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Why is price of oil coming down? (08/10/2008)
By John Edstrom

Recently, our office received a press release from the office of Tim Walz, our Democratic congressman from the First District here in Southern Minnesota. It was entitled, “Walz Votes To Expand Drilling, Bring More Oil To Market.” This was met, at first, with shock and surprise. Could Walz actually have defied his party’s leadership, Nancy Pelosi and Harry Reid, in order to bring more oil to the market and cut his First District constituents a break from $4 per gallon gasoline?

Actually, no. The release is a conscious effort to mislead the public about what the Dems and, therefore, Walz are up to. What Walz voted for is called the Drill Responsibly in Leased Lands Act (DRILL) and what it essentially calls for is oil companies, (Big Oil), to drill for oil where there is none, or not enough to be extracted profitably. The premise here is that bad, bad Big Oil won’t drill for $150 a barrel oil except where it will persecute the Alaskan caribou or threaten the surfer gals and guys in California.

The Democrats are the party of trial lawyers but, even so, you still would think they’d blush to advance such a perfectly stupid argument. It shows what a barrel they have gotten themselves over on energy policy – oh go ahead and drill then, except not where the oil is. I am sure that Congressman Walz will be grateful to party leadership for this modest fig leaf of political cover.

Meanwhile, we are coached by various Hollywood economists to believe that productive drilling for American oil would not bring down gas prices. They roll out charts to indicate that ANWR and offshore oil production would only bring prices down by 2 – no, maybe 3 cents a gallon, twenty years off, as if a bunch of actors could actually make such fine calculations. Yet even now, with only the threat that America will get serious about revving its domestic oil production back up, the price of crude has fallen back as low as $114 a barrel.

This is solid evidence that the recent runup in oil prices is based more on speculation than demand, the former, by definition, a betting on future prices. A serious commitment to ramping up future production will alter those bets downward immediately, as we are seeing. A perception that America will go the other direction will send those futures bets right back up into the stratosphere.

Probably the chief brake on the present U.S. economy is the run-up in gas prices which, in turn, depresses other consumer spending and fuels the inflation which makes the dollar worth less, tying the hands of the fed against raising interest rates so as to bolster the dollar. (Remember, a falling dollar is also a reason for higher gas prices.) It is a damaging spiral which only lower energy prices can halt in the short run.

Why are the Democrats, or at least the liberal, Hollywood wing of the party running the show, so willing to let this happen, and perfectly indifferent to the dilemma that Americans face, their own constituents for that matter, trying to make the family budget while paying $4 a gallon for gas?

Is it an honest concern for the environment? Why then, would they be promoting ethanol, a bogus product which ravages our rural Midwestern environment, sucks our aquifers dry, all the while pumping carbon into the air just like a fossil fuel, and driving up food prices worldwide? (Talk about an inconvenient truth.)

Why would they promote the well-being of Alaskan caribou in an area no one visits over the welfare of American citizens who live in their districts? Why is a frozen, barren arctic area more important than the immediate environment we live in all around us, never forgetting that there is no reasonable proof the caribou will be disturbed anyhow, nor that modern drilling techniques will harm that supposedly pristine environment. Why is it more important that Hollywood fantasists living in an urban sty should be able to imagine caribou thousands of miles away, while we here in Southern Minnesota should see our local environment degraded immediately in innumerable ways?

One is forced to conclude that the liberals poised to seize control of our government simply don’t want us to drive around in our own automobiles, at our own discretion. They look forward to energy and economic crisis as a means of extracting more money (read: windfall profits tax) and more control over everything. If you live in a green rural environment which is pleasant and beautiful, they want to force you into a gray, choked urban one, and once there, herded onto public transportation controlled by and run for the convenience of a public employee’s union. But don’t worry – you won’t have a job to go to anyhow.




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