Senator Schumer Responds (and so do I…)

Senator Charles Schumer responds to last week’s column in which I claim he is responsible for the high price of oil. This is his full response along with some helpful commentary that illustrates the fact that he never actually answers the question. Welcome to Washington.

I'm not done. I have 400 other ways to not answer your question.

Last week I authored a rebuke of the financial regulatory system in the United States, particularly with respect to the rising cost of fossil fuels. Americans, and in fact all citizens of the world, are being fed what I consider to be utter nonsense from our elected officials, and the Wall Street puppeteers who control them, about the reasons behind the high oil prices.

My findings were published in my regular column, Off The Reservation in the Long Island Press and archived exclusively here, as always, on JedMorey.com. In it I concluded that because irresponsible deregulation spanning two decades is the most dominant factor in the price of oil, a responsible regulatory correction is the only solution to mitigate the current crisis. Further, because Senator Charles Schumer (D-NY) sits on every governing body with the ability to restore accountability in the markets, he is therefore quite logically the one man on the planet responsible for the price of oil. This is not to say that he was responsible thus far, but that because control is within his ability and purview, it is therefore incumbent upon him to reverse this horrendous trend.

You are welcome to review my assertions and follow my logic in arriving at this conclusion by clicking here. Then, you can read the Senator’s response below. Here is my take (spoiler alert) on his rebuttal: It is exactly the type of benign platitudinous response Americans have been conditioned to accept from the people who occupy the highest offices in the land.  748 words of nothing designed to throw us all off the scent. This is what we refer to in the newsroom as “gorilla dust” whereby two gorillas face off against one another in a spectacle of chest-thumping and screaming, throwing dirt in the air to create a commotion for the purpose of actually avoiding an altercation.

With that said, below is Senator Schumer’s response to my column that appeared in the Letters section of the Press this week. You be the judge. (Oh, and I’ll help a little along the way…)

Dear Editor,

I know that with oil prices surging day after day, Americans are being squeezed at the pump and paying more for everything from groceries to plane tickets. The bottom line is, Americans need relief from soaring gas prices. (Yes we are. Thank you for acknowledging that.)

That’s why, as a short term solution, I’ve called on the administration to tap the Strategic Petroleum Reserve (SPR). Established by the U.S. government in the wake of the 1970s Arab oil embargo, the reserve has been used since then to deal with crises that disrupt oil production. And it’s worked. When President Bill Clinton released 30 million barrels in 2000, in part because of my constant prodding, gasoline prices fell 10%. When President Bush released oil from the SPR in 2005 following Hurricane Katrina, oil prices fell more than 9 percent. If accessed today, the reserve would not only provide much needed relief to New Yorkers and Americans across the country – but also help ensure that our economy doesn’t slip back into a decline. (Wait, what? The 70’s embargo was a forced supply crisis and Katrina was a natural disaster. Supply is at an all-time high and experts agree supply has nothing to do with prices.)

But we cannot rely on the SPR alone. We must do more over the long-term so we are not constantly at the whim of what happens in places like Libya, Iraq or Venezuela. The way to do that is by reducing our dependence on foreign oil and investing in clean energy. We can do that by: (Golly, I hate to be rude but Libya doesn’t supply the U.S., we pretty much took care of the whole Iraq thing – wouldn’t you say? – and Venezuela owns Citgo… Can’t force them out of business in America, can you?)

1)      Passing NOPEC, the No Oil Producing and Exporting Cartels Act. This legislation would prevent future price increases of gasoline by permitting the Department of Justice to bring actions against foreign states – such as members of the Organization of Petroleum Exporting Countries (OPEC) – for collusive practices in setting the price or limiting the production of oil.  (But I think it’s been established that they’re not setting the prices, the investment banks on our own commodities exchanges are. Sounds like gorilla dust to me… )

2)      Ending subsidies for oil companies and putting the money into renewable energy sources. We need to make sure that oil companies, that are currently making record profits, aren’t receiving billions of billions of dollars in subsidies. Astonishingly, that’s what’s happening. I’ve called for the elimination of these subsidizes to help reduce our deficit and stop wasting taxpayer money subsidizing oil companies that don’t need any help. This week, House Speaker John Boehner stated his openness to ending some taxpayer subsidies for oil and gas companies, and I am urging my Republican colleagues in the senate to follow his example. (Again, this has NOTHING to do with why prices are so high given the extraordinary supply. Fostering renewable energy is a great idea, but it’s a way to create an additional supply of energy, not mitigate the current price. Of course the subsidies are ridiculous but given that logic shouldn’t prices be lower because we’re subsidizing part of the cost of production through tax breaks Senator? Hmmm. Something doesn’t quite add up here.)

3)      Passing the Use It or Lose It legislation. Under current law, oil companies can lease possible oil reserves on Federal land regardless of whether they are producing oil on that land or have plans to produce oil there. In some cases, oil companies are leasing – but failing to develop – federal land in order to book more reserves on their balance sheet and inflate their stock price. This legislation would force companies to report how they plan to use millions of federal acres already under lease for energy exploration and innovation. (Um, okay. We’re not talking about land use or stock prices here. We’re talking about the price of oil TODAY. Hey, are you trying to change the subject?)

4)      Promoting renewable energy sources.  This month, I helped secure over $57 million dollars to support solar photovoltaic technologies at Albany University that will produce clean power from domestic renewable energy. Additionally, in 2008 I supported a two billion dollar investment in wind power for New York. We must build off these successes and continue to promote clean and renewable energy investments. (Wow. $57 million dollars. Here’s a fun fact… Did you know that ExxonMobil just released their first quarter earnings of more than $10billion in profit?! This section doesn’t fall under the category of gorilla dust. This is what we call ‘pissing in the ocean to warm it up’.)

5)      Promoting cleaner energy sources. Also this month, I helped to protect a $100 million loan guarantee to build the Taylor Biomass Energy facility in Orange County that uses a process called gasification to convert over 95% of the waste received at its facility into cleaner energy.  We must also promote and fund similar projects across the country. (“Gasification” I see. There’s only one thing spouting hot gas right now and it ain’t the Taylor Biomass Energy facility.) 

6)      Using new sources of oil in the US where we can and it is safe to do so. I was one of 6 Democrats to support expanding a portion of the east Gulf to oil exploration, so long as it’s safe, with the greatest environmental protections, and small businesses and workers are not put at a financial risk. (Ahhh. Drill baby drill. Where have I heard this before?)

In this still-recovering economy it is vital that we do everything we possibly can to help middle class families stretch their paychecks. Every additional dollar spent on filling the gas tank is a dollar that could go toward paying for college, a much-needed family vacation, or paying the grocery bill.  By focusing on long-term fixes to our dependence on foreign oil and immediate short-term relief at the pump, we can bring down the costs of gasoline now and finally end the stranglehold that oil producing countries have on the New York and Long Island economies.  

Sincerely,

U.S. Senator Charles E. Schumer

Well, there you have it. Hope my helpful cues along the way illustrated what an absolute load of “gasification” this response was. Pity. Like I said, I guess Chuck Schumer is responsible for the price of oil.

Why Is Oil So High? Crude: Part II

Former Morgan CEO John Mack and His Love Pump

Greetings all. With oil prices rising and likely topping $100 per barrel in the New Year, I revisited a favorite subject in the Long Island Press this week. This week’s Off The Reservation is an update to a cover story penned two years ago about the oil speculation scandal in 2008 that artificially drove prices through the roof.

Returning to the subject, I found that not much had changed. A couple of the players, perhaps, but the speculation scheme is alive and well. So when you read projections from “industry analysts” who see crude oil prices rising due to a weak dollar and surging demand, you’ll know the real deal. Don’t get me wrong, these are key drivers of crude oil but are far from the entire picture. There are those who believe that pricing for the last several years is anywhere between 60% and 70% as a result of speculation; the remainder is due to market forces.

So when you’re at the pump cursing the Saudi’s, China, Obama, the Fed – whatever your poison – the biggest ass f#$*ing is still coming from Wall Street.