How Crude

I think they are going to let the price rise until the general public screams “uncle”, and supports them drilling in ANWR, off our coasts and anywhere else they think they might find a drop of oil. They will say to hell with the environment, just drill and find more oil.

–from a comment here @ Crooks&Liars

I’m enough of a pessimist these days to believe the above sentiment is fairly on track.  Surfing the internetotubulars today, you may be drawn to the same conclusion.  Because clearly, clearly, not one of these people in Washington knows what the hell they’re doing. 

Let’s start with the glaring display of public stupidity as reported on yahoo:

Senate Republicans blocked a proposal Tuesday to tax the windfall profits of the largest oil companies, despite pleas by Democratic leaders to use the measure to address America’s anger over $4 a gallon gasoline.

The problem here isn’t that Congress failed to tax the oil companies.  The problem lies in attempting to rewrite laws after profits have been made in order to save face, which is what the Democrats did in this case.  If the oil companies are involved in price fixing, market manipulation, profiteering, or other schemes reminiscent of the Baronies of old, then publicly accuse them of such crimes and penalize them appropriately.  Imposing an unwise tax that will inevitably get passed on as yet another increase in consumer prices does nothing but score political points among the “easily gullible” constituency.  It will not alleviate the problem of oil dependency, nor will it address the inadequate supply or the overwhelming demand.  Quit complaining about how much money they made within the system you politicians dreamed up, and fix the system itself. 

This, alas, is what politicians do.  Address the symptoms, not the problem.  They roll all of the bad ideas into the same bill as the good ideas and succeed in getting none of them passed.  Brilliant

Separately, Democrats also failed to get Republican support for a proposal to extend tax breaks for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. The tax breaks have either expired or are scheduled to end this year.

At a time when we are gasping for energy amidst record worldwide demand, investment in alternative energy resources is one of the wisest tax incentives I can think of.  Yet because it was bundled with the bungled “record profit tax,” these tax incentives are going to expire, leaving researchers at the end of the proverbial rope. 

The Republicans are just as complicit in this idiocy as the Democrats, if not moreso.  The overwhelming sentiment among many Republicans seems to be that if we allow drilling in ANWR, then *poof!* we will have an instant fix to the fuel crisis.  (In other words, let’s go back to blaming it all on Bill Clinton.)   

Did you see me roll my eyes just then?  Next Republican to say ANWR/Clinton to me gets slapped for stupidity.  Fair warning. 

Unless you believe the ultraconservative accounts that say “drill all over the damned place, and we just might find some more oil up there,” the by even the most truthful and optimistic estimates, ANWR contains only enough oil to supply us for about twenty years.  And that’s

  1. after the drills start and the supply line is established
  2. if the oil pipeline proves defensible considering the length it will need to be
  3. if, and only if, we have increased domestic refining capacity.  The last domestic oil refinery here was built in 1976.  When I was 3 years old. 

As with most problems facing Americans today, our solutions are not all or nothing, but that’s the tenor set by our Congress.  ANWR is not the only place we can drill, and the dangers to wildlife are slimmer when we are willing to consider offshore drilling.  As George Will points out in this ridiculously slanted column in the Washington Post,

Offshore? Hurricanes Katrina and Rita destroyed or damaged hundreds of drilling rigs without causing a large spill. There has not been a significant spill from an offshore U.S. well since 1969. Of the more than 7 billion barrels of oil pumped offshore in the past 25 years, 0.001 percent — that is one-thousandth of 1 percent — has been spilled. Louisiana has more than 3,200 rigs offshore — and a thriving commercial fishing industry.

So while the Chinese and Cubans drill oil 60 miles off the Florida coast (some of which may be flowing from oil fields deep beneath territorial Florida), we stand by and do nothing but complain about how the Arabic countries in OPEC aren’t drilling to give us enough of their oil for a cheap price. 

Funny.  I don’t see anyone telling Ferrari that their cars are too expensive, so they should make more and sell them for a cheaper price.  And that any investment in efficiencies they make from now on (and that we so obviously, desperately need) is without tax incentives that we’ve been promising them.

Probably because that’s more obviously stupid. 

Advertisements

11 thoughts on “How Crude

  1. Right. I’ll believe that Democrats are interested in “alternative energy” the day that they have Ted Kennedy publicly flogged for opposing a wind farm.

    Meanwhile, we sit on billions of barrels of oil in the Gulf, off the California coast, and in shale formations in Colorado and North Dakota, not to mention ANWR. Furthermore, thanks to Democrat meddling, we don’t even have nuclear energy to fall back upon.

  2. Your point on a windfall profits tax is right on. It’s a proven loser of an idea.

    Republicans seems to be that if we allow drilling in ANWR, then *poof!* we will have an instant fix to the fuel crisis.

    What Republicans have said that? And it’s a fact that if we had started drilling in ANWR ten plus years ago, there would be a greater supply of oil today.

    At a time when we are gasping for energy amidst record worldwide demand, investment in alternative energy resources is one of the wisest tax incentives I can think of.

    We are not gasping for energy in the least. You might gasp at the price but we have plenty of energy. And the best incentive for alternative energy solutions is high energy prices. That is unless you want more fabulous government incentives for things like corn based ethanol.

  3. And the best incentive for alternative energy solutions is high energy prices.

    Agreed. The greatest leaps in the production of fuel-efficient automobiles and planes came, not when the government mandated them, not when they were first produced, but when gas prices went through the roof in the early and late 1970s.

    The reason government needs to offer tax credits for alternative energy is because it’s vastly more expensive, both in terms of producing the equipment and in terms of lesser efficiency.

    Explain that one to me; the government is taxing — and thus raising the price — of the cheapest and most efficient fuel source to fund more-expensive and more-inefficient ones.

  4. NDT: As I think I adequately pointed out, there is more than enough blame for both parties. Here’s an idea: instead of spouting nonsense partisan crap about what “democrats are interested in,” how about addressing the points I made? I outright stated that the politicians don’t have a clue about an energy policy, and gave my thoughts on how we could go about developing a reasonable one.

    For the record, and much to my brother’s chagrin, I am FOR nuclear energy. I am also strongly in favor of solar and wind energy. Wind farms are one of the brightest ideas I’ve seen in a long time. Why are you injecting what Kennedy thinks? I already said my bit on politicians.

    John in Il, is that even if we did drill in ANWR, it would only be a stopgap measure. We need to develop alternative energy for the future. Fossil fuels aren’t limitless, and it’s just plain shortsighted to act as if they are. In the short run we do need to drill more and refine more–but we can’t act as if those are long term solutions.

    I do not buy the argument that there is no energy crisis. And I’m not solely talking about the price, either. Developing countries are competing in the global market for the supply of fossil fuels, driving up the price. But since it’s been practically ceded that we won’t halt our population growth, then we need to push energy independence not only for ourselves, but for those developing countries as well. The crisis is whether we fall behind other countries, or take the lead in developing energy producing technology that lessens our dependence on other nations.

    If we continue to only think about our own energy use in the short run, then we’ll be well and truly screwed in the long run.

    NDT, your assertion that alternative energy is “vastly” more expensive is true in the short run, but not over the next twenty-year span. Many of these newer technologies have been proven to pay for themselves. Solar panels have come a long way since their inception, and many power companies will let you sell back your excess energy generated, and in the long run you end up making a small profit. True, the initial investment is high, but the energy independence of the individual is achievable to some extent through these newer technologies.

    Which is one reason why I support tax incentives for energy technology. Solar panels are currently beyond my financial means for purchasing to use at my house. However, if there was some program (and I’d be happier if it was sponsored by the power companies rather than government) that helped me install solar panels, then pay them back (with appropriate interest) through sellback of excess solar energy captured, eventually I would end up owning the solar panels and the program itself would have long-term profit generation.

  5. However, if there was some program (and I’d be happier if it was sponsored by the power companies rather than government) that helped me install solar panels, then pay them back (with appropriate interest) through sellback of excess solar energy captured, eventually I would end up owning the solar panels and the program itself would have long-term profit generation.

    You could do better more effectively and quickly by simply changing out the lightbulbs in your house, unplugging or interrupting the power to “vampire” appliances when they’re not in use (and buying more efficient ones to replace them), drying your clothes on a line rather than a dryer (assuming you have an electric dryer), and shifting your periods of peak power consumption to off-peak times, just to name a few.

    That way, you’re also not stuck with a solar system that requires exotic and expensive parts, the annoyances of having to hook and unhook from the grid, and so forth. Furthermore, you’d be reducing the amount of energy you actually use, versus using the same amount of energy while paying more to get it from “renewable” sources.

    Gee-whiz technology is nice, but honestly, it’s better left to the power companies, who can afford massive solar arrays and whatnot to actually generate some meaningful power and can capitalize this over the decades that it actually takes to pay off. The best thing people can do on a home and office level is conserve.

  6. I do not buy the argument that there is no energy crisis. And I’m not solely talking about the price, either. Developing countries are competing in the global market for the supply of fossil fuels, driving up the price.

    So it’s not about the price, it’s about the price.

  7. You could do better more effectively and quickly by simply changing out the lightbulbs in your house, unplugging or interrupting the power to “vampire” appliances when they’re not in use (and buying more efficient ones to replace them), drying your clothes on a line rather than a dryer (assuming you have an electric dryer), and shifting your periods of peak power consumption to off-peak times, just to name a few.

    Thanks for the lecture, but those are all things I’ve already done (and do), so I don’t see how it would be “doing better.” As for “exotic and expensive parts,” you really need to get up to speed on the latest technology. Where it cost my grandfather over ten grand 20 years ago for just a few panels, the new ones from GE, which are more efficient and longer lasting are less than $1300 today. And there’s no need for “hooking and unhooking from the grid.”

    Welcome to 2008, Contrary Mary.

    Frankly, my desire is to be off the grid. I don’t find Green Homes desirable because they’re de rigeur, but because they’re smart. Geothermal heating systems, gravity-fed water systems, and solar panels help comprise the smart, sustainable housing of the future. With lower bills for the homeowner.

  8. So it’s not about the price, it’s about the price.

    Perhaps it wasn’t clear from the way I worded it: it’s not about the price today, but it is partly about the consistently rising prices we face in the future as world growth demands more energy. What we do now to change our own energy paradigm keeps us from being pigeonholed in the future by a foreseeable incapacity to supply our own energy sources.

  9. You may wish to read about the winery cited in the GE link you provided, Jamie, especially the cost.

    And I live in 2008. I’ve merely done a bit more research on the topic, mainly because a) we pay among the highest electricity rates in the country already and b) the water heater needs replacement, and there are incentives to install solar ones. However, it all boils down to this; it costs me more money and forces me to be more inefficient to go “green” than it does to simply be more intelligent in use with the energy sources that are already there.

    The world has not stuck with fossil fuels for so long because we hate solar. It’s stuck with them for so long because they are cheap, readily available, easy to produce and transport, and provide an enormous amount of energy for their weight and complexity. The reason we have a problem now is because the bill is finally coming due for dubious environmental feel-good schemes versus expanding US energy production.

  10. Um, here’s the cost. I did my research, and have been looking into purchasing solar panels since I bought the house. And my interest in them started when my grandfather bought them two decades ago. It’s not like I just hopped on this train today, dude.

    And I readily admit that fossil fuels are cheaper, but they are not unlimited. You are simply incorrect in stating that they are “easy to produce and transport,” particularly oil-based fuels. Crude oil is just that: crude. Refineries must be built specifically to deal with different grades and types of crude, and take years to build. (And, as I admitted in the post, we do need more of them.) The pipelines are also expensive to maintain, and in this age of terrorism, to guard. Coal mines, as we’ve seen in recent years, are notoriously dangerous and extraordinarily expensive to insure workers for. So you might want to keep doing your research.

    To reiterate, however, I never said “abandon all fossil fuels now.” What I said was that we need to encourage alternative sources of energy that are easily renewable and allow for energy independence, not just for the country, but for the individual.

    I’m all about self-reliance in this (and many other things.)

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 )

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s