Supply-Side Whackonomics

Dallas Dunlap's letter to the editor in the June 1 edition of Hernando Today gave us a lesson in "Supply-Side Whackonomics" and its impact on the price of gas. The hairs on the back of my neck are still vibrating!

He lists four things that determine the price of oil: Increased cost of production; commodities market speculators; the decline of the value of the dollar; and increased demand/reduced supply.

He conveniently doesn't have any remedies for these sad situations but subtly lays this mess at the feet of the Republicans. I say subtly, but it was about as subtle as Hillary's citing the assassination of Bobby Kennedy as the reason for her staying in the race! He admonishes us for the foolish practices of blaming environmentalists or greedy oil companies. However, he points out that we should blame the Bush Administration, the fount from which all our national problems flow, for bad financial practices. He recommends that we kiss up to our dear friends, the leaders of Iran and Venezuela, I guess because he feels that deep down inside they have our best interests at heart. And to sum it up he warns us we need to "develop a whole new infrastructure" in order to survive.

Now? A new infrastructure now? Now that our economy is in the toilet, inflation is rampant, food prices going through the roof because of raising energy costs, you mean that now? And anyhow, what the heck is a whole new infrastructure? Highways, bridges, tunnels, railways? Massive rapid transit systems that will rapidly take 60 million cars off the road? Maybe he means re-engineering of society; sort of a cultural makeover. Bicycles, potato patches instead of lawns and pony carts; cottage industries in real cottages with thatched roofs. Sounds like an onramp of the third-world freeway to me.

Fuel production costs have increased because the price of crude has increased. The price of crude has increased because OPEC has decided to increase their profits by limiting production in the face of increased demand. This feat of wizardry causes speculators to, duh, speculate. So, obviously the way to stop the up spiral is to make enough crude available so it no longer profitable to speculate. I guess we might not be able to depend on OPEC to increase production so we might just have to do some drilling ourselves, perish the thought. I read somewhere it takes five years to get a new refinery on line. Better late than never.

That brings to mind the time I saw Tom Daschle being interviewed on TV by a newsman back in 2001, when he was Democratic majority leader of the Senate. Daschle was asked his opinion on drilling in Anwar, and his response was, "Oh, we're not ready for that yet." Not to beat up on the Dems, though it's fun, the problem is we haven't had a Congress, Republican or Democrat, that was willing or able to concoct a decent energy strategy for the last 20 years. Between the environmental handcuffs and the unending partisanship battles, they haven't really done anything except lie about each other and meticulously schedule their recesses.

In a much aired TV commercial, the ungreedy gas and oil industry boasts of the vast supply of oil there remains. They say we have on hand now sufficient supplies to drive 60 million cars and heat 160 million homes for the next 60 years. On their Web site, www.energytomorrow.org, they boast of the billions they invest in developing alternative energy technology. So, where are the hydroelectric or geothermal projects? Where are the hydrogen fuel cells? What about solar or wind? Show me one scientific or technological breakthrough those billions bring to us. You see, they're not really in the energy business. They're in the gas and oil business! There's got to be a reason there hasn't been an oil refinery built in this country for more than 30 years and that our capacity hasn't kept pace with the demand. Could short supplies equal high prices be the rationale there?

But, oh, these environmentalists, you've got to love them! He doubts the existence of oil deposits in Alaska, the Baltimore Canyon and the Gulf of Mexico. Based on what? A crystal ball? Somebody tell China they're wasting their time. I hear tell they are drilling off the coast of Cuba - not straight down but sideways, toward Key West.

Don't get me wrong, I've been known to hug a tree or two, and I'm all for reducing carbon emissions and saving the whales, but you have to admit most rabid environmentalists are Democrats. When it comes to choosing between polar bears or caribou and preserving our freedom, our way of life - well, actually it never really has to come to that. If global warming is a fact then another fact is that Mt. Saint Helens spewed more garbage into the air in one day than all the cars since Henry Ford started shaving.

Are we so arrogant that we think we can affect the physical meanderings of the planet's orbit or the tilt of its axis, or volcanoes, or whatever else has caused the comings and goings of ice ages time immemorial?

So what, Dear Dallas, are we to do? Which comes first, the "new infrastructure" or the last drop of oil being sucked from the bosom of Mother Earth? Biofuels are a bust. They cause more problems than they solve. I'm pulling for hydrogen. It's cheap and clean. Cheer up! It didn't take us 60 years of trying to get to the moon.

Tom Cannariato

Weeki Wachee