Oil Ironies
By Doug Edelman (01/02/06)
I have recently found myself somewhat amused at some ironies centered around environmentalists (and other liberals) and oil. See if you also find these ironic.
There is enough oil in the Gulf of Mexico and in Alaska to essentially END our dependence on foreign oil. Yet the Leftists refuse to allow us to drill in either location citing environmental concerns.
Hurricane Katrina tore an oil rig from its moorings and drove it onto the Gulf shore. How much oil was spilled? None.
Yet it's very well known that drilling platforms provide very welcoming habitat to all kinds of marine life. HMMM.
Drilling in ANWR is supposedly going to ruin the "pristine" wildlife refuge. Yet history has shown with the original Alaskan Oil Pipeline that the indigenous wildlife is not disturbed by drilling & pumping operations… but in fact they provide additional habitat enhancement. The preserve is HUGE, and the drilling operations proposed would occupy a miniscule percentage of the real estate. Even if the presence of these operations DID disturb the local Caribou… they could walk away a mile or two and not even see or hear them… and it's not like one square mile of tundra looks that much different than another! They have millions of acres of habitat!
So we're left to IMPORT our oil. Have you ever given thought to how those billions of barrels of oil get here from the Middle East? Yup, they arrive in oceangoing ships. Now THERE'S an environmentally friendly solution! Remember Exxon Valdez? Sure it's rare to have a Tanker run aground – but ships DO get in trouble at sea. What's the first line of defense for a ship in trouble? Lighten the load – dump the cargo. So we can't drill domestically and pump through pipelines (which have a very low likelihood of a spill, and where they do spill – the volume is insignificant compared to a tanker spill) so instead, virtually every barrel of oil we consume must first float over here on a ship! Hmmm.
Meantime, the Left decries high oil prices! Well, if we drilled and pumped our own, we'd have a little more control over that! Oh yeah, and if we had a few more refineries, we could turn that crude into useable products faster and cheaper… but thanks to the environmentalists we haven't built a refinery since the Carter Administration. We have, however, lost a few refineries in that time. Our refining capacity is less than it was during the gas lines of the 70s.
The refineries we do have are forced by environmentalist inspired law to make boutique blends and formulations – varying from one geographical location to another. Gasoline formulated for Detroit can't be sold in Pittsburgh. Gas meant for Utah can't go to California. Refineries must not only go through the processing of multiple formulations, they must attempt to predict demand for each type. If they make too little of one formulation, the price in the area it's destined for must go up as supply/demand dictates. If they make too much of another grade, the price will drop for the same reason – making for wide disparity of gas prices from location to location. The glut of one region can't be tapped to assuage the shortage in another because of the special formulation requirements. But when prices are higher in one region than in another, the Left shouts "Gouging". Hmmm.
On the subject of gouging and "windfall profits" one must remember that while the raw numbers may seem large – billions of dollars of profit – those profits represent a profit to revenue ratio of less than 10% -- a much smaller margin than most businesses and industries. And who gets those profits? The oil companies are not mom and pop shops… they're publicly held corporations. WIDELY HELD corporations. There is hardly a mutual fund, pension plan or investment club that doesn't have SOME of it's assets in oil companies. So who profits? Nearly EVERYONE!! Got a 401 (k) or IRA in a mutual fund? I'll bet YOU are an oil profiteer! Hmmm.
Yes, the ironies seem to go on and on when it comes to oil and the Left.
Copyright © 2006 by Doug Edelman
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