What “Oil Crisis”?

by | Aug 23, 2005

With oil prices passing the record-breaking $60 a barrel level and heading even higher, the word “crisis” is now being used and all sorts of political “solutions” are being proposed. Is there really a crisis? One of the dictionary definitions of a crisis is “the point in the course of a serious disease at which […]

With oil prices passing the record-breaking $60 a barrel level and heading even higher, the word “crisis” is now being used and all sorts of political “solutions” are being proposed. Is there really a crisis?

One of the dictionary definitions of a crisis is “the point in the course of a serious disease at which a decisive change occurs, leading either to recovery or to death.” Is that where we are when it comes to oil?

Are we either going to solve the problem of oil or see it destroy us economically?

Political and media definitions of “crisis” are much looser than the dictionary’s definition. In political semantics, the word “crisis” has come to mean any situation that someone wants to use to justify doing something that will be called a “solution.” Crises are a dime a dozen by political and media definitions.

Almost as common as crises are conspiracy theories. Whenever the price of gasoline shoots up, California’s Senator Barbara Boxer can be depended on to demand an investigation of the oil companies. The fact that previous investigations have found no conspiracies is no deterrent.

Why, then, are oil prices so high?

There is no esoteric reason. It is plain old supply and demand.

With the economies of huge nations like China and India developing more rapidly, now that they have freed their markets from many stifling government controls, more oil is being demanded in the world market and there are few new sources of supply.

What should our government do?

We will be lucky if they do nothing. But, with Congressional elections coming up next year, that is very unlikely. Candidates for Congress next year, and politicians hoping to run for President in 2008, are virtually guaranteed to come up with all sorts of “solutions.”

These “solutions” will be packaged as brilliant new ideas, courageous and far-seeing. But most will be retreads of old ideas that remain untested or which have been tested in the past and found wanting.

Price controls, arbitrary new higher gas mileage standards for cars, “alternative energy sources,” and other nostrums are sure to surface once again.

The last time we had price controls on gasoline, we had long lines of cars at filling stations, these lines sometimes stretching around the block, with motorists sitting in those lines for hours.

That nonsense ended almost overnight when President Ronald Reagan, ignoring the cries of liberal politicians and the liberal media, got rid of price controls with a stroke of the pen.

What happened is what usually happens when government restrictions are ended: There was more production of oil. In fact the 1980s became known as the era of an “oil glut” and gasoline prices declined.

Today production is being held back, not by price controls, but by political hysteria whenever anyone suggests actually producing more oil ourselves. Organized nature cults go ballistic at the thought that we might drill for oil in some remote part of Alaska that 99 percent of Americans will never see, including 99 percent of the nature cultists.

People used to ask whether there is any sound if a tree falls in an empty forest. Today, there are deafening political sounds over oil-drilling in an empty wilderness.

Nor can we drill for oil offshore, or in many places on land, again for political reasons. Nor can we build enough refineries or even build hydroelectric dams as alternative sources of power.

Many of the same people who cry “No blood for oil!” also want higher gas mileage standards for cars. But higher mileage standards have meant lighter and more flimsy cars, leading to more injuries and deaths in accidents — in other words, trading blood for oil.

Apparently the only things we can do are the things in vogue among nature cultists and the politicians that cater to them, such as windmills and electric cars. That is why we would be better off if the government did nothing and let people adjust their own energy consumption individually in their own ways as the prices of gasoline and fuel oil rise.

But that is also politically unlikely.

Thomas Sowell has published a large volume of writing. His dozen books, as well as numerous articles and essays, cover a wide range of topics, from classic economic theory to judicial activism, from civil rights to choosing the right college. Please contact your local newspaper editor if you want to read the THOMAS SOWELL column in your hometown paper.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

Have a comment?

Post your response in our Capitalism Community on X.

Related articles

Are the Democrats betraying Israel?

Are the Democrats betraying Israel?

Both Biden and his predecessor, President Barack Obama, promised that they had Israel’s back, but it now appears that they are painting a target on its back at a time of its greatest vulnerability.

No spam. Unsubscribe anytime.

Pin It on Pinterest