Tuesday, 8 July 2008
Politics Of Gasoline Part 2
« Scorsone As A Judge? | Main | P90X »The price of gasoline continues to hover around $4 a gallon. But the last few days have seen oil prices drop 5%. With almost all commodities heading downward, it looks like the oil bubble may be about to burst. At least I hope it is the bursting of the bubble. It will be nice to see gas prices back in the more reasonable $2 a gallon level.
Regardless, it looks like gas prices will be one of the top issues in this election cycle. We have already seen McConnell and and Lunsford battle over the issue and now Northup is engaging Yarmuth! on the topic.
This is an issue that is ready made for Republicans to take advantage of and use it to deflate the momentum that Democrats currently enjoy. For years Democrats have stifled attempts to expand the U.S.'s capability to find and drill for more oil. This short sightedness has created an environment where a bubble in the commodities market has put a hurt on our economy.
The Democrats, beholden to the environmental groups, have no answer for the current crisis. All they can do is talk about technologies that are not economically feasible. The paralysis does nothing to make angry car owners happy.
The obvious near term solution is to drill and drill now for new sources of oil. It is the only way to ease the increased demand for oil. It will do nothing for the current crisis, but it will help to reduce the chances of a new bubble forming in the future. Republicans led by Mitch McConnell is attempting to craft legislation to do just this. The bill will allow for new drilling along with providing new conservation measures.
We need to buy time while alternative solutions which are economically feasible can be developed. Adding to our supply will not make gas cheap again. I imagine gas will continue to be in the $2 a gallon range for some time. What it will do is keep us from going up to $4 a gallon again. A price that strangles our economy. Even at $2 a gallon, the price is high enough, that an opportunity exists for the free market to find alternatives to our dependence on oil.
The price of gas is a gift to the Republican party. They need to take advantage of it to put the Democrats on the defensive and expose their failed leadership on energy.
The price of gas is a gift to Big Oil. From your own admission, drilling will do nothing to help the current crises. Oil companies have enjoyed record profits throughout the Bush/Cheney Regime but they have not drilled in the 68 million acres that they have available in the USA. Regulations haven't prevented them from updating and/or building new refineries. It has been their decision not to invest. Now they want the heart of the watermelon and they want it now. Voters are scared, angry, and broke. When people get this way, they're easily tricked into buying in to such nonsense, grasping for hope and wanting to believe that this sugar pill will ease their pain. Even John McCain has admitted it would only create a psychological effect at best, just like his gas holiday nonsense.
If you look at ANWR for example, the concept of opening it up to ease prices simply doesn't compute. The figures vary but it's reasonable to say that oil can be extracted in about 10 years and will pump about 1 million barrels a day for about 15 yrs. Assuming that oil comes to the USA and isn't sold to China, that would ease out imports from about 67% to about 65%. This could bring the price of gas at the pumps down about a nickel at best IN TEN YEARS. After that oil is depleted, we're right back where we are today.
There's an argument that this extra oil would ease the burden of world demand and that would lower prices. Why would EXXON et al want to deliver less profits to their stock holders than they did last year? That doesn't make sense. New drilling is a scam. Everything the Bush/Cheney/McConnell team touches ends up making a fortune for their campaign contributors and does nothing American voters. These people have no problems slaughtering the village milk producing cow by selling the villagers on the concept that it's in their best interest, cashing in on the prime rib, then leaving the caucus for the people to bury. New drilling is a scam.