Posted on 07/04/2008 4:26:45 PM PDT by vietvet67
You would think that this story is right out of science fiction. But the facts appear to be that the US Democrat-controlled Congress intends to destroy the Republican middle class with $11 per gallon gasoline.
The Democrats base -- wealthy white limousine liberals, and very poor people -- wont be harmed, but the families who live in suburbia will be devastated.
The multi-millionaires like billionaire Senators John Kerry & Jay Rockefeller, financial speculator George Soros, filmmaker Michael Moore, and actors George Clooney & Meg Ryan can easily pay for their auto and private jet fuel. Poor people are forced to take public transit.
Heres the reasoning behind the move.
The so-called Global Oil Crisis is an invention of the US liberal ruling class, which has successfully managed to export their disastrous ideas worldwide. Oil supply and demand has been on knife-edge balance for years. With the growth of the newly well off Chinese and Indian car-consuming populations, oil consumption has been rapidly increasing in the developing world even as it has been dropping in the US. No wonder India and China, with nearly half the worlds population, refused to sign on to the Kyoto global warming treaty.
Cheap energy -- and specifically oil -- is what made America the powerhouse of the 20th century. When gasoline was $1 a gallon in the US, it was $2-3 a gallon in high-tax Europe. Low US excise taxes enabled the country to grow and our vast middle class to prosper. Even today, the American consumer is paying $4-$5 per gallon of gasoline while his European counterpart is paying $10-12.
To meet this new energy shortfall, economists would assume that the rational market would increase the supply of oil and other oil-substitute energy supplies. But they would be wrong.
First, US the anti-nuclear lobby got the nuclear power industry banned from building new safe and clean fifth-generation power plants, abandoning the field to countries like France, which runs its super-fast trains on nuclear plants scattered throughout the country. In fact, fully 90% of Frances electricity comes from 59 non-polluting carbon neutral nuclear; they also recycle 99% of the spent fuel into new fuel using a breeder reactor at the La Hague chemical complex. We dont do this either.
Next, the eco-greens got the drilling for new known American oil reserves in the barren wasteland of the Alaska ANWRs near-coast sites, and along the east and west-coasts of the continental US, and in the Gulf of America. Now China & Venezuela are set to start drilling off the coast of Cuba - but not Exxon or Chevron. Theyre forbidden by law.
Then, the construction of new modern and efficient US-based refineries has been halted for 40 years. So there is a perennial shortage of heating fuel in the winter and gasoline in the summer. One hurricane can take out 5% of the nations refining capacity for months. A 5% shortfall can now easily cause a $25 price increase.
Meanwhile, the nations electricity generators, primarily fuelled by coal-burning plants, were forced to convert to natural-gas, previously mostly used in industry, agriculture and home heating. This has, in turn, driven the price of natural gas through the roof, from $3 per thousand cubic feet to over $11.
Finally, the hundreds of older existing oil fields and pumping derricks were closed and not allowed to re-open due to environmental concerns. California alone has scores of older fields just waiting to be re-opened to increase the US oil supply. And these could be re-opened in a matter of months, not years.
But wait, theres more.
To make matters worse, Congress then mandated using a toxic and polluting chemical -- ethanol -- inefficiently converted from corn, to help alleviate the oil shortage. Corn farmers promptly sold their commodity to the highest bidder, the ethanol refiners. The price of corn-based foods, like cornflakes - and sugar, chicken, milk, eggs and beef has now shot up.
In the process, a minor supply-demand problem has been artificially legislated into a full-blown crisis. The stock markets response has been predictable: down, down, down.
The liberal solution, of course, is for Congress to raise taxes, increase the fuel excise tax, and force industry to adapt wacky carbon credit schemes to line the pockets of the rich liberals who are capitalizing on the global warming scare by selling newly-invented credits, like Al Gores new company is doing. Wrong. This will stress the mostly-Republican middle class even more.
So what is the solution? Whats right for America is wrong for the limousine liberals. Its simple, really. Unleash the supply-side forces of economics.
Open up domestic oil drilling immediately. Turn back on the older wells now capped off. Fast-track new safe nuclear power plants. Stop creating global food shortages by killing off corn-based Ethanol production. Waive the punitive duty on cheap Brazilian sugar cane ethanol. Plant lots of domestic switchgrass for cleaner & cheaper ethanol manufacture. Begin a crash construction program of 50 new advanced nuclear power plants nationwide. Stop burning up natural gas to generate electricity. Build new clean coal-burning electric power plants nationwide (China is turning one per week for the next 5 years), and construct coal-to-oil conversion plants. The Germans were doing this in WWII. Alternative-energy sources like cheap 4th-generation solar panels will ramp up as their prices continue to fall.
In other words, return to the old policy of cheap domestic energy that has made America the powerhouse (pun intended) that it once was. The US will become oil-independent of our enemies whose treasuries are now overflowing with a flood of newly-printed dollars weve been using to pay our oil bills with, and the dollar regain its strength as the worlds reserve currency.
And the irony? All of this can be done now with results beginning in 90 days, and using new super-clean super-efficient and environmentally-friendly technology. The result: oil will drop down to well below $100 per barrel and the economy will once again boom. If France and China and Brazil can do it, why cant America? Why not indeed?
Oil sells for $145 per barrel mostly because of artificially-created supply-side shortages. A small part of its price is also determined by speculators and uncertainty over a future cut-off of oil from the middle east that a war with Iran could cause. Assuming that Irans nuclear bomb program is destroyed by Israel this fall -- with or without Americas help - look for oil to spike up to $250-300. And 40 years of congressional bumbling will be the cause.
-------------------------------------------------------------------------------- Mr. Easton teaches University economics and is passionate about technology and entrepreneurship. He is rosy about the long-term future: The glass isnt half full, its overflowing!
As on the other threads, oil at $300 = world economy STOPS.
yes but carbon credits will be amazing
...it’s for the children and Earth...
Won’t be any buses.
Lock Congress in Gitmo until gas is $2.50 a gallon again.
Wow! Extremely common-sensical essay written by a university professor? In the economics department, no less? Color me impressed. I’m sure his students are getting a great education.
He forgot to mention the outright denial of permits for new coal fired power plants because they do not sequester CO2 which is now declared a “pollutant” in the same class as sulfur oxides, nitric oxides and particulate matter. This is absolutely going to kill us.
I’ve always thought that it is criminal to make electricity from natural gas. It is far too valuable as a home and commercial fuel and a feedstock for higher-value products. Nuclear and low-value coal should be used for generating baseload electricity and reserve gas for running peakers.
Peak Coal coming soon.
Peak uranium in 20 years.
Happiness is mass transit.
and yours...
As on the other threads, oil at $300 = world economy STOPS.
The SWHTF before that. With crude at $300 fuel in most of Europe will be around $30 - $35 a gallon. In other words too much. Here in the US that will have diesel at $10 to $12 or more. And that is simply too much.
The cost of fuel to move goods around will be so far out of sync with the rest of the business model that everything will just stop moving. No food delivery, no medical supplies, even the fuel itself, etc. When that starts to happen, the liberals/socialists/communists will demand emergency procedures and the enviro-whacks will be dumped by the commies around the world.
Then drilling, pumping, uncapping and new exploration will get kicked into high gear.
Peak RightWhale is here NOW!
http://www.freerepublic.com/focus/f-news/2040782/posts
http://www.freerepublic.com/focus/chat/2040746/posts
Countries won’t just sit around and let that happen.
There will be wars and a lot of dead OPEC member citizens before that is allowed to happen for any length of time.
In 2004, the $30,000-$50,000 income range was evenly split between Bush and Kerry. The further down you went the more heavily they voted Kerry, and the further up you went the more heavily they voted Bush.
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