Sunday, May 25, 2008

Oil: Free Markets and Regulation
Mike Rappaport

For those who can remember before the Reagan presidency, the nation then had some problems with oil prices as well.  Back in those days, free market principles were understood even less than they are today.  So one had a system of price controls and other regulations in place, but that didn't stop people from blaming markets and the capitalist system for the gas lines and the high prices that the regulations caused.  These people were sort of like Hillary Clinton and Barack Obama, but with more fire. 

These days, it seems like the oil markets -- in the United States, of course, not with OPEC -- are reasonably free, but it is not true.  And the restrictions are significant.  As Powerline reported,

According to the Department of the Interior, 62 percent of all on-shore federal lands are off limits to oil and gas developments, with restrictions applying to 92 percent of all federal lands. We have an outer continental shelf moratorium on the Atlantic Ocean, an outer continental shelf moratorium on the Pacific Ocean, an outer continental shelf moratorium on the eastern Gulf of Mexico, congressional bans on on-shore oil and gas activities in specific areas of the Rockies and Alaska, and even a congressional ban on doing an analysis of the resource potential for oil and gas in the Atlantic, Pacific and eastern Gulf of Mexico.

The Argonne National Laboratory did a report in 2004 that identified 40 specific federal policy areas that halt, limit, delay or restrict natural gas projects. I urge you to review it. It is a long list. If I may, I offer it today if you would like to include it in the record.

And, of course, these restrictions do not even mention the limits on nuclear power that are imposed in this nation, not to mention oil refining.  One could go on, but you get the picture.

It is, of course, environmentalists and Democrats who are behind these and other restrictions.  These groups do have their own solutions to these problems.  It is simple:  more taxes.

I wonder how close to energy independence the nation would be if all of these sources were allowed.  My guess is that we would be pretty darn close.

I should add that I am not necessarily recommending energy independence.  I am not sure what it would involve.  It sounds like a nationalist/mercantilist type of program.  But the point is that there would be a lot more oil available if these  sources were made available.  Now why aren't we discussing that?

The answer, unfortunately, is pretty obvious.  All of the Presidential candidates -- McCain and the Democrats -- appear to favor these restrictions.

It is looking more like the 70s every day.

Update: I left my name off by mistake.

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Mike Rappaport


Who dat dere?

Posted by: dearieme | May 25, 2008 8:21:12 AM

It are the Rapper or the Smith. I vote Rap.

Posted by: james wilson | May 25, 2008 10:13:15 AM

The rocketing price of oil coincided with the opening of the Dubai Mercantile Exchange. The price of the exchange CME soared in advance of that. One wonders who is buying all the options on the oil futures markets with such huge leverage and who profits the most.

Posted by: Athena Clark | May 26, 2008 7:36:43 PM

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