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J.C. WATTS: Seeking energy independence

When folks in Washington want to find out what's on the mind of the American people, they tune in to CNN or Fox News and listen to the best of the Washington talking heads. Not me. I have breakfast at my favorite diner in Eufaula, my hometown in Oklahoma.

Last week, the folks at J.M.s Restaurant weren't talking about Sens. Obama and McCain, or the fact the Iraqi government has al-Qaida on the run. They were talking about energy prices. They were talking about the fact it costs $80 to fill up their cars and $120 to fill up their pickup trucks. They were talking about the fact we import more than 65 percent of all the oil we use annually and that we are now sending more than $840 million a day to OPEC.


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  • Why are gasoline and diesel prices so ridiculously high? It's pretty simple. When oil prices go up, so do gas and diesel prices.

    Why are crude oil prices so high? Pretty simple. Only 8 percent of the oil and gas reserves we have onshore are currently available for conventional leasing in the United States and more than 85 percent of the areas containing potential oil and gas reserves in the Outer Continental Shelf are off limits to exploration and production. Our government energy policy has increased our dependence on imports. In fact, our imports from the Middle East have doubled in the past 20 years. Not to mention the Chinese and Indian economies are growing faster than ours and they need energy to fuel their growth.

    Not surprisingly, people in Eufaula want to know what the government is doing to help. Unfortunately, not much.

    Despite the fact energy prices are directly pegged to the price of crude oil, members of Congress have spent the past 18 months frantically trying to drive the price of oil up. They attempted to let trial lawyers sue OPEC. They attempted to institute a windfall profits tax on oil companies. They have prohibited development of domestic unconventional fuels -- such as oil shale, heavy oil, coal-to-liquids and exploring on federal lands for natural gas. They have tried to raise taxes by trying to implement a climate change regime that would act as a carbon tax on gasoline, diesel, coal and natural gas (which our economy runs on).

    They have also tried to unconstitutionally seize offshore leases held by oil and gas producers. And they have blocked efforts to open up ANWR or the Outer Continental Shelf to any exploration whatsoever!

    How have our congressional leaders explained the fact that every vote they have taken is a vote to raise energy prices even further than they are today? They haven't. Instead, they have blamed President Bush, "big oil," speculators and OPEC for the recent spike in gasoline and diesel prices. They have claimed we can't drill our way out of this problem, we don't have enough domestic oil or natural gas to make a difference and that it will take too long to bring these resources on line to help reduce energy prices. FYI Congress, we can't tax, sue or regulate our way to lower energy prices either.

    The economics of energy prices are again simple. If you want to reduce energy prices, you have to increase supply.

    The fact is, we have the resources here in America to solve this problem. Chesapeake Energy estimates we have 82 years of natural gas at current rates of production. Canada's natural gas has an additional 40 years' supply. A RAND Corporation study concludes we have more oil in Wyoming, Colorado and Utah than Saudi Arabia has. We have enough oil in ANWR and the Outer Continental Shelf to significantly reduce -- if not completely eliminate -- our imports from the Persian Gulf. At current costs, we could produce oil in the United States for less than $35 a barrel. Or we could keep buying it from OPEC for more than $135 a barrel.

    We also have advanced biofuels technologies such as renewable diesel that doesn't compete with food sources and doesn't have to be blended with conventional diesel and we have clean burning natural gas cars, trucks and buses that can take pressure off of the super-heated diesel markets today.

    We can bring these resources online faster than any of the alternative technologies congressional leaders talk about. Even the ardent supporters of cellulosic ethanol, hydrogen technologies and plug-in electric cars will admit their solutions to our addiction to hydrocarbon fuels are decades away.

    A strong signal by the government that we are going to get serious about domestic energy production will not only restore equilibrium to the supply-demand equation for oil, it would help rein in market speculation and drop prices of energy immediately.

    Let's hope Washington listens to the folks at J. M.'s.

    J.C. Watts, chairman of J.C. Watts Companies, a business consulting group, is former chairman of the Republican Conference of the U.S. House, where he served as an Oklahoma representative from 1995 to 2002. His e-mail address is JCWatts01@jcwatts.com.

    Erin Neff is on vacation. Her column will return next week.

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    NYJoe wrote on July 24, 2008 03:14 PM: Saw a link to these comments at www.polijam.com Great site for news and commentary. These comments by J.C. watts are great. I keep on remembering Pelosi's promise before the last ccngressional elections that when the Democrats take over gas prices will drop immediately. I don't know whether to laugh or cry.


    Travis wrote on July 22, 2008 03:32 PM: "what i understand is that harry osama reid is deliberately preventing elected u.s. senators from voting on a current, critical bill regarding exploration and harvesting of u.s. energy sources."

    "what possible reason is there other than reid is the inside man for the al queda agenda to cripple the u.s. economy?"

    The reason he won't let Republicans vote on opening up those regions is because of the reasons I indicated (supply side, use what you have first). He's refusing to cave in on the unsubstantiated demands of the oil industry.

    What I really want to know is where you got this information from. I've been looking for something new to make me laugh.

    "the leftists are unwilling to directly answer the issue. instead they spin with leftist party rhetoric. spinning away from the issue is dishonest and exemplifies the "progressive" anti-american consumer agenda."

    Saying it over and over won't make it true. Fortunately, we don't have to worry about hearing you shout it in this forum. If you can't follow my logic, then I feel sorry for your lack of cognitive ability. There's a reason conspiracy theories almost always remain theories and don't make the transition into fact. Your argument will join the majority of others.


    douglas wrote on July 22, 2008 03:11 PM: "what i understand" is that harry osama reid is deliberately preventing elected u.s. senators from voting on a current, critical bill regarding exploration and harvesting of u.s. energy sources.

    this while he repeatedly demands that illegal/infiltrator/saboteur/welfare parasites must vote in u.s. elections.

    what possible reason is there other than reid is the inside man for the al queda agenda to cripple the u.s. economy ?

    the leftists are unwilling to directly answer the issue. instead they spin with leftist party rhetoric. spinning away from the issue is dishonest and exemplifies the "progressive" anti-american consumer agenda.


    Travis wrote on July 22, 2008 02:18 PM: One trick the oil industry uses is supply-side economics to inflate the price of oil.

    Follow the link; http://www.publiccitizen.org/documents/oilmergers.pdf

    Here's a part of it,

    The largest five oil companies operating in the United States (ExxonMobil, ChevronTexaco,
    ConocoPhillips, BP and Royal Dutch Shell) now control:
    · 14.2% of global oil production (nearly as much as the entire Middle East members of the
    OPEC cartel).
    · 48% of the domestic oil production (which is significant given the fact that the U.S. is the
    3rd largest oil producer in the world).
    · 50.3% of domestic refinery capacity.
    · 61.8% of the retail gasoline market.
    · These same five companies also control 21.3% of domestic natural gas production.

    These figures are in stark contrast to just a decade ago, when the top five oil companies
    controlled only:
    · 7.7% of global crude oil production.
    · 33.7% of domestic crude oil production.
    · 33.4% of domestic refinery capacity.
    · 27.0% of the retail market.
    · In addition, in 1993, the top five U.S. companies controlled only 12.7% of domestic
    natural gas production.

    They have increased their control of domestic supply, increasing their ability to restrict supply, thus increasing prices. Supply and demand is being manipulated, not a free market. The current push to open up more areas for drilling will further increase their influence on domestic supply. Is anybody surprised that during this time of increased control of supply has resulted in oil prices going so high? Cause and effect, plain and simple.

    Doubters, please PROVE me wrong.


    Travis wrote on July 22, 2008 02:00 PM: "again and again, the anti-american spin is to strangle the exploration and harvesting of potential u.s. energy reserves."

    What do you not understand about the fact that the oil industry is purposefully withholding supply by not recovering the oil they have already located on existing leases. No spin, just straight fact.

    "there is no reasonable explanation by the leftists other than an intent to cripple the u.s. economy, by harry osama reid."

    Reread my response above to make sure you understand. If not, I'll try and explain it again.

    "why can't the leftists answer that without out spin?"

    I'm not spinning anything here. It is quite simple to understand. Let me put it as an analogy. Your child has 68 toys, just like their other toys, that they don't play with yet. They have been busy playing with their other toys, saving the 68 for later. Are you going to go to the store and buy them more if they want more? Or, are you going to tell them to play with the toys they already have. Then, you'll consider buying them more toys, but not until they make use of their existing ones.

    The oil industry is the child, the toys are their existing leases. Get it.

    One last point which has been made repeatedly, even by the Bush administration. We CANNOT drill ourselves out of this deficit. It requires alternatives.


    dennis1944 wrote on July 22, 2008 01:52 PM: In my humble "politically correct" opinion Dingy, Hapless Harry Reid is mentally challenged. Many Liberals and democrats already encourage illegals to vote! Check out the election of Loretta Sanchez in Orange County, in the Peoples Republic of California. Some of the votes were found to be cast by illegals, but nothing was done about it. Loretta reportedly told people at her rallys that "You don't need papers to register to vote!


    Jack Kinch(1uncle) wrote on July 22, 2008 12:33 PM: People need to be told over and over that we must drill here and drill now.
    We are sending great wealth to likely enemies at Armageddon to arm themselves.


    Claudia wrote on July 22, 2008 12:29 PM: All of you who think the oil industry is doing anything to increase supply, please read the following AP article in today's Buffalo News.
    buffalonews.com/180/story/396907.html
    To quote in part, "The five biggest international oil companies plowed about 55% of cash received into stock buybacks and dividends last year." (to keep their stock prices up) "The percentage they spent to find new deposits of fossil fuels has remainded flat for years, in the mid-single digits." Obviously, there is more to the article, but add to that the fact that Conoco-Phillips has a corporate policy of not putting into production the oil it has discovered in Alaska in the last few years, as evidenced by the fact that they will not allow all the well logs required for production to be run, in favor of higher prices at some time in the future, I see no reason to give them any new drilling rights until they show they are developing those oil deposits they are sitting on.


    douglas wrote on July 22, 2008 12:29 PM: verbally attacking the columnist when she isn't able to filter/screen/censor non "politically correct" posts in unfair.

    before posters hint at a replacement, what would be the result if a sharper leftist were installed ? be happy for an unarmed adversary.


    Terry Lavely wrote on July 22, 2008 12:16 PM: Erin Neff is on vacation. Her column will return next week.

    PLEASE LEAVE HER ON PERMANENT VACATION!

    This column was far more necessary than her slanted drabble.

    Thank you,

    Terry Lavely


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