White House Chronicle

News Analysis With a Sense of Humor

Obama on Oil’s Slippery Slope

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Way back in the 1970s, the old Mobil Oil Company paid $212 million for an oil shale lease in Colorado. The company did not produce a single barrel of oil from that lease. After leasing the land, Mobil shied away from developing the resource because of substantial environmental problems, involving water and degradation of the high desert.

Traditionally, oil companies have taken leases that they have had to abandon either because the resource was not as substantial as they had hoped, or because the economics had changed or as in Colorado, other impediments appear.

Also, there are physical limitations on where the oil companies can look for oil. And sometimes the judgment of their geologists is just wrong. Even in this age of seismic sophistication, there are dry holes.

A modern deep-sea oil rig is nearly as complex and sophisticated as a refinery. Every off shore rig (there are a little over 400 of them around the world) is working flat out; sometimes in the service of international oil companies, and sometimes in the service of state-owned oil companies, which control a majority of the world’s resources.

When it comes to offshore drilling, the oil industry feels that there would be a better chance of finding reserves in new leases rather than old leases, which they acquired defensively at a different time.

To the Democrats, this is evidence of oil company ineptitude and greed. To the oil companies, it is a situation reminiscent of the David Mamet play “Glengarry, Glen Ross,” where the real estate salesmen are denied the best prospects in order to shift lousy inventory.

The best oil-drilling prospects are in the eastern Gulf of Mexico and the Arctic National Wildlife Refuge (ANWR). Not only do these areas have the best expectation of good reserves, but there is already a sophisticated infrastructure in place in the Gulf and Alaska. No such infrastructure exists on the Atlantic Coast or the West Coast north of Santa Barbara. Infrastructure is important because it reduces cost, and especially because it speeds the time it would take to bring new oil to market.

The drilling controversy has been a gift to the Republican Party because it enables John McCain to go after Barack Obama on an issue that people understand: the price of gasoline. Seventy percent of Americans, according to the polls, favor drilling offshore now. Yet Nancy Pelosi, speaker of the House, refuses to allow an up or down vote on this simple issue. She wants a vote to be part of a larger energy and environment bill.

Pelosi is handing the best issue yet to John McCain. The public cannot understand many of the complex problems confronting the country, but it can understand the price of gasoline, even if new drilling will not lower that. It does not matter to the public that it was a Republican president, George H.W. Bush, who originally blocked drilling in the Outer Continental Shelf, or that John McCain was a supporter of not drilling there and still opposes drilling in ANWR.

The Democrats have boxed in their presumptive presidential nominee. Unless Pelosi softens her position, the issue is going to dog Obama through to the election. Even if he comes out in favor of drilling, he is vulnerable to McCain’s attacks if he is at odds with the speaker of the House.

Democratic antipathy to Big Oil goes back many decades. To many Democrats, the dislike of Big Oil is visceral. They have convinced themselves that somehow the oil companies represent a malign international conspiracy to block alternative energy sources and to run up prices. The left wing of the party has never been able to separate the oil industry from John D. Rockefeller and his kerosene cartel.

For their part, supporters of more drilling onshore and offshore are overselling what can be expected in the way of new supplies. The United States has about 2.5 percent of the world’s oil reserves and consumes about 25 percent of the world’s oil. Nothing can be done about the former, so something will have to be done about the latter. Right in the front of doing something about the latter are–surprise, surprise–the oil companies. British Petroleum has enormous investments in alternative energy, including hydrogen. And Chevron, as it likes to remind us, is the largest geothermal producer in the United States.

The oil companies are not perfect, but they are quite good at what they do: getting oil out of the ground and to your local gas station.

Appalachian Man: He Is Hurting

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See George.

George is our handyman. As the owners of a 1780 stone house in Virginia, my husband and I have seen George a lot in the past five years. This year, we have seen his already sorry lot in life change for the worse.

It hit a new low last week when Kevin, his new partner, decided to start his own painting and home repair company. He had replaced George’s brother-in-law, Billy, who had quit in November and taken the license plates of the reconditioned ice cream truck that they used to haul their ladders, painting equipment and tools. Petty and pity.

Billy quit at the same time as George’s wife, Amber, decided that she wanted to go it alone, taking their young son Carter. Amber, who is not a well woman, is just about holding onto her low-pay, no-benefits job. And Gayle, George’s unmarried daughter, has just had a baby boy and lost her job, which had some benefits. Last week, Gayle asked her father to pay her rent. Her partner, Jed, who works at a hardware chain store and a chain restaurant, can only pay for food, car fuel, and some of their baby’s bills. So George is now paying child support to his estranged wife, and helping out his grown child.

For now, George is living with a nephew, Mark, who he hopes will work with him. George can’t work alone, because his health is collapsing from a combination of heavy physical work in his present and past job in an auto body repair shop, and from Type 2 diabetes and lung disease. Over the last five years, George has gone from a burly man to barely a man, almost child-sized. Needless to say, he has no health insurance.

I know exactly what Sen. Jim Webb was talking about when he said on MSNBC’s “Morning Joe,” that “Black America and Scots-Irish America are like tortured siblings. They both have a long history, and they both missed the boat when it came to all of the larger benefits that a lot of other people were able to receive,” the Virginia Democrat added: “There’s a saying in the Appalachian Mountains that they say to one another and it’s ‘if you’re poor and white, you’re out of sight.’ ”

George typifies these poor, working people–white and black–who fall out with each other but who need each other to survive. A nephew has a room, or couch, you can use for a while; a sister can pick you up and drive you to a job, or pick up a paintbrush, when your van, or partner, is out of sorts; and a high-school buddy can take your wife to the hospital, when she becomes ill at work, pick up your son from school, and watch him until you can get home.

So when the presidential candidates toss off references to the struggle of working-class people, they should see George in their minds’ eye. And when elected, the president should not toss these people into a desk drawer in the Oval Office.