I’m surprised it has taken so long for American politicians to realize that the surest way for the nation to reach energy independence is to annex neighboring oil-producing countries that have extra oil to sell and just keep it for ourselves. That is effectively what one of Mitt Romney’s potential VP picks, Paul Ryan, suggested while lecturing President Obama about “gimmicks” that cannot lower gasoline prices.
Here’s how this works: All you need to do is approve more oil pipelines to carry oil from the Canadian tar sands all the way to refineries along the Gulf Coast where the refined products will be sold to
world oil markets just us Americans.
“Let’s open up the Keystone pipeline to bring Canadian oil into our country to dramatically reduce our dependency on foreign oil. It creates jobs here in America. It lowers gas prices, increases supply, ” said Ryan.
“And just by passing this legislation, you’ll improve the prices in the futures market, because you’ll see that all this new American-made energy is coming online. Unfortunately, the president is standing in the way of all of those kinds of reforms, and so he’s resorting to what I call these sort of policy gimmicks that in the past really haven’t done a whole lot to change the outcome.”
The “gimmick” Ryan was referring to is having western nations actually or threaten to dip into their strategic reserves as a means to signal to oil markets that higher oil prices cannot be sustained. So, according to our wannabe future VP, you can’t affect current prices or futures for the next six months by doing something that could actually increase supplies very quickly, but you can influence near term futures prices by promising to increase supplies that won’t reach markets for several years. How could anyone argue with that?
It’s on a par with the argument that by relieving the bottleneck at Cushing by building the lower part of Keystone, thus allowing surplus supplies in the middle US to reach the Gulf Coast and hence world markets, it will lower prices from Denver to Chicago. Sure it will. Read the rest of this entry →