OFFSHORE DRILLING MEANS LOWER GAS PRICES: Smoke And Mirrors In An Election Year

Well, (pardon the play on words), the Washington politicians, lead by John McCain, have found the solution that’s going to lower gas prices and solve the growing economic crisis. I would like to jump up and yell, “PRAISE THE LORD!” But, I’m obliged to mumble, “Not so fast, Slick…..” (Again, pardon the play on words.)

Let’s follow the oil. One of the biggest gripes from the oil companies is that the environmentalists have stood in the way of new domestic exploration and drilling. I agree with that, and I do believe that technology has advanced enough so that the environmental dangers of drilling and pumping oil are now negligible. So, I do favor domestic production in ANWAR, the Rockies, and offshore. Will that bring down prices and solve the problem? No. Not now, not tomorrow, not ever.

Even if the argument that increased production will increase supply and bring down the prices were true, we know for a fact, (because the politicians and the oil companies have been telling us this for months, and we all know that politicians and oil companies don’t lie,) that demand from China and other emerging industrialized nations is growing. So, if the U.S. buys less, there’s more oil on the global market for those nations to suck up. At the very best, you might have some temporary stabilization of prices at some point of time in the distant future. As far as I am concerned, this “solution” for us is not even “smoke and mirrors;” it’s more like “smokescreen.”

If we were able to increase domestic production tomorrow, there would be no effect because, (again, we all know this is true because “they” don’t lie,) we don’t have the refinery capacity to produce any more fuel than we are. Nowhere in the trumpeting solution of this last week have we heard any discussion about how to increase domestic refinery capacity. If we don’t have more refining capacity, it doesn’t matter how much oil we can produce.

So, you see the “solution” is a paradox.

Oh well, (there I go again,) let’s put on a “windfall profits” tax. If we did that, they’d just pass it on in the price at the pump. That would jack the prices up even more. But, let’s assume that we could find some way of preventing the retail prices from going up while under this special tax. You have four major oil companies controlling everything in this country; that’s as close to being a monopoly as you can get. Two companies are owned by foreign firms: Shell by the Dutch and ARCO by British Petroleum. If the U.S. puts a tax on them that they can’t pass on to the consumer, why wouldn’t they just simply sell their products to some other country with less hassle, thereby decreasing supply to us and…jacking up prices even more.

While McCain is playing HIS game, Obama has his head stuck firmly in the sand over the issue and the Boys of Summer in Washington obviously have no clue. I’ve yet to hear anyone suggest a method for siphoning off, (I just can’t help playing on words, can I?) any of this money that is flowing around for the purpose of increasing meaningful research on development of alternative forms of energy. One day the oil WILL run dry, you know; are we going to be able to conduct such research by candlelight and slide rule?

So, what do I propose?

What needs to happen is that we (1) Open up domestic fields for exploration and drilling, (2) Prevent any and all domestic oil from being sold on the global market, (3) build at least two more refineries and modernize the existing ones, and (4) cap domestic retail prices at cost of exploration, plus drilling, plus production, plus refining, plus delivery, plus an amount for research into alternative renewable energy, and plus a reasonable amount of profit. The first step is an absolute necessity to carry us through the next 25 years. The second step will prevent the oil companies from selling our oil on the global market and keeping the prices up. The third step will provide capacity and the fourth step will probably cut prices at the pump by at least 50%.

As much as I dislike saying it, since two of the four majors ARE owned by foreign companies, it occurs to me that the only solution to make these things happen may be to nationalize the domestic oil systems on at least a temporary basis.

That’s MY AMERICAN OPINION, respectfully submitted.