Posted by
mpgerace on Thursday, July 17, 2008 2:09:07 PM
T. Boone Pickens is playing on the public’s ignorance with his TV commercial showcasing his wind power plans. He says that the current price of oil will lead to the greatest wealth transfer in human history and, to avoid this, we must get off of foreign oil. His wind power plans will apparently help us do this.
While wind power is a good bet for the future, T. Boone’s argument is cynical.
It’s not just foreign oil producing nations that are gaining by the high price of oil, it’s also American oil firms (Exxon/Mobil, et. al., not to mention non-American firms) whose profits are higher than ever before in history and are driving up the cost of production to non-energy firms (look at the ravaging effects of oil prices on the airline industry, who blame speculation for the price of oil). The wealth transfer that T. Boone speaks of is, in good measure, from our economy as a whole to our own energy sector in particular, not merely to oil producing countries.
So it may be oil dependence in general we must reduce, not necessarily foreign oil. American oil firms have had no more mercy on the American economy than oil producing nations have.
T. Boone wants to make a profit on wind power. This is no sin, of course, but he’s billing his billion-plus dollar initiative as an altruistic effort to reduce our dependence on foreign oil using “American technology.” This is supposed to engage our patriotism? He is playing to our ignorance like our political candidates do.
Let’s be honest. There is no likelihood of reducing our dependence on oil for the foreseeable future. Every single American president since Nixon has announced a plan to reduce our dependence on foreign oil and none has ever made even a tiny dent in our oil imports. In fact, the last 40 years of experience reflects the very opposite of the stated intentions of our presidents. Oil imports as a percentage of our total oil consumption has risen over the years.
President Bush, of course, has made the issue of foreign oil dependence a highlight of his state of the Union Addresses, but they strain believability. Here are two recent ones: 2006 and 2007, where he pledged to reduce our dependence on foreign oil. Do we believe Bush? Oil politics has been at the very center of the Bush administration. Unless his rhetoric for reducing our dependence on foreign oil is but code language for wanting to distribute more domestic oil producing rights to some big oil players, then his words are senseless.
Let’s remember that our own oil firms have become increasingly entangled with oil producing nations. They are so entangled in foreign oil exploration, drilling and shipping that they are, for all intents and purposes, indistinguishable from foreign oil. So what does it actually mean to be free of foreign oil anyway?
It’s no sin, of course, to have multinational firms with entangling alliances overseas, but these complex relationships contrast mightily with the simplistic rhetoric that T. Boone and our leaders routinely offer us.
Oil is simply too integrated into our economy for us to do anything about it for the near and medium term. Major oil companies would benefit from domestic drilling and production as much as from foreign, so they’d gain no matter where the oil comes from. The major problem with oil, then, is the price—whether it is produced domestically or overseas.
T. Boone should tell us how to reduce the price of oil. If he did, of course, he might just say what is currently being said on the matter—that demand for oil has outstripped supply and that’s why the price is high; to reduce the price, we need to drill more at home to drive prices down. But that’s a phony argument for another blog post.