T. Boone Pickens , the down to earth billionaire, revealed probably the most sound, logical and comprehensive US energy independence plan to date. Conspicuously absent from his discussion was the typical environmental disaster scenarios spewed forth by the environmentalists. No charts showing that a statistically insignificant 1 degree average temperature change can be extrapolated to an 8 degree temperature rise that results in the extinction of man as we sink into the ocean.
Instead he explained a logical and thought out approach using a white board and marker on CNBC. Using history tested economic logic Pickens started by explaining that the US spends $700 billion (US) on foreign oil annually. America buys 25% of the world’s daily production even though we are only 4% of the world’s population.
Yes, Pickens has a stake in the game. He’s placing a huge investment in wind but he’s already a billionaire because he has an instinctive ability to foresee a problem before it occurs and be in a position to benefit from solving it. That’s what entrepreneurs do in a free society where good ideas are economically rewarded.
The logic of of “Obamanomics” are at work. See if you can follow Obama’s view of the world. $5.00 gasoline is good as long as it doesn’t get there too fast. In other words, if you don’t notice the price creeping up then there won’t be enough outraged people to hold the government accountable. That way the tax revenue will continue to roll in so the government can transfer a greater portion of YOUR earnings into social programs that continue to grow geometrically. That way there is no need to make the hard decisions like cutting back on the Ponzi scheme known as Social Security. You can even fund nationalized health care and Medicare.
Why? You’re being duped by the government. We’re sitting on 89 Billion (that’s with a B) barrels of oil in the Alaskan wilderness. Two times as much in the Gulf of Mexico and 3 times as much is in Iraq. If you’re counting that’s 50 years of oil not counting the other countries in OPEC. The only reason there is a supply problem is because of a perfect cocktail to take increasing tax money on a fungible asset. Like cigarettes the demand curve for oil is nearly vertical. So you can keep raising the prices on oil and people will still keep buying gasoline because they don’t have a choice unless they want to ride a ten speed for 13 miles from the suburbs to get to work every day.
In a previous post, I mentioned that the price of gasoline was due to the high demand of oil throught the world. I even suggested that, in order to bring the price of gas down, we would have to increase supply by finding other sources of the crude, since the demand of oil would only increase. But a report today by the US Energy Information Administration suggests otherwise.
The average price of a gallon of regular unleaded is approaching an all time high, and it isn’t even Summer yet! The official U.S. average price is $3.22 a gallon, but just yesterday, my local pumps displayed $3.45 (maybe a good time to buy that Prius)! Why are gas prices so high? Will they ever come down to a level we can comfortable tolerate? I took a look at the DOE / EPA joint website so you don’t have to…