Exploding energy prices, the falling dollar and the lack of will to stop it...

oil rig

March 14, 2008

As is evident when driving a car, taking a plane or just going to buy groceries -- energy prices are exploding. Every politician has their own view on this issue. However, the realities are quite clear when you remove the fog of all the political spin.

Petroleum energy is a commodity that responds to the demands of the market. As you learned in Economics 101, the basis of free markets is supply and demand. On the surface then, one may buy into the hysteria that supply is limited and therefore the prices are rising. However, there is one problem to that theory -- the world is pumping more oil today than ever before! There is no shortage of oil in the world. Untapped oil fields abound all over the planet. While oil and gas will eventually run out, that is certainly not the reason for today’s high prices. Just think about the 1970’s with the first great oil “shortage” -- all the politicians and pundits cried how we were at the end of our oil, that the wells were going dry. Chicken Little was screaming that the sky was falling and only extreme conservation would solve our problems! Then, by some miracle, in the 80’s and 90’s we were pumping more oil than ever and prices for energy were dropping.

This not-so-distant history should be remembered when one hears of today’s scenarios of “the sky is falling”. The key to supply and demand economics is free markets. Does anyone believe that oil and gas are really traded in a free market? Energy cartels adjust the price of oil to their needs. The government taxes oil more than any other commodity -- not only do we pay taxes on the refined gasoline but we pay the astronomic taxes that government imposes on the oil companies. Yes, the politicians will tell you that they tax big oil and not you. But really, can anyone be so naive as to think that this tax cost isn’t passed right to the consumer at the pump? To top it all off, governments adjust the money supply, printing money out of thin air and pegging currency values to suit their needs. When the US dollar hits a historic low against the Euro, what do you think happens to the dollar's ability to purchase oil overseas? Everyone talks about $100/barrel oil. But what portion of that $100 is the result of letting the US dollar slide into the gutter the last few years against all foreign currencies? Without changing anything else in the supply and distribution channel, a strong dollar would make this price $70 a barrel or less. Americans are not making a whole lot more than they were 10 years ago but the dollar is worth over 30% less. In essence, we are working more to make less than ever before!

One solution to this foreign currency problem would be to increase our domestic supply of oil, natural gas and refined gasoline. This sounds like a perfectly logical idea until you look at the facts. Government regulation and policy prevents the drilling of wells in many parts of the country. Getting a new well on line is a huge bureaucratic nightmare with every possible agency at the federal, state and local level wanting to get a piece of the action. Then, add unreasonable environmental regulations that become increasingly more costly and prohibitive for only a trivial improvement in the environment. The situation becomes almost impossible. The environmental regulations in the United States have gotten us something like a 99% improvement since they began in the 60’s. All of this has been at great cost but was necessary. Unfortunately, that last 1% that some people want to go after will result in almost immeasurable improvements, yet cost us more than the initial 99% did.

The United States is blessed with an abundance of energy... we just need the will to make use of it!

If it takes almost 10 years to get permission to build an oil refinery -- we will lose.

If we keep nuclear power plants off the table by making the regulations impossible to get through -- we will lose.

If we ignore all the coal and natural gas resources in the USA -- we will lose.

If we let free markets deliver energy without extreme government regulation, taxes and bureaucracy and if we stop playing games with the dollar to suit the few at the expense of many -- then we will break the back of the energy cartels and foreign tyrants and ensure our freedom!

If we refuse to drill in our own fields full of oil, but instead import foreign oil -- we deserve to lose!

What can you do?

Contact your Federal, State and local politicians and tell them to stop the spin and get real.

     --Make your vote count, check out every person you vote for and make sure they are grounded in reality.

     --Get involved, respond to ridiculous news articles and make your views heard.

     --Reach out to friends and neighbors and show them the truth.

Then... do it over and over again!








July 14, 2008

Oil is approaching $150 a barrel and gasoline is nearing $5.00 a gallon. What are we hearing from our fearless leaders in Washington? It's everyone's fault but their own. Republicans, Democrats it's all one political game and the people are the ones to pay. The spin continues as the rich get richer, the politicians pander to their benefactors and none of them care what the will of the people is. Why is that? Because the people have no will and the politicians have no fear of the people becoming united and calling them to the mat. Perhaps $10.00 a gallon gas will be the right fertilizer to grow the peoples spines and get them to make the politicians accountable, stop thinking Republican or Democrat, and start thinking about what's going to save us from ourselves.

November 1, 2008

The stock markets and banks of the world have imploded and governments are busily printing billions of dollars, Euro's and whatever else to put cash into a broken system. Due to the drop in these markets and people switching their investments into US dollars the Dollar has risen lately despite this massive currency creation scheme. This has caused the price of oil to drop along with some reduction in demand. However, this will not last. Oil prices will rise again soon and exceed the peaks reached in the summer of 2008. The continued failed policies of our politicians and the extremists that guide them will ensure it.

February 5, 2009

Our new president has repeatedly told us to stop driving gas guzzling SUV's, turn our thermostats down and that we have to give up our way of life to combat energy dependence and global warming. However, like all politicians and elitists these things only apply to the rest of us.

Telegraph.co.UK - Although Mr. Obama is famous for his "cool" demeanour, the temperature of the White House has been raised since he arrived – a result of the President's Hawaii roots, which made him favour an office so warm, his adviser David Axelrod joked to the "New York Times", that you could "grow orchids in there".

Really, he's lived in Chicago for over 20 years. What hypocrisy!

The First Post - This is just as well because another regime change is the temperature. Unlike his predecessor, who kept the Oval Office a bracing 18C (64.4 degrees F) all year round, Obama has cranked up the heating full blast.

We now understand that "change we can believe in" was referring to the temperature setting in the White House.


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