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May 27, 2004

Kerry's Oil Contradiction

The USA Today lambastes the Democrats and John Kerry for their recent proposals regarding gas prices:

Here is an excerpt:

On Tuesday, Democratic presidential candidate John Kerry stood in front of a row of school buses in Portland, Ore., and blamed skyrocketing gasoline prices on President Bush's failure to pressure foreign oil producers to open their spigots more.

Kerry's attack is the latest attempt by Democrats to convince voters that Bush is responsible for prices averaging $2.06 a gallon for unleaded nationwide, up 60 cents since December. Last week, a group of Democratic senators called on the administration to lower prices by releasing 1 million barrels a day from the government's Strategic Petroleum Reserve. Ten Democratic governors are demanding an investigation of oil prices, and Democratic National Chairman Terry McAuliffe claims the White House is "in the pocket of Big Oil."

Ho-hum. Must be an election year, when the aim is to get votes, not fix the problem.

The oil-price spike is driven by a trio of long-term forces: rising demand at home, inadequate supplies and spectacular growth in emerging markets, particularly China. No quick solution exists for any of the three. Or at least none that will work by Election Day. So Democrats would rather flog the administration and trot out a few useless bromides than propose sensible remedies.

First of all, I agree with Easterbook, gas prices are just not as urgent of a problem as the Dems are making it seem. I see Kerry's current proposals as the actions of a campaign that is desperate for issues because the economy is improving and they do not want to talk about Iraq.

Second of all, this is exactly what bothers me about Kerry. On the one hand, energy independence is one issue where I believe he could do a better job than the current administration. His plan calls for reducing American dependence on foreign oil by providing tax incentives for alternatives to be created and used, demanding lower emissions from the automobile industry, promoting smart growth and liveable communities, and re-engaging the United States into the discussion with the global community. All of these ideas I strongly support, but on the other hand, Kerry is spending a lot of time pleasing the UAW and other oil loving special interests by promoting short term ideas that mostly will not work in the end, like tapping into national reserves or twisting the arm of Saudi Arabia.

Oil is not the answer. The government should be putting its energy into creating alternatives that are clean and efficient and providing an economic incentive for American's to create a market for fuel cell and hybrid technology, as well as other alternatives such as solar, wind, and ethanol. You want to lower gas prices? Fine, than reduce the demand for gas, and you can do this by ending corporate welfare for oil companies and forcing them to fairly compete against cleaner energy alternatives.

So here is my question: What John Kerry is going to be President, the one that in the long term is going to stand by the legislation he created with John McCain to reduce car emissions, or the one that promotes oil production as the way to lower gas prices? Those interests are definitely conflicting. What will win policy or politics?

To accomplish the goals Kerry set out on his sight will take bold leadership. Certain interest groups or individuals will not be happy with sound environmental policy because it will hit them in the pocketbook. With my current perception of Kerry based upon his campaign since he won Iowa and his nineteen year voting record, I am not sure that he will do more than propose bold ideas without doing what is takes to see them come to fruition. In the mean time I am afraid he will enact pointless political short-term solutions to advance his own career.

On the environment, what makes Kerry any different than the current administration who has also talked a good talk with little action concerning these same issues? What about him or his leadership gives us any real reason to change?


Posted by Mathew at May 27, 2004 10:53 AM
Comments

Good post. What I find laughable is that Kerry is railing against Bush for high oil prices, then he criticizes the president for apparently using his friendship with the Saudis to release more oil before Election Day (according to Woodward's book). Kerry should at least keep his criticisms consistent.

Posted by: Staunch Moderate at May 27, 2004 11:16 AM

Well, yeah, but it's not desperation. It's shameless opportunism. Until we reach a point where people no longer buy the "if something bad is happening it must be the Presidents fault" line of reasoning, let's expect it to continue. If Gore were president the GOP would be blaming him for $2.10 per gallon.

The strategic reserves thing is a bit interesting. There actually is reason to believe that a release might nudge the equilibrium down. But there is also reason to worry that OPEC might call this bluff by responding with a curtailment. I don't think we should do it, but people who just want lower gas prices do, and will be happy if the Prez does it.

It may be too early to pat Bush on the back for holding the line, as he may just be waiting for a better time to do it. Even if he does it much closer to November and gets accused of a naked election ploy, doing so won't lose him votes, as such critics would be decided voters,. But it might get him a few votes among people who just want the president to be daddy and make things better right now.

Posted by: bk at May 27, 2004 11:30 AM

Disagree stronglly with Kerry and rallying crew on this issue.

This country should have put genuine energy alternatives in place by a decade ago.
[Most of you are aware of my views as to effects of too many types of non-productive, as in yuppies fields and now the multitude of their offspring to have to put up with.

Posted by: Alex at May 27, 2004 02:59 PM

First of all, the fact that USA Today is buying into the righwing pablum that the rise in gas prices is due to inadequate supply. The supply is virtually unchanged from last year. We also have the same number of refineries that we had last year. Prices weren't this high then.

What they conveniently skip is that oil companies are currently raking in record profits.

Posted by: carla at May 28, 2004 12:58 AM

Uhhh Carla, I think you are reading the wrong article. The USA Today is saying that increase supply will NOT work. John Kerry is the candidate currently proposing to increase supply of oil, not George W. Bush. I am not saying Bush hasn't done this in the past or that he anymore right on this then Kerry is, but tapping into the reserves or twisting the arm of Saudi Arabia to produce more oil is a Democrat idea, not a Republican one.

Posted by: Mathew at May 28, 2004 09:20 AM

Mathew:

Perhaps I misread...but Bush has been saying that supplies are tight...and so did USA Today when discussing consumption (especially in regard to China). Bush has been advocating for more domestic drilling and wants to dump more tax dollars into that.

What bugs me about the piece tho is that USA TODAY completely ignores the fact that oil companies and refineries are right now making whopping record profits. While refinery costs only make up about 10% of the total cost at the pump...crude prices make up roughly 40%-50%, as I understand it.

So if supplies aren't especially low but huge profits are especially high in an industry that has little competition...then it would stand to reason that this is where the main bite is coming from.

Posted by: carla at May 28, 2004 01:07 PM

^Whats is this joker talking about?

In any case, I am curious about the alternate energy source Kerry is talking about. The first "Fusion Power Generator" is ready to be built, but there is a political problem or where to build it, west or east?(if it works it can power half the planet theoretically so they can't come to an agreement as of where to build it). He makes quite a few nice proposals with regard to energy problems but doesn't say how they will be implemented/carried out. I am hoping he will throw some tax dollars into research such as what I mentioned above and solar power if is to be elected.

Posted by: Azhrei at July 30, 2004 11:46 AM
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