Sunday, March 20, 2011
Bingaman, defending Obama through partisan blinders, is oblivious to his own prescription on energy
But even while the president was under attack in the House, allies in the Senate rose to the his defense. Most notably, Senator Jeff Bingaman, Democrat of New Mexico, used a lengthy floor speech to rebut the claims.
Mr. Bingaman, chairman of the Energy and Natural Resources committee, noted that at a hearing earlier in the week, a panel of energy experts collectively dismissed the claims that either climate policy or the pace of offshore oil permitting were driving gas prices higher.
“None of these experts highlighted the administration’s permitting process in the Gulf of Mexico as being a significant factor in world oil markets,” he said.
“Second, any anticipated Environmental Protection Agency regulation of greenhouse gas emissions at refineries was not included in any of the presentations as a driver behind the current increased in prices,” Mr. Bingaman added.
The crucial driver behind the price increase, he said, was the instability of world oil markets in the face of uprisings across the Middle East, particularly in Libya, where a popular revolt has effectively curtailed oil exports.
“When political unrest threatens major choke points in the world oil transit routes, world oil prices react, as they have,” he said. “When a member of the Organization of Petroleum Exporting Countries stops exporting oil, which has virtually occurred in the case of Libya, world oil markets react.”
“When there are fears that a nearby neighbor and close ally of Saudi Arabia, home to the world’s largest spare oil production capacity, might begin a series of political upheavals in the Persian Gulf region, world oil markets react as well,” Mr. Bingaman continued.
He closed by arguing that only reducing the country’s overall dependence on foreign oil would result in long-term relief at the pump.
Unless "experts" are asked to list all the things that don't exist, but that would reduce oil prices if they did, then their failure to discuss or consider the possible effect of a change in U.S. government energy policies (to something permitting safe but aggressive development) in their price inquiries would be quite predictably meaningless. And Sen. Bingaman should know that.
But what's appalling is how desperate Sen. Bingaman is to ignore what he clearly does know — indeed, what he recites himself in the same speech. "Instability in world oil markets" does indeed make a vast contribution to the rise in the market price of oil, and in the consequent price rises in gasoline and other products refined from oil, including plastics. Threats to international transport systems also raise prices. But U.S. government policies that permit the development of domestic oil, onshore and off-, add supplies to the market that are stable and that are less subject to disruption in a crisis.
Barrels of oil of a like quality (e.g., sweet intermediate crude) are indeed fungible once they're in-hand. But the addition of secure oil supplies reduces the overall volatility of the world market. The addition of new oil supplies that can't be denied to us by some despot or cartel during a world political crisis drives down the current world price of oil more than the addition of the same amount and type of oil supplies from, for instance, a new reservoir in Saudi Arabia or Venezuela.
So yes, changing U.S. government policy to permit development of our own onshore and offshore reserves is essential to reducing our dependence on foreign oil. And reducing dependence on foreign oil in turn reduces market instability and our vulnerability in it.
Moreover, today's oil prices are predicated not only on existing supplies and their sources, but on the market participants' aggregate expectations about oil supply in the future. That's why opening the Strategic Oil Reserves would have only a limited effect on current prices (since its contributions to supply would be small at best and definitely limited in duration). But that's why changing U.S. government policies to permit — not even to encourage, but simply to permit — private development of our onshore and offshore resources, particularly in and around Alaska, would have a more profound immediate impact on current prices: It would tell the market something important about long-term supplies that can be predicted with confidence to become available for year after year in the future, supplies that are not subject to political blackmail or interruption at shipping choke-points.
So the fecklessness of the Obama energy policy will continue to hurt the United States for a long, long time. But it's hurting us today, too — at the gas pump, and at the cash register whenever we buy anything that's made from plastic or transported from a far-off place of manufacture. And the intrinsic indefensibility of Obama's policies is vividly illustrated by the fact that someone normally as plausible as Jeff Bingaman can't mount a defense of it on the Senate floor or in the NYT without immediately contradicting himself and undercutting his entire argument.
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(1) Gregory Koster made the following comment | Mar 20, 2011 4:54:57 PM | Permalink
Dear Mr. Dyer: Perhaps it's the operation Senator Bingaman had recently, that required a blood transfusion from Paul Krugman. I know this rumor is true, because I just made it up myself...If anyone else has a more plausible explanation for this idiocy from Bingaman, have at it.
The parts of the GreenBlog article you did not quote are in the same vein of idiocy. We gotta get more 'lectric cars on the road, sez Jeff. Where's the juice gonna come from, Jeff? From nuclear power? Nuclear power that the Left has howled against and will howl against for eternity? Nuclear power, that in the aftermath of Japan's earthquake, has an even heavier load to carry in the public relations war? Nuclear power, that requires a stable area to store waste in, say, the desert of New Mexico? Jeff? Jeff? Nope, he's off roaring for "renewable fuels" i.e. ethanol now. Just what food prices need, more corn being subsidized so Archer-Daniels-Midland can rake in more billions, kicking back a trifling amount in campaign contributions. Sure, pour more ethanol in the tank, watch what it does to the performance and reliability of car engines...
Truly, the country is going down the toilet, but an EPA mandated 1.8 gallon toilet that plugs all too easily...
(2) stan made the following comment | Mar 20, 2011 6:29:29 PM | Permalink
Since they clearly do not feel like they are bound by the law embodied in the Constitution, perhaps they feel like they are no longer bound by the law of supply and demand. Thus, servere limitations on supply no longer cause higher prices because .... because they said so!
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