The market effectively balances the country’s oil supply and demand

So Sen. Byron Dorgan, D-N.D., thinks the price of gasoline is going to come down! At least that view must be behind his suggestion that the government postpone filling the Strategic Petroleum Reserve at this time because the price of oil is too high.

Doesn’t someone as influential as the chairman of the Appropriations Subcommittee on Energy and Water know that the price of oil will never come down, and not simply because OPEC is greedy? Nominal petroleum demand is growing much faster than supply because the growing economies of India and China are demanding their share and will go to any lengths to get it (i.e., Darfur). Our own insatiable appetite for oil only exacerbates the problem.

Of course, the market has an effective and ruthless mechanism for ensuring that demand cannot exceed supply. The “invisible hand” will raise the price until consumers drop out in sufficient numbers to restore the balance.

This story continues below
Advertisement

Perhaps Dorgan simply does not want to spend money on the strategic reserve. There are certainly arguments to support this view, as well as those to the contrary. But his excuse of waiting until the price comes down just makes him look foolish.

Is he trying, in some obscure way, to protect his constituents? North Dakota’s Red Trail ethanol plant in Richardton is powered by local brown coal, and the corn used is transported for long distances. The process emits more greenhouse gas by far than the ethanol produced saves over the use of gasoline.

The environment would be better off if the government simply paid the owners not to run the plant!

John B. Walsh
McLean

Examiner exposé of Metrorail project flawed

Re: “Major Tysons Corner players will be big winners and losers,” Commentary, June 18

Barbara Hollingsworth’s op-ed made several inaccurate claims regarding the Dulles Corridor Metrorail Project that need to be corrected. Had she checked the facts or contacted Dulles Transit Partners (DTP) directly, she would have known DTP was selected through a competitive procurement process as required by Virginia’s Public-Private Transportation Act.

She would also have discovered that her cost-per-mile estimate of the contract value was greatly overexaggerated.

The project is not a secretive deal — it has been under development for several years, involving multiple consultations with the public and key stakeholders who have been integral to the approval process.

Finally, her comments regarding Bechtel are simply wrong. Bechtel became the largest U.S. engineering and construction firm by earning an unsurpassed reputation for tackling complex projects, including work on 7,800 miles of rail track and 35 transit systems.

Howard Menaker
Dulles Transit Partners