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May 09, 2006
The End of Thinking

Thomas Sowell shows the rampant silliness over our energy prices debate:

Amid all the hysteria among politicians and in the media over rising gasoline prices, and all the outraged indignation about oil company profits and their executives' high pay and lavish perks, has anybody bothered to even estimate how much effect any of this actually has on the price we pay at the pump?

If the profit per gallon of gas were reduced to zero, would that be enough to reduce the price by even a dime? If the oil company executives were to work free of charge, would that be enough to reduce the price of gasoline by even a penny a gallon?

Surely media loudmouths making millions of dollars a year and the multibillion dollar TV networks they work for can afford to get some statistics and buy a pocket calculator to do the arithmetic before spouting off nationwide.

But this is the age of emotion, not analysis.

Sowell goes on to point out that the politicians who have heavily taxed gasoline, have prevented any refinery construction for 30 years and who have prevented drilling for new sources of oil are the very same politicians who are most vocal in denouncing "obscene" oil company profits. Thinking about it, a properly thought-out Big Oil conspiracy theory would have it that BIg Oil was working with Big Environmentalist in order to secure the set of circimstances likely to produce the highest energy prices possible - it almost is as if the environmentalists set out to raise energy prices; everything they have done has tended to restrict supply without any actual effort to constrict consumption.

It is getting harder and harder to describe the left in terms other than those of vituperation - but as a nice guy, I hold back...though if I were to say what I think, then it would be something like, "where the *** have these ***** ***** been all their ****** lives? Do they live in a ******* box? Do anyone of them know the difference between **** and shinola?" But I wouldn't say things like that....all we can do on the right is keep pressing, gently but firmly, for the President's energy policy of increased supply and increased alternative energy sources.

Posted by Mark Noonan at May 9, 2006 06:29 PM



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Comments

60 Minutes (Mark, don't dismiss the source - after linking to the NYT today, no more of that from you) ran a good piece about Ethanol last Sunday.

The transcript:

http://www.cbsnews.com/stories/2006/05/04/60minutes/main1588659.shtml

Posted by: maf53 [TypeKey Profile Page] at May 9, 2006 06:35 PM

maf

I wish I would have gotten in on the ground floor with those farmers in Iowa that are producing ethanol. Good old fashioned American ingenuity. Now that's what I'm talking about!

My next car is going to be a flex car so I can take advantage of E-85 (or better) where it is available. Flex cars are what made Brazil independent from oil producing nations. If only our president and vice-president weren't oil whores!!!!!!!

Posted by: Ash [TypeKey Profile Page] at May 9, 2006 06:51 PM

Why can't the oil companies use the huge profits they make to construct new refineries?

Posted by: Canadian Observer at May 9, 2006 07:26 PM

Oil whores huh... two more in the united States senate who always vote against cafe standards for SUVs and anything that could jeopardize the auto industry in the US... Carl Levin - D and Debbie Stabenow -D. And joining that lists are those senators who have plants in their states.

We need to be honest. A huge problem are the manufacturers and producers who don't want to make those changes UNLESS there is a profit to be had for the change.

And I prefer to think that the President and Vice President seem to be more interested in letting the market dictate what americans want because they believe in choice.

But hell, let's have it your way, the government picks the car for you. And I'll be the director of that... you get a 1986 Ford Fiesta.

Enjoy.

If we truly want to get rid of high prices or more specifically end our dependence on foreign oil, tax gas at 50 cents more per gallon. Make it so unaffordable that people choose other forms of transportation. THEN... make sure auto manufacturers don't gauge us on the price of hybrids and alternate fuel vehicles.

But I maintain, we must let the people decide. Therefore I'm not in favor of the idea above as a policy. I own a hybrid but that's for my own finances and desire to help the planet. I can't and won't force anyone else to do so.

Posted by: wawilliyo [TypeKey Profile Page] at May 9, 2006 07:32 PM

The motto of the American people should be, "No more Oil". We need to use less oil and more "other" fuels. No Nukes! Ethanol,solar,wind,water,ground steam,maybe moonlight, anything but oil(or nukes). If we would focus on the problems that relying on Oil brings, we would run quicky away from it's use. Peace

Posted by: steve at May 9, 2006 07:33 PM

“…have prevented any refinery construction for 30 years..”

Mark, they have not built any (refineries) because they were too busy shutting down over 200 refineries in the same time period.

Posted by: Barneyg2000 [TypeKey Profile Page] at May 9, 2006 07:36 PM

"But hell, let's have it your way, the government picks the car for you. And I'll be the director of that... you get a 1986 Ford Fiesta."

wllyworld: How, pray tell did you make that giganitic leap? I stated that I want to purchase a flexcar and have E-85 available for my use. And you assign me a Ford Fiesta? (I have never nor will I ever own a Ford, GM or Chrysler product) Is my vote in the market not valid? I vote for flex cars. I won't accept any shades of the current choices. The problem with totally market driven products is the same reason kids aren't allowed to eat candy all day. The don't make sustainable choices.

You know the more I read your statement I pasted in here the more ridiculous it sounded. Doesn't it sound silly to you know that you see it again?

Posted by: Ash [TypeKey Profile Page] at May 9, 2006 08:13 PM

I didn't say the Pres and VP were the only oil whores. But certainly the most powerful, no?

Posted by: Ash [TypeKey Profile Page] at May 9, 2006 08:14 PM

Barney,

I doubt that the number shut down is that high - but supposing that it was, I'll bet that 99% of them were shut down because of things outside of energy company control...zoning, NIMBYism, environmentalist whacko lawsuits against upgrades; that sort of thing.

Posted by: Mark Noonan [TypeKey Profile Page] at May 9, 2006 08:21 PM

Ash,

I think his point is that while purely market-driven choices aren't perfect, any other means of driving the choice is even worse...

Posted by: Mark Noonan [TypeKey Profile Page] at May 9, 2006 08:23 PM

Is there nothing in between? Combinations of market-driven and some sacrifice for the greater good? I guess if you are his interpreter you can tell me how he made the leap to assigning me a Ford Fiesta? That was my main question.

Posted by: Ash [TypeKey Profile Page] at May 9, 2006 08:32 PM

I have to go with Karl Rove on this one. The best thing for goverment to do is to wait.

Government should sit on the sidelines and let the market sort it out. It's pretty clear that gasoline has been extremely affordable for the past 20 years. If it were not, we wouldn't have seen average fuel economy go DOWN considerably in that same period. There will be a little bit of pain in the short term, but if you leave it alone, people will gravitate to more economical transportation solution- whether it be more fuel efficient cars, public transportation or a reverse migration back from the exurbs. Likewise, investors and entreprenuers will be incented to advance emerging technologies to make transportation cheaper.

Posted by: extramedium [TypeKey Profile Page] at May 9, 2006 08:42 PM

Ash: I think Mark did a great job of summarizing what I mean. The problem with your logic and the idea of self-sacrifice is that people don't want to... and to force them in the ways you've mentioned, isn't self-sacrifice, but rather a forced mandate by a leader that 50% of the population probably hates. I.E. You and Bush... Me and Nancy Pelosi (for example).

And yes, they are the vice president and president...but I didn't hear Bubba ever say America needs to end it's dependence on foreign oil and give as much money to alternatives as Bush did. But then again, you don't give him credit for anything but his "evil" deeds.

Posted by: wawilliyo [TypeKey Profile Page] at May 9, 2006 09:05 PM

Why can't the oil companies use the huge profits they make to construct new refineries?

Ever heard of the EPA? Environmental whacko tree-huggers? The left? Liberalism? Take your pick; they're the same reason we don't increase domestic production of oil...

Posted by: keefer [TypeKey Profile Page] at May 9, 2006 09:24 PM

Oh Canada

Because "not in my backyard" is the message of the day here in America. They cannot just expand their refineries because the whack nut jobs have blocked them at every pass to do so.

Posted by: Warriornation [TypeKey Profile Page] at May 9, 2006 09:25 PM

Congrats, Barney; you're no longer the biggest dumbAsh troll here. Steve is...

Posted by: keefer [TypeKey Profile Page] at May 9, 2006 09:30 PM

"..I'll bet that 99% of them were shut down because of things outside of energy company control.."

Mark, It was none of the above. The answer is simple economics. As oil companies consolidated, they had excess refining capacity. It is more economical to run any business at peak capacity, so they began shutting down refineries.

Now the oil companies are running their refineries at 90% capacity.

Don’t get me wrong. I am not against profits or efficiencies. I have a problem with blaming refiner capacity on the high cost of gas. There are no shortages. The cost is directly linked to the cost of oil.

Posted by: Barneyg2000 [TypeKey Profile Page] at May 9, 2006 09:39 PM

"The motto of the American people should be, "No more Oil". We need to use less oil and more "other" fuels. No Nukes! Ethanol,solar,wind,water,ground steam,maybe moonlight, anything but oil(or nukes). If we would focus on the problems that relying on Oil brings, we would run quicky away from it's use. Peace"
--Steve


Steve, is this before or after you implement your 100% tax on anything made over $100,000. Seems that would be tough for a lot of people to buy those new, non-gas cars to bring about this change.

:)

Posted by: Warriornation [TypeKey Profile Page] at May 9, 2006 09:40 PM

Here is some more information:

The United States experienced a steep decline in refining capacity between 1981 and the mid-1990s. Between 1981 and 1989, the number of U.S. refineries fell from 324 to 204, representing a loss of 3 million bbl/d in operable capacity (from 18.6 million bbl/d to 15.7 million bbl/d), while refining capacity utilization increased from 69% to 87%. Much of the decline in U.S. refining capacity resulted from the 1981 deregulation (elimination of price controls and allocations), which effectively removed the major prop from underneath many marginally profitable, often smaller, refineries.

http://www.eia.doe.gov/emeu/cabs/usa.html

Posted by: Barneyg2000 [TypeKey Profile Page] at May 9, 2006 09:42 PM

Barney,

Lots of things go into it - consolidation in the name of efficiency is always there, but suppose you have a forty year old refinery...do you do through the immense and expensive hassle of environmentalist lawsuits to upgrade it, or do you shut it down and try to increase production at your twenty year old refinery?

Posted by: Mark Noonan [TypeKey Profile Page] at May 9, 2006 10:02 PM

extra,

Nukes and hydrogeon for me...but the essential is correct: let the market work.

As for me, I'm entirely unfazed by gas prices...they just don't hurt me. When I think that back when I was making $6 an hour I paid $1 for a gallon of gas, to pay $3 when I make $20 per hour is actually a net reduction in the cost of gasoline to me...if there has been an increase in cost, it is slight, and it is entirely counter-balanced by the continuing convenience of operating my own vehicle. Gas would have to hit the $10 a gallon range, without any rise in my income, before I'd go to mass transit...

Posted by: Mark Noonan [TypeKey Profile Page] at May 9, 2006 10:05 PM

Oh really Blarney.

Interesting, just two nights ago on the news an oil executive recited incident after incident after incident (with dates) where his company tried to add to their refineries but were taken to court by environmentalists.

So please, sell your crap elsewhere.

Posted by: Warriornation [TypeKey Profile Page] at May 9, 2006 10:08 PM

Blarney

We did lose refining capacity. Also cited by oil executives. They attempted to modernize and expand many of those and were lawsuited to death by the left whackos.

Is the oil industry partly to blame? Yes. Is the government? Yes.

Why will you not admit that many environmental liberals are also to blame or is this just not possible for you (and yet isn't it the left that always goes crazy for Bush not say he's wrong...oh my).

Posted by: Warriornation [TypeKey Profile Page] at May 9, 2006 10:17 PM

“Why will you not admit that many environmental liberals are also to blame or is this just not possible for you (and yet isn't it the left that always goes crazy for Bush not say he's wrong...oh my).”
Posted by: Warriornation


Warr, there is no doubt that environmental laws do restrict the building of refineries, but the environmental laws that regulate the development of an oil field in ANRW are just as tough, and the oil companies can’t wait to start drilling.

How is that environmental laws are too tough to allow the building of a refinery, but are no problem when it comes to pulling oil out of the ground? Think about it. Oil is a commodity that can be sold, a refinery is an expenditure.

Posted by: Barneyg2000 [TypeKey Profile Page] at May 9, 2006 11:14 PM

MOONLIGHT......steve...good freaking Lord!!! I always knew you could eclipse Blarney!!!!!

Posted by: Xango Annie at May 10, 2006 12:12 AM

The President's proposed budget calls for significant cuts in renewable energy, energy efficiency, clean air, and climate change related-programs at the U.S. Department of Energy, U.S. Department of Agriculture, U.S. Department of Transportation, U.S. Environmental Protection Agency, and other agencies.

(Cuts...cuts...what cuts!)

The FY06 budget request for the U.S. Department of Energy's (DOE) energy efficiency and renewable energy (EE/RE) programs envisions reductions totaling nearly $50 million - an overall cut of roughly 4 percent. This includes a 6 percent cut in Distributed Energy programs ($60,416 to $56,629); an 8 percent cut in the Geothermal Energy program ($25,270 to $23,299); an 18 percent cut in the Biomass/Biofuels program ($88,099 to $72,164); and a 90 percent cut in the Hydropower program ($4,862 to $500).

(Oh, these cuts, well ya see, blah, blah, blah.)
((Ya see these are NOT cuts. They are re-distribution allocated pre-emptive programs that serve no useful purpose) Yeah! That's the ticket!))

Bush Budget Guts Energy Efficiency Programs. Despite President Bush's pledge to reduce dependence on foreign oil, his budget would gut key energy conservation programs. While Congress authorized more than $1.8 billion for key energy efficiency programs last year, President Bush's budget for 2007 includes just $638 million. Another program designed to help state governments run their energy offices will receive just $49 million, less than half the $100 million authorized last year by Congress, while President Bush is also slashing $5 million from the Energy Star program, under which appliances are labeled for their efficiency.

(What? What? Hey man. Don't go there.)

The day after President Bush pledged to end America's reliance on foreign oil by funding renewable energy initiatives, the Department of Energy announced that 40 researchers at the prestigious National Renewable Energy Laboratory were being laid off because Republican budget cuts had slashed $28 million from the lab's budget. "The Energy Department will begin laying off researchers at the National Renewable Energy Laboratory in the next week or two because of cuts to its budget.

Facing a major political embarrassment, the Energy Department redirected $5 million to rehire laid off researchers days ahead of President Bush's visit to the lab. "Then, over the weekend, just before Bush's planned visit to the lab on Tuesday, the government restored the jobs

So tell me, What, no BS, what is the boy wonder REALLY doing to reduce our dependence on foreign oil.

LIP SERVICE BABY, just lip service. Go tell it to someone wearing jackboots.

Maroons.

Posted by: raker13 [TypeKey Profile Page] at May 10, 2006 12:31 AM

Can you say GREED? The same thing that's wrong with every other facet of Amrican life. That is, along with ME FIRST, GIMME-GIMME-GIMME and THE DEVIL TAKE THE HINDMOST.

And your little blog continues to spin, twist, excuse, lie, etc. defending the parasites responsible. Just look what your Repubs have done to the old folks on this Medicare Drug fiasco. Despicable doesn't even cover it.

May your camel step on a rusty nail and be infested with a million biting, voraceous fleas.

Gary P

Posted by: Gary P at May 10, 2006 12:36 AM

"they have not built any (refineries) because they were too busy shutting down over 200 refineries in the same time period."

Posted by: Barneyg2000

And why was this?? It was because these refineries were either too inefficient or in most cases they could not meet new pollution standards and bringing them up to the standards would not be economicall feasible.


"Why can't the oil companies use the huge profits they make to construct new refineries?

Posted by: Canadian Observer

Simple, because everytime they try, they are prevented by environmentalist wackos and their apologists in congress.

Posted by: phnxbmed at May 10, 2006 01:51 AM

Blarney

Thank you for answering my question. You're right, the oil companies (and Alaskans) can't wait to drill in Alaska. By the way, how's that going so far? What's preventing it?

The same thing that's preventing them from expanding refineries....enviornmental group think, threats of lawsuits, real lawsuits, and on and on.

As for Gary P....the Medicare plan also passed by Democrats...that one? Give me a break. That was an entitlement that GREW exponentially under the Bush administration. Exactly what are you crying about you idiot?

Posted by: Warriornation [TypeKey Profile Page] at May 10, 2006 02:18 AM

All in due time folks, It's just been reported that oil will soon be a forgotten memory,did you see on fox this morning that, pig manure will soon be furnishing automobiles across the country?

Whoa!!, what a discusting thought people will actually be pouring the bowels of pigs into their vehicles.

America will do anything to get free from the clutches of BIG OIL ANARCHY!.

Which of course sounds better(earth or animal) than paying eighty bucks just to fill up?

You decide.

Posted by: Jeremiah [TypeKey Profile Page] at May 10, 2006 11:01 AM

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