Despite a recent rise in oil prices, they are still quite low compared to last year’s painful run-up. Our politicians, therefore, in their usual short-sighted wisdom, have decided that there is no urgency to pursue new oil. This will likely set us up for another price spike.
While low prices and excess capacity sound good, they could vanish like the morning dew. The long lead times, up to a decade for a new field, needed to expand capacity and replenish supplies should compel us to drill like there’s no tomorrow — for there might not be.
Oil will continue to be a big player in our energy mix no matter how many windmills we tilt at or how many clown cars we place in front of 18-wheelers on our interstates.
But these are not the lovable Captain Jack Sparrow variety, unfortunately.
“Ask Big Oil,” says Scott Mayerowitz of ABC News. He points to the oil companies’ deep pockets, fleets of helicopters, and years of experience dealing with hurricane evacuations in the Gulf of Mexico. The closing interview with an oil company engineer, James Kovacs, however, hints of another reason:
Many times over those years he was evacuated off rigs and platforms. The process, he said, “was pretty routine.”
“They’ve never left anybody out there. Everybody’s always been off when a hurricane hits,” Kovacs said. “The oil business is very on top things.”
So what if the government was responsible to evacuate the rigs?
“We’d still be out there,” Kovacs said. “They’d have the TSA [Transportation Security Administration] guys out there inspecting our bags.”
Private enterprises learn to be efficient, or they go broke. Governments have the luxury of ignoring that principle, so efficiency is the exception, rather than the rule.
So says today’s Telegraph:
The great “oil up” story has finally revealed itself not as the fundamental reflection of scarce supply that its adherents liked to claim, but as a simple, speculative bubble that was always going to burst.
I told you so.
Hats off to ABC’s George Stephanopoulos, who repeatedly hammered House Speaker Nancy Pelosi on her refusal to allow an up-or-down vote in the House on the offshore drilling issue. Pelosi weaved and dodged and tried to shift blame on the evil Republicans, but Stephanopoulos refused to be distracted, repeating the same question over and over again. Pelosi came off looking like a fool.
Either ABC has suddenly turned into an agent of the RNC, or Pelosi is so out of touch with mainstream America that even the media can see it.
Once again, the screaming headlines are designed to get a weary public up in arms over the “obscene profits” of the evil oil companies. See, for example, this headline on yesterday’s Drudge Report: “RECORD: EXXONMOBIL: $11,700,000,000.00.”
But look closer at the facts: Yes, ExxonMobil had record profits last quarter. But they also paid record taxes. Mark Perry provides this chart to put things in perspective.
Now if a $11.68B profit is “obscene,” what label should we attach to the government’s take?
Daniel Henninger in the Wall Street Journal comments on the breathtaking stupidity of America’s unwillingness to drill our own oil during a time of global energy shortages.
While other nations use their oil reserves to attain world status, we give ours up. Why shouldn’t they conclude that, long term, these people can be taken? Nikita Khrushchev said, “We will bury you.” Forget that. We’ll do it ourselves.
Instead, our politicians shove each other to be the first to whack the very ones who could get us out of this jam — the oil companies — if we would let them.
Surely, the American public will someday wake up and realize what our political class is doing to our nation’s future, and throw the scoundrels out.