Wednesday, June 25, 2008

Domestic Oil Everywhere, but Not a Drop to Drill

Domestic Oil Everywhere, but Not a Drop to Drill
Commentary by Sanford D. Horn
June 25, 2008

Raise your hands if you know Yemen sold 13,000 barrels of crude oil and products each and every day during 2007 to the United States. OK, just raise your hands if you heard of Yemen in the first place. Yemen? Yes, Yemen. “Oh, good one! And ‘Yemen,’ that actually sounds like a real country!,” said the ubiquitously clueless Joey Tribiani from the NBC comedy Friends.

Now, Yemen is not exactly one of our BFFs, as the teens say, yet we are helping to support their economy. And Yemen is just the tip of the oil-berg. Of the top 20 nations from which the United States imports oil, nine are part of the 13-member OPEC (Organization of the Petroleum Exporting Countries). And the total amount of oil the U.S. purchases from OPEC nations as a whole equals 5,983,000 barrels per day, every day, just in 2007 alone, according to the Energy Information Administration, the organization that provides official energy statistics from the United States government. That figure equals 44.5 percent of the total U.S. crude oil imports of 13,439,000 barrels each and every day during 2007.

So, while we are not drilling here in the United States, nor opening new refineries, something that hasn’t been done in more than 30 years, we continue to grow the economies of countries that wish us harm, failure and ultimate destruction. This is not just deleterious to the economy of the United States, but its national security as well. From Saudi Arabia alone the U.S. procured 1,489,000 barrels per day last year – that country ranks number four on the list. At number five is Venezuela, led by the despotic Hugo Chavez. That country sold the U.S. 1,362,000 barrels per day last year. Again, the question must be asked – why do we continue to do business with countries diametrically opposed to the goals and mission of the United States?

Angola, one of the few remaining communist countries in the world, ranks number seven, selling us more than a half million barrels per day last year. Iraq ranks number eight, selling us just under a half million barrels per day in 2007 and Libya, under its dictator Moammar al-Qadaffi, ranks 19th and sold the U.S. 116,000 barrels per day last year.

First, the United States, in an effort to begin weaning itself off of foreign oil , should cease conducting business with countries seeking to do us harm. After all, the figures quoted above are far from diaphanous. As long as we need to procure foreign crude oil and products, the United States ought to do business with more friendly nations such as Canada, our number one business partner in oil, selling us 2,426,000 barrels per day last year. Let’s do more business with the British – they sold us 278,000 barrels per day last year, ranking number 11. How about the tiny U.S. Virgin Islands, who rank number 10, selling us 346,000 barrels per day in 2007? Just over 24 percent of United States’ oil imports come from Russia, Saudi Arabia and Venezuela.

The United States should be helping the economies of seemingly friendly nations, and by purchasing oil, these are not hand-outs, but sound business deals.

Perhaps one of the most sound business proposals the United States could make is with its number two oil trading partner – Mexico. This is a genuine opportunity. A deal should be struck to increase the number of barrels the United States purchases from Mexico in exchange for the Mexican government working more stringently to keep its nationals on their side of the border. The U.S. bought 1,533,000 barrels of oil per day last year from Mexico – second only to Canada. (Mexico should treat its northern border as it does its southern, but that is a column for another day.) However, by increasing our purchases from Mexico, that nation, may, in turn, need to increase its labor force in the oil industry, all of which help produce a boon for the Mexican economy and keep more people south of the U.S. border, helping both countries.

The United States should simultaneously be working to drill more domestically, as well as develop additional sources of energy. While there are those who say the U.S. cannot drill itself out of the current energy crunch, we must do so while we are developing new sources of energy. While there are those who say drilling domestically will not prove productive for five or 10 years down the road, if we had drilled five, 10, or 20 years ago, we would not be in the deleterious circumstances we are mired in today. Yet there are experts in the employ of the drilling companies, not the oil companies, who believe with increasing certainty that drilling with positive, effective results could be realized one to six years from its commencement.

For the allegedly most powerful nation in the world, the United States looks pathetic going “hat-in-hand” begging the Saudis to increase their oil production. There are billions of gallons of crude oil offshore of this country that should be extracted. Florida Governor Charlie Crist, a one time opponent of offshore drilling, has come to realize the benefits of doing just that. There is an economic windfall to be had by domestic drilling – and not just for the oil companies, who by the way, provide thousands of jobs and have a legal right to turn a profit. Gov. Crist realizes if gas prices continue chugging ahead, people will not be able to afford to either fly or drive to Florida to visit Epcot Center, Cape Canaveral, the beaches, spring training baseball or Mickey Mouse.

Senator John McCain (R-AZ) the GOP nominee for president has also amended his belief system regarding offshore drilling. Call it a flip-flop, call it an epiphany, call it doing one’s homework, but the Senator has also come to realize the necessity of domestic offshore drilling. Now, if he could only see the light regarding ANWR (Arctic National Wildlife Refuge), we’d be in business.

Neither McCain nor his presumptive Democratic opponent Senator Barrack Obama (IL) support drilling in ANWR. This piece of frozen tundra, to borrow a phrase from ESPN’s Chris Berman, clocks in at about 70 degrees below zero and home to some caribou. Caribou. We’re paying more than $4 a gallon at the pump because of caribou. OK, it’s not just the caribou, but ANWR is roughly the size of South Carolina, and the desired area for drilling in ANWR is roughly the size of Dulles Airport, or as I’ve heard, it would be like drilling on something the size of a postage stamp on a football field.

I’ve got nothing against the caribou, but they can be relocated. We continue to build houses and the indigenous animals find other places to roam. Bottom line is while we are developing alternative fuel sources, which I absolutely support, we must drill domestically. I’m talking about ANWR, not the Grand Canyon or the Florida Everglades for goodness sakes.

Both major party candidates for the White House must realize the importance of drilling in ANWR. And in the case of Sen. Obama, to him, offshore means off limits. He doesn’t support offshore drilling and has taken the same tack as those opposing domestic drilling because it will not solve anything today. This is terribly short-sighted on Obama’s part. Nothing will solve the energy crisis today – period. This is the same short-sightedness demonstrated by former President Clinton when he vetoed legislation passed by Congress to drill in ANWR.

For a candidate whose slogan is “Yes we can,” he says “no we can’t” at every turn where the energy crisis is concerned such as offshore drilling and nuclear energy, for examples.

Knowing what Obama is against is one thing, but what is he for, aside from mandatory conservation? “We can't drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times,” said Obama last month in Oregon. Isn’t that what freedom is about? If someone wants to buy an SUV and can afford to pay for it, the gas, and the upkeep, that’s his or her business. If someone wishes to heat his or her home at 72 degrees or cool that home at 66 degrees and can afford to do so, again, that is his or her business. I am all for conservation – I too like to keep costs down, whether the price of a barrel of crude is $135 or $35 (wishful thinking). I do not need a repeat of Jimmy Carter sitting in the Oval Office in his Fred Rogers cardigan micromanaging my thermostat.

One thing Obama does seem to advocate is a windfall profits tax against the oil companies. Who should determine how much of a profit is too much? How much of a tax? Where should the federal government draw the line? Should such a tax be imposed, the oil companies will simply recoup their tax loses by raising prices, cutting production and cutting jobs. Thus the potential failure of the windfall profits tax, the downward spiraling of the U.S. economy and an “F” in Econ 101.

Liberals famously cart out the slippery slope whenever it suits their needs. Here is a prime example of where the slippery slope will run this nation into depression on the way to socialism. Liberals are of the mindset that government control is the proper path to traverse. However, that path will be riddled with tolls and taxes. Should the federal government take over the cola industry because the Coca Cola Company made more of a profit than the oil companies? Certainly not, nor should they do it with the oil industry.

Some of Obama’s Democratic colleagues in the Senate as recently as last week called for the nationalization of the oil companies. Now we are taking a page out of the playbook of Venezuelan anti-American dictator Hugo Chavez. The last thing people want is for the government to get its grubby hands on the oil supply or control its production. If that happens, count on $6 a gallon before too long, or higher. Instead, the federal government needs to overturn its 1982 moratorium and ban on drilling in the outer-continental shelf.

America remains the only nation in the world that has curtailed access to its own energy supplies,” said former Delaware Governor Pete du Pont.

Yet, the Congress, as usual, is playing politics. In an interview given to the Fox News Channel on Wednesday, May 21 Senator Orrin Hatch (R-UT) admitted “Congress isn’t doing anything. We have no energy policy in this country.” Hatch called for the extraction of oil shale, which he estimates there are “between 800 billion and 1.9 trillion barrels of oil in Wyoming, Colorado and Utah in oil shale that could be recovered at about 30 to 40 bucks a barrel.”

Meanwhile, we continue to blindly pay more than $135 (a figure that will no doubt be obsolete by the time this column is printed) per barrel of imported crude like the lemmings we have become. Hatch’s plan is good for the economy as it will produce jobs, lower the price at the pump – eventually, reduce our dependence on foreign oil and help further secure our nation.

Drilling domestically, both on shore and offshore is much safer than it used to be. There hasn’t been a significant oil spill since 1969. Thousands of rigs in the Gulf of Mexico sustained no damage during Hurricane Katrina.

The United States, in addition to researching alternative sources of energy, must explore domestically for oil. Refineries must be built – the likes of which have not been realized on our shores since the Gerald Ford administration. Of course, there’s the question of where to put said refineries, but that is the purpose of exploration – to explore, to research, to discover – just like the concept of researching alternative fuel sources – to explore, to discover. Installing refineries prior to knowing where to erect them is much like putting the cart before the horse. Seems appropriate, though, with gas prices screaming past $4 a gallon on the way to $5, we may need to revert to that form of transportation.

Here again the economy and more importantly the American people are the beneficiaries. More jobs are created, gas prices will be reduced, ultimately reducing food prices as well, giving the average consumer more disposable income with which to dine out, take the children to a ballgame, buy new clothes for back to school time in the fall, save for retirement – all of which help grow the economy. Whereas, just the opposite is sure to befall the U.S. as gas prices rise, forcing food prices to continue rising causing the American consumer to pare back on non-essential purchases leading to a surplus on the shelves, which will force employers to scale back their labor force. What a grim picture this paints, except no one can afford to drive to the store to buy the paint.

In addition to the “drill here, drill now, pay less” concept as advocated by former Speaker of the House Newt Gingrich (see his non-partisan website and the more than one million signatories who support his effort, the federal government must stop giving subsidies to the oil industry. Pursuit of nuclear energy is vital – something McCain supports but Obama opposes. I support nuclear energy, even though this is something the French do – and successfully, as do the Swedes. France and Sweden bury their nuclear waste underground and have yet to report any problems.

I am not the only person to support solar and wind as sources of energy. Senator John Kyl (R-AZ) is a strong supporter of solar energy and Congressman John Peterson (R-PA) fervently supports wind energy. Peterson pointed out in an interview on June 25th that even doubling the output of those sources would only bring them to one percent of our energy production.

The United States must pursue coal, hydrogen, nuclear, solar and wind not just as alternative fuel sources, but eventual mainstream and conventional sources. The hot air from all of Congress’s bloviating could provide this country enough energy for decades.

Also on the table should be sugar-based ethanol – this is what is successful in Brazil with their flex-fuel automobiles. (In an effort to keep food prices from rising uncontrollably due to this fuel source, the government must stop subsidizing those in the agricultural field for a paucity in production.)

Each of these sources should be vigorously pursued. The power must be taken out of the hands of the foreign nations that wish us ill, such as the OPEC mafia, and the power must never be put in the hands of the federal government.

Sanford D. Horn is a writer and political consultant living in Alexandria, VA.

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