Washington, DC – Fuel and food prices are up. So is unemployment. Officials in the Obama administration and their allies on Capitol Hill are stunned. They shouldn’t be. It’s O-Team policy – or lack of it – that got us here.
According to the U.S. Department of Labor, the number of Americans seeking unemployment benefits for the first time jumped this week to 397,000 – meaning there are more people looking for work than the private sector has jobs available. You don’t have to be a government economist to see the direct connection between rising costs for essentials – such as gasoline, home heating fuel, electricity and eating – and layoffs.
This week, the U.S. Energy Information Administration (EIA) claimed the new spike in the cost of fuel is the result of a “sudden and dramatic increase in crude oil prices” precipitated by “political unrest in North Africa, including violent uprisings in Libya.” Truckers buying diesel and those of us who heat our homes with fuel oil are already paying a nationwide average of $3.87 a gallon – up a whopping 35 percent from a year ago. On March 9, our government experts forecast regular-grade retail gasoline – already 38 cents a gallon higher than it was a month ago – will “average $3.71 per gallon during this year’s summer peak driving season.” That prediction ignores reality.
Instability in Yemen and Bahrain and Somali piracy have already added to supply uncertainty and contributed to higher global prices for crude oil. Now Libyan sweet crude production – more than 1 million barrels per day – has all but ceased. Just hours after French President Nicolas Sarkozy granted formal recognition to a rebel “interim government” in Benghazi, James Clapper – the Obama administration’s hand-picked Director of National Intelligence – publicly told the Senate Armed Services Committee he expects that Muammar Qaddafi’s “regime will prevail.” But even if he’s right, Libya’s major oil port at Ras Lanouf is likely to remain “offline” as long as Qaddafi holds on to power in Tripoli.
Unfortunately, what happens in Libya may turn out to be the least of our “oil troubles” – no matter what the Obama administration finally decides to do about supporting the rebels or a no-fly zone to keep Qadaffi’s air force grounded. Less than 24 hours after this week’s EIA forecast, crude oil prices spiked again – and international financial markets plummeted – on reports of unprecedented violent anti-government protests in Saudi Arabia, the world’s number one oil producer.
No reasonably informed person debates the devastating consequences for the global economy if Saudi crude is suddenly less available. Though Canada and Mexico are our primary sources of imported oil, 10 percent of U.S. petroleum product originates in Saudi Arabia – and the price keeps going up as the certainty of supply goes down. Meanwhile, we already are paying more for electricity, consumer products, air travel, heat for our homes and the cost of getting to work – for those of us who do have jobs.
What’s Mr. Obama’s answer? In his “Winning the Future with Clean Energy” speech at Penn State University last month, he introduced his “Better Buildings Initiative” and said we should all live and work in places that are “energy efficient.” He repeatedly used the words “research” and “innovative” and “”high tech.” As expected, his line about eliminating “the billions in taxpayer dollars we currently give to oil companies” was wildly applauded. So was his Utopian vision of “developing a way to turn sunlight and water into fuel for cars.
I share the hope of living long enough to drive a fuel cell automobile. I think it’s a great idea because I don’t want my petro-dollars going to people who hate us and wage jihad against us. But I don’t expect that’s going to happen in the next five years – and the “next energy crisis” is here and now.
That’s why it is so disappointing that Mr. Obama has done nothing to accelerate exploitation of our own domestic energy sources or build more nuclear power plants. He doesn’t breathe a word about American energy independence. He can’t say the words “clean coal,” though the technology exists today.
Though the present turmoil in the Middle East began as a protest over food prices in Tunisia, he cannot acknowledge the devastating global consequences of converting food into fuel. This year, more than 30 percent of America’s corn crop – subsidized with billions of taxpayer dollars – will be converted into ethanol. And he still wants stringent rules and regulations that will force Americans to drive more electric cars, use more biofuel and buy compact florescent light bulbs (CFLs) from China.
Supposedly, the Obama administration has embraced Rahm Emanuel’s infamous axiom: “You never want a serious crisis go to waste… It’s an opportunity to do things that you think you could not do before.” Yet even with the looming prospect of catastrophic increases in the availability and cost of transportation fuel, the most imaginative thought the O-Team can conjure up is to release supplies from our Strategic Petroleum Reserve (SPR).
On Capitol Hill, Senate Majority Leader Harry Reid claims to be working hard to prevent a shutdown of the federal government. At the White House, officials are busy urging union supporters to shut down state governments in Wisconsin, Indiana and Ohio. Unfortunately, nobody seems particularly concerned that the lack of a coherent national energy policy threatens to shut down the U.S. economy. That’s crude cruelty.