JWR columnist Tony Blankley is upset with President Bush for joining Democrats in demagoguery over gasoline prices.
"One of the things that always made me feel good in the morning was waking up and realizing I did not belong to the same political party as [New York Democratic Sen.] Chuck Schumer. It made me feel clean — even before I took a shower," he wrote. "But now, with my Republican president pulling a 'full Schumer,' even a series of showers will not help."
Mr. Blankley was decrying Mr. Bush's order to investigate whether oil companies are gouging consumers.
The president took the step Tuesday after being urged to do so by Republicowards Bill Frist, the soon-to-be Senate Minority Leader, and Dennis Hastert, the soon-to-be ex-Speaker of the House.
I have nothing kind to say about oil company executives. The $400 million retirement package ExxonMobil is giving retiring CEO Lee Raymond is the sort of thing that makes ordinary Americans suspect they're being ripped off.
But President Bush knows full well price manipulation by American corporations has little or nothing to do with the steady rise of, and the recent spike in, gasoline prices. The average profit margin of the oil industry is much less than that of many media organizations whose editorialists decry oil's "excess profits."
Oil prices are rising because world wide demand is soaring, and production has leveled off. Consumption in China and India has nearly doubled from 10 years ago, and our own consumption has increased substantially.
The recent spike in oil prices is due mostly to civil unrest in oil producing countries. Production in Nigeria is down more than 10 percent this year, thanks to civil war. Violence in Iraq has kept production there below prewar levels. The policies of Castro wannabe Hugo Chavez are hampering Venezuela's oil industry. Nuclear saber rattling by Iranian president Mahmoud Ahmadinejad has cast doubt on the reliability of supplies from there.
Only three things can make the price of oil drop a lot, for a sustained period of time: Discovery of vast new quantities of petroleum; a massive shift to alternative fuels, or a worldwide depression.
Since production is declining in 33 of the 48 largest producers, the first isn't likely.
But it is possible. In both the oil shale of Colorado and Utah, and in the tar sands of northern Alberta, there are oil reserves that exceed those of Saudi Arabia.
Development of these resources has been retarded partly by price (at $72 a barrel, this is no longer an issue), mostly by environmental restrictions.
Royal Dutch Shell has developed a process for "in situ" mining (the shale is heated in place, and the oil leaches to the surface) that avoids the environmental degradation of older processes, and also reduces the cost. All that's standing in the way of a boom that would make Colorado the Spindletop of the 21st century are the politicians and environmental lawyers.
It would be nice if there were a safe, effective, inexpensive alternative fuel for our automobiles. But for the time being, that remains pie in the sky.
We could reduce the cost of gasoline if we used less oil to heat our homes and offices, and to generate electricity. Nuclear power could do this, as could expanded use of clean-burning coal. It is politics, not economics or science, that has been the barrier to more extensive use of these fuels.
In the short term, the blow to consumers can be eased by suspending the federal gasoline tax — currently 18.4 cents a gallon — for the summer.
In the long run, the only way to have lower gasoline prices and a healthy economy is to increase supply. But since 2001, Democrats have opposed every measure to increase supply, most notably by blocking drilling in the Arctic National Wildlife Reserve in Alaska, though the area affected is the equivalent of a bath towel on a tennis court.
In the rare instances when they venture beyond calling President Bush names to making actual policy recommendations, Democrats call for price controls, and conservation. We tried this when Jimmy Carter was president. The result was soaring inflation and unemployment, and long gas lines.
"There is no silver bullet to solving this side of the equation," said Rep. Richard Pombo of California, a Republican who gets it. "But a billion barrels here, a billion barrels there, and pretty soon we're talking about real energy."
President Bush should be listening to Rep. Pombo, not to Sen. Frist and Rep. Hastert.
>
