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Friday, May 23, 2008
Donald Lambro :: Townhall.com Columnist
Dems 'Oil' Wet About Gas Prices
by Donald Lambro
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WASHINGTON -- Have you noticed that ever since the Democrats took control of Congress, oil and gas prices have been going through the roof?

The Dems won control of the House and Senate last year in part on the notion that sinking billions of taxpayer dollars into corn-based ethanol would combat global warming; itself a dubious superstition that some scientists say is part of the Earth's natural environmental changes over many eons.

Among the predictable results: increased gas prices because of higher refinery costs to blend ethanol into petroleum-based fuel, and higher grain and food prices because the government-induced demand for corn drove up agricultural prices on the commodities market. This is known as the law of unintended consequences, and it seems to be popping up with just about everything the Democratic-run Congress has been passing lately.

The Democrats also ran against the oil companies, charging them with collusion to drive up the price of oil and gas, attacking their rising profits and high salaries, and proposing that the answer to all this was to smack Exxon-Mobil and their partners in crime with an "excess profits" tax so that Congress can spend that money on other things -- like ethanol subsidies.

Every so often, to demonstrate their concern about higher gas prices, Congress calls oil executives up to Capitol Hill to explain why the numbers keep rising. Lawmakers angrily wag their fingers at the cornered businessmen, threatening to uncover their alleged skullduggery. The executives in turn patiently explain how oil prices rise and fall in global trading and are largely driven by the laws of supply and demand. The hearings end and not much comes of it except some newspaper headlines.

An abysmal level of ignorance about all this pervades Congress, a cloud of cluelessness breathtaking to behold. Apparently these lawmakers skipped Economics 101 or were never taught about the principles of supply and demand. Here's what Democratic Sen. Herb Kohl of Wisconsin told senior oil company executives at a recent Judiciary Committee hearing: "People don't get it. Demand is not crazy. Why are prices going crazy?"

I guess Kohl must have missed all the stories about skyrocketing global demand for oil. One executive explained that world demand was certainly crazy, driven by fast-growth economies like China and India. Oil and gas inventories have barely kept pace with that demand, but the gap between supply and demand has grown tighter, and that drives up prices in global commodities markets.

Kohl seemed unconvinced by this explanation because it did not fit in with his party's belief that oil executives are crooks who charge excessively and draw lavish paychecks. Indeed, the executives were actually asked how much they were paid, as if this had anything to do with production and refinery capacity, inventories and oil exploration.

"Where is the corporate conscience?" Sen. Richard Durbin, Democrat of Illinois, asked the executives at one point in the hearing. Such is the demagoguery that now permeates congressional inquiry.

But Durbin faced some uncomfortable cross-examination that evening when he was challenged by CNN news anchor Campbell Brown who wanted to know what he and the Democrats were doing about rising oil and gas prices. Durbin responded by attacking President Bush, suggesting that the answer lay in a change in administrations, but he did not utter a single plausible solution to the problem.

Brown tried again, reminding him that Democrats said they were going to deal with this issue, and asked, "What are you proposing to do to bring down gas prices?" Again Durbin dodged the question, saying instead that the answer was to elect more Democrats to Congress in November. That ended the interview.

Perhaps the reason Durbin's responses were so evasive has to do the fact that Democrats don't have answers that make any sense. Ethanol is now a big political problem for the Democrats and is seen as one of the chief causes of higher food prices. Fatter farm subsidies, which Democrats stuffed into last week's farm bill, is the other, pushing up the price of grains, milk, bread, beef and poultry. Democrats talked of expanding ethanol subsidies last year, expanding production into other environmentally friendly resources such as witch grass and wood chips. Two things Democrats did not run on last year: boosting oil and natural gas exploration here at home and building more refineries.

"The basic story that has brought oil from $20 to $130 is that world demand is growing robustly when world supply is not," says Jeffrey Rubin, chief economist of CIBC World Markets.

"It all comes down to supply and demand," says oil magnate T. Boone Pickens who knows a thing or two about both.

That's the problem and the solution in a nutshell. But it's not the answer Democrats like Kohl and Durbin want to hear because in an election year, fanatic finger-pointing sells better.

So they continue to point the finger of blame at oil-company executives, commodity traders, and gas-guzzling SUVs, and promote wood chips, witch grasses and windmills as the answer to all our energy needs.

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About The Author

Donald Lambro is chief political correspondent for The Washington Times.

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I Wonder
If Liberals use kneepads when servicing their TreeHugger Masters.

USA holds own energy supply hostage --
environmentalists pleased.

that's the headline...

"Two things Democrats did not run on last year: boosting oil and natural gas exploration here at home and building more refineries."

we have GOT to get out of this "drilling is bad mindset." Our country RUNS ON ENERGY!

And the Farmers
have been making record profits. I wonder why the dems aren't drilling them for an explanation. Shouldn't we be asking them to explain such profits while food prices continue to skyrocket?

Dumocrats haven't a clue ....
... at least most of them don't. They truly believe that they can pass whatever legislation they think is best for their party and their clients and nothing will happen other than what they intended. That, of course, assumes that they intended anything other than giving away public money. The few Dumocrats who do have a clue - that is to say, truly understand what they do and the real-world limitations on it - don't care. Business as usual, paying-off politican debts, maintaining support from the various factions of the Dumocrat Party - i.e., Greens, Victims-'R-Us groups 1 and 2, Federation of Union Leaders, Radical Homosexuals, Idiots with B.Ed. degrees and their unions .. have I left anyone out? If I have, just figure they're in that list anyway; okay? I don't want to not insult someone or some group who deserve it.

Science, knowledge, what might be best for the nation, honor, justice, truth, freedom, etc ... all those words and concepts mean something completely different to Dumocrats and their clients than to the rest of us. For a more inclusive list, read Orwell's 1984 again. And who is surprised that this collection of collectivist idiots haven't done anything sensible about gas prices or energy policy? Why are you surprised?

Stupid dhimmicrats
Four letters: ANWR.

Democrats understand economics...
They just choose to ignore them for their own political motivations. The truely sad thing is that the people who vote for them DON'T understand economics. The world where George Bush is to blame for everything is such a nicer place then the world that has complex interactions of forces.

START THE DRILLING!
Domestic drilling is the only logical solution.

A Math Problem
Let someone who is good at figures do this little problem:

A poorly-producing oil well occupies twenty five acers of land, pumping ONE BARREL a day for 300 days a year (counting week-ends and hollidays).
A well-managed cornfield occupies twenty acers of land and is capable of TWO harvests a year.
The problem is; what is the total barrel/gallon yield of produce from the cornfield that is turned into ethanol and what is the yield of oil from the well that is turned into gasoline?
BONUS POINTS:
1: Calculate the fuel used to produce in both cases. 2: Calculate the energy yield from the refined fuels. 3: What OTHER products are produced from these resources durring refining?

My money is on oil.

political grandstanding...
There's not a damn thing that any politician can do to affect the price of gas. Everybody knows it, but we have to watch those idiots grill oil execs on national TV as if they're doing something.

Oil companies have no incentive to do anything different. The supply is good, we're draining the middle east oil fields and they're making lots of money. They don't even have any incentive to drill domestically. That won't make them anymore money.

The price of gas is the price of capitalism and the free market. I wouldn't have it any other way. God help us if the government sticks their stupid noses in oil and gas supplies and prices. I was there in the mid 70s and it wasn't pretty.

There is no one so blind as ..........
There is no one so blind as those who will not see - the Dumbocrats!

Idiot Totalitarian Dictators
I still run into people who think "supply and demand" is a "theory" and that government can nullify it thru regulation.

Career government people who've focused on their own ambition & whatever it takes to keep themselves in office have little clue about such economic fundamentals. They're little Canutes commanding the tide to go out. Furthermore, they rely on an electorate even more stupid, who has been conditioned to look to Big Sugar Daddy to make all the boo-boos better & to make the meanies go away.

These are the idiots who think housing, medical care, & fuel would cost less if there weren't landlords, doctors, drug makers, & oil barons demanding a profit.

Energy infrastructure has to be developed over decades. It's cheap & easy to oppose a coal or nuclear power plant, a refinery, or an oil field development on some silly grounds today because the consequences may not bite until one is already set to retire, or gone.

Were it not for Jimmy Carter & _The China Syndrome_ we could have significant nuclear power, & much less CO2 emissions IF that's even a problem. Now it would take at least 20 yrs to replace significant fossil fuel power w/ nuclear.

Notice that the same people who create policies that cripple energy capacity growth over the long term can't stand present pain (especially before an election) & will offer silly pandering moves like these stupid hearings & temporary suspension of the gas tax. That's why they have to delegate legislative authority to such outfits as the IRS, EPA, Fish & Wildlife, etc, & activists suing in federal court, to do their dirty work.

They want to preside over totalitarian planned-economy fascism, even while they illustrate why it has never brought anything but misery & disaster.

Speaking of Jimmy Carter...
The "energy crisis" of the 1970's was largely a result of the price controls on oil & petroleum products.

Dunno about you, but I'd rather see high prices than actual shortages. Within limits, I can economize & set priorities, but doing with nothing is another matter.

That's coming, tho, once the regime of energy rationing, a.k.a. "cap and trade" drops in on our lives.

More Socialist droppings
Rep. Maxine Waters (D-Ca.) has an excellent plan to lower gas prices ... nationalize the oil companies. Here's what she said in House hearings on gas prices:

"This liberal will be all about socializing--uh....um....will be about....basically, taking over and the government running all of your companies."

Evil.

Re-defeat communism.

ANWR and the outer continental shelf....
We don't need to deal with the engineering extremes, generated by geography and climate to solve our petroleump product needs.

There is an estimated 2 to 3 trillion barrels of reserves (greater than the reserves of Canada, Saudi Arabia, and Iraq combined) in the western slope of the US.

In situ removal of the oil from the shale is technilogically straight forward, and inexpensive. My research into companies that are doing limited exploration/extraction shows that these companies, when allowed to go full bore, can produce oil from the shale for the price of about $36 a barrel. Team that with refineries built at closed US military facilities, like Rocky Mountain Flats Army Base, a tremendous burden can be taken off the shoulders of the American consumer and the American producer.

But then again, Congress is more concerned with classifying the Polar Bear as "Threatened" (which is a joke, since the natives living in the polar bear's territory can't recall having seen such high bear populations in their lifetimes), they've demonstrated once again, that they don't care one bit about the citizen's of this country.


New twist on Economics 101
Those of us who were required to take at least the requisite courses in economics, are well acquainted with the first law of that subject, supply and demand.

I propose that in light of the fact that Congress has no intention of allowing an increase in supply by exploiting the abundant resources within our own borders, we engage in establishing another law to offset the first law they intentionally eschew.

The new law would be to address the economic reality that has befallen every American as a result of the idiotic refusal of Congress to allow oil companies to "buy American."

The title for this new law of economics is simple, it states: "Demand the Supply."

The premise of this new law is equally simple: Continued political interference to the demand of obtaining the domestic supply of oil will create a resultant energy force specific to create the kinetic power required to boot their butts out of office.

I recommend we apply the letter of the law starting today.

Hello orlandocajun
In your post #9 you stated

"There's not a damn thing that any politician can do to affect the price of gas. Everybody knows it, but we have to watch those idiots grill oil execs on national TV as if they're doing something."

I will disagree with you on one minor point, though I think that you may concede the point. Government has affected the price of gas through its restrictive domestic policies. It has helped cause prices to increase and will continue to do so.

Democrats either don't understand economics or they choose to ignore economics for their own political gain. In either case that makes them unfit to govern.

Tibby

Correction
In my post, I ment that the oil well and cornfield would BOTH occupy 25 acers of land. I don't want any polar bear lover to think I was rigging the game.

Kohl
He was a businessman before he bought his way into the Senate and he said WHAT? Proves one thing, in order to be a "leader" in liberal circuses whoops, I mean circles (Dem and REp)
you have to have the i.q. of a gnat.

It just frosts me to see these pompous ninnyhammers sitting on high, on their thrones, looking down on the witnesses the kinglets have
ordered before them. These kinglets who are,
according to the Constitution, hirelings of
the ones they ordered to come before them making the employers look like supplicants.
The arrogance of that arrangement is, I don't know what it is, but just once I wish one of the employers would take them on, and make them look like the fools they are. Ollie did a great job in the Iran Contra kangaroo trial.
This is what happens when hirelings believe they are invulnerable, and have fixed the system to make sure they can never be fired.
Corrupt bunch of toads.
We can only hope that the gas and food hikes will come back to haunt the DemonRats in the Fall. Too bad we don't have an operation chaos plan for that.

Liberals Want Gas Price to Rise
It's out in the open now; the liberal Democrats aren't even TRYING to get gas prices down, regardless of what the majority of American people want. They want the price to go up, the higher the better. It's about forcing us to cut back on driving so we don't do further damage to Mother Earff. It's about raising more of our tax dollars for them to squander. They don't care that people in the world are now having food riots and are starving because of their lunatic biofuel ideas. These are the same people that would rather force people to starve than allow us to use oil (which we have in great abundance but aren't allowed to refine). If we were talking about a polar bear or an owl they'd be outraged. They call themselves "compassionate" yet they're heartless.

These ecologists and environmental wackos in Congress need to sit down and shut up; they've done enough damage to America already. Things were much better before this Democrat Congress took control of things in 2006.


U.S. Government Take Over Big Oil?
Where exactly does the lunatic Democrat Senator from California think she is? What right or authority does the U.S. Government have to take over an entire industry? This is a democracy and we demand that America be allowed to drill and refine oil. We demand to become energy independent; Yes! We Can!

We don't want to take the bus!

Democrats and energy
These ninconpoops in Washington are fiddling while the country goes down the toilet. Example
the enviro-nuts have the US not being able to drill for natural gas in the Great lakes. BUT
Canada has drilled slant wells on OUR SIDE of the lake and is taking the gas and then selling it to the US. OH my do we have idiots in Washington! France and China can drill for oil off our own coast but the US can't. We are being led by idiots!!

Where is the leadership?
Who speaks for reason on the energy subject? With no energy candidate in the race and the congress voting overwhelmingly for yet another huge farm and ethanol subsidy there is no national organization to unite behind.

We can write, call and try to pressure them but the congress is becoming very skillful in hiding their hand from public view until the subject is moot. NumbersUSA managed to get the word out on the amnesty features in the farm bill but no one is leading on the energy component. Ethanol just got a huge boost instead of the demise it deserves.

The anti-energy people are organized why not the pro-energy voters?

Supply is not the whole issue
According to some of the oil execs during the hearing on Wednesday, the amount of supply is not the only factor in high prices. They mentioned several times that risk plays a big part in the price. One of the biggest risks being geo-political. This risk could be lowered if our government became more freindly to domestic resource development. It's time for the US to become energy independent.

NATIONALIZE OIL AND SUBSIDIZE FARMS?
The cynic in me says oil company exec's are tired of being pulled before congress and have decided to put democrats in a difficult position with voters-right around election time oil will suddenly become more affordable, courtesy of a republican.

McCainics
Not all Republicans, but too many Republicans have joined the evil side and are playing their part in distroying this nation.

Dare I say McCain?

Now is the time we need to vote for a third party. We need to get behind either the Constitution (my preference) or the Libitarian Party (too close to anarchy to be my 1st choice). We need to pick one and promote it. That is our only chance to save this nation. Forget about the Republicans or Democrates. They are poison.

This whole thing stinks to high heaven.

Drill ANWR! Drill off shore, Drill the west. Build refineries. Build nuclear power plants. Use hydro, wind, waves, and solar where they are ECONOMICLE and useful. Realize they are NOT the solution. They are just another part of the energy mix. Rightfully this nation should be exporting energy, not importing it.

And for G-D's sake close the borders! Quit imprisioning our border guards for doing their jobs.

This nation is toast, and the liberals are working as fast as they can to rush the end.

As I have said before...
the most important issue at this time is new refineries. Yes, we need to drill, but without refineries to refine the crude oil, the stuff will sit. You can't run your car on crude.

Democrat aren't mainly to blame
Gas prices were already well over $2 a gallon before they took control. Bush and the Republicans are mostly to blame. They've signed on to all of this spending as much as the Democrats, which necessarily means inflation. Since Republicans don't want to be blamed for higher taxes, the Federal Reserve simply prints the money to pay for it all. That means a lower valued dollar. But tax increases are tax increases either way. There's no crisis of oil today, just as there wasn't one in the 70s when this happened before. The cause then is the cause now - massive increases in spending for war and welfare.

Democrats aren't mainly to blame...
Hey Rick! After reading your post and having lived through the gas-less 70's, I am sure you would make an excellent, excellent politician
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