Playing bad poker with the gas money.
“If, after the first twenty minutes, you don’t know who the sucker at the table is, it’s you. ”
I have played a little bit of poker in my life. I’m not a great card player but I do understand the fundamentals of the game. The game is not about what cards you draw. The game is about how you play your cards against your opponent.
Imagine yourself in a high stakes card game. A game in which your financial security and that of your family is on the line. Imagine being at the table with ruthless players, the kind of players that will exploit the smallest weakness.
Imagine opponents who wish to take all of your money and then have you killed when you leave the saloon.
Now imagine someone standing right behind you telling these adversaries exactly what cards you are holding and exactly how you intend to play them. Imagine also that that same someone is prohibiting you from drawing even a single card to improve your hand.
If you can picture all of that, you are seeing one of the fundamental reasons that gasoline prices have gone up by more than 60 percent since the November election of 2006.
In this poker game, you are the U.S. energy industry. Your opponents are Middle East oil producers, together with energy traders and speculators. And the idiot behind you tying your hands when you try to draw, while telegraphing your cards to your adversaries, is the U.S. Congress.
Oil prices are sky high for a number of reasons, most of them beyond our control. One of the biggest is that world demand keeps rising because of the economic expansions in China and India. Another is that the U.S. dollar, the currency in which oil is denominated, is at a cyclical low.
But a big reason that oil prices are high is because oil is being bid up by speculators. And that is a reason over which we have a great deal of control.
Those that produce oil and those that trade in oil are now convinced that we will not draw to our hand. By that, I mean that despite the fact that we know that there is oil in the Alaska National Wildlife Refuge (ANWR), that there is oil and gas in the Outer Continental Shelf and that there is oil locked up on federal lands in the Midwest, our government steadfastly refuses to allow the American oil industry to go produce it.
Oil speculators, knowing that demand will continue to rise while the biggest oil user, the U.S., will do nothing about supply, continue to bet on higher prices. So far, that has been a good bet.
In Congressional testimony this week, representatives of the oil industry testified that because a pipeline head is only 74 miles from ANWR, we could begin producing a million to a million and a half barrels a day from ANWR within a year.
In other hearings, Schlumberger estimated that federal lands in the Midwest hold shale reserves equal to over a trillion barrels of oil, yet the process for leasing and exploring that land is so cumbersome as to be impossible.
But Paul, drilling for oil in all of those places will cause severe environmental damage.
Will someone please show me the ecological catastrophes in Kilgore and Longview? You know, all that environmental damage that has been done in the 81 years that we’ve been producing oil in East Texas.
We’re playing poker with ruthless players who know that we don’t have the stones to draw to a pair of tens.
Energy economists estimate that speculation is adding 20 to 25 percent to the cost of gasoline. Want to end the speculation? It can be done literally tomorrow – before even the first well is drilled.
House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid just need to hold a joint press conference. They announce that in light of the high prices working Americans are paying for gasoline; and in light of America’s ability to make a significant impact on world oil supplies through production of its own resources; they are reversing their position on ANWR and the Outer Continental Shelf and other federal lands and will immediately propose legislation to enable the U.S. energy industry to begin exploration in those areas.
The price of gasoline at the pump would drop by as much as a dollar almost overnight.
In poker it’s called “calling your opponents’ hand.” In government, it’s called sound policy.