Wednesday, June 11, 2008

Why Can't McCain Say "Oil"?

By Alan Caruba

While grabbing a bite to eat for lunch, I turned on the television and MSNBC was broadcasting live a presentation John McCain was making somewhere. He does well in these relatively unscripted events, but when he got to the topic of the price of gasoline and how to reduce current and future pain at the pump, he could not bring himself to say “oil.”

He ran off a string of “alternative” energy ideas such as solar, wind, nuclear, and “a battery that will let your car go a hundred miles” on a single charge, but there was no mention of America’s vast oil reserves in Alaska or the billions of barrels geologists believe exist in our continental shelf, 85% of which Congress has put off-limits to exploration or drilling. There was also no mention of the coal that accounts for more than 50% of the electricity in the U.S. and which would be required by his magical future automobiles.

(Revised text) Bill Clinton did not favor drilling in the Alaskan National Wildlife Refuge where an estimated 7 to 15 billion barrels of oil exists and Congress resisted efforts of the Bush administration to permit drilling. That's a total of 16 wasted years when we could have been extracting it.

That is precisely why America has become dependent on foreign oil, the price of which is currently being bid up by speculators worried about more war in the Middle East, i.e., an imminent attack on Iran. First we had to kick Saddam Hussein out of Kuwait and then we decided to remove him entirely. Was this about tyranny or oil? Read my lips: O-I-L.

As for Iran's nuclear ambitions, the same action Israel took first with Iraq and more recently with Syria would end that. Or we could, in cooperation with the European Union and other nations, cut off foreign investment and markets to the ayatollahs until they cry "Uncle Sam!"

As the Saudis keep telling us, there is plenty of global oil to meet our needs, but it is the mercantile exchanges around the world where the price is set. Lacking an adequate domestic supply, Americans depend daily on the importation of 10.1 million barrels of foreign oil. We use 5.1 million barrels of domestic oil, and are required to add 0.4 million barrels of ethanol.

You can thank OPEC and Jimmy Carter for the pathetic state of domestic oil production. It has been in decline since the OPEC oil embargo that saw the first real jump in prices at the pump. You would have thought we would have taken a look at our capacity for domestic oil production, but what Carter did and some politicians (Obama!)are advocating today was to impose a “windfall profits” tax on American investor-owned oil companies.

All of a sudden the incentive to spend the millions required to find oil and produce it for domestic consumption disappeared, a condition that dates back to at least 1985. Thereafter, since most of the places in America where oil can be found were put off-limits, U.S. oil companies decided to look and drill for oil elsewhere in the world. (The exception is the Gulf of Mexico.)

With either McCain or Obama in the White House, new domestic exploration and drilling is not likely to happen, particularly since McCain cannot bring himself to even say the word “oil” and Obama wants to seize oil company profits in precisely the same way Jimmy Carter sabotaged the industry.

The recent charade of hauling oil company executives before a congressional committee demonstrates what idiots we have elected to high office.

While McCain is reeling off his list of alternative energy sources, he neglects to mention you can’t pour solar, wind or nuclear energy into the tank of an automobile, truck or tractor! McCain has drunk deeply of the global warming Kool-Aid and favors the kind of carbon credit program that was just defeated in the Senate. Both he and Obama were conveniently out of town when the vote on Al Gore’s cap-and-trade scheme was taken. Otherwise we would have discovered that both candidates cannot wait to destroy what is left of our economy.

How to turn things around is almost too simple.

First, get rid of the congressional mandate for ethanol. Ethanol effluent pollutes more than gasoline and ethanol ensures less mileage per gallon. It has significantly distorted the worldwide agricultural marketplace.

Second, get rid of the EPA mandate for the formulation of some 45 different blends of gasoline that drive up the cost in various areas of the nation. Consumers end up paying for all this essentially useless additional refining process. Unless you live in some place where the natural geography contributes to smog, the air in most of the nation is just fine.

Third, open up ANWR to drilling. NOW!

Fourth, let oil companies explore and drill for oil and natural gas offshore of our coasts. Environmentalists want to build miles of ugly wind farms there, but a couple of drill platforms are apparently too awful to endure for the literally billions of barrels of oil and trillions of cubic feet of natural gas that exist.

Then wait patiently as the price of oil and natural gas drops like a stone.

Frankly both the presidential candidates scare the hell out of me, but I will settle for McCain if he just begins to say that magic word, OIL.


Saildog said...

10-15 bn barrels in ANWR? Yes - could be a bit more, maybe a bit less.

If the US had drilled it 16 years ago, as you suggest, it , like Prudhoe Bay, would be significantky in decline by now. And you would be even more dependent on those pesky foreigners.

Israel attack Iran? Have you looked at a map? Maybe you haven't noticed how big Iran is, or how far away from Israel it is. Maybe you have noticed that small choke point on the worlds jugular called the Straits of Hormuz. Maybe you haven't heard the terms Sunburn or Silkworm (missiles). Maybe you haven't looked at the geography of the Gulf and all those oil production assets.

Forgetting for the moment the jackboot ethics of such an attack on Iran by Israel, as proxy for the US, for O-I-L, the move would be suicidal. Iran has displayed infinitely superior diplomacy and strategy to the US in recent years. I have absolutely no doubt they are well prepared for an attack and the initial and very rapid response would be to destroy as much of the oil production assets in the region as possible and if possible to close the Straits of Hormuz. The global and US economies will be destroyed.

Not to mention a dangerous and very unstable; and nuclear Pakistan is right next door.

Such an attack would be sheer lunacy - but then all those involved in the US and Isarel are lunatics.

Alan Caruba said...

Saildog, your latest analysis of every line in today's post is being posted so that I may ask you to delete "Alan Caruba BS" as a site. I note you have not contributed to it since March and this suggests a lack of dedication to disputing everything I write.

You are not posted here regularly because, as I continue to remind you, this is MY blog, not yours. I notice, too, that you are always in disagreement with me. You are free to disagree, but why am I obligated to share MY blog with you? The answer is that I am not.

Delete "Alan Caruba BS" and I might feel a bit more kindly toward you. At the very least, I take comfort in knowing you are far away in Australia.

Jeremy Jacobs said...

Hi Alan.

Sorry you've attracted the trolls. Such is the price one pays!

You posted this "European Union and other nations" The EU is NOT a nation. It's a quasi-superstate which seeks the diminution of sovereign states.

Trust you are keeping well despite the advancement of Mr Obama

Alan Caruba said...

Jeremy, I stand corrected. I sit corrected. I am herewith and forevermore corrected.

I did not, of course, intend to suggest the EU was a "nation", but rather a coalition of nations. That's what happens when you write about a topic and you're all fired up over something a politician says or, in this case, does not say.

Good hearing from you!

Saildog said...

Alan Caruba BS has been deleted. You are right - a blog like that must be maintained. Nobody was reading it - or at least no one was responding to the single old posting.

It does not mean that I don't find the stuff you write offensive - I do. I might just put it up again when I have a bit more time.

Of course it is up to you which responses you publish. I strongly suspect that your blog (and your message) would be more successful if it had some robust discussion. Hmmm, maybe I should stop visiting. And anyway; I am such a bore with all that horrible detail.

But then robust discussion may not be your intention. Being in furious agreement at all times with a small, but loyal band of sycophants maybe is what you are looking for.

A Watcher said...

"In fairness, neither Bill Clinton, nor George W. Bush favored drilling in the Alaskan National Wildlife Refuge"

Sorry, have to disagree with including GWB here. ANWR drilling has always been called for in the Bush energy policies. It has been successfully blocked by Democrats and some Republicans, but definitely has been promoted by President Bush.

Alan Caruba said...

Thank you for the clarification of the Bush administration support for drilling in ANWR.

I was under the impression, given Bush's comment about being "addicted to oil" that it was not favored.

Lee Hazel said...

Alan: This may sound very naive but I wonder if we could get a more serious look at opening up the various drilling sites, such as ANWR if it was suggested that the oil from these sites be restricted to commercial transportation use only. (I almost forgot Fertilizer for US use)
The crude would not be sold through the commodities market but through a closed government controlled auction to american processors. The finished products, gasoline, diesel, aviation fuel ect would go to stations that would "sell" this product to legitimate businesses and farms (could be "card" holders). It would also be used by police, emergency and public transportation vehicles as well.
I am no friend to government control of anything, it and politicians have a habit of screwing up things as simple as unzipping ones own pants.

But, something has to be done before we go into a spiral of inflation the likes of which even Jimmy Carter would view in awe.

Also this could be a wedge to get us past the god awful mess we have gotten ourseves into by listening to every crackpot environmental and anti-nuclear nutcase who came along.

I wrote you not to long ago about the affect of these crude prices on the cattle and lumber industry in this central Missouri area.

This could also be a sop to those that feel that our "big" car days must end. By restricting and pricing our own crude for commercial and farm use only we might get around some of the Global Warming Scam cultists.

Just a thought.

PC is Thought Control

Alan Caruba said...

Lee, since oil is a global commodity sold on mercantile exchanges and this is a fixed element of the industry worldwide, I am afraid your proposal would go no where. Also, like yourself, the less involvement the government has with the oil industry, the better.

From 2003 to 2007, ExxonMobil paid taxes in the amount of $64.7 billion which actually exceeded its earnings in the US by more than $19 billion.

The oil industry as a whole needs less taxes in order to encourage more exploration and drilling.

Lee Hazel said...

Alan: No argument here, just a question. If we could not drill, extract and use oil for our own uses how is it that Iraq, Iran, Venezuala, Mexico and other oil producing countries are selling gasoline in thier own countries for in some cases dollars per gallon less than we are paying? They are well below what our price would be even if we removed federal and state taxes.
How are they getting around the Global Mercantile Exchange?

PC is Thought Control

Alan Caruba said...

In the nations you named, the oil industry is nationalized and controlled by the government. One way to keep the masses quiet is to keep the price of gasoline low by absorbing some of the cost of providing it.

Mexico has depended on oil for some 40% of their entire annual budget. Venezuela once had a prosperous oil industry and it is now failing. Iran literally has to import gasoline because it lacks refining capacity. Iraq is still trying to come up with a formula to divvy up the earnings among various groups, tribes, etc.

Want to drive the cost down? Drill for more oil. That's something Congress (Democrat controlled with some Republicans included) does not want to do.

Pretty soon the American public will be in the streets with pitchfolks hunting down Senators and Representatives. At that point, they will open up our natural resources.

Lee Hazel said...

Alan: Thanks for the info. I must admit a limited knowledge regarding the financial mechanisms of oil supply.
One thing I think we agree on: Big Oil is NOT the problem. Unfettered by totally ignorent politicians Big Energy (Big Oil plus Nuclear and Coal) would solve much of our problem in almost no time.
I do know enough about commodities to know that most of our current problem is two fold, first world wide instability regarding crude supply, and two, the US not an active stable supplier. Our immediate start of drilling would signal the entry of a very large, very stable player. Crude prices would come down precipitously.

Again Thanks