Rep Neugebauer's Newsletter on Oil Pipeline

Open e-Mail to Rep. Neugebauer:

Randy,

I read your latest newsletter.

The Keystone oil pipeline is not a no-brainer for Pres. Obama. It is a real problem! He wants to be reelected so badly he can taste it, and he knows that approving the pipeline would be a real help in his reelection. However, he is still stuck on his global agenda of redistributing wealth and promoting solar and wind energy. An oil pipeline from Canada would make gasoline and oil significantly cheaper, which would then make solar and wind energy much more difficult to compete.

I don't know what Congress can do about this, except keep hollering. Maybe the hollering will bring the problem more to the attention of the public and Obama may concede in order to retain reelection votes.

Silly Government Fuel Subsidy

At the end of December, Congress allowed a $.54 per gallon tariff on imported ethanol in a $.45 per gallon credit to US oil companies for purchase and use of ethanol to inspire. Great move! We need ethanol to substitute for gasoline like we need another hole in our collective head.

In that context, does Congress have a hole in its head as it continues to subsidize ethanol production from cellulosic materials, such as wood chips, grass, etc.?

Let's make an analogy. Wheat is a staple food in the US diet. Fortunately, we have enough, so that there is no present shortage. But, suppose we started to run a bit short and the price began to rise. In its wisdom, government would not allow farmers to increase wheat production. Instead, it would give farmers a subsidy to grow oats.

We have a large untapped reserve of petroleum, which could be refined to gasoline. Why are we fooling around with ethanol and wasting taxpayer money in the fooling around?

Oil and the Hormuz Strait

The price I pay for gasoline jumped from $2.88 per gallon to $3.15 over the last few days. It seems to be accepted that the reason for this is the threat of the Iranians to close the Strait of Hormuz to the passage of oil tankers.

Because of this, I hear cries of "war" on the news.

I find this ridiculous. I believe that most of Europe's oil flows through the Hormuz Strait and the US obtains a reasonable portion. Europeans have a stronger need to maintain the opening of that Strait, but the US also has a need and an obligation to keep it open for the world economy.

We have already a significant number of naval war vessels in the area. If Iranian naval vessels try to block the passage of tankers, we are in a position to blow them out of the water. This would not necessarily be war. It would merely be an engagement or skirmish and most likely accomplish the purpose of keeping that waterway open to passage of oil tankers.

Let us remember that war is an operation with intention to completely destroy the will of a potential enemy. This is usually accomplished through a massive destruction of physical facilities and horrendous death toll in an enemy country. As examples, the US completely destroyed the physical facilities of Germany by saturation bombing in the Second World War. Similarly, two major cities of Japan were obliterated, with a few million deaths in that conflict. Do we really want to do that to Iran because they want to impede the passage oil tankers through the Hormuz Strait?

I don't like $3.15 per gallon for gasoline, and I strongly support the sinking of a few Iranian war vessels, if that will bring the price back to $2.88 per gallon.

However, I am more concerned with the $2.88, when the price of gasoline should actually be less than half that amount. The reason I have to pay $2.88 is because the Obama Administration has declared its own personal "war" against oil drillers and petroleum in general, in order to foster a pie-in-the-sky program of renewable energy. If anybody believes in war, in less than the conventional manner, let's have a Congressional war against the Obama Administration, in order to get our oil production humming and the gasoline prices down.