You are invited to read the latest commentary from the Free Enterprise Foundation. It will make you think!

Drill Here! Drill Now! Pay Less!

Every few generations our cozy politically correct national persona needs a heavy dose of reality. Reality can be delivered through a study of history with an eye to man’s advancement. Regrettably, our society appears determined to ignore that history and has received the first bitter harvest of our foolish reliance on foreign sources for a vital product. If we don’t become laser focused on solving our energy dependence on insecure sources of oil, four dollar a gallon gasoline is but a down payment on the debt yet to be paid.

Those societies that are both the most productive and peaceful, fairly reward the constructive gifts of mind and labor by those who are most productive in every generation. Failure to unleash our technologically superior geologists and the capital they command is crippling our society. Just as we say that we can’t fool Mother Nature, immutable rules of both the physical world and economics, borne out by experience, support democratic free markets as the engine of both our freedom and prosperity. There is an immutable symbiotic relationship between liberty, free markets and human advancement, and we have hobbled our society by piling obstacle before obstacle in the way of supplying a secure source of vital energy available from our own energy rich land.

While pulling up to a gas pump telling me I must pay $3.99 a gallon, I might twinge and question this reality, but when Maxine Waters, Congresswoman from California’s 35th District threatens the Chairman of Shell Oil with nationalization, merely for stating the truth regarding our inability to solve the present dilemma without more oil, it is time to require every member of Congress to read Atlas Shrugged one more time to get them to understand that you cannot regulate a physical problem out of existence.

We cannot just wish the problem to go away, and it would be wrongly placed anger to blame the oil companies for a problem that has been manufactured by political miscalculation. The solution must come from the private sector in its ability to respond to the opportunity presented by the pain of our over dependence and come up with an array of solutions.

If oil extraction and production was the product of a truly free market, we would have moved to correct the problem already. Unfortunately oil, like diamonds is not the product of a free market but is made available by the coordinated decisions of an international cartel that is far more powerful than anything we have seen practiced in our industrial history.

We bear the blame for letting this situation come into existence. The seeds of our dependence were politically created in the midst of an earlier war. Working with our British allies, we created a co-dependence with the principle oil producing states to provide our technological sophistication and long term marketing arrangements in exchange for the product of their sands and a military alliance. Today as the result of that alliance and for an indeterminate time in the future, the cartel that exists today has us as fully captive as if we were physically tied and locked up.

Since 1960 the now 13 nations that comprise this cartel meet regularly to coordinate their flow of oil to an increasingly thirsty world. Their goal is, not unexpectedly, profit and their long term self interest. Our failure to protect our own national interest long before this situation got to where it is, is a bi-partisan failure of shameful proportions. Ultimately each of us is to blame. Our politicians made decisions along the way based on not rocking their political constituency, and we let them. Shame on us!

We are not anytime in the foreseeable future going to reach energy independence, but even a serious effort now to fully develop, pursuant to the best available environmental standards, our Dakota lands, Canadian and Colorado Oil shale and our coastal resources beyond the 12 mile limit could provide an immediate inhibiting impact on world pricing for what is admittedly an “oil bubble” which cannot stand in the long term.

Today we should as well be assisting Brazil to develop its oil resources on an expedited basis to remove our reliance on the Middle East as our major supplier and continue to work on environmentally sound use of coal gasification and liquefaction as well as bio fuels where the energy cost of its creation is not a negative.

In the process, we cannot forget that this is a two part problem; Oil needs to be refined once extracted. We are at least 2 million barrels short (and growing) of U.S. daily consumption in our domestic refining capacity with a reluctance on the part of domestic producers to undertake the financial and compliance hurdles that confront them in what many consider a transitional period to other forms of motive and power generation just beyond the useful life of a refining facility. There are so many “ifs” connected to such a decision, prudent businessmen aren’t willing to take the risk given the lack of clarity on obtaining an acceptable return on a very big bet.

I have written often on this subject and can hear the anguished calls from the grandstands regarding renewable resources. They are not to be ignored. We should be doing all we can to encourage the development of all renewable energy sources available, but our basic energy needs are expected to grow by forty-five percent between now and 2030. Renewable resources, while they can help at the margins, cannot fulfill our major needs today.

Like most of the serious challenges facing us, government restrictions which inhibit the creative forces in our society and burden our great entrepreneurial capital sources inhibit solutions rather than clear the ground for progress. General regulatory reform is a subject we need to work hard to solve in a future Congress. What we need to do today is support those in Congress who are, under the banner, “Drill Here! Drill Now! Pay Less!” introducing measures to remove the sanctions that have exploration and exploitation of our oil resources from being brought to market.

American Solutions, a bi-partisan group of concerned Americans led by Newt Gingrich has urged Congress to adopt the following petition: “We, therefore, the undersigned citizens of the United States, petition the U.S. Congress to act immediately to lower gasoline prices by authorizing the exploration of proven energy reserves to reduce our dependence on foreign energy sources from unstable countries.” In my opinion it is an effort that deserves our support.

Copyright © 2008 by Robert E. Freer, Jr. All rights reserved

About the author: Robert E. Freer, Jr. is President of The Free Enterprise Foundation. He is a Visiting Professor, at The Citadel and elected in 2005 to be their first John S. Grinalds Leader in Residence. A regular contributor to the Mercury, He can be reached by E-mail at The Citadel . Copies of his earlier columns can be found The Free Enterprise Foundation. A new book from Professor Freer, Citadel Values, containing the wisdom of some of his most beloved columns, is available on Amazon.com, through the Foundation’s website and at The Citadel Gift Shop.

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