Thursday, September 18, 2008

Today in a town hall campaign meeting, Sarah Palin, who is one of the 'world's leading energy experts' according to John McCain, had this to say about Alaskan oil actually going mostly to Asia:
Oil and coal? Of course, it's a fungible commodity and they don't flag, you know, the molecules, where it's going and where it's not. But in the sense of the Congress today, they know that there are very, very hungry domestic markets that need that oil first. So, I believe that what Congress is going to do, also, is not to allow the export bans to such a degree that it's Americans that get stuck to holding the bag without the energy source that is produced here, pumped here. It's got to flow into our domestic markets first.
If that doesn't make very much sense to you, don't worry, it doesn't make very much sense to anybody. After much discussion, the general consensus is that she's advocating the idea that we may need to restrict oil exports, and artificially redirect it back into the US instead.

This is just dumb. First of all, when Venezuela does stuff like this, we rightly decry it as counterproductive protectionism, because it is.

Second of all, there's a reason most oil pumped in Alaska flows to Asia and not the continental US: it's much cheaper that way. If you impose trade restrictions and force the oil companies to pipe the oil a more expensive route, costs go up, and oil producers may even shut down, decreasing world supply and having exactly the opposite impact as intended. There's a reason that supply/demand curves and their implications are the first chapter of every economics textbook in existence.

I've said it time and time again: more oil should not, and cannot, be part of any solution to America's energy problems. The first law of thermodynamics prohibits it from being part of a long-term solution, and there's no feasible or productive way to increase supplies in the short-term to lessen the impact.

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