Bill O'Reilly: Stunning Ignorance

Bill O'Reilly continues to rail against the oil companies. High gasoline prices, according to O'Reilly, must be because of nefarious tactics and greed by the oil companies. He caterwauls about Bush not doing something about these high prices. Then, just to make his tirade look fair and balanced he includes some of the past presidents.


He completely forgets that we have a market-based economy. The people that need the petroleum buy 70% of the futures contracts. The bidders for those future contracts are people like the airline industry, trucking contractors, and other downstream users whose businesses depend on having an uninterrupted energy supply. The oil companies are not holding back the supply of oil Bill, there just isn't enough to satisfy everybody. The economics of a limited oil supply goes like this. If your business can survive with the cost of energy that is available, then you will bid/use that energy for the available price. If the available price is too high then you either go out of business, or just don't use so much of the high priced stuff. And let me iterate a point here, at the prices we are paying now, using less is only available to some of the people. Most, like the carriers who bring our products to market and commuters have no choice in the matter. Using less for most of them is not an option.

Supply, not more government is the answer. The government created this problem and if they would just get out of the way, the problem would mend. Bush is not a dictator, and cannot wave a magic wand that will get congress off their duffs to rebalance the market. Choking off supply will give these results every time. The congress has forced us to use the foreign oil that has put our economy in such jeopardy. Congress limited offshore drilling, not the oil companies. Congress prohibited nuclear energy, not the oil companies. It was not enough to regulate how the oil companies went about their business. No, making sure that the oil companies drilled in a responsible manner would have been the responsible thing for congress to have done. But they opted to kill exploration instead of just being stewards of the land.

Another straw dog that O'Reilly didn't refute was the idea that the oil companies were not drilling on the leases that they hold. The oil companies, if you listen to the Democrats, are sitting on big tracts of leases and refusing to drill. How ridiculous! The airheads that say things like that certainly know nothing about the oil industry. I personally have property that over time, I have leased the mineral rights out to different oil companies. The oil companies will come in and 'doodlebug' (doodlebug is a term for seismic work) the area and move on. They are not going to spend millions drilling where there is such a low percentage of a return on their investment. Offshore Texas and Louisiana, the oil companies do seismic work to determine where oil might be found. They do seismic surveys all over the gulf. This tells the oil companies which properties that they want to lease. They are not going to pay for leases and drill in areas if there is no prospect of a return on investment. In other words, they are not going to spend millions on a dry holes intentionally. The Democrats keep throwing up this available, non-productive land to enhance their position. Where were you Bill when your guest threw up that argument?

If you are going to have a segment about oil and oil production, either learn something about it or just don't do it. We also note that you never have anybody on your show who actually knows anything about the oil industry.

Cheers,

-Robert-