Oil for the factories of China and India

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Column by Jim Flynn

Oil For The Lamps of China is a movie that was released on my birthday in 1935. The story created an image of big oil as a business giant without a soul. Years later we discovered that the requirements for incorporation do not include evidence of a soul.
Realistically, big oil is a group of artificial entities called corporations, created to produce and sell oil products and earn profits for their stockholders and management. Television caught the spirit of oil profits when Jed Clampett discovered bubbling crude in his outback, moved his TV family from West Virginia to the west coast, and became known as the Beverly Hillbillies.
More recently big oil has received a lot of negative publicity, because of rising prices and occasional disasters, all the while producing growing profits. With so many angry consumers and governments, how was that possible? Quite simple: supply, demand, and speculation.
For many years the price of oil (and gasoline) stayed low in comparison to other commodities, and the U.S. enjoyed a low cost, eight-cylinder, nationwide ride. Now the easy pickings are declining, and world demand for oil is rising rapidly.
Domestic companies pumped out most of America’s in-ground oil in the first 100 years to meet the nation’s domestic needs of growing industry, wars, and independent transportation for everybody. During those years, U.S. oil created a private club of multi-millionaires and cooperative politicians who did their bidding.
Current political chatter intended to convince voters that government can affect the day-to-day price of gasoline is bunkum. Politicians create a delusion that an increase in domestic production would be processed, priced, and delivered in the US, but nobody actually says that, because that’s not how the markets work.
Oil and gasoline prices respond to world-wide supply and demand, which will continue because nations such as China and India are competing for larger shares of the world supply. Speculators also affect prices by buying oil for use or resale later when prices rise.
Drill-baby-drill has a nice cadence, but it doesn’t reveal that harvesting new deposits of oil will be expensive and in some locations hazardous to the planet. Oil sands, shale, deep-water deposits, and far-north reserves are more difficult to mine and more dangerous to recover than shooting holes in Jed Clampett’s back yard.
Followers of political news are aware by now that the Obama administration has restricted access to additional sources of oil. Their unspoken mission is to save the planet, a goal worthy of President Woodrow Wilson’s failed League of Nations, which was intended to end wars and guarantee world stability.
President Obama seems comfortable producing less domestic oil at higher prices, until the nation is worn down financially and willing to go shopping on bicycles with baskets. In the meantime the president is committed to financing dreamy multi-million dollar “green research” until someone perfects an automobile which can be driven coast to coast powered by a rooftop solar panel. Idealists tend to be persistent, but not practical.