Jewish World Review April 28, 2006/ 30 Nissan,
Seeking the fixers, but they R us
Nobody knows more about gas production than a senator, but there's a difference in "gasbaggery" and "refining gasoline." Nothing illustrates the difference more eloquently than the panic of the politicians over the price of a gallon of gasoline.
A vice president of Exxon Mobil was so miserable at lunch the other day that he could barely deal with his swordfish steak, so great was the cloud of gloom and fog of melancholia hovering over our table. "Today's news is bad enough," he said of the punditry mocking the $400 million retirement package for the departing chairman of his company. "But tomorrow will be worse. We'll be reporting $10 billion quarterly earnings."
This is where we've come to in America, circa 2006. Black ink bad, red ink not so bad. The unfortunate man from Big Oil might envy his counterparts at Big Air, who can take ease in financial collapse and comfort in bankruptcy at our major airline companies. You do have to wonder how anyone can spend a $400 million retirement, with only so many years left to buy so many sports cars, yachts and villas in the south of France stocked with randy blondes, sultry brunettes and eager redheads. But it's nevertheless true that unless he gets a middle seat for a flight to L.A., nobody's mad at a vice president at Delta or United.
Dennis Hastert, the speaker of the House, and Bill Frist, the leader of the Republican majority in the Senate, have clearly been Schumerized and Pelosified. They're demanding that President Bush, a refugee from Little Oil, sic the Federal Trade Commission and the Justice Department on the likes of Exxon Mobil, Shell, Texaco and maybe even Spur, Hess and Sheetz in hopes of finding fixers and gougers. This is no doubt immensely emotionally satisfying, in the way that screaming curses at the umpire can be, but it's all show and tell. The rising price of a gallon of gasoline has nothing to do with fixers and gougers and everything to do with timid congressmen and opportunistic senators, such as Arlen Specter of Pennsylvania who proposes a "windfall profits tax." He wants the retiring chairman of Exxon Mobil to choke on his caviar as he sits on the quarterdeck of his yacht, watching his nubile blondes peel grapes for the supper salad being prepared by one of his fiery redheads.
In the superheated politics of Washington it's hard to blame a congressman for a desperate diversion strategy. Who but Congress, after all, is responsible for the run-up of the price at the pump? The energy legislation of the summer of '05 dictated that gasoline be "oxygenated" with ethanol, pushed by an effective lobby of Midwestern congressmen whose constituents produce the stuff. Now ethanol, which is difficult to distribute, is scarce, particularly along the coasts, and without enough ethanol to mix with the gasoline many motorists are seeing the first lines at the pumps since the gasoline panic of '73. The shortage is likely to get worse before it gets better, though the price of oil began to subside yesterday. This is likely to be temporary.
These considerations are only elements of the short-term gasoline panic. The long-term panic will be fed not by temporary scarcity but by sustained demand, particularly as China and India, whose peasants once never had to worry about oil because they never had the pot to put it in, continue to move toward 21st century prosperity. If that were not worrisome enough, we can expect further mischief from tinpots in Venezuela and Iran. Warfare in Nigeria further complicates supply.
Big Oil is accused of greed and selfishness, but greed and selfishness long ago became the engines driving the ambition of the millions determined to live at the expense of others. House-proud Californians won't allow drilling offshore, or the construction of refineries anywhere. Prosperous yuppies send their kids off to college with SUVs that guzzle gasoline and throttle traffic. "Greens," who demand the refining of 17 "boutique blends" of gasoline, have so intimidated Congress that it won't allow drilling for oil in a small plot of the vast Arctic National Wildlife Refuge the size of New York's Central Park, where nobody lives. Drilling there would add a million barrels of oil a day to U.S. domestic gasoline supplies. We're all paying the price of using oil instead of nuclear energy to generate electricity.
Railing at Big Oil is cheap and fun but off the point. We've found the fixers and gougers, and they R us.
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JWR contributor Wesley Pruden is editor in chief of The Washington Times. Comment by clicking here.
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