Brian December 29th, 2006
I realize Mr. Fuhrman gets up early and publishes a lot of posts each morning, however, I could not help but notice that he put very little objective thought and research into one of his latest entries.
Today, via the Southwest Virginia Blogs aggregator1, I happened to catch his post entitled “Boucher’s Big Plans,” in which he took some time to critique Congressman Boucher’s statements to the Coalfield Progress.
One of Mr. Fuhrman’s first points really caught my eye. He refers to Congressman Boucher’s statement regarding the economic benefits of a price floor on oil as “idocy.”
Mr. Fuhrman said:
A price floor. What that means is Boucher doesn’t ever want that gallon of gasoline you pay for to get too cheap. What’s with that? And, if he’s willing to set prices on gasoline at the pump, is he willing to set prices on milk? Aspirin? Diapers? PlayStation3’s? Water?
His averment that “Boucher doesn’t ever want that gallon of gasoline you pay for to get too cheap” is, of course, clearly and completely false.
In my opinion, the reason that Congressman Boucher would support a price floor on oil is the same reason that Republican Senator Lugar of Indiana does. They both – Boucher and Lugar – are concerned about our dependence on foreign oil and they want to improve the local economies of their constituents.
A price floor on oil, as Philip Gordon opined in this article for the Financial Times earlier this year, would be a “simple” way to get energy producers and consumers to “make long-term investment and consumption decisions in a way that makes little economic sense so long as price stability is not guaranteed.”
Gordon, I think, is on target when he says “Americans will not take long-term decisions to [invest in alternative energy sources (i.e., coal-to-liquid, ethanol)] unless they know that a future sharp fall in oil prices will not undercut them.”
In other words, Congressman Boucher, specifically, appears to looking for a way to reduce our dependence on imported oil while greatly improving the economy in the Coalfields of Southwest Virginia.
Sen. Lugar’s support for an oil price floor is based on the same reasoning, but his interest is in ethanol, as opposed to coal-to-liquid fuels.
Producers will not be able to attract the requisite investors necessary to develop and manufacture coal-to-liquid and ethanol fuels as long as there is still a chance the bottom will fall out of the oil market. A price floor would remove that concern.
As for what to do with the collected funds if the price per barrel actually ever fell below the floor, Gordon had some excellent ideas. Gordon suggested “[t]o make the proposal even more palatable politically, Washington could promise to spend the money on education, healthcare, homeland security and even tax cuts rather than use if for deficit reduction, a noble purpose but one that rarely excites voters.”
The reason I point this out is that, obviously, I am very concerned about the improvement of life here in the Coalfields. I do believe that the furtherance of coal-to-liquid transportation fuels will help our struggling economy. I further believe that a price floor on oil will be necessary if we want to see meaningful investments in coal-to-liquid development.
It would be very unfortunate if someone took Mr. Fuhrman’s post and knee-jerk reactions at face value, and used it as political fodder against Congressman Boucher’s efforts to improve the Coalfields of Southwest Virginia.
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1 No blog has ever been removed from the Southwest Virginia Blogs aggregator, but the offensive content, which has recently been discussed at length, would certainly be a basis for removal.
The votes are in and looks like Sen. Obama has won the Virginia primary, as expected. I had predicted a 60% to 40% victory for Obama and it looks like I will be about correct.
Congressman Rick Boucher 
Although I have remained undecided on who to support for the nomination, 
The 38th President, Gerald Ford, 
Mark Warner 