President Obama has been telling Americans that an increase in the supply of oil will not affect the price of oil.
Compare that to what the Associated press recently reported about the supply of natural gas affecting the price of natural gas. Then draw your own conclusions. Is somebody an economic nit-wit? Obfuscating?
Over the course of the past few months, we have seen President Obama say the following concerning oil prices.
-- "There are no quick fixes to this problem."
-- "The U.S. can't drill its way out of high prices."
-- "The Republican mantra is that we need to 'drill baby drill.' This slogan may sound good, but it's based on complete fiction."
-- "No matter how much we drill, our gasoline prices are going to rise if there's a crisis in the Middle East, labor unrest in Nigeria."
-- "The only solution to the challenge (is that) we start using less. That lowers the demand, prices come down."
When President Obama's quotes are taken together in context, this is what we get. "The U.S. can't drill its way out of high prices. The Republicans' simplistic solution is 'drill, baby, drill.' If there is unrest anywhere in the world, no matter how much we drill, gasoline prices are still going to rise. We can't lower prices by increasing supply -- by drilling. The only solution is to reduce demand -- to start using less."
On April 9, The Dispatch/Argus ran excerpts from a New York datelined AP piece headlined, "Too much natural gas?":
"So much natural gas is being produced that soon there may be nowhere left to put the country's swelling surplus..
"U.S. natural gas production has boomed in recent years as a result of new drilling techniques that allow companies to unlock fuel trapped in shale formations. Last year, the U.S. produced an average of 63 billion cubic feet of natural gas per day, a 24 percent increase from 2006. But over that period consumption has grown half as fast.
"The glut has benefited businesses and homeowners that use natural gas.
"But with natural gas prices at a 10-year low -- and falling -- companies that produce the fuel are becoming victims of their drilling successes. Their stock prices are falling in anticipation of declining profits and scaled-back growth plans.
'There hasn't been enough demand to use up all the supply being pushed into the market.'
"So far, efforts to limit production have barely made a dent. Unless the pace of production declines sharply or demand picks up significantly this summer, analysts say the nation's storage facilities could reach their limits by fall.
"That would cause the price of natural gas, which has been halved over the past year, to nosedive. Citigroup ... says the price of natural gas -- now $2.08 per 1,000 cubic feet -- could briefly fall below $1."
Compare what the president has said on oil to what the AP says on natural gas.
While the president tells the American public that only a reduction of demand -- and not an increase in supply -- can reduce the price of oil, the AP story says that the "new drilling technologies" have produced an over supply of natural gas and have driven the price to a 10-year low -- to $2.08 per 1,000 cubic feet, and that the price may well fall below $1.
Why does the law of supply and demand govern the price of natural gas, but not the price of oil?
What has happened with natural gas is economic fact. What the president tells us will happen with oil, is the product of a man looking at the world through green-colored glasses.
When a president continues to try to tell the American public that there is no law of supply and demand at work in the realm of oil, while ignoring the incontrovertible evidence that the same law is clearly at work in the realm of natural gas, one can only wonder whether Mr. Obama is economically challenged or oblivious to the truth!
If we can become as oil self-sufficient as we are natural gas self-sufficient, then all the unrest in Nigeria, or Iran will have far less effect, if any, on our prices.
Perhaps the president should have studied economics instead of constitutional law.
That's where you learn about the law of supply and demand.
Posted Online: April 20, 2012, 1:25 pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2012, John Donald O'Shea
Saturday, April 21, 2012
Thursday, April 12, 2012
House GOP Should Assert Constitutional Prerogative
In 1627, England was at war, and King Charles I needed money.
The House of Commons refused to provide that money. The King reacted by dissolving Parliament.
Two week later, the King opted to raise the money he needed by resorting to "forced loans" -- a euphemism for a "tax" imposed by the king without the consent of the Commons.
For the next 20 years, the King and Parliament battled over who controlled the "power of the purse." The issue was finally settled only after the English Civil War (1642-1651), during the course of which Charles I, lost his head.
When America adopted its Constitution (1788), that "power of the purse," which the House of Common fought a 10-year civil war to hold on to, was, in the first instance, vested in our House of Representatives. It is the House's preeminent power, and the guarantee that the people of our country will not be taxed without the consent of their Representatives in the House. A guarantee that they will not be taxed by a "king" or his ministers.
This is the historical backdrop in front of which President Obama rails against a "do-nothing (Republican) Congress" on an almost daily basis. So, is he being honest with the voters? Or is he playing an anti-constitutional cynical game?
How does he explain the fact that when he recently sent his own "budget" to Congress, that every member of the House of Representatives -- every Republicans and even every Democrats -- voted against it!
And how does he explain the fact that Democrat Harry Reid refuses to even call it up for a vote in the Senate the House's proposed appropriations bills?
If President Obama's budget is a "good faith submission," why doesn't Reid call it?
The Democrats control the Senate. If it has an iota of merit, the Senate could pass it without a single Republican vote! Then senators could go to conference with the House, where maybe something might get done.
So, who is really to blame? A president who cannot get a single Democratic House member or senator to vote for his "budget?" Both houses of Congress?
Or would it be "fairer" to blame only one house? And if so, which house? The House or the Senate?
I am from a generation that believes talk is cheap, and that "actions speak louder than words." So what would I do if I were running the House?
It is very simple. I would pass legislation, which if ignored by the Senate or vetoed by the president, would clearly demonstrate to the voters who is really at fault for the current mess. (Of course, the Republican leadership in the House may lack the wit to fashion such legislation.)
Section 7 [1] of the U. S. Constitution provides "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills."
It also provides "No money shall be drawn from the treasury but in consequence of appropriations made by law ..."
Two years ago, Americans gave the Republicans control of the House.
They concluded that the Democrats had been spending ruinously. They expected the Republicans to fix things. Instead, the House and Senate have given us a series of gutless "continuing resolutions."
So here is my solution. The Republicans, rather than passing "omnibus" appropriation and spending bills, should pass a series of separate appropriation bills, and a series of separate spending bills.
If the Republicans believe that there should be an appropriation for the armed forces, they should pass a "clean" appropriations bill for funding the armed forces. (When I say "clean," I mean a bill that does nothing other than fund the armed forces -- with no earmarks, no gimmicks, no extraneous provision.)
If they want to fund Social Security (which will be necessary to make up for revenue shortages caused by President Obama's payroll tax holiday), pass a clean appropriations bill for that purpose.
If they want to fund Medicare, pass a clean appropriations bill for that purpose, etc.
On the other hand, if they are serious about wanting to defund Obamacare, or the Department of Education or any other department, they can refuse to pass an appropriations bill for that department.
If the House passes clean appropriation bills, and if the Senate refuses to consider them, or amends them in a way to dirty them up, it will then be patently clear to the American public which branch of Congress is truly the do-nothing branch.
House Republicans would then be in perfect position to say if the government is forced to shut down, "Don't blame us. We passed a clean bill to make sure that every American would get his Social Security check. And if you don't get your checks, blame Harry Reid and the Senate and/or the president for shutting down the Social Security programs of the government."
Under our Constitution, the House "controls the purse."
It's time that the House, asserts its Constitutional prerogative. Demonstrate in a way that the public can't misunderstand that the Democrats in the Senate are the true obstructionists -- if that is indeed the case.
A House that won't fight to maintain its right to control the power of the purse is a disgrace to its heritage.
Posted Online: April 11, 2012, 3:08 pm pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2012, John Donald O'Shea
The House of Commons refused to provide that money. The King reacted by dissolving Parliament.
Two week later, the King opted to raise the money he needed by resorting to "forced loans" -- a euphemism for a "tax" imposed by the king without the consent of the Commons.
For the next 20 years, the King and Parliament battled over who controlled the "power of the purse." The issue was finally settled only after the English Civil War (1642-1651), during the course of which Charles I, lost his head.
When America adopted its Constitution (1788), that "power of the purse," which the House of Common fought a 10-year civil war to hold on to, was, in the first instance, vested in our House of Representatives. It is the House's preeminent power, and the guarantee that the people of our country will not be taxed without the consent of their Representatives in the House. A guarantee that they will not be taxed by a "king" or his ministers.
This is the historical backdrop in front of which President Obama rails against a "do-nothing (Republican) Congress" on an almost daily basis. So, is he being honest with the voters? Or is he playing an anti-constitutional cynical game?
How does he explain the fact that when he recently sent his own "budget" to Congress, that every member of the House of Representatives -- every Republicans and even every Democrats -- voted against it!
And how does he explain the fact that Democrat Harry Reid refuses to even call it up for a vote in the Senate the House's proposed appropriations bills?
If President Obama's budget is a "good faith submission," why doesn't Reid call it?
The Democrats control the Senate. If it has an iota of merit, the Senate could pass it without a single Republican vote! Then senators could go to conference with the House, where maybe something might get done.
So, who is really to blame? A president who cannot get a single Democratic House member or senator to vote for his "budget?" Both houses of Congress?
Or would it be "fairer" to blame only one house? And if so, which house? The House or the Senate?
I am from a generation that believes talk is cheap, and that "actions speak louder than words." So what would I do if I were running the House?
It is very simple. I would pass legislation, which if ignored by the Senate or vetoed by the president, would clearly demonstrate to the voters who is really at fault for the current mess. (Of course, the Republican leadership in the House may lack the wit to fashion such legislation.)
Section 7 [1] of the U. S. Constitution provides "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills."
It also provides "No money shall be drawn from the treasury but in consequence of appropriations made by law ..."
Two years ago, Americans gave the Republicans control of the House.
They concluded that the Democrats had been spending ruinously. They expected the Republicans to fix things. Instead, the House and Senate have given us a series of gutless "continuing resolutions."
So here is my solution. The Republicans, rather than passing "omnibus" appropriation and spending bills, should pass a series of separate appropriation bills, and a series of separate spending bills.
If the Republicans believe that there should be an appropriation for the armed forces, they should pass a "clean" appropriations bill for funding the armed forces. (When I say "clean," I mean a bill that does nothing other than fund the armed forces -- with no earmarks, no gimmicks, no extraneous provision.)
If they want to fund Social Security (which will be necessary to make up for revenue shortages caused by President Obama's payroll tax holiday), pass a clean appropriations bill for that purpose.
If they want to fund Medicare, pass a clean appropriations bill for that purpose, etc.
On the other hand, if they are serious about wanting to defund Obamacare, or the Department of Education or any other department, they can refuse to pass an appropriations bill for that department.
If the House passes clean appropriation bills, and if the Senate refuses to consider them, or amends them in a way to dirty them up, it will then be patently clear to the American public which branch of Congress is truly the do-nothing branch.
House Republicans would then be in perfect position to say if the government is forced to shut down, "Don't blame us. We passed a clean bill to make sure that every American would get his Social Security check. And if you don't get your checks, blame Harry Reid and the Senate and/or the president for shutting down the Social Security programs of the government."
Under our Constitution, the House "controls the purse."
It's time that the House, asserts its Constitutional prerogative. Demonstrate in a way that the public can't misunderstand that the Democrats in the Senate are the true obstructionists -- if that is indeed the case.
A House that won't fight to maintain its right to control the power of the purse is a disgrace to its heritage.
Posted Online: April 11, 2012, 3:08 pm pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2012, John Donald O'Shea
Wednesday, April 4, 2012
Why Send Our Oil Money to the Saudis? Hugo Chavez?
The Associated Press reports that President Obama has said, "Rising gas prices are not my fault."
Harry Truman said, "The buck stops here!"
But assuming arguendo that President Obama is correct when he says he can't do anything about gasoline prices, why not "buy American"?
According to Der Spiegel, Saudi Arabia pumps about 9 million barrels (378 gallons) of crude oil per day. When oil is priced at $114 per barrel, the Saudi Royal Kingdom earns just over $1 billion a day -- roughly $365B per year! I provide these figures by way of illustration. I realize America gets oil from many countries other than Saudi Arabia. And I realize that others report the Saudis export more.
So how much crude oil did the U.S. import in 2010? According to the U.S. Energy Information Administration (EIA), the U.S. imported (a net figure of) about 9.4 million barrels per day of petroleum in 2010.
My point is simple. The United States in 2010 imported a net of 9.4 million barrels of oil per day. Saudi Arabia pumps 9 million barrels a day. If the U.S. imported oil only from Saudi Arabia, and took Saudi Arabia's entire 9 million barrel output (which isn't the case), the U.S. would still need to import additional crude. And that is 9.4 million barrels a day is on top of the crude that the U.S. produces.
The EIA cannot determine exactly the amount of crude oil produced in the U.S. that is consumed, as refined products, in the U.S. However, the majority of the crude oil produced in the U.S. is refined in U.S. refineries.
The U.S. also produces other liquids that are used in the refining process that are added or blended with the refined products. The bottom line in 2010 was this: The U.S. produced about 5.5 million barrels of crude oil per day, and imported about 9.4 million barrels per day.
President Obama says the U.S. can effect gasoline prices only by decreasing demand and usage. He denies, I believe disingenuously, that prices can be decreased by increasing supply. Yet when presidents have tapped the Strategic Reserve -- which increased supply -- prices have dropped. Why? (No, I am not advocating tapping the Strategic Reserve.)
But assuming, for the sake of discussion, the truth of the inane claim that oil prices are somehow unaffected by the "law of supply and demand," why can't the president see that it is bad for the U.S. when $365 billion leave America each year and find their way into the pockets of foreigners-- many of whom hate our guts?
When Saudi oil sells for $114 per barrel, even if part of that goes to the oil companies and the refineries and not the Saudis, it still costs the U.S. $114 per barrel to import each of the 9 million barrels we import per day.
That money goes to the Saudis, Venezuelans, the Mexican or some other foreign country, and to the foreign oil companies and their refineries, etc., That $365 billion per year is sucked out of the American economy and sent overseas.
Why? To help the Arab tyrants who hate our guts? To ensure that a Marxist ally of Iran retains power in Venezuela? To provide employment for foreign workers, and profits for foreign oil companies and refiners? That's nuts!
Why not keep that $365 billion here?
How many high-paying drilling jobs would $365 billion create?
How much money would flow into the pockets of American oil drilling companies?
How many high-paying refining jobs would be created? How much money would flow into the pockets of the refining companies?
How many high paying transportation or pipeline jobs would be created? How much money would flow into the pockets of the trucking companies, or the pipeline companies?
How many billion dollars would the federal and state governments rake in in taxes?
We have a president who says "it's not my fault" if $365 billion U.S. oil dollars leave our country.
When I was a boy, I used to read "Mad Magazine." Their "cover boy" was one Alfred E. Neuman. He was famous for the line, "What, me worry?" I prefer a president who does "worry." One who says, "The Buck Stops Here."
But then, since 1956, Alfred he has periodically offered himself as a candidate for the presidency of the United States with the slogan, "You could do worse... and always have!"
It appears, we indeed have.
Posted Online: April 03, 2012, 2:58 pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2012, John Donald O'Shea
Harry Truman said, "The buck stops here!"
But assuming arguendo that President Obama is correct when he says he can't do anything about gasoline prices, why not "buy American"?
According to Der Spiegel, Saudi Arabia pumps about 9 million barrels (378 gallons) of crude oil per day. When oil is priced at $114 per barrel, the Saudi Royal Kingdom earns just over $1 billion a day -- roughly $365B per year! I provide these figures by way of illustration. I realize America gets oil from many countries other than Saudi Arabia. And I realize that others report the Saudis export more.
So how much crude oil did the U.S. import in 2010? According to the U.S. Energy Information Administration (EIA), the U.S. imported (a net figure of) about 9.4 million barrels per day of petroleum in 2010.
My point is simple. The United States in 2010 imported a net of 9.4 million barrels of oil per day. Saudi Arabia pumps 9 million barrels a day. If the U.S. imported oil only from Saudi Arabia, and took Saudi Arabia's entire 9 million barrel output (which isn't the case), the U.S. would still need to import additional crude. And that is 9.4 million barrels a day is on top of the crude that the U.S. produces.
The EIA cannot determine exactly the amount of crude oil produced in the U.S. that is consumed, as refined products, in the U.S. However, the majority of the crude oil produced in the U.S. is refined in U.S. refineries.
The U.S. also produces other liquids that are used in the refining process that are added or blended with the refined products. The bottom line in 2010 was this: The U.S. produced about 5.5 million barrels of crude oil per day, and imported about 9.4 million barrels per day.
President Obama says the U.S. can effect gasoline prices only by decreasing demand and usage. He denies, I believe disingenuously, that prices can be decreased by increasing supply. Yet when presidents have tapped the Strategic Reserve -- which increased supply -- prices have dropped. Why? (No, I am not advocating tapping the Strategic Reserve.)
But assuming, for the sake of discussion, the truth of the inane claim that oil prices are somehow unaffected by the "law of supply and demand," why can't the president see that it is bad for the U.S. when $365 billion leave America each year and find their way into the pockets of foreigners-- many of whom hate our guts?
When Saudi oil sells for $114 per barrel, even if part of that goes to the oil companies and the refineries and not the Saudis, it still costs the U.S. $114 per barrel to import each of the 9 million barrels we import per day.
That money goes to the Saudis, Venezuelans, the Mexican or some other foreign country, and to the foreign oil companies and their refineries, etc., That $365 billion per year is sucked out of the American economy and sent overseas.
Why? To help the Arab tyrants who hate our guts? To ensure that a Marxist ally of Iran retains power in Venezuela? To provide employment for foreign workers, and profits for foreign oil companies and refiners? That's nuts!
Why not keep that $365 billion here?
How many high-paying drilling jobs would $365 billion create?
How much money would flow into the pockets of American oil drilling companies?
How many high-paying refining jobs would be created? How much money would flow into the pockets of the refining companies?
How many high paying transportation or pipeline jobs would be created? How much money would flow into the pockets of the trucking companies, or the pipeline companies?
How many billion dollars would the federal and state governments rake in in taxes?
We have a president who says "it's not my fault" if $365 billion U.S. oil dollars leave our country.
When I was a boy, I used to read "Mad Magazine." Their "cover boy" was one Alfred E. Neuman. He was famous for the line, "What, me worry?" I prefer a president who does "worry." One who says, "The Buck Stops Here."
But then, since 1956, Alfred he has periodically offered himself as a candidate for the presidency of the United States with the slogan, "You could do worse... and always have!"
It appears, we indeed have.
Posted Online: April 03, 2012, 2:58 pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2012, John Donald O'Shea
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