Dow plunges 200 points on oil prices — huh! I thought windpower was going to save us …

So once again the cost of oil is dragging us down, as we live in a country where the administration pushes imaginary “green” energy instead of actually doing what we need, which is to drill the large quantities of oil we have within our borders/near our shores. Don’t get me wrong, I’m not against windpower or any other form of renewable energy, so long as it makes at least close to economic sense (within 15% of the cost of coal). But however much windpower we manage to produce doesn’t affect our oil usage for the next decade or two, as we don’t burn oil for power generation; we burn it mostly for vehicles/transportation, and windpower isn’t EVER going to power the cars we currently have on the road.

So my usual critics are going to jump to the defense of no-drill-local-oil policy saying, among other things, that there’s not enough to matter. But the fact is, there is PLENTY to have an impact (read below) and large areas (such as off the coast of California) that almost certainly have much more oil that we would find with today’s technology that would couldn’t discover in the 1970′s — the last time we were allowed to explore. And if we did start drilling … if nothing else all the new wells coming in would help assuage the fears of Wall Street, where once again we’ve all taken a big hit.

As our 401k’s drop again, and gas goes up to $4 a gallon, and we find ourselves in a double dip recession … just remember to thank the man in the White House and all those legislators with “D”s next to their names. And if you voted for him and them … I hope you’ll remember what that vote got all of us and next year vote for someone with REALISTIC and HELPFUL economic policies, instead of an ideologue  that ignores reality while chasing progressive rainbows. Like windpower replacing all of our oil importation.

So here is a repost of a post I did earlier. Since the Democrat’s refuse to govern with anything approaching common sense and keep repeating the same idiot mistakes, apparently not realizing those mistakes have been realized by the electorate and they lost them the last election, I imagine I’ll be able to do a lot more reposts.

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Like I’ve always said … waiting to ambush any economic recovery is expensive oil/energy to slam us right back down again. Because the current administration is too blinded by environmental extremism to do the right thing and develop real sources of energy (windpower sounds nice, but it doesn’t run our cars — it just puts coal miners out of work because we don’t get electricity from oil). The Democrats/Environmentalists have always poo-pooed increasing domestic production because it would take years to develop. Well … now it’s years later, and how did that work out for us? How will that same logic work out for us years from now?

To put rising oil prices into perspective … the extension of the Bush tax cuts is targeted to keep about 800 billion dollars in the economy over the next two years, which is hoped to have a stimulative effect. But being as oil is currently about $90 a barrel, and probably going to be $120 a barrel by the end of next year (an increase of $30 a barrel), and we import 20 million barrels of oil per day … do the math:

30*20,000,000*365=219,000,000,000

In other words … about $219 billion a year, or half of those stimulative tax cuts over two years, will be sent right back overseas IF the price stays at $120 for 2 years (and that’s only figuring the increased expenditure, NOT the total price). And if the economy manages to keep picking up anyway and we get back up to $150 a barrel in 2012 (a growing economy will always mean growing demand), a $60 per barrel increase ($4 a gallon for gas again, anyone?) means:

60*20,000,000*365=438,000,000,000

Which means that with 1 year at $120 per barrel, and a 2nd year at $150 per barrel … in 2 years we’ll have sent 657 billion dollars out of the economy back overseas. So much for the tax cut stimulus. We’ll have all the debt from keeping taxes low … but the money we borrowed will go to Chavez in Venezuela and other oil producing countries.

Yeah … but let’s keep pumping money into wind power … that’ll allow me to drive my kids to school.

And I’m so glad that once they got the gushing Deep Water Horizon oil well in the gulf under control they capped it with cement instead of producing it through the relief well, which would have been smarter. Let’s see … if the flow rate had continued at 49,000 barrels of crude a day (look here for more facts on that) it would mean …

at $120 per barrel, 120*49,000*365=2,146,200,000 (about 2 billion dollars a year of domestic oil, vs. sending it overseas)

at $150 per barrel, 150*49,000*365=2,682,750,000 (about 2.6 billion dollars a year of domestic oil, vs. sending that money overseas)

And that’s just one well. If Obama hadn’t canceled out gulf drilling and exploration, we’d have more wells coming in. And while we’d never replace all our imports … it would replace a percentage. And while it wouldn’t keep oil prices from going up, it would help a little. And if we went full bore and just plain drilled everything everywhere … it still wouldn’t replace all our oil imports, but it would replace a decent percentage.

And of course all of the above means oil workers go back to their high-paying jobs on oil rigs, vs. collecting unemployment and either having to uproot and move and start a new career or just accept handing out bags of french fries through a drive-up window the rest of their lives.

Now I realize that certain individuals out there will immediately jump on this with shrill cries of but you don’t understand … oil companies are international corporations and not all that money stays in the US anyway. And when we produce oil in Alaska we sell it overseas so it doesn’t help with domestic production …”

Which is pure BS.

It’s an international economy, of course. But in the end it’s all debits and credits and how much total wealth stays in a given national economy. When we sell Alaska oil overseas (because it’s more efficient than shipping it to the lower 48) we bring money in, which offsets oil we import. While companies like BP aren’t based in the US, they hire a lot of highly paid American workers, pay taxes to the American government, have to support their rigs with American companies/ships/helicopters, have to buy a lot of equipment here … etc. And for the amount of profit that goes overseas to the home company … again, that’s at least partially offset by the American oil companies that pump oil overseas and are based in the US. It is an international economy, but since they pump money in to develop the wells they certainly deserve the profit.

Minerals from the earth, be they oil or gold or whatever, are pure money. There’s no economic negatives to producing them.

So while I know this will fall on deaf ears in the current administration … we all have to take up the chant of “DRILL BABY, DRILL!” and keep after the issue so that the next administration/bunch of congressional members we elect in 2012 will do the right thing and start producing every bit of energy they can in this country. Be it off the coast of Florida, Alaska, California … or right here in Colorado.

The world’s oil is going to run out eventually anyway, or at least we’ll get past peak production and we’ll HAVE to have alternatives ready, but I’m confident that we will. Because we should have enough oil to keep going for several decades if we develop it all. And by the time capacity truly decreases below need … we’ll be ready. Versus the artificial shortage politicians and radical environmentalists are creating now, which will do nothing but force us to waste billions on energy production and technologies not ready for production. And possibly do a lot of damage by promoting technologies and supporting infrastructures that are actually detrimental.

Suppose a hundred or so years ago the government had decided that horse emissions were causing global warming, and forced the production of the best mechanical transportation means they had — the Stanley Steamer (especially since the Steamer Automotive Production Union had pumped so much money into the last election that other technologies were ignored). And spent huge amounts of tax dollar wealth promoting an infrastructure to support steam driven automobiles. Where would we be now?

Is that what is happening as we dump money into wind power to replace plentiful coal generated power? And try to develop electric cars that we don’t have the power production capability or infrastructure to even support if everyone bought one tomorrow? Or is there some Einstein out there right now with a totally new concept that will be so efficient that there will be no need to force it down the throats of consumers (it didn’t take a government program to replace horse drawn carriages with Model T’s — the consumer’s decided that on their own).

Drill Baby Drill!

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