Ok Let's look at it this way, the Government has a giant Milk Shake. Standard Oil (Exxon/Mobile/Phillips/Shell/Etc) wants the rights to stick straws in that giant Milk Shake. So the government rents them 21 stools at the counter where the Giant Milk Shake is sitting. But the government makes sure that a few of those stools remain vacant.
The CEO's from Standard Oil show up and sit on the 21 stools rented to them by the government. Now a third of those CEO's take out long straws that reach over to a bunch of tables where all the consumers sit. But there are many more consumers than there are straws. So the consumers have to pay to drink from these straws.
Over the next 7 years, the consumers watch the price of the Milk Shake triple. They start complaining. Now Standard Oil says, don't blame us, it's the government's fault for not giving us all of the seats at the counter. Many of the consumers, blinded by their frustrations over the expensive Milk Shakes, buy into what Standard Oil is telling them and start complaining to the government. The government then rents three more stools to Standard Oil. After that one more of Standard Oil's CEO's reaches in his front pocket and takes out a long straw that reaches back to the tables were all the consumers are.
Moral of the story, he who controls the straws controls the price of the Milk Shake.
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2 comments:
Mr. Anonymous,
Your parable is an interpretation of the phony baloney “Use it or Lose it” Democratic talking point.
The following article exposed the mythology behind that phony talking point before Mr. Reich repeated it.
Quoting the “non-partisan” Congressional Quarterly:
“When federal land or waters are leased to oil companies in parcels of about 1,000 to 3,000 acres, usually for 10 years, there is typically just ‘a very general sense of the value of the land,’ said Larry Nation, a spokesman for the American Association of Petroleum Geologists.
Only some portions of leased land may hold accessible oil, while other portions do not, Nation said, but companies must continue to lease the entire parcel.
‘There’s the misconception that every lease has oil,’ added David Curtiss, director of the association’s Washington office. ‘A lease is a line on a map. It has nothing to do with the geology of where oil is.’
Young, meanwhile, called it ‘most ironic’ that Markey, Hinchey and Emanuel were ‘even attempting to talk about increasing America’s energy production.’
‘That they are attempting to make it appear as if they are for domestic energy production is baffling to me,’ Young said. ‘Barely one month ago, Mr. Markey and Mr. Hinchey voted against my provision to open [the Arctic Refuge] for production.’ ”
You can find an objective, quantitatively accurate and fully substantiated analysis of the facts here.
I have no doubt that CQ is fairly non-partisan, but I find it interesting that you pull a few lines from the very end of the story. Making it seem that it was slanted in favor of your position. It's also nice to see that you pass off your blog as an "objective, quantitatively accurate and fully substantiated analysis of the facts." When in fact it is just another right-wing blog. (BTW, I have no problem admitting that this is indeed a Liberal blog - in fact I am quite proud to wear that monicker.)
So I guess if the lands that Standard Oil already has leases for are as you have suggested - barren of oil, then Standard would not mind returning federal lands.
As the the "parable" suggests, it is not in the interests of Standard Oil to increase it's production, if doing so will only lower the price of their product. To use another "parable," why would the pusher man flood the streets with twice as much heroine if it meant that the junkies would get it at half the price. He would be selling twice as much product but still taking home the same profit.
Also, it seems that you are banking too much credence in the notion that demand is the main culprit of the rising prices. You seem to have overlooked the shrinking dollar and the role of speculators and Dark Markets (thanks former senator Gramm.)
Your hope for the "Drill Here, Drill Now" battle cry to be the savior of the Republican Party in November seems like a reach. I wouldn't print up the bumper-stickers just yet. Especially in the light of the colossal profits of Standard Oil. A "free market" may help lower gas prices, but what we have is far from a true free market.
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