Why I don’t want to drill for oil in ANWAR.

Over the years I have found out that I tend to be fiscally conservative and socially moderate. That means, of course, that neither party has much use for me. Not socially conservative enough for the Republicans and definitely not liberal enough for the Democrats. Heck, I have absolutely no reason to vote for Obama and I suspect he has absolutely no intention of doing anything for me other than making me, my income, and my success into one of the bigger problems in America requiring “change”. I’ve learned to live with it and over time, the country tends to plow a middle of the road course which suits me just fine. So why wouldn’t I be for drilling in ANWAR and shooting every ecoweeny on sight? It’s not difficult to understand but it does take a little bandwidth.

I do run a business and I am a physicist by training which means I prefer to view reality for what it is, and not delude myself into believing there is alternate reality just around the corner. So here is reality one, we aren’t going to pay the deft off. Without up to the nanosecond calculation, let’s say the debt is four trillion dollars. Let’s also say that the Democrats and the Republicans arrive at a new view of life and become fast friends. Let’s say that they trim spending and generate a $400 million surplus. They would have to keep things that way for maybe twelve years to pay the debt off, with interest. And the voting taxpayers would have to make the agreement that they will be happy paying their tax burden with no expansion of any programs to pay the debt off. My view – it will never happen. I don’t think we will ever have a government that could consistently generate a $400 million surplus and even if they did, we’d kick them all out of office if they didn’t either expand programs people want or cut taxes.

Social Security is in about the same boat. I don’t want to get into the debates of the SS funds going into the general fund and one part of the gov writing another part of the gov an IOU or the fact that the program pays out more than it takes in. I have my own ideas about how we could make some progress on it but, in truth, I doubt anything will change. For elected officials, SS is a third rail. Propose cuts and you’re not long for office. Obama wants to increase the level of contribution, almost certainly without proportionate return for those who will be required to make the contribution, but I doubt that his increase will do anything other than play accounting sleight of hand and make things appear better for a longer period of time. But he won’t fix anything.

So why do I bring those issues up when I say I am against drilling in ANWAR? The other part of reality is that some of you reading this are going to pay for my retirement just like I have paid for your parents and grandparents retirement by my payments to SS and taxes for civil servant retirement. And your children are going to pay for yours, and so on. At the same time, the gov will keep increasing the debt and the borrowing will get more expensive – those developing countries are going to find that they can buy their own bonds to build their own roads instead of buying ours so our costs will go up. I view the US oil reserves, whether you talk about ANWAR or shale or any other resource that, with technology development, will be available to those children and grandchildren that pay off the bills they accrue as well as the ones we leave to them. I don’t mean to diminish the suffering that people are suffering today with the increase gas prices but we are handling it. There are people that are seeing 15% of their income go to just gasoline and that is a tragedy in the making. For all the squealing of the conservatives playing “I told you so” about not opening up ANWAR they don’t seem to have any interest in anything other than today’s balance sheet. We are feeling the pain with oil at $130/barrel. What happens when it gets to $230 or $330/barrel? Regardless of whether you think today’s prices are driven solely by speculation or not, I can guarantee we will get to those prices for oil eventually. So, as long as anyone is willing to sell us oil and we can somehow make it work, let’s make it work. Transportation costs are going to go up and maybe not come down. After years of everyone telling me how stupid I was for keeping a manufacturing facility in the continental US, some of the brightest guys in the room are starting to bring their manufacturing, and the jobs, back here to the US because of transportation costs. WSJ had an article just yesterday on that. Fortunately, the company hadn’t held the auction and sold their manufacturing equipment off at 10 cents on the dollar so they have one leg up bringing their manufacturing back home from China. But eventually we may get to the point where people won’t sell oil, at any price, but keep it for their own uses. And that is a much different situation. I don’t have a problem with sitting on significant oil reserves at that time. Hopefully, at that time, the ecoweenies will not be able to make much of a case for using our reserves. Maybe we can remind them of what they did to food prices with  their perfect solution of ethanol. No, let’s debate and wrangle and get whatever sound bites there are to get but let’s leave those oil reserves to future Americans. It’s little enough for having them pay off our bills.