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Wednesday, August 27, 2008
John Stossel :: Townhall.com Columnist
Energy Independence II
by John Stossel
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"John Stossel sounds like a real defeatist. ... We have our backs to the wall, and he's raising the white flag."

"Stossel has lost his mind."

My column last week mocking "energy independence" angered people.

I argued that "independence," a favorite slogan of vote-hungry politicians, would require the government to interfere with the global division of labor, which, as economists have understood since Adam Smith's day, make us richer and therefore better able to deal with the future uncertainties. "It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. ... If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them," wrote Smith.

Of course, as many readers noted, the federal government, by doing things like prohibiting drilling in on- and off-shore areas that may have oil reserves, makes it more expensive or even impossible to produce energy in this country. Those policies should go, but that would still not bring self-sufficiency. Our demand for oil is too great.

And anyway, if the economics of oil production favor foreign over domestic producers, it still makes sense to buy the cheaper product. It wouldn't matter how much shale oil we have in the United States.

Readers correctly point out that because governments control much oil production, there is no global free market. But it does not follow that market forces don't work. There are many sources of oil in the world and many buyers. Supply and demand still set the price globally. It is foolish not to buy at the lowest price.

Many readers agreed with the one who said: "The short-term goal here is not complete energy independence. ... The goal is partial independence from those countries, many of whose citizens hate us and would do us harm."

"Partial independence" sounds like partial pregnancy. People don't have to like each other to benefit from trade. Those who sell us oil need the money so they can turn it into food, automobiles and other things. Refusing to sell because they don't like us would be self-destructive. Anyway, all the world's oil ends up in the same bathtub. If one foreign source stopped selling oil to the United States, it would sell to someone else, and that buyer would then have an incentive to sell to us.

Several readers argued that "Energy independence doesn't mean opposition to trade. If we ever become energy independent, we'll still have the option of buying energy on the world market."

Of course. But this misses the bigger point. To even attempt to achieve energy independence, the government will have to plan the energy sector. Considering how pervasive energy is throughout the economy, this is a recipe for full central planning and a step toward poverty and tyranny.

"Why not keep all that $720 billion [we spend to import oil] in the United States of America?" was a sentiment expressed by many. But that reveals a poor understanding of world trade. When we trade dollars to foreigners for oil, they have to do something with those dollars. They don't stuff them in mattresses. (If they did, it would mean we got free oil.) They buy American products. (U.S. exports are soaring.) Or they invest in businesses here. Or they sell the dollars to someone else who buys American products or invests in the United States.

If we stop buying from abroad, foreigners will have fewer dollars with which to buy American products or to invest. That would hurt us.

Many readers think that energy independence would produce jobs for Americans. But the idea that money spent abroad means fewer jobs here is just plain wrong. If Americans don't produce energy, they will produce something else. The number of jobs is not fixed. There is always work to do.

If Americans can produce competitive forms of energy -- without government subsidies -- great! But if others can produce energy more cheaply, we'd be crazy not to buy it and use the savings to make other things to improve our lives.

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John Stossel blogs at http://blogs.abcnews.com/johnstossel/ is an award-winning news correspondent and author of Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong.
 
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Great article, John
Having read Henry Hazlett's great book, Economics in One Lesson, I find myself constantly in arguments with people who think it's a good idea to limit trade with other countries in order to keep jobs here. It's amazing how such a brain-off idea gets perpetuated even among so-called lovers of freedom in the Republican Party. If more people would read a good economics primer such as Hazlett's book or even Thomas Sowell's books, we would be much better off.

... and/or ...
... read more of Stossel's columns, even though he's not an "official" economist.

Do Not Confuse
Do not confuse "independence" with "autarky".

The latter means no import of oil no matter what the price. The former means that we COULD
produce every drop that we need if we HAD to.

World War II of course is the example of having to. We were able to respond because domestic production had not been hamstrung as it has been today.

We do need to guarantee certain price levels to domestic producers simply to overcome the tendency for increased production-----which means increased debt----to result in decreased prices. Contractual price fixing is a legitimate tool that should not be outlawed.

And the fact that royalties paid to American citizens are a business expense while royalties paid to foreign governments are a tax credit
is protectionism for others. It really should go.

But...
I love your stuff first of all John but I have one issue with this article. The argument for energy independence for me is what if terrorists take out the oil facilities all over the Middle East? or block the strait of Hormuz? We should be self sufficient enough to maintain a normal functioning country even though a large supply of the world's energy has been cut off. What do you think about the Saudi's and others using the money we trade for oil to finance terrorism? Isn't that a good reason to maybe not become 100% independent but to at least mostly independent?

Oilpatch - Whaddaya mean ''we,'' sonny?
--
Says Oilpatch Mercenary:

"We do need to guarantee certain price levels to domestic producers simply to overcome the tendency for increased production - which means increased debt - to result in decreased prices. Contractual price fixing is a legitimate tool that should not be outlawed."


What the puck?

By "We" is meant "the federal government," right?

And by a "need to guarantee certain price levels," you mean MEDDLING IN THE MARKET to favor particular participants, right?

And how do governments meddle in the marketplace?

Well, how do governments do anything?

They point guns at inoffensive private citizens and "negotiate."


What's a "free market," Oily?

It's a market "free" of violent force. No thieves, no protectionism, no pre-ordained outcomes, no extortion, no favoritism, and - except for deterrence against theft and fraudulence - NO GOVERNMENT.

You want to know how we got into the present puck-up, son?

Government intervention in the marketplace, interfering with private property rights "in the public interest" to pick anointed winners.

Meaning in the interest of politically influential actors who didn't want to compete in a marketplace at the service of the consumer whose abilities and needs make up the "demand" side.




=====
"The issue is always the same: the government or the market. There is no third solution."

-- Ludwig von Mises

Nail meet Hammer
John, you did it again. You have explained in laymans terms how the global marketplace works. I especially liked the part about how those to whom we give dollars give them back to us by purchasing our products.

This is not a transfer of wealth to foreign countries. It is an exchange of one thing for another. We get something back for what we pay. That is not a transfer of wealth.

Oily - more on debt, prices, and fixing
--
There is a perpetual idiotic assumption on the part of Sowell's much-despised "country club Republicans" that without government goons to guarantee a profit, nothing would get done.

That may be true for the inbred scions of Ivy League families.

Like Dubbya.

But it's not true of the market at optimal function (in which condition, all other things being equal, it does the best possible job of matching supply and demand to the benefit of people able in action pertinent thereunto).

When the criterion of success is "connection" and "political influence" (( "It's not what you know, but *WHO* you know" )) neither the real producer nor the real consumer is well-served, and when agents of government are involved in making those connections and exerting that political influence, it's known as "malfeasance in public office."

It's pretty much completely criminal, both in intention and in effect.

So we're supposed to have institutionalized government criminality - directly to the detriment of the average putz at the gas pump - so that Oil Patch folks can Enronically defray any "increased debt" in the capital markets?

Debt that is perhaps "increased" only because the financiers know full well that these particular people - while they may have made Skull & Bones at Yale - don't know dick about efficient and productive exploitation of petrochemical resources, and are nothing much more than expensive, high-risk, incompetent wastoids who *MUST NOT* be given loans except at premium "high-risk" levels of interest?

Unless, of course, they're doing business with the U.S. taxpayer being held - unwitting and unwilling - hostage to their performance.

And you're actually selling this as a *GOOD* thing for us Americans both as consumers and as taxpayers?

Oh, delightful.

You wanna yank the other one while you're down there groping me?

--

Energy Security
Our goal should be energy security. There has to be a "win-win" outcome for America vis-a-vis the Muslims (1.4 billion) who feel our foreign policy oppresses them.

Energy security would begin to address this Muslim perception, e.g., in Saudi Arabia, that American support for oppressive regimes is part of the problem, not part of the solution.

From their legitimate vantage, justice begins when we leave. Staying put does not help, long term, any of the affected parties.

By the way, What is the deal with Bill Clinton and Dubai (an issue discussed in "Fleeced," by Dick Morris)?

Another 3
You missed the point on many of the posters. First you must throw out all the comments from the liberal trolls. They are doing nothing more than repeating the vacuous talking points of the Democratic Party. Next you need to take all the comments from the pseudo-engineers and techno-geeks with a grain of heavy salt. After all that, then weigh the comments.

The biggest objection that I saw wasn’t with the overall premise of the article, which was that “energy independence” is not necessarily a wise goal. The objections were with all of the government controls that are interfering with the market place. The argument that “energy independence” doesn’t take into account free market incentives which makes it more expensive to drill out own oil is hardly persuasive when there is NO FREEMARKET in oil at home.

Vic - - Your Objection
I think John addressed your point. I believe he said something to the effect that, even if we eliminated all of the idiotic government interference in the marketplace, it's still very likely going to be cheaper to get oil from places like the Middle East.

I'm not going to say he's right or wrong, because I don't have the numbers -- but if he's right, it means that even in a "perfect" free marketplace, we'd still probably end up buying a significant fraction of our oil from people who hate our guts.

Uncle Alby
My objection was with his logic. He used "free market" to justify a point when there is no free market.

Give it up John!
You're trying to talk basic economics to idiots who hav'nt a clue.
Talk to your dog,at least he'll listen & probably has more comprehension than a dem-o-rat.

Dumb Bliss
You seem quite confused about this issue John. All we need now is for our government to get out of the way. Let private industry decide whether it's worthwhile exploring our offshore areas, ANWR or shale oil. We can always buy energy on the world market, especially if government stays out of the way.

While the BRIC countries (Brazil, Russia, India, China) are steamrolling towards record prosperity the USA seems to be happy living off past glory.
We are borrowing heavily (from them) to keep our "Standard" of living and at the same time, in a global economy, we are taxing and regulating our companies out of business.
Not a very optimistic situation.

trade deficit
"Why not keep all that $720 billion [we spend to import oil] in the United States of America?" was a sentiment expressed by many. But that reveals a poor understanding of world trade. When we trade dollars to foreigners for oil, they have to do something with those dollars. They don't stuff them in mattresses. (If they did, it would mean we got free oil.) They buy American products."

What about the trade deficit we have been running for many years? If all the dollars we spend abroad eventually were used to buy American products, there shouldn't be a persistant trade deficit.

We already have energy independence...
in the electricity area. We do not import electricity unless we swap electricity back and forth on our borders with Canada and Mexico. For the most part electricity can do what oil does except in making plastics etc. The challenge before America is to realize that our electrical supply should be shored up and made more efficient. We are on the verge of new battery technology that will make electric vehicles capable of serving the needs of average commuting Americans without using oil. The switch to electricity for transportation would reduce our need for oil by up to 40%. That would result in America being able to be energy independent within our hemisphere.

If we reduced our demand for oil then the rising demand for oil in China and India would pick up the oil we don't need. In return the imbalance in trade that we have with China, resulting in billions of dollars, could then be used by China to buy oil for China and the suppliers of oil would then have dollars that could be used to buy goods that America makes.

We must make the transition to electrical cars and make it soon.

Every cause needs a slogan
John, come-on.
Sure "Energy Independence" is stupid if we truely sought it, but it sounds good, and that's what slogans are all about. If that slogan help's get the govt. of our backs just a little it would be a good thing.
America needs to modernize and diversify our energy future, but the enviros have every effort tied up in red tape. If we can shed some of that red tape by shouting "Energy Independence", let our voices be heard.

John, looking for a topic? What's up with all these commercials telling me that I can walk from all/most of my credit card and tax dept if it's over $10,000. It's like, "If your a dead beat, or would like to be one, we can help."

1. pseudo-engineers ect ect
I've been doing "pseudo-engineering", in the energy field, for a few decades now and probably, per Vic, know nothing of importance about any of this. Well --- Opinions and rectal orifices; different yet all the same.
Truth is that there has never been a "state-of-the art" refinery/oil production facility built in the United States, not since the 1970's. The tech that is now available, for process production, in a state-of-the art facility, could factually drive down the present cost of energy production.
Coal Gasification is a process that has been around for close to 80 years and has been the primary fuel-source for the South African electric generation grid, for 4 or 5 decades. Factually the U.S. has enuf bituminous coal reserves to power our electric grid for a couple of centuries, utilizing Coal Gasification. Phenol is a by-product of the process, the sale of which significantly off-sets the cost of producing the synthetic natural gas; as is hydrogen.
Nuclear power technolgy has also made quantum leaps in sophistication, that would drive the price of a "state-of-the-art" plant down from what they have historically cost.
Will any of these options make the U.S. "energy independent"?? Last time I checked, Saudi, Venezuella, Kuwait ect ect, were all pretty much "energy independent" nations. Their Governments do not force them to produce their products in the most prohibitively expensive manner possible; ours does. As usual Government is the nemesis of the U.S. being truly competitive in the world market; any world market.
--more to come--

H2 Head
DEid you see your name in my post anywhere?

2. pseudo-engineers ect ect
What you guys, john Stossel included, are all telling us is that the U.S. does not have the talents, intelligence,expertise or resources to compete with the present "potentates of oil & energy". Horse-*hit.
Get the technology correct; get the Government out of the way and in a few short years the U.S. can be as competitive as anybody in the world, in any production field,discipline or market. Economists don't build crap, all they do is pontificate about the past and pray their prognostications get close enuf to the real world results to crow about how smart they are.
But what do I know - I'm just one of the guys that ensure you have the electricity and other goodies to make your life sweet and allow you to tell us how life really is.
The ability of the American business community, at all levels and markets, is & has been strangled by the U.S. Governments, across the board tax structure and the excessive regulation of all American industry.
If you economists were as smart as you think you are - you would have figured out how to get Government off the backs of American business & industry. The rest of the world is busy competing and the U.S. is busy being buried by it's own Government. Help us fix that and your U.S. "pseudo-engineers" will build you a brand new paradigm.

Dwain Cleveland

Vic
My apology - you are correct. I'm an engineer - not a saint. I'm as subject as anyone to get carried away.

Dwain Cleveland

OIL IS A STRATEGIC RESOURCE

.....BOTTOM LINE ...

.....We have a wealth of natural resources that are going unharvested ...we are leaving our oil in the ground ...this does not make sense no matter what kind economic mumbo jumbo you want to site ...

.....Russia could cripple our economy by cutting off our supply of foreign oil ...what would you suggest we do in this scenario? ...nuclear war? ....if we had access to our own resources we would not be so vulnerable ...Putin understands this ...Stossel does not ...JAPAN bombed Pearl Harbor because we threatened to cut off their access to Far East oil fields .....COLOSSUS

Things To Do With Dollars
"When we trade dollars to foreigners for oil, they have to do something with those dollars."

Buy suicide bomb vests... build Islamic Fundamentalist indoctination "schools"... invest in nuclear bomb -- excuse me, peaceful nuclear technology -- development....

Enmity Defeats Free Market Theory
The issue of national security, in my opinion, has still not been successfully addressed in the classic "free market" analysis. Free markets *do* work in most cases. HOWEVER, when an essential resource is unavailable to sustain need at home and those who hold the resource can sustain their economy without selling to us, we are, in fact, vulnerable. (This holds true with more things than oil--batteries, silicon chips, etc.)

Historically, countries DO behave in ways not in their immediate economic interest if they view another nation as a threat or want to punish them. The US did pre-WWII, when we kept fuel and steel from Japan. Note that other nations did NOT make up the economic slack by re-selling US steel and oil! (Of course, Japan took its recourse by invading other areas that did have the resources . . . but I have doubts that this is a viable strategy for the US in the modern era!) Accordingly, I do not believe that Mr. Stossel's happy scenario to adequately address a real security problem the US faces if it is not prepared to recognize that several resources essential to our quality of life and economic health are controlled by hostile powers and make some provision or contingency plan for operating our country when the free market forces fall victim to hostile national interests.

Susan

It takes the whole package
The USA has oil reserves nearly equal to the total of the rest of the world and we are denied access to them by our obscene democrat congress-critters.
We must have oil to power the defense mechanisms of our country, Navy, Air Force, Coast Guard, Border Patrol and all other means we employ to defend our great nation. You cannot find enough french fry grease to fly our B-1 bombers or fighter planes, the majority of our Navy ships are oil fueled. Forget about not needing oil, that ain't gonna happen anywhere soon.
We must drill now and build now, right here. Build now means new refineries, nuclear power plants, wind farms, solar panels, bio-fuels (to the point of NOT creating food shortages), clean coal technology, oil and gas from coal(as Indiana is doing) and we must learn to conserve by all means possible without losing the American dream. We will "GO GREEN" as time goes by, but oil will get us there in the meantime.
This nation depends on OIL for our very existance at this time and we damn well better find a friendly source of supply.
John

Stossel Has Lost His Mind, part 3.
Why do you refuse to discuss the national security and foreign policy implications of our dependence on foreign energy? Oil is a strategic commodity. Our enemies hold it to our throats like a knife and then use our own dollars to undermine our security.

You are attempting to make an economic argument without looking at the broader implications of our dependence on foreign energy. Trade does not occur in a vacuum.

Perhaps you can get to this in your part 3.

BTW “Partial Intelligence” sounds like “Partial Ignorance.”

(My parts one and two are at the original thread.)

Cheapest source is independent
Given that right now energy dependence costs us over $100+ per barrel, and the shale oil could be grabbed for the high 60s, and coal gassification would cost around 40, energy independence and cheaper energy prices would both be reached if government would just get out of the way.

Agreed - Stossel has lost his mind
To totally discount the value of energy independence is the most foolish thing I have heard in a while. WAY Down South has it right - trade does not occur in a vaccuum. Nor are foreign policy and a myriad of other decisions made in a vaccuum. Independence is the opposite of Dependence (duh). Is Stossel honestly arguing that some forms of dependence are good? Or just inevitable? Then he goes on to say that there is no such thing as "partial dependence". That's just ridiculous. There is a huge difference between being a drinker and being an alcoholic.

SJ DOC!
Let's try this one again, shall we? This time, read what I say with your eyes open. Works better that way.

I said CONTRACTUAL price fixing------. Note them thar capital letters. They be plumb important.

That means them what need sign contracts with them what produce guaranteeing the latter
will get paid for their efforts.

I also said "SHOULD NOT BE OUTLAWED": that means
the government should not intervene in private contractual matters---not unless those contracts were obtained at gunpoint or are fraudulent.

Got it? Good boy! Next time, you might want to activate your personal blowout preventer
before erupting at somebody on your side.

As far as your (somewhat) well-intentioned efforts to educate me as to the ill effects of statism, I can only quote Churchhill and tell you that "this is the sort of mindless pedantry up with which I shall not put!"

(I buy him books. I send him to school. And all he does is chew the covers off.)





Connertown
Far less food is grown in New York City than is eaten by its residents.

Should New York City achieve food independence (producing more than enough food to feed everyone inside)?

$700 Million for Solar Energy
Back in the Carter administration, the President's budget proposed spending $700 million to subsidize solar energy. I asked the budget examiner at OMB who prepared the budget estimate "Why $700 million?" His answer: "Nice, big round number." In other words, he was saying, there realy was little or no economic rationale for the spending proposal, other than some vague urge to make us "energy independent"...to please the lobbyists who stood to profit from the proposal...and to provide political cover to show that the Administraion was "pro-solar."

Throwing money at an issue is, of course, something Washington is comfortable doing, and is not limited to energy issues. But the rest of us should keep in mind that this is show business, not sensible public policy.

Three cheers for John Stossell for stimulating discussion of "energy indepence". A thoughtful, critical examination of the issue is long overdue.

From my perspective it makes good sense to encourage energy production and conservation that is market-based. E.g. end government hoarding of public lands. But we need to avoid "hot-house" energy production and conservation that is dependent on government spending, taxation and regulation.

dbz77
If there were several thousand acres of open farm land in NYC that the government had placed off limits for farming there may be a way for them to be "food independent".

More Money
At $25 dollars a barrel it cost too much to produce in the US because of our higher living standard, but at $120 a barrel it may be profitable to produce it here again and thats the real reason John is right. We use oil at the same price as everyone else but we cant produce it for the same price as everyone else!
Mr Bill :o

Not sure
I'm not so sure it's a good thing for us to buy such an important commodity from countries and people who could so easily use it as a weapon against us. Ask Europe how they're going to like their reliance on Russian oil in the coming decade. If you don't see independence from Russian manipulations as something in their best interest, then there's probably nothing more to discuss.

I don't suppose I'd mind getting all of our energy from "good" countries and governments. But to make a moral equivalence between buying our oil from Canada and Mexico and Venequela and Iran is quite something, but it's something I'm used to from Libertarians. Sometimes it's not a question of not liking each other; sometimes it's an issue of being enemies in a lethal struggle...and you certainly don't want to throw a lifeline to them.

Why All the Invective?
It appears that the critics to Stossel's excellent article missed the whole point:

"To even attempt to achieve energy independence, the GOVERNMENT will have to plan the energy sector. Considering how pervasive energy is throughout the economy, this is a recipe for full central planning and a step toward poverty and tyranny." [Emphasis added.]

As several others have already said, the ideal for the USA is to end government interference in our private energy industry, so that it is free to use all available technologies and resources and maximize efficiencies in developing all of our energy resources. Oil is only part of the equation; nuclear, coal, oil sands, shale, etc., should all be part of the mix. That mix should be self-determined, not government engineered, lest we wind up with more boondoggles like our ethanol program.

Nonsense
I have never read such nonsense from John before. This problem has nothing to do with economics. It is 100% political, with environmental extremists driving democrat lawmakers toward the destruction of the US economy and the society it produced. If the US were allowed to develop its own resources, the world price of oil could not possibly hold at the level it is. The key point here is "allowed". This crisis could not possibly have happened now if the world had just a few percent more oil available. The unfortunate fact is that none of the major oil suppliers has an interest in lowering the cost of oil because they have no signficant competition. The US should be building thousands of nuclear plants for electric power. Manhattan style projects should be under way to find new sources of base material for plastic, and to develop the power sources we have. And using oil and natural gas to generate power should be phased out and eventually outlawed. Nuclear fuel should be recycled. Training programs for nuclear power engineers should be developed. Food should not be used for fuel, but waste and byproducts should. Farm land should be put back into production. The fact is that the US can compete in this market if our industries are permitted. John is wrong to cede this industry to our enemies without a hell of a fight.

H2PE - The technical vs. the political
--
I'm a primary care physician who, upon going through the Carter Administration, saw things getting enormously pucked up, and like any doctor confronted with pathology, started reading up on the etiology thereof, finding the Austrians - Mises, Hayek, Rothbard, etc. - the most reliably perceptive and predictive.

I'm therefore not one of your "economists." Just another low-level tech type - in another field than yours - trying to make sense out of the theoreticians.

Unlike the guys who majored in government and history and political science - like Algore and Alterman and Barack Hussein - I had to have a grounding in the sciences. Med school requirements. This means that it's fairly easy for me to understand your meaning when you mention refinery technology, coal gasification, phenol production, and suchlike.

(( What's your impression on thermal depolymerization - a method for processing industrial and consumer waste into the equivalent of light crude and other useful products? ))

I agree with you that in strictly technical terms, "energy independence" is possible for the United States. The rationalization of domestic resources, production base, and distribution systems - and by "rationalization" I mean market-dictated efficiencies, *NOT* the intervention of government goons - would be sensible and valuable even if such independence were not possible, if only for its salutory stabilizing effect on prices, both direct and concatenative.

The problem is manifest in comments such as those of Oilpatch Mercenary (above), invoking the expectation among the petrochemical industry's moguls that government will guarantee them preferences, price supports, capitalization, and profitability, even underwriting their operating expenses.

This is insane, but this is "how it's always been done," and these parasites are as firmly fastened upon the American body politic as so many lampreys on a lake trout.

--

Yes, folks afre missing the point in
this second article. The point here is attemtping to justify the first article in which most people blasted him.


SJDOC AGAIN!
Have you read my second post? If not, scroll down and find it!

My advocacy is on behalf of PRIVATE CONTRACTS
between consenting adults. I keep saying that the blankety-blank government ought to stop
prosecuting people for making contracts not based on force or fraud!

And by the way, the "moguls" are the ones who buy the oil. They are not the ones who find it and get it into producing trim.

I favor having the "moguls" cease and desist from governmental assistance in manipulating supply and instead contract with their suppliers on a performance-required basis.
Whatinhell do you have against that?

Will all good Townhallers please strike SJDoc severely and repeatedly about the head and shoulders? Once we get his attention, he might
be able to decipher what I have said.

galtegfa, and John
No we did not miss the point, you did. Energy independence means the Government has to get out of the way, not plan it! Not to mention, as so many have, the National Security issues!! What do you think will happen when our foreign oil is cut off?? If we aren't ready to pick up the slack, we will go to war for it!! And this time we won't be so careful about civilian casualties. WWIII will be fully engaged.

Oilpatch - Say ''price fixing''...
--
...whether it is preceded by the modifier "contractual" or not, and the message is invariably taken to signify a conspiracy between two or more sellers, the purpose being to coordinate pricing for mutual benefit at the expense of buyers.

To propose that such be conducted openly (as "a legitimate tool that should not be outlawed") or to imply that it be facilitated by government in order to favorably support outcomes for the price-fixing participants is somehow going to be taken as anything *EXCEPT* overtly malignant?

"Price fixing" is one of those expressions like "child molesting." The only kinds of people who find positive connotation in the term are those who take profit or pleasure in the activities thus described.

This is not to denigrate the trading of commodities in exchanges where qualities, quantities, prices, penalties, and delivery specifications are agreed upon by the participants - both sellers and buyers - therein.

To the extent that government "regulatory" agencies interfere in such assurances of performance, their impacts are necessarily pernicious.

(( How they hell do they do so in the petrochemical industry, and under what sorts of excuses? ))


By the bye, if you're going to use "We" in one paragraph to mean the government of these United States collectively ("We were able to respond [in World War II] because domestic production had not been hamstrung..."), you'd best expect the use of "We" in the next paragraph ("We do need to guarantee certain price levels...") to taken as meaning the same damned thing.


You know the clown's on the Internet; you know he can instantly look up definitions and conditions of usage; you know he's *TRYING* to write in English....

--

He Who Trust his Enemy ....
Mr John Stossel I formerly though all these years before his Second Energy Indenpendence 11 article was a Brilliant man . Maybe he is going though the Change of Life or on somthing Weird like becoming a green Liberal tree hugger ?
Anyway This will help him coming from ''THE ART OF WAR "I hope written in 1200 AD that is far more in Vogue today than it was in 1200 ad . . Reguired reading for all ReCon Marines . Food and water was the subject back then but Oil is equal today .
Any man that trust his proven enemy knows that at his weakest and Volatile moment that same Enemy he trusted will kill him or starve him to death without a shot ever being fired or a sword being drawn .
He not the enemny dies from within . Oil rich and Natural gas Russia is Black Mailing Western and Eastern Europe at this exact minute JOHN STOSSEL .
Supply and Demand also matters on who supplies and its and its cost JOHN IF THERE IS TOO BE ANY ??? !!!!!!!!!!! DUH !

Rich Not Wealthy
I guess you missed the line about all the oil being put into a big bathtub - the commodities market. All producers put their product out there for whoever is buying - that's why the large price swings are attributed to speculators, and why increasing our output will lower the price to everyone. Consumers ultimately receive product from the closest suppliers because transportation of the product is one of the most sensitive costs. In our case, Mexico and Canada are the closest producers - in fact much of Alaska's oil goes to Japan because it's closer. I don't see Mexico and Canada cutting off their supply. But in any event, since the Saudis, et al, sell on the open market, not directly to the end user, they would only be cutting off their own revenue supply if they elected to stop taking their oil to market.

THE TRIFECTA
Here is the problem with energy independence, it is now a matter of how to continue to bilk the American public and feed them more lies and keep them on a string.

We have three major entities involved here, the politics who of course want their palms greased by graft and new taxes, the energy corporations who want to seem concerned but in reality want to continue with windfall profit and confusion and not new refineries and last but not least by any means the ever do-gooding environmental agenda who want to appear as saviours of the planet and as the fall guy who will stand in the way of the corporations by use of politic and government and they too expect to be paid.

Thr American public is being played like the fools they are the violin of ignorance, the government is getting larger, more expensive and if possible more inept, corporation are making out like bandits because they are being assisted and paying for it, the well organized do-gooders are there to obstruct and create as much chaos as possible to extend and delay solutions, their due is used to stay in business.

WASS, We Are So Screwed.

Green paper
Look, we send $720 billion abroad and we get oil to power our cars, our homes, our businesses, foreigners end up with green pieces of paper.

If the dollars never come back then America has created the cheapest export industry in the world. Great for us. The Canadians, Arabians, and Russians are stuck with pieces of paper.

This claim of needing energy independence is a stupid nationalist and socialist idea. If economic independence even remotely worked, then North Korea and Cuba would be the worlds richest and most powerful countries.


http://npri.org/publications/the-high-cost-of-renewable-ene rgy

Zero Sum Game of Trade?
John Stossel hits the nail on the head again. Logic and reason is easily overlooked by the emotional driven beings. John's point is that global trade(or any trade transaction) is NOT a zero sum game.
Trade deficits are immaterial IF YOU REALLY UNDERSTAND Stossel's point. Trade Deficits provide nice slogan matierial for polticians. Good article John, I see your point.

BATHTUB? ...what the....
How about buying US origin oil, since we are the biggest user of oil, why do we let the world market set our price on domestic oil? Even Walmart negotiates their prices.

For all the free trade fans, let's just call it vertical integration of the U.S. energy business. It's getting to the point of which faction to believe and are they independent enough to be credible on how much we have available in reserves. I'm all for "independent" of foreign energy, but we need a transition instead of letting the energy situation skew our economy and dollar. I don't much give a damn about Pelosi's diety aspirations in "saving the world". She can try to explain that after she dies, and, by the way, good luck with that Nan. I want to know why conservatives in both houses aren't conducting frequent news conferences detailing the progress or lack thereof in working on our energy policies and I mean revealing names. Let the "environmentalists" go nose to face shields with police if they wish because the true environmentalists are the farmers, ranchers, loggers, etc. whose livelihood depends on care and nurture of mother earth.

This entire article is all
much ado about nothing anyway. Congress has NEVER had any intention of anything approaching “energy independence”. If they really wanted that we would be pumping oil from every nook and cranny in the country and it would be illegal to import or export oil and gas. The price of oil and gas would settle out at some value where the cost of the product and the demand for the product would stabilize.

What congress is really after is socialism and communism through the Tax and Spend mantra of the Lames.

John is only partly correct
(A) in his assumption that it would still be cheaper to buy oil from other countries if our government got its heavy hands out of the way. If that were true, we wouldn't be producing the oil we are producing now and we wouldn't be drilling for more, as we are doing.

(B) We are paying much to much for foreign oil right now because there is inadaquate competition. By developing our own oil resources we would also be providing competition which, in turn would moderate foreign oil prices.

(C) We are not simply trading our goods for oil. Our balance of payments is way out of whack, which means we are borrowing, not just trading, with the result that we are depreciating the dollar, or, to put it another way, further increasing the price of oil. Our trading partners are not stupid, they will not continue to give us oil for "green pieces of paper" unless they can get value in return.

(D) If we had full employment in the U.S., Stossel would be correct on the jobs issue, but we don't. We could put more people to work here, increasing this country's gross product, reducing the cost of welfare here and reducing our balance of payments abroad.

(E) Becoming "energy independent" really has nothing to do with government control, unless the government were to mandate independence. That is quit a different proposition from government getting out of the way of progress.

(F) It still does not address the national security issue.

John didn't quite hit the nail on the head, he hit it a glancing blow and bent it.

Energy Independence is About More Choice
Energy Independence has to be based on the free market, not protectionist, but also mindful of the geopolitical order. We need to also look at the energy independence of our allies, and the cost of making evil countries stronger.

Bringing to market and freeing up all businesses to make new kinds of energy and expand present operations, is necessary.

Inconvenient truths must be dealt with. We need coal and nuclear now. those are the cleanest and cheapest energies we can buy.

One small thing I would like for a choice, is the kind of energy I buy.

1. I would like to be able to buy American gas for my car: "Freedom Oil". It would cost more. Its price would be determined by supply and demand. If americans don't want to buy it then it won't mean anything. but if it is a product many want, it could have a market created "subsidy" for american oil, and reduce the money going overseas.

2. I would like to be able to independently buy the different forms of energy my electric utility sells me. Solar, coal, nuclear, natural gas, wind, hydro, should be able to bought independent from the other.

let me have a choice. At a basic level I could choice Cheapest, Greenest, or Security. And where I can define how high I will allow bid to be.

So if google wants all green energy, they can pay extra. and that higher cost being paid for green energy will than make it more profitable to invest in that.

Or I can buy security/"Freedom" energy, and pay a premium on those kind of energy.

and also the net effect would lower prices on those that take the cheapest option.


Energy Independance---
means being able to survive a disaster by being able to produce our own energy. People need to quit worrying about the price of oil and who we're paying for it and worry about national security. Where will this country be if we are unable to ship oil in from overseas? We need to open drilling in this country and let the world know they won't be able to shut us down if they no longer provide their oil.

Stossel misses something again.
I completely agree with his ideas on free markets and trade, and that we should buy the cheapest energy. That is what is good for america.

I find the mistake Stossel makes in how he sees what energy independence is or can be. If it is American protectionism, than Stossel is right. That is a kind of ignorance and fear that needs to be fought, confronted, and simply educated on facts.

But energy independence can also be about expanding choices and reducing monopolies/oligopolies/trusts.

1. When we don't want to buy arab oil, we can't change to another choice. When they raise prices or limit production, we can't make another choice.

2. Buying chinese made things at wallmart is good for china and for america. Buying cheap energy from dictators, is good for us, but bad for their people. Resource money doesn't progress and develop a country.

3. These backward countries are not themselves living on the free-market, they are government controlled companies, with political interests greater than market/profit interests.

4. Those high energy prices embolden evil. They give power to backward countries that we are beholden to. We have no choice but to buy their energy. Europe also has no other choice.



Energy independence is more than protectionism. If Stossel really wants to get it right, he should argue for a true market based energy independence, where we free up the markets and the choices for the consumer. but also He should be mindful how our money harms the people of those petro dictatorships, and threatens global security.



So Stossel where are we being cheated!? Where can we as consumers have more choices?

Could you also talk about how free-markets do lead to freedom in goods and service trade, but not in resource trade?




Galltegfa, you obviously don't know much
about crude oil. There are many types of crude and for some, the refineries have to be equiped to deal with it or it is useless. There is much more to this issue than can be adequately argued here, but your simplistic analogy to a bathtub is far too simple to be of any real use. If it were simply a matter of proximity, then the US producing its own oil would be far cheaper than having to transport it across the world. In some ways that is correct, but as has been pointed out, it costs more to get the oil out of the ground here, even without the greens making it impossible, than it does in countries where there are no minimum wage laws and the value of a worker is close to zero.

"Energy Independence"..
...as used by a Dem & / or leftist, is a euphemism for "independence FROM energy" i.e. greenie Ludditism, doing without. It means having our energy usage rationed according to what the private-jet-set elite think we "need," therefore not needing to import oil 'cause we the little people are not using it.

Oilpatch - From exploration to delivery
--
...at the local filling station pump, from the fingers-crossed payment for an oil and gas lease to the point at which the homeowner ponies up payment on his heating bill, the petrochemical portion of the energy industry has to be taken as whole.

Whether the overpaid Ivy League "legacies" of the Oil Patch - the moguls - are the ones who are or are *NOT* "the ones who find it and get it into producing trim," their control of this sector of the American economy through "governmental assistance in manipulating supply is the pervasive influence upon everything from exploration forward.

The geologists, engineers, chemists, and actual (as opposed to "executive") management people who work on their demand or at their command are not culprits in this manipulated marketplace, but are nonetheless as much complicit in the moguls' actions as is the average doctor in the oligopoly the AMA has made of the nation's medical profession.

The fact of the matter is that government interference in the petrochemicals market has been created by (and is perpetuated to the benefit of) the people who collude in control of both industry and government - whether they call themselves "Liberals" or masquerade as conservatives.

It is pervasive and entrenched, but it is also intolerable, and (like medical and other occupational licensing) it would serve the nation best as a whole and the private citizen most justly in small were it to be destroyed.




=====
"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."

-- P.J. O'Rourke

Rich Not Wealthy
There's nothing complicated about this. Not every last oil producer is going to cut us off all at once, especially while those producers need our products - we're still the world's largest agricultural producer. They need to sell us their oil for our dollars to buy our food. I'll wager they'd prefer to sell us their oil than go hungry. So, to me the national security argument borders on the paranoid.

Nonetheless, I fully favor developing all domestic energy sources, and I fully favor removing the government from the equation. I believe that's what Stossel said, too. The idea that our government could develop and implement a competent comprehensive energy policy in the name of national security is patently absurd. They just need to get out of the way and let the market do its thing.

SJ Doc
Folks that track & study economics/history are a different breed from the theoretical guys. When someone comes up with a new theory, everyone either jumps on-board or beats the daylights out of the guy what thunk it up.
At this point in History most of the economic models, successfull and otherwise, have been applied at one time or another to someones economy. Long term predictions seem to be highly dependent on the actions of that select few individuals and/or nations that can successfully leverage ever increasing amounts of liquidity. Figuring all that out is a task for psycho-analysts as well as economists at the best of times. That kind of stroke gives people/nations/banking cartels, sometimes unpredictable notions.
I know how to build plants and make money on the process; after that it gets to complicated for me to follow most times.
As far as the thermal depolymerization process, it has the potential to be a reasonable method of turning waste into usable product. I have no experience in that field but from what I read it is miles better than the extant ethanol/biofuels track.
I agree with your take on the unacceptable practice of the subsidizing of industry by Government. It is a pay me-to-pay you-to-pay me circle jerk, financed by the taxpayers. Get rid of the criminal tax rates across the board in the U.S. and industry will take care of itself. Every national and international Client I have ever had express's the same reasoning for moving industry overseas,out of the U.S. The U.S. has a punitivetax structure and actively drives business and industry out of the U.S.

Regards,
Dwain Cleveland

Saudi's only pay 45 cents a gallon
They make so much money from the rest of the world, they can subsidize gas for their citizens. (And bankroll terrorists.)

If the US-based oil companies refined gasoline from USA's own natural resources for use in the USA only, foreign prices would have to go down to make their product attractive to American consumers.

THIS IS NOT AN ECONOMIC PROBLEM

.....IT IS A NATIONAL SECURITY ISSUE ...

.....When enemies and hostile forces control a strategic resource that we must have to survive ...it does not take a PHD to realize that this is not a good position to be in ...

.....Does anyone remember why Japan bombed Pearl Harbor? ...our survival depends on a reliable supply of energy ...and right now that source is oil, natural gas and coal .....COLOSSUS

dear god
baseball doc. We get the vast bulk of our energy needs from Canada, Mexico, and OURSELVES.

It is not a national security issue if we buy energy from Russia, China, or Saudia Arabia. That is bogus nationalist scaremongering halk-baked boneheaded bull.

The American dollars always come back to us in some way shape or form. If they didn't they'd be useless to other nations...or they'd be stupid enough to hold onto the green pieces of paper.

At anyrate, closing off America, reducing our purchasing power and choking our own economy is no way to prepare our national security for any kind of threat.

Dear John
I don't know how you do it, I've read down a few posts and there is so much poor analysis and misunderstanding that I'm pulling my own hair out. I don't have enough time or energy to sit down and go through all the frustratingly stupid points being made by others.

How do you keep all your hair with the hundreds if not thousands of really silly responses coming back at you?

Wally wally wally
You don't need a PhD in economics to see you're wrong. Anyone can Google search the US trade deficit and look at the data over the last 40 years. When you average it out you will find America's economy BOOMING when our trade deficit is growing. Not only that but our GDP growth rate soars and unemployment is down.

When our trade deficit slows or decreases our economy skids, GDP growth crawls, and unemployment rises.

This is because our trade deficit grows because Americans buy foreign goods and foreigners take our green pieces of paper and invest them back in America (if the trade deficit is a problem, part of that investment is buying US government debt).

2) Give it a rest on "full employement" that term is nonsense.

3) If our government got out of messing with the energy business and oil was cheaper to pump abroad than it is here (and it is) then we'd still produce oil. Think a little harder.

If our companies stop producing and we buy 100% from abroad the price will go up, profits increase. No oil company is going to sit buy and forgo profits so they throw their hat in the game.

Cars are cheaper to produce abroad yet we still have cars manufactured in America?

Come on are you some kind of keynsian macroeconomist...this is the 21st century not 1947.

It's not quite so simple
The assumption is wrong that foreigners with US dollars will buy US products because our imports
of foreign oil are what is causing our entire trade deficit. Countries getting US petrodollars are NOT buying a reciprocal amount of
US products.

The excess dollars in foreign banks are are doing other things. They buy the US media, buy huge parts of
our buinsess infrastructure, buy our
real estate, and would even buy our ports and new toll roads if we let them. Plus they are buying East Bloc military equipment, funding madrasas, constructing thousands of mosques
all over the world, and funding whole terrorist infrastructures, such as the Taliban, Hamas, and Al Quaida.

Like diamonds and drugs, cartels loosely control the supply, and thereby the demand, and thereby the price for oil; and wars are fought over it. The exhorbitant profits from this shady black grease unfairly fund the rise of illegitinate powers.

Kind of reminds me of how the Kennedys came to power, thanks to
bootlegging.

Oil from unstable parts of the world cost oil companies the same to buy, yet the US, for example, also must spend illions/trillions in defense costs to keep those parts of the world stable and safe for trade. Not having to pay for that would greatly benefit every US citizen.

Maybe Stossel is right that the rest of the world will buy whatever foreign oil the US doesn't buy, but the US at least won't be subsidizing foreign oil trade with huge defense bills and a huge trade deficit. The rest of the world will, and if they want that, let them have it.


YOU are guilty!
Well, it seems that anybody who undertakes, or even suggests, corrective actions to insure
a supply of petroleum will be complicit in the great petrochemical conspiracy.

You will probably be charged with neo-conning without a yarmulka.

As for me, I shall continue to do what I can to see to it that oilmen get paid for doing what I want them to do. While I will not try to shortchange anyone, those that produce in the USA and contiguous states will be my primary concern. They have always provided me with far more value than their critics. I expect that to continue.

Robert Bleiberg of Barrons used to frequently say: "Differences make markets." Everybody loves markets until they provide dislikes. Then it is either "down with the market" or "this is not really the market". Amusing.














Chip - Think about spending...
--
...and what petrodollars in the Islamic world are being spent upon. You say:

"The excess dollars in foreign banks are are doing other things. They buy the US media, buy huge parts of our buinsess infrastructure, buy our real estate, and would even buy our ports and new toll roads if we let them. Plus they are buying East Bloc military equipment, funding madrasas, constructing thousands of mosques all over the world, and funding whole terrorist infrastructures, such as the Taliban, Hamas, and Al Quaida."


So they're spending in two principal ways:

(1) Capital investments in these United States (our media, our infrastructure, etc.) because *THIS* is a safer and more productive place to put their money than in their own countries.

(( Consider the liabilities of foreign investment for anyone, especially in an era where America's National Socialist Party selects Joe Biden - a declared enemy of the 5th Amendment's "takings" clause - to its election-year veepslot. Think about Pemex and all the investors who lost everything when los Chilangos "nationalized" the whole Mexican oil industry. ))

(2) Uselessly nonproductive "vanity" projects.

(( And just how else would you characterize third-rate "East Bloc military equipment" that the camel-jockeys can't even half-competently operate? Or money chucked down the rathole on madrassas and mosques that produce - at best - the Islamic equivalent of rabbinical scholars who know *NOTHING* but the Torah and the Talmud, being otherwise a complete waste of human capital. ))

These vanity projects are known in economics as "malinvestments." They're kept at home (even the "terrorist infrastructures"), but they don't create new wealth.

Which is what true capital investment does.

Hell, they don't really do anything but cripple all progress in the Islamic world, and destroy the wogs' ability to compete.

--

SJ Doc
You don't believe foreign petrodollar investments buy anything that really
harms us? I think the typical American would not concur.

Now, I probably should have added that foreign petrodollars also significantly fund some level of
development of infrastructure within foreign countries, which is also true, and this would have better supported your basic point. But I still consider the other examples I gave as hurtful to America. I don't consider East Bloc military hardware, madrassas, mosques, and terrorist infrastructures to all be harmless, and I think you should rethink your position here. At the very least, Americans certainly would not want to their dollars to end up going in these directions.

And I also discussed our trade deficit. It is still clear that too few petrodollars leaving America come back to buy our products, and this is why we have a trade deficit, which I also discussed as harmful to us.

Also, ill-gotten and easy money rackets tend to create illegitimate power bases. I gave the example of how bootlegging funded the Kennedys rise to power. If we become energy self-sufficient, at least only domestic cartels would
have the illegitimate power and influence, which at least is better than a bunch of rags controlling our society.

Plus I discussed how we need to spend huge amounts on our defense budget to keep the places we buy much of our oil from safe and stable enough to do business with, which also harms us, because the extra defense costs are not defrayed by any oil tarrifffs or other revenues than US taxpayers dollars.

Overall, buying foreign oil from unfriendly countries is a very bad policy.

By the way, what is a "wog"?

STOSSEL: STILL THE BLOCK'S SMARTEST KID!
Stossel says: "... this misses the bigger point. To even attempt to achieve energy independence, the government will have to plan the energy sector."
Perhaps John misses this point:
THE GOVERNMENT DOES PLAN THE ENERGY SECTOR!
There is NO part of the energy sector that the government doesn't have its fingers all over, under, and in.
Unfettered free market may not the best idea, but absolute control of where, how, when, which, and for how much our resources are utilized based on political pandering belies sensibility.
The politicians are not wise enough -- nay, they're not SMART enough to pick winners and losers.
Washington needs to back off, be a referee, a judge, or arbitrator, but you guys ARE NOT PLAYERS! You don't have the skills or the brains!

Chip - Petrodollar damages
--
Says Chip:

"You don't believe foreign petrodollar investments buy anything that really harms us? I think the typical American would not concur."


The "typical American" doesn't know much about either economics or warfare. The ragheads have a long and reliable record of putting their money into vanity purchases - in the areas of military spending and political influence especially - that produce either no positive effect (from their perspective) or ultimately adverse impacts.

Consider Pakistan and their creation of the ISI as an instrument of covert warfare against India, and how it has become a parasitic "government within a government" of ultra-Islamic fanatics that roils the country and makes it impossible for anyone in Islamabad to keep the nation governed.

There's not only the inescapable, crippling corruption that pervades World Wide Woggery, but also the generally godawful decision-making that appears to be the direct result of their submission to Islam.

Religious belief is always a pernicious influence. In the West, we'd fought our way through the Protestant Reformation (which essentially broke the political power of Holy Mother Church) and the Enlightenment (of which philosophical movement these United States were the direct political expression), and though we have occasional pestilences of god-shouting Bryans and Coughlins and Wildmons, they have not (as yet) been able to significantly gain the political power they desire to suppress speech, science, thought and rationality.

(( We consider the *If This Goes On -* scenario (Heinlein, 1940 & 1953), but ridicule and the exposure of their own cupidities and criminalities seems to work well against them. ))

The wogs have not been able to achieve their own Enlightenment, and it looks as if the poor sonzabitches never will.

--

Chip - On the price of imperium
--
You mention: "...how we need to spend huge amounts on our defense budget to keep the places we buy much of our oil from safe and stable enough to do business with...."


Reminds me rather much of General Smedley Butler's remarks in *War is a Racket* (1935), and his other remarks that same year:

"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National city Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested."


The question your remark - and General Butlers - beg is whether or not it is appropriate for the U.S. government to function as "the cops of the world."

It was a question on the mind of the Commandant of the U.S. Marine Corps almost a century ago, and it's a question that's appropriate to examine right now.


But your fixation on "our trade deficit" is purely idiotic. Didn't Adam Smith do enough to put paid to your kind of cement-headedness in 1776?

Purchasing power (especially in the hands of wogs) is not wealth. Wealth is goods and services you know how to use, and the wogs *DON'T*.

Lord, you've just observed that they don't even know how to secure their own internal civil order or their borders against foreign conquest.

--

SJ Doc
If you think you can describe
an opinion of mine as "idiodic", all I can say is:

Get lost, punk.

Chip - That's all it takes...?
--
...to get rid of you?

Jeez, and all this time and effort spent treating you as if you had a brain.




=====
"Stupidity cannot be cured with money, or through education, or by legislation. Stupidity is not a sin, the victim can't help being stupid. But stupidity is the only universal capital crime; the sentence is death, there is no appeal, and execution is carried out automatically and without pity."

-- Robert A. Heinlein

Even Oil-Rich Countries Are Greedy
You would think that oil-rich countries that hate America would hoard the oil to bring the US to its knees.

In fact, they try to raise prices, but are terrified that US demand for oil will fall, and so prices.

Development of US oil sources would provide an extra margin of world supply, and prices would fall dramatically. Democrats in Congress don't want to develop our oil, to save the world from carbon. This is misguided.

There is a fear that these countries might not sell us their oil. That is the same as deciding to lower their national income. They can't do that, because it would cause revolution. There are always people who want more, and always pressure to raise incomes.

No matter how oil-rich a country is, they are always at the boundary of selling all the oil they can, because of the fear that the US will wake up and produce more.

Andrew - Forget about waking up
--
There is *NO* "fear that these countries might not sell us their oil."

First, most of them have no other way of generating revenue.

Second, almost all of the Middle Eastern nations *must* have that revenue to keep control of their restive populations. Iran's a good example, where maybe one-third of the Iranian population (remember, there's a *bunch* of Arabs living all over the only real oil-producing areas of the country, and they *HATE* the Farsi-speaking Iranians) is even tepidly loyal to the mullahcracy, and that's chiefly because they get the lion's share of the money left over after the holy men have funded Hezbollah and Hamas.

Third, if any one OPEC member nation pulls back on its production quota, other members - hungry for that revenue - will move in to sell *their* oil.


Then there's the fact that synthetic fuels manufacture in consuming countries (F-T coal processing, thermal depolymerization, shale oil extraction) becomes economically attractive as the per-barrel dollar-denominated price of OPEC light crude oil goies up.

Right now, for example, thermal depolymerization can turn slaughterhouse offal, plastic consumer trash, medical waste, tires and suchlike into API 40+ at an energy efficiency of 560% (85 units of energy made available for 15 units of energy consumed; ethanol and biodiesel EE is only 320%) at a cost of about $80/barrel.

If world market prices for OPEC output stays as high as it has been recently, the capital investment for synfuels manufacture (like thermal depolymerization) is going to get freed up *REAL* soon. There's simply too much money to be made.

In other words, if the wogs keep charging $115 for a barrel of crude that costs them $5 to extract, the profit incentives in an "end run" get just too friggin' tempting to forego.

Fun prospect, ain't it?

--

Our Position on the Global Market
Drilling in our nation positions us as a player in the global market with regard to oil production.

Flooding any market with additional product helps reduce pricing (duh!)

Exchanging the product for dollars increases revenues & elevates living standards for those that purchase the product and those that sell it(duh!)

Why is it that so many who claim to love freedom apparently are so h*ll bent on controlling the freedom of the markets.

If another person's choice isn't infringing on your civil liberties to make free choices, why do you care?

Apparently our nation fails in educating its people on basic economics and that economics is not a zero sum game.

Thomas Sowell is worth reading on this subject; Poverty of Reason is worth reading on this subject.

Idiocy of Energy Independence
Rebutting John Stossel’s Views on the Idiocy of Energy Independence
Amos Bokros
Stossel commits two fallacies in his arguments that energy independence is not desirable for the United States and even harmful to the cause of free trade. First, he confuses the significant difference between preferring free-trade during times of peace as opposed to times of political conflict and war.
In a peaceful world free-trade is always desirable. However, from time to time political forces come to power that are interested in pushing national chauvinism, ideological expansionism, or intolerant religious subordination. These political forces are only interested in promoting free trade when it serves their purposes as a means to destroy the free enterprise system. In the same way Moslem Fundamentalists are using the First Amendment to hide behind as a means to eventually over throw the United States Constitution with Sharia Law.
Saudi Arabia, Iran, Libya and Venezuela are regimes that don’t wish us well and when given the opportunity they have used their oil profits to promote terrorist movements. A complex geopolitical chess game must be played with each of these nations individually. But in none of these cases does the United States benefit from oil dependence. Nor do the internal dissident political forces with in these nations benefit

Read the rest of this letter at http://amosbokros.blogspot.com/

As Usual
This is Stossel's default setting: "The masses are idiots. If they believe it, it must be wrong."

On some issues that's true, and on others it isn't.

That's Stossel's default setting, whether the general public is right or wrong.

Not to Mention
"Independence" in general is a distinctly American value set down in the U.S. constitution.

Stossel overlooks the hidden costs of his idea of "free trade." Our constant buying from China has made them wealthier- hence able to consume more energy, which has driven up fuel prices on the world market.

So it is a zero sum game, and it is a transfer of wealth.

One Big Mistake With Stossel
...and others on this board is that he thinks that everyone is like Stossel- that they can be trusted to act within their own rational self- interest.

This is hardly the case.

In a dictatorship, the dictator isn't worried about America not buying his oil, or a revolution.

The dictator will make sure that he himself, and those with the power to revolt against him, are well taken care of- everyone else can starve.
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