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A World Afloat on an Ocean of Oil
Considering how much untapped oil is known to exist, not just in the United States, but worldwide, one would think that its current price was some kind of anomaly and it is. It is more the result of speculation than anything else.
The most fundamental fact about oil worldwide is that there is lots of it. Though frequently overlooked, the ability to refine crude oil plays an essential role in the supply and demand equation. More refining capacity is needed worldwide. Finally, there’s the fact that, in general, oil is very expensive to get at and often found in the most inhospitable places on Earth.
For sheer insanity, however, consider a nation that has an estimated 31 billion barrels of oil offshore of its coasts and 117 billion barrels of oil under land owned or managed by the government, plus 139 billion barrels beneath privately held land.
In just one area, a desolate place designated a wildlife refuge, there’s an estimated 7.7 billion barrels untapped. The nation with this abundance of oil is, of course, the United States of America. Most of the areas where oil is known to exist have been ruled off-limits to any exploration or extraction by the government.
In the areas where it is accessible, drilling for it is hugely encumbered and often denied by the National Environmental Policy Act, the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act.
If, however, you connect the dots, you will have noticed by now that America’s energy problems, namely the price of a gallon of gasoline or heating oil, is making everyone miserable thanks in great part to environmental legislation designed to make it impossible to access oil on both public and privately held lands. Then, just to make matters worse, the government requires that every gallon of gasoline include the additive, ethanol, which reduces its mileage and increases its cost.
Further, we’re told that Sen. Barack Obama, if elected, intends to seize “windfall profits.” This is sufficient reason for American oil companies to decide to drill anywhere else. The last time a windfall profits tax was implemented was at the end of President Carter’s term. It had such a negative impact on U.S. oil companies that drilling for oil domestically dropped dramatically. It has stayed that way since the 1980s. Their actual profits are now less than pharmaceutical, high tech, and other elements of the economy. Imagine how thrilled they were to hear Rep. Maxine Waters’ threat to nationalize them.
No profits. No exploration. No drilling. And no domestic oil with which to correct our dependence on foreign oil and thus provide a measure of security to a nation that runs on oil.
If you wanted to bring the United States to ruin, you could not have designed and implemented a more perfect scheme. Along with too many members of Congress, environmentalists are America’s Fifth Column.
As my friend, Seldon B. Graham, a veteran petroleum engineer and oil industry attorney, and a graduate of West Point says of oil, “If it is worth dying for in the Near East, it is worth drilling for in the United States.”
As to the claim that the Earth is running out of oil, that can be easily dismissed simply by reading information available in respected publications such as Business Week that, “The Saudis have embarked on an ambitious expansion program that should see more than 2 million barrels of new production capacity come onstream by the middle of next year.”
Those of us who follow energy trends read the Energy Tribune because it has some of the best information available on what is really occurring. In its May edition, Matt Pickard wrote about the expansion worldwide of offshore drilling, noting that today’s prices are being driven by increased demand from rapidly developing nations such as China and India. This demand is going to increase over the next two or three decades.
Unless the United States begins to free up its own oil and natural gas reserves, Americans are going to be paying more at the pump and in their homes for a very long time to come.
The good news is that the offshore oil and gas industry, despite the huge risks and costs involved and despite an aging, understaffed workforce, is making strides to meet demand. Whether it’s in the Gulf of Mexico or the North Sea, the icy waters of the Barents Sea or offshore of Brazil and Africa, massive new reserves of oil are being found.
“Large discoveries offshore Brazil, the continued progress in every region’s major projects, and the ongoing push for Arctic exploration and production point to the industry’s potential for growth over the next 20 to 30 years,” wrote Pickard. Brazil is poised to become a major producer. In its Tupi field, “Petrobas announced an aggressive development plan, with an early production system possible within two or three years,” reports Pickard. The nearby Jupiter field has gas reserves to rival Tupi.
None of this is a secret! Both privately owned U.S. and foreign national oil companies are going to find more oil and gas.
Neither candidate for President is telling the truth these days because both believe global warming is real and both keep blathering on about “alternative” energy. The big problem for the rest of us is that you can’t pour wind or solar energy into a gas tank.
The U.S. mandate for ethanol as a gasoline additive has already significantly put the world’s food supply in jeopardy, but most Americans are blissfully unaware that it requires 1.5 gallons of ethanol to produce the same energy as a gallon of gasoline. It actually emits more carbon dioxide than gasoline. It is an environmental hoax.
The world is afloat an ocean of oil. Meanwhile, the United States continues to rule 85% of its offshore oil off-limits to exploration and extraction. This is occurring while the Chinese prepare to pump oil just offshore of Cuba, a mere 90 miles from Florida. It is occurring while the Russians are looking to plant their flag on potential reserves of subterranean oil in the Arctic.
The next time you hear a politician say we need to be “energy independent”, ask him or her why Americans cannot have access to the oil reserves known to exist in California, in Alaska, and in many of our other States or off the coastlines of Florida and elsewhere.
Ask them why the fate of the condors and little known species is more important than the family budget of Americans forced to make choices between more food and more gasoline.
Ask them why they continue to claim that global warming is a threat when the entire Earth is now in a decade-old cooling cycle.
Ask them why they insist on blaming investor-owned oil companies whose own reserves are barely four percent of the world’s known oil reserves? Ask them how they expect these oil companies to compete in the global marketplace when they threaten to seize their profits.
Energy is the master resource. It determines which nations thrive and which lag behind. For now, America is being ill-served by a Congress that refuses to permit access our own energy resources.
Ask yourself how we have arrived at a point in time when both candidates for President believe in a non-existent global warming and whose proposals offer no practical solution to our current and future energy needs.
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Obama’s Dreams of Big Government
I am frequently and repeatedly surprised that Americans still do not understand what goes on in Washington, D.C. despite the millions of words published and uttered about the place.
In an interesting new book by John Harwood and Gerald F. Seib, two leading journalists with credentials to spare and longtime observers of the public and private ways that Washington, D.C. actually operates, “Pennsylvania Avenue: Profiles in Backroom Power”, they point out that, “At heart, the business of Washington is dividing the federal pie in all its forms, taxing, spending, contracting, regulating.”
As Harwood and Seib further note, “Even in periods of ostensible retrenchments, that business has grown. Since 1990, scholar Paul Light has estimated, direct and indirect federal-government employment has swelled to 14.6 million from 12.6 million.”
With so many millions, nay trillions, at stake, why would anyone be surprised that a virtual army of people are employed to influence where the money is allocated? In my own office there is a directory called the Government Affairs Yellow Book. It’s a who’s who and, in 2007, it included “more than 24,000 government affairs experts who represent the interests of leading businesses, professional organizations, interest groups, and governmental institutions” as well as listing who’s who in federal, state, and local governments.
In Washington, D.C. today you will find representatives of more than 625 corporations, plus 125 subsidiaries or divisions, each with distinct government affairs operations. There are more than 160 financial institutions and 46 subsidiaries or division. You will find representatives of 714 professional organizations, 41 labor unions, and more than 230 interest groups and think tanks.
All of these people and groups keep a close eye on the 435 members of the House of Representatives and the 100 members of the Senate. They read every line of every piece of proposed legislation that ultimately will affect, for good or ill, every aspect of life in America. Lobbyists often propose and even write some of that legislation. Then they go looking for elected officials to sponsor it, virtually all of whom are recipients of political action committee largess.
Senators and Representatives engage in a continual effort to secure campaign contributions for themselves and their parties. They are literally assigned specific fund-raising amounts by party leaders. “The minimum amount for those representing the poorest rural or inner-city districts was $200.000.” Others in politically powerful positions are expected to individually raise millions.
This brings me to Sen. Barack Obama’s most constant campaign theme. As noted by Politico.com back in December, “It could be Barack Obama’s ‘axis of evil’ (is) lobbyists, political action committees and corporations.”
At a rally in Iowa, Obama said, “The days of corporate lobbyists setting the agenda in Washington are over.” Aside from the fact that this is pure hogwash—and he knows it, Obama’s antipathy to American corporations, the backbone of the nation’s economy, employer of millions, and the source of billions in tax revenue, is troubling and reflects more than just a liberal bias, but one that suggests a strong socialist, i.e., anti-capitalist point of view.
However, in December, according to public documents, three of the political aides on his campaign payroll were registered lobbyists for dozens of corporations, including Wal-Mart, British Petroleum and Lockheed Martin. The movement back and forth between lobbying and serving in campaigns and in government is constant and an accepted way of life in Washington, D.C. Former Senators and Representatives often do not return home, but instead set up offices in town to become lobbyists.
Even Michelle Obama echoes the anti-corporate theme of her husband. In March, speaking at a rally, she said, “We left corporate America, which is a lot of what we are asking young people to do. Don’t go into corporate America. You know, become teachers, work for the community, be a social worker, be a nurse…move out of the money making industry, into the helping industry.”
The problem with this is that Michelle Obama has contributed significantly to the family budget by working for corporations, most recently for a hospital where her salary was $311,000. According to their tax returns, she earned $51,200 as a director on the board for Treehouse and earned $217,618 working for the corporation that owns the University of Chicago Hospitals.
If the reek of hypocrisy is beginning to reach your nostrils, it is because this mesmerizing candidate offering “change” and his wife have been cashing in the old-fashioned way and employing the skills of an army of political operatives to make their way to the White House.
Obama’s distaste for corporations has not gone unnoticed on Wall Street. As Lawrence Kudlow, radio and television commentator, has pointed out, “Markets don’t like Obama. If he wins alongside Democratic gains in the House and Senate, taxes are going up big time. This is especially true for the capital-gains tax, which is the single most important levy on assets of all kind, including stocks.”
Obama may not like corporations, but he loves Big Government. Kudlow noted that “He wants to spend $150 billion on a green-energy plan. He wants to establish an infrastructure investment bank to the tune of $60 billion. He wants to expand health insurance by roughly $65 billion.” By February, based on what he had said on the campaign trail, “The Obama spend-o-meter” was already up to around $800 billion.
If you think the federal government is big now, you ain’t seen nothing yet!
This should be a significant cause for concern for every taxpayer and voter in the nation. The tax cuts that helped swell the government coffers during the Bush administration will end in an Obama administration. The earnings of the millions who have invested in American business and industry will be further skimmed to pay for his Big Government proposals.
“Obama’s program is anti-growth”, warns Kudlow. If you think the American economy hasn’t already been harmed by the mortgage-loan debacle, the declining value of homes, and by the rise in the cost of oil, a government under President Obama, supported by a Democrat-controlled Congress would crash the economy for everyone from the corporations to small business owners on Main Street.
It may seem odd to say so, but I take comfort knowing that Washington, D.C. is wall-to-wall lobbyists and government representatives from the many sectors of our economy. They may be the only people capable of saving us from a very uncertain future if Obama were to be the next President of the United States of America.
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©
2008 Alan Caruba.
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