 Shedding OPEC Oil Addiction By JOHN HERBERT From Where I Sit Published: Mar 22, 2008
Just about every U.S. taxpayer got a form letter from the much-feared IRS recently. We usually turn all wobbly-kneed and sweaty whenever an envelope arrives with an IRS return address on it. But, this particular IRS greeting promised the check is in the mail — or will be, shortly after Easter.
Worth some $600 to $1,200 each, the checks are supposed to help revive the national economy, or so the White House hopes.
That's great news — just in time to fill up the SUV a few times so we can do some VFR-ing (visiting friends and relatives) over the Memorial Day weekend. We could be saving a few oil refinery jobs, theoretically, or possibly a few more on the assembly line at the Ford plant up in Michigan in the process.
That may not exactly what's meant by “stimulating the economy;” but if we're not buying gas at $3.50 a gallon, we're keeping our nation's already heavily-subsidized farmers happy by grabbing a gallon of milk for $4 (70 cents more than last year) at the supermarket down the street.
Spending an unanticipated $600 or so will be as easy as the old walk in the park. The federal bonus won't last a consumer all that long: a couple of mortgage payments or energy bills and — poof! Back to financial square one, which is the brink of recession.
President Bush's cash gift won't have much long-term effect on the nation's bottom line, though. Not when our dependence on foreign oil is so acute. And not when we have been passive spectators while the illegal (according to U.S. law) OPEC cartel in effect sets prices for us.
OPEC is an international alliance of petroleum-exporting countries that could, if they wanted to, step up the flow of crude oil. That would, logically, spark a reduction in energy prices and in anything else with a fuel cost factored in. More than 40 percent of American petroleum products come from OPEC countries.
We fret over a looming $4 a gallon price of fuel while OPEC sells gas to its own motorists for as little as 18 cents a gallon. Member-nations still have plenty of dollars left over for their princes to buy $400 million playthings like private 747 jumbo jets or the Airbus 380 super jumbo and super-luxurious jetliners.
Atlanta-based Delta Airlines seeks to lay off 30,000 more employees to compensate for even more fuel-cost increases, so OPEC price-fixing powers will eventually send new tremors through the Tampa Bay area. Delta is the second-largest operator at Tampa International Airport.
Our dependence on foreign oil is all wrong, the cause of most everything dogging us. We haven't been able to control OPEC, but OPEC is very much in control of the price of a gallon of American milk or, even, the admission price to an all-American baseball game.
Developing alternative energy sources will be a lengthy process; an expensive one, too.
In the meantime, whenever politicians moan about the price at the pump or the pace of inflation, we should be urging them to open oil fields in Alaska or offshore to be utilized as generation-long stop-gap measures to correct the high-priced influence from OPEC.
It wouldn't hurt, either, to insist that all that Alaskan oil be pumped into the domestic American market rather than to the Far East.
We shouldn't let vote-hungry politicians use all-too-convenient environmental concerns to block alternative initiatives like wind farms and nuclear energy while throwing more money at ethanol production, which demands too much energy to produce in the first place.
Access to more domestic petroleum products won't cure all our ills, though. A new oil refinery has not been built in America in 30 years. At the same time, Big Oil is reporting record profits: $40 billion for ExxonMobil last year alone. That's disgraceful.
It might be close to advocating a socialist-style planned economy, but Washington must convince Big Oil to unclog our energy system and use a fraction of its excess profits to build new refineries. Big Oil apparently won't take the initiative on its own.
With new refineries, more domestic oil fields and even alternative energy sources in sight, we would then be free to ask: OPEC? Who needs them?
A regular columnist for Hernando Today, John Herbert lives in Spring Hill.
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