“Anyone who tells you that we can drill our way out of this problem doesn’t know what they’re talking about or just isn’t telling you the truth.” President Obama said this to a group of students at the University of Miami; he was talking to them about energy policy. The problem is, he is very wrong. I’m not sure if he knows he’s wrong and consciously misleading the students for political reasons, or if he honestly believes that there is essentially nothing that he can do. I don’t like the president of the United States of America having either flaw. Incompetence is unacceptable and consciously misleading a group of students is unethical.
As Obama says, oil is sold in a global market. There is, however, a debate as to whether the price of oil on the global market is driven by speculation, or supply and demand. While you can get economists to argue both sides, it appears that the majority of economists arguing speculation are in league with either OPEC or the Obama administration, while those arguing supply and demand tend to be more aligned with searching out the truth.
To clarify, OPEC wins if the price of oil stays high, and therefore gains by blaming speculators. The last thing Obama wants is to increase the supply; therefore, he also wins by blaming speculators.
Regardless, the oil refineries are forced to purchase crude at the price dictated by the market; this increases the cost of gasoline and other fuels they are producing. However, since oil is critical to our civilization, countries around the world, including America, are forced to pay the going price.
What’s the solution?
Obama suggests that we invest millions in developing technology to turn algae into fuel. I don’t know if I’ve ever heard a more ignorant comment from someone who is supposed to be the leader of the free world, the protector of the socio-economic health of our country, and the person who stated a solemn oath to “preserve and protect the Constitution of the United States of America.”
He is essentially asking us to put up with very high gasoline prices for the next few decades until the technology needed is ready for mass production, the production facilities have been built and are operating at peak efficiency, and the infrastructure is in place. The first step alone could take a quarter of a century or longer.
As a futurist, I’ve been writing about the problem with alternative fuels for over 30 years. Back when the price of gasoline was $1.00 a gallon, I was telling people it would have to get to $5.00 a gallon before alternative fuels would be viable. What I didn’t account for was inflation. At today’s prices, gasoline will have to get to $10 a gallon before we will see a major shift to alternative fuels. And, even then, this price will have to be forced through government regulation and energy policy, because we keep discovering more and more oil, coal, and natural gas resources.
Back to, what’s the solution? Bill O’Reilly, wants government controls instigated. He likes to think of himself as a strong supporter of capitalism; however, whenever push comes to shove, he seems to opt for government control in one form or another. O’Reilly has chosen the speculator argument and he wants the Obama administration to clamp down on speculators and the oil companies. To paraphrase him, “This is our oil, they can’t just come and get it and then sell it to the rest of the world, thereby driving our prices up.”
It is interesting that Liberals believe O’Reilly and Fox News are in the pockets of the Republicans and Conservatives. As a true Conservative, I can tell you that not a day goes by that I don’t hear a number of statements on Fox News that make me want to scream at my television set. Lately, it’s been O’Reilly’s bloviating about the oil crisis.
All of the bloviating in the world won’t solve anything. However, the solution is as obvious as Obama’s ears. And, it doesn’t make a dam bit of difference if the problem is speculation or supply and demand; the solution is the same in both instances.
Currently, even though we are a major exporter of natural gas, we are not seen as a country with major reserves. This is true even though, potentially, we might have more reserves than any other nation on the earth; enough to last us another 600 years. What do you think would happen if we were to get serious about exploiting our total energy potential? What if we began serious drilling for oil in those areas where we would expect to find ample resources? What if we built the Keystone Pipeline that would enable us to move ours and Canada’s oil to our major refineries? What if we got serious about the potential that exists in our oil sands?
The answer is obvious. First, if the problem is speculators, just the threat of a major new supply of oil would drive the price of oil down dramatically and immediately. An economist friend of mine, Michael Ashton (Maestro My Ass!: How We Got into This Mess), put it this way, “Yes. I think a convincing commitment to an exploration/drilling plan, or a funded project to build a major pipeline from Canada, etc., would lower NYMEX prices at least, and immediately.”
Likewise, if the problem is supply and demand, the result would be almost identical. Contrary to popular belief, we wouldn’t have to see the completion of those projects before prices would begin to drop precipitously; just the threat of new major sources of oil, coal, and natural gas would cause OPEC and other oil-producing nations to rethink their commitment to high prices for a barrel of crude. The Obama Administration by design is doing everything possible to keep energy prices up. This is essential if you have a policy of supporting the development of alternative fuels at any cost to the society. However, these policies are extremely dangerous to our socio-economic health and fly in the face of his commitment and responsibilities as president of the United States. This is what happens when fanatics of any stripe gain power. The unintended consequences of their decisions are ignored and often disaster results. Of course, it wasn’t their fault … they can’t be blamed … after all, they were doing their best to save the planet from the selfishness of human beings.
Bottom line, we CAN drill our way out of this. And, I am far from the only person stating this obvious fact.
Obama’s personal beliefs as to what is best for society and the environment, as well as his fanatical base, will not allow him to take this course of action. It is critical for our country to have new leadership willing to pursue this course of action. Otherwise, most of us, along with our economy, are going to suffer.
The Moral Liberal Contributing Editor, Brad Fregger, is President and CEO of Groundbreaking Press and a lecturer (professor) at Texas State University-San Marcos. He founded three corporate-training departments (Mervyns Department Stores, Atari, and Activision), and was featured in Tom Peters’ book Liberation Management. He is the author of seven books, including: Lucky That Way – Stories of Seizing the Moment While Creating the Games Millions Play, Get Out of The Way! – You’ll Never Manage Your Way to Great Leadership, My Thinking Cap – Solutions for Global Crisis, One Shovel Full – Telling Stories to Change Beliefs, Attitudes, and Perceptions, Why Publish (book publishing) and, his latest, Why Does Anybody Believe in God? – An Essay on Creation. Brad has written and published articles at four influential, conservative websites: The Moral Liberal, Breitbart’s Big Peace, American Thinker, and America’s Right.
In addition, Brad has produced more than 50 videos, 60 books, 12 audio books, over 100 consumer and business enterprise software products, including the most successful computer game in the world (Shanghai) and the most played computer game in the world (the first commercial version of computer card solitaire).
Fregger holds a Master’s Degree in Societal Futures from San Jose State University. Read Brad’s full bio here.
Email Brad at: [email protected]
Copyright © 2011 Brad Fregger.