Senator Cornyn Pushes Gas Price Reduction Act of 2008

As our nation struggles with the impact of high fuel prices we see little concrete action from our elected officials. It is frustrating that the wheels of government do not seem to be moving on this critical issue.

One exception to this inertia is the continued push by Senator John Cornyn for comprehensive legislation that would not only provide near-term relief for consumers but would pave the way for future energy independence. I pray that he will continue to take the fight to the Democrat controlled Senate on behalf of the U.S. consumer.

Energized About Energy

Sometimes you can pick out the "hot spot" in U.S. politics with ease. It doesn't mean that anything will be accomplished, but lots of hot air rising can give clues to the perceived point of pain. In this case, the pain is at the pump and is hopefully being passed on to elected representatives in the form of "do something or I might actually vote for someone who will..." threats of action.

So, will anything come out of the rhetoric? Don't count on it. At best, expect a short-term band-aid to hide the "ouch" -- not a long-term fix that goes to the root of the problem. We are such a short-sighted nation that we often treat with aspirin the headache that pains us rather than pulling out the spike that is causing the headache in the first place. If only we could use that "hot air" to turn a turbine we might at least cut the energy bill for D.C. residents....

Gasoline Prices Affecting Driving Habits

Finding the economic price point at which consumer behavior changes has always been an issue for businesses. Sometimes market conditions force changes. At other times it is a question of "charging what the market will bear" in order to maximize profit. It is dependent on the price elacity of demand for a particular product or service.

It seems that we have finally reached a critical point in the price of gasoline. Americans are driving less and they are flying less. They also are moving from SUV's to smaller vehicles. Who said the marketplace isn't the best way to address so-called global warming?

More on Drilling the Outer Continental Shelf

Drilling the outer continental shelf for oil seems on the surface to be a simple, quick-fix approach to alleviating gasoline prices. According to this article from Forbes, it will not be quick and it is certainly not simple.

Both Senator McCain and President Bush this week have called for opening the outer continental shelf to drilling. It may be somewhat disingenuous at this point in the election cycle. It is unlikely that sufficient votes can be garnered to pass any comprehensive energy legislation prior to the election.

If the area was open for drilling, it would be good for the U.S. consumer. In the short-term, we could see a decline in oil prices due to a relaxing of speculative pressure. However, it is unlikely that any decline would be sustainable due to the longer term supply and demand issues faced. The big benefit to the U.S. consumer would be in the revenue generated from such leases. A large portion of it would find its way into government coffers -- either at the federal or state level. The big issue there is how will it be utilized. If it does become a reality, let's hope that it isn't just a new way for government to grow. Let's use it to offset other taxes or possibly to pay down debt. Reducing debt reduces the annual interest bill that we are paying on that debt. Either way, the taxpayer wins.

Texas RR Commissioner Williams Speech

Wow! I wish I had heard this speech in person. It was given by Texas Railroad Commission Chairman Michael Williams at the Texas Republican Party Convention. It is a little over 20 minutes in length but well worth it. He expresses why I consider myself a Republican. You can see the video here. He gets my vote.

Defeat of the Tax and Sue Democratic Scheme

It was gratifying to see the Dem's plan to tax windfall profits of oil companies go down to defeat today. It was such an amazingly misguided approach to "fix" high gasoline prices that I'm surprised they weren't laughed out of town. Sadly, that seems to always be the approach of the party of the Candidate of Change. We need to work on the supply side as well as to use common sense methods of husbanding existing resources wisely. Developing new energy resources is definitely something that needs done -- just not through ill-conceived tax-and-spend schemes.

What is the Top Issue of the Campaign?

I've said it before, it's the economy. Not everyone agrees though that the economy will be the defining issue of the 2008 Presidential race. Some believe it is the candidate's positions on Iraq that will be the deciding factor. What is going on in Iraq has profound consequences for our economy. They are deeply interconnected.

I don't believe in wars for purely economic reasons unless they are a matter of survival. But, think of what happens if we pull all of our troops home. Does it have an impact on unemployment? Does it have an impact on jobs in the defense related industries? What about oil prices? Will a politically unstable Iraq be good for oil prices? The situation isn't great now but it is improving. What happens if we pull out before they can stand on their own? Will we be handing them over to Iran? It is very difficult to separate the issues.

The people in the U.S. want to see something done about the price of gasoline. They want their heating and cooling costs to come down. This fall, they will ultimately decide based on their perception of which candidate is best for their pocketbook. Every other issue will be secondary.

Is it Just a Coincidence?

The chart shows an interesting coincidence don't you think? When did the Renewable Fuels Standards included in the Energy Policy Act of 2005 go into effect? Sept. 1, 2007. When did oil prices head for the roof? I think you can read the chart.