Democrats Aren’t Getting the Message on Energy
Shame on you Senator McCaskill
Over the course of the last couple of months I have made a conscious effort to move from a typical online pundit (of the highly amateur variety) into much more of an activist. I’ve increased the number of state specific blogs. I’ve also started to call and write to my Congressman and Senators on issues that I find important. One such issue is energy. We are in the midst of a five week vacation in the U.S. House of Representatives (The Senate is “technically” in session, but they’ve flown the coop too.)
Last night, I utilized FreedomWorks to send this letter to Representative Todd Akin and Senators Claire McCaskill (D) and Kit Bond (R).
With gas prices topping $4.00 a gallon, the majority of Americans are feeling severe pain at the pump. The high cost of fuel is causing economic uncertainty throughout the country. Still, many in Congress have chosen to block efforts that would increase domestic oil production and make the United States more energy independent.
Currently, 85% of the Outer Continental Shelf (OCS) is off-limits for exploration and drilling because of a 27 year-old Congressional moratorium. It does not make sense to allow the vital reserves of oil in this area to sit idle while the United States remains dependent on foreign sources of oil from unstable parts of the world.
Please support efforts to lift this outdated moratorium and allow greater exploration and drilling for oil here in the United States. Until an economically viable source of alternative energy can be found, this is the only way to lower gas prices in the short-term.
Usually letters like this are roundly ignored. On the off chance that you do get an actual reply it is a form letter. I got one of those form letters from Senator McCaskill:
Dear Mr. Simpson:
Thank you for contacting me regarding domestic energy production. I appreciate hearing from you and welcome the opportunity to respond.
Our leaders need to be more up-front about what is really going on with energy production in this country. Oil companies already have an opportunity to increase domestic oil supply, but they sit on their hands and ask for more land when there is no evidence that they need it. Approvals for drilling on federal lands are at an all-time high and leasing to areas like the Outer Continental Shelf is already occurring.
Combined, oil and gas companies hold leases to nearly 68 million acres of federal land that they’re not using both in Alaska and in the Gulf. This is over 80% of available federal land and the federal government provides these leases at a discount. Congress needs to pass legislation that would force oil companies to fully utilize these existing areas which contain some of the most abundant supply of oil in this country. It only makes sense that they explore and develop the millions of acres they already have access to before Congress permits drilling in new areas.
Energy experts contend opening new areas like the Arctic National Wildlife Refuge would not lower prices at the pump for years and then only by a few cents. Additionally, it would fail to move the country toward energy independence. With only 3 percent of the world’s oil supply and 25 percent of the world’s demand, it is clear America can not drill its way to lower prices. Our country instead needs real solutions to the energy crisis.
Congress, for example, is taking a hard look at oil speculation and whether there should be more regulation in this area to more accurately reflect the rates of supply and demand. This could mean a more fair and reasonable price at the gas pump. I also believe that continued investment in alternative fuels is the best way to reduce America’s addiction to oil and America’s best long-term energy strategy. Unfortunately, some members of Congress continue to block legislation that would help address this crisis and allow our nation become energy independent.
Also, I want to take this opportunity to dispel the myth that appears to be circulating that China has partnered with Cuba to drill off the coast of Florida. Some of my constituents are concerned that this is happening, but there is no offshore drilling venture between Cuba and China at this time.
Again, thank you for contacting me. Please do not hesitate to let me know if I can address any other issue that is important to you.
Senator Claire McCaskill
This made my blood boil. There were so many things that the Senator is out-right lying to her constituents about that I had to respond. And I did:
Thank you for your response. I feel that I need to clear up some of the myths that you are circulating.
With respect to the 68 million acres that are currently leased to, the oil companies already have sufficient incentives to drill on that land. The “Drill it or Lose it” bill is truly nothing but a political ploy. The oil companies already paid massive sums of money to the federal government for those leases (#3.7 billion dollars last March alone) and they continue to pay an annual rental payment on non-producing leases. Therefor there is already a “use it or lose it” provision built into the current system. [All of that, by the way, is in addition to the royalties that the federal government collects in the form of either cash or barrels of oil.]
Another misconception is that all 68 million acres of leased land contain oil. While it is true that a majority of them do, all one has to do is look at this picture to see that a large percentage of those leased acres will never be produced. http://www.aapg.org/explorer/2006/11nov/jack_playmap.cfm The dots (representing drilling sites) are distributed over a majority of the area. This means that many of the acres do not need to be developed because they would represent duplicate resources drilling in what is most likely the same field as the well in a neighboring lease.
So please don’t cry that leases are at an all time high. This also means that payments to the government in the form of leases, annual rental payments and royalties are at an all time high. That should warm the heart of a liberal.
You, and many of the other Democrats in the Senate and the House, like to demonize the speculators in the oil commodities market. As you state in your letter to me: “Congress, for example, is taking a hard look at oil speculation and whether there should be more regulation in this area to more accurately reflect the rates of supply and demand.” Removing speculators from the market will do nothing to improve this situation. Speculation is a necessary piece of every market. But, just in case you don’t believe me, let me introduce you to the onion. The onion is one of the rare commodities that is not traded on a futures market. [Much of the same rationale for moving oil off the futures market now was used in the 1950s to take the onion out of the futures markets.] Has it worked in keeping onion prices low and stable? No. Fortune Magazine (http://money.cnn.com/2008/06/27/news/economy/Theonionconundrum_Birger.fortune/?postversion=2008062713) examined the issue recently:
And yet even with no traders to blame, the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics’ belief that futures trading diminishes extreme price swings. Since 2006, oil prices have risen 100%, and corn is up 300%. But onion prices soared 400% between October 2006 and April 2007, when weather reduced crops, according to the U.S. Department of Agriculture, only to crash 96% by March 2008 on overproduction and then rebound 300% by this past April.
The volatility has been so extreme that the son of one of the original onion growers who lobbied Congress for the trading ban now thinks the onion market would operate more smoothly if a futures contract were in place.
So remove oil from the futures markets, but know that it will not solve the problem that you hope it will.
And lastly, there is a bill that would help us effectively address our energy supply problems: H.R. 6566 The American Energy Act. This piece of legislation represents and “all of the above” mentality. This bill seeks to increase the supply of American produced energy, provide incentives for energy conservation and efficiency and promote renewable and alternative sources of energy. This approach makes a lot of sense. Alternative energy and renewable energy sources are the future. We need a bridge to that future and increased oil production is just that. Increasing production domestically will allow us to run our economy while we develop reliable alternatives.
Please Senator, the American people are seeking real answers to these problems. You provide excuses.
I guess in short: Be informed and become activists. We have a lot of work to do to battle against those who refuse to see the error of their ways.