BIG OIL VERSUS BIG GOVERNMENT

Much to do has been made over the profits of Big Oil -- a phrase that is spoken in a way to highlight the apparent Eeeevilll inherent in the engine of our prosperity and our Liberty.

You see, to Liberals, Big Oil (or Big Medical, Big Pharmaceutical, or Big Food) is, without a doubt, the truly besetting Evil of the Modern World. Ossama bin Ladin and Hugo Chavez may be pesky, but it is the world of Big Business (again spoken in ominous tones) that is truly the threat to Life, Liberty, Truth, and the American Way -- provided you define "American Way" as Liberalism run amok.

This week sees executives of the the largest oil producing corporations being interrogated by people in Congress. These Congressmen, given the current majority of the Democrats, have no real knowledge of business nor of the oil industry.

Ah! But they look at the current oil prices, the fact that, as Rep. Eward Markey (D. Ma) says "With gas prices at $3.29 per gallon, the poorest 20 percent of American households are spending nearly 10 percent of their income just on gasoline.'' He also belabors the record profits of Big Oil and the relative little they invest in "alternative energy sources": "Your companies and the Bush administration must support, not oppose, legislation that will unleash the renewable revolution we need to become energy independent and cut global-warming emissions.''

So what is the reality? Gas prices are very high. Oil profits are correspondingly high. Liberals are calling for a "windfall profits tax" to punish oil companies for being successful. It all sounds good, doesn't it?

Reality check: no business, whether a multinational oil company or a Mom-n-Pop corner grocery, pays taxes. I know, I know! They have to fill out all sorts of tax forms, they have to hire all sorts of tax accountants and attorneys to satisfy the bloodless, demented gods of the IRS bureaucracies, and they have to send in checks, amounting to billions of dollars to the government.

But the fact remains: these businesses aren't paying the taxes at all. You, the consumer of the goods and services provided by these businesses, are paying those taxes.

How can that be? Consider what the price of a product includes: the cost of producing it, the cost of materials, the cost of transportation, the cost of labor, and the cost of the taxes levied upon the business that produced that product.

You can't get around it, folks! If you call for a "windfall profits tax", all you're going to get is even higher prices at the pump.

So, then, why don't we forbid Big Oil from passing along the costs of those higher taxes? This way, we'll cut those profits and we won't have to pay the tax!

Sure, we can do that. But can we force any business to remain open if they don't get as much profit as they'd hope for? What if we confiscate all of Big Oil's profits? Where would we get the oil and fuel for our cars, our homes, our economy?

Fine, you might say. Well what about alternative, renewable resources? Why aren't we demanding that Big Oil do something about that?

Let's see... Big Oil is in the business of selling oil. Let's get Big Oil to fund the research that, if successful (which is highly questionable. See It's the Energy, Stupid!) would remove the very reason Big Oil is in business for in the first place.

I'm sorry, but does that really make sense to anyone who isn't an all-out Marxist?

Like it or not, the energy we need to continue as an economic powerhouse is oil. Of course, we could look to some alternatives, but the ones that make the most sense (wind and nuclear, for instance) are fought tooth and nail by the Left. Nuclear power has been libeled by the Left for decades, to the point that we'll build nuclear plants in North Korea (thanks, Bill Clinton, Jimmy Carter and Madeleine Albright!) but no new plants have been built in America since the 1970's.

And don't get me started on Ted "Chappaquiddick" Kennedy and his opposition to wind farms off the coast of Nantucket, where they would make the most sense.

Also, we have the Liberals' steadfast opposition to searching for and acquiring our own oil reserves here in the United States. Unless, of course, we're talking about Occidental Oil, founded by infamous Stalinist and Friend of Al Gore, Armand Hammar. As long as Al Gore still gets his cut of new oil sources and profits that only Occidental can extract on American soil, he'll be free to make sure we all live in a 19th Century lifestyle to prevent Global Warming.

The fact is, we are sitting on untold oil reserves here in the United States. The only reason we need to import foreign oil is the Democratic Party and its ideological masters in the radical environmental movement. As a result, only Occidental can drill for oil in the Gulf of Mexico. China, in partnership with Cuba and Venezuela, can drill off the coast of Florida, while we can't. And it's been more than three decades since a new refinery has been built in the United States.

And the Democrats, who created these problems in the first place, want to blame Big Oil?

There are two reasons why the price of gasoline and heating oil have risen so high. Neither of them have anything to do with the War in Iraq or Big Oil.

The first reason is simply supply and demand. In the last decade, we suddenly have two extremely populous nations -- India and China -- that are modernizing. They are coming out of their (relatively speaking) primitive stages and are becoming fully industrialized nations, with all the energy demands that inevitably ensue.

Meanwhile, here in the US, we are always demanding more energy, both for transportation and for our infrastructure. This is as it should be, for if we do not expand our energy sources and our consumption, we will descend into squalor.

Or, as Al Gore would prefer to phrase it, we will have achieved a sustainable economy.

In any economic system, increase demand must be met with increased prices. Couple that with the Left's refusal to back sensible alternatives -- wind and nuclear -- or to expand our own domestic supplies of oil, we naturally get hit at the pump.

But then, there's the other reason, the most pernicious reason, for our massively high gasoline prices. We hear daily harangues about Big Oil and their "obscene" profits. But almost no one mentions an organization that reaps far more profit, about twice as much as Big Oil. And this organization drills for no oil, buys and sells no oil, refines no oil. And it makes about twice as much on a gallon of gasoline as Big Oil.

This organization is none other than Big Government. According to The TaxProf Blog we find the following datum:

"[F]ederal and state taxes on gasoline production and imports have been climbing steadily since the late 1970s and now total roughly $58.4 billion. Due in part to substantial hikes in the federal gasoline excise tax in 1983, 1990, and 1993, annual tax revenues have continued to grow. Since 1977, governments
collected more than $1.34 trillion, after adjusting for inflation, in gasoline tax revenues—more than twice the amount of domestic profits earned by major U.S. oil companies during the same period."

Let’s try a little thought experiment. Let’s say you ran a lemon ice stand. But I, whether through legitimate taxation or strong arm tactics (but I repeat myself!) force you to give me twice as much of the money generated by sales than you get to keep in profit. Wouldn’t you be a bit upset? Wouldn’t you be forced to pass that added cost of my larceny onto your customers? Why is this any different than taxing Big Oil at confiscatory rates?

Only Liberal can find a way around these simple facts. And his “solutions” would only make matters far worse than they already are. The demand for oil and energy is at historic levels. Never before have so many people wanted so much energy, which translates into higher prices due to the demand.

But even worse, Big Government (please note the ominous tones as I write those words) – which produces absolutely no oil, which refines absolutely no oil products, which transports absolutely no oil, which sells absolutely no oil, which impedes and prevents the development of domestic oil supplies – extracts twice the “profit” from a gallon of gasoline as all of Big Oil combined!

Friends, regardless of what the Legacy Media and the Democratic Party tell you, Big Oil is not the enemy. They are truly our friends and they are being slandered by our leaders for the sake of political advantage and economic power.

The real enemy, the 500-pound gorilla in the living room, is Big Government!

Copyright April 1st, 2008

IT'S THE ENERGY, STUPID!

Without a doubt, there are a few troubling signs for the American economy, although we have yet to have one quarter of decline, rather than the three consecutive quarters required to qualify as a recession.

At the top of the list of troubles is the price of energy. Oil now goes for $90 to $100 a barrel. The cost of electricity and natural gas is climbing. Gasoline prices are hovering at over $3 a gallon.

Naturally, this puts an upward pressure on the prices of just about everything else, since we need that more expensive energy to either make, transport or preserve that everything else.

Meanwhile, the money we are forking over for imported oil funds such delightful folks as Hugo Chavez and the Saudi royal family. In other words, we are funding the enemies of the United States.

Most Liberals like to blame Republicans for the imbroglio. After all, the Bushes are an oil family. Vice President Dick Cheney was an executive for the much-maligned Halliburton. And everyone on the Left is spouting that happy nonsense that we went to war for oil.

Of course, if you talk to a Liberal long enough, he'll get around to talking about over population, Global Warmism, the greed of Big Oil, the gluttony of the American people, etc. Basically, what these Leftists want is for the masses, unlike their favorite elitists like Al Gore, to have a reduced standard of living with fewer and fewer children, and fewer and fewer Liberties.

So what do the Leftists suggest as solutions? Well, they are quite fond of energy taxes, renewable energy, solar and wind power and the like. So let's look at a few of these.

Energy Taxes:

During the 1990's many Liberals were looking to Europe as an example of "sensible" energy policies. They gleefully pointed out that our then $2 a gallon gas was "spoiling" us, whereas Europe's $5 a gallon prices made sure that there was enough to go around and that we wouldn't pollute as much.

There are any number of problems with that, however. For one thing, it strictly limited the ability of Europeans to travel, one of the Liberties we Americans enjoy. Another issue is the kinds of cars they drive. For the most part, they are little more than glorified go-karts.

And then, there is the European economy.

France, Germany, Britain, all have inordinately large percentages of the populations on the dole. Germany, for instance, in recent years has been posting unemployment rates of 12-13%. In France the rate was 9.8%. Which might explain one of the ostensible reasons for such high rates of taxation: it's awfully expensive to support such a large fraction of your population when they are out of work.

In recent years, Liberals have taken to denigrating Big Oil for their "obscene"profits, conveniently ignoring that pesky fact that government (which produces no gasoline or energy for that matter) gets a bigger slice of the price of a gallon of gas than Big Oil takes in profits. If the politicians, of every stripe, were as serious about reducing the cost of energy as they claim to be, they'd cut those taxes. Of course, then they'd have to find another way to cut our production of carbon dioxide, since that would limit carbon taxes.

As the history of the last forty years in America has shown, cutting taxes will increase economic activity, thereby reducing unemployment. But Liberals pathologically refuse to see this simple fact. Besides, that would reduce their power over the American people. Remember Montag's Immutable Law of Nature # 7: "Liberalism is nothing short of an insatiable appetite for power".

Nuclear Power:

On the other hand, Europe is a lot more sensible when it comes to producing electricity. Most of their power is generated by nuclear power. Nuclear power is clean, non-polluting, and highly efficient. The trouble is, here in America, we've successfully miseducated our people into fearing nuclear power. Lacking a sane tort situation has also tied the hands of power companies, who can't even propose a new nuclear plant for fear of the endless litigation. Court challenges end up actually costing more than the plant itself.

Ethanol and bio-fuels:

What about so-called bio-fuels? Again, here we have absolute evidence of a national psychosis. What are these renewable fuels made of? Mostly corn. We are now burning our food! With this reduction of supply, naturally, the price of our food goes up. And this is true of all our foods.

And bio-fuels aren't all that environmentally friendly either. The fact of the matter is, ethanol production involves the use of diesel and other oil products to drive the various chemical reactions needed to produce it. Then, it has to be shipped by truck to where the markets are, since it cannot be transported in a pipeline, like gasoline and natural gas. Furthermore, it can easily be ruined, made useless, if water gets into it.

In short, ethanol costs more to produce than fossil fuels, uses more fossil fuels to produce than it replaces, and requires even more fossil fuels to transport.

And we're still burning out food!

Solar power:

Well, there's solar power, isn't there? Sure, if you can afford to coat your house with solar panels, and if you don't get much cloudy weather. Seattle, for all its Liberalism, doesn't have much use for solar power. Even then, we're talking about 15 to 25% efficiency here. Even if you could afford all the technology, you'd have to cut back your energy use dramatically. In other words, while you're being taxed into the ground and forced to burn your food, you'd have to have a lower standard of living.

A while ago, I saw an article about an experimental solar power plant that used computer-controlled "smart" mirrors to focus sunlight on a fluid which was used to power a generator. This is marginally better, but it still requires covering vast areas with mirrors, and it's still not as efficient as nuclear or fossil fuel fed power generation.

The fact is, if solar power were all it's claimed to be, we'd have it today. We don't and that's because it costs more than it's worth.

Wind power:

This isn't all that bad an idea. It's not the most efficient source of energy, but it does have the advantage that it doesn't need fuel. Once again, however, you need vast areas dotted with these giant, high tech windmills. This becomes a problem for environmentalists, since birds often collide with the spinning blades with catastrophic results. Then you have to get past the very elitist Liberals who want to shut all us little people down. The Kennedy's, for instance, recently squelched a wind farm off Nantucket, claiming that the windmills built out in the ocean (an otherwise ideal spot, since it is near the users of the energy and the wind is unimpeded over the ocean) would be an eyesore and a navigational hazard. The Kennedy's, you see, are both avid yachtsmen and avid drinkers!

Hydrogen:

This would be an almost ideal fuel. Hydrogen is the most abundant element in the Universe. It burns completely at a very high temperature. And its ash is nothing but water. It can either be burned directly (like natural gas) or used in a fuel cell to produce electricity chemically.

The problem is, since hydrogen is so highly reactive, it can't be found outside of molecules such as water. Currently, the only way to produce hydrogen is to "crack" water, releasing the oxygen and the hydrogen into separate containers. This requires huge amounts of electricity, which, like ethanol, requires fossil fuels or nuclear power. There may be ways to harness genetically engineered bacteria or algae to produce hydrogen, but this has yet to be achieved in a commercially viable manner.

Another problem with hydrogen is that we don't have the infrastructure to transport, store and sell it. For it to be practical our entire gasoline distribution system would have to be supplanted. And that can't happen unless there's a market. This is a classic Catch 22.

Hybrid vehicles:

Nothing annoys me more than to see a Prius at a Citco gas pump! First, owning a Prius is a way for some pointy headed elitist to flaunt his superiority over us mere mortals, proclaiming his greater concern for the environment. Citco, of course, is owned by that little tinpot dictator, Hugo Chavez.

Hybrid vehicles may use a little less gasoline than standard autos in their day to day operation. But it's in the details that we have a problem.

The batteries are made of nickle and cadmium, both highly poisonous and polluting. This is mined in Canada, in a region made to resemble the Moon due to the heavy metal poisoning of the land. These poisonous materials have to be shipped to Europe for some of their transformation into batteries, then shipped to the US for the rest. Once manufactured, the batteries are then shipped to Japan to be installed in the Prius, which, in turn, is shipped to the US to be purchased by those very same pointy headed elitists.

In short, from beginning to end, buying a Prius actually burns more fossil fuels than if you'd just bought a Hummer right from the beginning and drove it as long as you drove your Prius.

And what do you do with the battery when it finally goes bad, as all batteries do? More heavy metal for the landfills? Or do you have to pay for its proper disposal?

Compact Florescent light bulbs:

Congress, in its abysmal stupidity, has banned the manufacture and sale of the old incandescent light bulb, mandating a total conversion to compact florescent bulbs. This is actually less than useless. It's actually worse than excess carbon dioxide.

First, while they use slightly less energy than incandescent bulbs, they also emit less light. This means you'd have to use more florescent bulbs to get the same amount of light and, therefore, more electricity.

And if you are unfortunate enough to break one of these newfangled bulbs, you are now at risk of mercury poisoning. In fact, you have to go through all sorts of expensive mercury abatements before you can use the room in which the bulb broke. Replacement is also problematic, since recycling these little abominations is also expensive.

So here is where we are today. We have politicians who decry our dependence on foreign supplies of oil, as well as the vastly exaggerated maladies of pollution. Meanwhile, we can't touch our own proven reserves, since that would upset the Sierra Club and the radical environmentalists. That doesn't stop China, Venezuela, Mexico and Cuba tapping our reserves off the coast of Florida, though. To add further insult to these injuries, we can't build nuclear power plants, new refineries, or wind farms.

But we are forced to burn our food, use all that fossil fuel to transport and create the ethanol, and poison our homes with nickle-cadmium batteries and compact florescent bulbs.

If we don't get our heads straight about our energy problems, America will be in a state of decline. Conservation isn't the answer, since it precludes growth.

To all the politicians who are strangling our economy with their idiotic policies and their punitive taxes: A POX ON ALL YOUR HOUSES!

Copyright Feb. 25th, 2008