Oil prices, embargoes, and lies

The Kimmeredge oil well. Is raising the price of oil a motive to let the Middle East erupt in flames?
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Oil prices have more than tripled from recession-era lows, and motor fuel prices have more than doubled. The last time prices were so high, a certain US Senator from Illinois used that against the then-incumbent President and that same Senator’s eventual opponent. That Senator is now President. Now he seems to want oil prices to stay high.

As oil prices rise

None can deny that oil prices are much higher today than they were when the man now holding office as President, took that office. In fact, oil sold for as low as $33 a barrel. Now, the West Texas light, sweet crude sells for $109.77 a barrel. Incredibly, Brent North Sea Crude, which has sulfur in it and is thus more difficult to refine, sells for even more! $125.47 a barrel, to be exact.

Gasoline prices have almost kept pace. When financial markets crashed in 2008, regular gasoline in northern New Jersey sold at $1.69 a gallon. A gallon of gasoline in the same region today sells for $3.37. That’s regular, not premium. And that price has risen three cents a day for two days straight.

High oil prices became an issue in the Presidential campaign of 2008. They also became an issue in the House of Representatives. Few have forgotten the day when Representative Maxine Waters (D-CA) blurted out, to several oil company executives seated at the green table before her committee,

Guess what this liberal would be all about?  This liberal would be about socializing … uh, umm.  … Would be about, basically, taking over, and the government running all of your companies.

Waters provoked her colleagues to laughter on that day. Two newsmen said that Waters really meant to have the government nationalize all oil companies. Commenting on that remark, they then said,

We have seen this movie before. It’s called Hugo Chavez.

They were talking about the President for Life of Venezuela.

One commentator calls for an embargo

The Kimmeredge oil well. Oil prices depend on the productivity of wells liek these

The Kimmeredge Oil Well, the oldest continuously productive oil well in Britain. Photo: Graham Horn (Geograph.UK); Creative COmmons Attribution/Share-alike 2.0 Generic LIcense

On the Fox News Channel, Lou Dobbs created a stir when he said that the oil companies were shipping gasoline, and other refined oil products, to China. And in fact, the economies in India and China are in “boom” times. Thus their people are using a lot more motor fuel than ever.

In reply, Bill O’Reilly (The O’Reilly Factor) called for the most radical measure that he has ever proposed. In three consecutive “Talking Points Memos,” he has called for an export tax on refined oil products. Furthermore, he said that since “We, the People” “own” American territory, and every mineral resource on it, the government has the authority to forbid companies to export gasoline abroad, until they first “take care of the folks at home.” How he would measure that happy result, he never said. But he did suggest that the Interior Department overtly threaten to disallow any future drilling unless the companies agreed to such terms.

Economists have a word for the result that O’Reilly seems to want: Embargo. He will not breathe that word out loud. But his “export tax” idea, and the policy he proposed to have the Interior Department refuse any further leases that do not reserve refined products (in whole or in part) for the American market, amount to embargo.

The American Thinker warned of where embargo might lead:

Do you have any idea where this leads?  There won’t be another refinery built in the United States.  We will end up importing all our refined products to escape the controls.  If the only way U.S. oil companies can reap the world price is to sell overseas, then you’ll see this entire industry migrate out of the United States.

That would be the sober reaction. The less temperate reaction would be the last scene in Atlas Shrugged, Part One, in which Ellis Wyatt lights his trademark Torch and leaves this telephone auto-answer greeting:

This is Ellis Wyatt. I’m gone. Don’t try to find me. You won’t. I am on strike.

In sum, if TMNHOAPOTUS really wanted to be a populist, he would do exactly as Bill O’Reilly suggested about oil prices. When he made his speech on Thursday afternoon at the University of Miami (Florida), he could have said:

By the authority vested in me, as President of the United States, I hereby order that any oil taken out of the ground, or the ocean floor, from this day forward, be subject to export controls. From now on, before you ship our gasoline to China or India, you will ship it first to the American market. You will keep the price of motor fuel in America below $2.50 per gallon for regular, or else you will export no refined petroleum products at all.

Whether that would have worked or not (laying aside whether he risked a lot of Wyatt’s Torches), it would have been a good stem-winding, populist speech.

But, to O’Reilly’s chagrin, that is not the speech he made.

And from Obama, crickets

Instead, Barack Obama said that he had no “magic bullets” to bring oil prices down. Indeed, the college students in his audience did not seem to mind! They laughed with him when he mocked the obvious solution: drill for oil to increase supply. They cheered when he literally said,

We’re going to double down on green energy.

To name one example, he talked of deriving motor fuel from algae. In other words, pond scum.

Thus he had his chance to score a lot of political points, at the expense of an industry whom everyone loves to hate when its prices rise. And he did not take it.

Aside from the spectacle of Bill O’Reilly’s jaw hanging open so that houseflies can fly into it, this means only one thing: Obama wants oil prices to rise. In fact, he said so three years ago, and so did his advisers. He said that, with the cap-and-trade system he proposed,

electricity prices would necessarily skyrocket.

And like those U. Miami students two days ago, his listeners cheered. They cheered almost as loudly when his “energy czar” wondered aloud how to make motor fuel prices in America go up as high as they are in Europe. (Or Israel, for that matter, though no one mentioned that.)

That’s why Obama disallowed the Keystone XL pipeline. That’s why Obama allowed no more drilling after the Deepwater Horizon incident, and today says that he will allow it, but doesn’t. (His bureaucrats seem to find any excuse not to allow drilling on any given lease.) Now he has the results he wants. So why should he think about slapping an embargo on American-refined gasoline, et cetera?

Add to it that his chief jobs “adviser,” Jeffrey Immelt of General Electric, has ordered that his “company car” program offer the Chevrolet Volt as the only car available.

Add something else to the mix: UN Agenda 21. Oil prices that rise and stay high are one way to convince people to move into those dingbat dormitory developments that the Agenda calls for building in major cities. In fact, no one will ever consider getting rid of his car until the total price of motor fuel, insurance, maintenance, and repairs is higher than the price of taxi, bus, and/or rail fare. Obama knows this. So do his “environmentalist” friends.

So when Obama insists that “there are no magic bullets,” he lies. He has deliberately restricted the supply of oil, and for a reason: he wanted oil prices to rise all along. Now he has his wish.

Summary

When oil prices rise, politicians and other rhetoricians always talk of populist measures. Why not this time? Because now our nominal head of state wants oil prices to go up and stay up. His “double down” remark shows that he will keep oil prices high through the summer. That might prompt the American people to light millions of “torches” of their own, at the polls this November. All political challengers, should have such luck in their choice of incumbents.