by Victor Davis Hanson
PJ Media
“They” Did It (Again)!
There are no “oil men” in the White House. So the Obamites cannot, as in the past, blame Halliburton, BP, or Exxon for rigging gas prices out of the Oval Office. Which leads to the question: why then are prices now climbing when the Bush-oil company connection is no longer the narrative? The new answer? “Wall Street” (e.g., the fat-cat bankers, corporate jet owners, those who don’t know when not to profit, etc.) raised prices.
But if true, who let them get away with that? The Chinese, who are scrounging every barrel they can on the world market? The Indians, who follow suit? Maybe it’s the Obama administration Treasury that has borrowed $5 trillion in three years, not only eroding the buying power of the world-traded dollar but also sending a message to oil producers that even more debt is coming and their petrodollars will only be worth less and less?
Or perhaps it is growing world tension, as in Iran, that caused the panic? But then who snubbed the Green revolution in Iran in the spring of 2009, sought “outreach” and “reset” with the theocracy, and leveled five serial demands to stop Iranian enrichment (or else!) to the point that Iran no doubt understood 2009-2012 was a once-in-a-lifetime exempt window of opportunity to get the bomb and to control the Gulf?
To paraphrase William Tecumseh Sherman, Obama might as well rail at the wind. The administration’s current panic mode arises because we are nearing $5 a gallon. (I just filled up two miles away in West Selma, with a supposed 21% unemployment rate and a per capita income of about $14,000, and the price today was $4.27.) It is only early March. Obama may blame Wall Street, but he is savvy enough to do the following calculus: by August, people will want to drive more than they do in March; the Chinese will suddenly not wish to buy less oil this summer; he has no federal leases that he approved in January 2009 that will be coming on line after three-and-a-half years; Volts will not be going into hyper-production mode [1]; and prices will only go up just as the campaign and the weather heat up. There is about an hour’s worth of Obama administration past quotes on gas prices that should make some interesting campaign ads [2].
High Gas Prices Are Good Bad
So what exactly is the administration’s reaction to skyrocketing gas prices? That should be an absurd question — except that we know administration officials are either on record as indifferent to the high cost of gasoline, or in fact hoping for higher prices.
Consider also the cancellation of the Keystone pipeline; the restrictions of new federal oil leases in the West, Alaska, offshore, and in the Gulf; Obama’s prior promises that energy prices would skyrocket because of his efforts to enact cap and trade; his boast to help Brazil out by importing its new offshore oil finds; his worries only over the abrupt rate of gas increases in 2011 rather than his desire for gradual, steadier escalation; Energy Secretary Chu’s various statements that high prices were not such a concern [3] and indeed that he wished to see gas reach European levels (e.g., $8-10 a gallon); Interior Secretary Salazar’s insistence [4] that even $10 gas would not open up new federal oil lands; and on and on.
I think that such words and deeds translate into some technocratic “never waste a crisis” dream in which we adapt to mass transit, begin to pile into Smart cars and subsidized government Volts, arrange our power use around the cycles of the Sun and wind, and in general consume far less as dictated by those in the technocratic overseer class, the waiting-Escalades-on-the-tarmac bunch [5] who by needs must consume far, far more to save us from ourselves. The financiers of Solyndra and other failed subsidized firms [6] are somehow exempt from the sorts of invective leveled at those who produce oil, as if we like those who lose our money and end up producing nothing but despise those who make a profit, pay taxes, and get us to work in the morning.
“Skyrocketing” for Thee, “Orchid-Growing” Temperatures for Me
I say technocratic because only those who work for government or live in larger cities or do not depend on driving vans, pick-up trucks, tractors, or semis could think it was wise for an oil- and natural gas-rich nation not to exploit fully its own natural resources. (Can any of you readers recall a civilization that in the past voluntarily chose not to exploit a valuable natural resource when it could be done safely, without damage, and to great profit?)
Whatever the level that the price of gas reaches, Barack Obama and Steven Chu and the technocracy won’t feel it all that much. Do you remember Obama’s first day in office when he abruptly ordered the temperature in the White House dialed up? (Had that “oil man” Bush been too energy-conscious?) David Axelrod himself complained that one could grow orchids[7] at Obama’s new presidentially mandated heat: “skyrocketing” prices for us, but orchid growing for the president?
Think of some of the ramifications of this faculty lounge policy (I use that term empirically rather than as invective, given I taught among faculty for 21 years). Americans must borrow even more billions to import ever-higher priced oil that enriches many of our enemies, all of which will be pumped abroad under far more lax environmental conditions than had we developed our own resources here at home. (What happened to “Planet Earth”?)
Increased gas costs will also simply transfer lots of dollars that might have been spent in America to foreign governments, and will curb consumer consumption of other goods in an economic downturn. Is the driving force then some philosophical desire to restrict crass American materialism in order to return to a preferable pre-carbon dioxide Golden Age past? And if so, are the president’s sudden complaints about high gas prices and considerations to draw again from the strategic petroleum reserve entirely cynical, in the sense that once reelected, he and Secretary Chu will accelerate their restrictionist policies in hopes of keeping gas prices even higher? (We are already halfway on the road to “European levels.”) Or of making subsidized Solyndra- and Volt-like projects at last viable?
Why would the president consider tapping the strategic oil reserve, but not start a breakneck effort at developing new sources? Is previously pumped oil less polluting; does it increase supply and lower prices in a way that freshly pumped oil does not? Does his mockery of “drill, drill, drill” suggest that “not drill, not drill, and not drill” is a wiser alternative? Does Obama realize that even an extra 3 to 4 million barrels a day produced here would earn the US billions in extra revenue and help to stabilize world prices by taking a commensurate amount of American demand off the world market?
The Strange Case of Dr. Chu
Give credit to Steven Chu. He’s not backing down and most recently reiterated to Congress that high prices are not much of a concern of this administration[8]. (But Mr. Chu: if they go up any more, you will soon be out of a job, yes?) In contrast, and faced with reelection, the president now brags that we are using less fuel and pumping more of it than when he took office. Again, examine that surreal logic: because unemployment is high and GDP growth low, there is less demand for gas, and that is suddenly a good thing? (Note how — for the first time? — Obama does not blame Bush for lowering gas demand as he had serially for causing the economic doldrums: “Bush wrecked the economy but I was smart enough to make it far worse to lower gas demand.”)
Then the president boasted further that domestic production is at an all-time high. Consider that weird reasoning as well: although he curtailed production on federal lands where there are now record levels of known oil and gas reserves, private industry has developed horizontal drilling and fracking — despite, rather than because of, the president — on mostly private land in the Dakotas and elsewhere. Is the reasoning, then, something like: “Congratulations to the oil industry for ignoring me”?
In sum, from January 2009 to January 2011 — in the pre-Climategate days before Al Gore was a “sex poodle” and when the Himalayan glaciers were to be swamps and polar bears extinct — new gas and oil production was considered “bad,” given that Obama was pushing wind, solar, and “alternative” energies. In those giddy cap-and-trade days, he could afford to pontificate because he was not up for reelection and world demand was sluggish, dropping oil prices at the wellhead. When the world economy began rebounding, demand picked up, prices spiked, and now Obama is in campaign mode: suddenly high gas prices are bad and he claims not that he wants his House-approved cap-and-trade bill pushed through his Democratically controlled Senate, but rather that all along he has encouraged private enterprise to drill while successfully persuading us to cut back our consumption (as if we did so because of the impressive oratory of Barack Obama rather than because he had managed to ensure millions of Americans now had no jobs to drive to work to).
The Omnipotent Mr. Obama
Why is it that Obama takes credit for the rebound of the stock market after the historic drops in September 2008, but sees the price of gas as extraneous in a way speculation on Wall Street is not? To say that gas prices have doubled under his watch is considered by sophisticates simplistic and reductionist, given all the factors beyond his control that contribute to such increases; to say that Wall Street has improved under his watch is to appreciate the brilliantly subtle and clever manner in which an omnipotent Obama has restored financial confidence and restored some of our lost 401(k) plans.
Obama keeps claiming that the oil companies are gouging us. Some of them may well be doing that; after all, they can profit well enough at the old $40-$50-a-barrel levels on about 45% of our supply produced domestically, and “need” not receive $110 for their Texas or Dakota oil at the world price. But such thinking assumes that we all should sell our product at less than we might to help fellow Americans. The farmer who produces almonds need not sell his crop at $1 a pound off the tree because he does not “need” such profits, even though he realizes that world demand has forced the price up (from the old $.75 a pound) that he could receive by exporting his almonds. In other words, everything produced in the United States that has the potential to be exported has a “world” price in this globally interconnected world, and the fact that oil does too does not make its producers inherently evil. We might as well try to convince this new generation of gold miners to sell their product to fellow Americans at $500 an ounce to help lower the deficit rather than to “gouge” us at demanding a “world” price of $1500 an ounce that is well beyond what they “need” to profit from mining.
So here we are: as gas keeps spiraling the secretary of energy simply cannot any longer remark on the resulting deleterious effects since he is on record that they are not deleterious. And the president has urged us to consider, in lieu of Neanderthal drilling, our sizable algae reserves (does algae grow in the US more abundantly than elsewhere?) in a manner that he once urged us to inflate our tires and “tune up” our electronic ignition cars.
So no worry: we have two Nobel laureates in Dr. Chu and Barack Obama to see us through.
URLs in this post:
[1] will not be going into hyper-production mode:http://hotair.com/archives/2012/03/02/short-circuit-chevy-volt-to-halt-production-for-five-weeks-1300-workers-to-be-laid-off/
[2] some interesting campaign ads:http://blog.heritage.org/2012/02/29/morning-bell-white-house-wants-to-keep-gas-prices-high/
[3] high prices were not such a concern:http://townhall.com/columnists/victordavishanson/2011/04/28/are_sky-high_gas_prices_good
[4] Interior Secretary Salazar’s insistence:http://pjmedia.com/eddriscoll/2011/04/21/obamaphenia-2/
[5] the waiting-Escalades-on-the-tarmac bunch:http://pjmedia.com/eddriscoll/2012/01/26/video-obama-greenfail/
[6] Solyndra and other failed subsidized firms: http://blogs.reuters.com/james-pethokoukis/2011/09/16/solyndra-the-logical-endpoint-of-obamanomics/
[7] that one could grow orchids: http://hotair.com/archives/2009/01/29/the-age-of-obama-heat-for-me-but-not-for-thee/
[8] are not much of a concern of this administration:http://ace.mu.nu/archives/327100.php