Should Republicans go ahead and add Supreme Court Justices to head off Democrats

Senate showcases bipartisan stupidity over gas prices

NY Times:

Opening a series of Congressional hearings on rising fuel prices, the Senate energy committee vented bipartisan wrath Tuesday over accusations of energy-company profiteering after the Gulf Coast was struck by a hurricane.

"Hurricane Katrina exposed the harsh reality that we have been skirting and skating on thin ice when it comes to this country's energy concentration on the Gulf Coast," said Senator Pete V. Domenici, the New Mexico Republican who is chairman of the panel.

"Why are the oil companies making record profits, and what are they doing with them?" he asked. "Our job is to make sure that one, price gouging, and, two, unfair profiteering and unconscionable profiteering, do not take place and especially does not take place as a result of the hurricane."

With gasoline prices hovering near the peaks set over the weekend, members of Congress say they consider fuel costs the biggest issue on voters' minds. On their first day back from the summer recess they began debating potential remedies with an intensity not seen since the oil shortages of the 1970's.

Nothing could be dumber than encouraging consumption by artificially lowering prices. This is economic stupidity of Jimmy Carter proportions. As for what they companies are doing with the profits this story tells one of the things:

Daily use rates for oil rigs will continue to rise dramatically in the next two years, with more and more rigs commanding rates of $200,000 per day or higher, the chief executives of two leading Houston-based rig companies said Tuesday.

In presentations at the Lehman Bros. CEO Energy/Power Conference, monitored via Webcast, the companies, Transocean and Noble Corp., said that while $1 million day rates were unlikely, $400,000 or better was certainly not out of the question.

At present, most rigs command day rates of less than $200,000 per day, though prices are rising dramatically as the price of crude shatters records and companies clamor to drill as much as possible.

Discussions for fifth-generation rigs "generally are comfortably over $400,000 a day," said Robert Long, president and chief executive at Transocean.

So heres the deal guys. The high prices is encouraging exploration and production which when it comes on line will put supplies more in line with demand lowering prices, unless you politicians screwup and artificially lower prices increasing demand at the same time you make it more difficult to increase supply. This was the Jimmy Carter formula for a failed energy policy.