Republicans Upset, No One's Listening

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Republicans threw a fit on the floor of Congress today, and then called a news conference to grandstand their fit. [Link is to video of conference.] Almost no one listened. And for good reason. Rep. Mike Spence (R-In) gave the cookies away when he said we Republicans could have given the American public greater access to oil, but, didn't. He went on to rail against Democrats for having recessed without an energy bill.

The fact of the matter is, there is no bill the Congress could pass, that would ease gas prices for American consumers over the next 5 weeks. Rep.'s Parker, and Blunt tried to make the case that drilling for more oil on the East and West Coasts would lower consumer gas prices so needed today. It is a plain and flat out lie. Drilling in new areas would not produce increased supply significant enough to lower world prices for oil for another 8 to 10 years.

Therefore, all of their fits today were a political grandstanding play, to vent their frustration over not being able to debate and pass an energy policy favorable to their oil corporation campaign donors and supporters. [Politico has a recap here.] And that is what this hissy fit news conference was all about. If Republicans fail to acquire favorable legislation for the their big donor oil corporation supporters before Pres. Bush leaves office, it is unlikely favorable legislation sought by the oil company lobbyists will ever be achieved if Obama is elected.

The oil corporations have been offering huge donations to the Democrats since their 2006 victories in the Congress, but, they have not been able to buy most Democrat's votes for even more favorable oil company legislation. Quite literally, this is tug o' war between states who seek to keep their shorelines pristine and free of derricks off in the distance, and the oil companies who seek to override State's Rights to manage their own shorelines and coastal waters upon which so much of their tourism and development dollars depend.

This issue is not, and cannot be about lowering gas prices for consumers today, as House Republicans claimed in their news conference. The only way our government could lower consumer gas prices today is if Pres. Bush were to order the release of large amounts of oil from our national oil reserve. Which begs the question, why are House Republicans leaning on Democrats for a solution that won't lower gas prices for 10 years, when they ought to be leaning on Pres. Bush to open the reserves, if lower gas prices today is their objective, as they claim?

The answer is very simple. House Republicans are not concerned over consumer gas prices. They are concerned over losing oil industry campaign donations due to impotence in successfully lobbying for oil corporations in favorable legislation. However, to the unenlightened public few, who watched today's news conference in ignorance or adoration of all things Republican, the news conference had the appearance of concern for consumers. But, it was a simple case of smoke and mirrors fraud.

Another simple fact of reality is that oil companies have declined to increase oil refinery facilities, which would have a significant impact on gas prices in the future. But why invest in gas refineries if the hydrogen fuel cell and electric vehicles already portend long term declines in demand for gasoline? Building new refineries would be a risky investment for oil companies.

Republicans continue to perpetuate the lie that there is a shortage of supply in oil which is driving up prices. That lie has been dispelled by industry experts the world over. Nowhere in the world has a single customer for oil been turned away empty handed after putting down the market price for shipment. There simply has not been any oil shortage. This dramatic rise in oil prices was started by oil speculators and those whose greed surpassed actual the actual supply demand equality.

Security and Exchange Commission and Congressional investigations are now underway to determine who these culprits were, and how they got away with billions in speculative oil bidding contracts, without ever taking receipt of one drop of oil for consumption. The process was quite simple, actually. Investors, knowing that one day, there will be a shortage of oil in the world, realized they didn't have to wait for that day to reap huge rewards on oil bidding and contracts today. They would begin bidding low at the beginning of the month, all the time knowing that they had neither the ability or desire to actually win an oil contract bid, and wait for the actual oil suppliers to outbid them, at which point they sold their contracts to the higher bidders reaping a handsome profit.

Only problem is, this speculative bidding for profits has caused oil and gasoline prices to rise so dramatically as to cause hardship for well more than a billion people in the world. Republicans herald this as free markets. Democrats decry it as price gouging by speculative Wall Street traders. Regardless of this political debate, the fact remains that there is no legislation the Congress could have passed that could have relieved gas pump prices for consumers in the here and now. Only Pres. Bush has that power, and he is not offering any olive branch to Republicans in the House to make their reelection bids easier with a dramatic release of the national oil reserves.

One closing fact to consider. Every month and year that goes by in which Americans have sufficient oil and gas supplies to meet their needs, is another month and year in which the urgency of the need to develop alternatives to fossil fuels is diminished. In other words, drilling on the East and West Coasts would open new oil production in a decade or so. But, knowing there will be a significant increase in oil supplies only lessens the need for sacrifice in seeking alternatives.

In a perverse sort of way, we have the oil speculators on futures contracts to thank for the sense of urgency growing in the nation for alternative energy sources. Without rising gasoline, oil, coal, and natural gas prices, there would be no sense of urgency or compulsion to invest in alternatives for the long term and which delay profit returns for many years. Why make investments in the future with only the promise of profits years away, when profits can be had today for nothing more than the guts to bid up fossil fuels, and sell before one is left holding the bag to take delivery?

If I were an unscrupulous Exxon Mobil executive, I would pay a small number of investors to do just this, knowing that my own corporation's profits would soar as a result. And as timing would have it, Exxon Mobil posted a new record high profit report again, just this last week. The economic stimulus checks received by working Americans exceeds all the extra cash they have doled out in elevated gas pump prices.

But, the stimulus checks are not making up for the all the other increases in pricing for food, health care, education, and stagnant or declining wages as a result of workers being forced from full time employment to part time. Many employers have been hit hard by the retraction in economic growth caused by the mortgage and credit crisis, which is still trying to find its way out of the hole Fed Chief Greenspan and President Bush dug for the nation with their low interest 'ownership society' idea that backfired in the worst way with unintended consequences.

Yes, America needs a comprehensive energy policy that secures our nation's future needs and demand for low cost energy. But, don't be fooled by House Republican parlor tricks feigning concern for the poor consumer. Always remember who their largest campaign financing donors are, so that these slight of hand news conferences railing against Democrats can be viewed for what they really are: quid pro quo for their corporate oil contributors. [AP has a short but good background article on this political play by Andrew Taylor.]

Thank you Rep. Spence for making that most salient of points that Republicans could have decreased our dependence on foreign oil when they were in power, and didn't. It reveals the hypocrisy of the House Republicans who would ask the public to "forget what we did, listen to us now."

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This page contains a single entry by David R. Remer published on August 1, 2008 11:21 PM.

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