The Energy Debate, National Security, and a Sane Energy Policy

President Obama during a speech in Cushing, Oklahoma: “We want every source of American-made energy. I don’t want the energy jobs of tomorrow going to other countries. I want them here in theUnited States of America. And that’s what an all-of-the-above strategy is all about. That’s how we break our dependence on foreign oil.”

President Obama during a visit to Copper Mountain Solar 1 plant: “If some politicians get their way, there won’t be any more public investments in solar energy. These folks dismiss the promise of solar power and wind power and fuel-efficient cars. . . . If these people were around whenColumbus set sail, they would’ve been founding members of the Flat Earth Society.”

Mitt Romney on energy: “I will ensure we utilize to the fullest extent our nation’s nuclear know-how and immense reserves in oil, gas and coal. We are an energy-rich country that, thanks to environmental extremism, has chosen to live like an energy-poor country. That has to end.”

Mitt Romney on climate change: “My view is that we don’t know what’s causing climate change on this planet. And the idea of spending trillions and trillions of dollars to try to reduce CO2 emissions is not the right course for us.”

Mitt Romney on energy: “I think the EPA, acting in concert with the president, really doesn’t like oil, gas, coal, and nuclear. I really do believe that the EPA wants to get its hands on all of energy and be able to crush it to cause prices to go through the roof. …The EPA should not be regulating carbon dioxide.”

Rick Santorum on oil: “This president, systematically, is doing everything he can to raise the price of energy in this country. He’s shutting down all sorts of opportunities for us to drill for oil. This is what the president’s agenda is. It’s not about you. It’s not about your jobs. It’s about some phony ideal, some phony theology. Oh, not a theology based on the Bible, a different theology.”

Rick Santorum on “Face the Nation”: “Well, I was talking about the radical environmentalists. That’s why I was talking about energy, this idea that man is here to serve the Earth as opposed to husband its resources and be good stewards of the Earth. And I think that is a phony ideal. I don’t believe that that’s what we’re here to do. That man is here to use the resources and use them wisely, to care for the Earth, to be a steward of the Earth. But we’re not here to serve the Earth. The Earth is not the objective. Man is the objective. And I think a lot of radical environmentalists have it upside down.”

There are only a few subjects that have become more “silly” during this season of presidential and congressional debates than energy policy and its related environmental and economic impacts and consequences. First point is that President Obama is largely right in that we live in a global energy market and most prices reflect the supply and demand of that market. Except when they don’t. 

I saw this when I was the Member of the Policy Planning staff following energy issues, among other subjects, for the Secretary of State in the 1970s, during the then “energy crisis.” At that time I played a significant role in helping to develop our response to what was in reality an artificial effort by the Arab oil producing states to control the international market and raise prices along with an effort to boycott some importing nations.   

There are today “artificial,” “emotional,” and “political” aspects of national and international energy markets. Many examples abound since the 1970s. Recently, the Minister of Petroleum and Mineral Resources in Saudi Arabia, Ali Naimi, wrote an article for the Financial Times, on Thursday, March 29th 2012, entitled “Saudi Arabia will act to lower soaring oil prices.”  His article illustrates how the global energy market is both driven by normal supply and demand and also by artificial, external, and not always rational influences. In short, he outlined that there is no shortage of oil on a global basis, stocks are full (this was confirmed by another article that noted that our main stocks here in the U.S. are also full). Naimi also said, “there is no rational reason why oil prices are continuing to remain at these high levels. It is the perceived potential shortage of oil keeping oil prices high.” His further statement was that Saudi Arabia “…will use spare production capacity to supply the oil market with any additional required volumes.” No while other “experts” have questioned if Saudi Arabia can in reality do this, those that know the spare capacity think it is doable.

The question remains when this “spare capacity” will be effective and hit the global market. Right now Saudi holding tanks are filled and Naimi noted that its capacity is 12.5 million barrels per day “way beyond current levels.”

President Obama is rightly struggling to reduce our imports of Middle East oil and has made significant progress, not least increasing the efficiency of our cars, in this effort but our allies in Europe and Asia will need Saudi oil, especially if a war starts in the region or Iran oil is “taken off the market.” 

So what is the Republican complaint?  They are wrong about “drill baby drill” since such oil is at least a year or more away from getting into our gas guzzling cars. Nor will more oil be the long-term answer to global warming.  

The Republicans oppose cutting the massive subsidies of many billions of dollars we are adding to the already massive profits the major oil companies are making even at these high prices. And most importantly for our national security interests, they oppose Obama’s effort to develop advanced clean energy alternatives to oil and coal. They do not address or deal with our real national security to safeguard our global climate and our earth’s ecosystem. 

Obama seems more likely to effectively address both the energy issues our nation faces and its concomitant massive and dangerous climate change impacts than candidates that will, at the expense of middle class Americans, continue to do the bidding of big oil and make irresponsible jesters of wanting to make now an unnecessary “war” on Iran. They must be happy that their talk of war has already given big profits to the oil companies at the expense of citizens who see fewer dollars in their pockets. Their “war mongering” only means great jumps in gas prices to the average American and leaves the rich and oil companies with even more money to influence our politics and our democratic system. We need real world solutions, a rational sensible debate, and not efforts to undermine both our real security and our economy.

By Harry C. Blaney III.

For more quotes by the 2012 presidential candidates, please visit our quotes page!

2 thoughts on “The Energy Debate, National Security, and a Sane Energy Policy

  1. Harry C. Blaney III April 3, 2012 / 1:56 PM

    There is little doubt that there is much we do not know about the often opaque global energy market, and as Mr. Lamoree notes, speculation is one factor that is perhaps the most opaque. One problem is that some of the oil markets’ exchange trading is carried on by legitimate companies hedging their energy costs while others are just trying to make a quick buck or perhaps in some cases trying to influence the direction of the market in ways that distorts the real underlining supply and demand. Clearly there is need for closer oversight of these markets and traders.

    But what is clear is that the oil companies seem to be making huge profits when oil prices rise which should not be the case if their costs go up and demand in response to it is elastic. Which it is to a degree and to a degree it is not.

    One controlling element is Saudi Arabia, which the Financial Times in its recent energy report special section (March 28th) said “Saudi Arabia is the linchpin of global oil.” It added several caveats, including noting the finding of a report by Chatham House, which indicated domestic growth of demand would, in time, undermine that capacity to influence the global supply.

    Lets be clear about one thing. There is no shortage of “energy” of all types per se. There is lack of investment in the key future energy technologies and their development into the market place. Renewable and clean energy sources are the long term key and Obama is doing about as much as he can, given the opposition from the GOP, to encourage growth in these sectors including use in transportation.

    But there are clear distortions in the overall energy market place which make for shortage and unnecessary price increases. Gas should NOT be at over $4.00 here in the U.S. when global supply lines are full.

    In the long run, however, the growing demand for oil will exert powerful forces to drive up prices unless there are major efforts are made to reduce globally demand and drive up efficiency while moving swiftly away from a carbon based economy. That challenge the Republicans do not want to face and perhaps not the public.

    The problem remains that President Obama now can have only a limited leverage over all these factors. George H.W. Bush, on an inflation adjusted basis, had even higher gas prices when in power and “seemed” unable (or unwilling) to act to bring them down. They did fall after the election and in response to the economic crisis, which was in full swing. The economy seems, at this moment, to be reviving slightly which also affects demand. The first effort is more transparency in the oil market, the other is SA’s immediate real effort to add to the supply and clamp down global prices, and finally a halt of the Republican war mongering about Iran. A help would be Israel’s stopping of its own senseless and counterproductive talk about attacking Iran’s nuclear facilities in the near term. And, in fact, not doing so.

  2. Bob Lamoree April 3, 2012 / 6:41 AM

    If ‘war mongering’ against Iran and the ensuing increase in oil prices doesn’t strike a chord, ring a bell. or otherwise make sense to the citizenry . . . we’re in worse trouble than we think.
    One element Mr. Blaney’s commentary does not address is how much speculators add to the cost of oil. Are speculators a stablilizing influence on the market, or do they serve only to raise prices?
    It may not be applicable, but considering all that affects oil prices, is there an element of ‘price fixing?’ Wouldn’t we like to know what we don’t know?

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