Making Change

I went on my first Spring Break as a college Freshman in 1966. We went to Daytona and discovered, much to our surprise, that Daytona was still not hot that time of year and the ocean was cold. We moved on down the road to Fort Lauderdale where the climate and the girls were warmer. Florida was much farther away in those days due to continental drift. Now one can get there quite easily. The speed limit was 70 mph but no one paid any attention to it, much like today, only the roads were not nearly as good so 70 and above could be a little harrowing. But gasoline was cheaper by a factor of about 10 so fuel costs weren't astronomical. Of course, you could buy a small house for about $238 so perhaps the fractions are approximately equal.

That trip set off a series of Spring Break trips that I anticipated eagerly each year. The cost of gasoline rose gradually but it was still less than 75 cents per gallon so not a big deal. We had cars that would race down whatever long, reasonably straight road we could find at a speed calculated to immobilize with fear any rational human being who was not a young male. But, in 1973 all of that changed. OPEC was formed in retaliation for our support of Israel in the Yom Kippur War and immediately began to cut exports to the United States. In a short time there were hideously long lines at any service station (that was a place that sold only gas, oil, cokes and peanuts and someone would actually put the gas in your vehicle) that actually had any gasoline to sell. But the worst impact was yet to come. The federal government instituted a 55 mph speed limit on all highways that received federal funding under pain of losing those dollars. What used to be a high speed dash to the southern climes now became a trek lasting at least 2 days. Spring break was actually lengthened by an additional day to allow for sufficient travel time. The journey down the length of Georgia was so mind numbing that ardent travelers were known to resort to reading Beowulf for entertainment and that lasted for years. I am told that many Spring Breakers gave up on the effort and returned to their dormitories and sat in class with a lackluster look in their eyes until Summer break.

Which brings me to the question: is it un-American to sell our domestically produced petroleum products to the global market while wrenching $4 per gallon from American pockets for those products?

We have heard a loud uproar over the past several years about the high price of gasoline and how it is recessionary in its impact on the average consumer. A lot of people are yelling for more domestic production off our coasts, in the Arctic, in the Gulf, from Canada and from Alaska and every other place that may have enough oil to allow us to continue driving our personal transport vehicles with abandon. Fact of the matter is that we are producing plenty crude oil to serve our own domestic needs but the giant oil companies choose to sell it to the high bidder on the global market. With gasoline $10 per gallon in some parts of the world our price of $4 per gallon is a bargain. So, if you had a business selling eggs would you rather get $10 a dozen or $4 a dozen. No brainer, right? So, the question is no longer can we produce enough oil to flood ourselves once again with cheap gasoline but, rather, can we produce enough oil to flood the global markets with expensive gasoline. No brainer, right? Well, it is a no brainer to the oil companies which are floating in almost as much money as they are crude oil and are perfectly happy that way, thank you.

Couldn't we do just as well by telling the oil companies that if they pump it here they have to sell it here? Take care of your own first, so to speak. See, that's just it. These are not American companies. These are international companies and have no loyalty to the United States and the domestic market. Their loyalty is to the bottom line and the stockholder. My point is that they could drill until the cows come home and it would have at best a negligible effect on the price of gasoline.

This is the imperative that drives the debate for renewable energy sources. If we generate electricity for cars then we can't easily move it to the other side of the world. Electricity generated by a wind turbine or a solar cell can't be sold overseas. It is captive to the domestic market. Rest assured the giant oil companies are aware of this and hope to keep us distracted long enough for them to construct a business model that will allow them to capture the emerging market and assure profits. Free markets and all that. Right now BP owns the largest wind farm in Texas.

Free markets are a great tool for encouraging entrepreneurship and should not be marginalized but neither should they be relied on exclusively. Any power that is concentrated in the large corporations is power that is removed from the people. Now, that may seem a little ethereal and slightly hippie-ish but it remains the truth.

My point is simple. Let's realize we are not going to wrench enough fossil fuels from the earth to satisfy our gluttonous appetites. We can absorb enough from our habitat to provide the power we need to live comfortably and maybe even effusively. We still are unable to run airplanes and tanks on windmills and nuclear reactors but we can begin to make the change and actually like it.

A slightly different stance on my take on renewable energy sources. What is your view of our domestic energy production? Let me know.