Monday, August 04, 2008

Hannity on Oil: Swallow or I'll Squirt in Your Eye

Earth in Oil
image stolen from How Stuff Works

I know I said I'd stop for a whole week, but I was in the car for over 2 hours - okay, I've got a problem! I learned it by watching you!

The last few months have seen Hannity piggybacking on Gingrich piggybacking on Big Oil to "Drill Here, Drill Now, Pay Less." The Beast of Repeated, Oily Backs, so to speak.

This is not a definitive report, so feel free to check my words. They are all true.

Our own government has said that the benefits of drilling might not be seen for a decade. In the last sentence, "benefit" means more oil available for barreling.

But, woah, step back. Let's look at the first factor.

Factor #1: The oil companies have speculation rights to millions of acres that they're already sitting on.

Sean Hannity-Gingrich claims that Americans would see a drop in prices at the pump if we simply lifted restrictions on many areas of unexplored land, literally handing over the deeds to oil companies to explore and drill. Current hot areas: ANWR and Off the Florida Coast. According to Sean, basic supply and demand is the king of all things economic. Would that he were right.

And the first caller I heard on the topic was actually given a couple seconds to bring this silliness to a head. He stated that opening the 15 or so different venues that Sean says would give us huge energy independence would not do so because of one word: refineries. New refineries haven't been built for something like 30 years.

Oh, no, says Hanniging, I support a full, expansive policy. Sure you do, but what was the right half of the house trying to do Friday? Pass comprehensive energy policy? Of course not, just trying to allow drilling.

Factor #2: Millions of gallons of brand spanking new oil will hurry up and wait to be turned into gas.

Why would oil companies make more gas? Here's a business economy lesson for you, Sean. If you control a commodity, such as oil, through the process of drilling so you own what's coming out of the ground to the process of refining it into gasoline and diesel and sell that end product, and you have the world market screaming, crying, and begging for your product, do you spend a nice chunk of your capital to build a refinery in order to turn your oil into gas, increase the supply of gasoline and, therefore, lower the price? Just for the good of the people?

No.

So let's take a fantasy trip down still-unidentified Hannity's brain process: More drilling means more oil means more gas means less money at the pump. Say the first two factors were not impeding factors and oil companies got more drilling rights, used them, brought up more oil, and turned it into gasoline.

In what fancy-shmancy fantasy world does a company with unmeetable demand suddenly introduce a mild influx of product and say "hey, we're producing slightly more, so let's lower the price"?

That's like Nintendo, sitting in corporate HQ, saying "Okay, there are still over 200 million people who want to get their hands on a Wii, and probably more when it becomes more available. This month we exceeded production, so even though everyone in the world is willing to pay $250 USD, let's just drop the price $50."

Which leads us to...

Factor #3: Millions of gallons of brand spanking new gas will hurry up and wait to be released to the public, or dripped at the same price.

Caller #2 showed up on the oil discussion and said his family was in the oil business. Sean immediately tried to nail him with "tell me some of the nomenclature related to drilling sideways." (What the fuck? Do you even know that, Sean?) The caller stated and defended a single statement: even with millions of gallons of more oil, even if it is turned into gas, if the companies selling gas have a complicit, complacent society sucking $4.00/gal through a straw, are they going to do anything to lower gas to $2.00 a gallon? Fuck no!

(Sean ended the call abruptly with "I don't believe you're in the oil industry" because, he said, the caller was parroting Democrat talking points. Democratic talking points are not that well-thought-out when it comes to oil.)

But that's what Sean Hannity says will happen.

I do understand the plight of the Democrats. They realize it's all bullshit right along with the Republicans. But if the Repubs push for drilling, and achieve it, honestly, it'll knock off maybe 10 cents a gallon for a while just on the speculation of the process. Hells yeah says America. And if they succeed in this, McCain looks heroic even if he wasn't even in the fucking Senate to vote on it and perhaps this even turns the damned election and all the while Ignorant America is rubbing their hands together, chanting like a cult "Two years, two years," and when two years doesn't happen, it pushes, but Ignorant America still hopes, rubbing their hands raw, and eventually realizes that none of it is happening and they've got an old curmudgeon of a President who lied to them and now they're paying $5 a gallon and now it's $7 because McCain invaded Iran and it's like Bush vol. 3: many just stick with the evil they know, 'cause they'll know better next time.

And then we all go homeless and defend our caves with pitchforks and hatchets.

The flaw lies here, Sean: Getting oil and turning it into gas is expensive but profitable, as we've seen by gas company profits.

In order to make gas cheaper, you are indirectly countering the three points of this post. Namely:
  1. Oil companies must explore all available resources and use all future resources instead of sitting on them in order to produce more oil.
  2. Oil companies must build more refineries, at their own expense, in order to make their own product cheaper.
  3. Oil companies must incorporate this new gasoline into the market with proper supply and demand rules, reducing the price, for the benefit of the consumer purchasing cheaper gas is the end product.


Sean, since I've listened to you many-a-time rail against people who even utter the words "windfall profits," your very thought that more oil leads to less at the pump is socialist at core. Oil companies are profitable for a reason: supply and demand. They control that supply. They control speculation. They control production. They control gas. And the more they control, the more they profit. That's capitalism, poor folks be damned.

And Democrats have foresight: Oil companies are going to fuck us no matter what, unless we regulate, which is the current synonym for Devil. We need to focus - even if forced - on alternatives. Not necessarily the best approach, but we don't necessarily have the best populace.

They're already rubbing their hands raw with crude.

1 comment:

DCup said...

You've got your winger radio, I've got Morning Joe and MSNBC.

We're co-co-dependent!

Great coverage on the absurdity. How about that $350K from Hess Oil for McCain?