No shortage of snake oil, anyway

DallasBlog.com | Trey Garrison:

“Say, here's an idea. Instead of berating a retiring CEO over money he earned and that his shareholders obviously agree with, pandering proposals to suspend gas taxes, and passing feel-good legislation to stop the ‘price gouging’ boogeyman, why not do something useful? Like opening ANWAR and the coasts to drilling? Easing ridiculous environmental regulations so that it's easier to build more refineries, since we haven't had a new one in 30 years? Or maybe building more nuclear plants so our grids wouldn't be reliant on natural gas? Oh wait - election year. Best to go after the companies whose total profits account for 9 cents of the price of a gallon of gas.”

Ed Cognoski responds:

No, there's no shortage of snake oil, not with Trey Garrison having access to a blog.

First, Mr Garrison asserts with no supporting documentation that shareholders "obviously agree" with ExxonMobil giving former CEO Lee Raymond a $400 million retirement package. Shareholders' rights are so limited that even changing the board of directors is practically impossible. Corporations are not required to solicit shareholders' opinions even on such gross abuses as this case, so there's no way to tell what shareholders really think.

Second, the proposal to suspend gas taxes is pandering, as Mr Garrison charges, but so has been the Republicans' mantra of tax cuts in the face of budget deficits, war costs, hurricane rebuilding, Social Security and Medicare insolvency, etc., etc. Why does this one stick in Mr Garrison's craw? When Congress listens to voters who don't share Mr Garrison's politics, he calls it pandering. When Congress listens to Mr Garrison, I suppose it's called good governance.

Third, Mr Garrison asks why not open up ANWR and the coasts to drilling? Because America can't drill our way out of the fact that oil is a nonrenewable resource, one where worldwide demand continues to grow but worldwide supply has peaked. ANWR doesn't change that equation. Instead, America needs a major effort to develop alternative sources of energy and to more efficiently use what we have. ANWR is a minor distraction compared to what really needs doing.

Fourth, it's not "ridiculous environmental regulations" that explains our shortage of refineries. As internal oil company memos from the 1990s have shown, the oil industry itself identified excess capacity as being the major barrier to increased profits. The oil industry itself had no interest in adding refinery capacity. Now that the surplus is gone and the price of oil is up, expect refinery projects to spring up, whether or not environmental regulations change one iota. Expect nuclear to get a renewed look, too, for the same reason.

The so-called free market conservatives in this country have kept the price of oil at artificially low levels for decades by not requiring the producers and consumers to pay the true costs of using fossil fuels. Because of this unofficial subsidy, other sources of energy couldn't compete. Now that demand is outstripping supply, we're not ready with alternatives. You mess with the free market, sooner or later you suffer the consequences.

Snake oil? No shortage of it in Mr Garrison's blog.