Roger L. Simon

Middle East madness makes energy winning issue for the Republicans

The New York Times’ Michael D. Shear engaged in some predictable wishful thinking on the Caucus blog Tuesday with Rising Gas Prices Pose Risks for 2012 Contenders:

At the height of the 2008 presidential campaign, operatives for Senator John McCain of Arizona sent reporters covering Senator Barack Obama tire gauges meant to mock Mr. Obama’s suggestion that people could save on gasoline by inflating their tires properly.

With gas prices then heading toward $4 a gallon, the Democratic National Committee returned the favor, sending reporters a basket of “Exxon-McCain ‘08″ goodies, including a black stress ball shaped like an oil barrel.

And so it went for weeks as the candidates sought to respond daily to voter anger about the prices at the pump. “Drill, baby, drill!” became a mantra at McCain rallies and a regular feature of Democratic ads warning of the consequences.

Nearly three years later and with a new presidential campaign looming, oil prices are surging again on fears of instability in the Middle East and uncertainty about the future of drilling off the United States coast. The prospect of a return to $4 gas — and the angst that could create in an electorate already frustrated about the economy — has the potential to become a new headache for the president as he gears up for his re-election.

But the political dynamics surrounding oil exploration are very different in 2011 than they were in 2008, making it less obvious that Mr. Obama’s Republican challengers can use the issue to their advantage.

As the great Pirandello once said, “Right You Are, If You Think You Are,” Mr. Shear. Here on terra firma we see things a bit differently. The Middle East is in a state of conflagration that is unlikely to stop for years. Everyone realizes this. Energy independence for the USA is more than ever a matter of economic survival, not to mention national security. [Even more than losing weight, like the First Lady says?-ed. Yes, even more than that.]

Alternative energy sources would be terrific of course, but as yet no one has come up with any that put a serious dent in our energy needs. That means increased oil and natural gas drilling and increased nuclear power. We should have done this years ago and we have to do it now. No one wants to despoil the Earth, but is there an alternative? None that makes any sense and no doubt even the editors of The New York Times would have to admit it (quietly, of course) as they plow through the snow on West End Avenue.

I am also skeptical of spending much government money on alternative energy research, mainly because I am not sure that it helps. In fact, it may be the reverse. The incentives to find breakthroughs in this area are already tremendous. Any person or company innovative enough to find serious renewable alternatives that really compete with petroleum or nuclear products, or even come close, would most likely become rich beyond their wildest imaginations — the world is that desperate. But great entrepreneur/inventors from Edison to Ford to Jobs have not needed government help in figuring out how to do what they did. Indeed, it might well have interfered with the process. Just set them free. And with Gaddafi or whatever Middle East Madman du jour controlling our supplies, or more accurately the world’s supplies and therefore impacting our own, we can only hope they work fast and become richer than anybody ever has.

Still, for now, we better drill and build those nuclear power plants. We evidently have plenty of oil of our own under the Dakotas and the good news is we have apparently begun to exploit it. Far more interesting than The New York Times these days is that reports the following in North Dakota oil fields benefiting from Mideast unrest:

North Dakota has sailed through the recession with the lowest unemployment in the country, a shortage of skilled workers and a budget surplus as the state has benefited from the shale oil boom in the western part of the state.

Now the stocks of companies working in the Bakken oil fields straddling western North Dakota and eastern Montana seems to be benefiting from turmoil in the Mideast.

While dwarfed by the integrated global giants, such as Exxon and BP, these companies are extracting oil about as far away as one can get from the civil strife and brutal repression reported in Libya and protests spreading across the region.

One result: Investors and traders are bidding up the stocks of these companies faster than the big oil companies.

Consider that since Jan. 20, just before the first protesters started pouring into Tahrir Square in Cairo, the value of six companies with significant operations in North Dakota have risen nearly 13 percent to a combined total market capitalization of $89 billion.

Ah, the market at work — isn’t it inspiring? But I feel as if I’m preaching to the choir here and that choir is a pretty extensive chunk of the American public at this point. So drill we must — and right on dry land. No tricky Gulf waters in North Dakota that I know of. And any Republican worth even a gram of salt will jump on this bandwagon and push it hard. Don’t believe the NYT (who would?). It’s not just a winner — it’s a gusher!