McCain and Bush, Perfect Together

Just one day after John McCain called for the ban on offshore driling to end (completely reversing his previous support for the ban back in his 2000 campaign), Bush chimed in, pushing for offshore drilling and, for good measure, reiterating his support for drilling in ANWR.

Ironically, his own father, George H.W. Bush, banned the practice back in 1990 when he was President, perpetuating a Congressional law that had first been put into effect in 1981. W's brother Jeb, former governor of Florida, has also opposed offshore drilling.

As usual, Bush complained that the Democratic Congress is standing in the way of his solutions to the nation's problems.

"So my administration has repeatedly called on Congress to expand domestic oil production. Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal -- and now Americans are paying the price at the pump for this obstruction."
(from Whitehouse.gov)

Bush would like us to believe that the only reason the oil prices are high is because Congress hasn't allowed oil drilling in offshore areas or in the Arctic National Wildlife Refuge.

Obama and other Democrats quickly rejected the call for domestic drilling in environmentally sensitive areas.

"'This is not something that’s going to give consumers short-term relief and it is not a long-term solution to our problems with fossil fuels generally and oil in particular,' said Obama. Senate Majority Leader Harry Reid, lumping Bush with McCain, accused them of staging a 'cynical campaign ploy' that won’t help lower energy prices.

'Despite what President Bush, John McCain and their friends in the oil industry claim, we cannot drill our way out of this problem,' Reid said. “The math is simple: America has just three percent of the world’s oil reserves, but Americans use a quarter of its oil.'"

Let's face it, the fact that the oil prices are suddenly skyrocketing out of control is not due to an oil shortage. There is plenty of oil. And while there will be a shortage in the future due to developing industrial nations like China and India using more and more of it, that doesn't explain the sudden change over the past year.

No, it's speculators that are the problem. And something called the "Enron Loophole" which was explained tonight on Keith Olbermann's "Countdown."

It's a long and complicated story, but basically the story is that Phil Gramm, now McCain's chief financial adviser and a close friend, back in 2000 was responsible for including an Enron-backed provision in the Commodities Futures Modernization Act that exempted energy trading via electronic platforms from any regulation. (The act was approved without even a Senate hearing).

This led into the whole Enron scandal, where Enron worked to create false energy shortages in California, defrauding consumers to the tune of $40 billion. And guess what else? Gramm's wife, Wendy Gramm, was serving on Enron's board of directors at the time!

It is very likely that this loophole, which encourages speculation in the energy markets, may have something to do with the high oil prices. According to Jason Leopold in the Baltimore Chronicle:

"Last week, a study sponsored by Sen. Carl Levin, D-Michigan, concluded that speculative futures markets were partly to blame for the surge in oil prices that have pushed gas at the pump toward $4 a gallon.

At a May 15 news conference, Levin said the skyrocketing price of oil is 'not the result of supply and demand. Speculators have taken over most of the futures market.'"

No wonder McCain is changing his tune about the offshore drilling. He doesn't want anyone to look too closely at the whole situation and see how connected his chief financial adviser and good friend was with the whole Enron scandal.

Luckily, Congress recently overrode Bush's veto to pass a Farm Bill that included a provision to authorize the Commodities Futures Trading Commission to oversee energy trades on electronic platforms and to impose limits on traders' positions.

So we may yet see the oil prices decline again. But let's hope they don't go down too much - the American public has a very short memory, and the moment gas prices fall by a significant amount, people will immediately flock back to their SUVs or the next big powerful vehicle to come along, and forget all about saving gas and developing alternative energy sources.