Free Markets, Free People

law of supply and demand


Obama’s “all-of-the-above” energy policy is really a “some-of-the-favored-above” political strategy

As usual President Obama has said one thing while demonstrating another.  He claimed, in his much panned energy speech, that the right energy strategy is to pursue an “all of the above” policy which includes not only fossil fuel, but alternative fuels as well.

“If we’re going to avoid being at the mercy of these world events, we’ve got to have a sustained, all-of-the-above strategy that develops every available source of American energy.”

And he claims that’s what he’s done.  Of course that’s nonsense as has been demonstrated many times on this blog.  His administration has done everything in its power for the past three years to block oil exploitation on federal land.  His administration has issued fewer permits for shorter times, slow walked those which have been let and disapproved such projects as the Keystone XL pipeline which is critical to any “all-of-the-above” strategy.

To make the point that fossil fuels are not in his “all of the above” plan, one only need look at his recent corporate income tax proposal in which petroleum companies are singled out for punitive treatment.  Hardly the move of a person interested in what he’s claiming.

“Since it’s an election year, they’re already dusting off their three-point plans for $2 gas. I’ll save you the suspense: Step one is drill, step two is drill, and step three is keep drilling,” Obama said. “Well, the American people aren’t stupid. You know that’s not a plan. . . . It’s a strategy to get politicians through an election. You know there are no quick fixes to this problem, and you know we can’t just drill our to lower prices.”

We can’t drill ourselves to lower gas prices?  But of course we can, if we will.  Remember that for 25 years, Democrats, who’ve taken every opportunity to block additional drilling, tell us it takes 3 to 10 years for us to benefit from new drilling.  Well, here we are, a quarter century later still in the same shape we were then and we have this guy telling us we can’t lower prices by increasing production?

Really?  So is there a new law of economics at work none of us have been privy too?  Supply and demand no longer work?

Rising prices now are a symptom of failing to do what we should have done over the previous quarter century.  Because of that we remain (as does the market) vulnerable to problems in supply elsewhere.   Like Iran, which is now cutting supplies to Europe and causing the market to react with higher prices due to a smaller supply.

Econ 101.  gas_prices_large3

If we had been drilling and producing for 25 years, we or the market wouldn’t be as susceptible to those sorts of shocks.   There’d be more supply and a greater diversity of supply.  That means lower prices.   And it would certainly mean more oil security for us.  Whether or not much of it is exported is irrelevant.  In time of emergency we would have a domestic supply that could be diverted to secure our energy needs.

Instead, we have a president who is reduced to claiming Americans “aren’t stupid” while he treats them as if they are.

He claims that you can’t reduce the price of oil by drilling for more oil (you can’t lower prices by meeting demand with increased product?)?  Now who is stupid.

And speaking of politics, because of his failure to enable the exploitation of petroleum products during his term in office, what is the only option Obama has in his bag of tricks?  Looting the Strategic Petroleum Reserve in order to help his re-election chances.  Who is it that doesn’t have much of a plan?

If you’re not tired of the double-speak from this man, you’re not paying attention.  His energy speech was pure blarney.

“There is no silver bullet. There never has been,” Obama said. “It’s the easiest thing in the world to make phony election-year promises about lower gas prices.”

Nonsense.  There certainly is a “silver bullet” way of lowering gasoline prices.  Produce more of it.  The reason there is no “silver bullet” in the offing is because he and people like him have stood in the way of its production.

You can’t make a silver bullet if you won’t let anyone mine the silver.  And that is precisely what Mr. Obama and the Democrats have done for 25 years.

~McQ

Twitter: @McQandO

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