Tag Archives: environmentalism

Voters Waiting For Candidate Who Will Drill

By LAWRENCE KUDLOW | Posted Thursday, June 12, 2008 4:30 PM PT

The recent spike in oil prices and unemployment is dramatically changing this presidential campaign — virtually overnight. The near $20 jump in oil to $140 a barrel, the unexpected half-point increase in the jobless rate to 5.5% (the biggest monthly increase in 20 years) and the resulting 400-point plunge in stocks has created a new campaign issue right before our eyes.

Public worry No. 1 is now oil, jobs and the economy, with the inflationary woes of the U.S. dollar right underneath. The candidate who can connect with these issues will win in November. But so far neither Barack Obama nor John McCain is dealing with the new political reality.

In fact, it’s all about oil right now. The price has doubled over the past year, while the economy has slumped.

But here’s an eye-opener. Recent polling data from Gallup show that the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34% to 20% over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57% from 41%.

And the candidates remain blind to these shifts.

Obama continues to lambaste oil companies, while congressional Democrats push for cap-and-trade. They’re missing the point, big time. The public wants more energy and more fuel to cut high prices and spur economic growth. But the costly cap-and-trade plan would produce less fuel and less growth. It would only raise gas-pump prices while mounting a Gosplan-type taxing, spending and regulating program that would be the moral equivalent of Hillarycare on nationalized medicine.

U.S. Rich In Coal

McCain has an opening here. Yet he, like Obama, would have voted for cap-and-trade, which went down to defeat in last week’s Senate vote. And while McCain favors some offshore production and has been strong on nuclear development, he is against drilling in ANWR.

Then there’s the oil nobody is talking about. The Bakken fields beneath North Dakota, Montana and Canada hold an estimated 400 billion barrels of oil. In comparison, Saudi Arabia’s biggest field, Gahawar, has an estimated 55 billion barrels, while ANWR has an estimated 10.4 billion barrels.

Hat tip to Mark Perry at the Carpe Diem blog site for these figures. Perry also is reporting a Bureau of Land Management study showing 279 million acres under federal management where oil and gas could potentially be extracted. But more than half of this is totally off limits. Offshore, where another 86 billion barrels lie in wait, is also restricted. Then there’s liquefied natural gas, oil shale and the various coal-to-liquid carbon-capture and sequestration technologies that would be priced out of the market by cap-and-trade.

The U.S. is the Saudi Arabia of coal, but we can’t produce. We’re still the world’s third-largest oil producer, but we could be the Saudi Arabia of oil if our companies were free to drill. Oil CEOs like Rex Tillerson of Exxon Mobil and David O’Reilly of Chevron keep saying this. But politicians aren’t heeding their message.

Israeli saber-rattling against Iran could have accounted for some of last week’s huge oil spike. And the unemployment story may not be as bad as the May jobs report suggests. An unexpected inflow of teenagers probably bloated the jobless figure by a couple tenths of a percent. And economist Jerry Bowyer points out that an unprecedented hike in the minimum wage may be derailing students looking for summer work.

A Recession Election

In a sign of future job improvement, however, the civilian labor force grew by nearly 600,000, meaning that more people looking for work could signal recovery. Weekly jobless claims are near 350,000, not the 500,000 of past recessions. Overall, at 5.5%, unemployment continues to be historically low.

But the economy is still in a slump, not a boom. And the fact remains that Americans are very worried about the economic outlook. This could be a recession election. And right now, voter economic anxieties are all about oil, even more than the subprime housing credit problem.

McCain has a great pro-growth plan to slash corporate tax rates, a move that would be a strong tonic for jobs and wages. But he must bolster that plan with a new emphasis on deregulated energy markets that can produce a total portfolio of conventional and nonconventional energy, including major new drilling. He should couple that with a strong-dollar message to curb both energy and non-energy inflation, which is shrinking consumer paychecks and damaging corporate profits.

More oil, more jobs, better wages and low inflation. That’s a winning GOP message this fall. But what if Obama gets there first? It’s unlikely, but not out of the question. Either way, voters will move to the candidate who connects with their worries. Right now those worries are up for grabs.

Copyright 2008 Creators Syndicate, Inc

Global Warming Policies’ Economic Chill

By MARGO THORNING | Posted Thursday, June 12, 2008 4:20 PM PT

Many Americans think that switching to energy-efficient light bulbs, buying environmentally friendly appliances and obeying a (100% recycled) bag of green living tips will be the extent of their contribution to curbing greenhouse gases. But the price tag to consumers could be a lot higher if some politicians have their way. In fact, U.S. households could expect a $2,900 annual hit to their family budget sooner than they think.

That’s just one figure causing concern as politicians race to address global warming. Therefore, it’s worth noting that at the same time Americans are concerned about climate change, they are also very concerned about the sluggish economy and the impact it is having on the pocketbook. It is only fair, then, to view the two issues side by side. When cooler heads prevail, the reality is clear:

There is weak public support for global-warming policies, which would end up costing the average family thousands of dollars.

First, it’s worth noting where Americans currently stand on global warming. According to Gallup, as much as 70% of the public during the late 1990s through 2000 said the environment should take priority over the economy. That number has dropped to just 49% this year.

Perhaps even more startling for some policymakers may be that “the environment barely registers as a top-of-mind concern” for the public when asked to name the nation’s biggest problem, according to Gallup’s research. Though the environment tops the list of problems Americans perceive for 25 years in the future, it still lags behind the economy and energy when taken together.

Even then, a poll from the Institute for Energy Research found that only 1 in 4 people citing the environment as their top concern rate global warming as the most serious threat.

None of this suggests the environment isn’t a concern, or that Americans are not concerned. The onslaught of scary warnings on global warming has worn down voters. Thus, many will tentatively agree when politicians ask them to support the cause. After all, a lot of people think, what’s wrong with kicking in a few bucks if it means a cleaner world?

Unfortunately, politicians are not asking for a few bucks. They’re asking that everyone give until it hurts, and then give some more.

Take, for instance, America’s Climate Security Act of 2007, sponsored by Sens. Joe Lieberman and John Warner. The climate would become more secure, they say, by thrusting rigid emissions rules on American business in a cap-and-trade system they liken to the free market at work.

(We are all too well aware of the “efficiency” big-government bureaucracy brings to an issue).

While the act would impose Uncle Sam further into our economy, the economic lives of average Americans would become far less secure. By requiring cuts in greenhouse gas emissions, the bill would increase energy costs ranging from gasoline to electricity. Those costs are just the beginning. Higher prices mean less economic activity, which will drag on job creation nationwide, further slowing the economy.

Those costs will hit home, literally. A joint analysis undertaken by the National Association of Manufacturers and the American Council for Capital Formation concluded that passage of the Lieberman-Warner bill, which was recently killed in the Senate but could return under another name, would have caused significant economic hardship. American households would have faced income losses of as much as $2,927 per year in just a dozen years, and as much as $6,752 per year in 2030. Job losses would have ranged from 1.2 million to 1.8 million in just 12 years and by as much as 4 million by 2030.

Additional research undertaken by the Heritage Foundation confirms these concerns. That organization found that under the Lieberman-Warner scheme, the average household would pay $467 more each year for its natural gas and electricity. Heritage says the average household will spend an additional $8,870 to purchase household energy over the 2012-30 period.

No one is asking politicians to be economists. But economists are telling politicians what they should already know: Government interference with our economy can have a very high price tag for working families.

Even if politicians don’t like to look at economic data on the cost of the Lieberman-Warner bill, polling figures are already equally revealing. Lawmakers can choose to heed those facts now, or they may have to face some tough polling information of their own when their constituents start getting higher energy bills.

Thorning is senior vice president and chief economist of the American Council for Capital Formation.