America is way behind the 8-ball in terms of having a next-generation energy program. But instead of taking action, Congressional Democrats spent the day badgering oil executives about high gas prices and their personal compensation packages. Democrats like to talk about John McCain’s lack of economic know-how and not without some justification. But their own approach to energy policy practically screams out that they don’t know what they’re doing.
Mr. Durbin added: “Does it trouble any of you when you see what you are doing to us, the profits that you are taking, the costs that you are imposing on working families, small businesses, truckers, farmers?”
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“As repetitive and uninteresting as it may sound, the fundamental laws of supply and demand are at work,” said John Hofmeister, the president of Shell Oil Company. “Oil exporting nations, as has been said, are managing their natural resource development and production to supply their local and global markets in their own self-interest.”
Indeed they are and those interests are not merely economic, as we all should realize. In response to volatile world market conditions, Arjun Murti of Goldman Sachs says that oil is going to hit $200 per barrel, a price point that would raise gas prices to $6 per gallon in the U.S.
Democrats, though, are more concerned about the alleged crisis of the moment – gas prices that are nearing $4 per gallon at the pump. Diane Feinstein:
"you rack up record profits, record profits, quarter after quarter after quarter, and apparently have no ethical compass about the price of gasoline.”
What of it? Prices of a commodity are based on cost of production and demand, not moral relativism about the benefit of the product to its users. Besides which, Feinstein and her left-wing compatriots say they want to develop more renewable domestic energy supplies. To do that those products have to be economically viable and a sustained period of high gas prices would help make that happen.
Democrats are burdened on one hand with promises made to far-left environmental groups who agitate against drilling in areas with important oil reserves like ANWR and others and by proponents of speculative alternative energy platforms such as wind and solar on the other. But what’s really driving them is the need to deny the reality of high oil and gas prices. Gas prices are high. I don’t like it but the fact that they negatively impact me doesn’t mean I need to find a whipping boy to blame.
Stop buying gasoline and prices will go down. Start producing more oil at home and prices will go down. Build more coal-fired power plants and prices will do down. Start building nuclear power plans – and finish them – and prices will go down.
The latter is particularly important because of nuclear energy’s potential use as a driving force behind a hydrogen-based energy system. When I spoke to John Hofmeister earlier this year he said he believed that we’d see substantial use of nuclear/hydrogen energy in approximately 50 years. One reason why it is going to take so long is the fact that we’re not actively engaged in building nuclear power plants as we should be.
France produces almost 80% of its electricity from nuclear power. There’s no good reason for the U.S. to have lagged so far behind, particularly given our early leadership in the field. Constructing the needed plants will take several years. So why aren’t we getting started now?
Because it’s far easier for Congress to natter at energy companies for their profits than to do its job and lead this country. The easiest and most efficient way to cut oil company’s profits down to size is to buy competing products. The fact that we don’t have any is our own problem to solve, not ExxonMobil’s.