Before the election of President Barrack Hussein Obama in November 2008, he gave an important speech. This speech (SF Chronicle Jan 17, 2008) was when Obama’s Promise to Bankrupt the Coal Industry was made. And your electricity rates will “necessarily skyrocket”.
So should we take those threats seriously? Well, President Obama, like Hillary Clinton, are Progressives. So how has our energy policy fared with Progressives over the history of America?
And secondly, Will the policies of the Progressives cause an energy shortage today, in 2012 and later?
The first clue I noticed was that, going back to GW Cartwright’s book, Mutual interests of Labor and Capital, where he noted:
“In 1918 there is a great fuel shortage.”
What? Why was there a shortage? Well, let’s read some more:
Not so long ago Amos Pinchot, a well-meaning millionaire philanthropist, proclaimed the gospel of conservation. “Conserve America’s Natural Resources” came like a call to duty from the lungs of the universe.
Nobody knew exactly what it meant, but it sounded good and everybody fell for it. The nation proceeded to conserve its forests, its water power, its undeveloped oil lands.
California never loses an opportunity to try anything called “Reform,” so she led the procession of progressive states for conservation. Among other laws along this line California created a Water Commission with wide discretionary powers and fat salaries, and woe to the man or corporation that dared to appropriate and use water for power or other purposes without complying with vexatious and annoying rules and restrictions.
The President (President Taft) withdrew millions of acres of oil-bearing lands from location. We all quit locating water sites, especially in California. There were no more hydro-electric power developments. Those who dared to drill and develop oil on lands withdrawn were promptly prosecuted by the government, and everybody was happy.
The raging mountain torrent swept onward to the sea unused. The lakes of oil lay undisturbed in subterranean caverns. The politicians had made a complete job of it.
By 1913 millions of willing dollars lay idle and uninvested and hundreds of thousands of willing hands were searching for something to do. But now! In 1918 there is a great fuel shortage. People in the middle west are freezing and in New York, too. The Fuel Administration finds it necessary to close down our factories at a loss of $100,000,000 per day. Ah! These corporations have failed in their duty. The railroad commission says we must co-ordinate them. The politician thinks “We ought to create another commission to take these corporations in hand.”
Bosh and nonsense! If the politician had kept his nose out of business and allowed the activities of our people to develop along natural lines without meddlesome, nosey, expensive political interference, we would have had an abundant supply of oil and gasoline at reduced prices. We would have extracted electric light, heat and power from a thousand mountain streams. Millions of dollars would have been invested and spent in California and thousands of men would have had fruitful employment. But neither man nor money will work full blast under political restraint.
OK, so what does that have to do with Progressives and government today? Digging deeper into the history of the time in the early 20th century, we find that Progressives were quite active and had great influence on Energy Policy. But was it good influence? The evidence will show that as we go through it.
From the paper, Running Out of Oil: Discourse and Public Policy, 1909-1929. In the 1920’s we find repeated instances where it was believed by some that:
The idea of America running out of oil, as current in the 1970s as in the 1920s. , offers a good example of the persistence over time of an element in petroleum-related discourse.
The fountainhead of the modern American conservation movement, George Perkins Marsh. , established the outlines of conservationist argument in his major work Man and Nature. , which was published during the Civil War. Marsh established major foci and themes, including alarm at the exhaustion of natural resources, insistence that resources be considered only in physical quantities and not in economic terms, condemnation of the “rottenness of private corporations,” and stress on need for governmental intervention, conforming to “the progress of science,” in the national interest. [Marsh, 1965, pp. 25, 35, 52]. Marsh’s book would be read in subsequent decades as a veritable warrant for the control of natural resources by government scientists..
As indicated, government scientists and officials would use this questionable study, ignoring the actual experience and knowledge of real oilmen to justify their various arguments of impending national doom regarding the future of oil and gas supplies. It was believed that by the late 1890’s America was running out of oil and gas:
…producers were depleting Pennsylvania oil fields so rapidly that these reserves would exhaust in a generation, and there was “no reasonable ground” to expect large new discoveries. By the late eighties, E. W. Claypole echoed them in saying gas fields were also approaching exhaustion, of special concern as natural gas use expanded in Eastern cities..
Despite improvements in drilling and handling methods, plus continual new finds in new reserves, government officials pressed forward with warnings of imminent exhaustion of resources.
Gifford Pinchot, chief forester of the United States. , … in 1908. , …arranging for the reprinting of Man and Nature.. …reinforced the exhaustion theme. and gave it a strongly nationalist thrust: “When the natural resources of any nation become exhausted, disaster and decay in every department of national life follow as a matter of course.”.
More importantly, we being to see the influence of Progressive politics with these “scientists” and government officials and the socialistic “fair share” moralistic mantra:
More revealingly, he disclosed his strategy in contention with “private monopoly,” the transformation of the dispute over control of natural resources into a moral issue, a “fair share” for every American. As for Marsh, for Pinchot the way to safeguard natural resources lay in governmental action, preferably directed by scientists.
The justifications for various controls, restrictions, and prevention of using assets were based on faulty assumptions, faulty data, and outright lies:
There was no way through such indications to make even approximately reliable judgments about amounts of petroleum underground..
Relying on hearsay and allowing a vast margin for error, Blatchley came up with estimates…came up with data dramatic enough to please any conservationist..
Then from these, advocating:
…he went on to advocate prioritization of gas use; gas used by industry rather than home consumers, as well as gas sold at bargain rates, was wasted gas.
And yet today, we are using vast amounts of gas in industry, with the current hatred by Progressive’s toward coal causing gas to be used to generate electricity.
Continuing the Progressive anti-business theme via fake shortage predictions:
Alarm at impending shortages could be used not only to justify bureaucratic functions but also to advocate limitation and regulation of operations of oil producers.[…]
Progressive anti-monopolists like Robert Marion La Follette described public lands bearing oil and other minerals as part of the national patrimony, to be administered by government for the public welfare and kept out of the hands of monopolies […] Keeping public lands with oil in public hands would create a federal oil reserve, available to thwart monopolistic schemes. As used by politicians like La Follette, conservationist discourse gave the anti monopoly theme a new channel to follow after the dissolution of the Standard Oil holding company in 1911..
The shortage theme went so far as the government to advocate the use of foreign oil reserves instead of American reserves. This is the actual movement that pushed the high import of foreign oil and gas that we still are under now.
there was an alternative policy option: that the United States provide for its petroleum needs by using the oil reserves of other countries. […] In fact, if the United States were running out of oil, it was wasteful to let the navy burn it as boiler fuel.
This is interesting also because we have now in 2012 a push for the Navy to have a ‘Green’ fleet burning so called renewable fuels at extraordinarily high prices in lieu of using conventional fuels.
The arguments were persuasive and emotional, though lacking in real facts:
But where Day argued in restrained terms, Requa’s language was worthy of Hollywood’s special effects departments:
Our very prosperity makes us careless of the future; we feast and revel while the handwriting blazes on the wall in letters of fire, and we do not pay it even the cold compliment of a passing glance. As a nation, we are wasteful, apathetic, and forgetful. We waste our natural resources with shameful prodigality; we are apathetic of the future, and we forget that our reserves of natural wealth are by no means inexhaustible” [U.S. Congress, 1916, p. 3]..
“In the exhaustion of its oil lands and with no assured sources of domestic supply in sight, the United States is confronted with a national crisis of the first magnitude.”.
The Progressive scares continued with a scare on the price of gasoline:
Americans would soon pay the outrageous sum of one dollar for a gallon of gasoline..
All of this continued the Progressive’s anti-business push for nationalization of oil.
No wonder that in February 1924, the Oil and Gas Journal told its readers that “the biggest and bitterest fight ever waged against the oil industry is on,” “the gravest crisis in the history of the industry.” Its columnists expected La Follette to push for nationalized oil.
Summarizing the paper’s notes on how soon the reserves would run out, it was estimated in various estimates that America would be out of oil and gas somewhere in the period of 1932 to 1942. Here is one:
The report told Americans what they had been hearing for almost twenty years; America was wasting petroleum, uses needed prioritization (read “federal regulation”), new discoveries probably would not keep up with demand, and America could run out of oil—this time, in about six years!. […] [FOCB Report, 1926, pp. 4, 6-10,12,14].
Notably, industry comments thought the government’s moves were Socialistic.
The Oil and Gas Journal thought this sounded “more like Moscow than Washington”. [OGJ, September 16, 1926, p. 40].
Throughout the whole period, the theme of involvement by Progressive’s to restrict, regulate, and kill business is evident:
For that matter, as the attempt to limit East Texas production in the early thirties would show, state regulation to limit production called forth anti monopoly opposition; warnings of shortages and their consequences sustained the traditional Progressive anti-monopoly ideology. in public discourse.
Then, just as it is now, Progressive’s would find it acceptable to lie or distort the truth to obtain their objectives:
Forecasts of shortage, he explained, were necessary because the American public had been “contentedly satisfied” with petroleum supply and the industry had shown “equally dangerous complacency.” The estimates of reserves had to be low “for to have encouraged the expectation of a yield greater than might later have been realized would have been to court hazard of economic harm…” […] Or, in other words, the experts intentionally misled the public for its own good..
The paper concludes that:
Conflict in discourse stood in the way of constructive cooperation between government and industry on conservation-related problems in the twenties, and it continues to be a barrier to constructive national energy policy.
Now going back to GW Cartwright on “Political Brains”:
Political Brains a Failure
So under government ownership and management of the means of production and distribution resorted to in socialist communities the best politicians, good speech-makers and hand-shakers but poor managers, are entrusted with the management and control of business enterprises, and the best business men, who rarely have the sauvity or the hand-shaking and speech-making proclivities necessary to political success, are retired to the rear ranks.
Industry languishes. Standards of living are lowered. The door of individual opportunity is closed. There are no inventions. Natural resources go undeveloped. No one will take the trouble to pioneer for there is no reward no grand prize.
Political brains cannot manage industry.
The conclusion we can draw is that we have been lied to, the facts have been made up out of thin air and distorted, since the Civil War. This has all been done in a push by Progressive’s for big government control of business, resources, and the people in opposition to the intent and purpose of the U. S. Constitution and the founding fathers attempt to create a government and nation of free prosperous people.
And in the Progressive’s push for regulation and anti-business legislation and regulation has the effect of killing business and energy production. It is a fact that prosperity comes from the use of energy. Reducing the production of energy decreases prosperity and increases the dependence of the people. And who would the people, failing because of these arrogant policies to be prosperous, be dependent on?
Government of course.
Now in 2012, government via the attempts at “Cap and Trade”, EPA, and various other regulatory and taxation schemes is over regulating and/or closing down perfectly good Coal Electric Generation, Coal Mines, Oil drilling and exploration, refining, distributing, gas production, and more. Government oppression toward energy production is worse than it was in 1918. And yet we are awash in the potential production capabilities of all these sources. America is the Saudi Arabia of Coal, has a current glut of natural gas that will last a long time, has an extensive and solid Electric generation and Distribution network, and plenty of oil production capability.
All of these energy assets would point toward unlimited jobs, prosperity, and more. Yet we are now facing energy shortages because of hostility toward known and proven energy sources, and large amounts of money being poured into unproven (and often proven bad) government (not business) funding of so called “green” energy. That same energy such as wind and solar, fail to generate, fail to generate when you need it, and fail to pay back on investments costing twice or more of the costs of proven energy.
Reducing energy production gives power to government. Power to Socialists. The same Socialists that have been wrong on energy since the Civil War.
To increase the prosperity of the people, the people must reduce the power of government. Period.