Energy Independence: But At What Cost?
by Bill Sardi
Recently by Bill Sardi: How Does Anybody Make a Living These Days?
Politicians are arguing for elimination of $4 billion of tax breaks for oil companies. But how disingenuous these efforts are! The public is paying to re-tool the American oil industry via higher prices at the pump, to subsidize fracking (hydraulic fracturing) technology that tap into shale bed oil. This method of extracting oil from shale is more costly and essentially perpetuates high oil prices.
Yes, America may become more energy independent, but with real inflation at 7-10% (ShadowStats.com) and high rates of unemployment, $5-6 gasoline may be the straw that broke the camel's back. Yes, money that would normally flow to foreign oil producers will now stay at home, but who can afford $5/gallon gasoline?
President Obama pretends he is doing something about this by saying he will consider tapping into the nation's oil reserves. But the President has no intention of lowering gasoline prices.
Recently energy secretary Steven Chu was asked if "the overall goal is to get our price lower?" Chu reportedly replied: "No," having said back in 2008 when he was first named to his position that "the administration's goal would be to raise prices high enough to make expensive alternatives more competitive."
The Heritage Foundation points out that high gas prices make electric and hybrid cars more appealing, a policy consistent with Obama administration and secretary Chu.
So the administration in Washington DC appears to be trying to force more energy efficient electric cars upon the public. There is no free market here. Americans are being herded into buying electric-powered automobiles with high gasoline prices! The President recently said fuel-efficient cars are an answer to high gas prices. He might as well have been wearing a cap that says "Chevrolet" when he made that statement. But those 55 mile-per-gallon cars the President talked about are more than a decade away. Auto buyers may save up to $8000 over time as the President claims, but these vehicles cost much more than standard autos, so the promised savings vanish.
A Chevy Volt costs $41,000 and is its average purchaser earns a $175,000/year income! Imagine Mr. Obama making a sales pitch to the 1% along with a $7500 tax credit to boot.
The President has become a shill salesman for the Obama-car as the Chevy Volt is known, since the Federal government bailed out General Motors who manufacturers the Volt. Sales of the Chevy Volt are so bad (only about 6000 have been purchased) that its production line is being shut down for three months.
The President has made a habit of talking out of two sides of his mouth. He recently said his payroll tax extension, which amounts to about $40/month for people making $25,000 a year ($1.33 a day), "means $40 extra in their paycheck, and that helps to pay the rent, the groceries and the rising cost of gas – which is on a lot of people's minds right now." But Mr. President, since you took office gasoline has risen from about $1.85 per gallon to over $4.00 per gallon, which one blogger pointed out would cost an extra $40 for every 20-gallon fill-up. If you give back what you have taken away, what do you call that? And the 99% like this guy?
According to recent polls, maybe maybe 50% of voters give a favorable rating to Mr. Obama. Many Americans believe in Mr. Obama, not because he is effective, but because they believe he is trying for them, and because they don't want McCain or Romney. Many Americans don't realize Mr. Obama's form of crony capitalism isn't American at all.