Economy

Republicans and the oil weapon: what Obama should do

by JS O’Brien

The Republicans have found a new weapon in their desperation to capture the White House again and retain as many seats as possible in Congress:  oil drilling.  Yesterday, President George W. Bush lifted a moratorium on offshore drilling his father implemented in 1990.  Note that this will make only a political difference, since Congress maintains its own moratorium.  It does do two very important political things for the Republicans, though.

1.  It allows Republicans to say that the Republican president wants to do something about the oil crisis and gasoline costs, even if the Democratic Congress does not, and

2. It allows Congressional Republicans to introduce a bill lifting the moratorium, forcing Democrats to vote on the measure, while robbing Democrats of the ability to say that what Congress votes doesn’t matter, because the presidential executive order is still in effect.

Most of those who read widely understand that additional drilling will do nothing to increase oil supply for many years, and most analysts are saying that the impact on prices, even when the new oil starts pumping, will be small.  At least one pundit, though, thinks that there could be a short-term drop in prices as speculators unload long-term positions, and that it just might come in time for the 2008 election.

And maybe it will.

The question of the moment, though, is:  What should Barack Obama do to counter the political charge that Democrats are not doing enough to alleviate gasoline prices and, worse, that Democratic initiatives banning offshore drilling, and drilling in the ANWR, are responsible for the high prices we have, today?

The temptation is to make a complex argument, because a complex argument is true.  Obama could say, for instance, that the real issue is that oil will not last forever, that the real way out of this mess in the long term is to develop alternative sources of energy, that even if we could get oil prices to drop today, our children will face an even greater crisis in the future as oil literally disappears off the earth.  He could go on to tell Americans that increasing use of oil will just increase global warming, so that our grandchildren might well face a world in which mass starvation and worlwide poverty are facts of life.

He could say all that — if he wants to lose.

The American people will not sit still for complex arguments.  Even if they are well enough educated to understand those arguments, complex messages almost always lose to simple messages in today’s sound-bite world, even if the simple message is dead wrong.

So, here’s my suggestion for Obama’s next speech on the matter of energy costs and offshore drilling.

My fellow Americans,

We are facing an energy crisis today that is new in all our memories.  No one alive today has ever seen anything like this.  If we don’t act swiftly, we can expect many, many years of increased costs for everything, and lowered expectations for our children.  Already, many of you are finding that things you once found easily affordable, like driving to work and buying food, are pinching your pocketbooks.  I’ve spoken with many people who are angry about this — and they have a right to be angry.

The fact is, your leaders have failed you.  By 1979, at the very latest, it was clear to any leader paying attention that the world would one day find itself addicted to oil, and that the oil would one day be used up.  For a while, we were serious about conserving energy, so that the day we used up all our oil could be put off as long as possible.  And we were serious about developing alternative forms of energy, so that we could one day put the oil addiction behind us.  But the lobbyists and special interests, the oil companies and oil-producing nations in the Middle East and the like, soon convinced our leaders that oil addiction is a good thing — or at the very least, that the special interests would contribute a great deal of money toward seeing that anyone who didn’t think oil addiction was a good thing didn’t get reelected.

The solution Republicans are putting forward today is just another addition to the same policy that has failed us for almost three decades.  If I’m elected president, here is what I will do to alleviate the energy crisis so that we get a real solution — not a solution that makes us more dependent on an oil supply that will dry up, someday.

1.  I will ask Congress to authorize offshore drilling to ease gasoline prices as soon as we can get more gasoline to the pumps, but ONLY to produce oil company profits at pre-crisis levels.  Any additional profits will go to research into alternative energy sources so that we can beat this thing forever.

2.  I will ask Congress to allow people to deduct the cost of travel to and from work.  That will decrease commuters’ taxes, and provide them with more disposable income to pay for gasoline.

3.  I will push hard for more money, a lot more money, to research and develop alternative energy technologies, and push to get those technologies on line as soon as possible.  American ingenuity has not failed us in the past, and it will not fail us now.  All it needs is seed money.

Voters have two starkly contrasting energy policies to choose from in the coming election:  continue the failed policies of George W. Bush and other leaders who increased our dependence on oil, or take steps to free us from enslavement to the oil companies, oil-producing nations, and other special interests who care little for America, but a great deal for themselves.

Thank you.

This policy speech does good things for Obama’s campaign.

1.  It acknowledges pain and anger, shows empathy, and tells people that the pain and anger is justified.  This is classic customer-service practice for organizations that do customer service well.

2.  It gives people a villain — leadership — that has mostly been Republican at the presidential level since 1979.

3.  It ties current Republican tactics to the villains of the past and present (including oil-producing nations in the Middle East), as well as that always-useful populist bugbear: special interests.

4.  It proposes solutions people can readily understand, and readily relate to the positive effect on their finances now and in the future.

5.  It means that there will probably never be any offshore drilling, since oil companies can earn higher-than-pre-crisis profits from other sources.  If they complain, they will have to use a complex argument against a simple one, which means they lose.

6.  It ties McCain and other Republicans to George W. Bush, one of the most unpopular presidents in history.  That fits in well with Democratic talking points, to date.

15 replies »

  1. Good post. I have to disagree with your bullet point #2 tax break as it would only serve as a back door subsidy for the oil companies and would in the end artificially increase demand and ultimately increase gas prices. Rather it might make more sense to replace that point with one that offers substantially greater tax incentives to encourage the purchase of more fuel efficient vehicles. It might even make sense to link that tax benefit to the mileage differential between your current vehicle and the new one and your estimated annual work mileage. I’m talking out my ass now but you get the idea. Good stuff you have here.

    Super J.

  2. Sam;

    Good! I like it!

    Super J:

    I hear ya. I don’t like the tax break idea either, but one has to win an election, doesn’t one? The break for buying a fuel efficient vehicle is a good idea, but won’t play all that well to people who don’t have the money to do that.

  3. One thing that might work (although it’s probably post-election) is a federal gas-guzzler buy-back program. Drivers sell their gas guzzler to the feds which then resells it for scrap and the drivers get a more fuel efficient vehicle in return. It’d take some planning, of course, but it would do wonders for getting aggregate fuel efficiency up. And it’s necessary over the long run.

  4. Cool idea, Brian! And it might even work pre-election. Probably, you’d want to give owners of gas-guzzlers a certain amount of money in excess of actual resale value, or pre-criisis resale value or something, but I think it’s a great idea if it’s affordable.

    Of course, I wouldn’t want to do it unless the stats show me that independent voters in swing states tend to own SUVs.

  5. Okay then, I revise my suggestion so that people get a huge tax incentive to buy a more fuel efficient vehicle, or if they cannot afford to do that they will get…free pie!

    (everyone loves pie!)
    Super J.

  6. A terrific post. But, if I were still the annoying, cynical reporter I used to be, I’d be picking apart Sen. Obama’s rhetoric. There’s plenty of opportunity to ask, were this speech actually delivered, “Hey. What does THAT mean?”

    For example, what is “cost of travel” to and from work? What do you mean by “pre-crisis levels”? 1979? 1992? 2001? 2008? Sooner or later, his rhetoric would unravel because it is essentially vague.

    Nonetheless, I really appreciate the exchange of ideas offered in the comments. That buy-back of SUVs is a damn good idea. And I’ve got an ’04 Liberty you all can have …

  7. Denny:

    Haven’t you realized yet the the press doesn’t matter? Complex messages don’t matter? What matters are simple messages that tie your candidate to good things and their candidate to bad things.

    Cost of travel to and from work is currently 48.5 cents per mile, I believe, in an automobile. It’s not deductible, currently. Pre-crisis levels would be some point in time before gasoline price increases looked like a hockey stick. The details would obviously be worked out before the speech — or not.

    Like I said, details don’t matter.

  8. I agree that simple messages work best. The Republicans currently are espousing an “all of the above” policy. It sounds good, but I don’t get a warm fuzzy about anything other than- more drilling.

    I would lke to see Obama agree to allowing the states to determine if they want off shore drilling. Agree with McCain on this point then quickly up the ante by endorsing the Pickens Plan ( http://www.pickensplan.com/ ). Doing this will move the argument further down the road. Instead of debating the relative value of the first step, let’s keep our eyes on the ultimate goal….energy independence without destroying the environment or the economy.

    Senator Obama has seaid “Perfect should not be the enemy of good”. This is an opportunity to live that. Drilling may not help immediately and it is not the ultimate solution, but it is not entirely bad either. Agreeing to this essentially takes the argument off the table and will force the other side to engage on the question “Then what?”

  9. If drilling in new places is going to aleviate our pain, then that must mean the domestic oil ill only be used domestically, right, I mean nobody would want to sell it to China or India, right?

  10. Right, pete. And the U.S. doesn’t export massive quantities of gasoline overseas either. Oh, that’s right, we do, don’t we?![sarcasm off]

    Check out the exports – 1.424 million barrels of oil worth of “petroleum products” every day. The EIA defines “petroleum products” as follows:

    “Petroleum products are obtained from the processing of crude oil (including lease condensate), natural gas, and other hydrocarbon compounds. Petroleum products include unfinished oils, liquefied petroleum gases, pentanes plus, aviation gasoline, motor gasoline, naphtha-type jet fuel, kerosene-type jet fuel, kerosene, distillate fuel oil, residual fuel oil, petrochemical feedstocks, special naphthas, lubricants, waxes, petroleum coke, asphalt, road oil, still gas, and miscellaneous products.”

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