Monday, March 14, 2022

The Steven Colbert School of Logic

 

Recently, late night talk show host and certified out-of-touch elitist, Steven Colbert, announced on air that he didn’t mind paying a higher price for gas here in the United States because it somehow soothed his conscience.  He went on to say that he wouldn’t mind if gas prices went up to $15 a gallon because he drove a $200,000 Tesla, and why doesn’t everyone?  Since Colbert made that statement, I’ve actually heard some of my friends echo that sentiment suggesting that we should all stop “bitching” about high gas prices here because people are being killed in Ukraine.  Most of the people using this line of reasoning and pretty well off (Colbert has a net worth of $75 million) so high gas prices really don’t affect them.  Many Americans of more modest means, however, will have to make some tough choices as they watch their gas and heating oil costs double in just a year’s time.  They will be choosing between gas and food or insurance or doctor visits.  They will not be out pricing Teslas as a solution to their problem.

While I and most Americans are appalled with the senseless slaughter of civilian Ukrainian life by the madman who is running Russia, we all need to take a step back and consider what things we can do here that will actually make a difference over there.  I can guarantee you, however, that paying a higher price for gasoline in The United States will NOT save a single life in Ukraine.  If fact, higher global oil prices will only intensify or prolong the assault on Ukraine because it is oil revenues that are financing Putin’s war. 

So, someone please tell Steven Colbert’s conscience that it is not off the hook, and in fact has some damage control to do.  If Steven Colbert and anyone here in the United States wants to help the people of Ukraine, the first thing you can do is send money to one of the hundreds of organizations, including the Ukrainian Red Cross, who are actively supporting Ukrainian women and children who are trying to flee that country.  I would hope that Mr. Colbert is using some of his $15 million annual salary and $75 million net worth to support some of those groups.  And I hope it’s not with a $100 check, lest his conscience should not be soothed.

The other thing you and I can do is to write our Congress people and ask them to stop the war on the oil and gas industry here in the United States.  We should also vote for candidates who align with that position.  The war here in the US has not only NOT prevented the assault on Ukraine, but it has undoubtedly contributed to it.  Stifling our gas and oil companies will also not develop renewable energy here in America or around the world any faster.  Again, it may even delay it.  What we need is an “all of the above” energy strategy.  

I do believe in developing renewable energy.  It was Thomas Edison who said, “I’d put my money on the sun and solar energy.”  That’s probably because Edison knew that the sun puts down more energy on this planet in an hour than we on earth consume in a year.  The power of the sun is amazing and I’m confident that it is the long-term solution to our energy needs, but that solution is not ready now.  Today, solar power only supplies about 1% of our energy needs here in the US, and that’s because we simply have not figured out how to capture and store that energy efficiently.  I’m confident that we will eventually figure out how to harness the energy of the sun, but considering where we are now, that time will not come for decades and it may even take 50 to 100 years.

But destroying our existing energy industry now, will not develop that capability any faster.  The Biden administration is strangling oil and gas production here through regulations and restrictions which is driving up those prices here and around the world, and those higher prices don’t help anyone.  He should be encouraging the development of all energy sources and allow the free market to transition to renewable energy sources through research and investment as that capability becomes efficient and affordable.  

The first gas powered car was invented in 1881, but then President Chester A. Arthur did not sign an executive order to kill all the horses in the country so that we could develop the car industry faster.  In fact, if President Arthur had made such an idiotic move, it would have caused extreme pain for the entire United States and actually delayed the progress of the auto industry. But that is exactly what we are doing today as this administration punishes the oil and gas industries in the US and suggesting that it can be replaced by wind and solar, etc.  That is ridiculous and delusional.

The point is, we cannot let our unscrupulous politicians sell us absurd concepts just by appealing to our compassionate natures, or unwarranted fear (paranoia).  High gas prices in the United States and the world with not save a single life in Ukraine.  In fact, high energy prices will probably make things better for Putin and worse for Ukraine.  Likewise, punishing and restricting our oil and gas industry in the US will not develop renewable energy any faster.  In fact, it will probably delay it.  What we need is an “all of the above” energy strategy now, and probably forever.  Drill and pump today, taking advantage of our massive resources while we research and develop alternative sources of energy so that we can transition to them when they become feasible in the future. 

8 comments:

  1. "The other thing you and I can do is to write our Congress people and ask them to stop the war on the oil and gas industry here in the United States."

    Ummm, this doesn't exist. The oil and gas industry is going through yet another in over 100 years of boom and bust cycles. (I would recommend the book Titan by Ron Chernow about the life of JD Rockefeller or The Prize by Daniel Yergin about the history of US oil)

    This boom is related to a roaring economy coming off a time when the price of oil actually briefly went negative because demand dropped so low. Oil companies, like so many other industries, are enjoying the record profits currently, though WTI price is falling and will level.

    Can you point to a single regulation or law enacted since January 2021 that should be reversed? And if you say Keystone XL, that will be silly, because it moves Canadian oil.

    Essentially you're repeating GOP talking points verbatim with no actual analysis of whether they're true.

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    1. Matt, if you don't believe Biden is perpetrating a war on oil and gas, you are simply wrong. The Keystone pipeline is at least friendly oil that comes to the US. He's also shutdown Anwar and much, much more. Here's an article that lays it out.
      https://www.heritage.org/energy-economics/commentary/bidens-many-anti-energy-policies-are-hurting-producers-consumers-alike

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    2. Read your own link. The majority of it is alleged "expected" or "proposed" policies. There are numerous capped wells that haven't even been opened yet but were closed because they didn't produce enough to justify the cost at previous prices. Including many not far from us in Kansas and Oklahoma. No one is stopping them from being opened again.

      The Keystone pipeline already exists. The XL pipeline was just going to take more heavy crude to refine and ship on the worldwide market 5 years from now. This is not the light sweet crude that comes out of OPEC. I do note that you've shifted the goalposts from US oil to "friendly" oil.

      At this point, don't you feel it's a little much to refer to a bunch of "expected" policies as a "war"?

      This is basic economics of business but the partisan culture you claim to lament has to make this into a partisan thing. It's also the history of the last 100+ years of the oil industry - boom to bust. The price of oil went down because the worldwide economy crashed and demand crashed. Heck the price of oil actually went negative just a year or so ago.

      Wells got closed, drilling wasn't profitable at the prices so equipment got mothballed, and production slowed. Then the economy, and thus demand, took off again and the industry is ramping up. The price of oil is already declining.

      You don't need to look far for this cycle. Look at the history of the Fayetteville Shale and natural gas. Local companies that were worth millions when gas was at $14 were worth nothing at $4. During the BUSH administration!

      You're always lamenting partisanship on one hand, but then spreading it on another. When the price of oil drops, which it will inevitably will per the traditional cycle, will you be saying "must have been those Biden policies that caused it to drop" even if not one policy has changed? Of course not.

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  2. I also find this criticism of Biden odd, given that Trump EXPLICITLY pushed the Saudis to cut production and raise the price of oil and the GOP said nothing at the time. Yet another reminder all this current caterwauling is simply partisan sniping and there's no real meaning behind any of it.

    https://www.washingtonexaminer.com/policy/energy/stunning-reversal-trump-pushes-for-higher-oil-prices-in-election-year

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    1. Matt, do you know the difference between asking for a "reduction" in production and begging for an increase? Policies matter and Joe's are all wrong when it comes to energy which is the biggest driver of our inflation.

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    2. You still haven't shown one single regulation or policy since January '21 which has changed.

      Asking the Saudis for a "reduction" in production is asking the American consumer to pay more at the pump. Why didn't you object when Donald Trump did that?

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  3. Overall it's a sad state of affairs when the party of business and plain dealing can't be honest with its base. Growing up I expected hysteria over every little thing from the Democrats, I expected they would be the ones to play the victim at every turn.

    I honestly never thought I'd see the party I identified with unable to speak honestly about the business cycle. About global economics and how they affect us here at home. To treat its base as manipulatable fools who deserve to consider themselves victims of literally everything.

    Yet here we are, and it's yet another reminder I am glad I am no longer a member of the GOP.

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  4. By they way, if Biden has a war going on against oil and gas, the major oil companies aren't showing it. Net profit for 21'

    Shell: $19.29B, up from $4.85B in '20
    Exxon: $23B, up from -22.4B in '20
    Chevron: $15.6B, up from -5.5B in '20.

    I could go on, but you get the picture. Now, there's no doubt there's some (legal) wiggle in there to take advantage of tax benefits but you get the picture. If this is a "war" on O&G producers, I'd hate to see how much they'd make in a time of peace!

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