RUSH: I was joking around about this yesterday but I really do have some serious questions about it. President Vicente Fox climbed aboard a drilling platform in the Gulf of Mexico yesterday to formally announce a new deep water oil discovery that he said could eventually yield about ten billion barrels of crude oil. This is the mother lode. It’s even bigger than the main field that they have now with offshore Cantarell Mexico. Luis Ramirez, chief executive of Mexico’s government-run monopoly on oil, said that this is the fourth deep-water well explored by their government-run monopoly, and they’re 3,000 feet down. They’ve got to go 13,000 feet, and they’re going to get there. I really am curious about this. We talk about security, we talk about independence, we talk about all kinds of things. How is it that the Mexicans can be drilling all over the Gulf of Mexico for oil and we can’t?
Where is the outcry? This is supposed to upset people. Seems they’re not dogged by the same environmentalist wackos that we are. They’re not dogged by a bunch of legislators that cower in fear every time some environmentalist wacko pops up to oppose something. We can’t even drill up in ANWR and ANWR doesn’t have anywhere near this kind of quantity, we can’t even do that. We got people in Florida and all through the Gulf coast saying, “You can’t drill here.” You can’t drill off the coast of California. We may as well just give up. If we’re going to have policies that make us dependent on foreign oil, if we’re going to have people support policies that make us dependent on foreign oil, I don’t want to hear anybody else ever again complain about high gasoline or petroleum prices. I’m not going to have any patience for it. You can’t sit there and say we’re going to be good stewards of the earth, and we’re not going to pollute and we’re not going to run of risks of oil spills and kill the animals, and then get mad when gasoline jumps a nickel or a dime or whatever. You can’t start complaining at the oil companies when we tell them where they can and can’t drill. We force them to go around the world where they can find other oil that’s not ours. That increases their costs. We drag them before Congress like happened yesterday and demand that they explain to us and justify why it is that they’re making all these profits and their prices are so high and so forth. You’ve got these blowhards pontificating. The very people that are telling these oil company people where they can and where they can’t drill, how they can do it, how they can’t do it. If I were the oil companies, I’d call my own hearing and I’d bring these congressmen and senators in, and I’d bring every environmentalist wacko in and I’d televise it, put it on this show: Why are you trying to harm our ability to do business in this country?
I need to correct myself. I got an e-mail from a subscriber at RushLimbaugh.com from Midland, Texas. He’s a petroleum geologist. He says, “Rush, ANWR has at least the ten billion barrel potential of the Mexican discovery. Many estimates at ANWR are 15 billion barrels.” To put that in perspective, I think the Mexicans right now are pumping out of their other field 1.6 million barrels a day. So it’s a pretty big number here, ten to 15 billion barrels. “Also, the DOE just made an estimate that the United States has a potential 50-year supply of oil at current production rates, if we’ll explore for and do development for our own resources. Did you know that the US is the third largest oil producing nation in the world right after Saudi Arabia and Russia?” Well, I didn’t know that. If you’re counting Saudi Arabia and the whole Middle East, I mean, the Emirates put out 10% of the world’s oil I read today in a scathing piece designed to discourage us from getting anywhere near them in any future ports deals. But the point is I still sand by this. If this geologist, if this petroleum geologist is right, and I’ve heard — by the way, I forget the name of the company, some oil company CEO in a trade magazine of their industry, said some of the largest reserves, untapped, would be hard to get under current technology that’s there, is right here in the Gulf of Mexico. It’s shocking how much oil is down there and around the Gulf coast. But that’s neither here nor there.
Once again, I get frustrated. We contradict ourselves. We have all this talk about we’re too dependent on oil, especially from the Arabs, especially from the Saudis, where 15 of the 19 hijackers on 9/11 came from. “Why, we’re too dependent! We’ve got to do something about it! Let’s all drive Priuses and hybrids!” It’s not the answer right now, maybe down the road, but it’s not the answer right now. As long as there’s a drop of oil on this planet it’s going to be the engine that fuels commerce on this planet, until it’s gone. It just is. The infrastructure is already built on it.
RUSH: Here’s Brett in Ann Arbor, Michigan. Welcome to the program Brett. Nice to have you with us.
CALLER: Thank you, Rush. Quickly, I disagree with you about the oil prices. I am in favor of drilling off the coast of Gulf of Mexico or California, ANWR, wherever we need to drill to retrieve these resources. However, by doing so there will be absolutely no incentive for the oil companies to reduce the price structures. Investors will want a return on their money. It’s going to take capital investment to produce the drilling mechanisms –
RUSH: Wait a second.
CALLER: — and they’re going to want their return.
RUSH: Wait. I have to make sure I heard you correctly. You say that the oil companies, if we allow them to drill here, are going to have to recoup that investment and prices will go up?
CALLER: I’m not saying they’re going to go up, but I will argue they will not go down.
RUSH: Trying to maintain my composure here. Do oil companies not drill for oil anywhere else in the world and bill us back or bill those costs into their pricing structure?
CALLER: Exactly. But we have to look at —
RUSH: So why —
CALLER: — we live in a capitalistic society, which I’m in favor of, by the way. But with that being said, that any time you invest, you’re going to want investors to get a return on their investments, even though we have the availability of drilling oil off the coasts and things, we are still going to want to recoup as a company, we want to recoup what we put into it, plus a profit. So just because there’s more supply doesn’t mean the prices are going to fall. The only reason prices are going to fall is more competition.
RUSH: Wait a second, wait a second. My support for domestic drilling has nothing to do with price falling. I don’t live in false illusions. Prices generally go up over the years, they don’t generally come down. They cycle; some things do, depending on how they go, but overall the cost of living always goes up. But I’m talking about dependence on foreign oil and making ourselves less dependent on people that we think are our enemies. Do you know how much money we send to the Saudis a day? I’ve got to get the number, I read it this morning and I didn’t print this out. It’s in a Ralph Reiland piece at American Spectator Online. Grab me that thing while I’m still talking so it’s ready for me in the next break. It’s a column, the AmericanSpectator.com. Something like $30 billion a day we’re sending over there, you and I, taxpayer dollars being used, well, yes, and a number of other sources for those dollars as well, to buy oil to import here. Now, you don’t think that’s built into the price, too, try this. The more domestic drilling we have, the more domestic oil, the less cost in shipping it. The loss cost in shipping it around to be refined, and the less cost to distribute it after it’s been refined. But I’m sorry you misunderstood me. I was not talking about finding a way to ensure that prices fall because I don’t know how to guarantee that.
RUSH: This is a piece, actually a piece by Ralph Reiland in the American Spectator today. He’s an associate professor of economics at Robert Morris University, which is near Pittsburgh. This is actually a piece warning us against the dangers of the UAE and allowing them to run our ports. It’s a piece that ran today and it’s got some interesting data here at the beginning. “Former CIA director James Woolsey points to the clear danger: ‘Two-thirds of the world’s oil reserves are in the Persian Gulf and as time goes on, the world is going to rely more on the Gulf, rather than less, and you can’t bet on this part of the world making a smooth, easy path that will allow all of us to happily continue to drive our SUVs and use that part of the world as our filling station.’ Worse, you can’t bet that the billions of dollars we’re sending to that part of the world for oil imports won’t be used to develop an arsenal that will threaten much more than our SUVs. All told, we’re sending approximately $30 billion a year to Persian Gulf countries for oil purchases, including nearly $20 billion to Saudi Arabia, the home of 15 of the 19 al-Qaeda-trained terrorists who hijacked the four American jetliners on Sept. 11.”
Thirty billion a year. And this is my whole point. You go back to the ports deal, everybody is so concerned, everybody is so terribly concerned about allowing a UAE company to have access to the ports, lead to a terrorist attack, and yet we’re funding terrorist acts against us if you believe that all these terrorists are in league with governments and Saudi Arabia, the United Arab Emirates and so forth. I don’t care if you do believe that, that’s fine, hypothetically if you want to believe that, that’s fine. Where is the concern? Where is the equivalent concern over who’s running our ports and terminals?
So when I see this Mexico deal, and they’ve got this big find, I’m assuming that there are not too many radical leftists out there trying to stop them. We got radical leftists trying to stop us from discovering oil in our own continental shelf and up in Alaska, and it burns me up. You can talk Prius and you can talk hybrids all you want, but until we’re down to the last drop of oil, it is going to be the fuel that powers this world. It just is, folks, we’re not going to drop oil, even if we came up with a bunch of Priuses that could run. It’s not going to happen. It’s not going to happen ’til we start to run out of it, and who knows when that will be, but it’s long beyond the life span of us, your children, I don’t have any, and your grandchildren, I won’t have any. I have nieces and nephews. Back to this guy that called, he’s very concerned, and I know he’s trying to do the right thing. The reason I was so incredulous, and didn’t quite know what to say was because I’m still floored when people don’t understand the more of something you add to the market, the cheaper it becomes. Laws of supply and demand. (Interruption) Well, I’ll get to that in a second. H.R. is whispering in my ear about government. But you add more oil to the supply, and then you also create a competitive environment amongst the suppliers. The Saudis and OPEC set the price these days, folks. If we were able to drill all the oil that we have here and we wouldn’t need them, what do you think would become of the price? With that added competition and the added quantity, the added supply, what do you think would happen to the price. Meanwhile, let me tell you what just happened. The housing boom that has just been going on here for the last four or five years, local governments made out like bandits in most places. I can sure tell you mine did. They increased property taxes 20, 30, sometimes 50% due to increased assessments based on the housing boom. The oil companies make about ten cents per dollar of gasoline sold at the pump.
Why all this focus on gasoline and not property taxes? How come nobody is focused on government windfall tax profits? Why aren’t these towns and counties and states accused of windfall taxes? The first chance they get to raise the price of owning a home in the form of property taxes they do it. I don’t hear any of you complaining. Let the pump price of gasoline go up a dime and I hear sheer outright panic and rage. And, frankly, it frosts me. You have no clue how much they’re already raking in at state, federal levels in taxes on a gallon of gasoline every time you buy it. But apparently if the money goes to a privately held company or a publicly held company, if money, if the price, if the profit goes to a company, why, we can’t have that, no, no, no, these companies ought to be more concerned for America and they should forego their profit, just make their costs back, have the prices low for everybody, but forgo profit, that would be the American thing. Well, if you’re going to tell that to the American business community, tell that to the government. Windfall tax profits out the wazoo for these people every year, and you don’t complain about it. When all the taxes on these things go up and government gets the money, I don’t hear any complaints, but when the oil companies or when Wal-Mart does something, I hear people raising holy hell, and I’m fed up with it. Because it’s sheer idiocy and ignorance, and I’m going to teach you that before I leave this program today.
*Note: Links to content outside RushLimbaugh.com usually become inactive over time.