Five bucks a gallon? Try SEVEN on for size.
by John Hayward
03/22/2012
On Thursday, President Obama will make a symbolic appearance in Cushing, Oklahoma, to take credit for the half of the Keystone XL pipeline that he has absolutely nothing to do with.
It cannot be stressed enough that Obama’s appearance today is the most hollow, cynical, meaningless photo op since the time he burned taxpayer dollars to lobby for his latest “stimulus” bill in front of a bridge that wouldn’t be affected by it. The pipeline announced by TransCanada in Oklahoma requires no State Department approval, as it is located a thousand miles from the Canadian border. Barack Obama’s sole meaningful contribution to this project is that he didn’t unleash one of his feral regulatory agencies to cook up some reason to block it.
The other part of the Keystone XL pipeline project is the part Obama killed. That’s the part that passed three years of exacting environmental studies, and plugs into a desperately-needed treasure trove of over 20 billion barrels of oil. The one and only reason you won’t be getting that oil is Democrat Party special-interest politics.
You remember “special interests,” don’t you? Politicians like Obama love to complain about them… unless they need their votes, of course. There’s no better example of a “special interest” than the environmentalist radicals Obama placated by killing Keystone XL, but you will absolutely never hear them referred to in such terms.
Perhaps Obama will take advantage of his new photo op to retail his favorite new lie, which is that American has only 2 percent of the world’s oil reserves. A Fox News debunking of this talking point from Wednesday quotes an energy industry analyst describing it as “accurate but extremely misleading.” That’s an unnecessarily polite way of saying “lie.” Obama knows the impression he’s trying to create is dangerously false. He wants you to think the astonishing slowdown in domestic oil exploration under his Administration is no big deal, because there’s not much of a milkshake left to drink under American soil.
In reality, the figure Obama cites is merely America’s “proven” reserves – in other words, the oil fields we’re already drilling. Obama’s own federal agencies call the President a liar by saying we have 10 to 20 times as much oil available, while the oil industry says it’s more like 60 times as much. That’s two centuries of oil at our present rate of consumption. Isn’t it remarkable that the President is trying to peddle a talking point that agencies within his own titanic government know is off by one or two thousand percent?
Now, let’s pause for a word from President Obama’s special interest allies in the environmentalist movement:
"We are addicted right now -- there's no question about that. But there's a question about how do we get off of that addiction," Erich Pica, president of Friends of the Earth, said.
The president prefers to emphasize weaning ourselves off of oil, which reduces the urgency to drill. And Pica and many other environmentalists agree.
"I don't think that it is a good decision for this country or for the globe, realistically, to push for maximum drilling," Pica said. "The atmosphere just can't hold that much carbon dioxide anymore."
Now there’s some Flat Earth thinking for you, Mr. President! Obama’s no-growth radical allies know he’s lying about how much oil is available, and don’t even try to argue the point. They just think the rest of us should be forced to buy that oil from foreign countries, and ratchet our standard of living down to pre-industrial levels, because retrieving it would offend their religion.
Don’t believe any of Obama’s equally phony talking points about oil production, either. The hard truth is that oil production on federal land was down 11 percent last year, and natural gas was down 6 percent. The former president of Shell Oil, John Hofmeister, told CNS News that new oil production is mostly taking place on private land these days, because federal permits have been “dramatically reduced in the last several years.”
And, contrary to Obama’s gas price fairy tales, it would make a difference if President Downgrade hadn’t been blocking American energy production. Here’s how Hofmeister explained it, in response to a question from an audience member:
“If we produced 10 [million barrels a day] – which we used to and we could today, if we were allowed to – that would have an ameliorating effect on global prices,” Hofmeister said.
“We do not sell crude oil – other than a very small amount from Alaska – outside the country. We consume all the crude oil. Plus, we import between 11 and 13 million barrels a day from other parts of the world into this country,” he said. “So the caller may not understand that we don’t produce enough crude oil to ship it to other parts of the world. And we need another, almost twice as much crude oil, just to get through everyday.”
Sure, Hofmeister hails from the oil industry, but who are you going to believe: the people who want to invest money in recovering all that oil, or the President who ignores his own agencies to lie about it?
How bad are gas prices going to get? CNBC speculated on Thursday that we could be looking at $200 per barrel within 12 months. It’s about $123 today. $200 a barrel means about $7 per gallon at the pump, folks.
Back in the summer of 2008, when somebody else was President, the L.A. Times asked “What If Oil Hits $200?” They interviewed experts who were “shuddering at the inflation fueled chaos $200-a-barrel crude could bring” and forecasting “fundamental shifts in the way we work, where we live, and how we spend our free time.”
"You'd have massive changes going on throughout the economy," said Robert Wescott, president of Keybridge Research, a Washington economic analysis firm. "Some activities are just plain going to be shut down."
Besides the obvious effect $7-a-gallon gasoline would have on commuters, automakers, airlines, truckers and shipping firms, $200 oil would drive up the price of a broad spectrum of products: Insecticides and hand lotions, cosmetics and food preservatives, shaving cream and rubber cement, plastic bottles and crayons -- all have ingredients derived from oil.
With every penny hike in the price of gas costing American consumers about $1 billion a year, sharply higher pump prices would lead to "significant bankruptcies and store closings," said Scott Hoyt, director of consumer economics at Moody's Economy.com.
Consumer spending has held up surprisingly well in the face of skyrocketing pump prices -- bolstered in part, perhaps, by federal tax rebates. But the same day the government reported a 0.8% rise in May consumer spending, a research firm said consumer confidence had plunged to its lowest level since 1980 -- hinting at the catastrophic effect another big gas price surge could have on retailers and customers.
"The purchasing power of the American people would be kicked in the teeth so darned hard by $200-a-barrel oil that they won't have the ability to buy much of anything," said S. David Freeman, president of the L.A. Board of Harbor Commissioners and author of the 2007 book "Winning Our Energy Independence."
That’s the future Barack Obama has planned for you. There’s no easy way to avoid rising gas prices now, but re-electing Obama guarantees they’ll continue long enough to bring about those “fundamental shifts in the way we work, where we live, and how we spend our free time” the media used to be much less shy about discussing. The one and only reason Obama is pretending to care about energy prices today, with meaningless photo ops that he burned tens of thousands of gallons of fuel to stage, is because his poll numbers are in free fall. He won’t be worried about that any more, if he survives in office beyond November 2012.
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