Democrats Hot Air Energy Plan
With the price of oil hitting a record high this week, I figured it was about time to point out some of the maddening inconsistencies in the opposition's current policy. The Democrats are demanding (more) hearings with oil executives in regards to price gouging. They also point to Exxon-Mobil CEO Lee Raymond's huge, recently exercised retirement package as evidence that Big Oil is screwing the consumer and lining its own pockets. The question I have for Messrs. Kennedy, Kerry, Wyden and Reid is as follows: Who exactly is screwing the consumer to line their own pockets, Big Oil or Big Government?
For better or worse, the Democratic Party has made a major policy issue out of protecting the environment. This can be done in one of two ways; we can either curb our dirty behaviors, or find cleaner ways to do them. Because it is the dirtiest industry we have, the energy sector is the most frequent target of the greens. Through taxation and legislation, we have regulated the amount and means by which energy can produced in this country. In practice, that means we have severely limited the capacities of our existing oil refineries and exploration stations while simultaneously requiring so many initial costs on the creation of any more that we have had less than a dozen built of either in the last 30 years. In addition, each state has the right to limit certain toxins in their gasoline, meaning our few refineries need to produce over 20 different types of gas. If that wasnt enough to curb production, we simply tax the shit out of all refined fossil fuels on both the federal and state levels to try and limit consumption.
To all the economists out there: Environmentalism moves the energy supply curve to the left. What does that do to price and quanity?
I dont know enough about the environment to know if these are good, or even worthwhile policy directives, and I do know enough about politics to avoid giving all the blame (or credit, as the case may be) to the Democrats. To their credit, the environmentalist movement in this country has been one of the best organized and politically diverse lobbies in America, and for that they deserve commendation; what other interest group in America encompasses members of the NRA and Green-peace? They have successfully convinced both Republicans and Democrats of the validity of their ideas to the point that their two most visible successes (Creation of the EPA, Clean Air Act) of the past 35 years were signed by GOP Presidents. Despite my tepid opposition to most ideas espoused by the greens, I have to admire their stunning success in influencing American energy policy for 2 generations. They set out to limit supply in both production and consumption and have been stunningly successful in convincing politicians of their merits.
While the GOP has been involved at times, no reasonable person, whether Green or Big Oil, would say that the Republican Party has led the environmentalist charge. In the few times they have capitulated, they have been dragged kicking and screaming.
And here's the rub: The people who have followed the dogged course of environmentalism are now the ones screaming the loudest about gas and energy prices. Am I the only one bothered that the very people who have contributed to the outrageous surcharges we pay for energy , are the ones screaming the loudest about its current price? (Less than 50% of the price of a gallon of gas is oil, the rest is taxes, refining and transportation costs) Worse still are New England Democrats who consistently vote to tax home heating oil, then demand the other 44 states help us pay to heat our homes in the winter because the price is so damn high. My own Congressman, Bill Delahunt, a man who has never seen an energy tax he didnt like, felt the need to beg Venezuelan President and near enemy of the US Hugo Chavez for help for my districts energy costs.
This is why no one is excited by the Democratic party anymore. For 40 years they have had a policy which they have implemented with stunning success, yet they refuse to even take credit for it, for fear of mild political backlash. Go back and listen to Algore's speeches. He specifically calls for raising taxes, thus prices, on energy to protect our atmosphere. If that's your policy, stand up for it, and defend the consequences as necessary for the stated goal. Dont try and create a boogy man out of Big Oil. Anyone who grew up in Texas will remember the late 1980's when the price of oil was literally so low that it cost more to take it out of the ground than it did to buy it and entire communities (and one of W's failed enterprices) collapsed. If Oil Companies could control the price of their own product, we would have seen them use that power then.
Simply put, there are two causes for high gas prices; world demand has surged, and through regulation and taxes, enviornmentalism has raised it past simple supply and demand. It is my sincere hope that those responsible for the latter will simply acknowledge their success and keep their mouths shut the next time market forces drive gas prices higher.



