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Posted on 01/16/2012 6:50:54 AM PST by sitetest
The United States is by far the world’s leading oil importer. Thus, when the price of oil goes up, our economy is severely taxed. At the beginning of 2011, many economists were talking about an emerging U.S. economic recovery. Yet by spring, as oil prices climbed above $100 per barrel, it became apparent to all who were paying attention that no escape from recession was in sight.
The economic impact of oil prices on the American economy is shown on the graph below, which compares oil prices (adjusted for inflation to 2010 dollars) to the unemployment rate from 1970 to the present. Every oil-price hike for the past four decades, including those in 1973, 1979, 1991, 2001, and 2008, was followed shortly afterwards by a sharp rise in American unemployment.
The distress to American workers caused by such events is manifest, but the economic damage goes far beyond the impact on the unemployed themselves. A sustained oil price of $100 per barrel will add $500 billion to the U.S. balance-of-trade deficit. This represents a subtraction from our gross domestic product equal to that required to support 5 million jobs at $100,000 per year each. And when Americans are out of work, many cannot pay their mortgages — a factor that undoubtedly contributed to the recent crash of home prices and the resulting recession.
Looking at the data in the graph, it is clear that cap-and-trade plans, or alternative methods of carbon or fuel taxation, are not the answer. Indeed, by increasing the cost of energy, they will only make the economic situation worse. Rather, what we need is a policy that will force world oil prices down. The way to do this is to flood the world market with liquid fuel from every source available to us.
(Excerpt) Read more at nationalreview.com ...
My own view is that, all things being equal, we're always better off producing more of our energy at home than importing it, not just for economic reasons, but for national security reasons, as well.
I'd like folks to think about the advantages and disadvantages of Mr. Zubrin's ideas.
I’m very interested in your thoughts about this article. Thanks.
Methanol not Ethanol. I like that.
Yes, along with other projects like east coast, west coast, Alaskan coast offshore drilling, production in NPRA and ANWR coastal plain.
and mandate flex-fuel vehicles.
No to the mandate, but no problem with companies offering that option. Flex-fuel vehicles are fine, if the owners want to pay for that option. That cost should not be forced on me nor subsidized by me.
This makes a lot of sense .... which means Obama will run the other way.
The only way that this can happen is replace obummer and maintain the house and get a filibuster proof senate and then us TEA party folks will have to hold them to account.
Methanol is a deadly poison. It ate the anti rust lining off of the inside of my tractors fuel tank. It turns nerophene fuel lines into mush. It can eat your fingerprints off and of course make you go blind. I don't like ethanol either. It also evaporates form my tank without giving me any MPG. My cousin says he has to use ether to start his tractors when they have been setting a while and then they do not run very well. Give me gasoline not myths.
Until we prove, one way or another, that we have enough gas and oil right here in the US to last 250 years, we will continue to have these discussions. Until we admit that there are those that want to keep the price of oil up to support the middle east, we will continue to have these discussions. Until then, it’s a waste of time.
Bump 2 read later. However, high oil prices encourage domestic drilling.
On the other hand, Brazil uses no fossil fuels for transport because they use ethanol/methanol/whatever - and have no silly laws against using their own resources. If we did the same, we'd be able to drill for oil.
Really? How about turn signals? Headlights? There's only one state in the Union that doesn't require seatbelts, but the cars there have them anyway.
Options are great, but let's be realistic about the base package - the government already mandates a lot. Mandating an option for fuel seems to me to be heading in the direction of freedom for the consumer, not the opposite.
There is certainly a difference between safety systems and the fuel input.
How would you feel about the government mandating you can only use electric heating systems in your home?
You got that right!
How about Obama get the heck out of the way of building the keystone pipeline....?
That would bring oil proces down.
I figured you'd say what you said about mandating flex-fuels. You are always in favor of minimizing or eliminating government intervention in the market. I commend you for your consistency.
The problem is though that, in the view of the author, it's a bit of a chicken-and-the-egg sort of thing. Why should I bother with putting a methanol pump in my gas station if no one wants to use it? And as a consumer, why should I want to buy a flex-fuel vehicle if there are no methanol pumps around?
And as someone who makes or distributes fuel, why should I make lots of methanol when there isn't any demand for it?
sitetest
Better get used to high oil prices ... and by association, high prices for everything.
First of all, there are lots of flex-fuel vehicles already available without the government mandate. I don’t see an arguement that the mandate is required when they are already in the market place.
Secondly, I think methanol is a horrible choice of fuel for the public. The fuel burns without visible flame or smoke. The fumes are toxic and you can be poisoned with it through skin contact.
We never stopped oil production in the Gulf of Mexico.
The did stop the permitting process for new wells, then that approval process started again but it has been slow and more restrictive for the new permits. But new drilling is going on today in the gulf.
Status of Gulf of Mexico Well Permits
http://www.bsee.gov/Regulations-and-Guidance/Permits/Status-of-Gulf-of-Mexico-Well-Permits.aspx
There are 43 rigs operating last week offshore in the US. 42 of those are in the Gulf of Mexico.
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