Thursday, October 2, 2014

Oil will save the economy

Two interesting phenomena are happening simultaneously that may prove to reduce the price at the pump dramatically over the next couple of years. First of all, the old “peak oil” predictions seem to be a thing of the past. So-called experts inside and outside the oil industry have predicted for years that we would run out of oil. Heck, J.D. Rockefeller’s partner at Standard Oil, John Archbold, famously sold some of his shares of stock at a discount in 1885 over fears the oil was running out.

Recent leaps in technology specifically hydraulic fracturing, or fracking — have brought once-dormant oil fields back to life. North Dakota is in the midst of an oil boom. The United States is set to overtake Saudi Arabia in oil production for
the first time since 1991. And this is happening on private land. This country could be completely energy-independent if the Obama administration would allow drilling on public land.

Instead, Obama has gone in the opposite direction, subsidizing green energy with direct payments and loan guarantees. There’s nothing wrong with green energy but wind and solar have been around longer than oil and they still haven’t managed to become commercially viable enough to make up a significant percentage of our energy sources.

The second phenomenon that we’re witnessing is the wholesale collapse of the global warming argument. This was the pretext for shifting away from oil to a so-called green economy. You wouldn’t know it was collapsing by the rhetoric coming out of the White House or the UN. They have doubled down on the notion that somehow we’re destroying the planet with harmless carbon dioxide. When one takes a step back, it’s laughable that something as essential to life on earth as carbon dioxide has been so demonized. It’s the equivalent of demonizing oxygen.

No one is denying that the production of carbon dioxide has gone up. In fact, this has been the plan all along. Inventions like the catalytic converter change harmful gases into harmless CO2. We should be encouraging more CO2 production. Any time CO2 is being released from an exhaust pipe or smokestack it is in place of something harmful and deadly. Yet the preachers of doom tell us that CO2 production causes temperatures to rise and the earth to bake. Turns out that over the last 18 years temperatures have remained steady while CO2 has gone, literally, through the roof. What happened?

What happened was the theory was seriously flawed from the beginning. The theory that more CO2 caused global warming was akin to the theory that a crowing rooster makes the sun rise. One has absolutely nothing to do with the other.

Temperature fluctuations are caused by all sorts of complicated combinations from solar output to the Pacific Decadal Oscillation. The climate is far more complicated than the over-simplistic notion that carbon dioxide causes warming. In fact, there’s a good reason why no one has been able to prove manmade global warming. Because it’s not happening.

According to Gallup, the percentage of people skeptical of manmade global warming has more than doubled since 2001. Much of the reason is because, with each passing year, the evidence of the global warming theory is evaporating.

Which means we’re in a great position for economic growth. Oil fuels the engine of our economy. When it’s cheap we have all sorts of disposable income to spend on other things. 

At the end of the day, it won’t be Obama, the Democrats, or green energy that get our economy going again. Much to their chagrin, it’ll be oil.

Phil Valentine is the host of the award-winning, nationally syndicated talk radio show, The Phil Valentine Show.

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