Senator Byron Dorgan Tries To Justify His Opposition To Drilling For Oil In ANWR

And the entire crux of his argument seems to be “McCain voted against ANWR drilling too!”
From Fox News Sunday:

WALLACE: Let’s start with the most obvious solution, domestic drilling. And as prices soar, public opinion is turning around on this subject. According to a recent Gallup poll, as you can see there, 57 percent now favor drilling in areas that are off-limits.
Senator Dorgan, if we started drilling in ANWR, the Arctic National Wildlife Refuge, if we started drilling offshore, if we started mining shale rock out West, over time we could dramatically reduce the price of energy and our dependence on foreign oil.
Why are Democrats blocking drilling as part of the mix of solutions?
DORGAN: Well, first of all, I don’t believe that statement is true. I mean, we have opened up at least 181 in the Gulf of Mexico, substantial oil and gas reserves.
I and Senator Bingaman joined Senator Domenici and then Senator Talent as the four people that offered the legislation to open that up.
You started with ANWR, which everybody always starts with, but even John McCain has voted against drilling in ANWR. He said, “We ought not drill in the Everglades, we ought not drill in the Grand Canyon, we ought not drill in ANWR.”
I believe we need to do a lot of things, including additional production, including offshore production, but we also need to move dramatically toward renewable energy as well.
And one final point. In North Dakota we have just had the largest assessment — North Dakota and Montana — in what’s called the Bakken shale field, the largest assessment of recoverable oil reserves that was ever issued in the lower 48 — over four billion recoverable barrels of oil.
So there is a lot of drilling going on, and I hope that we see more in the right places.

More drilling in the right places? First, why does Senator Dorgan think it’s his job to define what is and is not the “right place” for oil production? Isn’t the “right” place determined by where the oil is? And if we need oil, and there’s oil in ANWR, why can’t we drill there? And why does Senator Dorgan also oppose developing oil shale deposits in Colorado?
He tries to take credit for expanding production in places like the Gulf Coast and here in his “home state” (if you can call a place where he only visits to campaign his “home) of North Dakota, but the reality is that such production took place despite the manipulations of protections like Dorgan. Not because of it.
Dorgan goes on to defend his opposition to drilling in ANWR because there is more oil in other areas:

WALLACE: I just want to follow up with you for a second before I bring in your colleagues here. ANWR — and let’s take a look, because we have a map of ANWR.
In a refuge the size of the state of South Carolina, we’re talking about drilling in an area the size of Washington’s Reagan Airport. ANWR contains 10 billion barrels of oil. Can we really afford to put that off limits?
DORGAN: Well, there’s far more oil in the Gulf of Mexico than in ANWR, far more oil there. And I’m someone who believes we ought to be drilling in a portion of that.
But as I said, even Senator John McCain has voted against drilling in ANWR. Don’t lay that just at the feet of Democrats. That is a large area set aside in legislation signed by Dwight Eisenhower. To suggest that ought to be the hood ornament for what we do in terms of solving our energy problem is just wrong.
We need additional drilling. We need renewables. We need conservation, efficiency — all of those things in a very aggressive way.

That there are bigger oil deposits in the world than those which lay under ANWR doesn’t not sound like a sound argument for opposing drilling in ANWR. We know there’s oil in ANWR. We know we can get to it and bring it to market. The question is: Why can’t we do that? Saying “there more oil in the gulf coast than in ANWR” does not answer that question. Dorgan, being the slippery politician that he is, knows he can’t answer that direct question so instead obfuscates with nonsense about oil deposits in the Gulf.
Typical.
Next up: Dorgan defends the windfall profits tax by saying that evil Exxon doesn’t invest all of its profits back into oil exploration:

WALLACE: Senator Dorgan, let me bring in another part of this equation, because the Democrats’ big idea in this area is a windfall profits tax on Mr. Cavaney’s employers, the big oil companies, to finance alternative energy as well as more conservation.
How does the government decide what’s a reasonable profit and what is a windfall profit? And how do you answer the fact that back when this tax was imposed in the ’80s, domestic production dropped and foreign imports increased?
DORGAN: Yeah. Well, let me talk about Exxon just for a moment. Last year, Exxon used $31 billion of profits to buy back their stock and only half as much for drilling and exploration.
I mean, you know, look. With respect to a windfall profits tax, it’s constructed so if they’re using that money to expand supply by drilling, they wouldn’t pay it. I mean, that’s the approach that makes sense to me.
But I want to talk about one other thing. This issue of production is a canard. We’re producing more in this country. Some Democrats, including myself, have supported additional production as well.
But let me say this. There is nothing at this point that justifies the price of oil or gas in this country with respect to supply and demand. Every month since January our domestic crude supply has gone up. Demand is going down because the economy is slowing. And yet the price of oil and gas are going through the roof.
Why? Because there’s an orgy of speculation going on in the futures markets, an unbelievable amount of speculation by hedge funds, investment banks and others, that are driving up prices for the American people.
And that ought to be one area at least where Democrats and Republicans can work together to say let’s wring this speculation out of…
WALLACE: Well, let me just follow up directly on that, because there is talk you’re blocked on — you want a windfall profits. They want more drilling. You’re not going to be able to pass either of those, it appears.
Are you willing to separate out some federal action to stop oil speculation?
DORGAN: Absolutely. Absolutely. I proposed that. I think others have proposed it. We ought to get at this. There’s nothing with respect to supply and demand that justifies the current price. This is all about a lot of speculators.
Will Rogers talked about that eight decades ago, people buying things they’ll never get from people that never had it, making money on both sides. These are people that don’t want to take delivery of oil. They want to speculate in the market, and they’ve driven up prices in a dramatic way.

I wasn’t aware that it was the duty of US Senators to tell businesses like Exxon how they’re to spend their profits. Dorgan acts as though high gas prices are a good thing for the oil industry. In reality, long-term high fuel prices are bad for companies like Exxon because the higher prices become the more likely it is that another business will develop a cheaper energy alternative that will cut into oil’s market share.
Dorgan isn’t a stupid man. He knows that high gas prices aren’t the result of oil company greed, but he throws that theory out there anyway because that’s more convenient than explaining to the American people that gas prices are so high because politicians like him are taxing and regulating the oil companies to death.
Finally, Dorgan lays all the gas price woes of the nation at the feet of a nasty sort of person called a “speculator.”

WALLACE: Senator Dorgan, let’s look at what Barack Obama said last week about — or this week, rather, about the spike in gas prices. Here it is.
(BEGIN VIDEO CLIP)
QUESTION: So could these high prices help us?
OBAMA: I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing.
(END VIDEO CLIP)
WALLACE: Senator Obama’s gradual adjustment — he seems to be saying that the rise in gas prices may actually be helping us form a better energy policy.
DORGAN: Well, it certainly forces some conservation for people that can’t afford to fill their tank. Let me say this.
WALLACE: So he favors…
DORGAN: No. No, he does not. But let me say this. You just heard him. Let me say this. We’ve had people testify before the Congress that says there’s — excess speculation that’s going on in these markets has increased the price of gas and oil by 20 percent to 30 percent.
We’ve got to wring that out. That’s unfair to the American people to be paying this kind of a price because speculators are having a field day.
And one final point. We tap dance around this table talking about everything except that which we have to talk about, and that is change. We’ve got to address renewables in a very significant way. We can’t drill our way out of this.
Yes, we should produce more. We should drill more. But you can’t drill your way out of this. We have to have a different energy mix, because 60 percent of our oil now comes from off our shore. This is all about change.

For all Dorgan’s hatred of speculators, it’s worth noting that speculators pay an important part of any market. As Victor Niederhoffer explained:

Let’s consider some of the principles that explain the causes of shortages and surpluses and the role of speculators. When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by the high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell. This reduces prices, encouraging consumption and exports and helping to reduce the surplus.

To put it simply, speculators provide the sort of market forces that defend against excessive shortages and surpluses. While speculation may at times inflate the price of a given commodity, on the whole without speculators the oil markets would be much more volatile than they are now.
That that Dorgan, the consummate economically-illiterate protectionist, is capable of grasping that concept.