Obama's oil free utopia is precipitating yet more mayhem on our economy. Today, two major news stories concerning our lack of oil production highlight just how profoundly oil affects our economy.
The first story concerns the Trans Alaska Pipeline. The pipeline employs 2,000 workers and delivers 11% of our domestically produced oil to the other states. During its early years, when we weren't impounding the oil in Alaska, the pipeline transported 2 million barrels of oil per day. Now, less than a third of that volume flows through the pipeline, with the trajectory spiraling sharply downward. The Wall Street Journal reported today that there is growing concern about the adverse effects of decreasing oil flow on the pipeline itself:
Now, dwindling oil production along Alaska's northern edge means the pipeline carries less than one-third the volume it once did—and the crude takes five times as long to get to its destination.
That leisurely flow means the oil is above ground longer and more exposed to Alaska's frigid weather; the crude sometimes arrives chilled to 40 degrees. As the flow and temperature continue to drop, experts say the risks of a clog or corrosion increase, as do the odds of ruptures and spills.
Unless a technological solution can be found, the arcane physics of crude flow may force the multibillion dollar, 48-inch-wide steel pipeline to shut down—and determine the fate of the largest oil field ever found in the U.S.
There's one other, seemingly simple fix: Add more oil.
Unfortunately, Obama only has plans to decrease the oil flow even further. In addition to locking up new areas in Alaska for domestic drilling (like ANWR), the EPA, in conjunction with frivolous lawsuits from environmental legal defense groups, has blocked Shell Oil from exploring an estimated 27 billion barrels of oil in the Beaufort and Chukchi Seas.
Republicans must continue to focus their attention on more oil production so we can replenish the supply of the pipeline. They should fast track Bob Latta's H.R. 1777, which would open up ANWR, streamline the permitting and application process, cancel onerous regulations, and reform the lawsuit process. It would be good for Alaska and the rest of us; bad for Obama and the environmentalists.
The other big story of the day is the widening trade deficit. Government officials have been trying to mimic the Chinese by boosting exports through the devaluation of the currency. To that end, exports grew 4.6% to a record $172.67 billion in March; the biggest monthly gain since 1994. Yet, astoundingly, the trade deficit still jumped 6% to $48.18 billion. Why? The Wall Street Journal reports that we paid roughly $8.5 billion more for "all types of energy-related imports" in March then in February. The annual pace of our trade deficit is currently running at $562.8 billion, $67.5 billion more than last year. Thus, even a concerted effort to attenuate the dollar cannot stem the tide of the trade deficit which is exacerbated by sluggish domestic oil production.
Today's news simply reinforces the self evident fact that oil is the bloodline of our economy. The cheap and free flow of oil affects every corner of our economy and virtually every facet of our lives. Sadly, Obama understands this as well. As he seeks to replace our free market society with a centrally planned one, he is going for the jugular.
Ever since the killing of Bin Laden, Obama has been promoting himself as if he was one of those Navy SEALs. There is some truth to that notion after all. Obama is the Navy SEAL of economic warfare.
Cross-posted to RedState.com