Wednesday, July 2, 2008

Canards, Evasions, and Lies About Energy and Energy Prices

No. 1. "We can't drill our way out of the energy crisis."

The Facts:


Of course we can. This is an outright falsehood constantly mouthed by politicians in thrall to the environmental Luddites who want to reverse our country's progress and have us all live where we can be more easily regulated -- in high rise beehives over public transit stations in inner cities.

Developing out own domestic sources of oil will increase the available supply and this will depress prices notwithstanding the assumption by those in Washington with delusions of adequacy that the law of supply and demand has been repealed.

And wouldn't it be nice to be able to stop sending so much of our money to the folks at OPEC who do not wish us well and routinely fund terrorists?


No. 2. "It would be ten years before oil from any new fields reaches consumers."

The Facts:


They never tell you how much of the ten-year period is caused by artificial governmental permitting requirements -- it's well more than half. Much of this could be streamlined or eliminated if our 'leaders' had any sense of urgency. They of course have no such sense since we taxpayers pay for whatever energy they consume.

In addition, any delay is an argument for getting started pronto. Had Clinton not vetoed energy development legislation that Congress enacted during his presidency we now would have oil flowing from our untapped domestic fields.

Finally, energy prices probably would fall immediately in response to a clear commitment to develop our own oil deposits as the end of the supply shortfall would appear on the horizon. Experts on the subject anticipate that a decision to begin domestic development would reduce gasoline prices to between $2 and $3 a gallon.


No. 3. "Speculators are responsible for high energy prices" and/or "Gouging by Big Oil (companies) is responsible for high energy prices."

The Facts:


Such statements are scapegoating efforts by members of Congress to deflect the blame they deserve for their irresponsible failure to enact any practical national energy policy and to support only sources of energy that do not actually exist in the real world today. It is an easy charge to make and to foist off on the significant portion of the public that is economically ignorant and too lazy and/or inept to do anything other than to remain so.

Our major oil companies collectively control only a tiny portion of the world's oil supplies -- far too little to be able to control gasoline or any other energy prices -- and they operate with profit margins far smaller than those of companies in other industries. Government receives substantially more in taxes than oil companies receive in profits from every gallon of gasoline we buy. The oil companies at least produce something for what they get. The government just takes because it can.

The role of those who buy and sell future contracts for oil -- whom the politicians disparage as 'speculators' -- fill an essential role in the market for all commodities, ensuring supplies and fulfillment (to the extent of available supplies) of demands at predictable prices. The market is a highly competitive global one and there are far too many participants in it to make its control by any participant or group of participants possible. This is explained in greater detail in an earlier posting that appears below and even in many current newspapers and magazines.

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