High Oil Prices – Blame The Government You Elected!
By Thomas D. Segel
April 29, 2008
Yesterday I topped off my tank at $3.49.9 a gallon. But, I am lucky. My home is in one of the lowest cost-of-living regions of the country. In California, for example, my brother filled up his tank again at $3.89.9 a gallon and he shops for “cheap” gas. The high price of gasoline is on the lips of everyone you meet these days. Also, everyone has his or her own idea about whom we should blame for our latest economic woes.
Those of us who dabble in writing politically oriented commentary expect to have our views challenged. However, reflecting back on my multiple years of journalistic ranting, I can remember no article that generated more comment than last week’s “A Gallon of Oil and the Ethanol Hoax”. While the majority of readers corresponding with me agreed with my attack on the liberal left and the environmental loonies who have caused most of our problems, there were still ample emails telling me I had no clue about the reality of our current plight.
My argument is very basic. If any blame is to be assessed, it must be laid at the feet of our national government. The problem starts with the price of oil, which everyone must agree is a commodity and seeks out the highest dollar buyers are willing to pay. Supply and demand determine high and low prices. To get lower prices you can either reduce the demand or increase the supply. Now what has been controlled for more than 35 years? Supply is the answer. And who has controlled the supply of oil in the United States? The answer to that big question is the United States Government.
We all know there is abundant oil in the Arctic National Wildlife Refuge. We know more oil is in the Dakotas and even Wyoming. We know there are huge deposits of oil off the California and Florida coasts. We know there are tons upon tons of oil shale in the West. We know that thousands of oil wells were capped and are no longer in production. Deep deposits of oil at up to 16,000 feet and natural gas, more than 3 miles underground and off shore await us and we know the technology exists to bring them to the surface.
We know that in the past three and one half decades no new oil refineries have been built, nor have the existing ones been modernized due to the restrictive rules and regulations placed upon the industry by governmental agencies.
While people are forced into making choices between buying gasoline to drive to work, or placing food on the table for their families, a few of our capped wells in California and other locales are being reopened. In California alone, there are currently more than 3,000-capped wells and many have seen only between 20% and 25% of their oil extracted. Some were capped just waiting for new technology and higher prices. Many were capped due to environmental objections. To be completely objective, we must also admit a large number were capped because they had turned into dry holes.
We have allowed the far left environmental movement to cripple the economy by its marriage to the Democratic Party and a few brain-dead Republicans. We have allowed the left to keep screaming in our ears that everything is the fault of Big Oil. As the politicos chant this mantra, we buy into the false claim because most of us get our facts from bubbleheads in the media who also are without a clue to reality.
According to Walter Youngquist writing in “Myths and Realities of Mineral Resources”, the six largest Big Oil companies really belong to America. He says, “Nearly 200 mutual insurance companies hold close to 16 million shares. Ninety-one colleges own these stocks and about 1,000 charities and educational foundations in the United States are holders of these oil company securities. In direct ownership more than 2.3 million Americans hold stock in these six companies.”
Our own citizens, investing in these combined resources have allowed the “big” companies to drill some very expensive wells. A single hole can cost a million dollars and more, without any assurance of success. And this is the Big Oil that should be punished with higher taxes that politicos yell about in the national ear.
Another governmental con job is the political falsehood that oil deposits in such places as the wildlife refuge or off the Florida coast don’t contain enough resources to make drilling worthwhile. Well, think about this. In the United States we use just under 20 million barrels of oil a day. A field that produces 100 million barrels of oil is considered huge. However, it takes years to use up the supply. If that 100 million barrel field were used to supply America’s daily needs, it would be gone in less than a week. But, that never happens. The oil is pumped over years and years. So, when you hear the political chatter about there “is only about 90 days worth of oil in that Alaskan refuge…and it won’t pay us to drill there”, remember not a single field is ever used to supply needed oil, and a field that could supply 90 days worth of Black Gold is huge. That would be a field containing multiple hundreds of millions of barrels. It would be assisting in our nation’s energy needs for decades.
The other chant from the left is we can wean ourselves off our oil addiction by conservation. There is nothing that can be saved through conservation efforts other than short-term relief. If you conserved until your economy fell apart, it would still not increase the supply. People fail to understand we can no longer rely upon our own resources for oil independence. We passed the point of self-sufficiency in 1970. Each year, as our population expands, our dependence upon foreign oil and other energy sources increases. We now consume far more than we can create from our own resources. The government has added to this burden by its massively restrictive regulations and mind-numbing pandering to the environmental left.
Removing governmental restrictions and adding to our refinery capacity would go a long way toward easing the heavy toll this major price hike has taken on both the national economy and the personal pocketbooks of Americans. Increased drilling, combined with the small amount of relief that can be brought about by alternative energy would go a long way toward easing the bidding war of oil speculators. That’s is not going to happen with the democratic majority in Congress. They will continue to point their collective fingers at the oil companies and never admit to their own actions or non-actions that have caused this crisis.