Wednesday, July 9, 2008

Bait and Switch

So every once and a while I get mad.

Don't take away my liberal membership card here, but there are aspects of the free market with which I agree, primarily that an organization whose primary purpose is to make money is going to make decisions based on what makes it the most money.

So when I read this Reuters analysis in Forbes Magazine, which essentially states that exports of refined American petroleum products have soared in the same year that gasoline is topping $4 a gallon, I got mad.

Now don't get me wrong, they have a right to sell their product wherever it will get the highest price.

Consider this paragraph from the Reuters piece: "Also, while U.S. gasoline demand is down due to high prices and a weak American economy, there is 'strong economic growth outside the United States' where fuel is often subsidized and demand is high," said John Cook, director of Energy Information Administration's Petroleum Division.

He's right; go crazy; this is a global economy right?

Here's the rub though, these same oil and gas companies -- joined by the Bush administration, our friends at Fox News and a goodly portion of The Mercury's Sound Off callers -- are arguing that if only the tree-huggers hadn't prevented our friends in Big Oil from dilling on our coastlines and in Alaska, gas would still be $2 a gallon.

"We can help alleviate shortages by drilling for oil and gas in our own country," President Bush told reporters this week, according to the Reuters story. "We have got the opportunity to find more crude oil here at home."

But a one-year increase of 33 percent in exports of refined petroleum products says otherwise. Apparently, even if we were to put our coastal and natural resources at risk for what is, at best, a year's worth of supply for our insatiable appetite for oil, one-third or it might be shipped overseas if the price was right.

"While the administration argues that more supplies would help to bring down prices, U.S exports of diesel fuel in April averaged 387,000 barrels per day, up almost seven-fold from 59,000 barrels a day in the same month a year earlier," Reuters reported.

"U.S. gasoline shipments in April averaged 202,000 barrels a day, the most for the month since 1945, when America was sending fuel overseas to ease supply shortages in other countries during World War II. Gasoline exports in April 2007 were almost half at 116,000 barrels per day."

Hey we're no capitalists though, so no problem.

Go ahead and make the money you were founded to make, Big Oil, that's what you're there to do.

But do us a favor please, don't ask the American taxpayers to take the risk. Because as Exxon's recent Supreme Court triumph demonstrates, the one that lowered their penalty for the Valdez oil spill, if things go bad, and a bad spill occurs off Florida's coast, or in Alaska, we know who will be paying the bill.

These same companies already have leases to drill for oil on public land in the U.S. that they are not acting on, so if our own resources are the key to success, why aren't we drilling there?

Answer, they want it all and a crisis atmosphere makes it more likely we will give it to them for free.

Instead of drilling where they already have leases and producing oil more quickly, Big oil/the White House (there's really little difference is there?) keep pushing for permission to lift the flimsy protections put in place to protect fragile areas that belong to us all and will take decades to recover, if at all, when the inevitable accident occurs.

Where we should be putting our public resources people, is into alternatives to oil. Even Chevron is doing it, as this New York Times article shows, investing in technology that would allow us to convert algae into oil.

The relevant paragraphs are as follows:

"If the price of production can be reduced, the advantages of algae include the fact that it grows much faster and in less space than conventional energy crops. An acre of corn can produce about 20 gallons of oil per year, Dr. (Roger) Ruan (of the University of Minnesota) said, compared with a possible 15,000 gallons of oil per acre of algae.

"An algae farm could be located almost anywhere. It would not require converting cropland from food production to energy production. It could use sea water and could consume pollutants from sewage and power plants."

Talk about a tricfecta! What's the hold up?

This is pretty basic folks. I can only say it so many times.

We're behind on this. Oil is the steam technology of our generation. It entangles us in wars and disputes that are none of our business. It's emissions are destroying our atmosphere.

Hey if Chevron or Exxon want to be the king of the next energy source, I could give a sh*t, more power to them. They're already an energy company and know more about distribution and pricing than I ever will.

But it's time to move on, and even the almighty market is heading that way. Let's give the coasts, the polar bears, the elk, the birds and the rest a rest. We have alternatives. Let's show our patriotism by showing by American can do when we put our minds to it.

And we do that by putting our tax dollars where they will work for us, not for companies who are, by their very nature, compelled to send that energy overseas if that's what the market demands.

Anything else is just infuriating and counterproductive. Haven't we had enough of that?

NOTE: One encouraging sign this week, the Dept. of the Interior lifted it's ill-conceived ban on new applications for solar power plants located on public lands, which I blogged about July 3.

Could it be we're starting to see the light? (no pun intended).

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Anonymous Thomas Mounce said...


Those in Europe figured out awhile ago that diesel is a more efficient fuel than gasoline. Oil companies realize it costs much less to make diesel out of crude. The demand is not in the US, but really high overseas for diesel. Hence oil companies are exporting it heavily.
"While the administration argues that more supplies would help to bring down prices, U.S exports of diesel fuel in April averaged 387,000 barrels per day, up almost seven-fold from 59,000 barrels a day in the same month a year earlier," Reuters reported."
One can blame the EPA for keeping diesel cars out of the US market, in my opinion.

July 17, 2008 7:34 PM 

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