Tuesday, August 23, 2011

Economic Monkeywrench

Democratic candidate Obama promised energy prices would rise when he stumped to become president. It seems he is delivering on that promise, one campaign promise kept.

Since Obama has entered office, the price of a gallon of gas has risen by more than $1. The explosion last year of the British Petroleum rig in the Gulf of Mexico that killed 11 seems to have presented the President and his advisors an opportunity. Secretary of the Interior Ken Salazar has imposed a moratorium on oil exploration in the Gulf of Mexico, even though a federal judge has ruled Salazar overstepped himself. As a result of all this tug of war generated uncertainty, the number of operating rigs has dropped with devestating economic consequences to states already reeling from the BP oil spill. When Sen. Vitter[R-LA] requested how many leases have been issued, he received two different answers. The Department of Justice, in another display of dishonesty - Fast&Furious, quoted a high number of leases but when Sen. Vitter got Salazar before him in sworn testimony the number was far lower.

Far to the north, our Canadian friends and ally in Afghanistan is offering to sell us oil. Yes it is oil developed from tar sands and needs to be processed, but its oil that does not need to be shipped from repressive countries like Venezuela and Saudi Arabia. Help our neighbor to the north seems to make more sense than funding Chavez's quest to conquer South America or the House of Saud keeping women repressed. But it seems some in the US do not want this oil because, get this, the process to extract oil releases more carbon dioxide. It seems the New York Times would prefer Canada to sell that oil to the Peoples Republic of China, those paragons of air pollution and political oppression, instead of allowing it in the United States. All because of extra carbon dioxide that I am sure the forests of Canada would love to turn into oxygen while growing bigger. The second reason the New York Times trots out, fear of oil spills, is equally ludicrous since the Trans-Alaska pipeline in its decades of production has suffered few spills and one of those due to a hunter shooting the pipeline. In fact the oil pipeline has become a microclime that is warmer than surrounding areas and hence wildlife has flourished.

I never thought I would say this, but bring back Jimmy Carter. At least he was for making the United States energy independent when he was President. That included developing the abundant supply of oil shale found in Ken Salazar's old stomping grounds of Colorado. Though Salazar and environmentalists are trying to prevent oil shale from being commercially viable. Do I want to know what they think a fair royalty rate is? Probably so high it renders oil shale non-viable even after adjsuting for inflation. Imagine that.

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