Saturday, May 24, 2008

Big Oil Is Not the Problem, It's Big Government

Congressional ignorance of basic laws of supply and demand is at once bizarre, breathtaking and frightening. For example, in a speech delivered by New York Democratic Sen. Chuck Schumer on May 13, he urged the U.S. to force Saudi Arabia to pump a million barrels a day more of oil — which Schumer claimed would slash the price of crude by $25 a barrel.

What Schumer didn't say was that 1 million barrels is exactly the amount of extra oil the U.S. would today be pumping if President Clinton hadn't vetoed drilling in the Arctic National Wildlife Refuge in 1995. Despite this, Schumer still opposes drilling in ANWR.

One of the oil business's dirty secrets is that only 6% of all reserves are controlled by investor-owned oil companies such as those demonized by Congress. The rest are controlled by governments, one way or another. And 11 of the 15 largest oil companies are government-owned. Government is the problem, not "Big Oil."

~IBD Editorial


At 5/24/2008 11:02 AM, Anonymous Anonymous said...

My opinion is that the US policy of not using extensively natural reserves at this point is right. Why drilling and pumping oil to sell it at $130 or even $200 a barrel to US refineries/consumers when the US can sell this reserves in the future at a - who knows - much higher price while dominating the energy field?

Using own resources at this point is not a prudent startegy for the US. It is not a prudent startegy in a game when your oppenents are willing to sell diminishing resources for short-term gains while there is certainty about a future shoartage. Let the nations deplete their own recourses and then come back and collect the money in the future at a much higher rate. Actually, whatever Americans pay at this time they will collect back many times in the future.

Simply said, I think Clinton was corerct to sign the bill and preserving those resources -- using whatever excuse -- secures a dominant position of US in the future and more demanding times.

At 5/24/2008 12:49 PM, Blogger Kraut said...

Yeah ... because Clinton was really thinking about conserving the resources for the future?

At 5/24/2008 1:30 PM, Anonymous Anonymous said...

E. Harokopos-

You are kidding right?

At 5/24/2008 5:42 PM, Anonymous Anonymous said...

To Kraut:

Yes, I suspect Mr Clinton was correctly adviced. As far as I know, US longer term policy relies on the input of several prestigious think tanks.

To anonymous,

This is a serious issue to be kidding about. Think about it: Converting worldwide economies to alternative energy will be a costly and time consuming endevor. It is unlikely that it will be done on time before oil reserves show sign of serious depletion. By that time the price of oil will be a lot higher, to say the least.

Basic economic decision: why wasting own resource when you can buy it now cheaper and then sell your stock at multiple price in the future?

Or even avoid economic collapse using your own resources while others face energy chaos?

At 5/24/2008 6:17 PM, Blogger Craig Howard said...

In early May, Schumer claimed that oil from ANWR would only reduce oil prices by a penny. Democrat math, I guess.

At 5/24/2008 10:39 PM, Anonymous Anonymous said...


Come on you sheeple
Schumer is a politician and a member of the opposition.

Who here can verify that increasing the worldwide production by 1 million barrels per day would reduce the price by $25.00 per barrel?

If oil is selling at $135/barrel what good is a $25.00 reduction to anyone?

If you elect me I'll give you all free gasoline for a year and pardon your parking tickets at the end of my second term.


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