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By Robert Rapier on Aug 8, 2008 with no responses

Tester’s Energy Plan

Tis the season for energy plans. Coming up on the elections, everyone has to have a plan – and I was just e-mailed a copy of Montana Senator John Tester’s plan. There are some good components, but it is also rich with irony.

A common-sense energy plan for Montana and America

As Sharla and I buckle down for another harvest near Big Sandy, we’re feeling what all Montanans are feeling at home — the pinch of out-of-control energy prices.

It’s an issue that I deal with every day as a U.S. Senator and as a family farmer. Our energy problems are the result of poor presidential leadership and a weak dollar. And with $12 billion in borrowed money going to Iraq every month, our dollar isn’t going to get stronger any time soon.

For 30 years we’ve known that depending on imported oil was dangerous foreign policy and bad economic policy. But we haven’t done what it takes to get ourselves off it. That needs to change. And that’s why I support a three-part plan for the short term and the long term:

First, we ought to drill more in places that make sense, like eastern Montana. The Bakken Formation holds an estimated four billion barrels of recoverable oil. I don’t have a problem with responsible drilling offshore or in parts of Alaska set aside for drilling. But I want to be darn sure that oil stays in America, not shipped off to Asia so the big oil companies can make more record profits.

Second, I believe that oil speculation and hedging has gotten way out of hand. Some folks on Wall Street are trading oil they never intend to actually use in order to make a quick buck. That creates artificial supply and demand, resulting in artificially high gas prices. That’s why I support smart legislation cracking down on out-of-control manipulation of the oil market.

And of course, conservation and renewable energy have to play a big role in our energy future. It’s time to make a serious investment in renewable energy like biofuels, wind, solar power, and geothermal energy.

Unfortunately, a few White House allies in Congress shot down important legislation like extending tax credits for renewable energy, cracking down on speculators and hedgers, and getting tough on OPEC. They pay lip service to the need for renewable energy, then insist on voting only for legislation that gives big oil bigger profits.

Drilling for more oil can’t be the only solution. Drilling is a bridge, but without a long-term solution it will be a bridge to nowhere. As a country that uses 25 percent of the world’s oil, yet has only three percent of it, drilling alone won’t solve the problem. Some on the other side of the aisle are not shooting straight with Montanans.

You would think from listening to some politicians that the big oil companies’ agenda is the solution to record high gas prices. That defies common sense when the U.S. is exporting 1.4 million barrels every day to other countries. It’s another example of the failed leadership that has taken the price of a gallon of gas from $1.50 in 2001 to more than $4 today.

With our national and economic security at stake, it’s time for all of Congress to work together. It’s a shame partisan politics gets in the way of common sense. Montana families and main street businesses deserve better than that.

I’m always interested in hearing your thoughts on the issues. Please visit http://tester.senate.gov/contact to drop me a note.

Jon Tester
United States Senator

Funny story about Tester. Montana has a significant oil refining industry. Yet when he was campaigning, gasoline had just cracked $3/gal, so he campaigned on the party line: “Big Oil is evil and is ripping everyone off.” So, one day I was at home in Billings, and the doorbell rang. It was someone from the Tester campaign, asking if they could count on my vote.

I looked at him for a few seconds, and I said “I work downtown at the ConocoPhillips refinery. You have said some pretty nasty things about my industry, and insulted a lot of hard-working people in the process. So tell me why I should vote for Tester.” The guy looked very uncomfortable, and said “Look, buddy. It’s not personal. It’s just politics.” So I responded with “And it won’t be personal if I don’t vote for him.”

That is Jon Tester. A man with some good idea, but also very quick to fall in line and resort to the ad hominem attacks in order to win votes. In his proposal above, he calls for responsible drilling, conservation, and investments in renewable energy. I am with him on those. And then he makes some completely asinine statements that make me wonder “Is this guy serious?” Here are some examples:

But I want to be darn sure that oil stays in America, not shipped off to Asia so the big oil companies can make more record profits.

That’s stupid on several fronts. First, oil removed from federal lands must already stay in America. Second is the implication that oil companies are engaged in the shady business of sending oil to Asia when we have shortfalls at home. (More on that below). Finally, he wants to be sure that America’s oil stays in America. How about Canada’s oil? As Canada is our largest supplier of oil, where would we be if Canada adopted Tester’s plan – that Canada’s oil stays in Canada? What if all of our suppliers adopted that position?

You would think from listening to some politicians that the big oil companies’ agenda is the solution to record high gas prices. That defies common sense when the U.S. is exporting 1.4 million barrels every day to other countries.

That’s just rubbish. He needs someone on his staff to do a bit of investigating before he makes uninformed statements like this. First off, here are the numbers from the EIA on exports from the U.S. of petroleum and petroleum products. What is the #1 destination for these exports? Mexico, one of our largest suppliers of crude oil. #2? Canada, our largest supplier of oil. And what are we sending them? Here, again, is the breakdown. The #1 product that we are supplying? Petroleum coke. #2? Residual fuel oil.

Less than 10% of what is exported is gasoline, and less than 2% is crude oil. Is that the picture Tester painted? Of course not. He has us exporting over a million barrels of crude oil to China so big oil can get rich. This is the Tester that I found so annoying during the campaign. Is he badly misinformed, or just playing political games?

Of course one might ask why we would export any petroleum products to other countries. That’s quite easy. If you are a refiner in Montana or Texas, and your product pipelines are full – or your orders are otherwise filled – you may sell some across the border to Canada or Mexico. Or, your petroleum coke that you might not be able to find a home for (and which you are selling at a loss) ends up going out of the country. Or you have some material that doesn’t meet U.S. specs, but it does meet the specs of some other country. When I was at the refinery, I remember we got in a shipment of butane. It did not meet one of our specs, but it did meet Mexico’s, so we sent it south. It had originated in Canada, came to Montana, and ended up in Mexico. It was counted as an export.

Further, I think if we adopted the position that we won’t sell to Canada or Mexico (which may be prohibited by NAFTA anyway) then we might have trouble convincing them to provide oil to us. This would be a problem, since those two countries provide more than three times the amount of oil to us as the amount of exports Tester is complaining about.

The irony then in Tester’s e-mail is that he felt compelled to write:

Some on the other side of the aisle are not shooting straight with Montanans.

And

It’s a shame partisan politics gets in the way of common sense.

I guess we can be thankful that Senator Tester is above all of that.