One of the aspects of the recent BP undersea oil gusher is a sudden flurry of lies from Congress and the administration regarding regulation in the sector.
To hear the president and selected members of Congress tell it, the oil industry has been unregulated for, oh, just about a decade. Sound convenient in terms of presidential terms?
Yet, I vividly recall then-CEO of ExxonMobil, Lee Raymond, caustically observing all the sudden experts in oil refining, when gasoline prices hit new highs several years ago amidst shortages. Raymond, among others, replied to the accusation by government that no new refineries had been built in the US since about 1968, by pointing to the complex, expensive and time-consuming permitting process.
Sounds like regulation to me.
Raymond explained that it was far easier, faster and cheaper to expand an existing refinery than to build a new one from scratch. Nobody, at least until they can't buy a gallon of gasoline, seems to want a refinery in their backyard.
How is it that the same administration and Congress that looks elsewhere for the cause of the recent financial crisis, while overlooking their own complicated regulatory schemes and agencies, can repeat the act in the energy arena?
Whatever regulatory processes exist would seem to have been deemed appropriate by Congress. If the MMS was 'captured' by industry participants, then Congress' legislation pertaining to the agency must have allowed for that.
Who's fault is that? Not BP's.
Perhaps regulations were inadequate. But it's a joke to suggest there are none, or they are totally unenforced. And then blame industry firms for that.
Last time I looked, only Congress could pass legislation in this country, not publicly-held companies.
Taking this travesty a step further, it's simply ludicrous to ignore Congress' legislative culpability in the oil gusher mess, then use the disaster as a reason to swear off of oil and nuclear.
If we are to believe the president, nobody has ever tried to find alternative, renewable energy sources, despite the immense payoff which would accrue to the first person or company to patent such discoveries.
As no less than, I believe, Jack Welch intoned on CNBC yesterday morning, if technology and ideas existed to build functioning, profitable alternative energy markets and businesses, someone would have done so already.
Having a president use a crisis of oil exploration to declare an end to our use of oil is just plain stupid. It's even more stupid to then propose to throw more unaffordable federal dollars into subsidies for non-existent replacement energy sources.
How is the US supposed to remain competitive if the only way to bring new energy sources to market is to subsidize them with government money? By definition, they'll be uncompetitive on a cost basis. Otherwise, those discoveries would already be providing said energy.
It's disappointing to see an administration and Congress so totally ignorant of economics that they believe that nobody has tried to find profitable renewable energy sources, and, thus, are only awaiting government handouts to make such ideas a profitable reality.
Now, that's a fantasy.
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