Wednesday, May 16, 2007

“With Congress, every time they make a joke it's a law, and every time they make a law it's a joke.” – Will Rogers

Someone should point this blog, among others, to the jokers on Capitol Hill.

The Congress’ House Judiciary Panel has begun a series of hearings regarding the oil industry and gasoline prices, and they are looking for someone to blame - other than themselves, of course.

This is an absolute embarrassment: These are educated, well informed individuals. They know full well where the #@*!!!$ we are. We are in “deep doo-doo” as the elder President Bush would say.

The chairman of the House Judiciary Panel, Rep. John Conyers Jr., D-Mich., made this idiotic observation:

“Oil companies today are enjoying record profits, and while they could use those profits to invest in more production capacity, instead they use the money to buy back shares in the markets.”

Believe you me, Mr. Conyers, oil exploration companies would drill in their CEO’s mother’s backyard, right through her dog skippy’s grave, if they thought there was oil to be found. They are not in the business of drilling dry holes just to satisfy you, at the expense of their shareholders.

The world has been picked over, Mr. Conyers. Onshore oil production PEAKED over 30 years ago, and has steadily declined since then. That’s right. The world’s production of land-based oil has been in decline for DECADES. All of the incremental gains have occurred offshore. Unfortunately, that, too, is peaking. You can say it, Mr Conyers: "Peak Oil". There are no super-giant oil fields left to find, Mr. Conyers. Oh, we will find some oil to be sure, maybe as much as 100 - 150 billion barrels remain to be found. Just an FYI, Mr. Conyers – if we found the upper range of that estimate tomorrow, and we produced it as fast as we wished starting the day after, the world would finish off that 150 billion barrel addition to world reserves in 5 years – then we would be RIGHT BACK WHERE WE ARE NOW. And what if we don’t find that 100 – 150 billion barrels? The U.S. will be a third world nation in 10 years, tops. 13 years if we do.

Mr. Conyers, all the hearings that Congress could possibly schedule along with all the silly, pandering, meaningless BS the Members of Congress can spin, won’t do a thing but waste precious oil driving your leaderless butts to Capitol Hill.

Lest you think Conyers was the only dim wit present at this charade…

“Rep. Bart Stupak, D-Mich., who has crafted a bill that would make oil and gas price gouging a federal crime, questioned why gasoline prices soared even as crude oil prices dropped.

“In April ... crude oil was $7 a barrel cheaper than last year (but) gas prices were almost 50 cents a gallon higher,” said Stupak. “Clearly there’s more at play than simply the world crude oil market.”

Ya think, Mr Stupak? You thought that up all by yourself? Impressive. We are talking gasoline, not crude oil, right? And sophisticated free market, free trade guys like us recognize that, like, if the U.S. consumer doesn’t like the price - the refiners could ship their product elsewhere. Further, Mr. Stupak, stick to lawyering, this clearly isn’t your thing. The U.S. imports gasoline, not just crude oil, Mr. Stupid – er , sorry – Mr. Stupak, and it is the price paid for those imports that sets the $#^$!!@ price of all of the #%$$!!@ gasoline! If we don’t like it, we don’t have to pay it! That’s how markets work. But before you do anything rash, like import tariffs or restrictions (I don’t think even Members of Congress are that daft), think of what would happen in the U.S. without those imports. OUR ENTIRE SYSTEM WOULD JUST SHUT DOWN. KAPUT. Think you’ve got political risks now? So let’s recap a little international commodity trade 101: It is the incremental unit of imported supply that sets the market price.

The MoRons in attendance were not limited to Members of Congress.

“Connecticut Attorney General Richard Blumenthal told the task force that “lax and lackluster” federal enforcement of antitrust laws has led to an explosion of oil industry mergers, “many of them profoundly anticompetitive and anti-consumer.” –

Well, there you have it folks. We can solve the enrgy crisis with some good old fashioned enforcement of the antitrust laws. You know, oil is a G-d given right, kind of like electricity, and we should treat it like some kind of Utility company.

Mr. Blumnethal! Can you count? Sorry, I forgot, you’re a lawyer (worse, actually - you're a politician/lawyer trying to exploit the people's ignorance and their propensity to want to believe).. No matter, I’ll keep this simple… The major oil companies are small potatoes next to the National Oil Companies – ya know, like Saudi Arabia’s Aramco and Russia’s Yukos. You could chop up all of the U.S. based “big oil” companies anyway you like and it won’t change the one primary fact of the matter – the U.S. has only 2% of the world’s oil reserves! We are not in charge any more. All that the idiotic rumblings by U.S. politicians of a windfall profits tax has done over the past several years is wake up the governments of the countries that have the oil. If there is any windfall-profit-taxing to be done, it will be done by the country’s that have the oil.

The sad fact is that I don’t really believe that these guys are this dumb. I think they are cowardly, hard-boiled, political opportunists willing to manipulate young men into losing their lives and their limbs in the military while they cannot bring themselves to risk losing their political office by telling the American people the truth:

We have a serious energy problem, a crisis, really. There is no simple, no painless, solution to the problem. Oil was a one time geological gift, and there is no substitute or alternative for it in the scale we are accustomed to. Our lifestyle will be permanently and profoundly degraded as the supply of oil declines. At some point in the not too distant future, our collective way of life will no longer exist. Our Social Security system will not be able to function, nor will Medicare and Medicaid. Our currency, the dollar, will lose most of its value, as will most of our financial assets. Your new car will outlast its fuel supply, and your suburban home its energy supply. American’s will have to grow some, or a great deal, of their own food, and what food they consume will have traveled far less distance to their dinner plate. The family will be important again (if you don’t have a family, get one). Travel will be infrequent. Consumerism will be dead. Population will decline. Lawyers will be, for the most part, unnecessary and superflous (as will accountants, advertising agencies, investment bankers...). All of the bombing, invading, burning, and murdering of Oil producing nations will not change this outcome.

We are leaving the age of Oil behind.

mentatt (at) yahoo (dot) com

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