Tag Archives: gas prices

Facts of Life on High Gas Prices: It’s the Speculators & Oil Companies to Blame, Not Middle East

While skirmishes in Libya and uncertainty in the Middle East are nice cover for outrageous gasoline prices, the fact is the same old suspects are making a killing from sky-high gas prices approaching $4 dollars per gallon in California: big oil companies and greedy speculators.

While skirmishes in Libya and uncertainty in the Middle East are nice cover for outrageous gasoline prices, the fact is the same old suspects are making a killing from sky-high gas prices approaching $4 dollars per gallon in California: big oil companies and greedy speculators.

The speculative market may have driven crude oil prices up, but that’s not the price oil companies pay for the crude oil that goes into our gasoline. America’s big oil companies use crude oil that they have harvested from the ground or bought much cheaper through long term contracts to refine into gasoline. You’ll see the results in next quarter’s profit statements: big profits from both crude oil sales and refineries that make gasoline, what’s called “upstream’ and “downstream” operations in profit reports.

Consumer Watchdog has for years both tried to curb the opaqueness of the volatile speculative market for oil and to regulate supplies at gasoline refineries because oil companies game both systems, creating artificial shortages in the markets to jack up prices or exploiting historical events to justify obscene profits.  Today’s sky high gasoline prices are the result of oil companies shutting down refineries and playing the speculative markets for big gains.

The deafening silence from the White House and groups in DC loyal to the President who know better is the most astonishing thing.

Obama campaigned against oil company greed on the campaign trail but now he seems to have lost his voice on the subject. Republicans are taking the offensive, but the oil industry that has been nourished in their bosoms for decades is at the heart of the crisis. Oil companies have kept the nation running on such short supplies of gasoline that any jolt to the system sends gas prices through the roof and makes the economy pay.

What follows is the five facts of life I have learned from more than a decade fighting oil companies, battles I recount in my new book The Progressive’s Guide To Raising Hell. It’s about time the White House started educating Americans about these facts of life and fighting back against the real perpetrators of the pain at the pump.

• Rather than compete with each other to provide more cheaper gasoline, oil companies cheat together to withhold needed gasoline supply from the market. Consistently, the companies artificially pull back refinery production of gasoline in order to reduce supply coming in during periods of peak demand so they can increase prices. It’s legal so long as there is no smoky back room where they talk about it, but they don’t need to since industry data about supply flows freely on corporate computer screens. This behavior has been documented by government agencies like the Federal Trade Commission, which found, for example, in an investigation of Midwest gasoline price spikes, that one refiner admitted keeping supply out of a region in need because it would boost prices.

• Oil companies failed to build ample refining capacity to meet demand. Over the last twenty years, America’s demand for gasoline increased 30 percent and refinery capacity at existing refineries increased only 10 percent. No new American refinery has come on line during the last thirty years. Internal memos and documents from the big oil companies show they deliberately shut down refining capacity in order to have a greater command over the market.

• The big oil companies have their own crude oil production operations and control substantial foreign production of crude oil. They profit wildly when the price of crude oil skyrockets, so they have an interest in driving up the price, despite the fact that they blame OPEC for those crude oil increases. The crude oil producers can even drive up the price of crude by restricting gasoline production and trading crude oil among their own subsidiaries to drive up the price paid for crude by others. Traders with connections to the oil companies can also make big bets on the opaque crude oil futures market to drive up the price and also drive up the value of their Exxon shares.

• The crude oil that big integrated oil companies use in their own refineries is mostly bought on long-term contracts or through their own production, so the oil companies don’t pay the world price for crude oil when it’s high. Their raw material costs are much lower than they would like us to believe. So when the companies raise the price of gasoline in tandem with the run-up in crude oil prices, they are making big profits because Exxon’s crude oil unit is charging its own refining unit a higher price for crude than is necessary. The accounting shenanigans result in an overall windfall profit but show the companies’ gasoline refineries making little profit, and “upstream” crude-oil production divisions making the lion’s share.

————-

Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Skelton: Let Go of the Future and Start Drilling

Brian mentioned this in the open thread, but it really deserves its own post, it’s such a ridiculous column. George Skelton today made a full-throated but deeply flawed argument for offshore drilling that as far as I can tell boils down to “well we did it in the past, and it’s not going to help in the future…so why not?!” and winds up arguing that we should sacrifice the future for hardly anything in return. The column doesn’t start off on a promising note:

On some beaches around Santa Barbara, you could feel the oozing tar between your toes — and that was long before a Union Oil platform five miles offshore spilled crud all over 20 miles of coast in 1969. For centuries, the tar naturally had seeped up through the sand, providing the native Chumash with caulking for their canoes.

Calling it “crud” is deliberately misleading readers about what actually happened in 1969. From UCSB:

Animals that depended on the sea were hard hit. Incoming tides brought the corpses of dead seals and dolphins. Oil had clogged the blowholes of the dolphins, causing massive lung hemorrhages. Animals that ingested the oil were poisoned. In the months that followed, gray whales migrating to their calving and breeding grounds in Baja California avoided the channel -their main route south.

The oil took its toll on the seabird population. Shorebirds like plovers, godwits and willets which feed on sand creatures fled the area. But diving birds which must get their nourishment from the waters themselves became soaked with tar….

Grebes, cormorants and other seabirds were so sick, their feathers so soaked in oil that they were not difficult to catch. Birds were bathed in Polycomplex A-11, medicated, and placed under heat lamps to stave off pneumonia. The survival rate was less than 30 percent for birds that were treated. Many more died on the beaches where they had formerly sought their livelihoods. Those who had managed to avoid the oil were threatened by the detergents used to disperse the oil slick. The chemicals robbed feathers of the natural waterproofing used to keep seabirds afloat.

In all 3686 birds were estimated to have died because of contact with oil. Aerial surveys a year later found only 200 grebes in an area that had previously drawn 4000 to 7000.

Skelton’s blithe dismissal of the ecological consequences of drilling is appalling. It’s not as if our oceans are healthy – oceans face crippling ecological crises and they’re in no position to withstand drilling.

Skelton goes on to turn “Big Oil” into a nostalgia piece (I’m guessing someone didn’t see There Will Be Blood):

Oh, another thing: My dad was an oil field roustabout, or driller or whatever job he could fill on a given shift. So were his dad, brother and cousins. They left their Tennessee farms and followed the migration to California for the 1920s oil boom.

My first summer job out of high school was in a Ventura oil field, an experience guaranteed to prod a kid into college if nothing else would. (But the oil job paid better than newspaper work, I soon discovered.)

So “Big Oil” never has been a big bugaboo for me. It was the producer of a vital commodity and provider of working-class jobs. Although oil derricks annoy many people as unsightly, I’ve always marveled at how they work, especially all lighted up at night.

Nostalgic memories do not count as a sound basis for public policy – unless of course he thinks we should go back to the days before OSHA, dump our toxic waste into the drinking water supply, and drive without seatbelts.

Worse is the conflation of Big Oil with working-class prosperity. Perhaps at some moment in the past this was true, but Skelton here merely reveals that he, like all the High Broderists, does not live in the 21st century, instead assuming that the conditions of the 1970s remain true today. They don’t.

Here in the 21st century Big Oil sucks precious income away form working-class families while returning hardly any in the form of jobs, taxes, or anything else resembling prosperity. And as anyone living near the Torrance refinery knows, they tend to actually have rather debilitating effect on working-class communities.

More below…

Skelton’s main thrust of the article is some weird attempt to argue that offshore drilling will actually produce self-sufficiency – since California uses so much gas, shouldn’t we drill offshore for more?

This argument has numerous flaws. First, Californians are reducing their gas consumption which has been relatively flat over the last 8 or 9 years. Conservation, not wasteful and useless drilling, is what brought prices back from the brink of $5 earlier this summer, and it alone is what will produce long-term savings.

Skelton tries to dismiss the correct argument that drilling now won’t produce usable oil for at least ten years:

Offshore exploration opponents point out that if the federal drilling ban were lifted today, there’d be no immediate effect on gasoline prices. It could take 10 years to get any crude to the gas pump. Fine. Most people driving today still will be 10 years from now.

This is a statement deeply ignorant of how oil works today. He is assuming that the supply of oil and the demand for oil will remain static so that in 10 years, the oil we drill off our coast will make it to the pump and reduce prices.

He is wrong.

The fact is that the demand for oil is soaring around the world, and it is becoming difficult if not impossible to increase production to match it. That is the phenomenon of peak oil at work and that is why gas prices have climbed by 30% every year since 2002. Supply can’t match ever-rising demand. The oil off American shores is so small an amount as to not be able to dent oil prices that, ten years from now, are very likely to be much higher than they are today. As demand rises around the world, oil companies will sell the oil we drill off our coast on a global market. The chances it will bring down the price of gas here in CA is next to none.

The only thing offshore drilling will accomplish is fouling our already suffering oceans and wildlife while lining the pockets of oil companies that sell the oil to China and India. How is that useful again?

Skelton does deal with the argument that lifting the drilling ban detracts us from the necessary long-term investment in alternatives – by dismissing it almost entirely:

Alan Salzman, founder of VantagePoint Venture Partners…adds, “The car industry is going to switch over to electric, and that’s a certainty. Hundreds of thousands of electric cars will be on the road in 2011.”

Let me know when one is affordable, practical and in the showroom.

People didn’t give up their horse and buggy until Henry Ford began making affordable cars. We’re anxiously awaiting our next transportation mode. Meanwhile, we’ll need to keep pumping gas — some of it from the Santa Barbara Channel.

Skelton needs to get out of the LA Times offices and take a look at the city around him. He might be surprised at what he finds. Hundreds of thousands of his fellow Angelenos have found alternatives to driving. That’s what enabled them to reduce their gas consumption and in turn bring down prices, albeit slightly. They bike. They walk.

His own paper reported on Metro Rail’s soaring ridership and again on Metrolink’s soaring ridership. Nowhere in Skelton’s drilling article is the MTA sales tax discussed, which would have the Subway to the Sea open by the time the first oil from the Santa Barbara Channel reaches Chinese gas pumps. Nor is high speed rail discussed, or clean bus technology, or greater urban density, or any other alternative to oil that is ready to go, right now, stalled merely for lack of political will that is currently being wasted on drilling.

Al Gore said it best at the TED Conference here in Monterey last March: drilling is “like a junkie looking for veins in his toes so he can get one last fix.” Drilling distracts us from the real problems our state faces, and for absolutely nothing in return.

Skelton doesn’t have to live in a future where the oil runs out and Californians, instead of building alternatives when we had the time and money to do so, are left with no viable alternative to oil. Unfortunately the rest of us do.

His plan for more drilling isn’t letting go of the past, it’s clinging desperately to the past in a blind refusal to accept the need to change in order to produce a better future. Just as California has failed its offspring by kicking the tax and deficit issues into the future, so too will it fail the future by drilling instead of developing alternatives.

If Skelton wants to live in the past, he’s welcome to do so. But he should not condemn the rest of us to do as well. California must change if we are to have a prosperous future.  

Schwarzenegger Helps Launch EcoDriving Campaign, Embarrasses McCain

It wasn’t too long ago that the McCain campaign tried desperately to mock the Obama suggestion that people would be well served to keep their tires inflated properly in order to get better gas mileage. They went so far as to send out a fundraising email offering a “free” tire gauge in exchange for a donation to the campaign. They asked “[w]ill simply inflating your tires reduce the financial burden of high gas prices on your wallet?”

Turns out, the answer from every corner is yes. To the point that McCain had to back off it entirely and concede that it’s probably a good idea to properly maintain one’s car.

But as McCain and other Republican leaders continue to push the ridiculous on its face notion that only increased offshore drilling can address the current energy challenges in this country, Automobile Manufacturers and our own Governor Schwarzenegger are lining up to push car maintenance and better driving habits as a simple way to ease the hit at the pump. He was even good enough to put a video together to promote the new EcoDriving campaign. Echoing Obama’s statements on the issue, Schwarzenegger says in part, “You can reduce your fuel costs by more than 15%. And I am talking about simple things, like proper tire pressure, avoiding rapid starts and stops, and keeping your engine tuned.”

This is admittedly a mixed bag. Better driving habits and car maintenance does have a significant impact on gas mileage, and the more attention this gets, the more likely it is that consumers will receive the message. But it’s also incumbent upon auto makers and others to not use this as a cop out on their responsibility to keep working towards more eco-friendly cars. Informing consumers is fantastic, passing the buck to consumers in not. Either way, especially in a car-centric state like California this is a nice step.

(over)

It also serves as yet another reminder that consistently, nobody agrees with John McCain. He tries to belittle the advantages of better driving habits and gets smacked down by the people who know- AAA and car makers. He tries to run on his foreign policy brilliance and even tried to claim that Obama “has now adopted John McCain’s position” on Iraq. Which was almost immediately met by Iraqi Prime Minister al-Maliki saying McCain’s Iraq plan “would cause problems” as he endorsed Obama’s plan for withdrawal over 16 months. Which left McCain with the embarrassingly sad response: 16 months is now “a pretty good timetable.”

Every time McCain tries to lead on an issue, he’s promptly smacked down by the tag team of Obama and reality. If McCain hadn’t made such an absurd deal out of proper tire inflation, nobody would have said anything about it and we likely wouldn’t have a national push from auto makers advocating better driving habits led by one of McCain’s most valuable allies. But here we are, and McCain is left, once again, looking out of touch and unprepared to deal with the world as it is.

Leibham Delivers $1.27 Gas

I mentioned on Monday that Nick Leibham would be offering gas to residents of the 50th district discounted to the price in April 1996 when Big Oil first started funneling money to Brian Bilbray.

Today, ExxonMobil posted $11.7 billion in second quarter profits, the all-time record for a U.S. Company, so the $182,818 that Bilbray has received from oil companies throughout his career may seem like a drop in the bucket. But he’s certainly delivered time and again for Big Oil: Responsible Federal Oil and Gas Lease Act (Use It or Lose It): No. Drill Responsibly in Leased Lands Act: No. Renewable Energy and Job Creation Act: No. Energy Independence and Security Act: No.

The response yesterday was- perhaps unsurprisingly- huge. Leibham’s campaign manager described to me “lines down the road…people were so enthusiastic.” Because pain at the pump is inescapable, it’s immediate, it’s obvious, and it’s not a complicated issue. There’s a clear choice being presented between the failed policies of the past- more drilling, and the policies of progress- investment in new and renewable energy, use of existing drilling leases, the elimination of tax breaks for Big Oil.

This is a race that’s often flown under the radar in online circles, but with Bilbray refusing to even enter his district in order to defend his extremist voting record, it could get pretty interesting. Bilbray is desperate to avoid engaging on real issues, crowing about a veterans memorial but voting to continue the Iraq debacle and voting against the new GI Bill. Every chance he gets to bring about positive change, Bilbray stands in opposition. But when he can stand far outside his district and lob rhetoric, he’s all for it.

While Bilbray continues to work against Americans, Nick Leibham got out, in the district, and did something that would actually help a little bit. It isn’t much, but it’s not supposed to be a solution. What it was supposed to be- and succeeded in being- is a sharp line of contrast between the priorities of these two candidates.

One of and for the people, the other bought and paid to oppose the people.

Gas at $1.27 a Gallon from Nick Leibham

It’s been more than 12 years since Brian Bilbray first took money from Big Oil to fund his political career. Back then, gas was $1.27/gallon in the 50th district, and after a dozen years of Bilbray and his Big Oil Republican buddies, gas is well over $4/gallon. Bilbray and his cronies think the solution is to give more tax dollars to oil companies, which makes sense since that money comes back as campaign contributions- a convenient way to launder taxes into re-election funds and not actually address gas prices in any way.

Nick Leibham just outraised Bilbray int he second quarter and is spreading a bit of that cash around as direct relief to drivers in the district. This Wednesday (July 30), Leibham will roll back gas prices at three gas stations in the 50th to $1.27, just like it was before Big Oil laid down the money to push Bilbray into office. This was a HUGE success in 2006 when Larry Kissell did it in North Carolina. More than 500 people showed up for the cheap gas, snarling traffic and bringing in police to wrangle the crowds. It’s a great time to be punching holes in Brian Bilbray’s absurd claim of being good on environmental and energy issues. Just a quick check of his recent voting record exposes how bad it is. Responsible Federal Oil and Gas Lease Act (Use It or Lose It): No. Drill Responsibly in Leased Lands Act: No. Renewable Energy and Job Creation Act: No. Energy Independence and Security Act: No.

Bad for the environment, bad for safe energy, bad for energy security, bad for creating new jobs in energy. And this guy’s supposed to be a friend of the environment and renewable energy? No.

[Update] Over at Politicker, Wally S. Edge wonders “isn’t it a little wrong to try to buy someone’s vote? Or is that just the American way?” Apparently there’s an electoral system in this country that I’m unaware of in which politicians do not spend money in the pursuit of receiving votes. Did we pass public election financing when I wasn’t looking?

Excerpted release on the flip:

Nick Leibham will temporarily roll back the price of gas during his “pain at the pump” tour on Wednesday, July 30th.  Leibham, the Democrat nominee for the 50th Congressional District, will have three different stops in North County throughout the day:

11 a.m: Encinitas, Shell Station, 1060 N. Camino Real

2 p.m: 4S Ranch, Chevron Station, 1629 Dove Canyon Road

5 p.m: Carmel Valley, Shell Station, 3861 Valley Center Drive

Leibham will offer 50 motorists at each location the opportunity to fill up at the price of $1.27 a gallon for up to 10 gallons of gas.  $1.27 was the average price of gas in San Diego in April, 1996 when Republican Brian Bilbray took his first campaign contribution from Big Oil.

LA Times Examines Impact of $200 Oil

As we’re all painfully aware, during the ’00s the US media have become ardent defenders of the status quo, generally unwilling to discuss harsh realities that might threaten that status quo unless absolutely forced to do so – Hurricane Katrina, for example, or the reaction to Al Gore’s An Inconvenient Truth. Perhaps the most significant issue not being discussed in the media is peak oil – which, in its simplistic form, explains why the high fuel prices we are seeing today are going to be a permanent feature of life.

Gas prices are NEVER coming back down – rising demand is meeting a shrinking supply and the result is the end of the cheap oil that modern America was built upon.

As gas prices remain high more media outlets are discussing energy policy but only lately are they beginning to acknowledge that the era of cheap oil is over. Today’s Los Angeles Times starts examining the topic with a front-page feature, Envisioning a world of $200-a-barrel oil. It focuses on how consumers, transportation, and global trade will be affected, and even tries to examine the “upside” to this, particularly the eventual localization of American life, perhaps the closest a major American media outlet has come to embracing the ideas of Jim Kunstler.

The article is a good beginning, but it avoids the key question of how we ought to respond. Videoconferencing and staycations are not substitutes for statewide initiatives to deal with the crisis. The article discusses the airline crisis but doesn’t discuss ways to provide alternative forms of transportation such as high speed rail. Nor does it discuss ways to encourage more renewable energy sources, or local food production, or urban density.

Still, just as it took Al Gore’s movie to convince Californians to take even the small step of climate change action embodied in AB 32, so too will it take the media’s willingness to tell Californians that cheap oil is over to produce action on shifting our state away from an oil-based economy.

Cheap oil was responsible for much of the prosperity of the postwar era, especially in California. It enabled people to find an affordable home to purchase, even if it was distant from their workplace. It enabled them to buy inexpensive food without needing to grow their own. It enabled the development of global trade networks that provided markets for Californian products and services.

The end of cheap oil is welcome from an ecological perspective but it will finish off working Californians if we don’t proactively work to build a post-oil infrastructure to provide for prosperity, just as we spent the 1950s and 1960s building an infrastructure around oil to provide for prosperity.

Newspapers like the LA Times could help show Californians the need for and value of such projects. It will require them to break with the status quo – but Californians are already doing so in practice, riding mass transit and even their bikes in much higher numbers than ever before. In the absence of media coverage of our changing state, we in the blogs will do what we can to keep up.

Gas Prices and the End of Sprawl

The New York Times confirms what I argued back in April: high energy prices are putting a halt to urban sprawl. The NYT article focuses on the Denver exurbs but one can just as easily substitute it for the Bay Area or SoCal exurbs:

Across the nation, the realization is taking hold that rising energy prices are less a momentary blip than a change with lasting consequences. The shift to costlier fuel is threatening to slow the decades-old migration away from cities, while exacerbating the housing downturn by diminishing the appeal of larger homes set far from urban jobs.

In Atlanta, Philadelphia, San Francisco and Minneapolis, homes beyond the urban core have been falling in value faster than those within, according to an analysis by Moody’s Economy.com….

Basic household arithmetic appears to be furthering the trend: In 2003, the average suburban household spent $1,422 a year on gasoline, according to the Bureau of Labor Statistics. By April of this year – when gas prices were about $3.60 a gallon- the same household was spending $3,196 a year, more than doubling consumption in dollar terms in less than five years.

Which is exactly what we witnessed here in California. The housing bubble began to burst here in CA in mid to late 2006, when gas prices first broke $3 for a sustained period of time. And the areas first and hardest hit were those dependent on long commuters – Riverside County, Stockton, Modesto.

It’s a phenomenon we’re witnessing here in Monterey County. Home prices have held fairly steady here on the peninsula, but in the new suburbs such as Marina and Greenfield sprawl has ceased. Several major developments have been put on hiatus or canceled outright, even though the cities have already built the roads.

The deeper problem is that California has spent far too much time and money promoting a failed urban model. The time has come to Redefine the California Dream for the 21st Century. We need to reinvest in our city centers and provide the infrastructure – especially the mass transit infrastructure – to bring folks into the urban centers. But we must also provide the housing capacity for them. The 20th century homeowner aristocracy has to give way to a 21st century middle class that will be fundamentally urban, not suburban.

Over the weekend David Dayen compared California’s situation to that of Youngstown, Ohio in the 1980s. It was an interesting choice of cities. Youngstown is pursuing a strategy of livability and post-industrial land use, including the encouragement of food production and cutting off services to abandoned housing tracts. It took Youngstown 25 hard years to accept that the past will never return and a new path is necessary. Will it take California that long to realize its suburban dream is dead and that our future is urban?

God I hope not.

LA transit ridership at an all-time high

People have a funny way of adapting.  They know that the oil companies are as far from committed to lowering gas prices as possible, so they’ll look to lower the cost of commuting rather than search for useless answers to drop gas prices like offshore drilling, which would do absolutely nothing.  The Metrolink rail system in LA isn’t perfect and doesn’t work for everyone, but people are making it work more than ever before.

Commuter rail ridership broke an all-time record this week, and Caltrans reported a dip in freeway traffic as commuters across California struggled with record gas prices.

Metrolink recorded its highest number of riders in a single day ever Tuesday – 50,232 – a 15.6% increase over the same amount of business last year on June 17. Metro Rail ridership last month shot up 6 percent over May 2007, said Dave Sotero, a Metro spokesman.

Meanwhile, Caltrans officials said today that traffic on California freeways dropped 1.5% compared with last year – or the equivalent of a billion fewer miles traveled, said spokesman Derrick Alatorre.

Just that miniscule drop is the difference between gridlock and a relatively smooth ride.  Not to mention the fact that hundreds of thousands of gallons of gas are being saved.  Between all that and not having to be constantly confronted by idiots driving while holding their cell phones, the LA commuting story is a little less bleak.

This is all happening under a BROKEN transit system.  Imagine what could happen with a little investment.

Schwarzenegger Says “No Thanks” To Offshore Drilling

Republicans in disarray.

Gov. Arnold Schwarzenegger said today he opposes lifting a ban on new oil drilling in coastal waters, breaking with President Bush and Republican presidential candidate John McCain.

He called California’s coastline “an international treasure” that must be protected by a federal oil-drilling moratorium that has been in place for 27 years.

“We’re serious about that, and we’re not going to change that,” he told reporters and business executives at BIO International, an annual biotechnology industry conference in San Diego.

Schwarzenegger, who has endorsed McCain’s presidential bid, said the federal offshore drilling ban was not to blame for soaring gas prices. In a statement issued earlier in the day, the governor said technological innovations and expanded fuel choices for consumers ultimately will lead the way to reduced fuel costs.

“We are in this situation because of our dependence on traditional petroleum-based oil,” Schwarzenegger said in the statement, which referred only to Bush’s call for lifting the ban and did not mention McCain.

He missed mass transit and smarter, more dense development, but in the main Arnold is right.  Sen. Feinstein and Speaker Bass are quoted in the article as well dismissing the notion of offshore development as a stunt.  GOP wingnut-in-charge Dave Cogdill, on the other hand, has a catch phrase:

“Personally, yes, I believe we need to be drilling in our own reserves,” Sen. Dave Cogdill, R-Modesto, said today during a news conference related to the state budget. “We need to use the resources available to us in this country.”

He said it would reduce the country’s dependence on foreign oil and would help drive down the cost of gasoline.

“So I am a very strong supporter, as I think most of my caucus is, in the catch phase ‘Drill here, drill now, pay less,'” Cogdill said. “It’s certainly a better energy policy relating to the needs of the citizens of the United States.”

Except there’s little to drill, the oil companies don’t want to do any drilling but want the reserves to line their pockets, and the structural problem with a carbon-based economy lingers.

So the real slogan is, “Drill here. Drill now. Run out sooner.  Get no benefits for 10 years.”

The Idiocy of Offshore Oil Drilling

When you drive along Highway 101 near Santa Barbara, or Highway 1 in Huntington Beach, it’s hard to miss the many oil rigs on the ocean’s horizon. They are relics of a bygone age – not just the 1960s, when they were constructed, but an age in which California believed that cheap oil would always be plentiful and available. We built an entire infrastructure around that and neglected trains, walkable neighborhoods, and lagged behind the rest of the world in developing solar and wind power.

Now the consequences of that misguided belief in the permanence of cheap oil have become clear. Gas prices are nearing $5, causing economic distress and sending Californians flocking to mass transit. For his part Barack Obama is proposing massive new investments in sustainable energy and rail infrastructure.

But what is instead dominating today’s news cycle is the Bush-McCain call for offshore oil drilling. The LA Times has an article today trying to convince us that offshore oil drilling opponents are “rethinking” their stance but the only California drilling supporter they quote is Republican Jerry Lewis.

It’s obvious that Republicans see opportunity in high gas prices to roll back sound environmental policies, such as the offshore ban. But for what gain? Drilling in the Arctic National Wildlife Refuge would take 10 years to deliver oil to American pumps and would only meet  about 4-6 months of US domestic demand. California’s offshore oil pools would probably not produce much more than that.

Like McCain’s gas tax holiday, offshore drilling is a gimmick designed to avoid the necessary fixes. Americans need to understand that gas prices will never come back down, and that cheap oil is a thing of the past. It’s not something we have a right to – it’s something we had for a few decades, but now it is over.

Republicans don’t have a solution to high oil prices. Drilling in ANWR and off our coast would not ameliorate prices now, and wouldn’t do so in 10 years – the rate of decline in North Sea and Mexican oil exports will far outweigh the new drills and rising global demand will continue to drive up prices.

Democrats would do well to follow Obama’s lead and firmly reject McCain’s drilling plan. It’s time we accepted the fact that cheap oil is a thing of the past, instead of looking for more sources like a junkie desperately seeking another fix. We need to build a sustainable transportation infrastructure that will provide green jobs and economic development for the 21st century – instead of trying to string out the obsolete 20th century any longer.