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Gas prices: Who’s to blame?

Congress sits on its duff amid oil crisis

Posted: June 8, 2008 1:58 a.m.
Updated: August 9, 2008 5:02 a.m.
 
Psychology defines an addiction as a state of being enslaved to something that is psychologically or physically habit-forming, to such an extent that its cessation causes severe trauma.

Observing Washington, one would think that at any given moment some pol might explode into a shivering, sweaty bout of honesty with no eye to grandstanding if "business as usual" became business as it ought to be.

Still, Washington's addictions continue to be on grand display. Its favorite pet addiction these last several months has been the infantile blame game that Congress has played in its failed put-on of confronting the energy crisis - particularly the crisis at the pump - staring down our nation.

Democrats naively blame that dastardly villain "Big Oil" and his alleged chief lobbyist, the shadowy Dick Cheney; Republicans stand naked of ideas and solutions. Except for blaming Democrats, of course.

All the while, the national average at the pump has climbed to $3.98 and $4.15 for Santa Clarita.

Helpless in the quagmire
So setting the schoolyard antics of Washington aside, enlightening as they are, what gives with these wallet-draining gas prices? Why is the most innovative and dynamic society on Earth seemingly helpless in this quagmire?

First off, I believe that our real crisis moment has yet to come. America is the third-highest-producing oil country in the world. Yet we rank painfully low among countries with the largest proven crude reserves.

That condition is one of getting much out of an increasingly little. Couple that with our heretofore unmatched oil-driven existence (e.g. record U.S. jet fuel consumption and our beloved SUVs) and we are presently forced to import approximately 10 million barrels of oil a day - roughly half our daily consumption.

With tapped reserves shrinking, that number can only increase, which translates into greater dependence on foreign oil.

That childlike dependence is further exacerbated by America containing a dwindling 6 percent of the world's proven crude reserves. A sobering 77 percent of those reserves lay in OPEC member countries such as Iran, Saudi Arabia and Iraq. Presently, OPEC produces 45 percent of the world's crude, but that is forecast to increase to 50 percent in the next quarter of a century. That means that: (a) our much-out-of-a-little condition will worsen, and (b) America is a slowly but increasingly insignificant player in what is a genuinely global petroleum market.

Increasingly insignificant
Our ebbing global reach and foreign dependence are also intensified by the decreased value of the dollar. As global crude prices are set in dollars, a weak U.S. dollar makes oil less expensive by increasing the buying power of currencies that have been gaining value against the dollar.

And as global demand has soared in recent years, mark Europe and Asia, enhanced purchasing power has begun to bottle a limited world supply. That supply/demand reality forces a devalued U.S. dollar to reach above its means to satisfy a seemingly bottomless U.S. appetite.

And the well from which that devalued dollar must draw is an increasingly foreign-controlled one.

As that foreign dependence grows, it faces foreign-dominated instability as well. Mexico, a chief U.S. exporter, cut nearly a fifth of its crude production in November. Our reliance on Nigeria's exports is threatened by its continued war-torn condition.

And inevitable geopolitical tensions with oil-abundant Iran and Venezuela could serve to ulteriorly aggravate that instability.

Contrary to what Congress would have you believe, especially congressional Democrats, the geology and numbers don't lie: America is a slowly but increasingly insignificant player in a truly global petroleum market.

With criminal negligence, Congress has disregarded the petroleum market's primal factor, its global nature, and instead blamed the U.S. oil industry for the $4.15 that I pay at the pump.

Despite having 85 percent of U.S. costal waters and 75 percent of onshore U.S. prospects off limits to American energy investment, Washington's willful intellectual dishonesty continues to ignore globalism's fundamental importance in determining America's price at the pump.

Chris Matthews once said that regular folks like honesty, but politicians like the other thing. Need more proof than this?

Andre Hollings is a Santa Clarita resident. His column reflects his own views, not necessarily those of The Signal.

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