Voters Say "Drill"

(National Review Online)  This column was written by Larry Kudlow.

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The recent spike in oil prices and unemployment is dramatically changing this presidential campaign - virtually overnight. The near $20 jump in oil to $140 a barrel, the unexpected half-point increase in the jobless rate to 5.5 percent (the biggest monthly increase in 20 years), and the resulting 400-point plunge in stocks has created a new campaign issue right before our eyes.

Public worry number one is now oil, jobs, and the economy, with the inflationary woes of the U.S. dollar right underneath. The candidate who can connect with these issues will win in November. But so far neither Obama nor McCain are dealing with the new political reality.

In fact, it's all about oil right now. The price has doubled over the past year while the economy has slumped.

But here's an eye opener. Recent polling data from Gallup show the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34 percent to 20 percent over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57 percent from 41 percent.

And the candidates remain blind to these shifts.

Obama continues to lambaste oil companies while congressional Democrats push for cap-and-trade. They're missing the point, big time. The public wants more energy and more fuel to cut high prices and spur economic growth. But the costly cap-and-trade plan would produce less fuel and less growth. It would only raise gas pump prices while mounting a Gosplan-type taxing, spending, and regulating program that would be the moral equivalent of Hillarycare on nationalized medicine.

Sen. McCain has an opening here. Yet he, like Obama, would have voted for cap-and-trade, which went down to defeat in last week's Senate vote. And while Mr. McCain favors some off-shore production and has been strong on nuclear development, he is against drilling in ANWR Alaska.

Then there's the oil nobody is talking about. The Bakken fields beneath North Dakota, Montana, and Canada hold an estimated 400 billion barrels of oil. In comparison, Saudi Arabia's biggest field, Gahawar, has an estimated 55 billion barrels, while ANWR has an estimated 10.4 billion barrels.

Hat tip to Mark Perry at the Carpe Diem blog site for these figures. Perry also is reporting a Bureau of Land Management study showing 279 million acres under federal management where oil and gas could potentially be extracted. But more than half of this is totally off limits. Off-shore, where another 86 billion barrels lie in wait, is also restricted. Then there's liquefied natural gas, oil shale, and the various coal-to-liquid carbon-capture and sequestration technologies that would be priced out of the market by cap-and-trade.

The U.S. is the Saudi Arabia of coal, but we can't produce. We're still the world's third-largest oil producer, but we could be the Saudi Arabia of oil if our companies were free to drill. Oil CEOs like Rex Tillerson of ExxonMobil and David O'Reilly of Chevron keep saying this. But politicians aren't heeding their message.

Israeli saber-rattling against Iran could have accounted for some of last week's huge oil spike. And the unemployment story may not be as bad as the May jobs report suggests. An unexpected inflow of teenagers probably bloated the jobless figure by a couple tenths of 1 percent. And economist Jerry Bowyer points out that an unprecedented hike in the minimum wage may be derailing students looking for summer work. However, in a sign of future job improvement, the civilian labor force grew by nearly 600,000, meaning that more people looking for work could signal recovery. Weekly jobless claims are near 350,000, not the 500,000 of past recessions. Overall, at 5.5 percent, unemployment continues to be historically low.

But the economy is still in a slump, not a boom. And the fact remains that Americans are very worried about the economic outlook. This could be a recession election. And right now voter economic anxieties are all about oil, even more than the sub-prime housing credit problem.

Sen. McCain has a great pro-growth plan to slash corporate tax rates, a move that would be a strong tonic for jobs and wages. But he must bolster that plan with a new emphasis on deregulated energy markets that can produce a total portfolio of conventional and non-conventional energy, including major new drilling. He should couple that with a strong-dollar message to curb both energy and non-energy inflation, which is shrinking consumer paychecks and damaging corporate profits.

More oil, more jobs, better wages, and low inflation. That's a winning GOP message this fall. But what if Sen. Obama gets there first? It's unlikely, but not out of the question. Either way, voters will move to the candidate who connects with their worries. Right now those worries are up for grabs.

Larry Kudlow, NRO's Economics Editor, is host of CNBC's Kudlow & Company and author of the daily web blog, Kudlow's Money Politic$.
By Larry Kudlow
Reprinted with permission from National Review Online

[mrsudonim]

Not very long ago I was hearing that the issue of high fuel prices was the lack of refinery capacity, not crude oil availability. If the oil companies are allowed to drill for more oil where will it be refined? Will the prices stay high because they have to build more refineries. Why not build refineries now with some of those outrageous profits.

I think our pocketbooks are being held hostage to increased drilling rights. The fact is that there is only so much oil buried on this globe and someday it will be gone - what then?

This is an opportune time to research crude oil alternatives. I am against further drilling as it will only prolong the agony. Prices won''t go down, global pollution will continue to increase, and quality of life will be further diminished.

[endofempire]

midwife4: You are spot on. Write your congressboob and let them know how you feel and why you''ll be voting them out of office next elections. Then it won''t make any difference how much money big oil was promising to put in their pockets. We need action to allow us access to the Suzuki, Daihatsu, Peugeot, Citroen, Nissan and Hondas that the rest of the world is driving today. For our elected officials not to do so and to allow our nation to continue in its downward spiral is simply criminal.

[endofempire]

No. No drilling, period. Just another misdirected tree hugging battle cry. Just like Ethanol, which is causing children in the third world to starve to death because of the high price of basic grains. Get a #$@!*# life! Drill away, boys, if you can bring the price of oil to levels that won''t topple our nation. At the same time, lets dissolve the EPA and the DOT or at the very least, hog tie them. Then we can buy the same fuel efficient cars everyone else has access to in the rest of the world. Ford and GM do make these 65 mpg cars, but they can''t sell them here because we are so much more refined and better than the French, the Brits and the Germans that we have special requirements, or so the DOT and EPA keep on telling us!!! I would dare say that someone in the oil industry is funding some high heeled officials in the EPA and DOT to keep these cars out. The Smart lost 15 mpg when it got sent over here, because, again, even though in its original 65-MPG European format it was perfectly acceptable to Germans, Swiss and French, it was not good enough for us Americans, or so the DOT and EPA conveniently decided on our behalf.

[javadavid]

I''m sorry, but we can do so much better than simply drilling our country to smithereens. What we need is NOT more drilling. More drilling will not result in cheaper gas prices at the pump. More drilling will not result in a long-term energy source. What we need is for taxpayers to stand up and demand that their dollars not be used to reward huge oil companies that have no interest in real energy independence. The only thing that matters to them is their profits. Our tax dollars should be used instead to develop sustainable energy generation. Investing in sustainable energy will result not only in all the energy we need forever without drastic environmental consequence, but also in the development of entirely new economic benefits--more jobs, new types of companies, cheaper energy costs.

[midwife4]

The article stated:
"The public wants more energy and more fuel to cut high prices and spur economic growth". What long term good does this band aid approach do? More, more, more. We Americans need to learn to live with less. We''ve been gluttons long enough. Lets have a real fix! Aren''t we smart enough to come up with alternatitives to our oil dependence? Call me a *** eyed optimist but I think we can.

[midwife4]

MOre oil, more drilling, more wasting of resources is not the answer. In 1979 I drove a datsun 210, it got 40 mgg''s. In 1998 I drove a Saturn Sedan, it got 40 mpg''s...What''s the deal? Why don''t we have cars that go 100 mpg''s at this point? We''ve been working on clean energy, solar power since the 70''s...Where are these cars? Where are the alternatives that were promised us when I was in highschool? It''s not about environmental exploitation. I am a voter. I don''t want more drilling. I want energy options! It''s ignorance to keep drilling and not solve the problem which is lack of good use of technology and clean fuels.

[pitifulgvt]

drill, but let intelligent government management pick exactly where; not the energy companies. have strict and enforced guidelines on exactly where and how access routes are constucted and maintained, how - and what regulations the site must conform to and basically force the companies to pay for it and do it right - something that can be done quickly and easily if we had good leadership. by the way, vote all the encumbents out of office as soon as possible. how can they be in congress for 20-30 years and not be responsible for our current problems. the power of encumbancy has brought powerful incompetency. don''t believe what they say but what they don''t do and throw them all out - its the only way to convey the message, hold them accountable. in my recent primary vote i had 54 choices for office. knowing only the major players but not wanting to waste a non vote i voted for every woman and non office holder - and i''m a man. something has to change, somehow and the box is the only real answer. vote ''em out asap.

[hsinco-2009]

You can''''t reduce dependence on foreign oil by drilling. We need government mandated conservation methods and tax breaks to develop new technology.

We have had a fascist regime for 8 years with the oil companies running the government and our foreign policy. All of a sudden this is a problem? This is Mission Accomplished for the Bush Cabal. Look, they got all the conservative morons to back more drilling. You know the ones who are "entitled" to drive their Hummers to their sprawling houses in the suburbs.

Again the NRO shows their absolute ignorance and failed conservative ideology. Bozos!!!!!!

Posted by noloyalisti at 06:02 PM : Jun 11, 2008

We would have been there if Reagan hadn''t killed all of those conservation/energy research programs begun under Carter.

[jimfinster]

Some people will not be satisfied until every last vestige of the natural world is destroyed, paved over, polluted, covered with freeways and mcdonalds and walmarts.

[messiahx4eve]

Those who wish us to drill and kill, I say you neocon blenderheads get on YOUR friggin'' knees and start to THRILL!!!! If you wanna skrew us, at least give us a kiss first.