High fuel prices have produced a tectonic shift in the United States’ political landscape. Recent polls indicate a strong surge of support for Uncle Sam lifting government restrictions against domestic drilling for oil. Blocking the development of domestic energy resources was a luxury we used to be able to afford. At current prices, though, the calculus has shifted. The reasons for proceeding full-speed-ahead with domestic drilling are compelling. They include:
1) Compassion toward relatively poor Americans. Those who oppose domestic oil production often are those who claim to champion “the little guy.” They can prove the sincerity of their professions by permitting increased domestic production of oil, thereby exerting downward pressure on the market price of the fuel that consumes a growing share of Americans’ incomes.
2) Reducing the merchandise trade deficit. For years, politicians left and right have decried the United States’ enormous trade deficit. Since imports of oil now account for more than half of that deficit, one of the most effective policies for reducing it would be to produce more oil domestically.
3) Creating more jobs, especially high-paying blue-collar jobs. Why does the party that aspires to be known as the friend of labor suppress the creation of thousands of high-paying jobs for American workers?
4) Showing more respect to the rest of the world. There is something pathetic about the president of the United States traveling to Saudi Arabia to plead for them to increase production while we refuse to increase our own. Liberals are uncomfortable with any manifestation of American exceptionalism, yet aren’t we practicing exceptionalism when we expect the rest of the world to produce our energy for us?
5) Increasing national security. Who benefits the most from today’s astronomical oil prices? Ideologues reflexively point the finger at “Big Oil,” but the major beneficiaries are the House of Saud—the sponsor of Wahhabism—and such mischief-makers as Venezuela’s Chavez.
6) Keep taxes on middle class Americans from being raised. If fuel prices stay high, don’t be surprised if Congress proposes new, costly federal energy assistance programs for poorer Americans. Shades of agricultural subsidies and food stamps! Once again, the American taxpayer will take it on the chin twice—first, by having to pay more for gas and heating oil as a result of government’s suppression of domestic production; second, by tax dollars being channeled to those hurt most by those unnecessarily high prices.
The following objections to a pro-drilling policy are weak and clearly untenable under present circumstances:
1) Oil and gas wells are not aesthetically pleasing. True, but neither is human hardship. Are well-to-do “green” sentimentalists willing to see an occasional derrick in exchange for millions of poorer Americans gaining critical relief from high fuel costs?
2) An accident could occur. No fooling? But if we are going to outlaw risk, why not ban driving? Automobile accidents claim over 40,000 American lives annually. The environmentalist assertion that oil companies won’t take sufficient precautions to prevent oil spills is a prima facie absurdity. Oil is valuable, and if American oil companies are half as greedy as their critics claim they are, then they will strive mightily to prevent spills which hurt them in two ways—loss of valuable product and incurring the huge cost of cleanups. Those fearing oil spills should take heart from the fact that a thousand oil and gas wells were smashed by Hurricane Katrina, yet no spills occurred. Technology has improved.
3) Oil company profits are “obscene.” Why discriminate against oil companies? We don’t think twice when other businesses—cell phone, beverage, retail , software, etc.—earn greater profits when they provide more of what people want. If you really resent oil company profits, you should favor opening up drilling to all comers, because increased production puts downward pressure on prices and increased competition squeezes profit margins.
4) Increased drilling won’t boost supply right away. True, but pointless. It is because people accepted this myopic premise years ago that we are in our present predicament. Let’s do a better job of planning ahead. Future oil prices will be lower with increased supply than without it.
5) We need to develop alternative energy sources to replace oil. Okay, but what will we do if those technological breakthroughs don’t occur as early as we hope? We will need affordable energy regardless, so it would be prudent to increase the supply of oil, just in case we find ourselves still needing it.
The time for drilling is now. Let’s get on with it.
- Biden Resumes Obama’s Efforts Against Domestic Oil Production - July 13, 2021
- Biden economic team predicts long-term slow growth - June 30, 2021
- The Worst-Kept Economic Secret in America: High Inflation Is Back - May 19, 2021
- Raise the Corporate Tax Rate? Economic Obtuseness in High Places - May 12, 2021
- Washington’s Bi-Partisan Fiscal Folly - May 6, 2021
- The Problem with Hedge Funds - April 13, 2021
- Wall Street Outsiders Versus Hedge Funds - February 1, 2021
- The Problematical COVID-19 Relief Legislation - January 14, 2021
- Giving Thanks to Society’s Economic Benefactors - November 19, 2020
- Why Fracking is a Big Issue - October 30, 2020