Let's debate oil drilling.

I have all kinds of friends and some of these friends enjoy disagreeing with me. That's cool with me. Dialogue is the only way we're going to get things done, so bring it on!

A few days ago, my buddy Gnu sent me this article from the the New American.

He attached this note: "Please read the attached and let me know what you think. Me personally, it’s pretty much what I have been preaching for a year. I do not generally like the New American; it’s even too conservative for me, but this article looks at the big picture not just the band wagon attacks the media is hyping to death."

Read the article and you can pretty much guess what I thought.

This is what I wrote back:

Thanks so much for sharing this article with me - Yay for debate!

In the first few paragraphs, the author notes that the declining dollar is one reason for the high cost of gas and as I understand it, that’s a pretty indisputable fact. However, Mr. Yates does a disservice by laying the entire blame for this devaluation on the Fed (who, of course, deserves a hefty chunk of it) by neglecting to note that the economic policies of our current president, most notably the war in Iraq, have also contributed to the weak dollar by sinking the US economy into debt and reliance on foreign lenders. Check out this quote from politico.com:

“And why do we have a weak dollar?

“You can start with the economic policies followed by the Bush administration. During Bush’s 7 years in office, we have maintained large trade deficits with the rest of the world and run up large domestic budget deficits to pay for our misadventure in Iraq and large tax cuts for the wealthy. Also, according to a monograph recently issued by the Center for American Progress, the Federal Reserve’s low-interest policy has caused a 14 percent decline in the value of the dollar since last September.”

Anyway. Moving on.

It’s pretty clear that supply and demand account for a huge percentage of the remaining increase in gas cost and relying on unstable foreign oil producers is no way to have a functioning economy. But say what you will about our megalomaniacal friend, Huge Chavez - I would resist fiscal imperialism, too. Venezuela doesn’t “share the American vision of a free society based on the ideals of constitutionally limited government” – and I must note that Yates must mean “US” when he writes “American” – because the US has a history of meddling in governments throughout Central America in a way that can only be described as disastrous.

On page 13, Yates begins to demonstrate that the US has substantial oil reserves by quoting statistics from API, the American Petroleum Institute. API is “is the main U.S trade association for the oil and natural gas industry, representing about 400 corporations involved in production, refinement, distribution, and many other aspects of the industry,” according to Wikipedia. Let me say that I know Wikipedia isn’t the most incredible, credible source of information but this is not a research paper and it is clear that API is a lobbying agency that promotes the goals of the private US oil companies. Check this out, found in the above article: “API both funds and conducts research related to many aspects of the petroleum industry. The association has drawn criticism for promoting research aimed at contradicting the scientific consensus that use of petroleum products is a major cause of climate change, as well as for supporting researchers who lack proper scientific credentials. In 2001, the head of AOI’s “Climate Team,” Philip A. Cooney, became chief of staff for the White House Council on Environmental Quality, where he repeatedly edited official reports on the link between petroleum emissions and climate change in ways that made their findings sound less credible. Mr. Cooney had received no scientific training.”

Anyway, it’s clear that API is not the most reliable of sources. (They’re less reliable than Wikipedia, anyway, heheh …)

Gnu, I have to confess that this sentence in the New American article made me lol: “Well-funded environmental groups have thus far successfully fought the development of ANWR.” Well-funded environmental groups? You mean, groups that have more money than the oil lobby? Pff. Not bloody likely. It’s totally careless on Yates’ part to try to imply that those working to protect the environment are only succeeding because they have more funds than those in the business of making gas.

I also have to point out that when Yates mentions Hurricane Rita’s impact on oil refinement, he was correct to note that the storm messed up supply and that increased cost in the US. However, he is again being a little careless when he implies that the temporary disruption is what caused gas to shoot to $3 in a day. Really, it was the speculation that caused that spike – Folks anticipated a decline in supply and that anxiety fueled (so to speak … hah) an increase in price.

It’s true that government regulations and taxes add to the cost of fuel but these regulations and taxes have remained relatively consistent through the past five years and so haven’t contributed in any real way to the climb in price. Yes, they contribute to the price but are not the reason for the current rise in price. Capice?

Coal liquefaction is an entertaining idea, if you don’t consider the environmental devastation caused by the most efficient and economical methods of coal mining.

I really dig what Yates has to say about oil profits and the financial beneficiaries of oil profits. That’s right, I dug it. This is something that I am really interested in, especially after having heard of record profits in the refining industry. In American Public Media’s show Marketplace, one industry analyst noted that, “The intermediaries (traders, speculators) might be getting a dollar or two, depending on their management of it. But most of the money is going back into the producer's pocket,” meaning that the Saudis appreciate the high cost of barrels of oil, not the US oil refiners. This is something I’d like to look into more.

I find it ironic that Yates has the audacity to write, “The more competition there is, not just among oil companies but among energy producers in general, the harder they will work to innovate, economize, and hold down prices to consumers,” and then follow that sentiment with a call to destroy the “roadblocks to the development of energy resources” as though he were toppling a statue of Saddam Hussein. Innovation and exploration of a myriad of alternative energies and non-fossil-fuel-based technologies has exploded as the price of gas has gone astronomical. For the first time since the 1970s, we’re seeing a reduction in the use of gasoline among the American populace and a real interest in viable alternatives. This means that it is the high cost of gas, the difficulty in refining it, and the other problems with the industry that are actually promoting innovation as entrepreneurs recognize that fuel alternatives offer more opportunity. It seems counterintuitive and almost idiotic for Yates to argue that what we really need is “more of the same” and by that I mean a further reliance on oil. He says, quite matter-of-factly, that our society will remain dependent on oil for the foreseeable future and so, dear friends, let’s keep repeating the same mistakes we’ve been making since 1973 and keep fouling environmental resources to dredge up fuel that we can then use to keep fouling the environment. Even if I didn’t give a fig about the state of world ecology, his argument is short-sighted, misinformed, and mired in the past.

I’m not even talking about the dozens of estimates that claim that tapping the currently off-limits oil supplies in the US will produce only miniscule relief from the cost of gas and won’t even do that for at least ten years. I’m not even talking about the ecological devastation incurred with drilling or mining. And I’m not even talking about burning fossil fuels and its impact on global climate change.

What I’m talking about is a refusal to believe in a real change in the way our society and economy works. Sure, I’m a hippy-dippy optimist but even the most rational among us knows that oil is history. It is bad news and sometime, there won’t be any of it left to be news. Quite frankly, what we as a society really need to do is come up with a way to help the poor cope with the climb in price and cushion the transition as the US adjusts to a different way of life.

Your Friend and Hippy,

Becky

Gnu wrote back, saying, "I agree with much of what you say," and made it clear that we have much to discuss.

I can't wait.