Once Again, With Feeling

Here we go, on the ferris wheel of price increases with regards to gasoline and heating fuel, and all other related products, as the price of a barrel of crude rises yet again to it’s highest price this year. In a land with common sense, this would mean that drilling off of our coasts would make sense especially given the lag time between beginning the process, and actually obtaining the oil.

We, however, do not live in a land with leaders who have a lick of common sense when it comes to this issue. Instead, they prefer to run around like Chicken Little, screaming at the “ecological ” damage done to the environment. Truth be told, more damage is done by the oil tankers that ship the crude from far away places, than the pipelines that the oil flows from in the Gulf of Mexico, or the Alaska pipeline.

When the price of crude fell sharply last year, most people breathed a sigh of relief,as if the crisis was behind us- not so, as this is just the deep breath before the plunge into icy water. If we do not begin to drill now, then we will continue to be reliant on the Arab world, or Chavez, both of whom are repugnant to me. It would be much better to use our own petroleum reserves while we search for an alternative that might be as long as ten years away from commercial viability.

Pump prices have been on a tear as the price of crude oil—the biggest single factor in gasoline prices—has more than doubled from a low point this spring.

On Wednesday, the national average price for regular rose a fraction of a penny to $2.63 per gallon, according to motor club AAA. That’s up 40 cents from a month ago and just over $1 since the first day of 2009. In Houston, the average edged up nearly half a penny overnight to $2.43 a gallon, and is up 34 cents from last month, AAA said.

Crude oil prices are surging as investors pour cash into commodities as a hedge against the weakening U.S. dollar. The price got another boost Wednesday as traders reacted to Energy Department data showing a higher-than-expected drop in U.S. oil inventories, a sign that supplies are tightening, demand increasing and the economy improving.

Light, sweet crude for July delivery rose $1.15 to $71.16 a barrel, its highest price this year.

chron.com

Oil rigs don’t just float into place and begin pumping oil,which is why we need to begin now, or we will be forever behind the curve. That might sit well with Hussein, but the rest of us, normal American people, should not get this kind of “change” in our lives. We have already suffered these Liberal fools quite enough, thank you, and we would like to begin a return to sanity. 

Part of this return would be to drill for the oil here while we figure out the best way to go. Using a shotgun approach to solve the energy crisis is counterproductive- what is needed is focus on what works. In some places, solar might work- in others, wind may do it, although I personally have my doubts about wind. 

Nuclear power should be used more for everyday residential and commercial use, and I believe that we can make coal much cleaner, but we won’t know this if we rely on people who say no- as my mother used to say, ” “Can’t” never could.” 

Total U.S. petroleum product deliveries, including gasoline, fell to their lowest point since 1998 during the first four months of the year, according to the American Petroleum Institute, an industry trade group in Washington. The decline came despite pump prices that hovered around $2 a gallon nationwide for most of that time.

Now, some experts fear higher pump prices will cut deeper into the pockets of Americans and prove a drag on the rebound of the U.S. economy.

“A lot of what drives the U.S. economy is consumption,” said Ken Medlock, a fellow in energy studies at Rice University’s Baker Institute. “If we’re not consuming, we’re not going to recover at the same kind of pace we would otherwise.”

“I think if we had stayed in the low $2 range, we probably would have seen much stronger demand this summer,” he said.

This week, the U.S. Energy Information Administration said it expects regular-grade gasoline prices to peak in July, hitting a national average near $2.70 per gallon.

chron.com

Now, on the one hand, decreased usage means that pollution will be less, but the other side of the equation is that reduced usage means that our economic recovery will be prolonged.

The drilling off of the East and West coasts could prove a boon financially to the states, like California, and New Jersey, both of whom desperately need the money, and also the Federal government, which would make money both in the sale of the leases, and the taxes on gasoline refining and sales.

And still you have some people in these respective governments turning a blind eye to the realities of the situation. 

Are they waiting for the return of four dollar gas?

Blake

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53 Responses to “Once Again, With Feeling”

  1. Adam says:

    “Truth be told, more damage is done by the oil tankers that ship the crude from far away places, than the pipelines that the oil flows from in the Gulf of Mexico, or the Alaska pipeline.”

    Can you go into detail on that? It doesn’t seem logical to me.

    This is still a major difference in the parties. The Republicans tend to want to address the supply curve for oil. They spread fantasies about drilling and ignore the reality that it could take decades for that oil to affect our supplies.

    The Democrats are taking a much more reasonable approach in the support for methods that decrease demand for oil such as enforcing fuel economy standards in automobiles and giving tax incentives for those people who buy hybrid and flex fuel vehicles.

    If anything is clear it is that oil prices only rely on supply and demand curves for so long. Look at our current situation. When the credit crisis took hold it became harder for oil distributors to sell their oil to smaller companies that depended on credit so the supply of oil went up. In the meantime demand was dropping because Americans were tightening our belts. This corresponded to a marked drop in the price of oil.

    But what happened? None of that has really changed yet oil is going back up. We’re getting hosed and no increase in oil supply will fix that. We’ll only be OK when we focus our maximum efforts on dropping our demand for oil.

    After mocking Obama for suggesting that Americans can do simple things like check tire pressure to start to reduce their consumption of oil, and then turning around to scream “drill baby drill” at the same time, it became abundantly clear to the reasonable masses of the United States which side of this debate had captured the high ground and which side was wallowing around in mud still like a bunch of pigs.

    • Blake says:

      pipelines are static- they don’t run into reefs or shoals, or other vessels.
      Oh its “abundantly clear?” In what way? I have yet to see ANYTHING that even comes close to oil, and even if something was perfected tomorrow, we still have no infrastructure to make the change possible.

      • Adam says:

        Pipelines do leak and leak often, so I don’t see your point. I can’t argue one is better than the other but neither seems that safe to me.

        I mean “abundantly clear” that in the debate over who was getting better ideas out to the public the Republicans were looking like fools. Obama mentioning smart, easy ways to save energy beat out a bunch of morons passing out tire pressure gauges at rally’s and screaming drill baby, drill.

        • Darrel says:

          And where did Obama get the idea to mention the savings from proper tire pressure?

          ***
          “From George Bush’s Energy Department and Environmental Protection Agency…. Their joint site fueleconomy.gov is loaded with fuel-saving, money-saving tips. Keep your tires properly inflated, for example, and you can save up to 12 cents a gallon.

          Compare that immediate savings from that single tip, with what coastal and Arctic National Wildlife Refuge drilling combined would get you two decades from now: 6 cents a gallon.”

          Link

          D.

        • Blake says:

          As I said below, it is not the savings, but where they keep their money- here at home instead of over in the Mideast. Not to mention, not having to transport from such a distance would bring not only savings, but from a security standpoint, be safer. Anytime your line of supply is short, you are in much better shape. That’s just logical.

        • Darrel says:

          From a security standpoint we are better leaving it in the ground a little longer. We’ll need it (really need it) soon enough. Think of it as another Strategic Petroleum Reserve.

        • Blake says:

          That might be true, except it takes awhile to get rigs up and running, so we need to begin now.

    • Blake says:

      Tankers hit reefs. In addition. when they transship close to shore, their wake erodes the shoreline- not good.
      The oil wouldn’t be taking decades if the libbies in Congress would get off their butts and quit blocking progress and then claiming they are for the future. Same for nuclear energy, but thats another story.

  2. Darrel says:

    BLK: “…which is why we need to begin now, or we will be forever behind the curve.”>>

    DAR
    Our domestic supply isn’t remotely capable of bringing us from “behind the curve.” Not even close.

    US production peaked in the 1970’s, as predicted and has been in steady decline since. This will be the case no matter how much we drill.

    The world is probably at or near peak production and since demand is likely to increase strongly when the world economy bounces we will see vast increases in price again.

    Hummers will be useful for planting flowers in. Or maybe gut it and have a team of horses pull it.

    BLK: “When the price of crude fell sharply last year most people breathed a sigh of relief,as if the crisis was behind us”

    DAR
    Then those people, like most people, have *no* clue as to the real situation. Our prices are far too low. The $150 per barrel was a hiccup and a warning shot. You ain’t seen nothing yet. I wish gas had been $5 a gallon in the ’90’s. Then we would have efficient vehicles and would be more prepared for what is to come. Now we have whining at $3?

    When you can go into a convenience store and buy a gallon of water for about what you can buy a gallon of gas for at the pump, something is askew. The amount of effort that went into creating each of those products is incomparable. One is limitless and falls from the sky, the other is finite, was shipped around the world and required extensive processing.

    People have no concept of the amount of energy, and the energy density of gasoline (or oil).

    We have no replacement for it, and like fools, we waste it like water. Those days will soon be over.

    D.
    —————–
    “US natural gas production is declining despite a large increase in the number of producing wells . The US natural gas peak was at 22 Tcf/a in 1973 with about 100,000 wells; 2005 production was at 19 Tcf/a with 400,000 wells.” — Jean LaHerrere, ASPO

  3. Blake says:

    US production fell from the 70s high due to obstructionists like you whining like little girls about the coastlines- well, despite oil rigs’ safety records being damn near pristine, you are as hypocritical as Teddy “Half a brain” Kennedy who just can’t stand the thought of wind turbines being seen from the family compound- what an elitist pig.

    • Darrel says:

      BLK: “US production fell from the 70s high due to obstructionists like you…>>

      DAR
      No, I am sorry to observe again that you have not the foggiest idea of what you are talking about. And sorry also that you are bound and determined to remain misinformed. I already provided you the link for to learn about this topic (again below). This is information, carefully referenced, that I put together for a lecture I gave in July of 2007.

      D.
      ————–
      “Just as you can lead a horse to water, but you can’t make one drink,” so also, “you can drag a zealot to the truth, but you cannot make them think.”

      Dar’s Peak Oil Primer

      ps.
      1) Oil rigs do have a good safety record.
      2) The Kennedy’s position on windmills on the ocean horizon of their property is extremely hypocritical.

      • Blake says:

        oil rigs beat tankers every time with regard to oil loss, and just because we maty never get out in front of the curve is no reason not to mitigate the cost loss to Arab states by drilling here- any other thinking is idiocy- why would we NOT want to keep as much money here at home as we can?

    • Adam says:

      Damn near pristine? Kind of like oil pipelines? It’s like my pal Mike Huckabee once said:

      When Katrina, a Cat-5 hurricane, hit the Gulf Coast, not one drop of oil was spilled off of those rigs out in the Gulf of Mexico.

      He’s right in a way. Not 1 drop spilled, but rather 1000’s of gallons.

      Hypocritical? Based on a fabricated story about why Kennedy opposes Cape Wind?

      • Darrel says:

        Actually Adam, millions of gallons, according to this source:

        ***
        “Damage to oil facilities from Hurricane Katrina caused four medium spills (more than 10,000 gallons) and 134 minor spills, in which 8 million gallons of oil leaked onto the ground and into waterways from Louisiana to Alabama. The largest single spill was at the Bass Enterprises Production Company site in Cox Bay, La., where 3.78 million gallons of oil spilled. Another large spill was at the Chevron Empire oil terminal in Buras, La., where the roof of one storage tank was ripped off and the foundation of another ripped out, leaking 1.4 million gallons of oil.”

        http://www.geotimes.org/feb06/feature_oilspill.html

        Regarding Kennedy, good catch, I think you’re right. I never looked up the debunk of that one. Here is a response:

        ***
        “Kennedy rejected suggestions that he doesn’t like the wind farm because it would be near his Cape home, and said the project probably wouldn’t be visible from the Kennedy compound. He said he’s against the project because it would create a range of environmental and navigational problems and would hurt tourism, one of the area’s key industries.

        The Cape Wind developers, he said, want to erect a sprawling, for-profit field of giant windmills on public, state-owned territory. Kennedy noted that the project was the beneficiary of more lenient regulations included in last year’s energy bill, which could have put it on a faster track to construction; therefore, a special deal was warranted to stop it.

        Ultimately, Kennedy said, Massachusetts and its governor should get to decide yes or no on the site for the farm, Kennedy said.

        ”We had an opportunity to right a wrong,” he said of the provision in the Coast Guard bill. ”The people who ought to be irate ought to be the citizens of Massachusetts. I don’t shrink from my advocacy for them. I welcome it. I’m going to continue to make sure that . . . a wealthy developer is not going to ride roughshod over the state’s interests.”

        Link

        • Blake says:

          Oh great- now Kennedy is attempting to debunk himself? What about John Kerry- did he have the same bogus revision?

        • Blake says:

          I noticed in that link, that ALL of the oil spilled came not from the rigs themselves, but land based sources, so my statement stays true.
          Kennedy tried (and failed) to limit the damage done by his hypocritical stance in that article, but it is on record that both he and Kerry objected vociferously to the project because you might actually be able to see it a couple of days a year, and they did not like that.

        • Darrel says:

          BLK: “[Kennedy] and Kerry objected vociferously to the project because you might actually be able to see it…”

          DAR
          Show this.

        • Adam says:

          Your statement does not stand true with regard to my quote. This table from this source shows you clearly that offshore rigs and platforms spilled thousands of gallons of oil. That is not “damn near pristine” in any way.

          But we cannot argue that those things aren’t working for us and having pretty good records for spills. The question lies in do we want to open up more of our offshore areas to this kind of development just to pretend it will help gas prices when it will take so long to develop and when we should be focusing all our energy on sustainable solutions instead? No.

      • Blake says:

        Kennedy’s objections weren’t fabricated, your rebuttal is.

  4. George - Houston says:

    Just my opinion, but the reason oil is going higher is because there is no fear among investors that Obama and Congress will allow drilling off the east/west coasts or Alaska. Last year when Bush lifted the ban on drilling, the price started to fall. Then Congress failed to reinstate their ban a month later and the price fell even faster.

    I don’t think the oil companies even with OPEC can manipulate price by themselves. However when investors (maybe hedge/retirement funds) think oil is a profit or safe investment then we have a self fulfilling prophecy.

    • Darrel says:

      Dear George, the world oil market gives not a flip what few drips of oil are drilled for off of the coast of Alaska. It is profoundly insignificant and the suggestion that world oil prices were affected by something Congress did or did not do about this, is *ridiculous.*

      D.
      ——————
      *Oil production in the U.S. is well past its peak, and is in long term decline.*

      “U.S. oil production has been in decline for most of the last 38 years. This is not due to politics; it is simply the nature of petroleum extraction. The U.S. uses about 20+ mbpd of petroleum, and produces about 7 of that. The other two-thirds are imported, and there is no possible way that the U.S. could produce that amount domestically, no matter where or how quickly we drilled.”

      *ANWR and the continental shelf are no panacea.*

      “We believe that if all limits on domestic drilling were removed, including those on ANWR and the outer continental shelf, it could only increase U.S. oil production by 2 mbpd at best, and would require several decades to reach that level. Once that production comes online, it will be a drop in the barrel compared to the loss in global oil production. The idea that we can somehow drill our way to independence from imported oil is, therefore, misleading in the extreme. The only way we could become energy independent soon is by severely curtailing our oil demand.”

      *Oil prices aren’t all about us.*

      “It’s an all-too-common belief that if only we had authorized more domestic development of oil, our gasoline prices would be lower. With the global supply and demand balance as tight as it is for oil, natural gas, and coal, it is highly unlikely that a slight increase in U.S. production could make any noticeable difference in our gasoline prices. Once we take into account the decades it will take to bring new domestic resources online, any additional production we can manage will only slightly nudge the decline curve in global oil production, and only slightly depress domestic prices for gasoline, for a short while.”

      Peak Oil Media Guide

      • Big Dog says:

        Just as it is ridiculous to think that the oil companies manipulate prices.

      • Blake says:

        It is not that oil prices would drop D- the money would just stay here instead of going to Saudi Arabia. Wouldn’t you like that?

        • Darrel says:

          BLK: “Wouldn’t you like that?”

          DAR
          a) The amounts we can increase domestically are insignificant in the big picture, as I’ve shown.

          b) Because of globalism the money/profit doesn’t necessarily go where you think.

          c) We get twice as much oil from Canada as we do Saudi Arabia and we get over four times as much oil from Canada, Mexico and Venezuela as we do from Saudi Arabia (which comes in fourth).

          Link

          D.

        • Blake says:

          And still you refuse to address the problem. Is it better to pay Canada than to keep the money at home? Or Mexico? You are so short sighted, D- any money we can keep in our economy is a good thing.
          And I know you will say that you are an expert in oil production, but you are not, and the amount we might have offshore is yet to be determined, because liberals won’t allow many of the surveys do be done properly, with due diligence.

        • Darrel says:

          BLK: “And still you refuse to address the problem. Is it better to pay Canada than to keep the money at home?”>>

          DAR
          It doesn’t really matter much. The companies operating in Canada are usually global and often US owned (or mostly US owned. Saying a company is “owned” by a country hardly means anything anymore).
          Money going to middle eastern countries is a concern, but again, any additional increase the US can produce is profoundly insignificant to them, and the world market.
          Better, and more effective, to inflate your tires properly. That’ll scare the Saudis.

          It doesn’t make sense to go to extraordinary measures to get the hard to get stuff right now just so some mouth breather can flush it down his Hummer. When it stabilizes above $100, which it probably will soon, it will make more sense. And broke California may reconsider their decision against allowing it (which is their “states right” right?).

          D.

        • Blake says:

          See? You still refuse to address the problem.

        • Darrel says:

          I directly responded to your question. If you don’t think I did, rephrase.

      • Blake says:

        Opec is not the oil companies- we have no control over crazy Islamic countries or even others, like Venezuela.

    • Adam says:

      “Last year when Bush lifted the ban on drilling, the price started to fall.”

      Post hoc ergo propter hoc.

      • Blake says:

        That quote is true, by the way.

        • Adam says:

          Right. Prove it then.

        • Blake says:

          The quote is true- whether or not the price reacted to what Bush did may be speculative, but the fact is that there was a time correlation between what Bush did, and the fall of the price of crude. You can argue that it was because people drove less, or whatever, but the one DID follow the other, for whatever reason.

        • Adam says:

          That’s why I said “Post hoc ergo propter hoc.” It’s a logical fallacy that you are just defending yourself and being equally illogical.

        • Blake says:

          No what I said was factually correct- I did not say that Bush’s action was the direct cause of that- I just said when Bush lifted the ban, the price started to fall. The proof is the correlation between the two, but not the direct connection of the two.

        • Adam says:

          This is a silly argument. You’ll argue with a sign post, apparently. My point still stands. Let’s go back a bit and see more of the quote.

          George – Houston wrote:

          Just my opinion, but the reason oil is going higher is because there is no fear among investors that Obama and Congress will allow drilling off the east/west coasts or Alaska. Last year when Bush lifted the ban on drilling, the price started to fall. Then Congress failed to reinstate their ban a month later and the price fell even faster.

          George is clearly arguing that the price of oil fell because Bush lifted the ban. It did not. There is no evidence to suggest so other than that it happened after the ban so George asserts it happened because of it. Post hoc ergo propter hoc, at it’s finest.

          Your argument? The quote containing the logical fallacy is true…because the quote does not imply cause? George implies cause. George is wrong. You are wrong.

          • Big Dog says:

            You don’t know George is wrong. There is no evidence to suggest it happened because of it and there is no evidence that it did not. I don’t know but it is not wrong because it was his OPINION and you are offering yours. Neither has evidence of what caused the decrease.

        • Blake says:

          No, actually, I am right, as George’s quote does not specifically state that it was the actions of either Bush, or Congress’ inaction that was a direct cause of the fall, just that the price fell. Read one word at a time if you must,

        • Adam says:

          One word at a time? You are a sad, pathetic little man. It’s hilarious how wrong you are all the time yet how big of a coward you are when it comes to admitting that.

    • Big Dog says:

      The Democrats knew what people wanted and they said they were all for it—until they were elected.

      • Darrel says:

        I had a huge debate on this with a lefty Hillary supporter back at the time. Here is what Obama actually said when he changed from blanket opposition to considering it:

        ***
        “My interest is in making sure we’ve got the kind of comprehensive energy policy that can bring down gas prices,…”

        “If, in order to get that passed, we have to compromise in terms of a careful, well thought-out drilling strategy that was carefully circumscribed to avoid significant environmental damage — I don’t want to be so rigid that we can’t get something done,” Obama told the newspaper.”

        Link

        DAR
        McCain still kept repeating that Obama was against all new offshore drilling, but it didn’t really stick after that.

        D.

        • Blake says:

          It should have, because Hussein was lying- he knew that pelosi et al wouldn’t allow that.

        • Darrel says:

          BLK: “[Obama] was lying- he knew that pelosi et al wouldn’t allow that.>>

          DAR
          Here is what she said at the time:

          “I don’t think that’s a good alternative. But if they can prove that it is, and they want to pay royalties to the taxpayer … then we have something to talk about,” the top congressional Democrat told NBC’s “Meet the Press” program.

          “I’m prepared to preside over legislation that will take a comprehensive approach,” she said. “Include that (drilling). Let it compete and see where we come down on it, and if that in fact is a good alternative, then that is something that we should do.”

          Democrats, always so doggone reasonable.

          D.

    • Blake says:

      It is the speculators, reacting like lemmings to whatever news they perceive is significant to the oil reserves, that affect the price the most in the market.

      • Darrel says:

        What is going to have a larger effect in the future is the fact that demand is going to be greater than supply.

        Invest in a bicycle company, or one that recycles Hummers.

        We are addicted to oil, and our economy is addicted to cheap oil. The detox is going to be difficult.

        D.
        ——————
        “Mexican oil production will fall to 2.7 million to 2.8 million barrels a day next year as the country’s main oil field continues to decline rapidly, Carlos Morales, the head of exploration and production at Petroleos Mexicanos, said.

        Mexican output has slid by 20% since peaking in 2004, and officials warn that the country will see exports completely dry up over the next decade unless Pemex accelerates oil exploration in new areas such as the deep waters of the Gulf of Mexico.

        Cantarell is producing just over 1 million barrels a day, and Pemex expects it to fall to around 600,000 barrels a day by end-2012. Mexico’s second-largest oil field, Ku-Maloob-Zaap, will also head into retirement in 2010 after hitting peak production of 800,000 barrels a day.

        “The age of easy oil has come to an end,” Morales told lawmakers at a forum. “We don’t expect to find another Cantarell or Ku-Maloob-Zaap.”

        Link

        • Blake says:

          Part of the reason “easy” oil for Mexico is over, is that they nationalized the oil fields, which shut out the oil companies. I’ll bet Exxon or Chevron can find new oil, and Mexico has been thinking about “inviting” the oil companies back in to look. The problem is that when you nationalize a resource, the oil companies become very wary of investing in the region again, and you can hardly blame them- I surely would hesitate, after Mexico broke those contracts- kind of like Hussein with the car companies, and breaking Contract Law there, Investors will never invest in them again.
          “Once bitten, Twice shy.”