Big Oil Meets Big Politics

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Oil hit $130 per barrel today and gas at the pump seems to be making a brief stop at $4 per gallon before charging ahead, seemingly ever upward.

So it's not the best day for the executives of Big Oil to appear before a Senate committee whose members represent angry and economically battered constituents.

The outrage over ever higher profits for Big Oil masks the real offense to average Americans, which is the gusher of dollars raining down on the oil producers — the people who pump crude from beneath sands, jungles and seas.

If today's hearings were honest they would center on the word "supply," because it is most certainly world-wide supply of oil which is being pressed by ever increasing demand from emerging economies around the planet.

For short term relief (and in this context "short term" is probably best described as decades, not years or months), the most likely solution and relief for hard pressed consumers is increased supply. The Saudis said "no" to President Bush; we probably can't ask Chavez in Venezuela to pump more and Mexico is under siege by narco cartels, so the mere fact they are pumping any oil is probably a miracle.

Many people, including me, think the supply question has really only one answer: U.S. domestic production.

Here's what Exxon Mobil Chairman and Chief Executive Officer Rex Tillerson told the Wall Street Journal this week: He found it "astonishing" that President Bush asked Saudi Arabia to pump more oil rather than working harder to clear the way for more oil production at home. He called it "terribly upside down."

He's right. The federal government has cooperated with states which want offshore oil production restricted or banned, namely California, Florida and New Jersey. The federal government has also cooperated with environmentalists who demand that a ready supply under the Alaska National Wildlife Refuge is also, by law, off limits.

Opponents of more drilling have consistently argued that the environmental damage caused by more domestic oil recovery will not be worth the small amount of oil that will be gained and Americans can "recover" more oil by conserving gasoline through various measures, of which higher fuel standard vehicles is just one.

But most people would probably be surprised to learn the United States as a huge supply of recoverable oil — fields which require no American soldiers to fight and die to protect.

In a report prepared for the U.S. Department of Energy in 2006, technical analysts at consulting firm Advanced Research International said "undeveloped domestic oil resources still in the ground (in-place) total of 1.1 trillion barrels" and "the U.S. still has 400 billion barrels of undeveloped technically recoverable oil."

Environmentalists say the U.S. has only 21 billion barrels of "proven oil reserves" and, just for reference, Saudi Arabia says it has 260 billion barrels of proven reserves.

But whether the real number is on the low end or high, why not more drilling?

Why is China able to drill for oil off Florida and the U.S. isn't? Why do Californians face $5 per gallon gas while millions of barrels of crude lie undisturbed under the Pacific a short "drive" from shore? Why are folks in New Jersey paying through the nose when a ready supply of is off limits within sight of the oil guzzling New Jersey Turnpike?

Up till now, Americans have insisted that pristine views — unsullied by the sight of oil rigs — are more important than the oil we could be using today.

The New York Times has called oil production in ANWR "Drilling in the Cathedral," hysterically raising that frozen tundra to the status of Yosemite National Park.

Till now, environmentalists have declared that the oil that would be available spoiling someone's kayaking trip on the rivers of the Alaska's North Slope is not worth the effort or the disturbance of the eco-tourism experience.

There seems little doubt that if America's domestic reserves were opened to development, oil futures speculators would see they are bidding the commodity up beyond reason.

So if Americans were to understand the solution to their problems at the pump, the relief from ruinous heating oil bills, the answer to the question "eat or drive?" in fact is within their grasp, will they continue to say "No, offshore is off limits and ANWR is for caribou?"

Somehow I doubt it.

The question is whether they will be allowed to hear the information that could lead to their salvation. Does any major political figure dare say it, or does the environmental stranglehold on Congress still hold?

That's My Word.

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