I've been reading a book called American Creation: Triumphs & Tragedies At The Founding Of The Republic, by Joseph J. Ellis. You may know him for writing Founding Brothers, for which he won a Pulitzer. I just finished the chapter on the creation of the two-party system. Ironically, the person most responsible for its creation would also condemn the very demon he released from Pandora's Box. I refer of course, to Thomas Jefferson. I won't go into the gory details of how it call came to pass. That will be for another post. But in reading about the creation of the two-party system and watching the current events on the news, I am reminded of this creation's insidious nature.
To my overall point, I want to look at the debate that is going on right now in Washington between the Republicans and the Democrats over the price of oil and what can be done about it. It's boiled down to two positions. The Republicans are pushing for opening up offshore drilling and the Democrats want to release oil from the strategic reserve both in the name of lowering the price of oil.
Apparently, both parties think we are morons. Let me be quite clear on both positions. Neither one would have an impact on oil prices. NONE.
Let's start with offshore drilling. We would not see any impact toward an increase in supply for a decade or more. How does that help? There are already countless land leases in the United States for oil companies to drill, that are going unused. Why is that? Have they explored the land and deemed it dry? I honestly don't know the answer to that question. Discussing this with a friend and colleague today, he suggested that offshore drilling may just be easier for the oil companies. It was a hypothesis on his part, but probably right on target. I would like to know the answer to that underlying question before we give license to open up more areas to drilling.
Now, the idea of releasing oil from the strategic reserve is just as idiotic. First of all, the whole idea of a strategic reserve is preparedness for a national emergency, like a military invasion, or a natural disaster calamity, not price stabilization. The idea that this would be a reasonable alternative to help bring down the price of oil is laughable. Even if we came to a national consensus that releasing oil from the strategic reserve was a good idea (and you will never convince me short of an actual emergency), there isn't enough oil to make a dent in the price of oil.
So while both parties are blustering and billowing at each other, pretending to get something done for the American people, the real problems are being ignored. "What are the real problems?" I'm glad you asked. How about starting with refining capacity. The biggest problem is not lack of supply. The biggest problem is we don't have enough refineries to process the oil. Why don't we have enough refineries? Because there are too many communities that don't want them. They fight them tooth and nail and then they complain about the price at the pump. We haven't even mentioned the fact that some states have different requirements on how gasoline is refined. Having a national policy on refining standards, would also help. There is an example where a lack of national regulation is actually costing the consumer more money, if Exxon has to refine oil for California one way, and another for New Jersey, and another for Florida. Pick the state that has demonstrated the most success with its standard for oil refinement and go with it. How about the low dollar policy that we've had for the last 7+ years? Guess what? The dollar goes down, the price of oil goes up, as does the price of ALL imports. Nobody in Washington is talking about how devalued the dollar has become on international markets.
In the meantime, there is a total lack of leadership on this issue. Where is the president, like Kennedy did with challenging the nation to put a man on the moon in 10 years? Where is Congress? With the demise of the Cold War, have we completely lost all motivation as a nation to accomplish great things?
The reality is we have to have all options on the table. If we need more domestic production, then let's find out why these oil leases are being unused. If we need more refineries, we need to build them. Do we need alternative energy? Absolutely. This isn't just an environmental issue. This is an issue of national security. We will never have enough oil to be self sufficient. So we keep importing oil from nations that hate us. Saudi Arabia, Venezuela, Russia, just to name a few. We are funding nations that work toward subverting us. We need to stand up and challenge ourselves to find sources of alternative energy that can support us in the long run. Again, everything is on the table. Solar, electricity, wind, even nuclear have to be an option. In the meantime, we have to bridge the gap with oil and there are no easy answers to bringing the price down.
The two parties are trying to distract us from reality. Don't buy into it. There is no third party that can balance out the dialog and say, "Hey, wait a minute. None of this makes sense." I once had a co-worker share a salty euphemism from her youth. She said her momma told her, "Don't [pee] on my head and tell me it's raining." That's what the two parties are doing to us on this issue. Thanks Mr. Jefferson.
5 comments:
I also don't understand why we aren't getting an honest debate:
*using strategic oil reserve; no, I don't believe for a second that the people who want this are sincere. Dishonest debate here IMO.
*demanding that the oil companies drill where it is legal to do so, but they aren't doing it; there is some reason for this that we aren't hearing about. Why? Dishonest debate here IMO.
*allowing drilling offshore where it is now prohibited: OK, but you can't hide behind this when meanwhile you have no solutions for the current crisis.
As for the lack of refinery capacity, I have heard that and heard that and heard that for years. I'm starting to wonder if it's true. I absolutely agree that [if true] shows more than anything that we as a country have no vision at all. How can we let nimby-ism rule the day like this? The country needs to get it together and just make these things happen. That includes disposing of nuclear waste.
You did forget to mention about speculation in the oil markets. Depending on who you believe, somewhere between 40-60% of all the oil trading is by speculators. Morgan Stanley is the largest holder of heating oil in the world. I doubt they are using it to keep their offices warm. Congress could pass legislature to close this "Enron" loophole and put these guys out of business. That could drop oil prices 20-30% in about a month.
You are right, I did forget speculation, though not intentionally. It certainly should be on the table. I doubt either party will close this loophole, though, especially with Republicans' endless championing of the free market and Chuck Schumer protecting from the Democratic side.
Also, to respond to Carl, I am afraid that NIMBY's have way too much say. We in the county that I live in are ruled by an even worse class of people, the BANANAs. Build Absolutely Nothing Anywhere Never Again. These people have no foresight.
I have heard different arguments about speculators, but certainly have to discount claims that there is no such thing as a real speculator effect on prices.
That's ridiculous. Looking at a market I understand a little better, are they trying to tell me that speculation had nothing to do with the real estate bubble and crash? Come on!
"With the demise of the Cold War, have we completely lost all motivation as a nation to accomplish great things?"
I wonder if you are onto something with that. It seems that since the Berlin Wall fell our government has been floundering - or, perhaps, lurching from one debacle to the next. We wallow in excesses we can't pay for. We bicker and blow-hard about things that don't matter. Where is the common goal, the thirst for achievement and success?
I had so hoped Obama would be a leader and would unite us in a positive forward direction. Instead he is bogged down by a media following a Rove-like pattern of character assassination by a thousand speculations - is he black enough, is he elite, is he too cool, is he Muslim ... and on it goes. The media is lazy so instead of reporting fact it speculates. We've all noticed the cycle of how it creates a political figure and helps build momentum and then turns on that figure and gets just as much milage out of the figures distraction. The cycle is playing out again.
Oil, the credit crisis, the home foreclosure mess - Congress has no guts to tackle these problems. The sooner we learn to manage crisises on our own, the better off we'll be. Expecting our government to do anything more than fill CNN's alloted time is expecting too much. We are on our own.
BTW, are Fox News and CNN evil twin brothers? Just for the heck of it, watch Fox News and then turn to CNN. There are alarming similarities in the breathless speculation leading into a story and the tones are mostly anti-Obama. CNN is not as overt but the tendency is there.
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