The Energy Debate - Are you serious?

In a previous post (June 9) I asked the question: How high will gas prices have to go before we get serious about drilling our own oil? I lamented that $4.00 did not seem high enough for concern. I was a bit premature - it seems that, in fact, $4.00 was in fact the tipping point.

The Democrats in congress, bowing to pressure from 'so-called' environmental groups still refuse to acknowledge that authorizing drilling now would have any immediate impact on prices. I say 'so-called' because IMHO these groups are mearly socialist groups that have found that using environment blather is/was effective. Their real goals are: more control over the economy; a huge wealth transfer out of the US (since they are embarrassed at our prosperity); and knocking the US down a notch on the world stage (same reason).

I want to examine one of Obama's (known here as BHO) 'lines of reasoning'. He recently came out for 'very limited' offshore drilling - with enough conditions to assure it would never happen without essentially being under complete governement control (can you say Socialist?). But this is not the most interesting mental contortion he has done. Now, granted, the contortions are legion, but I had to pick one.

His starting premise is that we cannot 'drill our way' out of high prices. That even if we drill, it would be 10 years before we saw any impact. Really? Since the President lifted the executive order banning offshore drilling (which had no real world impact - drilling is still blocked by Congress) - oil prices have dropped 20%. Gas in my area is down from %4.05 to $3.65.

BHO wants to tap the Strategic Petroleum reserve. Interesting. A month ago, he said he was against this (gas was at $4.00) and said it should be kept for a 'true emergency'. As one commetator pointed out, apparently BHO's crashing poll numbers is, in fact, that emergency.

But let's examine this. He wants to tap the Strategic Petroleum resevere. Now, how did the oil get into the Reserve? It was not put there by the Petroleum Fairy. It got there as a result of DRILLING. So, it appears drilling WILL help the situation.

Now - you need to understand that the price of oil is ruled by the market. All oil goes into the world market. People bid on it based on their prediction about the FUTURE supply and demand of oil. Why did prices fall recently after POTUS lifted the executive ban? Because, as a whole, the market took this as a sign that, in the future, supply might be going UP. So, they bid the price DOWN. Yes, the market still works.

As an aside, I wish BHO would articulate what his plan actually is. I am all for energy alternatives. But, they are truly many years away. If cost effective sources existed now, people would be marketing them. People are not marketing, ergo, they do not yet exist. BHO also wants to tax BIG OIL. Again - this will not produce a single drop of oil. In fact, it will have the opposite impact. Any more money you tax the oil companies (they already pay 1/2 of their profits in Income Tax) will be unavailable for the Capital investment needed to explore and produce more oil. His tire gauge idea - MAY save about 1% in demand - but again NO new oil. He is silent on nuclear. This is the ultimate 'alternative' energy source, but much to scary for the enviro-weenies. So, net result, his plan produce no new energy. Not much of a plan - at least in this observer's opinion.

It is easy to criticize. You may ask, what is a better idea. I think you can guess. Do it all. Drill everywhere NOW (there are rigs ready to go that could be in production in 12 months). Do oil shale and tar sands. Build nukes. Build refineries. Continue research in to alternatives.

Yes, Elizabeth - do it all - do it now.