Got Gas Money?: Cashing In on American Oil in an Age of Scarcity

"The question is, O Daddy Warbucks of the World, 'Will you drill?' And the answer is, 'Why bother?'"

Then Duke stands up and beats his chest,
Says "I made it. Why can't all the rest?
You got nothing to lose
But the shine on your shoes"
-- Steve Strauss, Wolfgang & Strauss

I'VE KNOWN MORE THAN A FEW very rich men. Some of them came by their wealth via a win in the sperm race. Some of them got a very big hit from the money machine in the first Internet Bubble lottery. Some of them married or divorced into it. Some of them got gobs of greenbacks the "old fashioned way, they worked for it."

Let's say you're one of these. Let's say you are so wealthy that, as one said to a friend of mine, "I no longer need a 'rate of return'." You've got ALL the stuff you will ever need and the dough just keeps piling up. You've got the private plane and your advisors keep saying you need the private helicopter "for tax purposes."

You've got the house here, you've got the house there. You've got another house over there and one down by the beach too. You've got so many houses the only place you ever feel at home is flying on the private plane between them. And all around each an every house is a fine, well-manicured garden. So well-manicured and kept that they appear to be entirely natural, wonderfully wild, pure wilderness. Of course, they aren't real wilderness, but they look it and so you decide to keep them around -- for sentimental purposes.

Next to many of your houses are your beaches since no real wealthy man can possibly hold his head up in the world without multiple and numerous beach houses. They are handy to the marinas of the world where your yachts are kept waiting for the few days of weeks a year you can repair to them and cruise about on the pristine seas that lap the shores of your present, pleasant world.

Now it is true that all the planes, yachts, helicopters, and cars consume an ocean of fuel that is brought in from the other side of the world at ever increasing prices, but in fact you don't care a whit outside of a passing bit of blather at your dinner parties that the price of gas is hard on "the little people." To you it doesn't matter if gas is a nickel a gallon or twenty bucks a gallon. You still fill the tanks and it doesn't dent your cash-flow in a way that makes you feel it.

Then one day your advisors come to you with great news. Oil has been discovered in a number of your wilderness gardens and just off the edge of your beaches in those pristine seas you like to cruise about in having boat drinks. There is so much oil there that it is a bonanza of crude that can free you from the high price and potential servitude to all those annoying semi-fascist Islamic regimes that keep sending their excess kids out to blow up the world. Yes, just by a little careful drilling you can get the price of gas for all those machines your wealth gives you down from five dollars a gallon to, well, three dollars a gallon -- maybe.

The question is, O Daddy Warbucks of the World, "Will you drill?"

Your answer is pretty pat: "Are you kidding, O my doltish advisors? You are all so very fired for the sin of drooling stupidity!

"Fired too for the deeper sin of being stupid about capitalism which, I remind you is how I and all the other richest people on the planet -- now about 300 million of us -- got rich in the first place.

"Why should we dig up our garden wilderness or drill in our pristine seas off our clean white beaches when we can easily afford to buy what we need from those knot heads in the Middle East or those drooling Socialists in South America or those clumsy kleptocrats in Russia?

"Pay attention, my overpaid idiots. Why do you think we have money in the first place? It is to buy the things we need and the things we want and to make more money at the same time, which we can do better than most on the planet.

"And if, at some point in the future, the supplies of crude lurking beneath the ground in all those pissant third-world crappers starts to actually peter out and get to the state called 'bone dry,' do you think the entire developing world will just shrug and say, 'Oh well, so much for the internal combustion engine?' You think China is just going to junk its smog-machines overnight and go back to push-carts? Get a grip.

"The fact of the matter is that when all the oil in all the cesspitts of the world is history, the need for oil will be greater than it is now.

"And who is going to be still sitting on an ocean of oil to sell into that ravenous global need? The one nation that didn't pump all of theirs out just to save a buck at the pump when they could afford a buck or two or five at the pump.

"And that's when this free and capitalist nation is going to make some real money. Clear out your desks and be gone by noon or I'm going to call security. Dismissed."

First published JULY 2, 2006

Posted by Vanderleun at July 4, 2008 11:35 PM | TrackBack