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June 10, 2008

On the Right Side: Don't fault companies for oil crisis


— It is unbelievable how blind these environmental radicals are, along with their leftist liberals in Congress and the anti-capitalism crowd, and how willing they all are to place the blame for the current energy crisis on everyone else when the real responsibility and resulting consequences rest squarely on their shoulders.

Let me see if I can pull you, kicking and screaming, into the world of reality for just a short time while I address rational people, and you can then go put your heads back in the sand.

Unless you can offer rational, workable solutions rather than just complain and unless you can talk about the salient issues in an intelligent fashion, then you don't deserve to be part of the discussion.

Like it or not, our economy is fueled by oil, coal and natural gas, of which there are immense reserves available for extraction. It has been this way for the last 150 years. You can't simply wave a magic wand and make this fact disappear.

Therefore, the only rational solution is to provide a steady and stable domestic supply of these resources until other alternative energy sources and technologies are available as economical substitutes.

First of all, the problem is not the oil companies' fault. Their return on investment to stockholders is totally in line or less than the returns of other industries, and more than 30 government agency reports verify that the pricing of gasoline is caused by legitimate market forces.

It is you obstructionists who have prevented the necessary drilling in onshore and offshore areas abundant with oil and gas. You have also prevented the building of refineries so that an adequate supply of gasoline and other energy products can bring prices down rather than having to import supplies at much higher prices.

The last refinery built in the U.S. was in 1976. We have gone from 324 refineries processing 18.6 million barrels a day down to 155 refineries with a maximum capacity of 16.6 million barrels a day, for a difference of 2 million barrels daily.

Remember when Chuck Schumer said a million additional barrels a day (he demands this from the Saudis, naturally) would drop prices by more than 50 cents a gallon?

The cost to build a refinery is huge. There is one being built in Arizona at a cost of $3.5 BILLION and is to open in 2011.

It costs $100 million to set up drilling operations at a particular site, and it is not certain that the well will be a producer. There are tremendous risks involved in locating new reserves. No one, you and me included, takes risks unless the potential rewards are greater.

We can't expect the oil companies to behave any differently. Their responsibility is to their shareholders, not to you environmentalists. Hence the necessary government tax credits.

Also, the oil companies are not simply hoarding all the profits or returning them to their shareholders. They have spent $89 billion since 1993 (as of 2006) to strengthen environmental performance.

As reported by Facts on Fuel, "the average new car on the road today runs 97 percent cleaner than the average car built in 1970 thanks to a combination of cleaner gasoline and more efficient engines."

Also, auto-related emissions are down more than 41 percent even though there are a greater number of cars on the road today than in 1970.

The oil companies have also spent close to $4 billion in alternative energy projects, including wind, solar and biofuels.

But of course, none of this matters to the eco-nuts. It's never enough when it isn't their money being spent. Their purpose is to control other people's lives and they don't care whether their impositions destroy the American economy.

There's a lot more ground to cover and a lot of liberal "untruths" to uncover, so I'll have to extend this topic into the next column unless something more important comes up in the meantime.

By the way, I wonder if Ted Kennedy is still for nationalized health care. Instead of getting an MRI the day after his seizure, he would have waited in line to see a neurologist and another three months for an MRI to be scheduled.

Think he would have been able to hand-pick his surgical team and have available the latest experimental drugs to fight the cancer?

Yes, he would, since he has the wealth to afford the best care possible. Maybe he will now realize the importance of all of us common folk having the same access.

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Tom Sears is a professor of accounting at Hartwick College in Oneonta. He can be reached at SearsT@hartwick.edu. His column appears every other week.