Friday, September 22, 2006

How the Democrats win the 2006 and 2008 elections

Drip, drip, drip. Do you feel any pain? You shouldn’t. This slow drip gives you freedom, speed and warmth.

What is it?

It’s oil.

It doesn’t really drip into our economy – it floods it. And it’s difficult, if not downright impossible, to get through a day without touching something that was made from oil. It underlies our economy and is powerful enough to undermine it.

Crude oil prices influence our stock markets and play a role determining whether our economy is headed for good times or bad. In addition, because, as President Bush says, we’re addicts, oil influences our foreign policy.

If the United States hasn’t made the world safe for democracy, it’s at least made the world safe for oil, thanks to its military.

The Department of Energy provides these statistics on U.S. oil consumption:

  • The United States is the world’s leading consumer of crude oil at 20 million barrels a day. Worldwide, nearly 84 million barrels of crude oil are consumed daily.
  • We import 10 to 14 million barrels of crude oil every day.
  • We produce about 5 million barrels of crude oil each day.
  • Canada and Mexico are our top two importers of crude oil, followed, in order, by Saudi Arabia, Venezuela, Nigeria, Algeria, Iraq, Angola, Russia and the United Kingdom.
  • Our crude oil consumption is expected to increase, by 2030, to nearly 28 million barrels a day. Global consumption is predicted to increase to 118 million barrels a day by 2030.
  • The United States started importing oil to meet its domestic energy needs in 1949.
  • The U.S. consumes nearly 600 million gallons of gasoline and diesel a day.

Each barrel of crude oil produces gasoline, heats homes, fuels jets and ships, and produces electrical power, lubricants, asphalt, road oil and kerosene. Just about anything touched in our daily lives is either composed of oil or is made from a product that uses a derivative of oil.

And, so far, other than the hybrid car and limited uses of nuclear, hydrogen, wind and solar power, there doesn’t appear to be a plan for the United States to wean itself from oil.

The only good news is that we’re not as dependent as our allies for oil from the Middle East. Starting in the 1970s, on the heels of the Yom Kippur War, the United States started diversifying its suppliers. Instead of being solely dependent on the Arabs for oil, we started buying oil from countries in Europe, Latin America and Africa.

The cost of this commodity is staggering. At today’s prices, roughly $60 a barrel, our daily supply of crude oil costs $1.2 billion or about $440 billion a year.

Let’s keep something in mind – that $440 billion is just the cost of the raw material. It doesn’t reflect all of the other costs, including marketing, refining, transportation, employees, which U.S. consumers pay to buy crude oil’s by-products.

So if you’re upset about the price you’re paying to fill ‘er up, then you need to think deeper about this issue. The $2.70 or so a gallon we’re paying for gas, while unsettling, is nothing compared to astounding costs we incur to keep ourselves – and the world – safe for oil.

Prior to the outbreak of the Iraq War, $60 billion was spent annually to keep our Navy in the Persian Gulf, estimates the Brookings Institution. The Navy was keeping the sea lanes safe for shipping oil and keeping Saddam Hussein in check.

Today’s war in Iraq, according to the Congressional Budget Office, is costing U.S. taxpayers, more than $100 billion a year. And while the war isn’t directly attributable to keeping the world safe for oil, it plays a role. Iraq, the Department of Energy reports, is estimated to have oil reserves that are in excess of 100 billion barrels. That’s the third largest supply, after Saudi Arabia and Canada.

Keep in mind that crude oil prices started 2005 at around $40 a barrel and then started to double. The U.S. economy went into shock last year when Hurricanes Katrina and Rita halted drilling in the Gulf of Mexico, one of our primary domestic sources of oil. Crude oil prices shot up to about $70 a barrel; suddenly, in some places, people were paying $4 a gallon for gas.

Two months ago, because of the war between Israel and the terrorist group Hezbollah, crude oil prices touched $80 a barrel, and there was speculation that we’d soon be paying $100 or more. Today, crude oil prices are hovering at $60 a barrel, resulting in lower gasoline prices. The prices dropped because there haven’t been any interruptions in supply and demand is down for petroleum-based products.

And while that might provide everyone with a sense of relief, it shouldn’t. Lower prices usually mean an increase in consumption, which usually results in higher prices; the only thing that might stem this intake is that it’s September – not July or August, when Americans take to the road for vacation.

But even if crude oil prices continue to drop, the United States will remain the world’s largest oil-consuming market; in addition, we’ll continue to have troops overseas so the world remains safe for oil.

President Bush announced this year that the United States needs to bring its addiction to oil to a halt. It’s hard to say how serious he is because the White House has yet to release a plan to cut our oil habit.

I understand why the Republicans, the party of big business, never show up for debates about oil prices.

But where are the Democrats?

Why are they missing in action over an issue that could likely help them seal a victory for The White House and Congress in the next two years?

Environmentalism, until recently, was perceived as a fringe cause. But no more. Americans are recycling left and right. SUV sales are down and people are becoming more familiar with conservation.

President Bush is right: It’s high time we cut our addiction to oil. And the Democrats could play this up by making our oil addiction not an environmental cause – but one that’s about national security.

They could tell the nation, for example, that we need to cut our dependence on oil – big time! – so we can deal with the Middle East from a position of strength, not dependence. Think how the dynamic of our relationship with Saudi Arabia or any other oil-producing nation would be if they knew we didn’t need them.

It would increase our options. We could tell Japan, which buys nearly all of its oil from the Middle East, to start sending its own navy to patrol the Persian Gulf. We would be in a position to significantly reduce our military presence in the Middle East, if not just outright end it. It would also force our friends, whether they’re in Europe or Asia, to start maintaining their own oil security, just as we’ve been doing for them for the last 30 years.

To get everyone on board, the Democrats might start getting closer to big oil companies, like ExxonMobil. Instead of bashing them, they should start proposing legislation that would provide these companies with incentives to find alternative sources that would fuel all of our energy needs. They might also start talking to Detroit, encouraging the Big Three auto companies to produce more and better hybrid cars.

Such a plan could also have some residual benefits. An initiative that begins to reduce the country’s dependence on oil could also affect countries run by dictators. Hugo Chavez, Venezuela’s strongman, for example, might not look like the hero he is to some if, suddenly, we weren’t knocking on their door to buy oil. Russia’s Vladimir Putin’s desire to regain some of his country’s old-time influence around the globe, when the country was known as the Soviet Union, might be clipped.

If we do nothing, then this addiction of ours will just continue to grow. If the Democrats fail to take up this cause, then they look no different than the Republicans – a political party, under a different name, that loves the status quo.

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