Friday, April 13, 2012

It's Deja-vu All Over Again

Here we go again. When I filled my car’s gas tank yesterday, I paid $4.05 a gallon.

High gas prices are a big drag on the economy, for many reasons. Closest to home, when we pay more at the pump, we have less to spend elsewhere, and that slows down the economy. People don’t drive to Myrtle Beach or other such places, they don’t buy airline tickets, thus hurting the leisure and tourist industries.

There’s more. When you drive on I81, or almost any major highway anywhere in the country, what do you see? You see trucks, a lot of them. Almost everything that is in our house, barn, yard, garage, apartment, store, place of work, or anywhere else was on a truck at some point. Whatever can’t be moved on a truck gets put in a train or an airplane. Sometimes two or three of these modes of transportation are used for a single item (Fed Ex – UPS). When gas/diesel/aviation fuel prices go up, the additional cost is passed on to the price of all those things that get moved. Again, those higher prices of everything hinder the entire economy.

Obama and his apologists have spent a lot of time recently saying that there is very little the President can do to lower gas prices.

However, the law of supply and demand has not been repealed. Everyone who has taken Economics 101 knows that if you want bring down the cost of something, you increase the supply.

The United States has the largest recoverable resources of oil, gas, and coal of any country in the world. When you combine all of these, we are number one in the world! Consider:

• America’s greatest concentration of untapped oil – an estimated 10 billion barrels – lies near the edge of Alaska’s 1.6 million acre Arctic National Wildlife Refuge (ANWAR).
• We also have large untapped oil reserves off shore and in the Gulf of Mexico
• The U.S. is home to the richest, thickest oil shale deposits in the world. Estimates show that we have four times more recoverable oil resources in oil shale than Saudi Arabia’s proven oil reserves.
• The U.S. has the world’s largest coal reserves, nearly 29% of the world’s proven coal reserves.
• The U.S. is the world’s largest coal producer. If the total coal resources of the lower 48 states could be completely mined, it would be enough coal to last an astonishing 3900 years at current consumption rates.
• Our natural gas reserves, also found most commonly in underground shale formations, have grown significantly in recent years due to the use of hydraulic fracturing (fracking).
• In North Dakota, we are already accessing the productive Bakken Oil Shale Reserve, with an estimated yield on 500,000 to 750,000 barrels per day.
• The Michigan Basin is estimated to hold more than 282 million barrels of oil and 2 trillion cubic feet of natural gas.
• The Marcellus Shale field in New York, Pennsylvania, West Virginia, and Ohio and the Utica Shale in Ohio are just beginning to be studied.

There is another drama playing out now that is very telling with regard to this claim that Obama can’t bring down the price of gas, and that is Obamacare. The Supreme Court is hearing a legal challenge to Obamacare, but that’s not the part of it relevant to this discussion. You will recall that during the extensive debate over Obamacare when it was being considered by Congress, one of the main reasons, if not the main reason, given as to why we must pass this law was that Obamacare would bring down the cost of health care overall. Obamacare was needed because it would lower the cost of health care, we were told over and over.

Here we have the situation that back then Obama was absolutely sure he could bring down the cost of something as economically large and intractable as the entire health care system with his Obamacare, but now he is completely impotent when it comes to doing the same for energy and gas prices.

The key to understanding this incoherence from Obama and crew, as I have said before, is to recognize that they WANT the price of gas and other conventional sources of energy to go up, so that then people will be willing to move to the much more expensive “green” energy. Obama’s Secretary of Energy even admitted this in 2008 when he told the Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels of Europe.” Obama has said that he wants to bankrupt the coal industry and that gas prices must necessarily skyrocket in order for his "cap and trade" scheme to work.

That’s why Obama recently refused to approve the Keystone Pipeline that would bring much oil to us from Canada, and why he refuses to allow additional off-shore drilling and has cut the number of drilling permits issued per year in half. He doesn’t want more oil and the lower prices that would go with it. He wants less oil and higher gas prices, the economy be damned.

After all, what’s more important - low energy prices, jobs, and economic prosperity; or following the dictates of the environment extremists about how our way of life must drastically change in order to “save the planet” in a manner that they find acceptable?

November is coming.

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