American Elephants

Myth, confusion and consequences… by The Elephant's Child

Many politicians depend on uninformed voters. People are worried about gas prices and the accompanying rise in the cost of food. People who buy their own groceries and pay for their own gas at the pump have a slightly different outlook than those who live in San Francisco mansions and whose drivers take care of the petrol problem.

When people are deeply worried, politicians want to DO SOMETHING. If they do something promptly, people will know how much they care. People will then return them to office, because politicians care for the ‘little people’.

Poorly informed voters have been fed myths for years, that serve only to confuse the issue. Why do you think that almost every country in the world is drilling and buying leases in the search for oil? Brazil has just discovered vast oil fields off their coast. Our own oil companies are drilling all over the world.  But we cannot drill off our own coast. How did we get here? Here are some of the myths that have stood in the way.

1. Big Oil makes too much profit. Did you see how much profit Exxon Mobil made this year? The profits that Exxon Mobil earned, eight cents per gallon, are dwarfed by the amount the government takes in taxes per gallon. That, in turn, is vastly less than the profits earned by the huge foreign state-owned oil companies who control 94% of current oil production. Have you heard Congress demanding a tax on windfall taxes?

2. Oil is a pollutant. It is dirty. Petroleum, when it is burned, produces carbon dioxide. You, when you breathe out, produce carbon dioxide. CO2 is a colorless, harmless gas that is essential to life. It acts as a fertilizer to plant life which takes in CO2 and produces oxygen. This is good. CO2 is not a pollutant, and not a cause of global warming. Everything you eat, wear or use is transported by petroleum power. At present there are no viable alternatives.

3. We can’t drill our way out of this. Yes we can. The Thunder Horse platform in the Gulf of Mexico is pumping oil and natural gas again. The platform will eventually produce the 250,000 barrels per day that we have been begging our Saudi friends to increase pumping. When running at full tilt, Thunder Horse alone will increase U.S. oil and natural gas production by 3.6 percent. Way to go, Big Oil.

4. We need to shift to alternative renewable fuels. Biofuels, like ethanol, use land that is needed for crops and redirect it to our fuel tanks. The amount of land we have devoted to fuel is already causing food riots and hunger in the developing world. Let’s see, you take in windfall taxes, excessively high, and use the excess money to subsidize the production of ethanol which not only produces less energy per gallon than gasoline, but starves people as well, while raising the price of food. This is all too complicated for me.

5. Nuclear? Chernobyl killed millions. Well, no it didn’t. I think the accurate number was 49. Greenpeace disagrees. Greenpeace is the “environmental” organization that coined the term ‘frankenfood’ in an attempt to drive consumers away from genetically improved food, such as “golden rice” that will save millions of children from blindness and death. Patrick Moore described the group he helped to found as “anti-human, anti-technology and anti-science”, and “basically anti-civilization.” The last nuclear reactor in the U.S. was built in 1977. France generates 79% of its electricity from nuclear plants. Safely and cheaply.

6. Someone else is to blame. The left has been anxious to blame: oil company executives; Big Oil in general; oil industry profits; oil executive salaries; alleged links to President Bush or Dick Cheney; and unnamed speculators. Not to blame: congressional action to prevent drilling; post-Enron Sarbanes-Oxley overkill; price controls; windfall profits taxes; or regulatory attacks on business. Not to be mentioned: the laws of supply and demand.

7. Speculators are the culprit. Institutional investors have been urged by academic advisers to diversify into ‘hard assets’ which includes oil. A lot of institutional investors got involved in oil speculation. We don’t know how many or how much. Futures trading allows producers of commodities to even out their risk in perfectly legal transactions. Transparency should help, but the worry is over-regulation by congressional busy bodies, who are not known for wisdom when meddling in American business.

8. We are running out of oil. This is an old, old story. There is supposed to be a point — peak oil — when it is all gone. 76% of Americans believe that we are running out. Fortunately, they are wrong. There is plenty. We just have to recover our sanity.

9. We need to achieve energy independence. Well, not likely. But allowing the laws of supply and demand to work would help, and it would be nice if we were enriching ourselves instead of foreign conglomerates.

10. Energy firms are “sitting on 68 million acres of federal lands they’ve already leased”, or so says Nancy Pelosi, and they aren’t producing any oil. Well, they are drilling, exploring, building facilities and spending billions to do so, but before they can produce oil, they have to find just where in the 68 million acres it is. It may officially be classified as “nonproducing”, but it is hardly idle. 94% of federal onshore lands remain off limits and 97% of offshore lands are off-limits to exploration. Nothing is preventing Congress from opening those lands except sheer irresponsibility.

But do you remember that in 2001 President Bush had an energy plan? It involved new oil and gas drilling, building new nuclear plants and improving the pipelines and electricity grid. The administration published the report of an energy task force containing scores of proposals for finding new sources of power and encouraging a range of new technologies. It included proposals for vetting locations of plants, streamlining or eliminating environmental reviews to help industry find and produce more energy.

Do you remember what happened? The left attacked. The Energy Task Force was illegal, how dare Vice President Cheney consult with energy company executives to devise a plan for producing more energy? They should be required to give us the minutes of every meeting. What could be more suspect or conspiratorial than talking to people actually connected to Big Oil or Big Energy? Evil, Bad, Wrong.

So the oil can has been kicked 8 years further down the road.

1 Comment so far
Leave a comment

Excellent analysis. Thanks.

Now, if the voting public would just get it.


Comment by renaissanceguy

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