You appear to be a pleasant slightly chubby guy Neil. You are the successful uncle that the traditional family loves to have over for Sunday dinner so that the young members can admire you as a positive and informative role model. But in truth, this particular nephew is greatly disappointed with you.

Hopefully, at that dinner table you would communicate with us in plain common sense terms when asked to be informative. You would not hide behind the jargon of your profession i.e., supply and demand, market forces at work, hedging, and so on. You would answer your favorite nephew in the simplest terms that he could understand, and if necessary you would blame things that shouldn’t be so on (bad men doing bad things).

In my years studying economics at Columbia, I emerged becoming aware of certain basic realities. The genuine, unaltered economic conditions can be enumerated on the fingers of one hand. The rest of economics is much of a science as alchemy and the professionals in the field are constantly struggling to be wrong less than half the time. Even those realities on that one little hand can be perverted and negated by industry, governmental, and “economist” interference. One of the most obvious examples is elasticity. We made the butter demand elastic by encouraging the production of margarine. We subsidized the margarine industry. We then subsidized the dairy industry by buying their butter from them. The ironic result was that when the direct federal food surplus was being used for distribution to poorer families in the 60’s, working people who did not need assistance were buying margarine in the markets while the unfortunates were being given free butter. No, cholesterol had nothing to do with it back then.

When we speak on alternate sources of energy, we are talking about the elasticity of petroleum. Again, subsidies, special interests, and the whole host of infernal demons plaguing US government swoop down and interferes with the remaining realities of that one little hand. I won’t bore you with the obvious inanities of producing ethanol from corn or from leaving nuclear energy as the mad relative locked up in the addict. After all, a polite nephew does not want to berate his uncle.

Like alchemists, economists protect themselves from accountability by developing and sharing whole plethora of terms, secrets, and formulas that are purposely not to be understood by anybody but themselves and cover up the fact that the philosopher stone is strictly in their mines or away to leach on the genuinely productive elements of society.
I am afraid that too often your program seems to be a social gathering of alchemist.

But let’s get back to this naïve uninitiated but genuinely concerned nephew of yours:
1. Uncle Neil what does it mean when we lease federal land for exploration and extraction, one of those fingers on that little hand says that there is value given for value received, what value is BP given for drilling for oil on presently leased land in Alaska. What value is received by the United States government and US citizens in return?
2. Underground oil reserves (and they are usually underground) are not unlike huge lakes. Now if you stick a giant straw in any even in the remotest corner of such lakes you are theoretically able to drain the entire lake. Though I understand that specific procedures such as the pumping in of water to push up the actually petroleum may make certain locations additionally desirable the basic principle remains the same. In other words, Uncle Neil if BP sinks its straw in Cuban waters it can drain the so-called American oil reserves in Florida waters. When we are still arguing over drilling off the coastal waters.
3. If international (foreign) oil companies pool their extractions from their many leases – American or otherwise, and go on to the world market, what difference does it make which political territory any of this petroleum is coming from, in other words Neil tell me why the Alaskan oil extracted by BP in Alaska is treated differently than were it to be forthcoming from anywhere else? Hopefully, there is a distinction, otherwise, we are bunch of idiots.

Just tell me how and make your nephew happy.



PS
If government is so completely inept that we can neither explore, extract, nor refine our own petroleum effectively, why is gasoline selling for half of our price in Mexico?