Demo Congress Still Pointing Fingers Instead Of Solving Energy Problem

Senator Chuck Schulmer, Democrat from New York, today lambasted Exxon for record profits, implying that the Company's financial success was harming Americans. Sen. Schulmer raked Exxon over the coals, saying that the Company was going to be using their profits to buyback stock to increase their share price rather than using it for exploration. Since when did it become a sin in America to increase the value of the owners investment in a company? Perhaps the good senator doesn't realize we are a capitalist nation with a free enterprise economy. Perhaps he doesn't know that Exxon is owned by its shareholders, not some monolithic owner or small group of managers. Perhaps he doesn't know who Exxon's shareholders are. Before he criticizes increasing the value of their investment, perhaps he should realize that tens of thousands of his constituents help comprise Exxon's shareholders (or ownership) and is an important way by which they are able to increase personal wealth by which they buy houses, pay for their children's education, buy medical insurance, feed their families and,, yes, help offset the cost of gasoline. No senator, Exxon's profits are not just helping the wealthy, they are part of the savings of vast "middle income" America, through their ownership in 401-K's, IRA's, mutual funds, union and corporate pension funds etc. And guess what, senator, where in the hell do you think the taxes come from that you and your colleagues so willingly spend--that's right, in significant part from taxes paid by investors(shareholders) who have made a profit on their investments. Senator Schulmer, you're either terribly ignorant or you're purposely misleading your consitituents for political purposes in this election year. In either case, it's inexcusable.

continuedpolitical nonsense about energy

MSNBC reported today that President Bush has called for increased drilling for oil and gas. Pres. Bush may have other faults, but a lack of knowledge about the oil and gas business is not one of them. He knows that new drilling will not impact crude oil and natural gas supplies quickly. His motive, no doubt, is to try and further dampen speculation in futures trading by raising the posssibility of increased production (most traders don't understand how long it takes to get new production on line and through the refining process). On the other hand, Democratic leaders responded by saying that oil companies already own thousands of acres which have not been drilled and , therefore , don't need any additional acreage made available. Of course oil companies own thousands of acres of lease rights which have not been drilled--that's because geological testing, as well as test wells, did not indicate economically viable opportunities, other wise they would certainly have begun exploration/drilling operations on this acreage. Do these Congressional Demos really think there is commercial oil reserves under every acre of drilling rights owned? How naive, or is this just another case of partisan politics?

Epilogue--more energy

Another thought on energy and politicians. All polls show that gasoline prices are the biggest issue with voters. It has been interesting to watch several Democrats ,who previously opposed any increased offshore exploration, react to the polls by changing their tune--now they're saying maybe we should consider it. What burns my butt is that they are so ignorant about energy that they believe(or they're lying and think the American public doesn't know any better) you can reduce gasoline prices by starting more drilling. The fact is, it takes two to three years to bring a new well onto production (assuming it's not a dry hole) and it takes many years to add new refining capacity. Unfortunately, we can't just drill our way out of this issue, either in the near term or ever.

Our energy "crisis"--same old problem-no plan

The last major energy "crisis" manifested itself in long gasoline lines during the Carter presidency. That was actually a supply problem caused by a lack of crude oil coming from the Middle East. It was "solved" when the Saudis decided to increase production because they were losing cash flow. Today's energy "crisis" is manifested by higher gasoline prices. Unlike before, there is gasoline available, it just costs more. Why? Forget what the politicians and broadcast journalists say (it's an election year--besides, they don't have a clue anyway). Simply put, three things are causing higher prices. (1)Oil is a finite global resource. Demand is growing globally due in large part to the rapidly increasing middle class in previously underdeveloped countries such as China and India. The United States' demand is also increasing, but we have not replaced our own petroleum reserves with new production in over three decades--thus we have been and continue to be increasingly reliant on oil imports. Bottom line--demand is increasing faster than supply. (2) The greatest impact on current gasoline prices in the U.S., however, is due to a lack of new refining capacity, which has not been added to any degree in decades (primarily because of costs associated with EPA clean air requirements--that's not all bad, just a fact). Finally, (3) there has been some impact (though limited) on gas prices because of investor speculation that oil prices would continue to increase(You can see evidence of this in the recent decline in gas prices following President Bush's repeal of a prior executive order prohibiting oil exploration in certain areas of the U.S. As a result, speculators were concerned that this might result in increased production in the U.S. and thus increase supply and put downward pressure on global oil prices, so they have backed off somewhat on investing in crude oil futures).

The rise in gas prices over recent months simply reflects supply and demand for crude oil and refined petroleum products (gasoline). It is not a conspiracy by the oil companies. Rather, it is simply the global marketplace at work. What can you do about it? In the short term, drive less and be sure your investments (401-K, IRA, mutual funds, etc ) include energy stocks--this will help offset some of the pain from higher gas prices.

The real issue is much bigger than gasoline prices--it is a lack of a legitimate and complete national energy policy designed to reduce the U.S.'s dependence on foreign oil as our primary energy source and increase our development and use of renewable sources, such as wind, etc., as well as new oil and natural gas exploration. No one source by itself will solve the problem.

My old boss, T. Boone Pickens, has such a plan. Ding it up --The Pickens Plan.com. Urge your Congressman to support Boone's plan or something similar. Most importantly, we must all hold the White House and Congress accountable for passing a viable energy policy that will put aside political gamesmanship and irrational finger pointing at others, such as the oil companies.

Our energy crisis is much bigger than the current "hub bub" about gasoline prices. Our nation's and children's future is at stake. There has been nothing but lies, ignorance and silence by our Congress since our first energy "wakeup" call during the Carter administration. Americans should deliver a strong message this election year to candidates and incumbents alike--cut the partisan BS and give us a viable energy policy or we'll vote your a_ _ out!

Addendum

A final thought. Just to set the record straight. I was kidding about my daughters and wife confining their current event knowledge to People magazine. Actually they are quite intelligent, well informed and most capable of thinking for themselves--we just don't always agree.

Pops

Introduction

My three grown daughters and wife insist that I find another audience for my "rantings." Why I don't know, because they have always said that I think I know everything. That simply is not true. When I don't know anything about a subject, I am the first to say that I don't know. Granted that doesn't happen often, because I am a voracious reader and connoisseur of current events. They, on the other hand, remain embarrassingly void of current event knowledge unless you count the contents of People magazine.

In the spirit of fair disclosure, permit me to tell you a little about myself. I am known as Pops by my children, grandchildren and wife. I am 67 years young, retired after a 38 year career in corporate America, including "tours" of duty in the oil (I spent most of my life in Oklahoma and Texas), building materials and packaging industries. I am a journalist by education and a corporate communicator by profession.

Politically, I describe myself as an economic conservative, a social moderate and an ardent believer in maintaining a strong defense. I am a registered Republican but have had strong issues with the Grand Old Party since it abdicated control of its destiny to the ultra right wing led by Newt and his gang. In college at the University of Oklahoma I was a member of the Young Democrats or as we used to be called--Dixiecrats. With the nomination of George McGovern, I lost all respect (yet to be regained) for the party of Jefferson and Jackson. You will find that my positions range across the gamut of political opinion, ranging from Populist to liberal to conservative. Frankly, I don't like labels. What I do like are people who form their political opinions based solely on facts and not emotions. I do not suffer fools lightly. I do like people who can think for themselves and ,given "the facts," come to an intelligent conclusion. I admire those who can change their minds when the facts change . I despise political demogogues, whatever their party might be.

Although my musings will cover far more than politics (better be ready for some Sooner football), this is the area I will start with first as it is timely. The next time we visit, again in the interest of full disclosure, I'll give you my list of things that really chap my butt in this season of lies, half truths, promises that are impossible to keep and statements about the need for change without ever defining what the term means.

You may not agree with me, and frankly I don't care. I'll feel accomplished if I can just challenge your thinking or get you to start thinking at all. Finally, let's don't take each other so seriously that we miss a little humor or tongue in cheek when it comes our way. No subject will be off the table. And if rants against radio and television evangelists and other charlatans trying to get into the pocketbooks of seniors are going to offend you, it would be wise to find another blog.

Regards,

Pops