"Duty is the means whereby freedom preserves itself by acknowledging responsibility."
Robert E. Lee
Who is to blame for the current oil Crisis? Just look in the Mirror.
I am truly amazed at the complete economic ignorance of even those who claim to be free market conservatives.
This absolute stupidity was driven home to me by a 'letter' from the American Family Association and its founder Donald E. Wilmon. NOW don't panic, I support Wilmon and the AFA on the moral and cultural issues they take up and champion.
However, Wilmon's letter could have just as easily been written by Charlie Shumer, the socialist demagogue senator from New York.
Its thrust was to blame the oil companies for high oil prices. And I was truly stunned when the President of the United States stood in front of the American people and called for investigations of the Oil Companies for possible price gouging.
Does anyone have an education any more? The price of gasoline is the direct result of market conditions - namely, (1) technical considerations (supply and demand) and (2) fundamental considerations (like who controls the production of oil world - wide).
Oil is a scare resource subject to the available supply and the demand. World wide, the demand for oil has changed radically over the past twenty years.
China and India have doubled their consumption of oil over this period while the United States, Japan and other industrialized economies have increased their consumption (demand) by one-half over this same period.
All of this increased demand is being played out against the reality that the supply (production) of oil while increasing, is being produced and found at a diminishing rate.
Does the average American understand that the United States has basically gone off line because of the likes of Charlie Shumer, Ted Kennedy, Hillary Clinton, Robert F. Kennedy, Junior, and RINO Republicans?
American has gone off line despite the fact we have more proven oil reserves (unexplored fields) than any other nation on earth. Why aren't we exploring and producing more oil for ourselves?
The answer is simple and tragic – a coalition of radical left-wing environmentalist buttressed by the Democrats and Republicans in congress who have bought into the tripe of environmentalism.
Consider the following:
Had we opened the northern slope (Anwar) in Alaska in the mid-1990s as the Republican Congress wanted to do (and Clinton vetoed), we would today have an additional 1-million barrels of oil flowing right now (perhaps even more) from that source.
If we were allowed to explore the oil reserves off the Atlantic and Pacific coastlines, we would have untold millions of barrels flowing right now. What would be the impact of this increased supply on the price of oil?
It would be substantial - perhaps as much as $25.00 per barrel in today's market.
This anti-capitalist mentality has used the political system, bureaucracy and courts to kill off exploration of proven reserves domestically, thus, making us more dependent on foreign sources of oil. While they have limited oil production, they have also worked to destroy the nation’s capacity to generate power.
This mentality has regulated the construction of new refineries out of business, effectively limiting the output of gasoline and other products over time, driving up the price of these products. The only way the oil industry has had to increase refining capacity has been to increase the size of existing facilities over the past 30 years. In reality, the United States should have increased production (refining) capacity by one-half (50%) over the past 20 years, instead we have increased it by about one-twentieth (5%).
This mentality has regulated the construction of new nuclear power plants out of business, effectively limiting the output of electricity overtime, driving up the price of electricity. There has not been a new nuclear plant constructed in the United States in 30 years. To keep up with the demand for electricity and bring about a conversion of oil to more economic uses, the capacity to generate electricity should have increased by at least one-half (50%) over the past 30 years. Yet, we have only expanded the capacity of fixed assets (nuclear plants) to generate about one-tenth (10%) more electricity over this period and force utilities to adopt more antiquated ways of generating electricity like coal burning plants t make up the difference.
This mentality has been allowed to regulate the refining process in to a maze of bureaucratic bottlenecks substantially running up the cost of gasoline and other products beyond the base cost of the raw material (crude oil). The myriad of regulations of the refining process runs up the price of gasoline. In addition, we have innumerable regulations on the types and processes that can be used to generate electricity through coal burning plants.
At every step in the production of power for this nation, government regulations have worked to drive up the price to the consumer, NOT oil or utility companies.
To add insult to injury, it is government who is the real gouger - benefiting daily, gallon by gallon - through windfall taxation of the consumer. State and Federal taxes make up from 12.5% to 25% of the price of a gallon of gasoline depending on the State. This does not include the taxes they reap through taxing utility (power) consumption. And while government reaps windfall taxes, what was the profit margin by ‘Big Oil’? Nine percent (9%).
So, who are we to blame for this?
We need not look any further than the man or woman in the mirror. Frankly, we as citizens and economic agents in a supposedly ‘free market’ have no one to blame but ourselves.
We are to blame because we have allowed this coalition to effectively create the oil crises of the past 30 years without a struggle.
There is no energy crisis, there is a crisis of government and we have allowed and we are allowing government to dictate the discussion when it is the problem.
Just consider their ignorance – how do they propose to deal with the latest oil crisis? By doing more of the same – more government regulations, a Wind-fall profits tax, and hearings about price gouging?
More to the point, consider our ignorance for allowing them to get away with it.
Disclaimer: The views, opinions and ideas are those of the Southern Agrarian and do not represent those of any other organization. I usually think about this stuff when I am working out,praying (yes infidel - God speaks to me like he will to you, if only you will let him in your heart), or suffering from a lack of sleep. ...torture me, kill me but just don’t bore me with your left-wing tripe. Semper Fidelis.
