Donald Lambro: Energy charade

Due to the press of work in the lab, I have not commented on some good commentaries I have read of late. I will direct your attention to a fine commentary by Donald Lambro this last Monday, published in the Washington Times, for which he is chief political correspondent. It is entitled "Energy charade." Lambro discusses the total emptiness of the Democrat energy plan which encourages lawsuits against OPEC countries and would put a so-called windfall profits tax on U.S. oil companies, while not allowing the production of additional U.S. oil and gas or the building of oil refineries. He quotes Republican Senators Kay Bailey Hutchison of Texas and Bob Corker of Tennessee, who note the tom-foolery of the Democrat energy plans.

He recounts how Ronald Reagan responded to high oil and gasoline prices by deregulating the oil industry, allowing more oil wells to be drilled, and allowed pipelines to be lengthened. We produced our way out of a high price and shortage situation brought on in good part by Jimmie Carter and a host of restrictions during his presidency. Then Republicans passed legislation to drill in ANWR, but President Clinton vetoed the bill. Sen. Hutchison says that the passage of that bill would have produced the same amount of oil that we import from Saudi Arabia every day.

Democrats use a counter argument that replacing this much Saudi oil would not drop the price of gasoline but a few pennies at the pump. They seem to like false calculations based on simple proportions to calculate savings, but this is not how pricing for gasoline works over short time periods such as we are experiencing now. Right now, most people are not in a position to respond to high prices by trading in vehicles using more gasoline per mile to obtain one using less. The price situation is not quite such that if gasoline doubles in price then everyone will respond by using half as much. But people do respond with some cut-backs even in the short run. Still, the demand is a bit greater than the supply, so the price is being bid up sharply so fewer people can afford to use gasoline and fewer companies can transport goods and services at a profit. Thus, it may only take a modest increase in supply to make a bigger decrease in price in many instances. In addition, there are those who claim that there is much more oil in the North Slope of Alaska than the amount commonly banted about as proven. If the oil companies are freed to develop the oil fields there, they are likely to deliver much more oil than the Democrats say they will.