Who's Really to Blame for $4 Gasoline?

Faced with blistering criticism from Senators this week, Exxon Mobil CEO Rex Tillerson blamed "speculators" for the high price of gasoline at the pump.  He claimed that the market price of oil really should be $60 to $70 per barrel, and that the extra $30 to $40 per barrel being paid right now is the result of speculation by traders making bets on margin.

Bloggers on Forbes picked up the cry, calling speculators "social parasites, gamblers who produce absolutely nothing of value."

Think about what this means for a moment.  It means that the CEO of Exxon Mobil said that we do not have a supply problem.  Or a demand problem.  The only problem we have -- a problem that costs $30 to $40 per barrel -- is speculators using margin to run up the price of oil and make a profit at society's expense.

How I wish someone would have pushed him on this point.  How I wish someone would have said:

"So, Mr. Tillerson, are you saying that we have adequate supplies?  That the moratorium on drilling in the Gulf following the BP Deepwater Horizon catastrophe is not giving traders legitimate reason to hedge against increasing prices for oil?  That your inability to drill in the Arctic National Wildlife Refuge is not affecting the price of oil?  That increasing demand from China, India, and other developing nations is not affecting the price of oil?  That unrest in the Middle East is not a legitimate cause for concern in oil markets?"

"Are you really saying, Mr. Tillerson, that speculation is the only reason why prices are above $60 to $70 per barrel?"

Obviously, he would never have agreed that speculation is the only reason why oil prices are so high.  He threw that out there because we live in a world of soundbites, where blaming speculators on Wall Street will shift the blame and get you good press in certain circles.

So why did Senators not press him on these points?  Because that Senate hearing was not about finding solutions to our energy problems.  It was about creating soundbites that Senators could use in the next election.

Which points out the real problem we face as a nation.  Neither our corporate leadership nor our political leadership is willing to have a serious conversation about the real problems and tough solutions we need to create a viable and sustainable energy policy.

John Howley
Woodbridge, New Jersey

Looking for Nuances in the Nuclear Debate

The must frustrating thing about politics in America is that every issue becomes a debate between black and white, right and wrong, Democrat and Republican.  Or maybe it's blue and red.

The fact is that most Americans are far more nuanced in their views on almost any subject.  And most solutions to our biggest problems are not binary.  The solutions are not either/or, yes/no.  The problems are far too complex for such simplistic thinking.

Take nuclear power.  It offers an abundant, low-carbon source of electricity without using up acres upon acres of land.  It can reduce our dependence on dirty fuels such as coal and oil.  It could make us energy self-sufficient at a time of great global unrest and uncertainty.


The question is how to we keep it safe?  More to the point, how do we keep it safe at a time when the debate in America is over which party will impose deeper cuts in government regulations and spending?

At least with nuclear power, we cannot have it both ways.  Nuclear power is not financially viable without government subsidies, guarantees, and/or free insurance in the form of liability limitations.  And nuclear power can turn catastrophic without vigorous safety regulations and enforcement.

If we want nuclear power, then we need to accept that it is sui generis (Latin, meaning unique in its characteristics).  We cannot just lump it into the overall black and white debate over the size and role of government in society.  Whatever we do with any other program or policy, we need a more nuanced approach with nuclear power.  Because if we're not willing to create unique solutions to the unique and potentially catastrophic risks of nuclear power, then we shouldn't go there at all.


John Howley