Analysis and rationality in a nonrational world

June 28, 2006

Oil prices again

Filed under: Energy — analysis @ 7:12 pm

Whenever oil prices rise, you can bet that the talking points will go out and those crazy tree-huggers will be blamed, because to people like Ann Coulter, the truth is for other people. It’s hard to fight people like that, because normal citizens assume that if it’s in a book or newspaper, or on TV, or even on a web forum, it’s probably true, and that people would not intentionally lie. Unfortunately, lying has long been a part of public life; the Nazis didn’t invent the Big Lie, but they sure showed immoral people how to use it well. (Not to equate run of the mill American hatemongers and liars with Nazis, but they do share some methods.)

One of the reasons for oil prices rising recently has been speculation over Iran, Nigeria, and Venezuela. The latter country was the subject of an attempted coup by the US, which, not surprisingly, led to some bad feelings over there. Venezuela wants to get more money for its oil, which is hardly a terrible thing; wouldn’t you like the United States to get more money for its exported grain? I’d hope the answer is “yes.”

Bolivia recently nationalized its oil industry and apparently raised its export prices; Venezuela, which owns one major gas company, could do the same with what remains of private oil pumpers in its own borders. That is also driving up the price of oil.

The big factor, though, is really China, the world’s second largest consumer of oil after the United States, and despite all our SUVs and minivans, China is expanding faster in its oil use than the US, and is, like the US, doing whatever it takes to get oil rights across the world. Speculators know that.

Now, the fear-uncertainty-doubt people – those who use the term “tree hugger” and mean it – honestly seem to believe that environmentalists have caused all the oil prices to go up. They honestly believe it when they say that environmentalists capped the oil wells and won’t let oil companies open the wells again. They honestly think it’s horrible to keep that six months’ supply of oil in Alaska all cooped up just because of some spotted owls or something (normally these people are not very good at understanding the real ramifications of oil exploration and exploitation, and the fact that the spotted owl was just the only way to stop a certain area from being over-logged some years back has been rather exaggerated out of proportion. By the way, remember all that anti-environmentalism in the lumber industry, where lumber companies were claiming that the bad tree-huggers were killing American jobs? Those companies happily started moving operations to China when they got a better deal. Jobs meant NOTHING to them.)

Back to the point: oil wells are ONLY capped when they run dry, or at least dry enough to make it uneconomic to drill further. I don’t know of any environmental group that ever got an active well capped. Can you imagine the Sierra Club pushing around Exxon? With George W. Bush in the White House? Seems a bit farfetched when they can’t even get the Federal government to stop giving away national forests to loggers and mining companies.

As for Alaska, knowing what you do about the global security situation, don’t you think it might be nice to have some oil in reserve in case the Arab world turns against the US? Don’t you think serious domestic reserves in case of war would be a nice idea? Doesn’t anyone remember what happened in World War II? The Germans cut off our supplies of a number of key materials; only our cleverness and quite a bit of rationing got us through. In a guerilla war against a real power like North Korea, I suspect we could see some anti-tanker sub action. Be nice to have a pipeline, wouldn’t it?

Once they’re finished on the oil well straw man argument, they start on oil refineries and how environmentalists won’t let any new ones open. That’s baloney – because the oil industry has actually shut down a number of refineries due to financial underperformance (that means not making enough money, rather than losing money). In the 14 years ending in 2000, there was a single application for a new oil refinery and it was quickly approved. Another refinery has been proposed for Arizona; environmentalists have not blocked it, but investors aren’t providing enough money.

The number of refineries is now half of what it was in 1980, because of oil company mergers – not a single one was shut by environmentalists. Do you really think environmentalists would shut down existing facilities when they could be stopping new strip mines from destroying federal wildlife preserves, or trying to stop groundwater contamination across Northwest New Jersey, or any of the other high-priority projects that have come up?

ExxonMobil has plenty of cash for new refineries and wells if they wanted to build them – they bought back $5 billion of stock last year.

The United States currently uses nearly 21 million barrels of gasoline per day. The number of vehicles in the US is increasing faster than its population, and the weight of American vehicles has been increasing rapidly. Americans drove 1.4 trillion more miles in 2004 than in 1980, increasing miles driven by about 90%. Average gas mileage of vehicles has increased less than 5 mpg in over 25 years.

In the Great War, stickers were produced that asked “Is this trip really necessary?” Americans could greatly lower the price of oil by asking the same questions, but we’re in the entitlement society now. Gone is the sense of personal responsibility, replaced by hatred and blame. Point the fingers at tree-hugging environmentalist wackos. Never mind that the Congress, White House, and Supreme Court are now all right-wing controlled and would never dream of following the advice or requests of environmentalists. They’re still somehow in control. Just don’t ask how.

If you want to blame people for high oil prices, start pointing fingers at John Q. Public first, then maybe at China, though they’re just pursuing that American Dream we’ve been selling them. We have seen the enemy, and it is us.


Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in: Logo

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

Google+ photo

You are commenting using your Google+ 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 )

Connecting to %s

Blog at

%d bloggers like this: