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| Wednesday, April 30, 2008 |
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The President Gets Specific on Energy
By Joe Eule ::
13 Comments :: Email to a friend
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A couple of interesting items on the energy front. First, an editorial in today’s Investor’s Business Daily applauds the President for “lambasting lawmakers for fiddling while the energy crisis burns,” adding that it was a “well deserved takedown of do-nothing lawmakers.”
The President’s scolding came as gas prices continue rising and Americans are understandably starting to lose patience. And the best the Congress can do is call for President Bush to jaw OPEC into increasing production and stop filling the strategic petroleum reserve. That’s the “commonsense plan” to cut energy prices they said they had two years ago?
As the IBD points out, the President hit back with specifics:
• Best of all, Bush didn't let the issue sit with just generalities. He reeled off a bill of particulars of congressional energy inaction, including:
• Failing to allow drilling in ANWR. We have, as Bush noted, estimated capacity of a million barrels of oil a day from this source alone — enough for 27 million gallons of gas and diesel. But Congress won't touch it, fearful of the clout of the environmental lobby. As a result, you pay at the pump so your representative can raise campaign cash.
• Refusing to build new refineries. The U.S. hasn't built one since 1976, yet sanctions at least 15 unique "boutique" fuel blends around the nation. So even the slightest problem at a refinery causes enormous supply problems and price spikes. Congress has done nothing about this.
• Turning its back on nuclear power. It's safe and, with advances in nuclear reprocessing technology, waste problems have been minimized. Still, we have just 104 nuclear plants — the same as a decade ago — producing just 19% of our total energy. (Many European nations produce 40% or more of their power with nuclear.) Granted, nuclear power plants are expensive — about $3 billion each. But they produce energy at $1.72/kilowatt-hour vs. $2.37 for coal and $6.35 for natural gas.
• Raising taxes on energy producers. This is where a basic understanding of economics would help: Higher taxes and needless regulation lead to less production of a commodity. So by proposing "windfall" and other taxes on energy companies plus tough new rules, Congress makes our energy situation worse.
Meanwhile, Robert Samuelson weighs in with a piece whose headline says it all: “Start Drilling.” Says Samuelson:
What to do about oil? First it went from $60 to $80 a barrel, then from $80 to $100 and now to $120. Perhaps we can persuade OPEC to raise production, as some senators suggest; but this seems unlikely. The truth is that we're almost powerless to influence today's prices. We are because we didn't take sensible actions 10 or 20 years ago. If we persist, we will be even worse off in a decade or two. The first thing to do: Start drilling.
It may surprise Americans to discover that the United States is the third-largest oil producer, behind Saudi Arabia and Russia. We could be producing more, but Congress has put large areas of potential supply off-limits. These include the Atlantic and Pacific coasts and parts of Alaska and the Gulf of Mexico. By government estimates, these areas may contain 25-30 billion barrels of oil (against about 30 billion of proven U.S. reserves today) and 80 trillion cubic feet or more of natural gas (compared with about 200 tcf of proven reserves).
On environmental grounds, the alternatives to more drilling are usually worse. Subsidies to ethanol made from corn have increased food prices and used scarce water, with few benefits. If oil is imported, it's vulnerable to tanker spills. By contrast, local production is probably safer. There were 4,000 platforms operating in the Gulf of Mexico when hurricanes Katrina and Rita hit. Despite extensive damage, there were no major spills, says Robbie Diamond of Securing America's Future Energy, an advocacy group.
The law of supply and demand is one law Congress cannot repeal, which means we have two choices available to us – increase supply or decrease demand. A “commonsense” plan would do both, but liberals in Congress beholden to special interest groups are only interested in attacking the demand side of the problem. As long as the liberals in Congress ignore supply, it’s safe to say we can count on gas prices continuing to climb. |
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| Comments |
 By
jbfair728 @
Thursday, May 01, 2008 11:32 AM
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Studies of Anwar show that after 20 years, yes, the price of gas could come down...1 cent a gallon. (Gov't's own studies) (big whoop.......(NOT).
LIE, LIE, LIE
Click on the following link to access the full report from the DEO.
http://tonto.eia.doe.gov/ftproot/service/sroiaf(2005)04.pdf
* The most significant impact on energy prices caused by H.R. 6 EH is the reduction in world oil prices from the opening of ANWR.
* The H.R. 6 EH case projects impacts of less than 1 cent per gallon on average gasoline prices throughout most of the forecast horizon, because their provisions of the bill increase the costs of using a more expensive blending component (ethanol).
And this report was done when a gallon of crude oil was approx. 12 dollars. Now with crude at >100, the impact that opening ANWR will have on the futures market will be much more significant.
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By
keeeemosabe @
Thursday, May 01, 2008 12:39 PM
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Here's what I know. I know you could find the study if you have a computer, know about Google and were not too lazy to find it.
I also know that tax breaks in themselves are not evil, but need to be designed not to be welfare for corporations, but encourage drilling right in the new oilfields (Bakken Barnett, Marcellus right in the US which are 20 times bigger than ANWR. The Bakken trend alone multiplies the entire US proven reserves including Alaska by 10 times. So the US could pay via tax breaks for the 1st 500 wells and guarantee triple profits on those, then say enough, the rest belong to the taxpayers. Everybody wins. But ultra capitalists will whine because they will claim all oil belongs to them.
I also know that offshore oil is around Florida and Santa Barbara, both controlled by Republican lawmakers last I checked, but the demagogues like billoreilly and Repugnican politicians blame it all on Dems, convenient scapegoats, who know there are better answers than ANWR, like alternative energry from geo, wave power, wind power and solar, and yes even drilling in not so sensitive enviro areas, like the above mentioned "new" fields.Screwing the customer. Well, yes they believe all the oil found belongs entirely to them and that they should not have to pay the nation for it because to them that smacks of commy-nism for it...but don't you believe in supply and demand? Or is that just trot out when it is convenient to righty rhetoric?*
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keeeemosabe @
Thursday, May 01, 2008 12:54 PM
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LIE LIE LIE??? Dated maybe, but not a lie. If that is a lie, the most everything published on this website is a lie.
Still it would take many years for that oil to begin to flow...at which time the oil will be more valuable yet. So conider it an investment in the bank gathering interest. The fact remains there are far better alternatives to exploit now. The ANWR is just a red herring political demagoguery tool to bash Dems. That is what is most valuable about ANWR to Repugnicans.
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keeeemosabe @
Thursday, May 01, 2008 1:12 PM
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From your link: "Starting in 2016, increased oil production from ANWR and from other fields in
Alaska accounts for most of the increase in energy production in the H.R. 6 EH case."
So this 2005 report says it takes 11 years to flow meaningful oil from ANWR... So... it is nearly irrelevant to today's problem except as a rhetoric.
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jbfair728 @
Thursday, May 01, 2008 2:00 PM
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How long will it take for renewable energy to start delivering the results that we're receiving from current energy components, such as Oil, Coal, Nuclear etc? Years!!! Renewable Energy isn’t as advanced that it should be able to take over the energy market. The only way to keep the price of crude oil balanced is by balancing the supply, something you Libs have blocked time and again. Now you all blame it on the President.
Should we have drilled in ANWR 8 years ago we would have been a year away from pumping cheap oil into the Futures market and you would’ve complained about something else.
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keeeemosabe @
Thursday, May 01, 2008 2:11 PM
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Jbfair Can you stop being silly for just a moment> Oil and coal took 100 years to get to todays production levels, but you think if renewables take some years it is unworthy? Renewables...renew. Oil depletes. Conservation saves and pollute less. Inventions like LED lighting will reduce the need for new power plants by 20%. Save that ANWR stuff and drill today in the Bakken, Barnett and Marcellus trends and deep Gulf o' Mex. They make ANWR look like a dirty puddle. But you perseverate on ANWR and name calling. Thast is what works best for you and your kind. Just like a Repugnican.
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Interogatory @
Thursday, May 01, 2008 7:15 PM
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Still, it detracts from the argument, doesn't it? Any posting doesn't change the fact that old Bill stated the opposite of what you believe.
Some of us get our news and opinion from more than one source, more than one media, as a matter of fact.
Our energy problem is a real one and cannot be ignored. We must develop non petroleum energy sources but that will of course take time.
Tell me who is taking positive action here.
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Interogatory @
Thursday, May 01, 2008 9:46 AM
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What government study are you referring to? I'm sure weld all like to read it. Would an increase in domestic production not lead to a decrease in foriegn oil demand?
Interestinly enough, Bill O' Reiley has stated for some time that:
1. the Republicans are too comfy with thr oil companies. (Tax breaks)
2. the Democrats are too close to environmentalists (thwarting drilling)
3. The oil companies are screwing the consumer.
Didn't you know that?
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keeeemosabe @
Wednesday, April 30, 2008 7:23 PM
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I guess it's the silly season as the only stuff offered here is old tired talking points.
1. Maybe Congress took Bushie at his word (BIG MISTAKE) when he criticized Clinton for not jawboning down the price of Saudi oil. That was HIS solution a few years ago.
2. Studies of Anwar show that after 20 years, yes, the price of gas could come down...1 cent a gallon. (Gov't's own studies) (big whoop.......(NOT).
3. Oil co. CEOs testified before Congressional hearings that they CHOOSE not to build new refineries because they can expand refineries AND because today US refineries are operating at only 85% capacity. T. Boone Pickens says we have excess refining capacity...(yesterday, 2.29.2008.) He oughta know.... He's a billionaire Texas oilman. Bushie’s proposals to build refineries on military bases is dismissed by oil companies as ridiculous because no oil pipelines pas under or near military bases. Why doesn't he just ask the experts? ((Was this the big idea of the resident big-oil guy, ex-spurt, Chickenhawk Cheney???))
4. Nuclear. Correct. We need to expand nuclear...but not with old fashioned plants of yesteryear. Let the Chinese prototype their new pebble bed nuclear technology which is likely the most fail-safe "nuk-you-ler" tech out there and easily expandable as it is "modular" and much cheaper, and terrorist resistant. Who could ask for more????? Nuclear is not the only power generation answer though... capturing wave power and geo thermal is aan even better answer along with new Thermoenergy's technology of clean coal that captures CO2 at pressure and produces pipeline quality CO@ which is used to produce more oil from spent oil wells.
4. Taxation. Under present tax policies, the big integrated oil companies are NOT exploring for oil. They are buying back their oqwn shares with their record profits, which just reduces investment capital availble for drilling and just produces dividends...NOT ENERGY. Tax policy must be adjusted to discourage this behavior.
PS... you would know all this if you ever watched Keith Olbermann's CNBC show instead of billoreilly's know nothing show that preys on the over 60 crowd of ignorant hillbillies for ratings
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Interogatory @
Thursday, May 01, 2008 5:28 PM
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Often we would like folks to tite the source from which they get information. What you condider laziness some of us would consider verification. It is very easy to say something without sighting. As for name calling: Bushie, Chickenhawk...Hmmm... Most times I see people call names to either d humanize a threat or cover for the fact that they cannot produce an argument for an issue.
I've found that such action just takes away from an argument. You know what I called Bill Clinton for 8 years? The President. I didn't agree with him but I saw no reason to lessen an argument by showing I couldn't put up and start throwing bile.
Now, I'll ask again for the cite.
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keeeemosabe @
Thursday, May 01, 2008 5:52 PM
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http://tonto.eia.doe.gov/ftproot/service/sroiaf(2005)04.pdf
You are one in a million. See even Senator Chuck Hagel called Cheney's military draft deferments disgraceful for a man who thrives on sending other men to their deaths and uses this power to further his political aims and tough guy reputation. I just use the shorthand of Chickenhawk Cheney becuase it fits so perfectly.
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Interogatory @
Tuesday, May 06, 2008 9:36 AM
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Righties? Still detracts doesn't it? Very much so. I don't see the Democrats doing anything special. As for you doing something positive, run for office and I might vote for you, if you put fourth a real argument(and I see some ideas here) without the 'gas' (no pun intended, really). Last weak the dollar went up and the price of a barrel of oil went down. Today I believe the price went up again. This will remain volitile for a long time.
I hear that sen's Obama and Clinton both want a windfall profit tax on oil companies. I see the '70's returning. Oil companies reduce production, gasoline prices go up and we sit on lines for half a tank.
Government is not the solution.
We are. I'm parking the car a lot more and I encourage friends, family and Neighbors to do the same. We must organize and hit companies where it counts.
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By
keeeemosabe @
Friday, May 02, 2008 12:38 PM
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>>>>>>Tell me who is taking positive action here. <<<<
I am. I'll tell you a little about the assumed " energy crisis" I don't believe there is an energy crisis per say, it is rather a petrol price crisis. Why the price crisis?
1. A failing falling dollar buys fewer barrels. The dollar falls because of faulty economic policy
2. Iraq Oil flow interruption to world markets creating a relative shortage
3. Speculators acting on that relative shortage
Ways to fix? 1. Reverse the above issues. 2. Even supply demand manipulation may not work here, because as price falls from higher supply, demand may pick up exponentially.
There is no immediate magic answer. Except using the railroads more extensively. The ultimate answer is to use renewable energy systems to convert kinetic energy to stored energy that can be used in vehicles. Build "compressed air cars" and higher battery type utilization. Even that will require upgrades to the nation's electrical grid, but it can handle increases during the 'off hours". Gov't can effect faster movement by offering higher tax incentives to move away from petroleum. Dems embrace this more than righties.
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