A National Review piece printed at CBS News by Larry Kudlow
The recent spike in oil prices and unemployment is dramatically changing this presidential campaign – virtually overnight. The near $20 jump in oil to $140 a barrel, the unexpected half-point increase in the jobless rate to 5.5 percent (the biggest monthly increase in 20 years), and the resulting 400-point plunge in stocks has created a new campaign issue right before our eyes.
Public worry number one is now oil, jobs, and the economy, with the inflationary woes of the U.S. dollar right underneath. The candidate who can connect with these issues will win in November. But so far neither Obama nor McCain are dealing with the new political reality.
In fact, it’s all about oil right now. The price has doubled over the past year while the economy has slumped.
But here’s an eye opener. Recent polling data from Gallup show the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34 percent to 20 percent over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57 percent from 41 percent.
And the candidates remain blind to these shifts.
Kudlow goes on to break down the positions of Obama and McCain. The cap and trade portion he mentions really doesn’t have much to do with drilling, which Obama is completely against (the drilling.) McCain is for offshore drilling and nuclear power, but not drilling in ANWR, which is a shame. If he would jump on this issue with both feet, he could take a big bite out of Obama, who would not be able to answer, as Obama’s plan is to slap “windfall profits” penalties on American oil companies and raise CAFE standards. That oughta do it!
Then there’s the oil nobody is talking about. The Bakken fields beneath North Dakota, Montana, and Canada hold an estimated 400 billion barrels of oil. In comparison, Saudi Arabia’s biggest field, Gahawar, has an estimated 55 billion barrels, while ANWR has an estimated 10.4 billion barrels.
Hat tip to Mark Perry at the Carpe Diem blog site for these figures. Perry also is reporting a Bureau of Land Management study showing 279 million acres under federal management where oil and gas could potentially be extracted. But more than half of this is totally off limits. Off-shore, where another 86 billion barrels lie in wait, is also restricted. Then there’s liquefied natural gas, oil shale, and the various coal-to-liquid carbon-capture and sequestration technologies that would be priced out of the market by cap-and-trade.
I understand Kudlow’s point, linking the issue in to the 2008 presidential race, but, let’s look at it now. Democrats want to go after the windfall profits of oil companies, ie, penalizing a company for doing well, which will not help lower prices at all, but may cause American oil companies to move their headquarters overseas, taking jobs and lots of tax revenue with them.
Republicans, at least in the House, want to drill. They want to allow new pipelines, nuclear plants, and refineries. Rep Tim Walberg (R-MI) has filed a discharge petition to force a vote in the House for the No More Excuses Energy Act.
We need to use what we have with existing technology to allow us to bridge to future technologies. They just don’t appear overnight, no matter how much the Democrats talk about them.
