It's a frightening day when I largely agree with both the Washington Post editorial board AND conservative columnist Charles Krauthammer. But, apparently, today's my lucky day, because on gasoline prices, they both pretty much nail it. From the Post editorial, "Phony War on Gas" (bolding added for emphasis):
NO DOUBT IT makes everyone feel better when the president states his concern for Americans, who are now paying more than $3 a gallon for gasoline. Unfortunately, the measures President Bush chose to announce this week to combat high prices are either meaningless or possibly dangerous in the long run, even if they do offer a bit of temporary relief......Stopping the filling of the Strategic Petroleum Reserve won't increase supply by much, and it sets a bad precedent: The reserve, after all, is meant for national emergencies, which this is not...
The president has, of course, had plenty of opportunities over the past five years to shape a more rational energy policy, one that would have provided incentives to move away from oil and toward other energy sources. He could have lobbied harder to remove the oil industry tax benefits from the energy bill he signed. He could have insisted that Congress add more tax breaks for hybrid cars, as he now says he wishes it had done...And he could have used his statutory authority to raise automobile fuel economy standards or persuaded Congress to find other ways to improve mileage per gallon of U.S. vehicles. Again,if he were completely honest, the president would tell Americans that the main reason fuel prices are higher in this country is because demand is growing -- and one reason for growing demand is that people drive inefficient cars. They drive inefficient cars because public policy, long shaped by the president and by Congress, has made it advantageous to do so. Until that changes, little else will.
The main thing - unless you really want to get into a discussion of MTBE and RBOB (not!) - I'd add to this analysis is the supply side, where a combination of OPEC and Big Oil have failed to invest adequately in new oil production capacity since the oil crash of the late 1990s. Sure, this is due partly to the cyclical nature of the oil business - boom following bust like day follows night. Still, it's hard to feel any sympathy for the oil producers when OPEC and ExxonMobil are raking in record revenues ($8.4 billion in first-quarter profit for ExxonMobil announced yesterday). What are they doing with all that money? A lot of things, but not much new oil drilling, that's for sure.
Which brings us to Charles Krauthammer, and his op-ed, "Say It With Me: Supply and Demand." I love this:
...Nothing can match the spectacle of politicians scrambling for cover during a spike in gasoline prices. And this time the panderfest has gone all the way to the Oval Office......A 60-day suspension of the federal gas tax. It would cost $6 billion and counteract the only good thing that comes with high gas prices -- the incentive to conserve.
George Shultz once said, "Nothing ever gets settled in this town." But even Shultz, who has seen everything, must marvel at the perfect regularity, the utter predictability, of the bottomless cynicism of Washington in the grip of gasoline fever.
Bottomless cynicism. Yep, that pretty much sums it up. Which is exactly why we need to get straight-talking, straight-shooting, Born Fighting people like Jim Webb to Washington, ASAP!
By the way, if it makes you feel any better about paying $3 per gallon (or more) for gas, close your eyes and think of England, where "petrol" is now around $7 per gallon. Maybe they deal with it by calling it 99 pence per liter? Sure sounds cheaper, anyway! Ha.
What I wonder is, am I the only one here who thinks ANWR drilling isn't a horrible idea? I know its only holds at max 16 billion barrels, I know its would destroy native species, I know it is little more than a giveaway to big oil, but what if we made the legislation so that the government bought all the oil and put it into a new SPR site so that if we hit the worst case scenario, we have a stable cushion to avoid total economic collapse?
I'm still open to being convinced by those of you I'm sure who think drilling in ANWR is the worst idea ever. I'm interested to hear comments and ideas.
Yeah, drilling in the Arctic National Wildlife Refuge (ANWR) is a really bad idea. For one thing, as you correctly point out, there's not a great deal of oil there, not enough to make even a dent in our national oil balance according to the US Energy Information Administration.
Meanwhile, drilling there sets a horrible precedent for our most pristine wilderness areas, that it's open season to drill and hack away at them. For what? As little as 600,000 barrels per day of oil at peak, compared to U.S. oil consumption of more than 20 MILLION barrels per day? No thanks.
Here's the bottom line: we all know the answer to America's oil addiction, and like the stupid "drug war," it's not mainly on the supply side. Look in the mirror of your Hummers and Suburbans, people, and there you will find the answer to our oil addiction. That's right, "it's the demand, stupid!" Right now, we have the technology to cut in half the amount of oil we need to drive our cars, but are we doing it? Are we undertaking a crash project to reduce our oil consumption by half, in the process both stopping global warming AND destroying OPEC? Oh no, that would be too intelligent. Instead, let's keep arguing over the miniscule amounts of oil in the ANWR and pandering to voters with gimmicks like a one-time $100 check from Uncle Sam. Yeah, now THAT will solve all our problems!
Screw you Big Oil, I'm walking!
Will they just leave the money on the dresser on their way out?
-Oil is now a world commodity with many more bidders. The price you see reflects not oil company greed but traders bidding up a commodity that they feel confident someone will buy. They are correct. A barrel of oil can still be brought to market for less than $10/bbl. The rest is speculation.
-In 1980 the oil price run-up was a concocted shortage that we could pump ourselves out of. There was excess production capacity. That is not true today. Saudi Arabia can't meet their own production quotas, the North Sea plays are spent. Meanwhile Iraq is offline as is Nigeria. Russia sees an opportunity, but it will not be able to ramp up anytime soon. Chad, Venezuela, ANWR are blips on the reserve totals.
-Everytime we howl about oil prices we get the same answer - increase production. There are now two oil men in the Whitehouse so extraction is all they have. America is asked to drill our wildlife preserves, tear down our mountains for the oil shale, put derricks on our Virginia coastline and wage war to protect supplies. What gives our generation the right to be so selfish, destroying our heritage, and degrading our childrens legacy. We need to pull on our boots and get to work on getting off the addiction, or face the cruel judgement of our children and our maker.
-Lowell is right - consumption and poor transportation choices are at the center of this problem. Oil is a transportation energy source, and poor transport choices effect the price by pushing up demand. If I drive a vehicle that gets 33 MPG instead of my 16 MPG truck, my gas costs are reduced by 1/2. My pain is reduced by 1/2.
-Everyone needs to be concerned about pricing because we won't be getting off the junk anytime soon. At least not before freighted commodities like food from Cali./Mexico/Florida goes through the roof. Wait until your OJ sells for Energy intensive industries like airlines, and trucking will be devastated for sure, but so will your small town businesses like car dealers, landscapers, and builders. And their decreased buying will ripple through the entire economy. We all face economic calamity as a result of our blurry addiction.