Good Morning Middle America, your King of Simple News is on the air.
Way, way back in ancient times, all the way back to 1973, the members of OPEC threw the U.S. into a recession by establishing an oil embargo. In other words, they cut us off from their oil and the U.S. suffered its first fuel shortage since the end of WWII.
OPEC consists of Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Socialist Peoples Libyan Arab Jamahiriya, United Arab Emirates, Algeria, Nigeria, Ecuador, Angola and Gabon. As you can see, these are all well governed stable countries and friends of the U.S. who we can trust.
For those of you who believe that, I am looking for investors for my new invention that burns plain dirt in your automobile.
But getting back to 1973; never underestimate our government leaders’ abilities to deal with the most challenging of adversaries…by giving a speech. Richard Nixon gave a dandy in November of 1974.
Mr. Nixon was on a roll that day and trotted out his “Project Independence.” The United States, Nixon asserted, should be independent of all oil producing countries, “including our Canadian friends,” by 1976. Canadians “can be pretty tough on us sometimes when they are looking down our throats.” I suspect that Mr. Nixon may have previously been enjoying another famous Canadian import, fine blended whiskey.
The U.S. of course, would never take advantage of our neighbors…unless under the unusual circumstance of our having something that they wanted.
Nixon went on to promise massive public funding for the exploration of American’s remaining energy resources-Alaskan oil and gas, offshore oil reserves, nuclear energy and synthetic fuels from coal and oil shale. Well, if that won’t do it what would?
Mr. Nixon’s plan worked so well that by 1977, the United States was importing a new record high of 46.5 percent of the oil that we needed to fuel our vehicles, heat our homes, and run our industry.
Okay just a minor setback, but have no fear, government is here. In reaction to the continual rising prices and elevated levels of imports, our Nation established a Department of Energy, spent billions of dollars on researching and finding new sources of energy supply, and redesigned our cars, houses, and factories to make them more energy efficient. Hear, hear.
This heroic effort of increasing government while spending billions of dollars and ignoring all geological and scientific evidence to the contrary, has over the past 31 years, been extremely effective at increasing our foreign oil dependence to 75%.
You will note that all of the solutions touted in 1973 are the same ones that are being rerun in 2008. The problem in 1973 was of course that oil is finite, while the problem in 2008 is that oil is finite.
How good is government forecasting? The Annual Energy Outlook 1998 (AEO98) reference case, projected that net dependence would exceed 50 percent in 2000 and rise to 66 percent by 2020. How about 75% in 2008? This is your tax money at work.