American Elephants


Pouring Gasoline on the Flames! Michael Ramirez Identifies the Problem. by The Elephant's Child


(click to enlarge)*

I suspect that everywhere you went today, the conversation turned to the price of gas. One of the puzzling things is why the price seems to change (and go up) daily, hourly.  It is because the station owner has to charge a price that reflects how much his next tanker-load of gasoline will cost, so he can pay for it, rather than how much the one he has now cost.  Is the driver of costs the violence in Libya? The insecure state of the Suez Canal? Or is it Obama’s goofy green energy initiatives? If Obama opened up drilling, the price of gas would start to drop. Past history proves it.

The administration’s energy policy is clearly at fault.  In 2035, Obama says, 80 percent of our energy will come from ‘renewable energy sources.”  Not going to happen.

We are told, by people who know him, that Obama does not change his mind.  That his ideas are set in concrete.  IMHO, If that is indeed so, I assume that Obama believes in global warming and the dire necessity of reducing emissions of CO2. He has said that carbon-based sources of energy are dirty and must be replaced.  I think he sees his vision of a Clean, Green 21st Century economy as his coming greatest accomplishment that will make him a world-historic figure. A higher price of oil will force reluctant Americans to buy his electric cars, use more public transportation, and change their behavior to demand the greener world that he envisions.  I wish he’d drop the 21st Century bit.

Not going to happen.  Not because of reluctant Americans, but because these technologies simply do not work.  Perhaps someday there will be a marvelous breakthrough in electric battery technology, but so far there is no such thing, and they are reaching the limits of what conventional technology can do. The problems with wind and solar are not matters of technology but matters of the nature of the source. Wind is unpredictable and intermittent. And for over ten percent of the time it does not blow at all. Solar is too diffuse — night, clouds, rain — to be an efficient way to produce power.

We have plenty of oil, more than Saudi Arabia does. The Bakken formation alone may hold double the amount of oil that Saudi Arabia has. When Obama slapped a moratorium on drilling after the BP disaster, the price began going up. A rise in the price of oil drives all prices up. Everything you buy has transportation costs.

We are a carbon-based life-form. We exhale CO2. CO2 makes the plants of the earth grow and resist drought and cold, and release more oxygen. How did a bunch of green political activists manage to convince gullible people that carbon dioxide is a pollutant? We knew the schools were deficient in teaching math and science, but the proof is doing real world damage. Our schools have a lot to answer for.
*See Michael Ramirez work at Investors. com.


1 Comment so far
Leave a comment

You start off with the right economics (gasoline stations have to charge a price that reflects the cost of procuring their next barrel) but then fail to extend that same logic to the rest of the market.

Loosening constraints on domestic oil production will not make much of a difference to the price of a barrel of oil, because that price is dependent on a whole host of factors operating at a global scale. (If you believe it will, then you must buy into the biofuel industry’s myth that their production is keeping the world price $15 per barrel lower than it would be otherwise.) Mainly — and then only after the several years it will take before the new supplies come on stream — it will improve the USA’s balance of payments (and profits of shareholders in oil companies, and the tax take of Alaska).

However, claiming that opening up more off-shore areas and the North Slope to oil production is a sure strategy for easing the price at the pump only perpetuates the idea stuck in people’s heads that cheap gasoline is some sort of inter-generational birthright.

The price of petroleum will rise and fall, but the inexorable direction is upwards.

Drivers in most other developed countries have been paying the kinds of prices that Americans are now experiencing for decades, thanks to high fuel-excise taxes (which in the UK, for example, were raised gradually). People and economies adjusted. No, they are not driving electric vehicles, but they are driving cars that are much, much more energy-efficient, and those that decide to commute long distances do so by rail.

When gasoline prices dropped in the 1990s, several of my cousins in New England with jobs in Boston bought big gas-guzzling SUVs and moved deep into New Hampshire, commuting 60-100 miles each way. That practice has now stopped. One has found a small apartment in the Boston area and commutes weekly. The others have found jobs or created new businesses in New Hampshire.

Like

Comment by Subsidy Eye




Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s



%d bloggers like this: