Friday, June 20, 2008

Current Oil and Gas Prices are Self-inflicted Wounds

For several reasons, I always enjoy finding articles that summarize everything I've been thinking on a current issue. First, it confirms what I've always thought - "I'm a smart guy." Second, it saves me the trouble of composing long blog posts - I can just cut, paste and link. Much easier.
so I'm glad I found this post on the real political and historical reasons for the current "energy crisis."
Short version: Congressional dismay about high gas prices is like me blindfolding myself and then complaining when I bump into things a lot.
Long Version:
Americans feeling the pinch at the pump should recognize that the wealthiest nation on the planet has nothing but itself to blame for the third in a series of energy crises that began when Richard Nixon was still in office.
Having largely ignored the previous two shots across the bow — the first coming in 1973 when OPEC decided to ban sales of oil to nations that supported Israel in the Yom Kippur War, and the second in 1979 after the Islamic Revolution in Iran — the U.S. seems determined to repeat the mistakes of the past.
What should make Americans on both sides of the aisle even more ashamed is that before the first energy crisis, the United States produced 11.428 million barrels of oil per day. This represented 66 percent of the 17.308 million barrels we consumed that year.
Compare that to 2007, when America produced 8.481 million barrels per day, or only 41 percent of the 20.7 million barrels consumed. Such is the result of the so-called energy policies of seven White Houses and 17 Congresses controlled by both Democrats and Republicans.
Yet, today’s politicians — mostly on the left side of the aisle, of course — have the gall to place all the blame for rising energy prices on increased demand from expanding economies like China and India.
At least those countries are participating in exploration efforts to expand their own supplies. China’s oil production has almost doubled since 1980, while India’s has grown by an astounding 375 percent. At the same time, U.S. production has declined by 22 percent. . .
Closer to home, our neighbors also ramped up oil production. To the south, Mexico has seen its crude output jump 64 percent since 1980, while Canada’s increased 85 percent.
Did I mention that our production declined by 22 percent in the same period?
Putting this in its proper perspective, if America had responded to the second energy crisis by increasing oil production only at the average rate of our North American neighbors, we’d currently be supplying ourselves with 18.86 million barrels of crude per day, or 91 percent of our usage.
It's not as if we don't have the oil available. According to an April 2006 study done for the Library of Congress:
Oil shale is prevalent in the western states of Colorado, Utah, and Wyoming. The resource potential of these shales is estimated to be the equivalent of 1.8 trillion barrels of oil in place. . . . In comparison, Saudi Arabia reportedly holds proved reserves of 267 billion barrels.
That doesn't include ANWR, and it doesn't include offshore drilling.
The real problem, I believe, is that liberals, and environmentalists in particular, want oil to be expensive. Read the words of Sen. Obama when ask his opinion of high oil prices:
I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing. But if we take some steps right now to help people make the adjustment, first of all by putting more money in their pockets, but also by encouraging the market to adapt to these new circumstances more rapidly, particularly U.S. automakers.
I think most people fail to see the need for an adjustment at all. the article points out that Democrats don't have this attitude about other scarce "resources."
Why has one political party for nearly four decades viewed energy crises through the narrow prism of learning to adjust to higher prices and declining resources, as opposed to aggressively finding and producing more of what the country and the economy needs?
Such questions seem particularly relevant given how this same party views hunger in our nation and throughout the world. The answer isn’t for those that have less to make an adjustment and adapt to their impoverished condition. 'Adjust to having less' is certainly not the Left’s prescription for Americans lacking health insurance.
Democrats want government to increase the supply of food and medical care to those deemed financially incapable of providing for themselves.
Why doesn’t the same hold true for energy?