October 8, 2006 - Constant Reminders We Should Never Forget

Since our memories are so short...how quickly we forget...a few reminders this week of how we are held hostage by the OPEC oil-producing countries.

We go back to the late 70's when the price of oil was less than half of what it is today. The Middle East oil countries decided to flex their muscles and show us they are really the boss. They cut production and supplies and Americans sat in line in their cars for hours waiting to buy gasoline. We vowed to invest in producing our own energy and cut our dependence on foreign oil. We quickly forgot the lines and nothing happened.

Corn producers invested their time, energy and checkoff dollars trying to convince political leaders and their constituents that we could produce energy in the form of ethanol, renewable every year from the nation’s corn fields. It fell on deaf ears for two decades and was ridiculed by the petroleum industry and critics who said it was too expensive and unfriendly to the environment.

Finally, well into the new century, realizing the danger and the billions of dollars being spent to keep our troops in the Middle East to protect oil supplies and the spiraling cost of oil, we began to look seriously at alternative and renewable sources of home-grown energy. But then the critics took center stage...we can’t take crops meant to feed the world’s hungry people and convert it to energy for our SUV’s; it will damage engines; it costs more than gasoline and I’m getting less mileage; and the myth that has been with us for two decades, it takes more energy to produce ethanol than ethanol produces. Other sources of home-grown energy from wind power to nuclear come under the NIMBY attack...Not In My Backyard.

And so we allow ourselves to be held hostage. Remember when oil was less than $40.00 a barrel; the oil rulers built their palaces and bought their personal jets and yachts and diamonds. Oil moved to $78.00 and the OPEC oil rulers enhanced their lifestyles even more. Now when oil has dropped below $60.00 a barrel, OPEC says we can’t allow this to happen, so let’s cut production to move the price higher. If they could thrive at $40.00, why do they now need $60.00. I’m convinced part of the reason is to point out our energy weakness and once again let us know who is boss.

Spell it in capital letters...HOSTAGE; that’s what we are and will continue to be as long as our memories let us forget and do not prompt serious action on our part to follow the lead of countries like Brazil and the Netherlands and become energy self-sufficient. I certainly prefer home-grown alternative energy to the alternative of spending military lives and billions of dollars to protect oil supplies in unfriendly countries.

My thoughts on Samuelson Sez.