Recently in Energy Category

I'd be remiss, especially after pointing out Democrat hyper-partisanship and dishonesty on energy policy, if I didn't also point out that our hope on the right for changing the 30 years of Democrat obstructionism is - well, disappointing. McCain, from this morning:

Although the GOP presidential candidate didn't address the question of raising taxes on oil companies, he said the companies "absolutely" should return some profits to consumers. "And they should be embarking on research and development that will pay off in reducing our dependence on foreign oil," he said.

"The point is, oil companies have got to be more participatory in alternate energy, in sharing their profits in a variety of ways, and there is very strong and justifiable emotion about their profits," McCain said.

The issue of oil company profits came up this week in the Senate, where Republicans stopped the Democrats from imposing a tax on windfall profits and taking away billions of dollars in tax breaks in response to the $4-a-gallon price of gas.

In the past McCain has indicated he would consider such a tax proposal, saying he didn't want to see companies making "obscene profits" that distort the market.

McCain would consider windfall profits taxes? Well, he said economics wasn't his strongest subject. Someone in the McCain camp please educate the Senator on the effects of raising corporate taxes on consumer prices, please. Also, I'm very disturbed by this socialist streak he flaunts when it comes to energy policy - all this "profit-sharing" doesn't belong in a country where freedom is revered.

Also, why do our politicians (and much of the population) expect OIL companies to develop alternative energy? Isn't that kind of like expecting Toro to research grass varieties that don't need mowing?

Added to his continued ANWR = Grand Canyon theme, McCain's ideas on energy are a tragic embarrassment to the Republican Party.

Starting with this incredible whopper from Nancy Pelosi yesterday in the wake of her failed attempt to raise taxes on oil companies:

Senate Republicans have once again shown themselves to be unwilling to break free of the costly, failed Bush energy policies of the past. They have again adopted President Bushs drill and veto policy that is driving up the price of oil, diesel, and gasoline and leaving us dangerously reliant on Middle East oil.

President Bush, Vice President Cheney, and Senate Republicans have shown no leadership on energy issues for seven years, which is why we face a growing energy crisis. If Republicans will not lead us to a cleaner, more independent energy future for America then they should at least get out of the way.

If there are among you that actually buy this, please sober up and do a little research on why we face a "growing energy crisis". I guarantee it isn't because President Bush, Vice President Cheney, and Senate Republicans have been drilling, because they haven't - primarily due to Democrat obstructionism.

In the very same press release, Pelosi touts halting deliveries to the Strategic Oil Reserve "to increase oil supply in the market" as being helpful for gas prices. But when applied to Republicans, suddenly the result of drilling for more oil equals "driving up the price of oil, diesel, and gasoline and leaving us dangerously reliant on Middle East oil"?

Which is it, Nancy? Does increasing supply lower prices, or raise them?

Equally dishonest is the second part of the above quote, but only because of the framing. The Republicans have been failures on energy, but only because they couldn't get around Democrat obstruction to increasing domestic oil production. It's Nancy and Democrats in Congress who have refused to get out of the way for thirty years.

It occurs to me that you anti-war Democrats are missing an opportunity. After all, you've been insisting for years that the Iraq war (and any interest in Iran) is all about oil. If you really believe that, then supporting domestic production would eventually result in denying future administrations a reason to start wars in the middle east. And imagine how catchy the bumper stickers would be with messages like "Drill For Oil, Not Blood For Oil", or "Drill For Peace". Just think about it, guys, okay?

Drivers are paying an average of $4 for a gallon of gasoline for the first time. AAA and the Oil Price Information Service say the national average price for a gallon of regular gas rose to $4.005 overnight from $3.988. But consumers in many parts of the country have already been paying well above that price for some time.

Gas is expected to keep climbing, putting greater pressure on consumers and businesses, because the price of oil is soaring in futures markets. Light, sweet crude shot up nearly $11 a barrel Friday and approached $140 for the first time.

Along with higher fuel costs, consumers are also contending with higher prices for food and other goods because of rising transportation costs.

As a reminder:

• Democrats have obstructed every attempt at expanding domestic oil production for the last 30 years.

• Democrats want to increase taxes on the oil companies, which will be passed directly to the consumer in the form of even higher gas prices.

I hope you Democrats are proud of yourselves.

Not bloody likely. The Democrats who have blocked oil exploration, nuclear energy, and every other method of powering the country have clung to their flawed theories through thick and thin (mostly thin, as we're seeing wholesale damage to the economy as a result). Indeed, it's hard to find any type of energy they do support. Even wind power, popular with the local Joe-bag-'o-socialism class here in Delaware, meets heavy resistance from Democrat elitists at the federal level. One has to wonder what life for Americans would look like if Democrats in Washington took their distaste for all things energy to its logical conclusion and banned all energy sources they didn't like - something like this?

While Congress has been the real villain in the energy mess we find ourselves in, the executive branch could make an impact if the right approach were taken with Congress. Unfortunately, we have little to look forward to regardless of who wins in November. Obama would raise gas prices through increased taxation, and offers no hope at all that prices would decline through increased supply.

The nation wouldn't fare any better under McCain. McCain's "cap & trade" plan would be no less of a disaster than any similar plan advanced by the left, and he opposes increasing oil supplies. His only saving grace - indeed, his only dramatic difference from the Democrats - is his opposition to increased taxing of the American people through corporate surrogates (aka the oil companies).

An argument could be made that we may fare worse under McCain, as his legendary stubbornness would keep his administration stuck on stupid while the citizens suffer under an ever-worsening economy. Obama, on the other hand, is a political opportunist who might relent on some of his harmful agenda in response to negative polling. In other words, a weasel might be less harmful than someone guided by principle. That's a painful point to have to make, and shows just how bad things have been allowed to get in our political system.

*sigh*.

As I said above, though, Congress is the primary cause of the problem. This also means that they're in a position to correct it as well, if the pressure is high enough. It may not be possible, but there's nothing to be gained by not trying. Calls and letters to Congress are a start. In the same spirit, petitions and lobbying also make your opinions heard. If you're looking for a petition, start with Newt (H/T Don Surber):

While there are many important issues this election season, there are none that affect all Americans as much as this one. Regardless of political stripe, everyone should be joining in the effort to convince our government to stop obstructing energy independence and increased prosperity.

Via AP/Yahoo Green, more clinging to guns and xenophobia:

BUSKIRK, N.Y. - A few years ago, Kathleen Breault was just another suburban grandma, driving countless hours every week, stopping for lunch at McDonald's, buying clothes at the mall, watching TV in the evenings.

That was before Breault heard an author talk about the bleak future of the world's oil supply. Now, she's preparing for the world as we know it to disappear.

Breault cut her driving time in half. She switched to a diet of locally grown foods near her upstate New York home and lost 70 pounds. She sliced up her credit cards, banished her television and swore off plane travel. She began relying on a wood-burning stove.

"I was panic-stricken," the 50-year-old recalled, her voice shaking. "Devastated. Depressed. Afraid. Vulnerable. Weak. Alone. Just terrible."

Convinced the planet's oil supply is dwindling and the world's economies are heading for a crash, some people around the country are moving onto homesteads, learning to live off their land, conserving fuel and, in some cases, stocking up on guns they expect to use to defend themselves and their supplies from desperate crowds of people who didn't prepare.

Maybe some of these folks have seen too many post-apocalyptic science fiction movies. Many are convinced that we're headed for anarchy by 2012. So they're planning for a personal future that looks like half the content on the Sci-Fi channel. Think "Little House on the Prairie" with Mel Gibson and Ruger's entire product line in the starring roles.

Democrat oil policies obstructionism doesn't seem to be creating the utopia that the left promised, does it?

Everyone complains about the rising costs here in the US, which are rising due to decades of liberal energy policies preventing supply from keeping up with demand. But at least we don't yet have runaway inflation like Zimbabwe:

HARARE, Zimbabwe - Weary Zimbabweans are facing a new wave of price increases that will put many basic goods even further out of their reach: A loaf of bread now costs what 12 new cars did a decade ago.

Independent finance houses said in an assessment Tuesday that annual inflation rose this month to 1,063,572 percent based on prices of a basket of basic foodstuffs. Economic analysts say unless the rate of inflation is slowed, annual inflation will likely reach about 5 million percent by October.

As stores opened for business Wednesday, a small pack of locally produced coffee beans cost just short of 1 billion Zimbabwe dollars. A decade ago, that sum would have bought 60 new cars.

As bad as things are here, at least our oil-driven problems can be fixed over time - all it requires is for Republicans to stop acting like Democrats when it comes to oil policy (listening, Sen McCain?) and for Democrats to start thinking about what's best for Americans instead of bowing and scraping to environmental extremists who oppose anything resembling common sense.

Via AP/Yahoo:

Both the House and Senate are expected to approve, with bipartisan support, legislation Tuesday directing Bush to temporarily halt the shipment of about 70,000 barrels of oil a day to the Strategic Petroleum Reserve.

Bush has refused to do so, arguing that this small amount of oil won't impact prices and that for security reasons he wants to increase the stockpile to its full capacity of 726 million barrels. It now has about 701 million barrels, equal to nearly two months of oil imports.

I have a relative who is a consultant to the oil industry - he tells me that this would have a small effect on prices, and would be factored out by the markets in short order. Of course, it also doesn't address the underlying problem - demand internationally is on the rise, and only tapping our own resources will provide a long term fix.

Yesterday I posted on the article from AP fact-checking the various proposals in play, but I didn't get back to it as I had planned. Two things stood out for me:

1. Each of the plans by Democrats would actually increase the pain at the pump. Increasing taxes and over-regulating always fails, nice to see an MSM article acknowledge it.

2. Each of the plans that would work have been stymied by Democrat obstructionism. The AP even inadvertently points out the irony of the ANWR debate - that results would be 10 years out, and had Democrats acted responsibly 13 years ago, we would be benefiting today.

Sadly, most politicians rarely look past the next election when considering policy. Help for the country that comes in a decade comes too late to help in re-election. Everyone should be reminding their Representatives and Senators that they have a greater responsibility.

AP's H. Josef Hebert has an article out on the divide in Congress over how to deal with gas prices, and there's actually some well-deserved but rare (for AP) criticism of the Democrat's plans. They miss the boat somewhat on the analysis of the Republican proposals, but I'll take it overall as a refreshing view of the issues involved.

I don't often quote articles in their entirety, but I suspect this one won't survive the morning meetings at AP and will be altered to give a less-balanced view or pulled entirely.

WASHINGTON - As millions of people approach the summer vacation season under the threat of $4-per-gallon gasoline, Congress is scrambling to respond. But don't wait for anything that will drive down prices at the pump.

A Senate vote on a GOP plan is scheduled for Tuesday, and Senate Majority Leader Harry Reid has promised to bring up a Democratic package before the Memorial Day congressional recess. Except for halting the flow of oil into the government's Strategic Petroleum Reserve, neither plan is likely to go very far. Both will be challenged by filibusters by opponents, meaning they would require 60 votes to advance.

Here is a rundown:

THE DEMOCRATIC PROPOSALS.

_Enact a windfall profits tax on oil companies.

SPIN: Oil companies are making too much money, earning $123 billion last year while motorists faced soaring gasoline costs. Imposing a 25 percent windfall profits tax on the five largest oil companies and repealing $17 billion in tax breaks could help the shift away from fossil fuels toward alternatives. Taxes could be avoided if profits are used for refinery expansion or development of wind, solar or biomass projects.

FACT: Profits are large because the companies are huge, and oil now sells for well over $120 a barrel. The taxes could spur some new alternative energy projects, but economists say they also could reduce investments in oil and gas exploration, and are unlikely to affect prices. They could do more harm than good, says Robert Hansen, senior associate dean at Dartmouth's Tuck School of Business. "Anytime you put in a tax you create an incentive to avoid it," says Hansen.

___

_Create a law against energy price gouging and new rules to stem energy market speculation.

SPIN: The government must police the energy markets with a federal law against price gouging and new rules against market speculation. The proposal creates a federal price gouging law with civil penalties of up to $5 million during a presidentially declared energy emergency. The law would prohibit refiners, wholesalers and retailers from charging an "unconscionably excessive price." Traders would be required to put up more cash collateral in the energy futures markets to curb speculation.

FACT: Energy price gouging laws now in 28 states are uneven and inadequate to deal with energy market abuses. Congress has considered a gouging law since 2005. Separate versions have passed both the House and Senate, but never gained final approval. Critics say gouging is ill defined and the law amounts to price controls. Bush has threatened a veto.

A former Federal Trade Commission chairman argued such a law could do consumers more harm than good and may result in higher prices if providers, fearing stiff penalties, avoid selling fuel when prices soar.

Increasing cash collateral, or margins, in energy futures trading could curb speculation, but there might be unintended consequences. Such new requirements, said a spokesman for the Commodities Futures Trading Commission, which would enforce the new rules, "may drive traders to unregulated trading or overseas" without reducing market abuses.

___

_Take on the OPEC oil cartel.

SPIN: We need to stand up to the OPEC oil cartel. The Justice Department would be given authority to bring antitrust cases against countries that collude to fix prices as part of OPEC.

FACT: While politically popular, such a measure would probably not change OPEC production decisions and could provoke retaliation. Similar proposals have been debated in Congress since 2005. "It's a catchy phrase, but it doesn't have any substance," says energy consultant Robert Ebel of the Center for Strategic and International Studies.

THE REPUBLICAN PROPOSALS.

_Pump oil from Alaska's Arctic National Wildlife Refuge, now off limits.

SPIN: The coastal strip of ANWR, as the refuge is called, probably has 11 billion barrels of oil. At the rate of 1 million barrels a day, it would add to domestic production, reduce U.S. reliance on imports, lower prices and produce jobs. With modern technology wildlife and the environment can be protected.

FACT: Drilling in ANWR has been debated for 28 years and remains one of the most contentious environmental issues. Several times the House, under GOP control, has approved development; it passed Congress in 1995 only to be vetoed by President Clinton. Drilling supporters repeatedly have been unable to get the 60 votes needed to overcome filibusters and are unlikely to do so this time.

While ANWR has substantial oil, none would flow for 10 years. Even then, its impact on global production of 87 billion barrels a day will be minimal, energy experts say, as OPEC could adjust to compensate.

___

_Develop vast amounts of oil and natural gas in offshore waters now off limits.

SPIN: For a quarter century, energy development has been blocked in more than 80 percent of U.S. coastal waters, depriving the country of vast oil and gas resources. States should be allowed waivers to the moratoria and get some of the revenues from development.

FACT: Most areas of federal offshore waters outside the western Gulf of Mexico and off much of Alaska have been placed off limits to drilling by a succession of presidential orders and congressional action to protect tourist industries and avoid the risk of spills and environmental damage. The House has twice approved giving states the right to opt out of the federal ban.

___

_Ease permitting for new refineries.

SPIN: A shortage of refineries is fueling high gasoline and diesel prices. There has not been a new one built in 30 years, with environmental and other permitting problems contributing to the reluctance of oil companies to build new refineries.

FACT: The lack of new refinery construction has been more an issue of economics, not government regulations. While the oil industry has complained about permitting and environmental regulations, oil company executives also have said the permitting issue has not been a deciding factor over refinery expansion or construction. Refinery investments are based in expectations of increased demand.

Oil company executives, asked recently if they wanted to build new refineries, said no. In part, this is because of the growth of ethanol as a substitute for gasoline. The industry prefers to expand existing refineries.

___

_Allow coal-based diesel be used as motor fuel.

SPIN: Coal is the country's most abundant energy resource, and technology exists to produce diesel fuel from coal. A mandate to produce 6 billion gallons a year of coal-derived motor fuel by 2022 would contribute to greater energy independence and spur the industry's development.

FACT: The process requires large amounts of energy and results in greenhouse gas emissions, running counter to efforts to combat global warming.

I'll try to have more on this subject later today.

Unfortunately, it's the wrong one.

If you missed the O'Reilly interview of McCain last night, here's a clip where he promises virtually no help on increasing oil supply while waiting for the elusive next energy source to be developed in who knows how many years. No drilling in ANWR, and leaving production off shore up to the states - which is about the same as saying no drilling considering the constituencies involved.

I guess all we can hope for is that gas prices won't go up as much under McCain as they would under Obama. Big whoop.

Well, at least he'll give us border enforcement first, right? Um, no. Keep watching as he falls back on his comprehensive reform lines. I wouldn't be surprised if his poll numbers plummet ten points after this performance.

And folks are raising the specter of McCain losing his bearings. Shame it's not true, I think that might be preferable to his current lucidity.

Can't we get a mulligan on the primaries?

Update: While I'm loath to validate a trackback blackballing site, credit where credit is due - Allahpundit may be on to something here. Delaware, after all, is also a foregone conclusion.

Over $124 per barrel - Democrat obstruction of drilling and refining continues to wreak havoc with the economy.

Gateway Pundit says this this will be the #1 Issue in the 2008 Elections. I hope so. The Dems have been completely wrong on energy for decades, and their chickens are coming home to roost in $4+ gas. Anyone who seriously believes that higher taxes on the oil industry will lower gas prices is simply deluded.

A lot of buzz is being generated lately by the discussion on whether to eliminate the federal gas tax temporarily. McCain wants the "tax holiday", as does Hillary. Obama doesn't. None of the three get it right.

The key word is "temporary" when discussing the gas-tax holiday. Would such a break help ordinary folks? Sure. But not to any great degree, and just wait for the anger come September when prices suddenly jump 18 cents in one day. But the real problem with the gas tax holiday is that it addresses none of the underlying conditions that keep prices high.

Don't be confused, though. I'm not taking Obama's side. His opposition to the gas tax holiday isn't based on anything resembling sanity:

Obama said the proposal to suspend the 18.4 cents-a-gallon gasoline tax and the 24.4-cent diesel tax from Memorial Day to Labor Day would provide little in actual savings to motorists. He said oil companies would quickly raise prices to make up the difference.

Couched in cynical anti-business tones typical of the hard left, Obama hides the fact that he, along with too many in Congress, is the reason for the high prices in the first place. Opposition to any reasonable expansion of domestic production is the core of $3.50+ gas prices, any will continue to be long after the debate about the gas tax holiday fades.

The oil companies have consistently operated on profit margins of around 8%. Most other industries operate on higher margins. Obama surely knows this, and his populist rhetoric on the topic ranks as some of his most blatantly dishonest.

What we really need (and aren't gonna get this election season) is a policy that allows exploration and production of U.S. oil assets, and a permanent reduction in gas taxes (50% would be a good start). Yes, it would take years for some of the benefits to be realized. So what? Do we really have to dismiss any policy that doesn't give results in a single term of office? I expect elected officials to do what's right for the country no matter how difficult or how long it takes. I'm really tired of instant gratification politics, and bet you are, too.

Of the three candidates, none currently have policy stances that will help at the gas pump, and two have policies that will cause great harm. McCain isn't completely opposed to new drilling, but seems to be too sensitive to environmentalists, who oppose any drilling at all. Clinton and Obama (who both oppose drilling) both want to raise taxes on oil companies, which has historically proven to raise gas prices, not lower them.

It's sad that we have to choose on the basis of who would do the least amount of harm to ordinary consumers, but given that it's all we have, McCain is the clear winner on energy policy.

BTW, am I the only one who's tired of hearing how good we have it here at $3.50 compared to Europe at $7-8+? France, Germany, and the UK pay the same for a barrel of oil that we do, the only reason their pump prices are so high is because their outrageously high taxes are even more outrageously higher than our outrageously high taxes. It's a model unworthy of either comparison or emulation.