From a guy who calls himself JohnGalt originally posted in September of 2009.
"I Love Oil(And why everyone else should too.)
JK recently heralded America's Petrosesquicentennial, the 150th anniversary of the first American oil well. We are quite enamored of the "black gold" on these pages. And why not? 3.8 gallons of oil derived gasoline (you may have heard of it - it's been used as a primary motor fuel for nearly a hundred years) which can be purchased on any street corner for about ten bucks, produce as much energy as an average lightning bolt (about 500 megajoules.)
And the safety of this miracle fuel is such that anti-industrial zealots like those on Dateline NBC have had to use remotely detonated explosives to recreate accidental fuel tank explosions.
But there's more to oil than gasoline. Much more. Modern necessities made from oil include jet fuel, propane gas, plastics, asphalt, and dozens of petrochemicals essential to hundreds of industries we could hardly imagine living without. (Paints, fertilizers and textiles to name just a few.)
I went searching for the historical significance of the Petrosesquicentennial and found the following graph of world population and income since 1500. It shows a precipitous rise in population around the time of the Industrial Revolution. But the per capita world GDP rose only 31 percent in the early decades of the Industrial Revolution (1820 to about 1870). In the next 30 years however, inflation-adjusted individual incomes went up another 45%, and 20 years later nearly doubled from there. Finally, by the end of the 20th century, individuals earned a whopping SEVEN TIMES what their ancestors did at the time commercial oil production began.
(Click on graph to enlarge)
While the Industrial Revolution began in the early 1800's without oil it "centered on improvement in coal, iron and steam technologies." The truly modern developments "steel, electricity and chemicals" were hallmarks of the Second Industrial Revolution which, though not clearly delineated from the first, roughly coincided with the commercialization of oil in America.
So if you love iPods, cell phones, jet planes, mass transit, modern medicines, supermarkets, artificial light, white collar jobs ... and the income to pay for all of these and more ... you'd best come to grips with your closet love affair with oil.
UPDATE [10:43a EDT]: As often happens, I omitted a key argument in the thread. The point of all this was to set up the assertion that the advent of cheap and abundant oil was not only coincident with the Second Industrial Revolution, but catalyzed it. Try to imagine the course of the industrial age without it. Certainly a gallon of gas could have been replaced, say with 121 cubic feet of natural gas or 9 pounds of coal, but extracting and using a liquid fuel proved far more practical and economical than those gaseous or solid ones, at least for some uses. And I contend those uses were - and remain - important. Add to this the less obvious fact that many chemical uses of oil may be irreplaceable.
Oil has clearly fueled prosperity. Not only that, it did so for everyone."
Nations have prospered as technology is allowed to have free rein in the market place, the market place of both ideas and innovation. Windmills work in some places. Hydroelectric power is vital to much of our nation. But we are importing much oil from overseas instead of harvesting our own, thus enriching other countries at our expense. Why do you suppose the Obama Administration hindered the cleanup efforts in the Gulf? They wanted pictures of oil-drenched birds in every front room in America to make the case against oil drilling. Yet it is the idiotic regulatory agencies that force us to drill far offshore so that the drilling process is much more costly and dangerous and harder to manage...and yet usually even the biggest storms fail to produce a disaster. This recent Gulf oil disaster could have been alleviated if only the government had allowed cleanup plans and bacteria to do their work unhindered. I lay the blame squarely at Obama's feet. I imagine that the eventual work of oil-munching bacteria surprised the President as he hoped the crisis would go on and on and on...
I live in an area where Democratic Machines have embedded themselves into the government animal like so many fat ticks. In Chicago there is no chance for a Republican to win and there is little likelihood of a Republican winning in Gary, Indiana. A similar situation exists in Detroit, Michigan. Chicago, they figured out how to parasitically rob that government beast just enough to let it prosper but in the two most liberal cities in America, Detroit and Gary, they're turning the animal into carrion. A tip of the hat to Thomas S. for pointing out this video!
A rarely understood postscript. Back in the 1970's and 80's the foreign carmakers were utilizing advanced quality control processes to ensure that all parts that went into their automobiles were standardized and predictable. US Automakers ignored "Kaizen" and QPC practices that were standard in Japan. The Detroiters were cranking out millions of cars and kowtowed to unions to avoid strikes, thus building more cost into every car. By the end of the 1980's the foreign cars like Toyota and Nissan made less expensive, more reliable automobiles while junk like the Chrysler "K" car was offered by domestic brands.
Detroit had short-sighted management in place in the auto industry, allowing unions to gain the upper hand. When market share slipped, they belatedly began demanding that their suppliers utilize modern Quality Process Control standards and meet audit standards like the ISO 9000 series. They pressed for cost cuts from suppliers, thus causing some suppliers to go out of business in order to get out from under union contracts or to negotiate contracts giving normal wages and benefits to incumbent workers but cutting the pay and benefits of future hires. Naturally this led to people being pressed into early retirements and being fired unfairly, with the union bosses being paid off to allow for it.
In Detroit the Big Three have been begging the government for subsidies but no one dares touch the union contracts. The few union workers with seniority continue to be paid in full while subsidiary jobs pay far less and are much harder to get since Detroit has lost market share on the grounds of both price and quality. They may have restored the quality by now, but much reputation and customer loyalty is gone forever.
I have been a union guy. Unions were formed to keep company bosses from being unfair and allow a guy to make a living, but they got too big and now the companies almost need a union to deal with the unions! If Detroit's auto workers gave back one-third of their pay and benefits, then Detroit could double production and thereby increase the paid labor force in Detroit amongst autoworkers by 100 per cent! What is .67 times two? 1.34. So in that scenario a one-third increase in wages amongst the working class would be likely and perhaps better than that. American workers are the most productive in the world. If auto wages rose in total to 134% of what they are today, then businesses around the area would see a rise in business and they could hire more people. Subsidiaries to Detroit could recall laid-off workers. Ford and Chevy and even Chrysler could thrive if they had union contracts like those of the workers of Subaru here in America! Why do foreign automakers move their businesses here? American labor is the best, and when they come here now they don't kowtow to the UAW and pay reasonable wages and benefits, not ludicrous ones.
If you buy a Subaru today it was very likely made in Indiana. You drive south on 1-65 and you will pass by that big Subaru factory (that also makes Toyota Camrys!). You think they pay out $130,000 a year per worker?! No. But they do pay well and families there are pretty happy there is a Subaru. It could have been a Ford plant. But the Fords of this world had their heads buried in the sand for far too long.
Learn from history. Like Detroit automakers, this US government is far too big and inefficient. The entrenched Democrats are used to passing out earmarks and getting automatically voted back into office. Has anyone ousted Pete Viscloskey? Last election cycle all you had to do was go to one of his town meetings to realize he was clueless about Obamacare other than the fact that he was for it! Where Democrats have long reigned, there is always corruption and usually disaster. Go ahead, take a long drive through the neighborhoods of Gary. See all the abandoned houses and buildings, things crumbling and partly demolished and splashed with gang graffiti. See all the bars like those of a prison, bars put on windows and doors by business and home owners seeking to keep the crime out. Because both in government and on the streets the crime runs rampant!
We are not a democracy, we are a republic!
I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all!
If we would live by those words, we would vote and live accordingly. Even so, let it be!