Bob Giaquinta for Congress

Drill, Drill, Drill

The current issue of drilling for oil offshore and in the ANWAR area of Alaska has been attaining front page coverage. The sound bites of both of my opponents, Dina Titus and Jon Porter, who support these drilling operations, try to persuade us into thinking that this is a major factor in the lowering of gas prices. The public uproar pertaining to the price of oil is being appeased, by most political candidates, by doing the “politically correct” thing, which is going to get them more votes from a poorly informed public. This is a “smoke screen” issue being used as a mechanism to get votes, without fully discussing the issue.

The major factor in the high price of oil is in reality the loss of the worth of the dollar. The dollar was taken off the metal standard, silver and gold, over thirty years ago, and was tied to oil, the petrodollar. The only asset supporting the dollar was the world's trust in the U.S.'s economy. Over the past several decades this trust has been diminished by many factors, such as; the unbridled governmental borrowing, the Iraqi war, the housing crisis, the corporate bailouts (Wall Street socialism), the decline in manufacturing, the printing of money, etc. This can be illustrated by the price of oil in Europe, which has risen in the past several years (20-40%) but not as much as in the U.S.(300%). In 2001 the Euro was worth .65 per U.S. dollar, it has now more than doubled.

Another major factor is the unregulated “Pork Butt” speculation on energy. This was allowed by the “Enron Loophole”, which was inserted in a bill by Senator Phil Graham. It allowed unregulated speculative trading in energy. This loophole has been supposedly closed in the recent farm bill, which of course includes massive farm subsidies, and may be the major reason for the recent dip in oil prices. However, there are two other loopholes still available to the speculators. The Foreign Market loophole allows trading in London and Dubai, which amounted to about 30% of the trading. The Swaps Loophole has no limits in positions, which allows marginal trading with only 7.5% security. These three loopholes have driven up the price oil immensely.

With the explosion of the economies of China and India the demand for oil has increased. Add to this the fact that China subsidizes its nation's oil purchases, lowering the internal sale of oil, which further increases demand. Our government has also helped increase demand by buying oil for “topping off” the Strategic Oil Reserve when prices were at there highest. When the buying started the reserve was about 75% of its capacity.

The record-breaking profits of the oil companies, usually called price gouging, adds more to the price of oil. Exxon just announced a 11.9 billion dollar profit for the second quarter of 2008. What are they doing with their profits? They are buying back their own stocks - I guess that's for the stock options for the next retiring CEO. No new refineries have been built in the last few decades. Don't believe the ads; less than 1% is being invested in alternate sources of energy.

Drilling in Alaska is not an answer. One third of the oil produced does not come to the U.S. BP is the largest producer of oil in Alaska - BP is BRITISH PETROLEUM. Alaska has basically prostituted itself, there is no state income tax, and everyone gets a yearly stipend from the oil companies. That is why Ted Stevens has been in the Senate so long. Hopefully that is at an end since his recent indictment for corruption. The citizens are paying a price due to the oil spills that have decimated 800 miles of coastline, destroying the fisheries, tourism, etc. (While we're on oil spills: hurricanes in the Gulf of Mexico have caused oil spills that are larger than that from the Exxon Valdez.)

If offshore drilling is allowed, most experts expect a 3% increase of oil production in 5-20 years. Wow, that should lower gas prices 10 cents a gallon, that will really help! Add to this that there are over 900,000,000 acres already leased to oil companies, and there is little drilling. By the way where do the royalties from drilling on federal land go? I wasn't able to find the answer. Another question, are royalties prorated to the price of oil, or are they a static amount?

About seventy cents per gallon are for taxes, which are supposed to be spent for the upkeep and expansion of the infrastructure of our roads. With the collapses and disrepair of bridges throughout the country, and many roads in disrepair, where is the money being spent? We're talking about 200-300 million dollars per day just in taxes.

If Congress caves, and does allow offshore drilling, which doesn't make sense to me at all, hopefully the following will be included:

No selling of the Strategic Oil Reserve; such sales must be for strategic reasons rather than a bargain basement sale - taxpayers would be paying for it anyway.

The sale of oil must be only to the U.S.

All loopholes for speculative trading must be removed.

There must be competitive bidding for oil leases, and negotiated royalties.

There must be no subsidies to oil companies.

There must be a preexisting fund for the cleanup of accidents.

As you can see I am definitely against the additional drilling, and hopefully, after reading this, you will be swayed to my camp.

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