and another thing... Harkin Back to the Dark Ages
  from: Offshore Engineer
  by: Rick von Flatern
  Monday, May 01, 2000

Residents of Iowa, located as they are in a land-locked state with a farm-based economy, are about as familiar with the workings of the upstream oil industry as they are with tuna fishing. Preying shamelessly on that ignorance, Senator Tom Harkin (Democrat, Iowa) last month publicly insisted that Energy Secretary Bill Richardson 'investigate whether the recent skyrocketing prices of gasoline and other petroleum products have resulted in unwarranted windfall profits for US and foreign oil companies'.

In his letter to the secretary, the senator made a list of information he and his congressional colleagues would require before they could actually do something about fuel prices. It is not a bad plan. Knowing as he does that he is in fact helpless in the face of a simple matter of supply and demand, Harkin's missive implies the fault could well lie with those evil and greedy oil companies.

Including the 'foreign oil companies' and 'windfall profits' reference was a stroke of genius. It instantly conjures in the minds of good, hard-working middle Americans the hardships of the 1970s brought on by what the press was pleased to call the 'Arab oil boycott'. Without saying as much, being the righteous social liberal he is, Harkin brilliantly invokes images of dark-skinned, headdress-wearing, Rolls Royce-driving, Middle East potentates laughing at the plight of their oil-starved victims in the West.

After the financial disaster that was the 1980s and most of the 1990s, Harkin also has the gall to ask how much oil company profits are contributing to oil prices. In the next breath he wants to know how profit margins at today's oil prices compare to those of a year ago, 'profit' of course being a profanity in Washington-speak loosely translated as 'gouging'. One is forced to wonder whether his math or economics skills are the more lacking.

Such questions are not particularly unsettling coming from his constituents. On a modern American farm, the cost of fuel is no small matter, consumed in such quantities hat rising fuel costs directly attack profits. Family farms in America have been failing at a pace challenged only by small, independent oil companies and they deserve an explanation for anything that worsens their plight.

But modern farmers are also commodity experts who are long familiar with the vagaries of futures prices. As most are also well educated and possessed of a sophisticated understanding of how markets work, Harkin's cynical and patronizing response to their concerns is nothing short of insulting.

Harkin's hints that he suspects a conspiracy of greedy oil companies and their foreign cohorts is the act of a man desperate to misdirect voters' attention. He knows full well that the recent run up in fuel prices in America is the result of bad, some would say non-existent, energy policy written by men and women like himself who have long made political hay at the expense of the American petroleum industry.

Harkin and his fellows can ill-afford for Iowans to learn that the US can do nothing about the situation because their inaction has left the country hopelessly dependent on imported oil. It is a fact that would not play well in Des Moines.

His constituents are not fools, after all, and soon they would ask how such a thing came to pass. They would ask why so much land and sea that holds the promise of oil and gas is off-limits to exploration. And they might want to know how 500,0-00 professionals and technicians were forced from the industry, as Texas oil man MB Landry put it so eloquently in a recent letter to the senator, 'without so much as a whimper from the party that's looking out for the working man'.

Imagine the outcry from Iowans told they must pay more to run their tractors because some ill-informed, but politically powerful, US coastal states fear their beaches would be spoiled if oil and gas were produced offshore Florida or California or New England.

And how those voters would register their displeasure at the polls were they to learn that Harkin prefers to send young Iowans to war to preserve the flow of oil from Kuwait than risk being associated with a piece of legislation designed to encourage a strong domestic petroleum industry.

Likewise, incumbents would rather not explain to voters that hundreds-of-thousands of barrels-per-day of oil products were lost forever when Washington turned a deaf ear to stripper well operators who warned they could not keep their wells pumping when oil was selling for $10 a barrel.

In his last point to the energy secretary, Harkin asks: 'Have the actions of US oil producers or refiners in cutting purchases of crude oil or letting reserves fall to historically low levels contributed to the price increases? If so, how?'

The senator has more aides-de-camp than Eisenhower at Normandy, so it is difficult to believe his ignorance is innocent. Indeed, with the intellectual resources at his fingertips and in light of his own campaigns to preserve huge corporate welfare handouts to agricultural interest so close to his heart, his dissembling over low inventories and the natural reaction of the marketplace to them, is almost embarrassing.