Recently, I saw an editorial cartoon showing a congressional hearing where a donkey symbolizing a Democrat congressman was leaning over the rostrum yelling at an oil company executive: "What do you want us to do, repeal the law of supply and demand?"
Unfortunately, for American motorists, the law of supply and demand is working very well and has allot to do with bringing us $4 a gallon gasoline and $4.50 diesel prices. As China and India economies strengthen and people have more disposable income to spend in those countries, they are buying more food, homes, flat screen TVs, cellphones and yes, AUTOMOBILES.
The May issue of National Geographic Magazine is devoted to China. It is a comprehensive look and contains a number of interesting pages with facts about China. When you come to page 142, it talks about the growing Chinese love affair with cars. China recently surpassed Japan as the second largest car market in the world behind the United States and those cars run on gas and diesel.
Here is a sampling of what National Geographic reported:
- There are now 11.5 million privately owned cars in China and the number of additional cars on Beijing roads alone every day numbers 1,000.
- By 2025, China will have more cars on the road than the United States.
- 96% of the Chinese pay cash for their cars.
- By the end of this year, all Chinese expressways expected to be completed would circle the Equator 1.5 times.
So what about the supply side? Auto manufacturers relish the burgeoning car markets in China, but as developing countries buy more crude oil, the price of a barrel is skyrocketing. Nobody dreamed the price of a barrel of crude would top $100. Recently, it hit $117.
As much as the current members of Congress love to haul "Big Oil" executives before their committees and scold them about record profits, they ought to ask themselves what they are doing to allow greater domestic exploration? Why do they keep putting more and more oil potential areas off limits?
Those areas not only have strong potential but we have the technology to develop them in environmentally friendly ways. But to even suggest that we tap into a small area of ANWR's (Arctic National Wildlife Refuge) 19 million acres is heresy. Don't mind the fact that new technology allows drilling from small remote platforms connected only by ice roads in the winter and small aircraft during the summer.
While it is essential that we continue to develop alternative fuels as expeditiously as we can, we need a bridge from fossil fuels to the alternatives. So far, Congress is not helping build that bridge and lecturing oil executives who have to deal with foreign crude suppliers does nothing to relieve the price Americans are paying at the pump.
Don C. Brunell, President (DonB@awb.org)
