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Morning Bell: The People's House, Not Pelosi's Politburo

Posted By Conn Carroll On August 4, 2008 @ 9:22 am In Energy | Comments Disabled

This Sunday, Speaker Nancy Pelosi again promised [1] to use all her power to prevent the House from voting on any measure that would allow new oil exploration in the Arctic National Wildlife Refuge and the Outer Continental Shelf. A majority of Americans support new oil exploration [2] in these regions. Pelosi has tried to prevent the House from even debating whether or not to increase domestic energy production, but this past Friday a small group of conservatives took over the House floor after Democrats voted to go on a five-week paid vacation.

After the vote to adjourn, 48 conservatives [3] simply refused to leave, continuing to speak from the well of the House floor. The lights were turned off, the microphones were shut off, and the C-SPAN cameras were ordered to go dark, but the remaining members stayed to do the people’s business. Reporters were asked to leave the speaker’s lobby but the remaining conservatives escorted the press one by one to a press gallery directly above it. When Capitol Police closed the tourist galleries, the House members invited the visitors down to the chamber floor. A boy in the visitors gallery asked, “When do you think you’re going to get this vote? [4]” Republican Policy Chairman Thaddeus McCotter (R-MI) declared, “This is the People’s House. This is not Pelosi’s Politburo.”

Asked Sunday why she refused to participate in a debate on increased domestic oil exploration, Pelosi said she refused to “mislead the American people as to thinking it’s going to reduce the price at the pump [5].” This is a common talking point for Pelosi and her global warming alarmist allies [6]. And they almost always cite the same Energy Information Administration study [7] that “any impact on average wellhead prices is expected to be insignificant.” But the left, as always, does not tell you the whole story. First of all, the study only looks at possible oil exploration in the Outer Continental Shelf. It does not even consider the combined impact of ANWR and Outer Continental Shelf oil production. Furthermore, the study only analyzes a possible Outer Continental Shelf ban lifting in 2012. Conservatives want to lift the ban today.

But more importantly, the left simply does not understand how markets, particularly commodity markets, work. The purpose of commodity markets is to send signals to producers and consumers today about expected supply and demand conditions in the future. Since prices in commodity markets are set at the margins [8], even a small amount of expected increased future production can have significant price impacts today [9]. Recently two authors submitted an article titled, “The Effect of Opening up ANWR to Drilling on the Current Price of Oil,” to The Energy Journal. The Journal’s editors replied [10]:

Basically, your main result (the present impact of an anticipated future supply change) is already known to economists (although perhaps not to the Democratic Policy Committee). … It is our policy to publish only original research that adds significantly to the body of received knowledge regarding energy markets and policy.

In other words, the concept that anticipated increased oil production in the future can significantly lower prices today is so fundamental that new research proving the point is too redundant to be published. The EIA estimates that there is more than 31 billion barrels of oil in ANWR and the Outer Continental Shelf combined [11]. Compare that to just the 22 billion barrels of proven oil reserves [12] the United States has today.

More conservatives will return to the House floor again this morningto resume the debate on our energy future. Even Barack Obama has shifted has position [13] and is now open to increased domestic oil exploration. Hopefully Pelosi will undergo a similar evolution.

Quick Hits:

  • Alexander Solzhenitsyn [14], the Nobel Prize-winning Russian author whose books chronicled the horrors of dictator Josef Stalin’s slave labor camps, died of heart failure late Sunday in Moscow.
  • Iran failed to respond [15] to a two-week deadline to give a yes-or-no answer to negotiations on dismantling crucial parts of its nuclear program.
  • According to the Office of Federal Housing Enterprise Oversight, only four states [16] — Arizona, California, Florida and Nevada — have had declines of more than 4% in home prices over the past year.
  • After deregulation democratized air travel, rising gas prices [17] threaten to make flying a service for the affluent.
  • Barack Obama’s new Boeing 757 campaign plane was retrofitted to install four individual La-Z-Boy like chairs [18] made of plush leather.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/08/04/morning-bell-the-peoples-house-not-pelosis-politburo/

URLs in this post:

[1] again promised: http://www.usatoday.com/money/industries/energy/2008-08-03-offshore_N.htm

[2] Americans support new oil exploration: http://pollingreport.com/energy.htm

[3] 48 conservatives: http://dyn.politico.com/printstory.cfm?uuid=80941415-3048-5C12-007377B1320B20FF

[4] When do you think you’re going to get this vote?: http://www.cq.com/document/display.do?docid=2932605&sourcetype=6

[5] mislead the American people as to thinking it’s going to reduce the price at the pump: http://thehill.com/leading-the-news/pelosi-rips-gops-energy-tactic-2008-08-03.html

[6] global warming alarmist allies: http://climateprogress.org/2008/06/18/eia-bombshell-offshore-drilling-would-not-have-a-significant-impact-on-domestic-crude-oil-and-natural-gas-production-or-prices-before-2030/

[7] study: http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html

[8] prices in commodity markets are set at the margins: http://www.washingtonpost.com/wp-dyn/content/article/2008/06/19/AR2008061903488_2.html

[9] can have significant price impacts today: http://online.wsj.com/article/SB121486800837317581.html?mod=opinion_main_commentaries

[10] replied: http://www.foundry.org/2008/07/29/already-known-to-economists-%e2%80%a6-but-not-to-the-democratic-policy-committee/

[11] combined: http://www.foundry.org/2008/07/18/shes-afraid-shes-very-afraid/

[12] just the 22 billion barrels of proven oil reserves: http://www.eia.doe.gov/emeu/international/reserves.html

[13] Barack Obama has shifted has position: http://abcnews.go.com/Politics/wireStory?id=5495750

[14] Alexander Solzhenitsyn: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/08/03/international/i144323D13.DTL

[15] Iran failed to respond: http://www.latimes.com/news/nationworld/world/la-fg-iran4-2008aug04,0,2845838.story

[16] only four states: http://www.washingtonpost.com/wp-dyn/content/article/2008/08/03/AR2008080301572.html

[17] rising gas prices: http://www.usatoday.com/travel/flights/2008-08-03-fares_N.htm

[18] retrofitted to install four individual La-Z-Boy like chairs: http://www.cbsnews.com/blogs/2008/08/03/politics/fromtheroad/entry4317827.shtml

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