Blame Congress for High Oil Prices

What would Reagan do? In 1981 Reagan was faced with a similar problem, sky-rocketing energy prices caused by the dumbest President in US history, that dunderhead Carter -- Reagan deregulated oil prices and the oil companies freed up exploration, and triggered the biggest peacetime expansion of the US economy in history. What the Democrat Socialists are now trying to destroy. History is your friend, just not WikiPedia history, which is infested with liberal lies and liars.

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I think the WSJ article needs a slight refinement, it's not Congress, it's the Democrat Socialists in Congress that think they have found their nirvana with the global warming hoax. After restricting supplies of energy for 30 years, they finally have arrived at what they see as the 'fix'. Convince enough people to pay sky high taxes so government can pretend to control the weather. They don't even plan on spending the tax money collected on energy related items, but for things like the peace core and other liberal wet dreams like free universal health care, that infinite demand sump.

Gasoline prices are through the roof and Americans are angry. Someone must be to blame and the obvious villain is "Big Oil" with its alleged ability to gouge consumers and achieve unconscionable, "windfall" profits. Congress is in a vile mood, and has dragged oil industry executives before its committees for show trials, issuing predictable threats of punishment, e.g. a "windfall profits tax."

But if there is a villain in all of this, it is Congress itself. That venerable body has made it impossible for U.S. producers of crude oil to tap significant domestic reserves of oil and gas, and it has foreclosed economically viable alternative sources of energy in favor of unfeasible alternatives such as wind and solar. In addition, Congress has slapped substantial taxes on gasoline. Indeed, as oil industry executives reiterated in their appearance before the Senate Judiciary Committee on May 21, 15% of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits.

To understand the depth of congressional complicity in the high price of gasoline, one must understand that crude oil prices explain 97% of the variation in the pretax price of gasoline. That price, which has risen to record levels, is set by the intersection of supply and demand. On the one hand, world-wide demand has accelerated mainly due to the rapid growth of China and India.

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It has done so by preventing the exploitation by IOCs of reserves available in nonpark federal lands in the West, Alaska and under the waters off our coasts. These areas hold an estimated 635 trillion cubic feet of recoverable natural gas – enough to meet the needs of the 60 million American homes fueled by natural gas for over a century. They also hold an estimated 112 billion barrels of recoverable oil – enough to produce gasoline for 60 million cars and fuel oil for 25 million homes for 60 years.

This doesn't even include substantial oil shale resources economically recoverable at oil prices substantially lower than those prevailing today. In an exchange between Sen. Orin Hatch (R., Utah) and John Hofmeister, president of Shell Oil Company during the May 21 Senate Judiciary Committee hearing, the point was made that anywhere from 800 million to two trillion barrels of oil are available from oil shale in Colorado, Utah and Wyoming.

Oil shale becomes economically viable when crude oil exceeds about $40 a barrel, unlike ethanol which seems to never become viable, because of land and water use issues. Shale oil is called 'synfuel'.

Then there is the punchline ...

If Congress really cared about the economic well-being of American citizens, it would stop fulminating against IOCs and reverse current policies that discourage, indeed prohibit, the production of domestic oil and natural gas. Even the announcement that Congress was opening the way for domestic production would lead to downward pressure on oil prices.

Which is the key issue, the Democrat Socialist in Congress care about one thing and one thing only -- POWER. Get used to tyranny, it creeps up on you, especially when you are upset about what the tyrants want you to focus on, instead of what the real problem is.