Patterico's Pontifications

4/29/2008

The Politics of Oil

Filed under: Environment,Politics — DRJ @ 1:32 pm



[Guest post by DRJ]

Democrats will do anything to help consumers deal with rising gasoline prices … except agree to open up ANWR for drilling as President Bush suggested in today’s Rose Garden speech.

Here’s Democratic Majority Leader Reid’s response:

“Only President Bush could allow Big Oil to write our nation’s energy policy, guarantee billions in oil tax breaks and refuse to stand up to OPEC or crack down on price gouging, and then shirk responsibility for gas prices that have more than doubled and oil prices that have quadrupled since he took office. Only President Bush could be surprised to learn that gas was approaching $4 a gallon and then claim the White House is concerned about high gas prices. President Bush’s Rose Garden rhetoric will not lower gas prices for Americans struggling in a weakening economy; he must work with Democrats in Congress to invest in renewable energy and lessen our dependence on oil.

“Further, President Bush still hasn’t learned that his words alone will not remedy the housing crisis threatening thousands of Americans families each day. Favoring voluntary programs that help far too few, the President and Bush Republicans in Congress blocked Democrats’ plan to help as many as 600,000 homeowners facing foreclosure by affording them the same bankruptcy protections available to other Americans. His call this morning for Congress to act is disingenuous at best. Whether on energy policy, the housing crisis or our many other economic woes, this Administration and its Republican allies in Congress offer nothing but the same failed ideas that got us into this mess in the first place.”

Only Democrats could conclude that putting Americans to work finding more oil won’t help our energy needs or the economy. Apparently they believe the only way to fix the “same failed ideas” is to give up oil and write new laws.

And we all know how well that works.

— DRJ

44 Responses to “The Politics of Oil”

  1. The sad part about this is all it will take to lower oil and lower gas alot is for the Fed to grow some balls and raise interest rates. This would spook all the speculators in oil out and the price would fall dramatically, plus it would strengthen the dollar another way in which oil would fall and gas right along with it. But no one on either side of the aisle has a clue or cares because they want to save their rich banking and hedge fund buddies from the bad loans they wrote, Disgusting

    Tom K (d3e3bf)

  2. Also, don’t forget that the Dems repeat, endlessly, that it will take 10-years to bring ANWR oil to market.
    What they love to ignore, is that Bubba vetoed the original ANWR bill in 1994!
    We would have been enjoying that oil for four years now.
    Any improvement in supply will depress prices – all things being equal.
    And we don’t need to wonder who slept through Econ-101, do we?

    Another Drew (f9dd2c)

  3. It’s silly for Bush to criticize the Dems here. He could open up ANWR by executive order if he really wanted to. He only wants to have the argument, not to have energy independence.

    David Drumright (4a3968)

  4. David, what do you base that claim upon, as I thought there was legislation restricting oil extraction from ANWR?

    SPQR (26be8b)

  5. Notice how stupid Harry Reid’s statement is –

    President Bush’s Rose Garden rhetoric will not lower gas prices for Americans struggling in a weakening economy; he must work with Democrats in Congress to invest in renewable energy and lessen our dependence on oil.

    – nothing about “investing” in renewable energy will have anything to do with gasoline prices.

    SPQR (26be8b)

  6. “Notice how stupid Harry Reid’s statement is ”

    They don’t call him the dim-bulb of Searchlight, for nothin’…

    Another Drew (f9dd2c)

  7. I think there has been a ban on ANWR drilling for almost 30 years. For the past several years, the GOP has offered legislation to open ANWR for drilling but they can’t get to 60 votes to avoid a Democratic filibuster.

    DRJ (a431ca)

  8. Sigh. Only President Bush would allow Dingy Harry and San Fran Nan to get away with all this crap for so long. He is no communicator. Why didn’t we clone Reagan when when we had the chance?

    nk (1f1707)

  9. Wasn’t it a fact that if McCain had voted for opening of ANWR then it would be law? What did Hussein and Hill do? I mean did he vote against or merely “present” as he is wont to do?

    I thought high gas prices are what the Greens wanted? Lower demand, stick it to those greedy neocons. Saw a thread on Huffington where the inmates were going bonkers about use of Hummers. Guess those Gulfstreams and stretch limos are tres economical.

    madmax333 (1166a1)

  10. Tom K,
    wow, didn’t know that, so it IS all posturing and rhetoric from both sides.

    ANWR is neither a cheap nor a quick fix for our energy problem, it’s just more posturing and people wanting to be “right” about how we “need” that oil.

    Better to have it there untapped for some real crisis, not the current “crisis” of politicians not wanting to look bad.

    EdWood (06cafa)

  11. Reuters: ANALYSIS-Bush drilling plan wouldn’t have eased pump prices.

    ANWR is estimated to contain around 10.4 billion barrels, or around 1.4 years worth of oil at current use rates.

    Russell (5ecf4a)

  12. The problem Ed and Russell is that if the ANWR fields do not come online in the nearterm, then the Alaskan oil pipeline will be shut down and dismantled once its current fields cease operation.

    SPQR (26be8b)

  13. Russell,

    Maybe your link is right or maybe it’s wrong, but we won’t know until we drill.

    DRJ (a431ca)

  14. #11 – the other day nancy pelosi was claiming that just 70,000 barrels a day going into the strategic reserve was worth a nickel a gallon at the pump so any little bit helps! and as #13 pointed out there is no reliable estimate of what is up there.

    have the dems responded to Sen. McConnell’s letter yet

    chas (a235bf)

  15. i agree with senator reid.

    assistant devil's advocate (bd3f63)

  16. ADA, you like non sequiturs too?

    SPQR (26be8b)

  17. Baracky and Hill know how to lower gasoline prices !!!! Tac the holy hell out of the gas companies !!!!!!

    JD (5f0e11)

  18. Get rid of the Pelosi Premium!

    daleyrocks (906622)

  19. #11 Russell – The analysis is BS. Merely the discovery of a large oil find can affect pricing, as the futures market, not just actual supply, plays into the going rate for crude.

    #5 SPQR – and nothing in Harry’s rhetoric about investing in renewable energy will lessen our dependence on foreign oil. Those corrupt bastards won’t move an inch towards energy independence unless they can make a buck off of it.

    Apogee (366e8b)

  20. Ah, yes. The Pelosi Premium:

    Washington, Apr 23 – Two years ago tomorrow, then-Minority Leader Nancy Pelosi (D-CA) promised the American people a “commonsense plan” to lower gas prices, but House Democrats voted today to keep it under wraps. House Republicans offered a proposal to force Speaker Pelosi to reveal her plan within five legislative days, but 222 House Democrats voted against it, making clear they have no plan to lower prices whatsoever.

    Since Pelosi made her famous promise, no one has seen, read, or heard about that plan, and gas prices have soared from $2.33 per gallon when Rep. Pelosi became Speaker on January 4, 2007 to $3.53 per gallon today, according to AAA. This $1.20 price increase – dubbed the Pelosi Premium – is having an increasingly painful impact on families and small businesses across the country. And with the summer driving season approaching, the pain will only intensify during the next several weeks.

    That’s why Rep. Dean Heller (R-NV) today introduced legislation demanding that Speaker Pelosi finally reveal the “commonsense plan” she promised the American people in 2006. House Republicans also forced a vote on the issue prior to consideration of legislation impacting small businesses – firms which must deal with the Pelosi Premium each and every day.

    The only problem: House Democrats blocked the GOP effort to demand that the Speaker reveal her vaunted “commonsense plan.” In other words, that plan – whatever it is – remains under wraps at this hour, even as gas prices continue to soar.

    Pablo (99243e)

  21. http://www.care2.com you neocons don’t care about the planet, the polar bears, the wolves, agw..er, I mean climate CHANGE!

    So whose fault is it if gasoline hits $10 a gallon, millions world-wide starve, we have at least stagflation if not global depression. Let’s submit it is all Bush’s fault, what will hill or obama do about it, other than price controls and windfall taxes on oil companies that will likely serve to exacerbate the situation? Remember ANWR, new refineries, off shore drilling, new nuclear plants, etc. are all off the table.

    What will Ms. Pelosi’s challenger who holds the moral high ground (Cindy Sheehan) do about it of elected?

    madmax333 (dcffb7)

  22. Better to have it there untapped for some real crisis, not the current “crisis” of politicians not wanting to look bad.

    The problem with this approach is that when the “real” crisis comes, it will take 10 years to tap into the oil there.

    It’s akin to forgo buying a fire extinguisher because there’s not a real fire yet, then dashing to the hardware store to buy one when your house catches on fire.

    Steverino (6772c8)

  23. #19 Apogee:

    Those corrupt bastards won’t move an inch towards energy independence unless they can make a buck off of it.

    Hell, neither will I, and I’m not even corrupt!

    Much, anyway.

    But even if Russell’s numbers are correct, what he doesn’t seem to realize is that that’s the consumable amount if substituted for all other sources combined, which would cause oil prices to something ridiculously low…like perhaps 25% or less than what they are now?

    EW1(SG) (84e813)

  24. #23 Steverino:

    …dashing to the hardware store to buy one when your house catches on fire.

    at 3:00 a.m. when the local TrueValue is closed…

    EW1(SG) (84e813)

  25. EW1(SG) – Thanks for forcing me to reiterate a point that I didn’t communicate very well. I’m not calling for some socialist program to move the US away from oil. Nor do I possess a naive utopian dream of altruistic sacrifice to mother gaia.

    What I meant to say is that the rhetoric coming from the left implies that 1) they have no political affiliations with the energy lobby and 2) if they could just do something about the wascally wepublicans, then America’s shining energy future would become a reality.

    On the contrary, Pelosi and Reid will continue to collect money from lobbyists who want a return on that investment – the return being the refusal to remove bureaucratic barriers to innovative competitors who don’t have the financial resources to out-bribe the entrenched lobby. It’s still pay to play, which, drilling in ANWR or not, regulates the hell out of us, limiting our choices. Limited choice is the reason for 10.00 per gallon predictions.

    The difference between you EW1(SG) and our political leaders is that it’s not their job to make a profit for themselves by regulating our choices for nuclear, expanded refining capacity, exploration, drilling and alternate energy sources, only extending opportunity to the highest bidder. Making a profit is expected of you, as that’s capitalism. Corruption is the restriction of market competition. They are diametrically opposed.

    Apogee (366e8b)

  26. #25 Apogee: Very well stated. Obviously my earlier comment was in jest, and in fact I had a pretty good idea what you meant, but it is nice to see it declaimed as clearly as you have set forth.

    Interestingly, the British and Italians have taken different approaches to regulation and corruption, something that I address on my blog, as an introduction to a Theordore Dalrymple article in City Journal.

    Sorry for the petty self promotion. We return you now to Patterico’s, where real blogging often happens!

    EW1(SG) (84e813)

  27. Oil policy is not well made in crisis. I think gasoline demand is quite inelastic — which is why price increases are so painful, and don’t lead to equal reductions in quantity consumed. All this for the basic reason of how much our society is oriented around the internal combustion engine. It’s going to take planning and the creation of alternatives to move on from this. Something not well made in crisis.

    stef (513533)

  28. You shouldn’t be using words you don’t understand the meaning of.

    EW1(SG) (84e813)

  29. Personally, if Liberals and Eco-whackos were denied the ability to purchase and use gasoline or other Oil products for home heating or travel, you’d see a solution PRONTO!!!

    If California were denied oil from the rest of the Union and the world, you’d see Pelosi, Feinstein, and other Democrats leading the charge to drill proven reserves off of California coasts.

    PCD (5c49b0)

  30. #4 SPQR:

    … as I thought there was legislation restricting oil extraction from ANWR?

    ANWR is part of the National Wildlife Refuge System, and there are rules about what kinds of activities can take place in the refuges: mostly hunting, fishing, wildlife photography.

    What’s inexplicable is how ANWR came to be~because it doesn’t really serve a useful function as a wildlife refuge, but certainly places a large area of mining potential off limits and under federal control (vs. the State of Alaska) in an otherwise uninteresting place.

    EW1(SG) (84e813)

  31. This might help to see the bigger picture. From Matt Badiali, a mining and energy newsletter author:

    This chart shows the price of crude measured against the money supply. What it means is the price of crude oil hasn’t increased all that much… It’s just kept pace with the supply of dollars trying to buy that crude. [allan, not ed.-The chart which doesn’t copy over shows a vertical range of crude oil prices and a horizontal range of money supply growth. The chart depicts them both rising in tandem virtually one to one.]

    So that’s why oil prices have climbed. But why haven’t they fallen back as the U.S. economic slowdown puts a damper on demand? CNN, Fox, CNBC, and all the talking heads assured us demand in other countries would dry up as the U.S. slipped into recession.

    Well, I’m afraid the U.S. isn’t the center of the economic universe anymore… and we’ve got a lot of competition.

    Simply stated then, if your income didn’t rise concomitantly with the increase in the money supply you’re cracking up as much as the crack spread. Also, another commodity analyst, Kevin Kerr, made the point that an approximately 15 dollar premium is baked into futures prices currently from speculative buying, which pushes spot price, of course. Another aspect of excess currencies affecting the price. Look directly at the Fed and Treasury. It’s the sinking buying power of the dollar that underlies all the current commodity shocks, just as it did in the housing boom. Yes, there are a myriad of other engines, too. But the big pappy is money supply growth. Too much money chasing too few goods. Price inflation basics. Price controls? Then watch production collapse. Disclosure…I’ve been profiting on these money supply principles here. And I plan to profit when the cycle tops and reverses.

    allan (d5a880)

  32. Note: when he says the price of crude oil hasn’t increased that much, he is referring to the ‘real’ price and not the nominal price. Real meaning knocking off the inflationary effect in the nominal price.

    allan (d5a880)

  33. Say, DRJ, aren’t you inwest Texas? Is this a big deal out there, yet?

    …infamous Texas wildcatter, and his Mesa Group are working to build the world’s largest wind energy production facility on the western Texas plains.

    The energy derived from the project would go to ERCOT, or the Electric Reliability Council of Texas, which, according to its Web site, “operates the electric grid and manages the deregulated market for 75% of the state.”

    allan's sockpuppet (d5a880)

  34. “Yes, there are a myriad of other engines, too.”

    That there would be the critical sentence for a commodity that is quoted on the international market in $U.S. It’s price is both a function of the view of $U.S. bt international markets, which is impacted by a myriad of factors and demand as well as supply. The Paulians and their simplistic money=debt analysis, not that I am saying allan is a Paulian, often overlook the fact that the U.S. cannot necessarily control its own destiny in global markets as easily today as in the past, especially when transactions don’t necessarily settle in cash.

    daleyrocks (906622)

  35. When George W. Bush became President of the United States of America he explicitly said two things had to happen – one was more refinery capability inside the United States of America and more localized drilling. Neither of which has come to fruition thanks to the stone-walling and foot-dragging of the Democrats.

    Once more Americans are left to suffer in the wake of the incompetence of the Democrats.

    Thank you for your time.

    The Outlander (910432)

  36. not that I am saying allan is a Paulian

    I leave the politics and law to you folks. I have no economic or financial catechism. My abundant interest and meager resources go to investing and trading. Pragmaticism is as about as close to a party or religion as I’ll get. And leave me out of libertarian, too. Although, I do have a fondness for the Libertarian who ran for CA Sec of State back in the 90’s who promised, if elected, to do his utter best to eliminate the office he was running for. Rationale? Its real duties were only duplications of other state agencies, and was a ceremonial bureaucracy at best. Can’t vouch for his veracity, but I did admire his sentiment and pragmaticism.

    allan's sockpuppet (d5a880)

  37. allan’s sockpuppet,

    I think T. Boone Pickens’ new project is a big deal but it isn’t big news in my area. West Texas is a nebulous term and includes everything from far north Texas to the Hill Country and El Paso to Fort Worth. Pickens’ project is near Amarillo in the Panhandle, while I live a couple of hundred miles south. We have different energy providers so his project probably won’t impact my area but I think it’s good for north Texas business, especially the farmers.

    DRJ (a431ca)

  38. Jimmy Carter locked up ANWR. The area had a less restrictive designation. By declaring it a refuge, by executive order, he locked up it and, it’s my understanding that it will take an act of Congress to unlock it. Thanks, Jimmah. Even knowing what you did at the time, you still took an action that you knew would stymie domestic energy production.

    sam (1a8310)

  39. ANWR…
    Yes, and Bubba did the same thing to vast stretches of Southern Utah/Northern Arizona in his last years.
    Neither one made many friends in the areas (&/or states) they are “protecting”.

    Another Drew (f9dd2c)

  40. Another Drew, Bubba’s action in Utah locked up the last major source of low sulfur coal. It is alleged that this increased the value of Riardy’s holdings in Indonesia.

    SPQR (26be8b)

  41. Yeh, that Bubba, always looking out for the donors to the Foundation/Library.
    Funny thing, I thought as President of the United States of America, he was supposed to give priority to looking out for us?
    Silly me!

    Another Drew (f9dd2c)

  42. I think the director of his “Foundation” has shown up in Hillary’s campaign. I’ve long thought that the Foundation’s purpose was to make a slush fund for them.

    SPQR (26be8b)

  43. Should americas have to pay big utility bills and $5 a gallon before these worthless jerks finaly tell the greens to GO TAKE A HIKE and vote to drill in the ANWR and the greens can go pelle their sissy pink bicycles up the side of a cliff

    krazy kagu (b3eb4a)

  44. Wondering if the potential for $8-9 a gallon home heating oil next winter will drive more people south? I need some housing demand here in Palm Beach county moonbat country as prices are 50% off highs with no end in sight.

    So her Thighness voted seven times against nuke power and opening of ANWR? And McCain cast the deciding nay on ANWR last time? Isn’t that special? I wonder what dipwad no-balls Obama’s plan might be? Vote present I suppose. Useless frackin’ Congressional drones on the take for sure.

    madmax333 (bd0876)


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