Third Party & Independents Archives

June 18, 2008

Oil & Gasoline: The Politics

oil rig photo - courtesy National GeographicThere is a factual story to be told about the multi-million dollar war being waged between the Oil and Gas and Republican team on the one side, and the Democrats, consumer, and environmental groups on the other. The factual story however, leaves much room for guesswork as to why the facts are as they are. Let’s examine this story as logically as possible.

Folks don't want oil derricks in on their front lawns, town squares, or Central Park. Hence, laws were passed ages ago regulating where mining and drilling operations may take place, to protect towns, farmlands, and even waterways, all necessary to American life.

The cost to the oil industry to buy up private properties where oil might sit, is a very expensive proposition. Oil companies seek oil deposits in the least expensive places possible to drill. Those places happen to be on Federal lands, bought and paid for by taxpayers, otherwise called the Public, and offshore.

Therefore, the Oil based corporations seek control of the reins of government power to avail themselves and shareholders of the least cost and maximum profit potential as possible, both now and into the distant future. These oil corporations are spending millions on TV advertising promoting an image of responsible management of America's energy needs, as environmentally friendly investors in the future, and in lobbying efforts seeking the authority to drill wherever and whenever it will be most profitable.

The Republicans are tied to these oil corporation efforts by campaign contributions, and more importantly, by their supporter's major investments in oil stocks and corporations. Democrats are being lobbied by the oil corporations as well, but view themselves as the champions of the environment and alternative non-polluting energy sources, which a majority of Americans also sanction. And here lies the field of battle between the Democrats, Environmentalists, and Coastal local governments on the one side, and Republicans, oil corporations and their shareholders on the other.

10's of billions in tax payer dollars are the prize being fought for on the U.S. Congress floor. Democrats want to subsidize alternative energy source innovation and production and foster independence from foreign oil which will require a long term commitment to that goal. Republicans want the oil companies to have nearly unrestricted access to oil deposits anywhere and anytime they discover them even though, this would reduce dependence upon imported oil very little as our domestic demand will increase as domestic supplies are increased. However, more native oil supplies would mean more profits for American oil corporations into the future.

It is a fact that the U.S. government has issued vast leases for oil drilling on land and offshore which the oil corporations have sat on without drilling them. There are 1 million square acres of Gulf Of Mexico oil leases purchased by oil corporations which remain untapped. Which begs the question, why are oil corporations fighting for oil rights on the East and West Coast continental shelves and the Arctic National Wildlife Refuge (ANWR) when they have leases for vast areas of federal lands and offshore sites which they have not begun to drill?

It is a question no one in government or the media seems to want to ask, nor are capable of answering with certainty and evidence. Which leaves the answer open to speculation. But, there is an obvious answer. This little known fact of sitting on, and not drilling, available oil field leases has the effect of lowering oil supply of domestic oil. Which in turn creates both higher profits on current oil tapped as well as, and this is important, the illusion that there is an emergency situation regarding shortage of oil the Republicans and oil corporations can use to argue their need to get leases for areas previously denied them.

They want it all. The very heart and soul of the oil industry is an unfettered and unlimited access to all suspected deposits of oil reserves. If alternative sources of energy are found to replace oil, the oil corporations are out of the oil business, which has been an extremely profitable business to be in. It is therefore, crucial to the oil corporations to secure leases on all potential oil reserves BEFORE such alternative energy sources are developed. Once alternative energy sources and technologies are developed and marketed to the point of being cost competitive with oil based energy, the oil industry will immediately become less profitable as it competes with alternatives for a lower price.

The oil industry with record profits today, can afford to fight this battle on the airwaves and in the Congress to secure access to all of America's oil reserves. Once alternatives to oil energy are marketable, their profits will reduce, and the costs of fighting these battles with environmentalists and Democrats will become less affordable. Therefore, it is in their interest to promote the false image of oil shortages and emergency need to secure access to all oil reserves everywhere, despite the fact that millions of acres untapped leases to drill are already available to the oil corporations.

This "crisis" is their means of swaying both the public and the Congress to grant rights to drill on the East and West Coasts and ANWR, while they can afford to wage that public perception war. There are many issues being fought over, federalism and state's rights to preserve the aesthetics and tourism industries for their coast lines, for example, and taxation of oil corporations while they are reaping historical records in profits. But, the core and central issue is whether oil will remain the mainstay of energy and product development for the rest of this century, or not.

In other words, this is a battle between the oil industry of the 20th century, and alternative energy industries present and future of the 21st century. This is a transition point in history. There is every indication that if sufficient investments are made today in alternative energies and non-oil based technologies, that America could become extremely oil independent, not just independent of foreign oil imports, over the next 25 years. That would spell an unprecedented decline in the oil industry and severe contraction in their profitability margins throughout the rest of this century and beyond.

The oil industry and Republicans view the Democrat's proposal to increase taxes on oil corporations and invest those revenues in the demise of the oil industry by fostering research and development of alternative energies and technologies as unconscionable. The Democrat's and Environmentalist's view as unconscionable the Oil industry's sitting on thousands of untapped oil drilling leases, all the while crying oil shortage.

You will hear Republicans say drilling in ANWR will reduce our oil dependence. This will be true, 10 years from now, and perhaps for no more than a couple years. You will hear Democrats say taxing oil corporations and funding energy alternatives with those taxes will reduce our dependence on foreign oil. This may be true in from 5 to 20 years from now, depending on how quickly alternatives can be perfected and marketed. The bottom line is, higher oil prices are hear to stay until competitive alternatives are put in place. Oil may drop as low as $80 to $100 per barrel in the future for a short period. That drop however, will only be part of a 2 steps higher one step lower trend in oil prices, until there is an available competitively priced alternative energy source for oil.

Gasoline is a matter of refinery capacity. There is no oil shortage in the world. We know this because not a single oil tanker anywhere in the world has pulled up to a port to fill up and been turned away empty or less than full. In America, there is an oil refinery capacity problem which creates seasonal and regional gasoline shortages. As these shortages occur more frequently, the price of gasoline spikes higher. And because they are occurring more frequently, the price dips don't dip as low as the previous one. This creates a trend of ever higher gasoline prices overall.

There is also the speculative pressure on gasoline prices. If the Democrats and environmentalists and alternative energy technology start-ups win their battle against the oil industry and Republicans, there will be no need for newer oil refineries. This makes the investment in new oil refineries a very risky one, until the outcome of the war over oil is determined.

It is crucial for the future of America that voters and the public bear this discussion in mind going forward. It is after all, their, and our children's future and pocketbooks which are hanging in the balance. It is the environmental quality of our nation and earth also hanging in the balance.

Some excellent article sources for the political battles being waged over this issue are:

Billions could be lost in Gulf oil leases.

Happy Earth Day, How About An Oil Lease?

Democrats take jab at holders of unused oil leases.

Posted by David R. Remer at June 18, 2008 04:51 PM
Comments
Comment #255963

very intresting article and well written too. I wonder if we will ever get a persident with the gravitas to lead the debate, and hasten the demise of big oil.

Posted by: napajohn at June 18, 2008 08:52 PM
Comment #255965

Every dit-dah in place on that one David. The world’s oil supply is at the half-way point. Big oil is frightening the people to get them to go along with more drilling and take their minds off alternatives. It would be super ignorant of me to assume that big oil has not cracked the hydrogen/oxygen separation nut and squirrled it away. They won’t dig that nut up untill the last drops of oil is burned or a competitor comes on line with alternatives. There must be hundreds of wells drilled and tapped in the carribean, off Africa’s east coast and around the world. But, that oil is way more expensive to suck up and it won’t be pumped untill the price is right. The Caspian fields have barely been tapped and on and on. If it takes energy to separate hydrogen why not use the nuclears in the evening hours and make hydrogen? Why not build four or five nukes and dedicate them to hydrogen production, etc. And here we sit, in a recession, with corn at $8/bu. Starving half the world to death. Out da*n politicians, OUT!

Posted by: Roy Ellis at June 18, 2008 09:39 PM
Comment #255969

Good article.

You’d think we’d have more progress on this energy issue with a $3 Trillion federal budget, and a Dept. Of Energy with a $24 Billion annual budget? ! ?

Has anyone ever seen a government with so much, accomplish so little?

If we wait for do-nothing Congress to do something, we’re probably in big trouble.

We need to find out why oil companies are not exploring and drilling hundreds of millions of acres in the U.S.?

We also need to find out why corn was over-sold as an ethanol source when other plants (e.g. sugar cain) can provide more ethanol. Just because corn is easier to grow apparently has not turned out to be a very good reason. Sugar cane can be grown from eastern Texas to the east to Louisiana, to South Carolina, to Florida, and also in Hawaii and Puerto Rico.
And how many of the corn growers are already getting massive subsidies?

With serious focus and action, the U.S. can become nearly (if not totally) energy independent. However, some people are standing in the way of that (for nefarious purposes). The lack of drilling and exploration on hundreds of millions of acres of oil and gas leases available to the oil companies seems to cooroborate the theory that supply/demand games are being played to indirectly manipulate (i.e. drive-up) prices (source: EWG’s analysis of well-by-well oil and gas production records from AUG-2004 via a Freedom of Information Act Request).

Still, we can’t drill our way (i.e. for oil and gas) our way out of our energy problems. The U.S. uses 25% of the world’s oil, and it can’t produce that much domestically (not for long, anyway).

At any rate, the voters have the government that the voters elect (and deserve).

Posted by: d.a.n at June 19, 2008 01:17 AM
Comment #255970

David,
Why you speak the truth about the driving force of the oil companies of America and the World, I see the problem not in Demand vs. Supply, but a challenge to My Peers and the Children of the 21st Century by the Elders and Powers-that-Be of the 70’s. For with all the talk of Political and Societal Change I have yet to here a single viable political solution being offered by a single candidate.

For why it can be said that oil is just nothing more than organic waste put under the forces of nature for thousands of years, knowing that composting is as old as the Hills, themselves. I have to ask the Children of the 21st Century what they think can be done with “Pure Carbon” and “Crystal Motor” Knowledge and Wisdom given the political debate that as an American I do not want to pay for Your Carbon Droppings!

No, the task of changing My Elders and Powers-that-Be mind about using the oil of the land to feed the Beast of Nature I the Corporation is for Americans and the Market to pull their heads out of the clouds and realize that the answer has always been held by Nature.

For why I hear the Republicans cry “Drill, Drill, Drill! I also hear the Democratic Party say nothing about using the Bio-Mass Material and Waste to make America Economically and Energy Independent.

So, if I may be so bold as to ask how one goes about making that part of the Political Debate of America. Can you help me?

Posted by: Henry Schlatman at June 19, 2008 01:41 AM
Comment #255971

David

First a small point. Federal lands are rarely bought and paid for by the taxpayers. Usually the Feds came into the land default. They are lands the nobody wanted to buy back 100 years ago and they are probably not productive enough to be bought even today.

The taxpayers obviously never bought or paid for offshore lands. When we just extended the limit to 200 miles we just got them free.

The question is whether or not we should use the resources, not who bought them.

Energy firms lease land and pay for that. Maybe you have rented a house sometime in the past. Do you feel that you ripped off the landlord by using his property?


Re not using the lands they already got, let me explain with a simple example. You rent a house, but you never move in. You continue to pay rent, but don’t use the property. Why would you do that?

The Federal government already has a “use or lose” provision in leasing. If energy firms do not use the leases, they can be taken back. The energy companies cannot be saving that oil until prices rise because – as you pointed out – they don’t own it. They are exploring for oil.

Most of the Democratic claims re oil firm abuses, therefore, are just BS. It is fun to watch them challenged on it.

High Oil Prices

As those who read what I write know, I agree with Barack Obama that gas prices should be higher. We disagree on the components of that price. I would be happier if a greater share of that price went to American producers and was American supplies. The Democrats prefer to keep feeding the despots. I disagree.

My ideal solution would be to have more American energy in the mix and then use a carbon tax to push the price high enough to encourage alternatives.

That way American firms, American taxpayer and Americans in general would benefit.

The Obama/Dem thinking is based on ideas and technologies of the 1970s. We have learned a lot since then. We can do things better now than we could 40 years ago. Dems should get with the program and understand that the energy mix is complex.

If you want to emit less CO2, you have to do the things that make us emit less CO2. If you want less foreign oil, you have to do the things that require less foreign oil. It is simple. Dems try to make it complex so that they can trick the public. We have caught on.

Posted by: Jack at June 19, 2008 01:52 AM
Comment #255972


SPONSORED SECTIONS

Will biofuels unite or divide the EU and the US?

by Friends of Europe






An “Atlantic Rendez-Vous” TV satellite debate between Washington DC and Brussels

Co-organised by Friends of Europe, the European Commission Delegation to the US and Gallup Europe

These policy recommendations represent the outcome of the sixth Atlantic Rendez-Vous (ARV) project in Friends of Europe’s 2006-2007 ARV series. The ARV series is an initiative of Friends of Europe in collaboration with the European Commission Delegation to the US and Gallup Europe. It aims to create a platform for enhanced dialogue and policy debate between the EU and the US on key transatlantic issues.

The pioneering transatlantic satellite format that connects Brussels and Washington in a lively TV-style debate, and the contributions of a wide range of American and European experts, make Friends of Europe’s ARV series unique in its genre and represent an unprecedented attempt to create a transatlantic platform for debate.

Policy recommendations: “AND THE EXPERTS SAID”

Launch a study into the environmental impacts of the various types of biofuels. Biofuels have the potential to make a huge difference to the emissions from the transportation sector, but not all of them are effective. We need to know what are the best feedstocks, fuels and locations to focus on.

Target incentives precisely. Once we know which biofuels we need and where, we can discourage what is bad about them – deforestation of rainforests, conflict with food crops, and overuse of water – and encourage the good things – feedstocks that do not conflict with food production, crop growth that encourages development in emerging markets and processes that cut emissions such as the development of cellulosic ethanol.

Introduce an international certification system. One of the barriers to the widespread use of biofuels is fears over sustainability. The creation of globally-recognised standards would boost consumer confidence in biofuels and encourage their use more widely.

Overhaul tariff regimes. Already, distortions are appearing in the biofuels market that are preventing the best available biofuel (such as Brazilian sugarcane-based bioethanol) from being sold in the US, while encouraging the dumping of biodiesel in Europe, hurting the continent’s attempts to build up a nascent industry.

Boost R&D funds and co-operation on cellulosic biofuels. In the long term, biofuels based on food crops are unsustainable. Not only are they not very efficient, they may also lead to an increase in food prices and encourage unsustainable use of land in inappropriate places. Cellulosic biofuels solve many of the problems that first-generation biofuels have – they emit far less CO2, they do not compete with food crops and they are more energy efficient. But they are a long way from commercialisation and there needs to be a concerted effort to bring them to market.

Encourage the production of biofuels in developing countries. Not every country can strike oil, but almost everyone can grow fuel crops, particularly when cellulosic ethanol is well-established. Not only does it provide access to revenue and encourage economic growth in the poorest parts of the world, it cuts the use of fossil fuels and increase energy security.

Encourage cross-sectoral participation. Cutting emissions in transport requires a focus on all aspects of the value chain. Measures need to be targeted at fuel suppliers (to cut the carbon content of fuel); vehicle producers (to increase the fuel efficiency of engines) and consumers (to encourage them to adopt biofuels).

Focus on demand management. Demand for transport is growing at a huge rate that is unsustainable not just from a carbon management point of view but also in terms of congestion, air pollution and safety. People are so frustrated at trying to travel around cities that they are beginning to demand measures such as congestion charges. We should capitalise on this discontent and readiness to consider alternatives to travelling by car.

Overhaul public transport. The key element in cutting traffic in cities is to make public transport more appealing. This requires massive, sustained, long-term investment and a clear vision of an integrated transport system.

Incorporate environmental requirements into Formula 1, Nascar and other motor sports. Motor sports teams are at the cutting edge of automotive research. They are far more nimble and innovative than the big car manufacturers. Requirements for them to cut emissions and increase fuel efficiency would be likely to produce quick results in the fight to cut the impact of vehicles.. AND CONGRESS DID NOT HEAR ..





Posted by: Rodney Brown at June 19, 2008 01:56 AM
Comment #255974

Henry, join an organization that is promoting that debate. There are many. It takes money to reach out to Americans and communicate. Organizations are the only way to expand the awareness and the debate and explore the solutions at the grass roots level, where ultimately a concensus must be formed to move the government one direction or another.

Posted by: David R. Remer at June 19, 2008 01:57 AM
Comment #255975

I like the additional “pop” of pictures on the front page.

Good Article. I think the gasoline and diesel deal is the one of most significance to most Americans. About a year ago I kept hearing about new refineries and expansions. Now I hear they are on hold. Refineries were closed shortly after the last round of mergers.

I don’t begrudge oil companies profits, but when they manipulate markets, it’s time to introduce some kind of competition to the market. A windfall tax to build a government subsidized refinery? Break up a merged company?

Are you sure there are proven fields on these unused leases? Are they at production stage, or do they need to be drilled? Are these easily recoverable oil sites?

I’m not sure the lease issue is as straight forward as your post states.

I personally think drilling should occur in ANWR and off Florida. It won’t destroy the environment or tourism. That’s just fear mongering. California is cool, if the faults don’t make it unsafe. It’s time for all the NIMBY folks to pony up, irregardless of idle leases. They can add a tax, in their provinces, if they believe they need to fund closer oversight of drilling or refining.

Posted by: googlumpugus at June 19, 2008 02:04 AM
Comment #255976

David,
Thanks, but I was thinking of a more direct method. Have any ideas on how we could use it to keep the drive of VOID going?

Posted by: Henry Schlatman at June 19, 2008 02:06 AM
Comment #255977

Jack said: “First a small point. Federal lands are rarely bought and paid for by the taxpayers.”

Right, Jack, let’s ignore the Louisiana Purchase, Alaska, Hawaii, the publics money to declare and enforce ANWR, Yellowstone, Yosemite, Glacier (soon to be Non-Glacier)Natl Park, and a host of others like Big Bend, Tx.

Your comment is full of it. These places had private ownerships which were paid for their properties by federal taxpayers. Alaska itself cost $$7,200,000 in 1867. There were about 60,000 people in Alaska at the time, 2,500 Russians, the rest Inuit and other aboriginals.

ANWR had its beginnings in 1927 with the Federal government’s set asides for military and oil reserve purposes. Statehood did not arrive until 1959. Prior to that, the federal government, meaning the American taxpayers, were the owners of the entire Alaskan purchase, and what is now called ANWR. 3 years before Alaskan statehood, grassroots movement on the creation of ANWR had already begun with Alaska’s Tanana Valley Sportsmen’s Association, Fairbanks Chamber of Commerce, and Fairbanks News Miner endorsing the Arctic Range proposal.

In 1960 legislation passed the House to create ANWR, but, the Senate didn’t. In Dec. of 1960, it was a Republican Administration’s Department of Interior that created the wilderness preserve. It has been fought over and about ever since. The president was D.D. Eisenhower.

If you do a little research, you can avoid such gross misstatements such as the one above. Yes, some lands are donated, as was the NorthWestern addition to the Big Bend National Park a little over a decade ago. But, it was not without federal dollars involved. That tax payers eat the tax deduction for the donation of the land, a form of payment by taxpayers without cash trading hands on the receipt of the land.

The Louisiana Purchase resulted in the taxpayers giving away millions of acres to the Railroads to tie East and West together. And save for a short period during the Civil War, the mighty Mississippi River remains in taxpayer owned and free artery for transportation of goods for all, maintained by federal taxpayer dollars.

Posted by: David R. Remer at June 19, 2008 02:42 AM
Comment #255978

googlumpus, there is no such thing as a proven field until you drill. ANWR is not yet a proven field. Exploration drilling is required to prove a field. Hence the leases from the government for federal areas permitting such drilling. Vast acreages of leases have been obtained, but not exercised by the oil industry, both on federal lands and in the Gulf of Mexico.

Posted by: David R. Remer at June 19, 2008 02:46 AM
Comment #255979

Goo said: “I personally think drilling should occur in ANWR and off Florida. It won’t destroy the environment or tourism.”

Poppycock. You aren’t keeping up with the news and risks. I used to love to go to the Texan Coast to sailboard, gather and cook clams, fish, and camp on the beaches. The Gulf view was beautiful. Not anymore and not for many, many years. I long ago quit making the 4.5 hour drive to the Corpus Christi area where successful fishing is a near miracle these days. Not because of oil, but because of overfishing and red tides. Another of which is coming thanks to the Mississippi bringing all those pollutants down from the Midwest flooding of farm lands.

Now, I go to California for coastal camping. There you can still find pristine vistas, beach fronts, and ocean life.

1989, March 24, Prince William Sound, Alaska: tanker Exxon Valdez hit an undersea reef and spilled 10 million–plus gallons of oil into the water, causing the worst oil spill in U.S. history.

1990, June 8, off Galveston, Tex.: Mega Borg released 5.1 million gallons of oil some 60 nautical miles south-southeast of Galveston as a result of an explosion and subsequent fire in the pump room.

1993, Aug. 10, Tampa Bay, Fla.: three ships collided, the barge Bouchard B155, the freighter Balsa 37, and the barge Ocean 255. The Bouchard spilled an estimated 336,000 gallons of No. 6 fuel oil into Tampa Bay.

Nov. 28, 2000, Mississippi River south of New Orleans: oil tanker Westchester lost power and ran aground near Port Sulphur, La., dumping 567,000 gallons of crude oil into lower Mississippi. Spill was largest in U.S. waters since Exxon Valdez disaster in March 1989.

Dec. 7, 2004 Unalaska, Aleutian Islands, Alaska: A major storm pushed the M/V Selendang Ayu up onto a rocky shore, breaking it in two. 337,000 gallons of oil were released, most of which was driven onto the shoreline of Makushin and Skan Bays.

2005
Aug.-Sept., New Orleans, Louisiana: The Coast Guard estimated that more than 7 million gallons of oil were spilled during Hurricane Katrina from various sources, including pipelines, storage tanks and industrial plants.

2006
June 19, Calcasieu River, Louisiana: An estimated 71,000 barrels of waste oil were released from a tank at the CITGO Refinery on the Calcasieu River during a violent rain storm.

Posted by: David R. Remer at June 19, 2008 03:03 AM
Comment #255983

Jack said: “The taxpayers obviously never bought or paid for offshore lands. When we just extended the limit to 200 miles we just got them free.”

True enough. Americans didn’t pay federal tax dollars for off-shore property: they paid in blood, sweat, lives, and horrible suffering in a Revolutionary War and a Civil War for those off-shore areas. Paltry price compared to what might be lost in profits by increasing taxation on oil companies, right? When are you Republicans going to shed that shared belief with Democrats that anything in this nation of physical substance can be free. American coastal waters were not free. The Gulf Of Mexico where oil rigs abound was not free. A war with Mexico was the price, the losses at the Alamo were the price.

You Republicans are so at ease with the concept of giving away publicly held anything and everything if a buck can be made from it. National Parks intended to be enjoyed by all the public, and cared for and protected and maintained by public federal dollars. Then came the Republican presidents who in addition spending tax dollars on these parks, had the audacity to then charge citizens admission to these same National Parks. The Day I was charged to camp in Big Bend National Park, was the day I knew I had a serious problem with Republican presidents.

And to this very minute, Republican presidents continue to defile the concept of public trust by granting exploitation rights to private interests in return for their votes and campaign contributions. It is disgusting, Jack. A form of treason if you ask me to everything T. Roosevelt and Dwight D. Eisenhower and H. Hoover stood for in terms of public trust acquisitions and designations for posterity.

Posted by: David R. Remer at June 19, 2008 03:20 AM
Comment #255984

Henry, I can’t think of any more direct way than communication. And while speech on a stump in the town square may be free, mass communication is not by a long shot.

Posted by: David R. Remer at June 19, 2008 03:21 AM
Comment #255985

napajoh, Roy Ellis, Henry, and d.a.n, thank you for the comments.

Jack, thank you for your input as well. I know I disagree with your points, but, I do appreciate your taking the time to provide them, giving me an opportunity to elaborate a different perspective.

Goo, thank you too! (Maybe I should write poetry?)

Rodney B. thanks too, but where is the link to your source? Thanks.

Posted by: David R. Remer at June 19, 2008 03:25 AM
Comment #255988

David,
Don’t feel bad I could not either. However, I was not sure that I could use mass communication to get my personal point of view heard. Thanks.

Posted by: Henry Schlatman at June 19, 2008 04:08 AM
Comment #255989

Billions could be lost in Gulf oil leases By DAVID ROGERS | 5/27/08 4:59 AM EST of Politico (website) Bingaman has pressed for a 13 percent excise tax to try to recoup the foregone revenues.
While Americans pay more at the pump, a draft government report shows that oil companies stand to enjoy an ever larger windfall from royalty relief granted by Washington to encourage deep-water drilling in the Gulf of Mexico.

The Government Accountability Office report — reviewed by Politico — suggests that the foregone royalties could reach $53 billion, depending on the outcome of industry lawsuits and what critics contend was a lapse in administration under President Bill Clinton.

The companies took risks and paid an estimated $2 billion more in bonus payments to get the leases. But the potential loss in long-term government revenues is 25 times greater than those gains upfront, and the imbalance will only get greater if oil prices rise higher
The House last year passed legislation seeking to pressure companies holding the 1998 and 1999 leases to renegotiate the terms. And Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) has pressed for a 13 percent excise tax to try to recoup the foregone revenues.

Written by ANWR News
Published April 06, 2005
Sen. Ron Wyden, D-Oregon, is demanding that the Commerce Department release detailed reports on which companies are exporting U.S. oil, how much and where it went.
Last year the nation exported 268 million barrels of oil. Shockingly, according to Dept. of Energy figures, that’s about equal to the amount of oil we imported from Iraq in 2001, the year before our latest war with that country began. It’s also about equal to the most optimistic guesses about production volume from ANWR, if drilling is allowed there.
In other words, if we simply held onto our own oil, the United States would have no oil interest in Iraq at all. And it would also negate any perceived need to disturb an irreplaceable wildlife refuge in the search for oil.
But the Commerce Department refused to provide the detail Wyden wants, saying it could only be released to a Congressional committee, not an individual representative. The agency also claims federal law forbids disclosure unless a finding is made that withholding the information contradicts national interests. That sounds like hogwash to me.

Posted by: Elisha Poole at June 19, 2008 04:44 AM
Comment #255990

David

The government manages those Federal lands. They should indeed try to make a profit for the taxpayer while managing them for the multiple uses we all want. I don’t remember the exact wording, but that is the mission of the national forests etc.

When they lease lands (or water) to firms, they should consider all the costs and benefits. Sometimes energy exploration is a good use.

You are right that Thomas Jefferson actually bought much of the Midwest from the French (for what a couple cents an acre) and we bought Alaska from the Russians and a slice of Arizona from the Mexicans. But the Americans of those times were buying those lands as part of the United States. None of them envisioned keeping these places in the hands of the Federal government. They understood that the American nation and the American government were not the same. In fact, they sold or gave away land as fast as they could to American citizens and prospective Americans. Leasing is in this tradition.

And please don’t bring up National Parks. I don’t think anybody is advocating using parks for oil drilling. Some places should be protected. America established the first national park, Yellowstone, during the Grant administration. We have a long history of conservation, preservation and wise use.

Re offshore lands and fighting for them – not exactly. Ronald Reagan signed an order declaring a 200 mile economic zone. We used to have a twelve mile limit, which is about as far as old fashioned cannon and gunboats could reasonably protect.

We disagree about what and who we are as Americans. Americans are NOT their government. The government serves us. I don’t advocate giving away anything (which is, BTW, why I don’t feel bad about the small amounts we pay to use national parks). Our government has a duty to serve us citizens. That usually means letting citizens do business.

Our Federal lands cover around 1/3 of our total land area. If you include our new sovereignty over 200 miles of coastal waters, they probably own or control most of the space in America. I don’t propose giving that to anybody, but such vast space should be useful to the citizens of the United States. Private citizens and firms can pay the government (and. the rest of Americans) for their use of Federal lands. This includes your one-night lease of a campground or the oil exploration lease in the Gulf of Mexico.

BTW - thanks for thanking but the opportunity to talk is thanks enough.

Posted by: Jack at June 19, 2008 04:45 AM
Comment #256004

Setting the conspiracy theories aside,it is all about maximizing profit for shareholders. You know, the common people out there who want to retire higher than social security induced poverty.
The leases presently owned; isn’t that a contradiction? Leases and owned? Anyways, they are temporary to guarantee a well to offset the costs of surveying should oil be indicated by their methods. They are not reserves and represent a very small amount of the total lands that could be leased. Exploration is the only way to confirm their findings. The areas that have the strongest indication after spending alot of money to arrive at that conclusion will be explored. That is the reason much more has to be opened up. The land they have now was leased to check and survey for indications and it most likely wasn’t strong, the leases continue to be active however. The science how they arrive at this is interesting.

Posted by: Kruser at June 19, 2008 09:13 AM
Comment #256010
Jack wrote: First a small point. Federal lands are rarely bought and paid for by the taxpayers. Usually the Feds came into the land default. They are lands the nobody wanted to buy back 100 years ago and they are probably not productive enough to be bought even today.
Not true.

Huge amounts of federal lands were “bought and paid for by the tax payers”.
Federal lands (public domain; under privately or state ownership during the 18th and 19th centuries) were obtained as the nation expanded, from:

  • the 13 original colonies,

  • bought from Native American Indians;

  • stolen from Native American tribes;

  • or bought from other countries (e.g. Lousiana Purchase (1803; a huge region), Alaska (1867; largest state in the U.S.), Gadsden Purchase(1853), etc.);

Some (not all) of that land was then sold by the General Land Office (GLO) of the federal government to state and private interests; often to promote settlement of the frontier (i.e. via the Homestead Act(1862), Timber and Stone Act(1878), and the Morrill Act(1859)).

Jack wrote: The question is whether or not we should use the resources, not who bought them.
Then why make “who bought them” it an issue?
Jack wrote: Energy firms lease land and pay for that. Maybe you have rented a house sometime in the past. Do you feel that you ripped off the landlord by using his property? Re not using the lands they already got, let me explain with a simple example. You rent a house, but you never move in. You continue to pay rent, but don’t use the property. Why would you do that?
Why? Possibly, to limit production (supply) in order to drive up prices. It’s possible, and access to 229 million acres of public and private land, but very little of it being accessed raises questions about the myths of restricted access.
Jack wrote: The Federal government already has a “use or lose” provision in leasing. If energy firms do not use the leases, they can be taken back. The energy companies cannot be saving that oil until prices rise because – as you pointed out – they don’t own it. They are exploring for oil.
Some, but how much exploration is there really? Is the myth of restricted access real, when access to 229 million acres is not being used?
Jack wrote: Most of the Democratic claims re oil firm abuses, therefore, are just BS. It is fun to watch them challenged on it.
It’s not BS if limited production (supply) is by design in order to drive up prices, uncertainty, speculation, etc.

Since 1982, the federal government has leased and/or offered 229 million acres of public and private land in 12 western states for oil and gas drilling, an area greater than the combined size of Colorado, New Mexico and Arizona. Currently, 35 million of the 229 million acres (15.3%) are leased. The amount of acres newly leased each year has steadily declined since the 1980s (probably because prices were low and foreign oil was cheaper). Thus, domestic onshore natural gas production from public and private lands has generally increased since 1990, while domestic onshore oil production has declined. But not for lack of access. A recent study by 3 federal agencies indicated that access is not a problem for the remaining available energy; in the 5 western basins that contain “most of the onshore natural gas and much of the oil under public ownership within the 48 contiguous states,” the study found that 88% of the natural gas and 85% of the oil is on land available for leasing.

Jack wrote: My ideal solution would be to have more American energy in the mix and then use a carbon tax to push the price high enough to encourage alternatives.
We can’t tax our way out of every problem. Especially when the government can not be trusted to use the tax revenues responsibly.

Already, there has never been a government that has accomplished so little with so much ($2.6 Trillion in tax revenues; 19% of a $13.9 Trillion GDP).
Besides, oil and gasoline prices are going to quickly become painful enough without the government imposing another regressive tax.

Jack wrote: That way American firms, American taxpayer and Americans in general would benefit.
Benefit? From more regressive taxation? Not likely.
Jack wrote: If you want to emit less CO2, you have to do the things that make us emit less CO2. If you want less foreign oil, you have to do the things that require less foreign oil. It is simple.
There are better solutions than inventing new regressive taxes.

However, a carbon tax may have one huge benefit. Angry voters will oust hundreds of incumbent politicians in do-nothing Congress as they did in year 1933 when they ousted 206 members of Congress (44% of the incumbent politicians up for re-election).

Jack wrote: Dems try to make it complex so that they can trick the public.
HHHHMMMmmmmmmm … perhaps we should invent a new tax to discourage that behavior?

When it comes to over-complication to make things ripe for abuse, few (if any) Democrat and Republican politicians are guiltless.

Jack wrote: We have caught on.
Really? Whose “we”? Is that why people are leaving the Republican party in droves?

Carbon Tax disadvantages:

  • (01) It is yet another regressive tax. It also punishes certain industries and professions more than others.

  • (02) It is price-based tax. While increased price may lower demand and emissions, no definite limits on emissions can be guaranteed. If demand is strong enough, emissions will still rise despite the tax.

  • (03) In order to achieve significant carbon emission reductions to put a dent in climate change, carbon taxes would have to be extremely high, and voters ain’t likely to stand for it. Especially the middle class that is already being hammered from every angle. Especially if progress toward alternative solutions is non-existent; a high likelihood based on do-nothing Congress’ track-record.

  • (04) Carbon taxes are bad for the economy. A carbon tax that may be effective in a boom economy would be grossly excessive in a recession.

  • (05) It is pointless if there are no suitable alternatives on the horizon.

  • (06) Carbon taxes will increase economic disadvantages for the middle-income and lower-income groups that are already being hammered by these deteriorating economic conditions.

  • (07) It would be difficult to tell what effect the tax is was having on emissions.

  • (08) A quantity (versus price based) system will be difficult to measure, and ripe for abuse.

  • (09) As tax-happy as most politicians are, they are not likely to commit career suicide by implementing carbon taxes large enough to put a dent in the current emission levels. We need altnernatives, and action to move toward those alternatives.

Raising taxes and prices on fuel doesn’t make much sense when potential alternatives are not yet widely available (but probably could be if we simply choose to do so).
There are other common-sense things that could also be done, such as:

  • (1) 4 day work week.

  • (2) employers could stagger work-day start-times (e.g. starting at 6AM, 7AM, 8AM, 9AM, and 10 AM to reduce traffic congestion).

  • (3) reduce speed limits 5 to 10 miles-per-hour.

  • (4) mandate higher miles-per-gallon standards for new automobiles.

  • (5) mandate higher energy efficient building standards

  • (6) more wind power.

  • (7) more solar power and research.

  • (8) more E85/15 pumps and flex-fuel vehicles (existing vehichles can be converted with a kit for only a few hundred dollars). E85/15 fuel pumps are almost non-existent in Dalls, Texas.

  • (9) more crops that produce 7+ times more ethanol than corn.

  • (10) more mass transit.

  • (11) more research: www.ovonics.com/oc_featuredsolutions.cfm

Is there really a need to raise fuel prices?
Fuel prices are already rising plenty all by itself (without more taxes).
The price of oil has doubled in a year: one-simple-idea.com/USD_Falling.htm#Oil
If government wants to make fuel consumption more painful, shouldn’t there be some alternatives?
You’d think the Dept. Of Energy’s $24 Billion annual budget could have been doing something about this a long, long time ago?
You’d think the federal government’s $2.6 Trillion of annual tax revenues could have been doing something about this issue a long, long time ago?
Instead, the government’s solution (as usual) is more taxes.
What ever ails us, just tax it some more.

The government doesn’t need more money and the voters don’t need more taxes.

Jack wrote: We can do things better now than we could 40 years ago. Dems should get with the program and understand that the energy mix is complex.
What we don’t need is more fueling and wallowing in the partisan warfare, more regressive taxation, and more abuses to add to the growing list. What we need is action and leadership, and that requires enough voters finally do what you suggested here.

At any rate, the voters have the government that the voters elect (and deserve).

Posted by: d.a.n at June 19, 2008 11:55 AM
Comment #256011

d.a.n.

My plan would be to have more American oil to lower the price and THEN impose the carbon tax.

All

If we don’t drill offshore, others will do it and take it first. The Cubans are contracting with Chinese and RUssian firms to drill for oil in their economic zone waters, which is the same fields as ours. The oil will come out. But if we do nothing, we will have to send our money to Russia or China instead of keeping some in America.

Posted by: Jack at June 19, 2008 01:44 PM
Comment #256013

Jack, when the oil companies drill the leases they have, then, AND ONLY THEN, should we consider depriving other Americans in deference to the oil industry Exec’s.

What part of this do you not understand? Oh, I forgot, you support Republicans, and Republicans believe the American people and States should bend over and take whatever the oil companies shove their way.

Republicans are NOT going to have their way with the people on THIS issue. NOT while their Buddy Oil Execs sit on Record Profits and millions of acres of undrilled lease access to Publicly owned resources, crying “WE WANT IT ALL, AND WE WANT IT NOW!”.

Posted by: David R. Remer at June 19, 2008 01:50 PM
Comment #256015

Kruser demonstrates his ONE SIDED REPUBLICAN viewpoint yet again by saying: “Setting the conspiracy theories aside,it is all about maximizing profit for shareholders. You know, the common people out there who want to retire higher than social security induced poverty.”

Those shareholders are enjoying record returns on their investments in oil, Kruser. They aren’t hurting at all. And if they should one day get less than they expect from their oil stocks, they or their fund managers have a duty to sell and buy stocks with greater returns. Any part of choice in this you don’t understand? No faith in the markets, Kruser? You believe owning stocks makes the stockholder a prisoner of poor returns? Your argument is completely absurd.

And no, stockholders aren’t the only stakeholders in this issue. But, your comment doesn’t want to grant consideration for other Americans concerned about their environments, their coastal properties, and activities surrounding them.

Posted by: David R. Remer at June 19, 2008 02:01 PM
Comment #256017

Jack said: “The government manages those Federal lands. They should indeed try to make a profit for the taxpayer while managing them for the multiple uses we all want. I don’t remember the exact wording, but that is the mission of the national forests etc.

When they lease lands (or water) to firms, they should consider all the costs and benefits.”

Jack, under Republicans all federal BLM land management has LOST money for taxpayers. The amount the Republican Interior collects for grazing, mining, etc, is LESS than the government spends to maintain and regulate those lands.

Perhaps, under Democrats, public lands MIGHT just break even and cost the taxpayers nothing, though I doubt it.

I agree with you entirely on managing government wherever possible such that use fees of federal lands (NOT NATIONAL PARKS), returns at least an equal amount to what the government spends to maintain those lands, INCLUDING NATIONAL PARKS.

National Parks were set aside for ALL Americans to enjoy, regardless of their ability to pay user fees. Commercial exploitation of public lands for a profit is an entirely different prospect, and access fees should cover Dept. Of Interior budgets. Otherwise they become just another Republican subsidy to private commercial interests.

Posted by: David R. Remer at June 19, 2008 02:09 PM
Comment #256019

David,

I am keeping up with the news. The problems with Gulf fishing are likely not related to any oil spills. The “dead zone” extends from the mouth of the Mississippi and other rivers and is likely due to fertilizers. But thanks for making the illogical extension to oil.

As much as I think you should enjoy pristine coastlines for you and John Kerry’s windboarding, the rest of us live here and would like some energy at reasonable prices. I suggest King’s David and John travel elsewhere to find their pristine lands. Maybe some Amazonian Indians will sell you a plot.

Posted by: googlumpugus at June 19, 2008 02:18 PM
Comment #256020

On using existing leases, Just a couple of months ago I read an article from the Anchorage Daily News about how Alaska is revoking (I believe its this company if not its one of its competitors) Exxon’s Lease of the land Next to ANWR because they have failed to exploit a KNOWN OIL FEILD. They keep sending in a revised exploitation plan every couple of years and don’t do a thing with the land. So for 20+ years they sat on this lease doing the absolute minimum (and probably less) needed to keep the lease but never develope it.
This is just one story that I cam across without looking, researching or even searching. I am thinking about moving my family to Alaska and wanted to check things out, I haven’t had much time to read more but if I can find one story in a state that pretty much defends the OIL companies then how bad is it really?
Sorry I don’t get to participate much and thank you all for the research that you do it helps me cast a much more informed ballot.

Posted by: timesend at June 19, 2008 02:21 PM
Comment #256022

Jack, thank you for acknowledging that you reject any difference between citizen campers in our national parks and Oil Companies drilling federal lands for profits.

It helps me understand Republicans and why they continue, despite all efforts to the contrary, to act and govern as a minority Party even when they are briefly the majority Party. It demonstrates the Republican view that life is all about dollars and greed and every person’s actions should be viewed as motivated by the dollar. It thoroughly explains why Republicans cannot abide a national wildlife refuge concept, or any part or place in America to be considered off limits to exploitation for profit.

How Republicans have changed. They once fought and died to rid our nation of the concept of exploiting people as property for profit. But, today, they can’t stomach the idea of any part of America being off limits from profit exploitation, no other values have meaning to them. Speaks volumes as to why Democrats took back control of Congress in 2006 and will take back the White House in November.

This Republican value system has a way of exposing itself to the public and voters over time. And the American public has always believed there are some things to be valued greater than profitability. It is one of the factors that relegates the GOP to minority Party status over most of the last century. And will continue to keep them the minority Party in this new century.

The only reason Republicans became a majority Party recently was by convincing the public they held certain values above that of profits. But, then they acquired power and worked feverishly to bankrupt the nation’s future in the name of profits and potential profits to the exclusion of all other values like peace, life, health, and future prosperity.

One cannot hide one’s true nature for long. Or as a Great Republican of the 19th century said, you can fool all the people some of the time, some of the people all of the time, but, you can’t fool all of the people all of the time. And thus, 21st century Republicans are a minority Party again, where they belong, representing those who believe in profits above all else.

Pennsylvania just Voted down a Republican idea to sell the Pa. Turnpike to foreign interests. Pa. is one of those states the GOP thought they had a lock on. Obama now polls dramatically ahead of McCain in Pa. Values have consequences, Jack.

You may want to consider what Pa. is telling folks like you and those in the GOP. You may want to consider what I am telling you here, about National Parks being free to citizens, and other federal land usage for profit result in zero cost to the tax payer. The National Parks were to be a gift to the American people. One does not win popularity by charging people for gifts. It just doesn’t sit well with American values, Jack.

Posted by: David R. Remer at June 19, 2008 02:49 PM
Comment #256024

googlumpus said: “The “dead zone” extends from the mouth of the Mississippi and other rivers and is likely due to fertilizers. But thanks for making the illogical extension to oil.”

What is your reading deficiency? How did you misinterpret my clear and emphatic statement: “I long ago quit making the 4.5 hour drive to the Corpus Christi area where successful fishing is a near miracle these days. Not because of oil, but because of overfishing and red tides. Another of which is coming thanks to the Mississippi bringing all those pollutants down from the Midwest flooding of farm lands.

Duh! There was no illogical extension of the lack of fishing to oil, on my part, Goo. Perhaps a new pair of spectacles are in order?

Posted by: David R. Remer at June 19, 2008 02:55 PM
Comment #256027

googlumpus said: “the rest of us live here and would like some energy at reasonable prices.”

Then I recommend you folks get some education and recognize that reasonable energy prices ARE NOT going to come from a diminishing energy resource like OIL. Any economics 101 course will teach that reliance on a diminishing resource equals ever higher prices.

Posted by: David R. Remer at June 19, 2008 02:59 PM
Comment #256058

With 1.3 Billion people in China and 1.1 Billion people next-door in India, the world population growing by 211,000 per day, finite supplies of oil, and poor planning for this inevitable day, it is unlikely oil will ever again be as cheap as it was in late 1980s and 1990s … that is, until a more viable alternative becomes available.

Read what this genius wrote 16-JAN-2008 …

Oil prices have finally reached $100 a barrel. I now hear predictions of $200 a barrel. People who make forecasts like round numbers.
I do not expect $200 oil any time soon. I expect $85 oil first, and $70 oil first, and $50 oil first.
I do not believe in doomsday scenarios that relate to the earth’s resources. There are phenomena in the universe that can end the earth or human life on it. They do not include running out of energy because we lack resources.

Posted by: d.a.n at June 19, 2008 05:30 PM
Comment #256059
the rest of us live here and would like some energy at reasonable prices.

Reasonable or unrealistic low prices?

The current fossil energy price *is* reasonable, considering the resource exhausting curve and the exploding demand curve conjunction worldwide.
Because during last century we never paid more than fuel extraction/transform cost + some margin profit doesn’t make the past price “reasonable”. It was a lie since start, which assume that black gold is both free, infinite and full property of the driller.

Now we’re paying a far more complete cost: the usual extraction/transform PLUS the primary resource itself, which is not free, never was, PLUS the foreign land leasing which are far less cheap than in the past, as foreign nations realized the richness of *their* soils and no more let people rip it freely like yesterday.

What you want is not a reasonable price but somehow paying only a small part of the actual price of one of the most useful molecule available, as in the past century.

Stop dreaming. This wont happens again.
Start to use *less* energy.
Lesser is not necessary badder.
Obviously for the #1 nation addicted to bigger is better paradigm, it sounds very hard.
But you’re a nation of can-do, don’t you!?

It’s time again to show it.


Posted by: Philippe Houdoin at June 19, 2008 05:43 PM
Comment #256072

I’m with d.a.n. i want an answer About that Ethanol bill ramrodded down our throats last year . we should not be drilling on the california coast life came from our oceans and it plays a big part of our life cycle go to catalina island and see the marine life . d.a.n we can get 2 crop harvests a year from switchgrass in most areas compared to only 1 harvest from corn so the energy factor goes up to 12 giving the other 2 back to the land ,the cows and people can eat the corn.

Posted by: Rodney Brown at June 19, 2008 10:57 PM
Comment #256073

Rodney Brown, Thanks. That’s even better (i.e. two crop harvests per year)!

Yes, it appears corn is more useful as a food. There was a report on CNN that raised a lot of questions about the choice of corn ethanol and asserted that corn was over-sold to Congress. Huge corn subsidies ($7 Billion in 2006) are at stake. Also, there are restrictions on ethanol imports. It all smells like another scam to bilk the tax payers.

Posted by: d.a.n at June 19, 2008 11:38 PM
Comment #256090

David, no new glasses needed. (I use Firefox 3 with the zoom feature).

Your response was to the point of how oil drilling will spoil your recreation.

You cited the dead zone. You listed oil spills. You then noted how you avoid the gulf.

What is one to infer from the coincidental placement of these things? Nothing? Ok, then how about a coherent response rather than nothing?

Maybe we-uns needs us sum education, but perhaps you-uns rich folks could live a little more down to earth, and stop whining about pristine windboarding, as though that schism made any sense.

I am not saying drilling offshore will solve everything, but banning it is stupidly wrong headed. You failed to cite significant damage from drilling. So what’s your next excuse?

Posted by: googlumpugus at June 20, 2008 01:57 AM
Comment #256098


David Remer: I appreciate your attention to this issue but, I think you underestimate the tenacity that politicians have for continuing business as usual. The oil companies will get a compromise that will give them much of what they want.

Despite the desire, by a few in this country, to produce an energy policy that will create a state of the art 21st century energy system that our grandchildren would be proud of and despite the retoric of some politicians to that effect, IMO, it will continue to be put off for as long as possible.

While some want hibrids and some would love to have electric cars, the majority in this country are interested in a quick cheap fix that they can fill their tanks with and turn those horsies over so they can get on with their personal persuits of happiness.

The politicians will give the majority of the federal dollars to the corporations that will help them present the illusion that they are responding to the will of the people. We shouldn’t underestimate the grip that the corporations have on the politicians and the minds and the will of the people.

It’s been 60 years and America is still waiting for the house that America has been waiting for.

Philippe H.: Bigger is better is the Texas paradigm.

While, mine is bigger than yours is an important part of it, more, more, more is the American paradigm.

Posted by: jlw at June 20, 2008 02:45 AM
Comment #256130

goo said: “What is one to infer from the coincidental placement of these things”

Infer nothing when the other person speaks explicitly. I clearly said what I meant to say. Inference is an activity of the reader, not the writer. Ergo… any incorrect inference has to be with the reader.

I could not have been more explicit in my meaning or choice of words. No inference was necessary or required to understand the meaning of my words.

Posted by: David R. Remer at June 20, 2008 10:42 AM
Comment #256132

jlw, compromise is usually the way of our legislation given the two party system. So, I agree, we are not likely to get the best of all options. But, we can still hope to achieve a better plan than that which the Oil Industry and Republicans are offering, which is more dependence upon oil for as long as the oil industry can keep it profitable.

The goal should be free energy for all, simply buy the equipment needed to harvest, convert, and store an endless supply of renewable, non polluting, non waste generating energy. The sun is such a source. The goal is achievable.

But, as one can readily see, this is a goal the fossil fuel industry, in fact all profit energy production industries, can and will fight and retard with every dollar at their disposal to prevent it. To the detriment of humanity, economies, and future unleashed productivity based on a free energy source.

Thus the argument can and should be made, that what the Republicans and Fossil Fuel industries are engaging in is nothing short of unethical and destructive of mankind’s future potential.

And one thing is abundantly clear and follows logically from this line of reasoning. If the U.S. does not develop the technologies to capture, store, and convert Sun energy for nearly all energy consumption activities, another nation’s people will. That writing has been on the wall since the rise of the Indian and Chinese economies into the industrial-technological age.

Posted by: David R. Remer at June 20, 2008 10:53 AM
Comment #256159

Just posted this in Rowan’s thread, but thought was more applicable here….. thoughts?????

http://www.nytimes.com/2008/06/19/world/middleeast/19iraq.html?em&ex=1214107200&en=ca7e8b58a63bb7fd&ei=5087%0A

Posted by: janedoe at June 20, 2008 01:40 PM
Comment #256204

janedoe, thank you for the link:

Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

And those sucker GOP supporters bought that yarn from Bush that invading Iraq was not about oil, and defended him against such charges. Some folks are just too predictable - like Bush and so many of his supporters.

Posted by: David R. Remer at June 20, 2008 07:52 PM
Comment #256205

NIMBY rules here. Drill for oil in your own backyard. Let the MIT student body run the Dept of Energy. Pay farmers to grow anything but corn. I don’t want any corn ethanol, or any corn syrup in any food or drink. Up with Firefox, it spellchecks even while posting here.

Posted by: ohrealy at June 20, 2008 08:08 PM
Comment #256212

ohrealy, does having FireFox mean your comments will suddenly appear more literate? This feature sold me on FireFox 2.0. It’s a god send.

See, capitalism at work in the best way. They are #2 and trying harder. Republicans aren’t always wrong about everything.

That’s why the Oil oligopoly needs a state run OIL company to give the oligopoly some competition and bring out the best in them again.

(Had to tie FireFox into this somehow, or the comment would be on topic.) :-)

Posted by: David R. Remer at June 20, 2008 09:21 PM
Comment #256222

DRRemer, I thought the big Firefox 3 download was at the end of the month. I’m actually on IE right now. There was a beverage, an accident, now I have stains on my screen, courtesy of Joseph Huber Brewing Company in Monroe Wisconsin. I haven’t reset my default browser yet, but I finally gave in to using tabs, which always confused me, having the open pages on top, instead of on the bottom, but it doesn’t do any good here, because Third Party and Independent is too long a title. So I have to go back to the top of the page to find the topic is Oil and Gasoline, the politics. I have been taking advice from http://chris.pirillo.com/live/ lately, but I’m already sick of all his Mac BS. They’re featuring him on the new Adobe Media Player, so he thinks it’s great whereas I think it sucks so far. Was this more literate than usual? Blame it on IE, I’ll be back to Firefox tomorrow. Oh, on the topic, I agree. I don’t have any oil stocks. I sold some shares to the government of Venezuala many years ago. William F Buckley Sr must be rolling in his grave. The site kicked me off again because I took too long a-typing.

Posted by: ohrealy at June 20, 2008 11:42 PM
Comment #256224
googlumpus, there is no such thing as a proven field until you drill. ANWR is not yet a proven field. Exploration drilling is required to prove a field. Hence the leases from the government for federal areas permitting such drilling. Vast acreages of leases have been obtained, but not exercised by the oil industry, both on federal lands and in the Gulf of Mexico.

David,

You have this exactly right. However, I would point that it is not necessary to drill when there is not significant oil there. Seismic data can be taken to determine the potential of a leased block of land. It’s reasonable to assume in many cases oil potential in some leases does not warrant even exploratory drilling. I will concede that this is not always the case, but I would also like to point out the drilling availability is a bottleneck over the near term. The problem is particularly severe for deep water drilling rigs. Having not seen the numbers, I don’t know how many leases to which this applies. So it will be interesting to see how many of the leases of which you speak are developed once additional deep water drilling capacity comes online in the next 2-3 years.

In light of this limitation, I am less apprehensive than you about opening up some areas for new offshore leases. It will months to go through the regulatory and bidding processes, and many additional months to obtain drilling equipment for offshore blocks. Really, anything we talk about leasing today will be producing several years from now. Personally, I don’t see the harm in ensuring part of our energy supply 5-10 years into the future.

One final point, in Post #255979 you give very little credit for the progress that has been made since Exxon Valdez. As a result of this tragedy, the technology to clean up or prevent oil spills before they make such a large environmental impact has improved dramatically. Seven million gallons (~170,000 barrels) spilled during Hurricane Katrina is a pittance to what was stored in that area. It’s a mere 2-3 hour supply to the refineries it shut down. This neglects the production capacity of the dozens of offshore platforms that were damaged or destroyed. Yes, I wish it were less, but once you realize 80% of the oil evaporated, was recovered or was contained, I think it’s a victory. Certainly, the lessons learned from Katrina will enable further improvements in the industry and make the numbers from future incidents ever smaller.

Posted by: Mr. Haney at June 21, 2008 12:31 AM
Comment #256227

David,
Since you then explicitly said nothing convincing as to why we shouldn’t drill, other than to clear windboarding spots for you, how about an answer to my question?


Is that really the best argument you have?

Posted by: googlumpugus at June 21, 2008 01:18 AM
Comment #256228

Mr.Haney,

Thanks for those numbers. David and I live in Texas, I’m closer to the beach than he is. While Texas has never had dramatic beaches, they aren’t oil soaked, despite David’s occasional dips with his windboard. I will remind to reapply his SPF15 regularly. So much for irrational fears.

Posted by: googlumpugus at June 21, 2008 01:23 AM
Comment #256229

Mr. Haney, reinvesting profits to expand a corporations business future and options is precisely what the oil oligopoly has failed to do. And in forming the OPEC cartel and the American Oil Oligopoly, they have created the boom that is about to come down on their heads. They scared everyone into believing there was an oil shortage to expand their profits.

They succeeded. Now, alternatives are on the front burner of American’s minds and Democrats in D.C., as they don’t want to ever find themselves in this dependent position again on either foreign oil or domestic oil corporate influence and deceptions in government. If they had done what sound businesses should do, avoid appearances of monopolization and artificially creating scarcity to improve profits, Obama’s position on this matter would not resonate. But, that wasn’t the case with the Oil Oligoply and Obama’s position does resonate and is sound, as a result.

It is time the Oil oligopoly went the way of RailRoad Oligopolies.

Posted by: David R. Remer at June 21, 2008 01:25 AM
Comment #256231

Goo, I gave you the facts. If you are not convinced by them, what can one say. Much of the world’s problems have denial of reality as their basis.

Like I said, inference wasn’t necessary when my words were unambiguous and explicit. Your failure to read them as written, or to be convinced by historical fact is, as I said, an issue for the reader, not the writer.

Posted by: David R. Remer at June 21, 2008 01:29 AM
Comment #256233

My point, though sarcastic, is a serious one. We shouldn’t allow people to starve because we want to commune with nature. Oil drilling has a very small impact on nature above ground. The rigs off Texas are barely visible on the horizon on a very clear day. (I confess to astigmatism). Offshore or ANWR drilling may not solve a lack of sound energy policy, but it beats the hell out of 3000 dead soldiers in Iraq. To steal a recent quote from an unknown source: It’s like a starving man sitting on a ham sandwich, instead of eating it.

Posted by: googlumpugus at June 21, 2008 01:36 AM
Comment #256234

Facts? You cited spills that had Zero impact on coastal beaches. What facts are you referring to?

Posted by: googlumpugus at June 21, 2008 01:42 AM
Comment #256235

At least go with the Valdez, which of course had nothing to do with drilling, or perhaps the Pemex spills which had nothing to do with American rigs.

Posted by: googlumpugus at June 21, 2008 01:44 AM
Comment #256247

BTW, I love the phrase oil oligopoly. It’s even more alliterative than my nom de plum.

Posted by: googlumpus at June 21, 2008 03:30 AM
Comment #256248

Googlumpusgus,
Why drilling for any oil will not lower the price of gas, it will deplete any and all reserves needed by the Children of the 21st Century to manufacture certain items that cannot be produced any other way. For other than lining the pockets of a few citizens, can you honestly say that burning Gold (Black) is the best use of this Natural Resource?

Posted by: Henry Schlatman at June 21, 2008 03:42 AM
Comment #256254

goo, there is a very much longer list of off shore accidents spilling oil and oil distillates into our oceans which occurred near other nations, since the Exxon Valdez. It happens, and I gave you a list proving they still happen here in the U.S.

That is not disputable. It is historical record.

Now if you want to focus with blinders on the single priority of More Oil, that is fine. Just don’t expect the people whose entire economies rest upon their beaches and shoreline vistas for tourism dollars to agree with you that More Oil at any cost, is in their best interests.

There are other priorities besides more fossil fuel pollution for the rest of this century. ANWR is a perfect example. ANWR was designated a SINGLE purpose public trust. A wildlife refuge off limits to commercial exploitation. If everything in America is to be put up for sale including our principles and commitments, it will not be the America most people feel proud to live in and be a part of.

There are other priorities besides More Oil. Eliminating the combustion of fossil fuels to prevent greenhouse emission gases is one others believe is of equal or greater priority. You have a right to your priorities. But, as an American, if you believe in our system and culture, you have to respect other’s right to priorities regarding government policy and priorities as well.

Posted by: David R. Remer at June 21, 2008 05:43 AM
Comment #256257

goo said: “At least go with the Valdez, which of course had nothing to do with drilling,”

It had everything to do with drilling. The Valdez transported to and from the drilling’s shipping port. Does no good to drill if you can’t ship what is drilled. No drilling, no Exxon Valdez’s to spill. They are inextricably linked.

The fact that the Valdez was the worst for the U.S. in no way guarantees all other accidents subsequent to it, and there have been many, will always be of lesser impact.

Then there is the cumulative impact which has not yet been ascertained regarding the effects upon our oceanic food chain, beyond mercury and lead content in certain fish in some areas of the Oceans. Compared to solar power conversion or Fusion, Oil is an extremely dangerous and toxic substance as are most of its finished products.

If elevating its price will hasten the day when solar energy conversion or Fusion can replace Oil for energy, that option will have appeal to many people. It does for me. We have altered somewhat our driving behavior and are getting hit with about a $45 per month increase in fuel costs over this time last year. And about $80 more than the same months the year before that.

It smarts. But, I don’t mind that investment anymore than the bill to send her to college, if my daughter enjoys an energy future not built upon toxic fossil fuels, or wars over the damn black goo. Pun intended.

Posted by: David R. Remer at June 21, 2008 05:58 AM
Comment #256262

I started out the first ten working years of my working life completing oil wells. The job became more demanding and dangerous as oil prices went down. This caused the necessity of a career change. You could say my job was outsourced to the Saudis. The transition from resisting environmental concerns to prioritizing them happened during this time. The major oil companies were fastest to change and the most thorough. We went from using unlined holes in the earth to store and bury crude and brine to not being allowed to urinate on site for fear of toxins showing up in a soil sample. Most environmental concerns today are unfounded and are propagated by associations that simply want to justify their existence and become relevant as they were in the seventies. This is similar to most civil rights associations.
Price is the governor for the issue of drilling, supply and alternative fuels. If there is a shortage thus high price then it simply becomes profitable to seek alternatives. I hosted a couple French guys in the early eighties and their cost of fuel was triple ours. This is why the power is nuclear based in that country. Politicians simply need to stand out of the way and let experts and markets work. Hysteria produces bad results such as ethanol etc. that produce unanticipated problems.
A little fun..
Since carbon dioxide is the fertilizer that produces sugars and cellulose for carbon based life, (practically all life) I would like to start a “Free the Carbon” movement. Apparently a lot of atmospheric carbon was used up to produce the huge deposits of coal and oil we find. Now it is trapped underground. Since fossil records indicate that plants and animals were huge and existed in a warm controlled environment before the catastrophe that buried them, we need to get that carbon back out there for future generations to use. It is the right thing to do.


Posted by: Kruser at June 21, 2008 08:52 AM
Comment #256267

David did write a well thought out post; it stands for reason that Oil companies want to maximize profits, if they abandoned that mindset their investors would bail out. I just don’t believe they have the power or are involved in price conspiracies. The market is global and there are numerous unknown variables involved.
Concerning exploration, Seismic data can determine presence of hydrocarbons. This doesn’t guarantee oil. It can be dissipated and unproduceable. The reserve can be vast but the rock it is in can be impermeable so you cannot get it out. The only way to find out is to explore or the real term is to drill a wildcat well. Engineers that cost hundreds of thousands of dollars will debate it out and pick their ideal place to drill out of thousands of pages and acres of data. I have seen weird ways to make the decision on where to drill. (One independent would put an Egyptian scarab on his hat and drive around a four wheeler while his partner held out diving rods.) Frequently, the area looks good but produces nothing. I completed some wells that started strong and dwindled to nothing in less than five years. The point is that you need vast tracts to find that elusive strike. Even then they may not produce anything or last long. The majors put so much of their resources into a field it has to be really good and have little hassle to be worthwhile. Small oil companies have the flexibility to drill in the back yard areas. The higher the price of oil the better your chances are to recover investment in wildcats. That is why the push for more areas from their standpoint. The more secured leases and data, the better your chances are to find the ideal location and your possibility of finding a useable reserve.

Posted by: Kruser at June 21, 2008 09:49 AM
Comment #256270

BTW, the sand on the beaches at Padre Island (also Cozumel and Cancun) came from the 474 mine near Disney via a company that used to be called Florida Crushed Stone, in Leesburg, FL. So the natural environment there was improved by mining and shipping. Just don’t mess with our winter homes in FL. GWBush coming up with a plan for offshore drilling at the end of his reign is just the most recent example of his jackassery, but maybe he intends to set up a new Harken after he abdicates, with a nice no payback loan from his Saudi friends.

Posted by: ohrealy at June 21, 2008 10:27 AM
Comment #256272

Kruser, you hinted at the topic that I now focus on. During record profit years, supply and demand logic would dictate that oil companies reinvest higher percentages of profits in drilling and testing. But that is not occurring with American Oil Companies. Instead they are using profits to lobby, run PR campaigns about their saving the world and future, and leaning heavy on the Pres. for those Iraqi contracts, which don’t require test drilling at all.

They are acting as if they don’t have to worry about future supplies. But, they do. As you rightly point out, the easy oil reserves are diminishing. Rather than work at securing oil they decided en masse to work government instead. Which isn’t hard with someone like Bush in the WH. Congress is pushing back. If Obama wins, American Oil companies are going to have to go back to working for a living instead of jawboning government for taxpayer money, overseas contracts in invaded and conquered countries, and off limit areas like ANWR which, like the gold speculators with fever, they think will be the motherlode of Oil easy for the taking.

ANWR might prove to be the motherlode. But, I for one will fight to insure they never find out if it is or not, unless there is absolutely nowhere else to turn for energy.

Posted by: David R. Remer at June 21, 2008 10:50 AM
Comment #256273

ohrealy, I did not know that about Padre Island beaches.

Posted by: David R. Remer at June 21, 2008 10:54 AM
Comment #256276

Kruser and David, I agree, this is a good piece. I just disagree with the fear of drilling parts.

Everytime there is a Hurricane or Tropical Storm, Galveston looses beach. They are constantly dredging to replace it. Padre and even Corpus Christie have better beaches. The thing I like about Texas is they allow you to drive on and park on the beaches. All Beaches here are public. You cannot own land beyond the dunes. As the beaches erode, beachfront houses are condemned. I have a friend with a near beach house, who almost welcomes hurricanes so that the latest crop of beachfront houses either are wiped out or condemned for being too close to the public beach.

Posted by: googlumpugus at June 21, 2008 11:10 AM
Comment #256286

DRRemer, the naturally occurring sands are not pretty enough in many places to attract investors and development for tourism. Calcium Carbonate (lime rock) and Calcium Phosphate are also mined. The CaPh is shipped in train loads to corporate chicken farms in Arkansas and Tennessee. It’s fed to them for hardening the eggshells. Why mess with the resources we are already using, to get a little more oil for thirsty SUVs to drink up? Is the internal combustion engine going to be the final scientific development of our civilization?

Posted by: ohrealy at June 21, 2008 01:26 PM
Comment #256299

goo said: “The thing I like about Texas is they allow you to drive on and park on the beaches.”

Yep, that is what blew my socks off about Bird Island near C.C. Drive up to the water’s edge and camp. Had a thunderstorm our second night on our first camping visit, it was awesome, scary, fun, exhillarating, and we found our sailboard an 1/8 mile down the coast line the next morning. Very cool. (Well, Hot, actually, it was July, Ughh!) On shore breeze kept mosquitoes away. Perfect.

Ohrealy asked: “Is the internal combustion engine going to be the final scientific development of our civilization?” One would think listening to some folks. There really are so many alternatives, none of them cheap, or easy, yet! But we will get there, hopefully.

Posted by: David R. Remer at June 21, 2008 04:57 PM
Comment #256302

David,

I fail to see how our oil companies did not invest. Let’s take ExxonMobil as an example since it is the largest supermajor oil company. Their net income for 2007 was $40B and their capital expenditures were $15.4B. Much of the rest of their income went to paying dividends and stock buybacks. They also banked about $5.5B for buying up alternative energy companies once these companies are actually competitive. But is $15.4B not enough investment??? I mean what is enough???

In regards to the Oil Oligopoly, let’s dig a little deeper here. ExxonMobil pumps 5.1% of the world oil supply, and ConocoPhillips pumps 2.3%. Saudi Arabia (12.6%), Russia (12.6%), Iran (5.4%), and China (4.8%) pump volumes roughly equivalent or larger to ExxonMobil’s (link). Now if we combine the six supermajors (“Big Oil”), they supply ~20% of the world oil supply. Frankly, it’s not as big as you give them credit for.

Still, let’s take this one step further. On Wikipedia’s “Supermajor” page:
“As a group, the supermajors control about 5% of global oil and gas reserves with largest supermajor, ExxonMobil, ranked 14th. Conversely, 95% of global oil and gas reserves are controlled by state-owned oil companies, primarily located in the middle east.”

The idea that “Big Oil” wields drastic power over the world oil price is a farce. They pump ~20% of the supply and hold 5% of the reserves. OPEC, Russia, and a few others are the ones holding the power here. Our leaders have put us in a stupid position and effectively have no plan. Obviously, we need to take a multi-pronged approach to fixing it. Alternatives are undoubtedly the future, but by they are not ready now. We are close. But to say fossil fuels don’t play a majority role in the 5-20 year economic plan is a denial of reality. Our economy needs to be healthy, so when alternative are ready, they can be integrated into our infrastructure. Until then, what do you suggest we use besides oil, gas, and coal? Personally, I don’t see a thing that can do it. So the question I ask is, where is the oil going to come from? Russia? OPEC? (YIKES!) Or the U.S.?

Let’s be honest. No one is seriously advocating drilling without regard for the environment, but rather balancing the economic future against some environmental sacrifice. Our country has strong environmental regulations, and this is why I am willing to make this trade-off. More bluntly, trusting OPEC, Russia, and the like with an increasing portion of our energy supply is a risk I am unwilling to take. We should take the responsibility on our future energy supplies, and this means both more domestic oil and renewable alternatives. Americans just need to stand up and demand it.

Posted by: Mr. Haney at June 21, 2008 07:39 PM
Comment #256304

Maybe I am cynical but there isn’t single sentence uttered by either candidate that indicates what he would do if elected. Especially before the actual convention. They hold focus groups, find what is popular at that time and proceed to tell us what is decided the public wants to hear. Obama is winning at this meaningless rhetoric by using the same demeanor as a used car salesman. Examining past records and associations are all logic dictates at this point. So far Obama has a practice of throwing associates to the wolves. Not a good trait.
Is it good to help the Iraqis or not? The use of our professionals in making their oil industry profitable like ours is a noble thing. Bush and his father worked with and owned an independent oil company in his past.. One of the small backyard drillers. They are in competition with major ones so the cronyism doesn’t exist any more than Clinton or Reagan had with majors and the Saudis. They were all representatives of the US and its energy needs. Halliburton is a service company that oil companies use. They have equipment and trucks for hire. The best in the industry. They aren’t an oil company. They are contracted to help deliver it from the reservoir for big and small companies; therefore cronyism doesn’t exist with Cheney either.

Posted by: Kruser at June 21, 2008 09:12 PM
Comment #256316

Objective of a catalytic converter is 2CxHy + (2x+y/2)O2 → 2xCO2 + yH2O ,

to Complete the process of combustion.

in the process of a cleaner burn it trades off the removal of hydrocarbons for co2 and water vapor. :)

Posted by: Rodney Brown at June 21, 2008 10:46 PM
Comment #256336

Why I realize that Senator McCain and others his age may believe that drilling will lower the cost of fuel that “We the People” are paying at the pumps, I do believe that they are once again missing the “Big Picture” that has caused the Oil Companies to have record profits as gas goes to over $4.00 a gallon.

Yes, America could drill and waste this natural resource; however, if the world would find a single well that would put onto the market today a Billion Barrels of Oil. I do believe that not one more gallon of gas would be seen in the Market.

For why OPEC can pump more Oil onto the Market, the Refiner Space of the Market in America and Humanity could not handle the huge increase that is needed to drive the price of the Goods down. And why I may think that this is the reason behind the record profits of the oil companies today, I have to ask myself if the cost of Drilling and Refining the Black Gold of Man is worth the investment?

For if oil is such a money maker would not have the Oil Companies built the Refiners in India and China were the emerging economies are causing the increase in demand world wide?

No, like the red herons of yesterday I do believe that President Bush, Senator McCain, and their Supporters are putting the Argument of Being Easy above the Argument of Being Politically Correct for America. So, why I do believe that Large Cities and Corporations may want to look into alternative energy sources I do believe that the average Small Business and Consumer can begin using the Bio-Mass Technology to begin profiting from the Debate of “Pure Carbon” and “Crystal Motors” held by the Hierarchy of Society and the Children of the 21st Century.

Posted by: Henry Schlatman at June 22, 2008 06:16 AM
Comment #256349

Kruser

I think all politicians pander to polls. Isn’t that, at least to some degree, responsiveness? What is disingenuous is saying you are doing something, but instead doing nothing.

Saying you have a policy for post invasion Iraq, and having none is dishonest. Saying it’s not about oil, then as you leave office, preside over preferential US oil contracts is dishonest.

Saying you have an energy policy and simply inviting the “boys” over and asking them what they want is disonest.

Whether that amounts to cronyism, you be the judge.

Posted by: googlumpugus at June 22, 2008 10:40 AM
Comment #256374

Mr. Haney asked: “I mean what is enough???”

Enough reinvestment in production is when the markets assess the futures price of oil in proximity of the current supply and demand price, which is estimated between $60 and $100 per barrel.

Of course that means less profits per barrel, but the compensation is securing sufficient production to fend off political and technological efforts to replace oil as an energy source, which is how Exxon is shooting itself in the foot by raking in the inflated profits these last couple years, but insuring oil will not be the profit cash cow it could have been for the rest of this century.

If the oligopoly had drilled and created a modicum of surplus capacity, all these efforts to replace oil would have gone away. This has always been the story of greedy monopolists, their greed reaches intolerable levels and the political - technological reaction is to put them out of business by finding alternatives.

That is how the capitalism works. And why we no longer have cattle barons, railroad barons, sweat shop garment industries staffed with children, etc. etc. etc. It is also why regulation is so widespread in our society, to combat such short sighted greed and monopolism of capitalists intent on cornering the market for max profit in the short-term, the future be damned.

The hubris and arrogance of the oil oligopoly companies thinking they had a lock on government with the election of GW Bush et. al. is really phenomenal. They helped usher forth a candidate like Obama who will crush their grip on legislation and government going forward. That is pretty damned short sighted, don’t you think?

The Saudis saw the future of Obama if they didn’t minimize the threat of OPEC’s monopolistic power, and hoped to secure a mutually beneficial and long lasting relationship with governments insuring oil would meet demand without price gouging and artificial scarcity for decades to come. But, they couldn’t bring all the other cartel members on board, especially American oil companies. The more the Saudis pumped, the less US companies explored and drilled for tomorrow’s supplies, diverting profits to other tasks like lobbying and PR, until the Saudis became concerned that their supplies would dry up prematurely while American oil companies refused to expand future supply.

Fantastic short term profits resulted, but the world’s people are now intent on replacing oil as an energy source, and that spells the end of the oil cartel in the foreseeable future. One might say the goose laying the black gold eggs committed suicide with a time released poison pill by creating the perception it was running out of eggs. Such is the fate of oligopolist greed in a more democratic world of consumers and governments.

Posted by: David R. Remer at June 22, 2008 02:54 PM
Comment #256376

Kruser asked: “Is it good to help the Iraqis or not?”

At far more than 12 billion per month while our economy struggles, Obama says no, McCain says yes. Pretty specific sounding to me.

“The use of our professionals in making their oil industry profitable like ours is a noble thing.”

The use of our professionals requires our military continue to occupy their country to protect our professionals. At far more than 12 billion per month, Obama says great deal for Iraqis, bad deal for American tax payers. McCain says, good for everyone including tax payers. Clear difference from my vantage point.

Cheney profits from policy designed to spend American tax payer dollars while enriching his own investments. Sounds like cronyism and despotic use of power to me.

Posted by: David R. Remer at June 22, 2008 03:02 PM
Comment #256421

Might be an answer to the big Diesel trucks CLOSER THAN YOU THINK..Sturman Digital Engine to be Unveiled at DEER Conference
New engine technology reduces emissions and fuel consumption, improves power output

WOODLAND PARK, Colo., Aug. 6 / / — A much-anticipated leap in engine technology will be presented at the 2007 Diesel Engine-Efficiency and Emissions Research (DEER) Conference in Detroit, Mich. Eddie Sturman, co- founder of Sturman Industries and 2003 Inductee into the Space Foundation Hall of Fame, will present for the first time in North America the Sturman Digital Engine and the Sturman Combustion Cycle at the “Emissions Reduction and Efficiency Improvements via the Sturman Digital Engine/Sturman Cycle” session on Thursday August 16 at 11:10 a.m. in the Ambassador Salon of the Renaissance Center.

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“The industry requires a solution that makes sense,” said Sturman. “The goal is to accomplish several targets simultaneously. First, we must meet the future emissions regulations in a more cost-effective manner than is being pursued today. This is best accomplished in-cylinder via closed-loop combustion control. Second, we must reduce fuel consumption and enable the use of more alternative fuels. This is a National Security issue. Third, we can further improve the power output of the engine without negative tradeoffs. The Sturman Digital Engine, running the Sturman Combustion Cycle, addresses these issues.”

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At the heart of the Sturman Digital Technology Platform is the Sturman Digital Valve technology. In the case of the Digital Engine, the latest- generation Digital Valves are integrated into both the Digital Fuel Injectors and the Hydraulic Valve Actuators. “This hydraulic system is very efficient,” said Sturman, “as it operates the injectors and valve actuators, and it is available for hydraulic hybridization of the complete vehicle.”

The Digital Fuel Injector: 3500 Bar and Multi-fuel Capable

The Digital Fuel Injector is designed for an industry leading 3500 bar pressure at the nozzle tip. However, the design has a unique nozzle configuration for reducing impact loading for improved durability. “The digital injector is designed to provide very high injection pressure, good small quantity control and high safety due to low pressure in the nozzle during most of the engine cycle. We believe this is a unique combination of features and it represents a competitive advantage,” according to Dr. Tibor Kiss at Sturman Industries. Furthermore, since Sturman injectors can utilize hydraulic fluid rather than the fuel itself as the working fluid, they can safely and reliably inject a wide variety of alternative fuels and oils for use in an engine. The Sturman Cycle is operating today with a Sturman injector on a dynamometer utilizing both B99 biodiesel and conventional diesel.

Sturman’s Global Customer Base

Sturman Industries has more than 28 customers worldwide utilizing various portions of the Sturman Digital Technology Platform, including industry, academia, and federal agencies. Sturman has delivered fifty HVA equipped engines and four demonstration vehicles. Sturman Industries President and Chairman, Carol Sturman, added, “We’ve recently been requested to supply the Digital Engine system for mass production in North America in 2013.”

Sturman Industries

Sturman is “Leading the Mechanical World into the Digital Age” from their headquarters in Woodland Park, CO. Sturman employs more than 75 team members active in the development, application, and licensing of Sturman Digital Technology Platform components and systems. Please see our website at www.sturmanindustries.com. Better yet, come visit us to for a firsthand look at the future.
news.thomasnet.com/companystory/527408

Posted by: Rodney Brown at June 23, 2008 12:55 AM
Comment #256438

Rodney, one piece of the puzzle appears to have been found. Many more to go.

I like the idea of air or water shuttles below ground using compressed air or water current to transport goods from train and air drop points directly to recipient warehousing centers in the area of local businesses. Of Course, we could not retrofit the country for such a system as rights of way would be prohibitively expensive. But, where new developments occur, it is a brilliant idea, as it eliminates a tremendous amount of fossil fuel driven above ground transportation vehicles entirely.

And definitely, definitely we need to legislate that ALL new utility conductors in America be below ground. The maintenance costs for above ground phone and electric transmission equipment is enormous over time. The only maintenance to below ground utilities would occur after an earthquake or sink hole, which means only a very small percentage of the below ground infrastructure would ever require maintenance at all. Expansion and contraction joints would have to be included in earthquake zones. But, would be highly effective in eliminating maintenance costs as well.

You can well imagine the billions of dollars that have been spent in the last century for wood poles and their constant replacement, the man hours hunting down shorts due to squirrel gnawing damage to insulated cables, and of course the many towers and poles knocked down by autos and storms, and cables ruined by lightning.

America would be extremely STUPID not to adopt this kind of legislation post haste and invest in the retrofit that would pay vast dividends for the next couple centuries in savings on utility infrastructure repairs and maintenance.

Posted by: David R. Remer at June 23, 2008 05:42 AM
Comment #256502
If the oligopoly had drilled and created a modicum of surplus capacity, all these efforts to replace oil would have gone away. This has always been the story of greedy monopolists, their greed reaches intolerable levels and the political - technological reaction is to put them out of business by finding alternatives.

They were trying to maintain a surplus capacity. Anticipated capacity increases by Yukos (Russia) and by the supermajor companies working with PDVSA in Venezuela were destroyed by the political winds in those countries. I am sure if I did my homework that I could find a couple more. However, my point is that the supermajor oil companies would never intentionally try to degrade/destroy their customer base. To suggest that they were trying to do so is to remain ignorant of the bigger picture. That being, oil was never going to be the top energy source of the world and remain cheap forever. Furthermore, political forces have aided in eliminating the surplus oil supply and driving up prices. As a result the capitalists are at work, and the markets are now moving us towards alternatives just as they should.

I see no need to place the blame on solely on “Big Oil”. As I pointed out in my previous post, they don’t have nearly as much power as you seem to imply. Why do you continue to insist on this fallacy? The oil companies are wise enough to know that any abuse of this power is at their own peril. In fact, there have been numerous congressional investigations into oil company abuses with little, if any, incriminating evidence uncovered. So I guess the evidence doesn’t matter.

Sadly, the fact is the state owned oil companies hold a majority of the power because they hold a majority of the oil reserves. Still, it does little good to blame them for our problem because our government has little influence as to what these countries produce. Several years ago we could have been responsible for our future by developing new oil fields and accelerating development of oil alternatives, but we didn’t. Why? Our irresponsible leaders have consistently put together a meaningless or even damaging energy policy over the recent past. They have let our energy supplies fall into the hands of foreign (and often unfriendly) governments. So please stop this blame “Big Oil” nonsense. We should have had a responsible energy policy. We didn’t because we didn’t demand it from Washington. We can have one now, and we must demand it. We must face the fact the oil’s role is still vital, and it’s role must recognized in any policy we demand.

Posted by: Mr. Haney at June 23, 2008 04:43 PM
Comment #256568

David R Said, ” And definitely, definitely we need to legislate that ALL new utility conductors in America be below ground. The maintenance costs for above ground phone and electric transmission equipment is enormous over time. The only maintenance to below ground utilities would occur after an earthquake or sink hole, which means only a very small percentage of the below ground infrastructure would ever require maintenance at all. Expansion and contraction joints would have to be included in earthquake zones. But, would be highly effective in eliminating maintenance costs as well.

You can well imagine the billions of dollars that have been spent in the last century for wood poles and their constant replacement, the man hours hunting down shorts due to squirrel gnawing damage to insulated cables, and of course the many towers and poles knocked down by autos and storms, and cables ruined by lightning.

America would be extremely STUPID not to adopt this kind of legislation post haste and invest in the retrofit that would pay vast dividends for the next couple centuries in savings on utility infrastructure repairs and maintenance.” Thanks David. Absolutely it’s a economic and environmental and safety Issue, just drive by any housing development built since the 1970s the utilities are underground even the street lights are wired underground, the elements above ground take there toll on old above ground utilities the maintenance costs are astronomical let alone the safety issues and there a pitiful eyesore, the electrical companies lose many millions of dollars a year on inefficient old above ground iron horse large bare copper transmission lines through resistance, not to mention the dangers of the high electrical magnetic fields around the transmission lines and the ugly and dangerous path they take up would be much much better suited underground same applies to old cities and infra-structure.

Posted by: Rodney Brown at June 23, 2008 11:43 PM
Comment #256572

If we want gas prices to fall to $2 with in 30 days Congress must act according to WSJ.

http://www.marketwatch.com/news/story/gas-could-fall-2-if/story.aspx?guid=%7B2673C102%2D68E0%2D41D9%2D9C9A%2D10EE2E723948%7D&dist=TNMostRead

Posted by: j2t2 at June 24, 2008 12:08 AM
Comment #256648

Mr. Haney said: “However, my point is that the supermajor oil companies would never intentionally try to degrade/destroy their customer base.”

My point is there is only one intent of oligopolist and monopolist organizations, to maximize profit. Supply shortages are the surest way to maximize profits - economics 101.

The fact that there currently IS NO shortage, but just on time delivery to fulfill demand says it all. Not a single ship pulling up for an oil refill is being turned away. Supply equals demand. Yet, there is no surplus going forward which fuels speculators driving up the costs, which in turn dramatically increases oil corporation’s profits.

They have created the maximum sweet spot for profits. To argue the Oil Corporations had no part to play in creating this sweetest of all spots, or wishes to change it, is very naive in my opinion.

Posted by: David R. Remer at June 24, 2008 03:06 PM
Comment #256734

I agree. There is no oil shortage. This leads me to conclude that we are in the midst of a oil bubble, and just as the housing and tech bubbles before it, it will burst. I think the difference in this bubble is everyone in the economy is immediately affected by it. So how should it be dealt with?

Before I answer that, let me set forth a simple scenario. Economics 101 also says demand should go down in response to a high price. This is exactly what is happening. Gasoline demand is down 2% from last year. Now, consumer confidence is plummeting. This leads me to conclude that this price cannot be supported over the near term because economy wide demand will breakdown. If our economy goes into a recession, international growth will be reduced. Quickly, the speculative bubble will burst or deflate without government intervention.

So should the government intervene to burst the bubble or do we let it work itself out even if this causes a recession? I am weary of government intervention in the speculation market because it will simply drive the market overseas. Thus, we will lose oversight and the tax revenue from these transactions. So I am willing to err on the side of doing nothing here.

So what options are left open for affecting the price? As I tried to indicate before, opening new areas for drilling doesn’t mean it will get drilled. States must approve it after the federal ban has been lifted. Furthermore, you have pointed out that there is already a huge drilling backlog. I pointed out this will take several years to get worked through due to rig shortages. So, more drilling leases are really symbolic. It lets the oil industry know that we are serious about our energy policy. It might also have the effect of reducing fear based speculation. Let me reiterate, I don’t advocate drilling alone. I advocate it as part of a comprehensive energy policy which focuses on alternatives as the long term solution.

Finally, let me be clear. I am not arguing that the oil companies have nothing to do with maintaining oil prices. I am arguing the publicly traded oil companies have minority control because they hold a minority share of the market. The fact remains that state owned oil companies can turn production on and off because they control the little spare capacity. I don’t see how we can change the production of the foreign oil companies, and so all oil companies will continue to reap large profits. We need to demand a reasonable energy policy moving forward so our economy can adapt to this new paradigm and minimize the long term consequences due to oil prices. I don’t see how oil is not part of the overall policy.

Posted by: Mr. Haney at June 25, 2008 03:10 PM
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