Blame Congress for Oil Prices
November 8, 2005

As gasoline prices climbed to $3 a gallon last month and word that people might have to spend more than they ever dreamed just to heat their homes this winter, politicians began the inevitable search for scapegoats.

Democrats predictably discovered without even having to look very hard that the blame for climbing gas prices could be found at the White House, where George W. Bush and Dick Cheney are continuing to conspire to enrich their oil-state cronies at the expense of Mr. and Mrs. America. The existence of the Bush-Cheney pro-oil conspiracy is, to most good liberals, a given, so most of their energies are devoted not to trying to figure out why the market price of crude and refined petroleum is skyrocketing but to convincing their fellow citizens that the blame lies wholly with the folks in the White House.

After all, these are the folks who put together an energy policy that would allow their friends to drill for oil and gas in places such as Alaska, where reserves actually exist, when what they should have been doing is not just attacking the oil companies for charging too much for their product but working to ban gas-guzzling SUVs and other vehicles that so many dumb Americans insist on buying and driving.

The Bush foreign policy is, of course, also geared to protecting U.S. energy producers by securing the deserts in which they might drill for oil and to making certain that the Middle Eastern potentates with whom they work remain in power.

All of this strikes a chord with some Americans who quite rightly distrust large institutions both public and private. Oil companies are, after all, making more money today than they have been in recent years simply because the price of their products has gone through the roof. They would no doubt like to charge even more but for the constraints of market forces that, in spite of everything, manage both to allow them to charge more than they did when supplies were more plentiful and demand less frenzied and to keep them from charging any more than they do.

The efficiency of the market is, after all, not dependent on the good intentions of those who enter it, so the question is not so much whether energy suppliers are too greedy or consumers too dim-witted to ditch their SUVs for bicycles but what might be constraining the supply of petroleum products and thereby driving up prices.

It could be, of course, that there just isn’t enough oil and gas out there; that we are, as the most pessimistic among us have been predicting for years, running out as more buyers race after fewer supplies. The problem is, of course, that objective research tells us there’s plenty of oil and gas right here in the United States (something like 600 trillion cubic feet of gas and 100 billion barrels of oil) that isn’t being brought to market because of government regulations that either make it prohibitively expensive to do so or simply prohibit oil companies from going after it.

The American people learned in the wake of Hurricane Katrina that most domestic production and much domestic refining takes place in the hurricane-vulnerable Gulf of Mexico as Fox and CNN flashed footage of damaged drilling platforms and refineries. Politicians immediately began blaming the oil industry for locating so much in so vulnerable an area on the assumption, I guess, that it’s all down there so that executives can make it to the Houston Petroleum Club for lunch.

The fact is, of course, that most of the country is off-limits to those searching for new oil and gas with which we might fill our tanks and heat our homes because no one seems to want a well or refinery anywhere near them or, in the case of the Alaskan reserves, anywhere they’ve heard might be inhabited by living creatures of any kind.

Republicans aren’t immune from piling on either. House Speaker Dennis Hastert (R-Ill.), whose strength as Speaker has been attributable to his level-headedness, seems to have gone round the bend on this one. He’s threatening to bring the oil executives in to browbeat them and threatening them with all kinds of punitive legislation. He wants them to invest their growing profits in building refineries and looking for new supplies, conveniently ignoring the fact that they have already committed something like $250 billion worldwide to this effort over the next three years.

Much of that money will be spent here on exploration, refineries, port facilities and the like if politicians don’t stop it. If they do, the next time Americans look for folks to blame, they may look no further than Congress itself.

Keene, chairman of the American Conservative Union, is a managing associate with Carmen Group, a D.C.-based governmental-affairs firm (www.carmengrouplobbying.com).