Let's play Connect The Dots. How are the following related?The U.S. military launches an emergency air evacuation of diplomatic personnel in Yemen, while two dozen other embassies and consulates throughout the Arab world remain closed because of major terror threats. Protesters at a Chevron oil refinery chant, “Hey, hey! Ho, ho! Fossil fuels have got to go!' as they continue to demand the death of drilling and the proposed KeystoneXL Pipeline. The Associated Press reports that nearly four of five Americans are at risk of poverty, joblessness and reliance on welfare, mainly due to manufacturing jobs going overseas.
Since these problems are certainly not new, their connections should be fairly obvious. But try telling that to the U.S. Congress, the Obama administration, and yes, both Bush administrations. Because none of them had, or have, a clue as to how they are related, let alone how to respond. And the clock is ticking.
It's not a stretch to say America is hated throughout much of the Middle East. Not by everyone, of course, but by a large number of extremists hell-bent on blowing us up, and the even larger silent majority that sheds no tears when their compatriots are successful. Since many of these folks have the tacit permission of their governments (and funding via our petro dollars) to engage in jihad, they are most definitely a threat. So why don't we just leave, instead of subjecting our citizens to the constant threat of annihilation, as is the case in Yemen right now?
Simple. America is totally dependent on the Middle East oil barons for its black gold. Translation: Because of our choices, we're now stuck in the most dangerous place on Earth for the foreseeable future.
But why? Why are we so dependent on foreign oil when, far and away, America has reserves larger than those of the entire Middle East combined?
Our refusal to maximize drilling for oil and natural gas, combined with Middle Eastern volatility, has driven energy prices through the roof. Whereas gasoline, diesel and jet fuel should retail for under $2 a gallon — and yes, that is a “pipe' dream, as more domestic drilling and pipelines would make that dream come true — we are instead bent over the barrel, faced with the impossible task of trying to make an economy boom while energy prices are double what they should be.
And guess what happens when energy costs soar? Manufacturing jobs disappear. It's that simple — hence the AP report's dire picture of America.
However, anyone who says we can't compete with cheaper overseas labor is dead wrong. True, we will never have the lowest employment cost, but if we make use of the world's cheapest energy right at our disposal, we'll have something better.
Low-cost energy not only eliminates the significant expense of importing goods from around the world, but dramatically lessens domestic distribution costs — the rising economic tide that lifts all boats.
The most expensive aspect of manufacturing is energy cost. When that number is low, more plants open, existing ones thrive, Americans get hired at substantial wages, and ancillary businesses boom, employing millions. If energy is expensive — and oil over $100/barrel ain't cheap — it all tanks. Costs to make and move goods skyrocket, inflation spikes and productivity takes a hit. Coupled with America having one of the highest corporate income tax rates on the planet, companies either raise prices, go under or leave.
A CEO who packs up and ships out overseas isn't unpatriotic, but is often doing the only thing possible to save the company. For the most part, business leaders don't move offshore because they want to, but because they have to, compliments of a government that refuses to make the right choices and citizens who don't demand otherwise.
Yet, there is a blueprint for success, as Proctor & Gamble's large manufacturing plant in Pennsylvania illustrates. After realizing there was a treasure trove of clean Marcellus Shale natural gas sitting under its feet, P&G drilled several wells and is now energy self-sufficient for the reported 800 billion kilowatt-hours it requires, enough to power 40,000 homes.
Companies that can reduce or eliminate millions in energy bills can jump-start the economy quickly by expanding manufacturing operations and hiring more Americans, which moves folks away from the poverty line and off the welfare and unemployment rolls. Tragically, the P&G example is the exception rather than the rule, even though America's resources could make the dream of cheap energy a reality for millions of businesses.
The situation in Yemen, along with the sobering AP report, should be a wake-up call to all Americans. The need to drill responsibly, but drill nonetheless, must be the No. 1 issue from this point forward. More than anything, energy independence would make the economy boom while protecting our security at home and abroad.
Alternative energies are certainly welcome in that equation, provided two things: 1.) They are cost-effective, and 2.) they can meet our needs. But since most of the anti-oil crowd is also fervently anti-nuclear (which accounts for 20 percent of U.S. energy), they need to do a whole lot better than the tired old “solar and wind' line while trashing fossil fuels.
Leaving Yemen isn't a bad thing; it's a good start. So bring our boys home, fire up the drills and let's get America making things again.
Otherwise, we all better learn to speak Arabic.