Friday, April 28, 2006

Finally - someone talks some sense about Oil

The crew at Powerline quotes Congressman Mike Conaway (R-TX), the one sensible voice I've heard thus far:

There is a great hypocrisy in America's national energy policy. As long as politicians continue to demagogue energy companies and oppose legislation that addresses the long-term problem of rising energy costs, we will continue to fail the American people.

Yes, oil companies are making large sums of money in real dollars; however it is disingenuous to simply look at the raw dollar amounts without looking at these numbers in the proper economic context. We need to look at the percent of return these companies are making. In reality the oil and gas industry's earnings are easily comparable to other industries and in many cases lower.

According to Business Week and Oil Daily magazines, the oil and natural gas industry earned 5.7 cents for every dollar of sales compared to an average of 5.5 cents for all U.S. industry over the past five years. By contrast in the third quarter of 2005 the pharmaceuticals industry made a profit of 18.6% per dollar of sales versus 7.6% for the oil and gas industry. The average profit per dollar for all US industries is 7.9%. ***

It is time for Congress to look at the facts. It is the global market place and the law of supply and demand, not greedy oil companies that are responsible for higher prices. The price of a barrel of oil is set by the global market not by multinational energy companies... We must enact legislation that would open ANWR, expand refinery capacity, reduce costly fuel regulation and allow for deep sea exploration. These are long-term issues that could have made a difference today had we avoided political posturing and addressed them years ago. It isn't too late for us to do the right thing now and begin enacting common sense legislation like increasing supply and increasing research and development regarding alternative sources of energy.

We must stop allowing the issue of rising energy costs to be clouded with misinformation and politically motivated emotion.

Can I get an "indeed"?

Update: Make it two voices of reason. Krauthammer gets it right with, "Say it with me, 'Supply and Demand'".

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