Dems Undermine Their Own Argument Against Drilling

As I had previously noted in this blog, last Thursday, President Obama contradicted himself in his energy speech. First he noted that our dependence on foreign oil was due to increased supplies of domestic production. Then, he said we can drill our way out of high oil prices; as if the economic law of supply and demand doesn't apply to oil/gasoline prices. In fact, history has proven that just the announcement of new drilling dramatically lowers the price of oil. In 2008, G.W. Bush announced a lifting of bans on offshore drilling and the price of oil fell $13 in just a few minutes.

Now, three Democrats -- Reps. Ed Markey, Peter Welch and Rosa DeLauro -- are urging the President to increase the supply by releasing oil from the Strategic Oil Reserve (SPR). So, once again we have Democrats acknowledging that increased oil supplies will lower oil prices and, subsequently, lower gasoline prices at the pump. However, they seem to forget that, just last year, Obama released oil reserves from the SPR and the impact was tepid at best, and the price of oil returned to previous highs in just a short amount of time.

If we want lower prices on a permanent basis, we need to drill. But, it pains Democrats to tell that truth. They will do everything possible to avoid increased drilling. They will drag oil execs into hearings to make the public think that high prices are all due to manipulation by big oil. During the Bush/Cheney years, they blamed it on the fact that the President and Vice President were ex-oil people and cozy with the big oil companies. But, for all the hearings and all the blaming, oil prices remain high. Only when a recession hit America did prices go down and that was simply because demand fell.

One last thing. Now is not the time to release oil from the SPR. We have a bellicose situation in the Middle East. The potential for disrupted supplies is higher than at any time since the 6-Day War. But, this is an election year and the Democrats are worried that high oil could jeopardize their election bids in the Fall. So, as a consequence, they are willing to put reelection ahead of national security.

Obama: "We're Not Going To Drill Ourselves Out Of This Problem

Last Thursday, in President Obama's address on energy, he repeated a familiar refrain of almost all Democrats when it comes to high gasoline prices and calls for increased drilling: "We're Not Going To Drill Ourselves Out Of This Problem". In that same speech, he tried to take credit for the fact that our dependency of foreign oil has been reduce through -- yes, that's right -- increased drilling.

Back in 2006, the then-Senator Obama from Illinois, wrote this in his book The Audacity of Hope: "We cannot drill our way out of our addiction to oil." Yet, since then, U.S. oil supplies have never been greater. All thanks to new and deeper oil finds and major advances in drilling techniques. Not, because of our government. Because of persistent exploration by the oil companies. Now, we actually may have enough reserves to last us through the beginning of the next century. If Obama would allow those companies to drill.

Over 40 years ago, during the OPEC Oil Embargo, the Democrat-controlled Congress under President Carter, trotted out a bunch of hand-picked, environmentally friendly experts who said we would run out of oil in 40 years. But, now, more than 40 years later, with more than a tripling of the world's automobiles, we still seem to have enough oil in the world.

This "we can't drill our way out" is a tactic that is used, over-and-over again, by the Democrats to delay bringing any new sources of oil into the marketplace. It is driven by their all too cozy association with the environmental movement. Sadly, every time they win using that slogan, it's the working poor and the middle class who suffer as a result of higher gasoline prices. A problem that the Democrats never seem to understand.

On The 38th Day

On the 38th day, the ravaging of the sea and earth continued and, then, out of the darkness, there rose a figure. With outstretched hands, he declared "no more drilling"; and, the drilling was stopped. To the left, he is truly the messiah. On the right, they cowered in awe and amazement. But, the vast majority remained unsure. Yet, the sea and earth continued to die because this messiah was a false messiah and he was 38 days late with any damn miracle!

A Little Sugar With Your Poison?

Yesterday, Obama announced that he will allow oil exploration in some previously barred offshore locations. But, this is just a political ruse. He's only allowing exploration, now, and the question of whether or not any actual drilling will ever really take place is highly questionable. In any event, the time of his announcement is intended to give America a little sugar to go along with the big dose of poison that he will serve us up; later this or the next week. And, of course, with Obama, timing is everything.

The poison that I am talking about is the fact that Obama's Environmental Protection Agency (EPA) will finally declare carbon dioxide a dangerous gas that will be subject to regulations beginning at the start of 2011. That means, from that point forward, the EPA will be able to regulate and fine anyone and any business who, in their estimation, is emitting too much carbon dioxide. This is Obama's attempt to force America into compliance with the stupidity of Global Warming mandates. It's also an override of Congress' inability to pass Cap and Trade legislation. It also means that, coupled with health care reform, businesses will again be forced to shed jobs in the face of higher operational costs.

As far as offshore drilling is concerned, Obama has no intention of actually allowing any new drilling for oil in those areas. If he was truly concerned about finding new oil sources in order to wean America off of its dependence on foreign oil, there are plenty of existing, inland locations that are ripe for drilling right now but have been put off bounds by Obama and the Democrats. Instead, he only specified these new offshore locations because they are 50 to 150 miles off our coasts and, as a consequence, would force drilling to be attempted at extreme and very costly depths. Additionally, Obama also knows that he can keep any actual drilling at bay because they can force years of environmental studies to be conducted before it would ever start. By then, most potential oil exploration companies would have just given up and gone elsewhere where overcoming environmental regulations would be less difficult.

As with everything that Obama does, nothing is done for the true benefit of America. Here's a guy that had campaigned for over a year on no drilling for oil; either onshore or offshore. Now, we are supposed to believe he's suddenly pro-oil? Or, pro-atomic energy? Instead, it's easier to believe that he's a con-man who constantly plays political games in order to ultimately put forth another piece of his intentionally far-left agenda. Even the environmental groups know this to be true; otherwise you'd be seeing rallies and picketing all over this country in opposition to this latest announcement.

OPEC's Short-Term Vision

Just recently, OPEC decided to cut production to keep oil prices high. The reason is simple: OPEC countries like Saudi Arabia, Iran, and Venezuela, have become accustomed to the mammoth cash inflows they have been getting into their government coffers for high oil prices. Many are still working off the cost to sink an oil well in the 1970's; so, profits can be as high as 800% on a barrel of oil.

But, OPEC's greed will ultimately hurt them. It will hurt them more than consumer actions that were taken following the Arab Oil Embargo of 1973 when small cars became the rage and the demand and price of oil fell dramatically. It hurt them more because, this time, the West won't just cut back on oil usage with more fuel efficient cars. This time, the West will walk away from oil completely as the consumer decides to find other ways to avoid four dollar a gallon, or higher, gasoline prices.

OPEC might not realize it but, this could be the beginning of their end. This country, and the world, has already started moving away from oil for its energy needs. People are buying more fuel efficient automobiles such as hybrids. Expect offshore drilling to become a reality. Electric cars like the GM volt and the Chrysler "EV's" are scheduled to appear on the market by 2010. Wind and solar are getting attention. Hydrogen vehicles are closer than ever in being a reality. And, yes, we might even build a Nuclear power plant our two!

It is possible, that within one or two decades, OPEC will see the demand for oil fall off dramatically. We could do it if we do "all those" things that will cut into this country's "imported" oil demand; including drilling for our own new oil reserves. We could be the leader that the world will follow in becoming energy independent. In doing so, we will become more secure because we would no longer be dependent on our enemies for oil. We won't be sending $700 billion a year to our enemies military coffers. But, most importantly, we can watch the only economic base that many of our enemies have, oil production, just wither away from below their feet.

Is $80 or $60 a Barrel Oil In Our Future?

At $147 per barrel on July 11, oil certainly kept up with its well-earned moniker of being the "black gold." This morning, oil isn't looking too much like "gold" anymore as it fell to a new 3-month low of $107.

Oil's fall from gold-um is due to a whole raft of reasons. First and foremost, the speculative bubble has burst. When gasoline prices hit $4 a gallon in the United States and over $9 dollars in Europe, drivers around the world started to tighten their belts and began driving less. Subsequently, oil demand fell and oil inventories started to rise. With that rise in inventories, oil and gasoline prices started to fall. Further, the high price of oil had created an environment where new oil supplies had been coming on line to take advantage of the attractive, high prices. This, too, added to the increased inventories. You can also expect future new sources oil to come on line. Those new sources had been drilled or are in the process of being drilled in response to the previously high oil prices and demand. In addition, oil usage is being naturally taken down a weak economy in the United States and one that appears to be spreading throughout the world. Finally, the United States dollar has been gaining strength after falling for so many years. Because oil prices are so closely tied to the U.S. dollar, the stronger dollar is forcing prices down.

My guess is that oil will keep falling to a least $80 a barrel and gasoline should go below $2.50 a gallon. That price could be achieved by year's end. However, the conga-line of tropical storms that appears to be heading towards our oil production facilities in the Gulf could cause that eventuality to be delayed until sometime in the first quarter of 2009. I would also expect, based on my years of investing, that oil prices could hit $60 a barrel as traders "overreact" to the falling prices of oil. However, I think that, ultimately, $80 is the probable low price that we could see in 2009; and, I would expect prices to go back above $147 a barrel, next year, as drivers and consumers incorrectly think they can start wasting oil and gasoline, again. (Please note: This is an opinion and my guess. If I was always accurate, my name would be Donald Trump, or something, and not Cranky George).

The problem with this momentary drop in oil prices is that it will take the heat off of our politicians to do something. For sure, the Democrats will use the drop to avoid the issue of drilling in Alaska and off of our East and West coasts. Once again, we will probably lose another year in creating new oil supplies while oil prices are down. But, the price will go up as the inevitable world demand for oil and oil products increases. Mark my words, in the Summer driving season of next year, as the price of gasoline probably goes well above $5 a gallon, the same debate over drilling will start up again. And, once again, that same old and tired argument will be used that says it will take 7 years before we see any new oil supplies. Expect the Democrats to use the same diversion of pitting America "against" big oil and big profits. Congressional hearings are sure to be held to make America think that something is being done in Congress. Once again, we will hear all this talk about new and green sources of energy. Green sources which will probably be just a far out of reach as they are now. Finally, you will hear the same talk about oil speculators and how the oil companies aren't drilling on the land they already have leases on.

I just keep wondering when the American people will wake up and realize the fact that our own politicians are more beholding to a few environmentalists than they are to the people who elected them. Will it take five dollars a gallon? Six dollars a gallon? Or, fifteen! You guess is as good as mine.

Obama's 3-Card Monte on Oil Supply

Yesterday, Mr. Obama gave another speech on energy. In that speech, he once again reiterated his stand that drilling in the Arctic National Wildlife Reserve (ANWR) and off the shores of California and Florida won't help lower oil prices. But, he said he was for limited drilling if "politically" it would get us on track for "the "alternative energy initiatives that he has proposed.

OK. I "guess" that sounds reasonable if you "really believe" that "increasing supplies" (by drilling for our own oil) won't actually reduce the price of gasoline at the pump.

But, then, Mr. Obama proceeded to expose his "own lie" about the effect of "increased supply" on high oil and gasoline prices. He did this by proposing a release of 70 million barrels of oil from the Strategic Oil Reserve (SPR) to increase oil supplies (See Full Story). He went on to say that this would reduce the high oil prices and, subsequently, reduce gasoline prices.

So, let me get this right.

America "burns" about 20 million barrels of oil per day. So, in the world of economics according to Obama, releasing 3-1/2 days of equivalent oil usage from the SPR (a total of 70 "million" barrels) will dramatically lower prices. However, increasing "new" oil supplies by an estimated 16 "billion" barrels from the Arctic National Wildlife Reserve and by a minimum of 18 "billion" barrels for offshore drilling won't have any impact on price. So, in other words, Mr. Obama thinks that replacing 3-1/2 "days" of oil usage in America would have more of an impact on gasoline prices "than" any new supplies of oil that could literally keep this country going for 4-1/2 "years" on their own. This is from a guy who actually has 300 people available on his economic team.

Besides the fact that Mr. Obama has "flipped" on his stands on drilling and the release of oil from the SPR (I guess after looking at the polls), he is flatout lying to the American people. His proposal of 70 million barrels, at best, might reduce prices at the pump by 5 cents; and, only for a very short time. Further, the longer it takes to release those 70 million barrels into the marketplace, the less the savings will be at the pump. Drilling in ANWR and off the shores of California and Florida and in the oil shales of Colorado will literally double or triple our domestic oil supplies and buy us the time that we need to convert to alternative energy sources. By drilling in those places that have been blocked by the Democrats, it is possible to increase our domestic oil supplies to above 70 percent of our oil usage instead of less than 35 percent of today. It will also reduce by half, the $100 billion dollars a year (and growing) that is flowing out of this country and into places like Saudi Arabia in order to satisfy our insatiable oil needs. Most importantly, we would reduce the "risk" of serious supply disruptions and the economic disaster that could result from the instabilities in the Middle East, Nigeria, and Venezuela.

The security of the United States is at risk. Oil should not be used like some pawn to garner votes and campaign contributions from the likes of MoveOn.org or Greenpeace or the Sierra Club. This is serious business that should not be treated so lightly that our politicians can take a 5-week hiatus; as they did last Friday. Nancy Pelosi and company are trying to stall past the election; thinking that they will have complete control and the ability to hoist the wishes of their "small" political base of environmentalists onto all of America. For the Democrats, the cost to America for their inaction is immaterial. They see no problem in ramming trillions upon trillions of dollars in ineffective and premature energy ideas onto this country so Al Gore can sleep at night. This is literally crazy and probably the most irresponsible government we've ever had in this country. A government that absolutely hasn't thought through the realities of what they are doing and plan to do.

United States of Pelosi

One of our greatest Presidents of the United States, Abraham Lincoln, once said "...a government of the people, by the people, and for the people.." . He said this in his famous Gettysburg Address. No one before or since has defined our form of Democracy, a republic, as succinctly as that.

So, why then have we suddenly become a government "of" Nancy Pelosi, "by" Nancy Pelosi, and "for" Nancy Pelosi. Why, then, when almost 70 percent of the people polled in this country want us to drill for our own oil, is Nancy Pelosi and a select group of Democrats able to block even a single vote on "our" drilling offshore, in the Rockies, and in ANWR (the Arctic National Wildlife Refuge). Have we literally become the United States of Nancy Pelosi?

Last Friday, after failing to do anything about the oil shortages and high gasoline prices in this country, she and the rest of the Democrats went on their 5 week summer vacation (See Full Story). Like some form of dictator in the once-communist Russia, she shut the doors of the Peoples' House, the House of Representatives, and cut the power and video feeds in order to silence any opposition to "her" government of the people.

To my knowledge, we are a country of majority rule. And, the majority of us want action, not vacation, on the energy crisis that is crippling our lives. The majority of us want "us" to drill for our "own oil" (See Full Story). Even a majority of the environmentally conscious Californians want offshore drilling (See Full Story) We are a country who "greedily" uses about 25% of the world oil reserves. But, at the same time, we want the rest of the world to feed our greed like some grotesque version of Jabba the Hutt. When the radicals and terrorists raise their fists to say "death to America", little do they know that it might just be a bloodless death; a death of our own doing. A death by being financially sucked dry by our insatiable dependence on foreign, and not domestic, oil.

We need to be realistic about the future of energy in this country. It will take decades (not just 10 years) to wean ourselves off the oil standard. We need to drill now and, in parallel, develop and implement those future technologies that will ultimately replace oil in the years past 2030 or even later. Whatever Nancy Pelosi thinks, the future is not now. Not even close. And, this country isn't going to be force-fed by Nancy Pelosi, the Democrats and their special interest group, the environmentalists, when America and the technology isn't even close to being ready to replace oil; either technologically, efficiently, or cost effectively.

Americans need to take back America from Nancy Pelosi! We can do that at the polls!

By the way. Barack Obama's proposed spending of $150 billion dollars over 10 years or $15 billion a year for "green" jobs isn't hardly going to make a dent in a multi-trillion dollar oil industry. Last year, alone, Exxon-Mobil "expended" $223 billion to bring their share of oil products to the marketplace. That is over 14 times what Barack Obama will spend per year in trying to replace Exxon-Mobil as an energy company. Over the next 10 years, Exxon-Mobil plans to spend billions of dollars in exploring and bringing new oil production to the market. A single offshore oil platform can cost more than 1/2 billion dollars to build and millions more to operate over its useful life. Exxon Mobil is just one oil company out of the hundreds that exist in this country that are involved in the various aspects of the oil energy business. That's how absolutely "clueless" and "small minded" Barack Obama and the Democrats "are" in terms of the massive scope of oil production and oil usage in this country and in the world! Oil is not just used as fuel for the nearly 200 million vehicles in operation in this country. It is used to make paints and plastics. It is used in asphalt to pave our roads. The list of products it is used in is almost unbelievably endless. Let's get real people!

Why The "Greening of Energy in America" Won't Happen For a Very Long, Long Time

Right now, we are more than 40 years past the point when the "trashing and contaminating of America" became a national issue and when we, as a country, decided to push recycling of waste. Like the "current" push for green energy and the fight against Global Warming, it was the liberal politicians who pushed for legislation in behalf of the environmentalists. So, where are we now?

Well, best case, Americans might be recycling between 10% and 20% of all possible recyclable materials. The actual statistics are complex and difficult to realistically sum up in one, single percentage. One thing is known, we are actually doing worse than we were just a few years ago. As an example, in 1992 we "peaked" on recycling aluminum cans at 53 percent (according to the Container Recycling Institute - Click to See the Full Story). Now, as country, we have slipped to less than a 33% rate. Worse yet, America's fascination with bottled water and plastic grocery bags has created an ever-increasing and a lack-of-recycling nightmare in America. Our ground water is becoming increasingly at risk from the heavy metals are being leached into the soil from thrown-away computers, electronic products, and those highly toxic, long-lasting and rechargeable batteries.

So, to Barack Obama, Al Gore, and the rest of the Democrats and those environmentalists who think we are going to "green" ourselves out of our energy problems, I say: Just look at the lack of any real progress in recycling in this country over the last "forty" years!

The belief that we will become "energy independent" and save this planet in 10 years or, even, 20 or 30 years is just plain folly! Our track record in "recycling" just proves that. And, to avoid drilling for oil, now, while waiting for the "green technologies" to become "a widespread reality" is just another folly!

To my knowledge, the internationally recognized symbol (above) has been contested in court and is now considered to be in the public domain.

Make Your Voice Heard

If you are tired of the high gasoline prices for the lack of drilling for oil: oil that is available, right here, in the United States...then make your voice heard. An organization called American Solutions, one that is headed up by the former Speaker of the House, Newt Gingrich, is asking for all concerned Americans to sign an online petition (Click to Access the Petition & Site). The petition, which is titled "Drill here. Drill now." will be forwarded to Congress for immediate action to allow drilling in the oil-abundant areas of this country; for Americans.

Don't think that Newt Gingrich and the American Solutions are singularly focused on drilling for oil. Don't forget that Newt and Nancy Pelosi teamed up on this Al Gore-sponsored TV ad to fight Global Warming (Click to see the video)

Like me, Newt and a lot of responsible, but energy-concerned, Americans believe that there are three "parallel" paths to fight the energy crisis and for the energy independence of this country: (1) Domestic Drilling, (2) conservation and, (3) alternatives to oil. Unless we act, our economy, the world's economies (and especially the world's poor), and domestic and global security are at risk and totally in the hand's of some very unstable countries within OPEC. This petition is very important. I hope you will sign it.

The Gore-"e,eee,eee,eee,eee" Details

Yesterday, Al Gore challenged America to get off fossil fuels for all of it's electrical energy production in this country; and, do it within 10 years (See Full Story). He compared putting 300 million people onto non-carbon-based energy production like putting those three men on the moon; a challenge we have never done since, because of the outrageous cost to this country. Anyway, in many ways, that was a just a P.R. stunt in order to beat the Russians into space.

While we are now busy diverting much of our hard-earned income to gasoline for our cars (because of drilling blocked by the Democrats) and because our food costs and other expenses are soaring (again, because of fuel shortages and our Congressional-mandated movement to ethanol), Al wants us to spend up to 3 trillion dollars to save the planet. Given that a trillion dollars is one million, million dollars and that there are 300 million people in this country, that's a "mere" $10,000 for "each" man, woman and child in this country. I'm ready to write Al a $20,000 check for me and my wife. Aren't you? Don't forget the kids! Of course, this is over-and-above what we are already paying and what we will be paying for our energy needs in the future. A cost that seems to be nearly doubling every year. But, Al's just a rich white guy with a life-long Senate pension from you and I, the tax payers, and he can't see any problem with his proposal. Anyway, I can't remember if I, and all the rest of America, during those Kennedy years, personally gave our government 10 grand to go to the moon. Can you? Actually, I don't think I was "even" making ten grand when Kennedy made that proposal! (Actually, I wasn't. And, a lot of people weren't, either. The average annual income when Kennedy was President was about $6700.)

You know, Al's just one funny guy. Every few weeks, he comes up with another laugher. I especially liked his award-winning comedy about Global Warming: "An Inconvenient Truth." Oh! By the way. According to Fox News this morning, while Al was giving his speech yesterday, his entourage of SUV's were parked with their engines running and their drivers cooling off under the blast of their individual vehicle's air conditioners. I guess the inconvenient truth of that "An Inconvenient Truth" is that all his drivers couldn't cool themselves, collectively, inside in an "electrically" air conditioned building while Al was busy flapping his jaws about the use of fossil fuels.

Al and the rest of the Dems just don't seem to get it. First, for every pound of carbon we avoid putting into the world's atmosphere, the Chinese, East Indians, and Indonesians are dumping a minimum of ten more pounds of it into the atmosphere. That's because they outnumber us 10 to 1 and because they have little or no environmental standards in those countries and with unbelievable economic growth. Second, when Al and all his friends negotiated the Kyoto Accords/Treaty, they neglected to mandate carbon reductions for China and India and the rest of the developing world. Third, besides being very expensive to us as a society, it will take just as long to build wind and solar alternatives as it will to drill for oil and natural gas. That's because any additional energy producing activities will be tied up in court in a variety of creative ways. Here's just a few examples of how the building of wind turbines in this country are being blocked and all tied up by lawsuits:

"Virginia Wind Farm Lawsuit" (See Full Story)
"In A Stir Over Wind Farms" (See Full Story)
"Wind farm development lawsuits directed at Town of Cohocton" (See Full Story)

Image by World Economic Forum's photostream on Flickr with Creative Commons Licensing (Click to View Other Works).

Not Drilling For Oil on 68 Million Acres

Let me, as simply as possible, state an argument that is buried within two of my recent blog entries regarding the 68 million acres of federal land that the Democrats say the oil companies aren't drilling on. I think it says it all!

"The" oil companies don't want high oil prices. They want supplies to be high through as much drilling as possible and, subsequently, prices to be low. If prices continue to be too high, these oil-dependent companies could ultimately go out of business. That's because any and all alternatives to oil would then become economically viable.

For this reason, it is the Democrats and the environmentalists/conservationists who "really" want high oil prices.

Can I be any clearer?!!!

Here are my two blog entries on the subject:
"Where "Does" Exxon Mobil Get It's Oil?" (See Full Story)
"68 Million "Acre" Lie" (See Full Story)