Note: If you read this carefully, you'll notice that I don't demonize Big Oil for their profits; particularly Exxon's announcement today of its particularly robust quarterly earnings. - 4/28/11
Any faithful reader of this blog knows I am not an economist.
In addition, some faithful readers probably still doubt that I'm a political conservative, considering my inability to fall in lockstep with the Republican party line.
So you won't be surprised to learn that I'm struggling to understand our nation's current war over entitlements for Big Oil. And why conservatives want this taxpayer-funded gravy train to continue.
After all, if we're supposed to be anti-entitlement on everything else, why does Big Oil get to be the exception? Because they'll go out of business if they lose their $4 billion in annual subsidies from our government? Something tells me that of all the industries in the world at this moment in history, Big Oil is definitely too big to fail. And it won't anytime soon, even if they have to give up their multi-billion-dollar slush fund.
Not only is $4 billion a drop in the bucket for these oil companies, it stands to reason that since capitalism currently runs on their product, they should be able to survive quite handsomely on their net profits. After accounting for research and development, human resources, transportation, liability insurance, and, yes, taxes. Just like any other enterprise in the United States.
The Irony of Big Oil
Does free market economics rely on special perks for the biggest players? Doesn't manipulation at one end of the market jeopardize viability at the other end? Isn't that part of the whole argument against subsidies and entitlements that we've been waging these past few months? What exempts Big Oil from playing by the same rules as everyone else?
And speaking of everyone else, what about other companies and industries that could also use a multi-billion-dollar subsidy? How fair is this? Why can't companies rise and fall based on the pure market mechanisms conservatives love to extol when it comes to everyone else?
What about Republican entrepreneurs who are trying to develop new alternative fuel sources? How much of Big Oil's bullying is stifling these smaller firms in their efforts to innovate? Isn't innovation one of the hallmarks of America's great economy?
What scares conservatives about diversifying our energy solutions and bringing new fuel sources to market? Does everybody's 401k ride on ExxonMobil's good fortunes alone? Why can't Big Oil branch out into alternative and renewable fuels themselves? Don't tell me the industry's leaders and investors are scared of change!
Good grief - being afraid of change is for people like me! People who are usually wary of innovation and new ideas. Skeptics who find comfort in the status-quo, and can tolerate unhealthy levels of bad things as long as they're constant. Where would America's industry be if Republicans talked Henry Ford out of inventing the assembly line? What if Thomas Edison was a neo-con who owned too much stock in the candlemaking business?
Would iPhones and iPads exist had Steve Jobs been a card-carrying member of the Heritage Foundation? Does being a conservative now mean nothing's left to be invented? Surely fossil fuels aren't the best - and only - way to power our future.
We Can Either Be Creative, or We Can Play Catch-Up
Are you aware that Germany - of all places - leads the world in solar power generation? Or that South Korea has announced plans to construct the world's largest tidal power station? They claim it will generate 1320 megawatts of power, enough to provide electricity to power 60% of Inchon's homes. And they'll be getting it from one of the most reliable and renewable natural sources of energy on the planet - tides.
I understand that for the foreseeable future, our global marketplace is pretty much joined at the hips with Big Oil. However, the United States, for all sorts of reasons, needs to seriously begin weening ourselves off of Middle East oil in particular, and petroleum in general. The environmental costs of oil dependency are proving to be too significant to ignore.
Not that Big Oil will ever become extinct. We use petroleum byproducts in too many beneficial synthetic materials. However, if we could get most of our energy needs from alternative sources, we should still have plenty of oil reserves in the United States to keep us in plastics and silicone for generations. That would eliminate our dependency on foreign oil while providing opportunities for innovation that could lead to sustainable energy production here at home.
Meanwhile, the longer Big Oil fights progressive change, the worse it could end up being for the United States in terms of global competition for dwindling resources. China has already begun industrializing pockets of Africa, and India's burgeoning middle class could outnumber our entire population in the US within 20 years. The world around us is not standing still, and our standard of living has become too energy-dependant for us to rely on one dominant fuel source.
How does myopic genuflecting to the idol that is Big Oil provide America a solid plan for the future?