I think it was George Will who said of the description of the United States Senate as the “world’s greatest deliberative body” that the Senate is neither great, nor deliberative, nor a body. I was reminded of that comment by the desultory debate over energy this week. Democrats sought to impose a windfall profits tax on the oil industry, a policy that has no grounding in economics and can have no impact on gasoline prices. Republicans argued for more drilling in environmentally sensitive areas, such as off the East and West coasts and in the Arctic National Wildlife Refuge.
I agree with the Republicans that Congress should approve more offshore drilling. I’m from Galveston, where you could drive on the seawall and view drilling platforms in the Gulf of Mexico. The only environmental harm that I can recall from offshore operations in the Gulf was the 1979 blowout of a SEDCO well (the company founded by then-Texas governor Bill Clements), and that took place off the Mexican coast. Nor do I see anything wrong with drilling in the ANWR wilderness. But the idea promoted by the Republicans, that we can drill our way to cheaper gasoline at the pump, is not true. America’s ability to affect the world price of oil is miniscule compared to nations with greater known reserves.
There is a famous saying about oilmen: They are like cats; you can never tell whether they are fighting or making love. Democrats have always believed that they are making love and manipulate the price of oil to their benefit. But the companies’ power over pricing is far less than that of the oil ministers of the OPEC cartel or the speculators on the New York Mercantile Exchange. Oil prices respond to market forces, like any other commodity, and the market forces today are extremely high demand, tight supplies, and fear: fear that “peak oil” has been reached, and fear of vulnerability of the Gulf of Mexico to hurricanes. Oil prices may go down some day, but it won’t be during hurricane season. And it won’t be because of anything Congress is likely to do.