THE BIG SQUEEZE

Dallas Morning News | Mark Davis:

“More American oil. We have whined for decades about relying too much on foreign oil, yet we have never seen a major public outcry for environmental extremists to get out of the way so that we can drill and refine more of our own oil and import less from countries that want to kill us. No new refineries in America in more than three decades. That track record of obstruction, thanks mostly but not totally to Democrats, has done more to keep our oil prices high than any Republican coziness with big oil.”

Ed Cognoski responds:

Mr Davis exceeds even his own usually high ratio of falsehoods per paragraph with this twisted opinion piece on oil prices. His unstated assumption is that the supply of oil is infinite. That if we'd only unleash the oil companies to rape the land and pollute the seas and skies we'd have enough oil to fuel our gas guzzling consumer tastes forever. That's simply false. Any reader who is unfamiliar with the concept of peak oil is well advised to read up on it instead of reading Mr Davis' rants blaming the Democrats for supposedly artificial shortages of oil.

As for Democratic obstructionism to the building of new refineries, it's well established from internal industry memos that the oil industry itself is as culpable as any tree-hugging environmentalist for the lack of any recent new refining capacity in the US. An internal Chevron memo from 1995 asserted that "If the U.S. petroleum industry doesn't reduce its refining capacity, it will never see any substantial increase in refinery margins." A 1996 Texaco memo identified excess refining capacity as "the most critical factor" facing the industry. That excess was leading to "very poor refining financial results."

Let's face it. The world is facing a supply squeeze. The world as a whole is close to peak oil production. It's not just the United States. Thirty three of the forty eight largest oil-producing countries are seeing declining production.

The world is facing an explosion in demand. US demand is not going to decline and demand in countries like China and India is skyrocketing. We're seeing a disconnect between supply and demand that no amount of US government relaxation of environmental regulations is going to solve.

It will take a Herculean effort on a global scale between government and industry and yes, individual behavior, to manage the disconnect. And Mr Davis' knee-jerk anti-government obstructionism is only going to delay getting this problem under control. If we could direct our energies toward controlling demand and developing alternative energy supplies, we might have a better chance of prevailing and seeing our world economy continue to grow and prosper.