, so much equipment, assets, that the writes offs, and the types of investment privileges (incentives) they have make it impossible to know what they are financially doing.
That being said, we should first address the “shortage” with more drilling and refining, and de-regulate, opening it up to investors, and take away some of the tax incentives in trade of opening up reserves. That will simplify the accounting.
After that is resolved, or on the path of resolution, then begin looking at any untoward business practices.
right2bright on May 29, 2008 at 12:41 PM
I went long AMR after the sell off last week. Thought that was the safest way to play a pullback in oil–don’t have the guts to play oil futures or buy DUG. Most investors I know are itching to short oil but the few that have have gotten their fingers burned.
I agree with you on the whole cacooning, staycation mentality. The best recent investments have been companies that cater to living economically.
dedalus on May 29, 2008 at 12:43 PM
.
There is no cartel of oil companies, it is a cartel of oil producing nations that sell to the oil companies. Exxon made a ton of dollars, but the return on investment was around 8%. Coca Cola made around 19% ROE, and Microsoft is around 28%. Who is doing the gouging here?
Think_b4_speaking on May 29, 2008 at 12:45 PM
A consumer strike… What would be the consequences? It might be that governmentals [governmentals are folks who think government is the solution, always] would notice and take action including economic stimulus checks. But it could also be that they take the ‘normal’ governmental action — increase the tax rates to ‘recover’ their ‘missing’ revenue.
Suppose a city, under the guise of conservation, decides to install water meters in all homes; of course, there is a budget where the water bills pay for not only the water but also the cost of the meters and billers and checkers and supervisors and auditors. As soon as actual conservation reduces the use of water, and hence the budgeted revenues, guess what has to happen to the water rates?
LaMonte on May 29, 2008 at 12:45 PM
Drill Here. Drill Now. Pay Less.
pabarge on May 29, 2008 at 12:46 PM
I have heard that while NZ may be physically beautiful, it has very high taxes, very low wages, and a fully developed nanny state. Be careful.
JiangxiDad on May 29, 2008 at 12:50 PM
Jaibones on May 29, 2008 at 12:37 PM
Maybe you do not have any idea how the market works? There have been many, many, many times when those on Wall Street have been out of touch with what was occurring on Main street. The recent housing crisis springs to mind, the dot.com bubble is another recent memory. Closer in time frame many people on Wall Street didn’t see the infaltion coming, didn’t see the ramifications on resources of opening up 2 billion people to Western styled economy. didn’t see the rise in gold prices, didn’t see the video game industry’ds bull run.
there were plenty of “knuckleheads” on the street that thought housing will always go up, that the dot.com era was a totally different economic model. The problem is that those on Wall Street like in Washington are removed from the general population. Gas prices are not a big deal for the wealthier among us, food inflation is nothing when you have extra money.
this disconnect is what makes a market.
they can think about it all they want until they live it they can not understand it. some of the greatest investors have come from humble positions. they were the ones that could see what was occurring before the other protected ones could.
unseen on May 29, 2008 at 12:51 PM
dedalus on May 29, 2008 at 12:43 PM
AMR was a good trade. I’ve been in and out of a couple positions for a day trade over the last week but I’m not confident in holding anything over night.
As far as shorting oil? i agree it should crash most of the recent prices seems like a bubble forming, the problem is it isn’t. while there are several reasons why it might not be retreating, none of them are good for the wider market IMO. Might want to take a look at GME and ATVI for the stay at home trade.
unseen on May 29, 2008 at 12:58 PM
Think_b4_speaking on May 29, 2008 at 12:45 PM
The merger of 11 oil companies into 5 major ones did not help competition at the pump any. nor does it appear to have helped the oil companies find new reserves which was the argument for letting them merge in the first place if i recall correctly.
unseen on May 29, 2008 at 1:02 PM
Have you ever heard of the late Dr. Bussard’s fusion reactor design being pursued by the US Navy?
It’s real, fascinating and full of potential.
http://www.strout.net/info/science/polywell/
http://en.wikipedia.org/wiki/Polywell
It seems to be a possible major breakthrough in dealing with our domestic energy issues.
Screw the Mideast!
gmoonster on May 29, 2008 at 1:06 PM
.
They have found plenty – just not allowed to drill for them.
Think_b4_speaking on May 29, 2008 at 1:09 PM
On the plus side, expensive oil is hastening the introduction of electric cars and plug-in hybrids. Nearly every major manufacturer of cars, and alot of startups are racing to the market. In 2010, GM will introduce the Volt, the first 40 miles, fully charged, will be all electric at the equivalent of less than $2.00 a gallon.
Golden Boy on May 29, 2008 at 1:13 PM
It will be nice to start drilling in Iraq–they may have more reserves than the Saudi’s.
dedalus on May 29, 2008 at 1:20 PM
Great. But how much will this little beauty cost?
pullingmyhairout on May 29, 2008 at 1:21 PM
Think_b4_speaking on May 29, 2008 at 1:09 PM
not allowed or unwilling?
In Washington, Republican lawmakers and oil-industry lobbyists are arguing that opening restricted areas would boost supply and bring down oil prices. Critics contend not enough is being done to encourage alternative fuels and development of already-leased federal lands. Of the more than 45.5 million acres of federal land under lease, oil companies aren’t producing oil or gas on 31 million acres.
“Why would we expect oil and gas companies to rush these new areas into production, when they are sitting on literally millions and millions of acres of existing leases without carrying out any production on them?” said Sen. Jeff Bingaman (D., N.M.).
This snail’s pace is leading some to try to wrest back existing leases. Alaskan officials are locked in a legal battle with Exxon, BP PLC and Chevron Corp. to reclaim leases on a North Slope oil-and-gas field that is estimated to hold eight trillion cubic feet of natural gas and hundreds of millions of barrels of oil. The companies acquired the leases decades ago but have yet to produce oil or gas. Exxon, which holds the largest interest in the field, has said in the past that it hasn’t drilled because there is no pipeline to move the gas to market.
http://online.wsj.com/article/SB121149858423815755.html?mod=googlenews_wsj
unseen on May 29, 2008 at 1:26 PM
Golden Boy on May 29, 2008 at 1:13 PM
i think the nissian model of leasing batteries will win the day.
unseen on May 29, 2008 at 1:27 PM
“The dumbest member of Congress”
BallisticBob on May 29, 2008 at 1:27 PM
Lemme fix that for you:
If Congress follows Barack Obama , Hillary Clinton, OR JOHN McCAIN, get ready for more damage.
LegendHasIt on May 29, 2008 at 1:31 PM
It doesn’t matter how much it will cost… the government will give subsidies on the Volt because of the greens, and really it doesn’t solve anything, since it still requires energy to be produced somewhere, with all the applicable losses that entails.
Canadian Imperialist Running Dog on May 29, 2008 at 1:34 PM
The is some manipulation of oil prices within the commodities markets. Ed is making a reasonable assertion, that prices increase when supply remains the same or contracts as demand increases. The statistics quoted in the attached link would suggest, however, that demand is curving flat while supply remains at sustainable levels. We should continue to explore new ways to be more efficient, but I would also expect the speculative bubble relating to commodities, especially oil, to relent at some point in the near future.
lexhamfox on May 29, 2008 at 1:35 PM
BallisticBob on May 29, 2008 at 1:27 PM
good article.
unseen on May 29, 2008 at 1:36 PM
lexhamfox on May 29, 2008 at 1:35 PM
IF it follows the same pattern. comodities bull markets last for about 10 years. This is how long it takes to bring more production online. It takes the next 20 years for the economy to adjust to the new prices, decrease useage of the resources to cut costs, etc find better ways to use the underlying commodities, have the producers close mines, industries as the oversupply is tapped out of the market and then the process repeats itself.
unseen on May 29, 2008 at 1:41 PM
.
You answered your own question with your quote, for Alaska. For the lower 48, they are doing plenty of drilling, where allowed. BTW, the gas comes with the oil, and in Alaska one has to reinject the gas if it is not piped out.
Think_b4_speaking on May 29, 2008 at 1:42 PM
Think_b4_speaking on May 29, 2008 at 1:42 PM
Why are they not building the pipeline? I don’t know. Is it environmental regs or just a reluctance to increase supply? Anyone know? links would be nice
unseen on May 29, 2008 at 1:50 PM
I have a suggestion to help fight Congress and increase oil supply: Alaska should declare independence.
Then they can drill ANWR, drop the unsubstantied listing of polar bears and walruses, and even build their own refineries and nuke plants. “Oil shortage? what oil shortage? Global warming? Well, we’re not sure about that, but just in case we’ve already got the farms mapped out if we ever get a good growing season here. My cousin is really looking forward to starting his own vinyard and winery!”
Lancer on May 29, 2008 at 1:52 PM
What’s pissing me off is the lame ass republicans refusing to campaign on this. They can point to decades of democratic obstruction and craven pandering to envrio-wackos.
Iblis on May 29, 2008 at 2:15 PM
.
I saw an article a few days ago that Alaska governor is pushing to get the gas pipeline, but it was hard copy, so I have no link. If she can get it by the environuts, It will be a go, but will take a few years to complete.
Think_b4_speaking on May 29, 2008 at 2:18 PM
Reminding voters of the high price of oil doesn’t seem like it would help the GOP. A poor economy doesn’t favor the incumbent, even if they can explain that the other party should be blamed.
dedalus on May 29, 2008 at 2:22 PM
Yeah… thats what we need ELECTRIC cars… cause you know.. its not like we don’t already stress the electric grid of the nation!!!
I mean, there are no brownouts in New York, or Los Angeles, or anything!
/sarc off…
Anyway, its amazing to me how dumb some people can get… yes, lets put a LOT of money into wind and solar power…
Of course Windpower doesn’t work without … wind.. and solar does not work at night, so you still have to build regular infrastructure and keep it online for when those don’t work… which raises the cost of ALL power… but hey… it sounds good…
Kinda like ethanol… sounds good, but a net energy LOSS to the national system, which is also driving up food prices, and taking tax dollars to do it…. but hey… it sounds good…
Just where in the heck is anyone with any intelligence in this whole debacle? (certainly no in Washinton, or the press…).
Romeo13 on May 29, 2008 at 2:28 PM
It doesn’t matter if our global climate is warming or cooling. What drives robust economies is robust energy supplies and governments who allow capitalism to work its magic. If we want to reduce immigration into this country, we need to encourage robust development of industry, energy, and freedom everywhere in the world. Most humans would probably stay close to where they grew up, if they had decent work and freedom in their own country. Supporting trade agreements and deposing evil dictators in favor of more representative governments helps to achieve this, but doing these things also bites us in the butt when we fail to increase our own energy supplies to compensate for demand increases elsewhere and surrender to the enemies of capitalism, freedom and democracy. The DEMS don’t get this fact and probably never will. They just crave the power to control other people’s lives through taxation and institutionalized entitlement slavery. The only viable solutions lie in the hope that the American people will eventually wake up and smell the roses. I eagerly await that day, but I’m not holding my breath.
NuclearPhysicist on May 29, 2008 at 2:28 PM
If I’m wrong about crude oil being a bubble, akin to housing and the Internet stocks of past fame, the next stage of these higher prices will be the rest of the world pointing their hating finger at us as the cause. High prices will cause social unrest, famine etc similar to our other hair brained idea, ethanol. Congress is on a roll.
Would we be guilty? I think so. On any given day we use 25% of the world’s total daily production. While it is true we are also 20% of the world’s economy, people don’t relate the two when they are pointing fingers. The rest of the world knows we are sitting on enormous quantities of oil and gas and choose not to exploit these reserves forcing less environmentally conscious states to spoil their backyards. Then to add insult to injury we drain the world market on a daily basis.
NIMBY will be coming back to haunt us. It’s about time.
patrick neid on May 29, 2008 at 2:53 PM
A poor economy doesn’t favor the incumbent, even if they can explain that the other party should be blamed.
dedalus on May 29, 2008 at 2:22 PM
That is the point. the GOP is NOT the incumbent party at the moment where energy policy is being formed. In the Congress. I really don’t think the majority of people understand that. the GOP could point to the fact that in the 2 years the Dems have had the Congress gasoline has went up 33%.
but since the GOP is running and hiding behind their desk the American people will never know. Because to attack the democratic congress will mean attacking the environnuts, global warming etc and the powers that be in the GOP have decided that it is not a fight they can win. I strongly disagree. You can connect the increase in gasline tothe dems, to liegal immigration, to unfair trade policies, tofood prices, to economic issues left right and center. But I guess since the GOP congress critters get their gas, car and insurance paid for by the taxpayer just like the dems they don’t understand that. I would love every GOP congress critter to turn in their leased car and push for the practice to be abolished. they could use the campaign commercial ” that in this time of gasoline prices it is not proper for the Congress to not pay gas prices. the demcratic congress has made this mess and they as the rest of America is already doing feel the price of their inaction. Hmm the GOP using class warfare on the elite Dems hmm priceless. Would be as good as the Congressional bank scandal IMO
unseen on May 29, 2008 at 2:54 PM
GM is gunning for costs under $30 k. The advantages of electricity over oil are multiple. It’s cleaner, we won’t send our $ to overseas tyrants, and the energy inputs are multiple(wind, nuclear, coal, solar, etc.) into the grid. Stress on the grid won’t be a problem as long as charging is done at night(off-peak hours.)
Golden Boy on May 29, 2008 at 3:14 PM
I’d like to have seen Bush run immediately against the Democratic congress after the 2006 elections. The Farm Bill was a corrupt piece of legislation that Bush should have pounded the Dems on, but the GOP in congress was on the take and all Bush could do was veto and have it overturned.
dedalus on May 29, 2008 at 3:17 PM
Actually, my idea was very simple…
President: “Since the Federal Government appropriated ANWR 28 years ago, it has never fulfilled the Constitutional requirements for land usage. Therefore on this date, I am issuing an Executive Order returning ANWR to the state of Alaska. I hope that they listen to their constituents and support the creation of jobs and revenue by using the resources with which God has blessed our great nation.”
dominigan on May 29, 2008 at 3:18 PM
funky chicken on May 29, 2008 at 3:20 PM
Waiting for the government to pay to build the pipeline. Waiting for the government to pay to build a new refinery.
Hey guys? You make plenty of money now, and perhaps you should spend some of it on your own infrastructure?
funky chicken on May 29, 2008 at 3:25 PM
HUH? Off peak hours… you mean night hours when solar does not work at all, and solar is lessened (depending on where it is)?.
People will get home from work, and plug in their cars… so at 6:00 PM there will be a surge load on the grid… which in California is still a time of peak load (dang air conditioners, daylight savings time, and the sun…).
To get electric cars to run, we’ll have to increase our electricity infrastructure, which will take YEARS… and we are not starting to build that infrastructure… so initialy it WILL NOT BE THERE WHEN NEEDED!
Romeo13 on May 29, 2008 at 3:30 PM
After years of hearing the false cries of “no war for oil” from the left, I’m taking it to heart by declaring war on Congress – now officially recognized as Public Enemy #1.
T J Green on May 29, 2008 at 3:39 PM
Romeo13 on May 29, 2008 at 3:30 PM
would irony not be that we would need to buy a gasoline power generator to be able to charge our cars? I can see it now. LOL
unseen on May 29, 2008 at 3:41 PM
T J Green on May 29, 2008 at 3:39 PM
I have never had a problem with war for oil. Congress is joke. they are idiots. But then Bush isn’t exaclty a poster child for universities. If we need to fight a war to secure our oil supplies AND the country/leader of the country we are going to war with is a nutjob that used WMD on his own people and said he had more WMD to use on us, and he was activly shooting at us AND he invaded his neighbors twice. then I see no, non, nota problem with it.
unseen on May 29, 2008 at 3:47 PM
Well, the advantage/disadvantage is that it will take years before electric cars really make an impact.
Yes, solar will not obviously be one of the grid inputs at night. People will have to wait later than 6PM for the cheaper rates/less stress on the grid to plug in. I agree we need to beef up the infrastructure to handle the load, but electric cars will bring an end to sending $ abroad to terrorists and tyrants, and will help our balance of payments tremendously. I agree we need to drill more, but we also need to use less oil. Why not buy American energy?
Golden Boy on May 29, 2008 at 3:49 PM
Golden Boy on May 29, 2008 at 3:49 PM
there is great leaps being made in energy storage of solar and wind energy so that it can be used at night, rainy days cloudy days etc.
unseen on May 29, 2008 at 3:52 PM
Thats just it… what American energy?
Can’t build dams for Hydroelectical power.
Can’t build Nuc plants, too much paperwork, and nowhere to put waste (in fact McCain just said he basicly wants to export our waste, and not open Yuka Flats… DUMB).
Coal plants? McCains new CO2 intitiative will make new coal plants almost impossible to biuld or finance because of the needed carbon offsets.
Solar? Not ready for primetime, and does not work at night, or in parts of the country where we, in the winter, have this stuff called SNOW.
Wind? don’t work if it aint blowing… I’ve driven through Tehachapi (near Bakersfeild CA) pass MANY MANY times when all those pretty windmills are not moving.
Natuaral Gas? It burns, will have the same CO2 prob as coal.
So, just where are we going to get the electricty to run our cars? Remember, energy does not come from nowhere… electricty has to be generated, and transmited to where it is used.
There are NO new power plants being built, or even in the planning stages… so just where are we going to get the energy we need to sustain our economy?
Romeo13 on May 29, 2008 at 4:10 PM
Well, we had better hope it’s a bubble otherwise prices will be going up significantly from here.
patrick neid on May 29, 2008 at 4:20 PM
There have been alot of studies on this. Everything I’ve read says we will have enough juice, at least initially, as long as people plug in at off-peak hours. Again, I’m all for increasing the grid capacity and more drilling, but the electrification of transportation is a very good thing overall, and is being hastened by high oil prices.
Golden Boy on May 29, 2008 at 4:24 PM
That liberal wants to socialize private companies and health care..
What has happened to America?
Chakra Hammer on May 29, 2008 at 4:30 PM
Sorry, it was a metaphor, I thought most would understand it. I could have used the word Union, or near Monopoly, or Incestuous, but all the same. Forget the %, take a look at their bookkeeping, the oil accounting is known to be the most complex of any. Anyone, with the complexity they have, can show a minimum return.
BTW, since when are you required to purchase Cola to keep your business running? The oil companies are far from a free market, even they admitted it. You can’t be free if the government restrains your inventories.
And as far as profits go, would you prefer to have 80% of $1,000 or 5% of a $1,000,000 or in this case:
8% of 400 billion or 19% of 7 billion? If you choose 19%, you’re fired…
right2bright on May 29, 2008 at 4:33 PM
.
Fixed it for you
Think_b4_speaking on May 29, 2008 at 4:35 PM
.
Think capital investment, and don’t forget that the return belongs to the stockholders. And as to inelasticity, good luck running a business without Microsoft. The oil companies compete mightily within the range they can. They are not a free market to the extent that the vast majority of crude is extracted via NOCs, most of whom are in a cartel that sets prices.
Think_b4_speaking on May 29, 2008 at 4:40 PM
What’s pissing me off is the lame ass republicans refusing to campaign on this. They can point to decades of democratic obstruction and craven pandering to envrio-wackos.
Iblis on May 29, 2008 at 2:15 PM
How can we after nominating a greenie-weenie jackoff like McCain?
Hell, he agrees with them, including the insane windfall profits tax on domestic oil companies (watch that babbling scumbag on Youtube, if you have the stomach).
TexasJew on May 29, 2008 at 4:41 PM
there is great leaps being made in energy storage of solar and wind energy so that it can be used at night, rainy days cloudy days etc.
unseen on May 29, 2008 at 3:52 PM
Oh goodie.
Who cares – it’s still superexpensive hypersubsidized crap.
Coal or nuclear and lots of drilling.
Occam’s razor – the simplest answer is the right one.
TexasJew on May 29, 2008 at 4:44 PM
Another point to ponder – I keep hearing about how the oil companies are getting government ‘handouts’…. The truth of the matter is that there are two tax breaks that oil companies are using, and other firms are entitled to the same: 1. IRS section 199 tax credit, passed in 2005 gives tax relief to US manufacturers when tax rates on foreign competitors are reduced. US refiners are eligible to participate. 2. US firms are allowed to deduct the cost of tax payments to foreign countries – which every firm, not just oil companies, can take advantage of. These are the ‘subsidies’ that you hear the lefties decry at every opportunity.
Think_b4_speaking on May 29, 2008 at 4:49 PM
But basically your are correct, the two Idaho plants were scrapped after protests.
Texas is drawing out permits for 15, but many won’t be built and if built 10 years from now.
right2bright on May 29, 2008 at 4:49 PM
So you would take the 19% of 7 billion, the Coca-Cola, and not the other…okay.
right2bright on May 29, 2008 at 4:52 PM
Forget about it…
Nuclear, or coal is our only hope for immediate relief from the power shortage.
Drilling and refining is our only hope of refuge from our oil shortage.
right2bright on May 29, 2008 at 4:54 PM
.
As an investor, I sure would, especially when morons on capitol hill are talking about nationalization. BTW the current yield on KO is 2.6% and the yield on XOM is 1.6%
Think_b4_speaking on May 29, 2008 at 4:56 PM
The lead waste from the batteries will be a nightmare, you are talking about hundreds of pounds of lead per car (10′s of thousands), you are talking about millions of pounds per year of an environmental nightmare.
Give me an nuclear plant anyday, and yes I lived withing 10 miles of one for years, and nothing negative ever happened. And it never affected me me me me me me me me.
right2bright on May 29, 2008 at 4:58 PM
Well you keep your money in Cola, I will keep my in oil (and energy).
right2bright on May 29, 2008 at 5:00 PM
.
LOL, I’m in both, gotta stay diversified.
Think_b4_speaking on May 29, 2008 at 5:02 PM
This woman has been a travesty for as long as I’ve been able to vote, and that’s a couple of decades.
The only reason she’s in Congress is because her constituents vote for her because of her defiant attitude and the color of her skin. Besides, most of her constituents are too busy trying not to get shot by each other than worry about the latest political issues. Actually, most of them don’t read or write very well because she teaches them that getting an education makes them an Uncle Tom. Besides, she can explain things to them if they need it, and she can go after the CIA/FBI/Nationalize Big Oil because they’re the real reason her voting block can’t get a job.
Sultry Beauty on May 29, 2008 at 5:02 PM
I really don’t get the kneejerk aversion I see on the Right towards alternative energy and driving smaller vehicles. Frank Gaffney noted out we’re funding both sides of the War on Terror, why not try to do something about it? I believe in the free market and believe subsidies create distortions, which is exactly what we should be striving for: a market distortion away from imported oil.
Golden Boy on May 29, 2008 at 5:06 PM
I’m not a scientist, but I know the new battery technology that is most promising is lithium ion based, not lead acid. How much lead, if any, is there in that type of battery?
I agree, more nuclear. But how are you going to power your car with nuclear energy unless your car is electric?
Golden Boy on May 29, 2008 at 5:11 PM
Not quite all true. The district was gerrymandered to give her the seat and most do not care about politics.
And I’d have to say that the over forty crowd is reasonably literate. Spot on about the gangs, however.
baldilocks on May 29, 2008 at 5:13 PM
And we put the waste where?
McCain just basicly came out against Yuka Flats, put forward an idea that we could EXPORT our waste… the ultimate Not in my back Yard thing.
Heck, we can’t even reprocess by Federal law, which would get rid of at least SOME waste.
Once again, Congress is the problem, not the solution.
Romeo13 on May 29, 2008 at 5:34 PM
California governor Arnold Shwartzneggar had a pretty good idea. To save money and much unnecessary legislation, he suggested a part time state, senate and legislative body. IMO, this would also be a good idea for the federal government. Our benevolent Washington idiots can’t solve practical problems, and all appear to be on the lobbyists take, with to many perks, and with way to much time on their hands. So I say, try them out part time, without perks, and make them flip burgers the rest of the time. Nothing like being brought down to earth, and being taught humbleness.
byteshredder on May 29, 2008 at 5:48 PM
ANWR, A ‘Nother Worthless Refuge. 21 Miiilllliion Acres of nothing.
kirkill on May 29, 2008 at 5:58 PM
Comment pages: « Previous 1 2 3 Next »