The following was provided on behalf of Jeff Semon, a Lexington Republican running for U.S. Congress in the Fifth District.
Bill O’Reilly is often maligned by the left wing for being wrong in his political views, so it is a rare exception when conservatively minded individuals disagree with O’Reilly as well. Recently, Bill has been in favor of a proposition to prevent petroleum manufacturers from exporting gasoline that is made domestically here in the United States. The premise of this argument is that stopping exports will lower prices for people here in America.
This view is also supported by U.S. Rep. Ed Markey (MA-5) who is in favor of this failed protectionist position for both gasoline and liquefied natural gas (LNG) and has introduced legislation to implement this policy.
Bill O’Reilly and Ed Markey are wrong.
While on its surface this position may seem like a good idea, it tries to work around the inescapable law of supply and demand. Oil is a global commodity and, as of right now, the United States is a net exporter of gasoline and fuels derived from crude oil. (The Federal Reserve also plays a large role in oil prices, but that is a discussion for another day.)
However, the underlying price of oil is the key component in this matter. That price is predicated purely on supply and demand principles. There is no way to avoid it. If gasoline manufacturers are at the point of domestic oversupply – as they are currently – and are not allowed to export that excess supply, it will become cost prohibitive for them to keep producing gasoline.
Gasoline manufacturers will then raise prices of what they are allowed to sell or produce less which will then result in decreased supply and higher prices. The same corollary can be drawn for natural gas producers.
The only way to reduce energy prices is to increase supply or decrease demand...or both. Markey and the Obama administration are fully focused on decreasing demand by attempting to implement laws like Cap & Trade (Waxman – Markey bill) and wasting billions of taxpayer dollars on failed green energy initiatives like Solyndra and A123.
Decreasing demand here in the U.S. would theoretically reduce our energy prices if we lived in an insulated world, but the reality is, global demand for oil will continue to rise. Unless supply keeps pace with demand, prices will go up regardless of demand here in the United States.
We have the opportunity to dramatically increase domestic production by safely and responsibly developing our own domestic natural resources which would, in real terms, lower the price of petroleum related products and energy across the board. Implementing a policy of domestic energy development not only increases supply, it breaks the back of speculators who are after all, speculating on government policy itself.
Would it make sense for the same parallels to be made for any product we make? Whether it is food, Fords or gasoline, preventing exports does not keep prices low. It simply decreases the amount of revenue the manufacturer receives and the level of potential wealth brought into the U.S.
Cheaper energy benefits all Americans. It is the essential ingredient of any robust, growing economy. It makes it easier for people to make ends meet by lowering the cost of not just energy, but any and all goods that rely on energy to be made.
The left is perpetually focused on “equality of income” rather than “equality of opportunity” and their modus operandi is to demonize success while pandering to a misinformed base. It is an inherently flawed argument that fails a logical threshold. The intellectually honest way to improve the lives of every American is to lower prices through free market principles. This frees up resources for private sector job creation and allows market forces to “stimulate” empowerment rather than entitlement.
While Bill O’Reilly’s motives may be pure, he is incorrect. The same cannot be said for Markey’s motives. Regardless, responsible leadership will do what is best for the American people and allow exports of all products enabling countries to send their wealth here, rather than the other way around.
Jeff Semon (pronounced Simone) is a candidate for US Congress in Massachusetts' 5th Congressional District. A graduate of the University of Massachusetts, Amherst - School of Management, Semon is a senior business consultant. He and his wife Nicole live in Lexington and had their first child in December. His campaign website is http://Jeffin2012.com.