OIL PRICES PASS $134 AFTER REPORT OF SUPPLY DROP. (AP – May 21, 2008)
“With demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude's rally.”
So, is it the weak dollar or the time-honored story of supply & demand? Whatever the underlying cause, the fact remains: we have an energy crisis, so what do we have to do to solve it? Not to worry. Our politicians are stepping up to face this newly emerging crisis.
1. The Senate calls in the oil company executives (May 21, 2008) and Senator Durbin (Illinois Democrat) berates them for having no “corporate conscience”. "Is there anybody here that has any concerns about what you're doing to this country with the prices that you're charging and the profits that you're taking?" Durbin asked.
According to the unbiased reporter from Associated Press, “The titans of America's oil industry sat quietly for a moment.” And further, from that fair and balanced reporter, “The executives, sitting shoulder to shoulder in the hearing room, said they understood people were hurting, but they tried to blunt the emotion with economic analysis.”
How dare the Oil Company executives blunt emotion – and with economic analysis, of all things?
2. The House votes to pursue legal action against OPEC “CONGRESS' LATEST ANSWER TO RISING GASOLINE PRICES: SUE OPEC” (The Los Angeles Times, May 21, 2008)
“Defying a White House veto threat, the House on Tuesday overwhelmingly approved legislation that would allow the Justice Department to pursue legal action against the Organization of the Petroleum Exporting Countries for conspiring to restrict supplies or drive up prices.”
So, the Democratic House goes in a direction different from the Democratic Senate and wants to lay the blame for our oil-related problems squarely on OPEC, of all people.
3. Barack Obama “wants windfall profits tax on oil companies.” (The Guardian April 25, 2008). “Democratic presidential hopeful Barack Obama today called for a windfall profits tax on oil companies, which he said would be used to ease the burden of rising energy costs on poor and middle-class Americans.”
So, Barack Obama throws his lot in with the ‘tax windfall profits’ gang founded by Jimmy Carter (and we know how well that worked for him) and recently joined by Venezuela’s Hugo Chavez. Chavez announced his ‘windfall profits tax’ in April 2008, claiming that it is necessary to fund key social programs as part of his effort to implement an economic and social system he calls "21st-century socialism."
With all this political posturing, confusion, finger pointing and hand wringing, where do we look for answers? Certainly not to our elected officials who have never some to grips with the fact that, other than through enacting tax related measures and caving in to the manic demands of the environmental lobby, they have negligible power over global markets. In fact, the sum total of their proposals will not produce one additional drop of oil. We are in the Hydrocarbon Age, reaping the rich harvest of rewards of this gift from God. Just as the Stone Age did not come to an end because we ran out of stones, the Hydrocarbon Age is not coming to an end because we're running out of oil.
According to the website http://www.partnershipforenergy.com (a project of The American Petroleum Institute), "As global demand for oil increases, many people are asking how our nation’s oil needs will be met in the coming decades. The good news is that America isn’t running out of oil—and neither is the rest of the world."
"New extraction and refining techniques have opened up opportunities to explore for oil cost-effectively in oil sands, oil shale, and coastal lands and waters. New oil discoveries worldwide would provide billions of barrels of oil for years to come. In the U.S. and Canada alone, these discoveries include:
• Up to 4.3 billion barrels of oil in oil shale in North Dakota’s Bakken Formation
• Up to 19 billion barrels of oil in oil sands in Utah
• More than 30 billion barrels of oil in Alaska’s coastal plains and the Chukchi Sea
• An estimated 173 billion barrels of oil from oil sands in western Canada
• More than 1.2 trillion barrels of oil in oil shale in the Green River Formation in Colorado, Wyoming, and Utah.
What does it mean? 1 billion barrels of oil could provide enough fuel to keep more than 1 million cars running for the next 30 years."
Now I know that Big, Bad Oil is supposed to be the enemy, Congress is our friend (assuming you pay no attention to Nancy Pelosi & Company's approval ratings) and the environmentalists all have our best interests at heart.
How about a novel approach? Might it not make sense to listen to the people who best know about oil, the oil industry itself?