The American Spectator

Jason| 11.26.08 @ 6:37AM

I suppose this delicate balance of interdependence keeps the world spinning relatively smoothly
http://rightklik.blogspot.com/

Martin Owens| 11.26.08 @ 7:24AM

There is an odd sort of comfort when one realizes at last that today, nobody, anywhere, really knows what they're doing.....

Daphne Kenward| 11.26.08 @ 8:26AM

If oil prices keeps going down, the Opec countries will reduce production, to stablise the prices. And when the economy pich up again, the demand will push prices up, but, it could cause another rise in oil prices, another drop in the value of the Us dollar, and create another worldwide economic crisis.

Glen Schorzman| 11.26.08 @ 9:17AM

Anyone who has studied the history of oil prices would know that the retreat to $40 oil was inevitable. OPEC has lost the power to set prices directly to the international finance community. (Does that give you confidence?) In reality, new development sparked by the $140 price spike, along with OPEC cheating will keep prices low for the next few years. The economic slowdown has reduced demand, and the high oilprices has pushed consumption to other energy forms, mainly coal. The comodity trading frenzy has subsided, which again foretells stable energy prices for the near term.

Jeremiah| 11.26.08 @ 12:27PM

About these falling prices:

The "drill baby drill" crowd claimed that unless we opened up our beaches and last wilderness frontiers to the oil companies, oil prices would spiral out of control.

They even chirped that Bush's attempt to open up offshore drilling had resulted in the price of oil dropping something like a nickel (and they claimed this as a major victory).

But what did we find? Were the oil companies and their cronies in Washington correct?

Naturally, they were not.

What happened reduce oil's price?

The steepest DECLINE in DEMAND in decades.

People are driving less, getting rid of their SUVs, and thinking about alternatives to the nineteenth century technology championed by Bush, Cheney, and the whole sick crew.

Drill, baby, drill.

Jeremiah| 11.26.08 @ 12:32PM

Re: the decline in demand

The decline in demand began long before the current economic crisis and even before it looked certain we would be heading into a recession.

It is true that an economic slowdown is also decreasing demand for energy (obviously), but the drop of oil prices was guaranteed as people have been changing their consumption for the past three years.

Back in the 90s, when oil was cheap, the evil liberals were laughed at when they warned about the consequences of building a fleet of SUVs instead of fuel efficient vehicles. I suspect quite a few families over the past five years wished they had listened to us tree huggers back when times were good. But learn they did, and the lesson learned may just secure us more reasonable fuel prices for a while.

Inevitably, though, world demand is going up and easily accessible supplies are going down. This price must go up.

Quartermaster| 11.26.08 @ 8:20PM

Yeah, baby, drill!

All we have now is a stay of execution. In a serious downturn, demand falls. When it turns back up, demand will rise, and so will the prices, again. The price trend since 1973 is in one direction, up. We can ameliorate the problem by developing here, and the Neo-Luddites will not changes things by their jawboning. The eco-maniacs have not offered no realistic solution to the problem, nor are they able. They remain in their pre-teen, idealistic mind set and will not let go no matter what facts are placed before them. We need to simply ignore them and solve the problems.

Jeremiah| 11.26.08 @ 10:26PM

Quartermaster -

Sounds like you've been given enough rope. Now go back and reread what you wrote, my friend.

Neo-Luddites? Luddites want to keep technology from progressing.

That's exactly what the oil cartels and drill baby drill crowd wants.

The price of oil dictated by the Middle East shouldn't amount to a hill of beans in the U.S.

We should -- yes, through taxation -- create a price floor that will guarantee investment in alternative fuels. Drilling on pristine coastline for oil that won't effect the long term price of fuel is about as foolish a thing as I could imagine.

This country can't leave it's energy policy to oil men and Sean Hannity anymore.

"Pre teen, idealistic mindset"?

Quartermaster, you clearly don't know what the hell you're talking about. Why don't you learn a little something about what's going on in the world.

Spikeytx86| 11.27.08 @ 5:06AM

Jeremiah-

I am all in favor of developing alternative energy and more fuel efficient vehicles. I live in West Texas; you can't go in any direction without hitting a wind farm. And this is in mean old conservative West Texas.

But even if we discover a clean, abundant, sustainable, and affordable energy source tomorrow, it would take at least 25 years for the vast majority of our fleet of cars, trucks, buses, and planes to be replaced. So in the mean time, we still need to be searching for a reliable source of crude oil for the next 25-50 years.

So that is why I support Drilling Offshore (which is done incredibly safely off TX, and LA gulf coasts), drilling in ANWR (the location of drill sites are in a barren tundra, far to the north of those beautiful photo's you see the media parade around about ANWR), and researching and developing technologies to develop our oil shale deposits and coal to liquid technologies. None of this would ruin the environment; it would give us a reliable source of domestic oil, and would garner the Federal Treasury tens of billions in taxes and royalty payments which could be used to fund Alternative Energy programs.

I and the vast majority of Conservatives are "All of the above" types. I think we should be pursuing every plausible path to energy independence and a cleaner environment.

I however would not support a "price floor" for oil. The market has worked very well. When demand was high and supply was tight, prices went through the roof, which curbed demand, and prices fell. This respite from high gas prices is giving consumers a much needed boost to their budgets, which will help keep the recession from getting too deep.

When the economy does begin to recover, and demand picks up again, the days of $1.50 per gallon gas will again vanish, to be replaced with $5 a gallon gas again. This cycle over the long run will foster energy conservation, and investment in alternative energy, fuel efficient cars, and next generation hybrids. This will lead in the end to more stable energy prices and an ever shrinking share of the economy devoted to fossil-fuel consumption.

The market has worked, and will continue to work.

Daphne Kenward| 11.27.08 @ 2:49PM

The philosophy of drilling for oil in America has consiquences, first you have the environmental issues, theres is global warming, the ice caps are melting, and will result in the sea levels rising.

I don't know if anyone remembers the Katrenia, but can any one imagin having two or three storms like that every year, it would cost so much in damages, I doubt any one would be able to get insurance in parts of America.

Then there is the question of loss of life, homelessness it could run into several billions per year. Many of these areas would never be re-built. Because the next year would be the same.

To survive people have to find a new way of life, now technology, shops built near communities, businesses built near where people live oposed to driving 200 miles to buy a loaf of bread, it's silly.

People get accustomed to a pattern and way of life and see change as a threat, change should be embraced, and we must learn and understand that we are not the only generation, but must provide away for future generations.

For example dealing with oil spills in the event of storms damage to oil rigs and platforms, could pose serious problems, to the environment and wildlife. There are some of us who think we as people are the only lifeform that needs protecting, but we must also remember we are also the most distructive. And dangerious life form on earth, and has the ability to destroy all form and source of life on the planet, we have to monitor our own behaviour.

Brent| 11.27.08 @ 6:07PM

Talk of using our resources Price Down,Force of Anti U.S. iNTELECTULAS Price Up. Drill everywhere,Mine everywhere Now! Now is not the time to consider childish and stupid wailing The "enviroment" dosen't belong to iNTELECTUALS only(use plastic toilet paper,use none at all people).

Jeremiah| 11.27.08 @ 10:20PM

Spikey --

I agree that a green economy (if we wait for the market) is decades away.

However, nineteenth century fuel is giving us nineteenth century problems. We just invaded a country and spent two trillion dollars (and killed tens of thousands of people) to ensure oil markets for the coming decades.

There is no such thing as a free market solution to a problem that has had everything to do with government from day one.

Do you think oil just appeared one day at a local market? The carbon economy is underwritten by the government now and always has been. The green one will be, too.

Now, about off shore drilling: there's no such thing as "domestic supply." As a Texan, you know better than to claim that oil can be produced in America for Americans. That's not how it works. Every drop of oil that is pumped enters a world market. The price is going to fluctuate, but ultimately it will go up with demand.

The "floor" simply gets us where we're going to go anyway sooner and ensures that we're not raped in the meantime by the oil cartel, whom conservatives seem to think is some all-American club.

The oil economy has propped up some of the most anti-American regimes in the world. More recently it's given us the least effective president this country has ever seen.

We can't go on this way, brother. It's time to enter the 21st century -- and that just doesn't have anything to do with internal combustion engines.

Spikeytx86| 11.28.08 @ 6:16AM

Jerimiah-

The Government can make all the mandates and regulations they want and finance all the projects they want, but regardless if we allow the market or the Government to dictate the direction and speed of the move toward a new energy economy, it will still take at least 25 years to fully transition (and this is a generous estimate). And that is if we had a cure all solution ready to go today. It would take decades for people to switch to the next generation vehicles and for the gas guzzlers to age out of used car lots. The only way to speed it up would be to buy every American a new next generation vehicle and scrap all gas guzzlers. Since spending $25,000 ea. to replace 150 million vehicles would be impossible to finance, we need to be realistic.

That is why in the meantime we need to be pursuing all possible avenues of increasing the supply of oil. We will need an affordable and reliable supply of oil for some time to come.

And I do know that our oil is sold on the world market. But the more oil we extract and sell on the world market, the less leverage those Anti-American oil states have over world oil markets. Not to mention that the export of that new oil would help reduce our trade deficit. And new oil production would bring more money into state and federal coffers which could be used to finance alternative energy projects.

Look, I am not saying we should not move toward a new source(s) of energy, which are also clean and renewable. Trust me; as soon as they produce a 100mpg plug-in hybrid that can go over a speed bump I will be first in line for it. I got nothing against saving money at the pump, cleaning up the environment, and bankrupting thugs like Chavez and Imanutjob.

And we can make the oil companies into the bad guys here, even though they don’t control the cost of oil, and though they have been making serious coin lately, many people seem to forget the years when they faced serious economic problems when the floor fell out from under oil prices in the eighties and nineties. We can continue to blame them. If making oil companies the scapegoat for problems caused by Oil Cartels and rapidly rising demand from China and India, then so be it.

Again, I favor an "all of the above" approach. We should be pursuing every alternative imaginable. And the Government in my view does have a role. Especially in financing promising energy alternatives that may not be profitable for some time without serious investment. This could be easily financed by eliminating a fraction of the nearly $1 trillion we spend in our shadow welfare state we call "Tax Expenditures".

And how does an "oil price floor" not favor oil companies? It pretty much guarantees them an artificially high price of oil.

Daphne Kenward| 11.28.08 @ 8:28AM

The problem with oil consumption as it stands today, Americans have never had to think about their attitudes, and their level of impact they have on the Global economy, and the impact their way of life affects the rest of the world.

America consumes 50% of the world supply and demand on oil. The fact America is using up more of the worlds resources, than any where else on earth. That makes America dependant on the Arab world to keep up their way of life, well for those who doubt what I am saying should go back to 1953, when America and Great Britain decided to invade Iran, in those days they could not accuse Iran of having Nuclear Missiles, they realised how huge their dependancy on oil was and increasing by the day, they robbed the Iranian people over turned their democratically government, to put in place some one who was willing to become a puppet of the west, and so doing gained control of the oil supply from that country forming British Petroleum (BP) so America and America has know for some time that if they are to survive economically they have to secure the flow of oil to the developed world.

Now if the developing world were to get some of the supplies to pecome productive, it would cause the price of oil to be very high. So people in the developing world could not develope and become industrialised. So the riches flowed to the west, plastic bags, polystyrene containers for McDonnalds and all sorts of things rappings, pre packed foods to feed 300 Million Americans and 470 Million Europeans, and other such stuf which requires oil to produce.

The west decided that China could produce goods much cheaper because of labour cost. And ship goods already manufactured to the west. As a result America began to decline, and Europe began to decline, they were no longer producers but consumers. The Jobs you could do became high tech, but America had not invested in education so jobs had to be moved to where the people with the ability were, or have them move to the US. Leaving millions in low paying jobs, and a falling living standard.

To prove what I am saying is true, lets look for a moment at the problems the west is facing, as a result, the decline in the economy, high levels of unemployment, people who were consumers have no money to consume, because of high unemployment, and America and Europe has nothing to sell to the rest of the world that China is not already supplying.

There is another side to the problem, the reliance on motor vehicles, America still has to buy oil from the Opec countries, or America come to a stand still, and the European nations, with the exception of Russia, who is a oil and gas supplier.

Suddenly all Opec countries are Axis of evil, the big question that no one ask is why?. With the exception of the Saudi's, I'll go back to that later.

The Americans and the Europeans realise that if something is done to garantee their supplies, when they can't afford to pay for oil will result in the stagnation of their economies, because they have no revenue to pay for their supplies, which is what took America to WAR with the Iraqi people, and the planned attack on Iran, this is to sure up their supplies, and the confrontations being engineered against the Russians, and Venezuelan's.

Further proof is that America and all of Europe is in a credit crisis, which affects their balance of payments deficits, and the leverage in way of credit with the rest of the world, this world I'm speaking about is the Arab world and most of which form the Opec countries, members of the oil producing nations. None of these countries have an economic problem, except for the Russians and Venezuelans, and even so their economy is not as bad as the rest of the European and American markets, reason is simple, they still have something to sell that is in demand, even though the demand is less due to the reduction of consumption due to the down turn in consumption, because of the recession.

Why was it so important that Obama won the election, it was because he knew what America and Europe is faced with, and the problem is the biggest since the 2nd world war and infact the 1st world war. The Media was on his side because he is able to recogonise what the problem is and is more abled to find a source or form of a solution.

Back to the Saudi issue, they have an agreement with the Americans, much the same as America has an agreement with Israel. The Saudies will supply oil to America and Europe in any time of crisis, if their country is never attacked by Europe or America, and Israel is not allowed to attack their nation.

Here is the porblem, the other Arab countries, are not happy that Saudi would have this agreement and not fall inline with its Arab neighbours.

The Saudi's with such agreements, have produced many people inside Saudi Arabia who feel disenfranchised, by the status quo, enough to feel that the Saudi Royal Families have sould out to the west, and when the oil is finished, there is a Royal House of Saud, who has paid little or no attention to the citizens inside that country, and have become extreamist, which is where the Terrorist come from, but America and Britian and other European states can do nothing because it is almost like cutting your own throat, because it is the only garanteed source of oil in the event of a WAR.

The whole problem the world is facing today is engineered, and to find answers, America has to find another source of energy, to get out of the trap they have forged for themselves.

Daphne Kenward| 11.28.08 @ 9:28AM

Few things I never mentioned, in the event of a war, I mean world war, no country at this moment in time, can fly war planes without oil. that is why George bush was paying $150.00 Us per barrel for oil reserves, in the event of a war that is the oil that would be used, and refueling war planes from positions in the gulf states, and India is important to America, Pakistan is another staging post, people in these countries who are seen as extreamist, are largely people who does not want their countries used as a staging post to attack what they see as fellow Muslims, or Moslems what ever, that is a part of the bone of contentions.

What appears as anti- Americanism, much of it can be traced back to American foreign policies. Many of these people are not anti American, it is more to do with what America does, many do not concieve that what America is doing is of any interest or benefit to them, because the people who are being attacked, are their fellow Moslems.

The Government in these countries go along with it, but the people who are acting upon what is agreed between the American Government and their Government is not in the interest of their popular ideology of what they see as Islam.

What ever is done in way of new technology will never solve the problem of flying war planes.

And many Muslims wonder why so much effort is spent on planning wars, by the Americans and the Europeans, and so little effort is spent on living peacefully with others in the world, it keeps raising the same questions, if Arabs and Muslims are the only ones being attacked, what does a Moslem do, who by and large want to live in a peaceful world.

Since the 2nd world war, all major wars have been waged in the Molsem world, by Christians against Moslems, so there is another problem. But it would seem to most of the rest of the world that Moslems have a problem, if the west want to depopulate their area, and in the African world they are being killed too, by famine and disease, and the invention of HIV AIDS, and more and more people life expectancy is 38 - 55 while in the west life expectancy has increased. Much of the developing world feels their are under attack, by western ideas, more so amongst Arab and Moslems, for example the idea of adultry, is not acceptable, but in the west it is. Prostitution is acceptable in the west not acceptable to Moslems.

Moslems do not wish to change their ways of life, and they don't accept western ideas or way of life and don't want it rammed down their throats, to them it's an afront to God, it's not their way of life, homosexuality is another problem they do not wish to adopt.

These people see their culture, way of life, and values under attack, and the truth is I personally feel that they should be allowed to live their own life and culture and maintain their values.

The fact is we need as a people to look at ourselves, even Christ said to the prostitute woman go away and sin no more, we should forgive people their iniquity, we don't have to shair in it. We don't have to shair their shame, but we have a duty to set standards to live by, we as Christians don't reach those standards, we choose to accept what we know as wrong according to the bible. We claim to be Christians, but have no Christian attributes, we ste no example, we think death and violent behaviours are acceptable, and force others to accept out criminal acts as normal.

What the Moslems are saying what the Government says is not necessarily right, there is a higher power who says it is wrong to kill murder and rape people because of their differences. AS Christians we should condem those behaviours wehre ever we find them, if it's moslems or Christians who proclaim they are God chosen Children who feel it is their God given right to Mass murder in Gods name. There is no such thing as Murder in Gods name if it's Palestinians, it's wromg if it's Blacks it's wrong. The good people in our society, have to let the government know they must lead by example. They are not elected to promote what is evil in society, but the best in our society.

Jeremiah| 11.28.08 @ 2:53PM

Spikey --

Let's look at an alternate history:

On September 13, 2001, President Bush and Congress passed an oil tax of 1.50 or so per gallon, leading to a total cost of 3.00 per gallon.

During the next seven years, consumption would have remained pretty much what it was. We know this because the raw price of oil sky-rocketed while demand continued to grow. Americans would have curbed their demand judiciously (and not precipitously, as they have for the past two years).

The result: hundreds of BILLIONS of dollars for the coffers of the United States government instead of for the coffers of Saudi Arabia, Iran, and Venezuela.

Because you have to choose. Conservatives have this bizaree hatred of the government -- so much so that they'd rather see American dollars shipped to OTHER governments than their own!

I don't and can't and won't understand it.

Creating a "floor" through taxes ENSURES the powerful investments required to transform the economy. The market will work if the market KNOWS that there will be some kind of pay off -- but not until then.

Meantime, we send billion dollar air craft carriers to the Gulf.

This is free market economics?

You know as well as I do that our entire foreign polilcy is calibrated to suit the convenience of an oil economy.

Talking about welfare: this has got to be the biggest most wasteful social program in the history of the world.

Money for Saudi Arabia? That's where the high jackers who hit us on 9/11 came from. These people fund terrorist organizations all over the world -- far more so than Saddam Hussein ever did.

Spikey, you sound like a reasonable man who knows what he's talking about, and I believe you when you say you are interested in alternatives. I also know that it's not as though oil companies are evil villains.

However, fueling an economy as large and dynamic as ours will always require government participation. The question is whether that participating stifles innovation and growth or not. From here on out, oil is a dead end.

Jeremiah| 11.28.08 @ 2:59PM

Re: Offshore Drilling

Obama did say that if it was PART of a total package to revamp the energy sector of the economy he would agree to offshore oil drilling.

I think you'll find he's more reasonable than he's being made out to be by some on the right.

I completely oppose offshore drilling -- not so much for environmental reasons as economic ones. In a sense this drilling would be one last little whimper of the oil compulsion -- something we've got to crush sooner or later. Why not now?

In the last two weeks we've seen that by reducing demand (driving less, especially) we can CONTROL the oil cartel -- rather than the other way around.

Bush's "Go shopping" philosophy resulted in a catastrophic mess.

We need to grow up, spend within our means, drive sensibly, and develop a culture of prudence and frugality rather than conspicuous consumption.

Now I have good friends in Texas. I know that down there a person doesn't just hop on a subway as an "alternative," and that you need to drive. Fair enough. That's why I would think these changes should happen in a rational, controlled, steady, sober way -- that is, in a way completely opposite from how the market does things.

spikeytx86| 11.29.08 @ 8:42AM

Jeremiah-

You have to remember the economy then was in the midst of a recession, and 9/11 threw more fuel on the recessionary fires. An overnight $1.50 jump in Gas Prices would have greatly deepened the recession and a deep recession was the last thing we needed after 9/11 .

As for raising the Gas Tax now, I would agree to a phased in gas tax hike, as long as taxes on income and capital were reduced commensurably. I would much rather curb oil consumption, than curb productivity and capital investment.

And Conservatives are not Anti-Government, Libertarians are. I am against unnecessary Government, I.E. Big Government. The Government does have a role in certain matters; In fact I believe the Government should be doing more in a few areas. I also believe the Government is doing, much, much more than it should. Especially the Federal Government. For instance, I am not against safety-net programs, but I am against them on the FEDERAL level. They are more appropriate on the State and Local level which is more responsive and adaptive to the needs of their people then the Federal Govt. could ever be.

And I agree, in the long run oil is a dead end. It is a finite resource (well technically it is a "renewable resource" if you have a few million years to wait) and we should be researching and developing technologies and energy sources that are renewable or inexhaustible.

I think where we disagree is in how we get there. You favor greater Government activism and market intervention to hopefully greatly speed up the transition to a renewable/green energy economy.

I favor allowing the market to work out the winners and losers in what will eventually replace our fossil fuel energy supply. I also favor allowing safe production where ever it is viable so we have a reliable source of oil to get us through in the meantime. I do favor some Government Action in encouraging the development of alternatives, like competitions with cash prizes like we do for some space and defense projects, block grants to universities and private firms to research and develop alternative fuels and next generation vehicles, and the current subsidies we give to wind and solar firms.

My main problem with your view is, Government mandates tend to backfire. Look at Ethanol. It takes more energy to produce then it generates, it cannot be sent through existing pipeline infrastructure, and it drives up food prices, and has already caused uncountable deaths in third world countries due to sky rocketing prices and corn being diverted to gas tanks instead of dinner plates. When the Government starts choosing winners and losers, it tends to choose the well connected lobbyists or listen to the voices of senators and congressmen who represent corn states.

We want to reach the same end, but we disagree on how to get there. Hopefully our elected representatives will be able to come up with a compromise that will satisfy both sides. More than likely though, they will come together to screw us both.

Ms. Know| 11.29.08 @ 2:56PM

The left-wing illuminati feel that they'll keep oil prices down by shaking hands with the countries who rob us blind with it, but that won't happen. Vote on the drilling please!

dennis| 12.1.08 @ 9:52AM

just a comment about the repeated reference to the 25 year period needed to make the transition to a new energy economy. the first arab oil embargo took place in 1973, 35 years ago, and letting omnipotent free market forces rule and burying our heads in the mideastern sand has now led us to a point where our choices are limited because we don't have the 25 years needed.