Archer County Advocate (Holliday, Tex.), Vol. 6, No. 11, Ed. 1 Thursday, June 19, 2008 Page: 4 of 12
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4 -
Thursday, June 19, 2008
Capitol
Comment
KAY BAILEY HUTCHISON
More Energy is the Simple Solution to the Energy Crisis
Archer County Advocate
Financial Focus
Grady R.>,SJr.
Don’t Get Burned.by “Hot” Stocks
President Reagan said,
“There are no easy answers, but
there are simple ones.” This prin-
ciple applies to America’s energy
woes. Since January 2007, the
price of a gallon of gasoline has
soared from $2.33 per gallon to a
record $4.04. Over the next two
decades, global demand for oil is
expected to rise by 50 percent.
Further price escalation is inevi-
table. When confronted by these
facts, the energy solution is
simple. We need more energy!
We should be increasing our pro-
duction of oil, natural gas, clean
coal, and nuclear power - and
those resources should come from
America, instead of foreign dicta-
torships.
One of the best kept secrets
in politics today is that America is
one of the richest energy nations
in the world and is capable of
achieving energy independence.
Our most valuable un-
tapped resource is the Arctic Na-
tional Wildlife Refuge (ANWR),
which is estimated to contain 10.4
billion barrels of oil. This remote
frozen tundra could be drilled with
minimal impact on surrounding
life. ANWR is the size of South
Carolina and the area drilled
would be roughly the size of Dal-
las/Love Field Airport. In 1995,
the Republican Congress passed
legislation to open ANWR for en-
ergy production. But President
Clinton vetoed our bill. If he had
signed it, America would now be
producing one million barrels a
day, almost enough oil to replace
all of our daily imports from Saudi
Arabia.
Beyond ANWR, federal law
prevents oil and gas production in
the deep waters off the Atlantic and
Pacific Coasts. These areas, along
with a section of the Gulf of
Mexico, could contain as much as
115 billion barrels of oil - greater
than Venezuela’s current reserves
- and 565 trillion cubic feet of
natural gas - greater than the com-
bined reserves of Iraq, China,
Yemen, Oman, Nigeria, and
Venezuela. Federal laws also pre-
vent us from exploiting one tril-
lion barrels of shale oil in Colo-
rado, Wyoming, and Utah - an
amazing amount that is three times
what Saudi Arabia has in-reserve.
In May, I joined 18 other
Senate Republicans to introduce
the American Energy Production
Act of2008. Our bill will remove
unnecessary government barriers
to domestic energy production and
allow us to tap our vast resources
with environmental safeguards.
This should be bolstered with an
energy portfolio that includes re-
newable and alternative sources
like solar, wind, and nuclear
power.
My Democratic colleagues
have a starkly different approach
to the energy crisis -it is one that
creates no new energy. Their an-
swer is to tax energy production.
In 1980, Congress passed a
“windfall profits tax,” and the con-
sequences were devastating. In the
six years following that levy, do-
mestic oil production dropped by
1.26 billion barrels and imports of
foreign oil rose 13 percent. The
disastrous tax was repealed in
1986. Rather than learn from that
mistake, some in Congress would
impose the same ineffective tax on
the oil industry.
Their proposal also seeks to
blame “price gouging” for soaring
energy prices. The Federal Trade
Commission has been vigilant in
its investigation of pricing prac-
tices in the oil industry. It has con-
sistently found no evidence of
market or price manipulation, and
instead points to global supply and
demand as a leading factor in the
price of gasoline. In fact, as of
January, the average tax on each
gallon of gasoline was 47 cents,
while the oil and gas industry has
testified that it earns only four
cents per dollar of gasoline sales.
The Democrats’ plan would
also repeal incentives for ex-
panded refinery investment. By
increasing taxes and reducing the
incentives to refine oil into usable
gasoline, we will end up with a
smaller supply of domestic energy,
which in turn fuels price increases,
perpetuates our present crisis and
keeps us at the mercy of OPEC.
Energy companies would be hit
with new taxes on foreign earn-
ings, potentially exposing produc-
ers to double taxation and hinder-
ing their ability to compete for oil
and natural gas reserves on the
global market.
This year, we will spend
about $500 billion to import oil.
All of those dollars should stay
here in America, instead of being
sent to foreign regimes that may
be hostile to our interests. We need
energy for Americans by Ameri-
cans, and we need it now. Instead
of searching for scapegoats, we
should be searching for additional
energy resources to be part of a
bold, comprehensive plan for
America’s energy security in the
21st century.
Summer is officially here,
which means, among other
things, that you should apply
sunscreen when you go out in the
hot sun. But no matter what the
season, you’ll also need to pro-
tect yourself from another poten-
tial source of bums -’’hot” stocks.
Stocks that seem poised to “take
off’ will always capture inves-
tors’ imaginations. But the lure
of these stocks may be particu-
larly strong during, or following,
periods of market volatility,
when investors are looking for
potential bright spots. However,
it’s usually not such a good idea
to chase “hot” stocks - and here’s
why: • You may be relying on
an unreliable source. You can get
a “hot stock tip” from anyone:
your barber or your brother-in-
law, your cousin or your chiro-
practor, your dentist or your dry
cleaner. While all these people
probably mean well, they may
not be the market experts on
whom you wish to rely. But even
the so-called market “gurus”
who tout stocks in magazines, on
television or on the Internet may
not be .the best forecasters, either,
so you’ll need to take their ad-
vice with a grain of salt, espe-
cially as they know nothing
about your individual situation.
You may be too late.
You may actually find a hot stock
- but by the time you do, it’s also
been “discovered” by a lot of
other investors. This usually
means one of two things: The
stock has already peaked and is
now starting to cool off or the
huge interest in the stock is driv-
ing up its price to an unsustain-
able level, given the stock’s earn-
ings and other factors. •
You’ll be “buying high.” Here’s
the classic rule of investing: Buy
low and sell high. It’s very good
advice, except that it’s almost
impossible to follow - after all,
no one can really predict when a
particular stock has reached ei-
ther its high or low points. How-
ever, that doesn’t mean you
shouldn’t at least try to pursue
stocks whose current prices are
low and thus may be good buys.
But if you’re purchasing a hot
stock - one that, almost by defi-
nition, has risen sharply - you’ve
probably already disqualified
yourself from the “buy low” part
of the formula, which means
your stock may have less “up-
side” potential than other,
cheaper stocks. • You may be
buying a stock that doesn’t meet
your needs. Some stocks -
whether they’re hot, cold or in-
between - are simply not right for
your individual needs. For ex-
ample, if you’ve built a diversi-
fied portfolio, and you already
have the right amount of
“growth” stocks, you might be
throwing your holdings out of
balance - and increasing your
risk level to a point beyond your
comfort zone - by purchasing
another growth stock, no matter
how hot it seems. (Keep in mind,
though, that while diversification
is important, it cannot, by itself,
guarantee a profit or protect
against a loss.) Ultimately, in-
stead of chasing after hot stocks,
evaluate each stock on its own
merits and prospects and on how
it fits into your existing holdings.
A qualified financial advisor can
assist you in selecting those
stocks that can help you achieve
your objectives. By doing your
research, and by getting the help
you need, you may not always
nab the hottest stocks- but you’ll
be less likely to be scorched.
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THE ARCHER COUNTY ADVOCATE
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Stevens, Charlotte. Archer County Advocate (Holliday, Tex.), Vol. 6, No. 11, Ed. 1 Thursday, June 19, 2008, newspaper, June 19, 2008; Holliday, Texas. (https://texashistory.unt.edu/ark:/67531/metapth828911/m1/4/: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Archer Public Library.