The Stout Republican

It’s difficult to be America at times. The constant internal struggles that we go through as a nation, and the awkward checks and balances that sometimes lead to…well…nothing. For example, our current dilemma with the oil industry.

The non-administration view:

Right now a large majority or our oil comes from several different regions, about half from OPEC countries, but interestingly enough, much of our oil comes from Mexico and Canada, about a third worth. Now when people complain about our reliance on “foreign oil”, the usually just conjure images up of the Persian Gulf or Iran, but the truth is, we get our oil from everywhere, and much of it is internal. We produce about 5.1 million barrels a day, and export about 1.1, leaving 4 million for our own consumption (source facts).

While it would be nice to be able to produce all of our own oil, the truth of the matter is, we consume far too much for that to be a reality. It also doesn’t help that at the same time political there’s pressure on the US to stop relying on imports, the Environmental lobby is throwing millions of dollars to keep us from utilizing other domestic sources. Save the Caribou, screw the consumer who pays the higher prices. So where does that leave us?

Don’t rely on foreign oil, don’t drill our own.

While a case can be made for alternative fuel sources, the affordability of such sources is still a long way away…and the cost to implement an infrastructure to distribute and support such a shift would be enormous. Does this mean that it shouldn’t be pursued…of course not, but the process is already starting, and that process is being sponsored by Exxon Mobil and BP.

The Political Hoopla:

President G.W. is screwed. Since he and some of his cabinet have backgrounds in oil and energy, they have the stigma of “big oil” attached to them for the rest of their political lives. Anything that he does in the political spectrum that touches the oil business will be spun into Executive Branch Collusion with business. Any comments that he makes against the oil industry or pro domestic reliance (such as this article) is “obviously” just a ploy to seem like he’s not in bed with big energy according to the left.

Now in California, we have a Proposition 87 which states:

Establishes $4 billion program to reduce oil and gasoline usage by 25%, with research and production incentives for alternative energy, alternative energy vehicles, energy efficient technologies, and for education and training. Funded by tax of 1.5% to 6%, depending on oil price per barrel, on producers of oil extracted in California. Prohibits producers from passing tax on to consumers. Program administered by California Energy Alternatives Program Authority. Prohibits changing tax while indebtedness remains.

Now if I understand this…you’re taxing business for extracting oil in California and not allowing them to pass that cost on to the consumer. As a business, if I knew it was more expensive to drill for oil in California, why would I drill here? Accordingly, less business in California, less jobs, higher cost to import gas into our state, more reliance on foreign oil (not taxed according to this prop), and ultimately, stressed supply chain lead to higher gas prices anyways (real economic support for said statements). Plus, there’s this wonderful new bureaucracy with $4 Billion dollars to play with. Proponents of 87 seem to have a problem with gas companies being run as efficient business…

High gas prices are in also thanks to the US and California governments…with Californians paying $0.50 per gallon in taxes alone. Let business run effectively…it’s what they’re good at. It’s why they make money.

Gas and Oil