With gas prices topping four dollars a gallon in some regions of the
country, now may not be the best time to say something positive about "big
oil," but here goes anyway.
Where is it written that the cost for a product or service should be frozen
in place and in time, never to rise again, or to rise at a pace commensurate
with our incomes? People who think this way know little to nothing about
supply and demand and less than nothing about the profit motive. That's
because at least three generations have been raised on the notion of
entitlement, and when one feels entitled to something, one believes someone
else should pay.
Senate Democrats last week sought to ingratiate themselves with voters,
while doing nothing to produce more energy, with a familiar attack on "big
oil." They want to repeal $17 billion in tax breaks for the oil companies
over 10 years and on top of that impose a windfall profit tax on companies
that don't invest in new energy sources. This is political expediency at its
worst.
Peter Robertson, vice chairman of Chevron, told me it's a myth that oil
companies are not investing in new energy sources. He says last year alone,
Chevron spent $20 billion exploring new sources of energy.
Robertson said President Bush's trip this week to Saudi Arabia is "highly
embarrassing" because he is "calling on the Saudis to produce more oil when
we are not doing it ourselves." The last refinery built in America was in
1976. Tighter government regulations are the main reason. That's how
unserious we are about our energy "crisis."
Robertson said there would be plenty of oil available to the United States
if the oil companies were allowed to get it: "Eighty-five percent of
offshore oil is off-limits." Responding to objections to offshore drilling
by environmentalists and their allies in Congress, Robertson noted that some
of the strongest pro-environment nations in Europe - he mentions Denmark,
Norway, the United Kingdom - lease offshore locations for oil exploration.
The technology has become so good, he said, that during Hurricanes Katrina
and Rita, "one thousand offshore wells were destroyed (in the Gulf of
Mexico), but not one leaked." Australia, he said, has allowed offshore
drilling for 40 years without any environmental damage.
In addition to the sinking value of the dollar, here is the main problem:
According to the Department of Energy, U.S. oil production has fallen
approximately 40 percent since 1985, while the consumption of oil has grown
by more than 30 percent.