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By Robert Rapier on Apr 4, 2011 with 45 responses

Contradicting Goals: Cheap Gas and Lower Carbon Emissions

The Phenomenon of Political Contradictions

Energy policy frequently highlights some glaring contradictions among lawmakers. Some politicians who have railed against our dependence on petroleum and who insist we must reduce carbon emissions turn around and introduce legislation aimed at making gasoline cheaper. Imagine that an advocate for more exercise and better eating was also advocating cheaper fast food — and you have a situation akin to the mutually exclusive energy policies of some of our political leaders.

Jekyll & Hyde

I have never been able to reconcile what goes on inside the heads of Congressman Ed Markey (D-MA) or Senator Chuck Schumer (D-NY).

Congressman Ed Markey, a longtime advocate of reducing carbon emissions, wants to open the Strategic Petroleum Reserve in order to lower fuel prices.

Congressman Markey has long been a passionate advocate of legislation designed to reduce carbon emissions. Once, after a huge iceberg reportedly broke away from Greenland, Congressman Markey suggested that this provided “plenty of room for global warming deniers to start their own country,” further stating that it is “unclear how many giant blocks of ice it will take to break the block of Republican climate deniers in the US Senate who continue [to] hold this critical clean energy and climate legislation hostage.”

That’s Ed Markey, who thinks we need to cut down on our fossil fuel usage to limit greenhouse gas emissions. Now meet Congressman Ed Markey, who has introduced legislation designed to make sure we don’t cut back on our fossil fuel usage:

A group of House Democrats introduced legislation Thursday to tap the country’s oil reserves in response to rising prices.

“This is the time to deploy a responsible amount of reserves before it is too late,” Rep. Edward Markey (D-Mass.), the author of the new bill, told reporters.

Markey’s bill represents the latest effort by Democrats to release oil from the Strategic Petroleum Reserve (SPR), a 727-million-barrel emergency stockpile of oil. But the proposal faces opposition from Republicans and at least one senior House Democrat.

The legislation would require that over the next six months at least 30 million barrels of oil be released from the SPR. President Obama ultimately has the authority to release oil from the SPR.

Senator Charles Schumer is playing the role of speculator once again, calling for the U.S. to tap the SPR.

Now meet Senator Charles Schumer. Senator Schumer, another who has long been concerned about the “looming threat of climate change” also wants us to pay less for gasoline while presumably using less of it. While Congressman Markey also has a long track record of trying to force releases of oil from the SPR, Senator Schumer’s track record on this issue is more “impressive.”

Senator Schumer has lobbied to have the SPR tapped since at least 1999, when he cited — and I am not making this up — oil’s “meteoric ascent to nearly $25 per barrel” as justification for taking oil from the SPR. He got his way in 2000, as President Clinton caved leading up to the elections. When oil hit $30 a barrel in March 2004 (also an election year), Schumer again called for release of oil from the SPR in a letter to President Bush — writing that it was “now or never.” He further wrote “In January of 2003, I urged you to utilize the fuel reserves when the price of unleaded gasoline was $1.50 in New York.”

Just last month in a letter to President Obama, Senator Schumer once more called for the “Administration to immediately access the Strategic Petroleum Reserve in order to offset the rising cost of gasoline.” He justified his request with a white lie, because there has certainly been no “severe energy supply interruption” as Senator Schumer claims:

Your administration has the clear statutory authority to access these reserves in accordance with the Energy Policy and Conservation Act. According to this Act, following a finding by the President that a “severe energy supply interruption” has occurred, an interruption which the situation in the Libya has caused, the Strategic Petroleum Reserve may be utilized.”

You Can’t Have it Both Ways

We can certainly debate whether it is in the best long-term interest of the country to have higher fossil fuel prices. My own position is that I am in no way opposed to cheap energy, but when we are dealing with depleting resources we need to use those resources wisely so we don’t put future generations at a serious disadvantage. And there is no debate that higher prices are an effective way of causing consumers to use our fossil fuel resources more conservatively — something these two lawmakers should applaud.

I do understand the downside of higher fossil fuel prices. I am not just a disinterested observer; I buy fuel and am impacted by higher prices as well. But I have also responded to higher prices as have many others — by getting more fuel efficient. We are not helpless consumers; there are actions we can take to minimize the impact of higher prices.

And keep in mind that prices have risen sharply over the past decade for a good reason — and it isn’t because oil companies or speculators became greedier. It is because supplies are getting tighter relative to demand. Trying to keep prices artificially low will simply exacerbate the price run-up in the long-term by depleting supplies that much quicker.

Over the past couple of years, the U.S. has seen a massive decline in carbon dioxide emissions due to lower demand for oil. Hypothetically, if Congressman Markey was successful and used the SPR to rein in prices (something I don’t believe could have anything more than a short term impact in any case), then he will manage to get carbon dioxide emissions headed back up. Then I suppose he can go pass more legislation to bring down those soaring carbon dioxide emissions.

Followup Essay: The Purpose, and Wisdom of Tapping the SPR

In Senator Schumer’s letter to then-President Bush, he made the following claim: “The petroleum reserves are intended to provide relief at times when working families are struggling to make ends meet.” While Senator Schumer’s belief may explain why he has repeatedly attempted to use the SPR in a speculative fashion, in the next essay we will explore whether 1). That is the purpose of the SPR; 2). If using it in that fashion is wise.

  1. By Walt on April 4, 2011 at 8:04 am

    Robert Rapier said:

    And keep in mind that prices have risen sharply over the past decade for a good reason — and it isn’t because oil companies or speculators became more greedy. It is because supplies are getting tighter relative to demand. Trying to keep prices artificially low will simply exacerbate the price run-up in the long-term by depleting supplies that much quicker.

    Over the past couple of years, the U.S. has seen a massive decline in carbon dioxide emissions due to lower demand for oil. Hypothetically, if Congressman Markey was successful and used the SPR to rein in prices (something I don’t believe could have anything more than a short term impact in any case), then he will manage to get carbon dioxide emissions headed back up. Then I suppose he can go pass more legislation to bring down those soaring carbon dioxide emissions.


     

    I don’t know if I believe that oil companies and speculators are not more greedy.  I think the evidence has become even more convincing that bankers abused the system and legislation/regulation, and speculators/traders certainly can pump and dump prices.

     

    From the detailed rules I’ve been going through on CO2 emissions reporting for Subpart W and if we think CO2 emissions are dramatically falling wait until Sept. 30, 2011 when we start reporting our emissions using these rules:

    http://www.epa.gov/climatechan…..bpart.html

     

    I cannot speak for the whole country, but I know that with the projects we are evaluating the CO2 emissions are going to jump from zero reporting to reporting the emissions.  Europe has been reporting emissions for years, and the they have high gasoline prices too, so we should all be pleased to have high gasoline prices and high CO2 emissions reporting like Europe!  In EU, I believe carbon taxes will start Jan. 1, 2012.

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  2. By rate-crimes on April 4, 2011 at 8:39 am

    Strategic Pedestrian Reserve . . .

    http://www.worldcarfree.net/

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  3. By Wendell Mercantile on April 4, 2011 at 11:41 am

    …another who has long been concerned about the “looming threat of climate change”

    Someone should tell Charles Schumer that climate change is not a threat and it’s not looming. Climate change is nothing more than the natural state of a dynamic earth.

    Since the creation of the earth about 4.5 billion years ago, the climate has always changed, and it will keep changing until the Sun turns into a red giant expanding beyond the earth’s orbit.

    The earth has been both hotter and cooler in the past than it is now. The earth will also be hotter and cooler in the future than it is now — and there isn’t a thing Charles Schumer or Ed Markey can do about it.

    Both Markey and Schumer should stop their political posturing and leave the SPR untapped, saving it for a true national emergency.

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  4. By Benny BND Cole on April 4, 2011 at 12:30 pm

    Excellent commentary by RR. For several elections now, the best one can do is hold one’s nose and vote.

    The R-Party is against even sensible energy conservation; the D-Party is against even sensible energy production. Neither party will back a gas tax.

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  5. By russ on April 4, 2011 at 12:33 pm

    Congressman Malarky strikes again!

    At present it is positioning for the next election – the president does not want to join the ranks of the unemployed while looking for one of those ‘green’ jobs he claims to have created.

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  6. By Benny BND Cole on April 4, 2011 at 2:05 pm

    Wendall-

    You’re correct about the globe having various temperature patterns, even in the last 15,000 years. For example, early man migrated to North America when oceans were betweem 60 meters and 120 meters lower than today, roughyl 15,000 yers ago. So oceans rising 2 meters in the next 50 years would be no big deal to Planet Earth. Or falling by that amount. (I found rocks exhibiting glacial scoring in the Mojave Desert, probably only from 10,000 years ago. Lake Manly filled Death Valley about that time).

    But I find myself agnostic about manmade Global Warming. What makes you so sure? It seems liberals embrace global warming, while conservatives do not, based purely on politics.

    This in today–

    LA Times

    Critics’ review unexpectedly supports scientific consensus on global warming
    A UC Berkeley team’s preliminary findings in a review of temperature data confirm global warming studies.

    UC Berkeley physicist Richard Muller, a longtime critic of the scientific consensus on climate change who is leading the Berkeley Earth Surface Temperature project, cautioned that the initial assessment is based on only 2% of data. (April 4, 2011)

    Berkeley scientists’ climate data review puts them at center of national debate
    By Margot Roosevelt, Los Angeles Times

    April 4, 2011
    A team of UC Berkeley physicists and statisticians that set out to challenge the scientific consensus on global warming is finding that its data-crunching effort is producing results nearly identical to those underlying the prevailing view.

    The Berkeley Earth Surface Temperature project was launched by physics professor Richard Muller, a longtime critic of government-led climate studies, to address what he called “the legitimate concerns” of skeptics who believe that global warming is exaggerated.

    But Muller unexpectedly told a congressional hearing last week that the work of the three principal groups that have analyzed the temperature trends underlying climate science is “excellent…. We see a global warming trend that is very similar to that previously reported by the other groups.”

    The hearing was called by GOP leaders of the House Science & Technology committee, who have expressed doubts about the integrity of climate science. It was one of several inquiries in recent weeks as the Environmental Protection Agency’s efforts to curb planet-heating emissions from industrial plants and motor vehicles have come under strenuous attack in Congress….

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  7. By moiety on April 4, 2011 at 2:28 pm

    Walt said:

    Europe has been reporting emissions for years, and the they have high gasoline prices too, so we should all be pleased to have high gasoline prices and high CO2 emissions reporting like Europe!  In EU, I believe carbon taxes will start Jan. 1, 2012.


     

     

    Walt. Wikipedia via ”carbon tax” gives a good overview. Carbon taxes have been a reality in several countries for over a decade. A EU wide carbon tax would be vetoed by at least the UK. I expect several other countries to follow notably the new additions.It would have to be agreed by all the EU 27.

    One of the issues is that despite these, large changes at least at a European level have not been major. Energy consumption has increased and while a move away from coal has happened, it has not been large enough. Energy consumption by sector

    Projection from 1995

    Report from 2007 (see figure 5 especially)

    One of the problems is highlighted in this Renewable policy roadmap

    A considerably bigger contribution from renewable energy sources to reach the 12% target, which is expressed as a percentage of overall energy consumption (as opposed to a share of overall energy production [current criteria]) is thus required.

    We can add as much generation capacity that we want but if it does not impact the market (because for example it must be backed up), it is of little use. This point is regularly ignored.

     

    Further reading

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  8. By face on April 4, 2011 at 3:40 pm

    Robert Rapier said:

    And keep in mind that prices have risen sharply over the past decade for a good reason — and it isn’t because oil companies or speculators became more greedy. It is because supplies are getting tighter relative to demand. ….
     

    RR, how do the oil companies post record profits quarter after quarter if not for being greedy?
     

    Right now, transportation fuels are priced at what the market will bear. The oil company will, under the guise of “shareholder value”, stick it to the consumer for as much as they can. The consumer will complain and perhaps change their driving habits to compensate. But the root cause IS greed of the oil companies and speculators.  Who, as yet, can stand against big oil?  

    Only a few companies have the capital resources to build facilities to refine petroleum, much less finance the discovery and recovery of the crude itself. Needless to say, going into the oil business with the intent of changing the way the business is done would be financial suicide.

    Smaller, locally derived HMA fuel process plants, owned by much smaller companies would provide the consumer with a more competitive fuel market. The cost of raw materials can vary greatly but free enters into the equation when looking at our current Municipal Waste streams. Producing a drop in fuel from what would normally go into a landfill is a sound idea. Supplementing or replacing petroleum products in this method also is cleaner, in that the addition of the oxygenates in HMA’s provide a more complete burn. The methods used to produce HMAs also produce less carbon emissions as compared to incineration for electricity generation.

    We can have cheaper gas as long as we are not stuck on the “Gas” part.

    We can have lower carbon emissions as long as we are not stuck on the “Gas” part.

     

    J.

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  9. By Doug on April 4, 2011 at 3:59 pm

    RR, I totally agree.  But then again, there’s nothing inherently inconsistent with lower demand leading to lower prices.  The problem is that absent some form of rationing, lower prices will lead to higher demand.  I think this is what you’re missing – these guys don’t know it, but they support rationing.  CAFE rules, for example, are a type of inefficient, indirect rationing.  But suppose they were stronger – suppose it was flatly illegal for a car to get less than 40mpg.  Then, in effect, you could force demand lower.  The problem, of course, is that people might driver longer distances in efficient vehicles with cheap fuel.  The only way round this, I think, is explicit rationing of the ration book type, e.g. 10 gallons per month per person or some such.

    Another dimension to the problem, and where I personally come in, is that it makes sense to support cheap and plentiful supplies while at the same time attempting to limit demand through higher prices experienced by consumers.  In other words, using fuel taxes rather than explicit rationing to motivate people to drive less and use more efficient vehicles, but try to keep the price of the raw input (petroleum) low in order to keep our tab for importing it as low as possible.  Thus, my personal position, in favour of fuel taxes similar to western Europe, but also in favour of more domestic production and lower prices for crude generally.

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  10. By Walt on April 4, 2011 at 4:04 pm

    Moiety said:

    Walt said:

    Europe has been reporting emissions for years, and the they have high gasoline prices too, so we should all be pleased to have high gasoline prices and high CO2 emissions reporting like Europe!  In EU, I believe carbon taxes will start Jan. 1, 2012.


    Walt. Wikipedia via ”carbon tax” gives a good overview. Carbon taxes have been a reality in several countries for over a decade. A EU wide carbon tax would be vetoed by at least the UK. I expect several other countries to follow notably the new additions.It would have to be agreed by all the EU 27.

    Further reading


     

    Moiety,

    I know that Kyoto is suppose to expire in 2012, and the Carbon movement is really upside down right now on what to do.  The reason I mentioned carbon taxes is that some flaring companies in Europe have mentioned they are being taxed started Jan. 2012 so I will need to get a bit more detail on what the means.  I went to the Wikipedia site and it was surprising to see all the “carbon taxes” and “environmental taxes” going back to 1991 in some cases.  I see what you mean.

     

    What I see coming, at least from those I’m working with, is a global carbon tax similar to what is explained here:

     

    http://www.sciencedaily.com/re…..194840.htm

     

    What I hear is that it would be collected at the gasoline pump like every other “hidden” tax on the consumer.  Exxon has backed a Carbon Tax since 2009 and I suspect it is a way for them to collect the taxes at the pump, and most easily pass it on to consumers.  If they have to actually operate a “Cap & Trade” scheme they can loose lots of money like everyone else has been loosing money on carbon, and Exxon is not in the business to loose money.  Like Shell, they are some of the smartest companies in the world to shift costs to consumers.  Look at the track record of Shell in Nigeria and its record…it is not only a major source of its revenue since the late 1950′s, but is an environmental disaster where they can shift that costs to the country, and export 95% of all the crude, NGL’s and even natural gas (LNG) they can to leave little behind.

     

    Exxon is better in the country…they do reinject their flared gas into their fields over many years…but the rest is exported leaving little behind but clean up costs, etc.  Nothing further that needs to be discussed on this thread…they are one of the best operators by far in my view.

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  11. By moiety on April 4, 2011 at 4:58 pm

    Florida Alliance for Clean Energy said:

    Robert Rapier said:

    And keep in mind that prices have risen sharply over the past decade for

    a good reason — and it isn’t because oil companies or speculators

    became more greedy. It is because supplies are getting tighter relative

    to demand. ….

    RR, how do the oil companies post record profits quarter after quarter if not for being greedy?


     

    One could ask the same of green energy companies who reap massive subsidies per MW produced. Oil companies have a very diversified product line producing for example ethylene which is a very valuable product and for which demand is increasing year on year.

     

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  12. By rrapier on April 4, 2011 at 5:53 pm

    Florida Alliance for Clean Energy said:

    Robert Rapier said:

    And keep in mind that prices have risen sharply over the past decade for a good reason — and it isn’t because oil companies or speculators became more greedy. It is because supplies are getting tighter relative to demand. ….

    RR, how do the oil companies post record profits quarter after quarter if not for being greedy?


     

    You have two separate issues there. The first — which I stated — was that they aren’t any greedier than they have ever been. To the extend that they are greedy, they were greedy 10 years ago when prices were much lower. It is just now they are reaping very high profits because the product they sell is in much demand. As you say, they charge what the market will bear, but in this case “they” is really OPEC. ExxonMobil can’t control oil prices; they charge what the world market is and that market is largely dictated by OPEC — but the reason OPEC is able to do it comes down to depletion and higher demand from India and China.

    But the second issue is greed itself. Inherently, that is what capitalism is. Is ExxonMobil greedier than Google? No, it is just that we are much more aware of how our money ends up in the hands of ExxonMobil. But both companies are trying to make as much money as they can.

    RR

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  13. By Benny BND Cole on April 4, 2011 at 7:52 pm

    Indeed, publicly held companies are supposed to make as much money as they can (legally). They do not, and should not, have social missions.

    It is government’s role to take on worthy social missions, and to pursue national interest and security.

    Thus, the federal government could levy a stiff gasoline tax, regardless of whether oil companies are greedy or not. OPEC is greedy too. We cannot expect oil companies or producers to act in the US national interest. That is not their role.

    In fat, I would expect oil producers to game the NYMEX to get the highest prices possible.

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  14. By Optimist on April 4, 2011 at 8:04 pm

    And keep in mind that prices have risen sharply over the past decade for a good reason — and it isn’t because oil companies or speculators became more greedy. It is because supplies are getting tighter relative to demand. ….

    RR, how do the oil companies post record profits quarter after quarter if not for being greedy?

    Say FACE, what is the difference between greed and capitalism? If I offered you a significantly higher salary, I suppose you’d turn me down, because you don’t want to be greedy, like the evil Big Oil.

    Only a few companies have the capital resources to build facilities to refine petroleum, much less finance the discovery and recovery of the crude itself. Needless to say, going into the oil business with the intent of changing the way the business is done would be financial suicide.

    That’s a convenient way of looking at it. Here is a less convenient way: challenging market conditions in the 90s lead to much cannibalism in the oil business, resulting in fewer independent companies.

    Smaller, locally derived HMA fuel process plants, owned by much smaller companies would provide the consumer with a more competitive fuel market. The cost of raw materials can vary greatly but free enters into the equation when looking at our current Municipal Waste streams. Producing a drop in fuel from what would normally go into a landfill is a sound idea. Supplementing or replacing petroleum products in this method also is cleaner, in that the addition of the oxygenates in HMA’s provide a more complete burn. The methods used to produce HMAs also produce less carbon emissions as compared to incineration for electricity generation.

    FACE, waste-derived fuels would indeed be a good idea. But what the #$% is HMA?

    Smaller, locally derived fuels would also lead to much more severe price swings as local events impact local markets in unforeseen ways. The main advantage of a global market is the ability to absorb all sorts of events from around the world with minimal impact.

    If you’re thinking $100/bbl is not minimal impact, just wait a few years. You’ll come around…

    We can have cheaper gas as long as we are not stuck on the “Gas” part. We can have lower carbon emissions as long as we are not stuck on the “Gas” part.

    The term “broken record” comes to mind.

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  15. By russ-finley on April 4, 2011 at 10:44 pm

    Pointing out politicians’ inconsistencies is like trying  to empty the oceans with a cup.

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  16. By Walt on April 5, 2011 at 2:27 am

    Benny BND Cole said:

    Indeed, publicly held companies are supposed to make as much money as they can (legally). They do not, and should not, have social missions.

    It is government’s role to take on worthy social missions, and to pursue national interest and security.

    Thus, the federal government could levy a stiff gasoline tax, regardless of whether oil companies are greedy or not. OPEC is greedy too. We cannot expect oil companies or producers to act in the US national interest. That is not their role.

    In fat, I would expect oil producers to game the NYMEX to get the highest prices possible.


     

    Interesting observation…

    Contracts for future deliveries of corn, soybeans and wheat prices
    surged to the most permitted by the Chicago Board of Trade in a single
    day. Corn was up 4.5%, soybeans were up 3.25% and wheat was up 5%. So
    far in the past year, corn prices have risen by 87%, soybeans have
    jumped 41% and wheat has climbed 54% — thanks in part to bad weather in
    Russia and Australia, two major wheat producers. The surge in prices on
    the futures exchanges was in reaction to a report by the U.S.
    Department of Agriculture that stockpiles of corn measured at the
    beginning of March had fallen 15% from their levels a year ago.

    The U.S. is the world’s largest consumer of corn. It seems to be in
    nearly everything — cereals, sweeteners and ethanol for our cars. Corn,
    and to a lesser extent soybeans, are also important for feeding
    livestock. According to the National Corn Growers Association,
    about 80% of all corn grown in the U.S. is consumed by “domestic and
    overseas livestock, poultry, and fish production.” So higher prices for
    these commodities means that prices for beef, pork and chicken are
    likely to go up as well down the road.

    See full article from DailyFinance: http://srph.it/f1v2wG

     

     

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  17. By moiety on April 5, 2011 at 4:45 am

    Walt said: 


    Moiety,
     

     

     What I see coming, at least from those I’m working with, is a global carbon tax similar to what is explained here:

     http://www.sciencedaily.com/re…..194840.htm

     What I hear is that it would be collected at the gasoline pump like every other “hidden” tax on the consumer.  Exxon has backed a Carbon Tax since 2009 and I suspect it is a way for them to collect the taxes at the pump, and most easily pass it on to consumers. 


     

    If I were a betting man (which I am not), I would bet that even that move would be vetoed by at least 5 member states. This is a big enough bloc to bring in other states. There is no constitutional mechanism for EU to regulate the taxes of its constituent states. What the EU can do is suggest that countries add additional taxes to fossil fuel producing companies in which case we will see the increase at the pump etc.

    In any case the point I was alluding to is that despite environmental taxes being a historical trend in Europe, the scope of the situation has not changed that much. In Denmark the carbon tax is essentially being used to pay for the shortfall that wind introduces to the market. Wind energy produced in Denmark is typically stored in other countries reservoirs and this storage costs more (in part due to efficiency losses but also direct cost) than Denmark can sell the electricity. Thus their energy consumption share has not radically changed in the last 10-20 years.

    Despite a policy that looks like a good idea on the surface, the implementation and final outcome is much different that the policy makers envisages. This is primarily due to policy makes wanting to the free lunch that RR was referring to.

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  18. By doggydogworld on April 5, 2011 at 10:59 am

    Florida Alliance for Clean Energy said:

    Right now, transportation fuels are priced at what the market will bear. The oil company will, under the guise of “shareholder value”, stick it to the consumer for as much as they can. The consumer will complain and perhaps change their driving habits to compensate. But the root cause IS greed of the oil companies and speculators.  Who, as yet, can stand against big oil?

    Only a few companies have the capital resources to build facilities to refine petroleum, much less finance the discovery and recovery of the crude itself. Needless to say, going into the oil business with the intent of changing the way the business is done would be financial suicide.


     

    Right now wheat and copper are priced at what the market will bear. Should we blame greedy farmers and miners?

    As for “facilities to refine petroleum”, Big Oil sold off scores of those years ago to independents like Tesoro and Valero. It’s no big deal to raise money and hire people to build new ones, the reason it doesn’t happen in the US is because of regulation, NIMBY-ism and lobbying from environmental groups.

    Financing for the “recovery and discovery of crude itself” is very easy to get in the US and many other parts of the world, even for very tiny operators. Lots of companies in the new shale oil plays are very small (note: shale oil plays are sisters of the shale gas plays, completely different to the undeveloped ‘oil shales’ aka kerogen deposits out west).

    Finally, most oil is not recovered by “Big Oil” but by Really Huge Oil, the national oil companies of Saudi Arabia, Kuwait, Brazil, Venezuela, Mexico and the quasi-national oil companies of Russia. Exxon-Mobil, Conoco-Philips and other conspiracy theory bogeymen are bit players in the oil biz and have no power to set prices.

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  19. By Wendell Mercantile on April 5, 2011 at 11:45 am

    But I find myself agnostic about man made Global Warming. What makes you so sure? It seems liberals embrace global warming, while conservatives do not, based purely on politics.

    Benny,

    You’re correct, it’s become a political issue, and a case of tremendous hubris on both sides of that political coin.

    When one thinks in terms of geological and astronomical time, it’s pure folly — not to mention an overwhelming sense of self-inflated importance — to think that in the short blink of an eye that humans will inhabit earth, we could affect the earth’s eventual geological destiny. The earth will continue on its course quite nicely (at least until the Sun completes its stellar evolution to the red giant phase) no matter what humans do.

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  20. By rrapier on April 5, 2011 at 12:38 pm

    Russ Finley said:

    Pointing out politicians’ inconsistencies is like trying  to empty the oceans with a cup.


     

    But sometimes they are so comically inconsistent that we can’t help ourselves. I mean, it is clear that Markey thinks Global Warming is a potential global catastrophe in the making. So what is he thinking here? If a person is willing to set their principles aside simply to buy votes, then that certainly isn’t someone I would want to represent me. But then I suppose they are all like that to some degree — which is mostly why I loathe politics.

    RR

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  21. By russ on April 5, 2011 at 12:42 pm

    Is ExxonMobil greedier than Google?

    Not at all but Google is of a different generation and it’s management spends half their time wandering around repeating the motto, ‘Do no evil’ and the other half doing the evil – such as collecting data off the air waves they have no use for.

    If the data collection problem were a one off thing it could be a screwup by a field guy but they have been caught at it many times and always say – accident!

    Google also makes a lot of news about spending/investing money on silly projects that the green community is in love with. If anything Google is far more hypocritical than most companies.

    Google PR is first class as long as no one asks questions it keeps the fools fooled.

     

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  22. By Benny BND Cole on April 5, 2011 at 1:01 pm

    Walt-
    Why the commodities prices after my quote?

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  23. By rrapier on April 5, 2011 at 1:24 pm

    doggydogworld said:

     

    It’s no big deal to raise money and hire people to build new ones, the reason it doesn’t happen in the US is because of regulation, NIMBY-ism and lobbying from environmental groups.


     

    There is one other important reason it doesn’t happen. Refiners have had some good years over the past five, and they have certainly made headlines with high gas prices. But historically refining isn’t a lucrative business. One year a refinery will make a billion dollars and generate lots of headlines, and the next it may lose a billion and make no headlines. Pure refiners like Valero lost money as recently as a couple of years ago.

    So the capital expenditure is huge, the risk is large, and if you get in at the wrong time of the cycle you may find yourself bleeding billions up front on the billions you just invested. All of this combines to ensure that existing refineries are expanded rather than new ones being built.

    RR

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  24. By Gerald Mittet on April 5, 2011 at 2:10 pm

    Dear Mr. Rapier

    Re: Contradicting Goals: Cheap Gas & Lower Carbon Emissions

    May I have a copy of this essay in a form I can send to my congressmen and senators. I do not entirely agree with everything you propose, although your arguments are always well presented, and in this case you have been reading my mind.

    Best Regards,

    Gerald Mittet, P.E.
    Mittet Engineering PLLC

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  25. By Mark H on April 5, 2011 at 4:22 pm

    Just a thought do the above senators walk their talk, do they live lives in which they reduce their own environmental impact? If they do, do they publish this? Might be insightful to find out…

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  26. By mcain6925 on April 5, 2011 at 5:40 pm

    Indeed, publicly held companies are supposed to make as much money as
    they can (legally). They do not, and should not, have social missions.

    Historically speaking, this is a very new claim.  Limited-liability corporations are created (or at least allowed to exist) by the state in order that people can pool their money and undertake risky ventures without putting all of their assets at risk in the case of disaster or other business failures.  Until quite recently, it was understood that the state expected something in return for the benefits that it was providing to investors.  The “only purpose is to maximize profits” is almost uniquely American.  Different governments have taken, and continue to take, quite different views.  Half of the members of supervising boards of German corporations are representatives of the employees.  The UK’s 2006 Companies Act requires corporations to consider the interests of employees and the communities where the corporation operates as well as the interests of the shareholders.

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  27. By Wendell Mercantile on April 5, 2011 at 9:43 pm

    …do they live lives in which they reduce their own environmental impact?

    I’d bet a dollar to a doughnut that both Markey and Schumer get driven around in black SUVs. When you’re in Washington DC, it’s amazing the number of black SUVs (with tinted windows) you see tooling around town.

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  28. By rate-crimes on April 6, 2011 at 12:11 pm

    “When one thinks in terms of geological and astronomical time, it’s pure folly — not to mention an overwhelming sense of self-inflated importance — to think that in the short blink of an eye that humans will inhabit earth, we could affect the earth’s eventual geological destiny. The earth will continue on its course quite nicely (at least until the Sun completes its stellar evolution to the red giant phase) no matter what humans do.” – Wendell Mercantile

    Congratulations, Wendell, on driveling a drossy, exemplary fusion of vacuous cynicism and cynical vacuity.  Why  do you even make the effort to draw breath?

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  29. By Wendell Mercantile on April 6, 2011 at 1:42 pm

    Rate Crimes,

    Obviously you have neither the skill nor inclination to be capable of thinking in astronomical or geological time. You must be someone like Markey or Schumer who has an inflated enough opinion of self to think humans are capable of changing the geological evolution and destiny of our dear planet.

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  30. By carbonbridge on April 6, 2011 at 4:20 pm

    Russ Finley said:

    Pointing out politicians’ inconsistencies is like trying  to empty the oceans with a cup.


     

    While global populations wish that they could dodge invisible Japanese rads now settling down to earth and simultaneously try not to become influenced by the sales price for iodine pills — national network news last evening broadcast a mention from the United Nations saying that the protective Ozone layer over Arctic is now thinner than ever…  40% reductions in Artic Ozone concentrations have been measured in just the past few months. 

    I wonder if some sort of atmospheric tipping point has been reached this winter?  Will excessive sunburn of exposed skin this summer be the near-term result of Ozone depletion?  Or will the diminishing values of protective Ozone be even more far reaching due to the speed of O3′s demise?  Personally, I have no clue, – simply an observer here…

    World weather agency says that nasty man-made chemicals combined with a cold winter have battered Earth’s protective Ozone Shield to unprecedented lows.  The stratospheric Ozone Layer is what protects life on Earth by absorbing ultraviolet light.

    •Is global warming really happening?  The pundits have been saying no way!  Lotsa people today think global warming in a scam…

     

    •Two images of the ozone hole were photographed by satellite on September 17, 1979 and again on October 1, 2010

     

    •Comparison of sea ice around Antarctica just one decade apart from 1999 and again in 2010.

     

    More excellent comparative images on CBS News are found at link below.

    http://www.cbsnews.com/2300-20…..l?tag=page

    The Google URL below is for images regarding Ozone depletion.  Many ozone related images will show up – each image then leads back to the web page where it was initially located.

    http://www.google.com/images?h…..n+Of+Ozone

     

    •Maybe something simple such as planting more trees can become a near-term and definitive answer?  Trees eat atmospheric carbon from CO2 for lunch and return to us (and the birds, bees, fish, monkeys, dogs & cats, etc.) a O2 oxygen molecule to rebreathe once again.

     

     

     

    –Mark 

    (Having just a wonderful work week on Hump Day.) 

    I think I’ll leave CNN news shut off tonight.  Monday night CNN had Jesse Ventura on for a one hour interview.  I was surprised that he even talked about HAARP.  He’s got some ‘wavos’ as the saying goes.  Good for him to at least speak his mind.

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  31. By Benny BND Cole on April 6, 2011 at 5:14 pm

    OT, but the Peak Oil doomsters are going to have to find a way to doom this one:

    We Have Gas Up the Wazoo to the Moon, and Globally.

    Study reports non-US global shale gas recoverable resources of 5,760 Tcf; global shale gas boosts total recoverable natural gas resources by 40%
    6 April 2011

    Map of 48 major shale gas basins in 32 countries. Source: EIA. Click to enlarge.

    Initial assessments of 48 shale gas basins containing almost 70 shale gas formations in 32 countries suggest that shale gas resources, which have recently provided a major boost to US natural gas production, are also available in other world regions. A new EIA-sponsored study by Advanced Resources International, Inc. reports initial assessments of 5,760 trillion cubic feet (Tcf) of technically recoverable shale gas resources in 32 foreign countries.

    Adding the estimated US shale gas technically recoverable resources (862 Tcf) to the assessments in the study gives a total of 6,622 Tcf. For comparison, most current estimates of world technically recoverable natural gas resources include few if any of the resources assessed in this study and total about 16,000 Tcf.

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  32. By Wendell Mercantile on April 6, 2011 at 5:34 pm

    We Have Gas Up the Wazoo to the Moon, and Globally.

    Plus gazillions more gas in the methane clathrates under the oceans. Prior to the earthquake/tsunami Japan was one of the few countries working on tapping the clathrates off their coast in the Pacific. I can guess that increased doubts about nuclear power will now only motivate them to accelerate getting at the huge amounts of gas locked in those clathrates.

    The people of Japan are going to have electricity. If not from nuclear, I’d expect a trend towards using the methane in the clathrates — either in fuel cells, or by burning it in power plants.

    [link]      
  33. By Walt on April 6, 2011 at 10:03 pm

    Benny BND Cole said:

    Indeed, publicly held companies are supposed to make as much money as they can (legally). They do not, and should not, have social missions.

    It is government’s role to take on worthy social missions, and to pursue national interest and security.


     

    Benny,

    Although my research shows a little disagreement (and I mean just a little) with the following presentation, how do you justify your statement above when it comes to bankers and those who control our money supply?

    http://www.youtube.com/watch?v…..pkniGDDSV4

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  34. By Benny BND Cole on April 6, 2011 at 11:57 pm

    Walt-

    I expect everyone in business to pursue their own interests, just as nations pursue national interests. Thus Goldman Sachs might collude with Russian-financed trading houses to boost oil on the NYMEX,

    I expect every federal agency to pursue its interests, whether HUD or Defense.

    Is this moral? Well, I think we have an amoral capitalistic society.

    I think such a society produces incredible wealth, and possibilities for corruption.

    We need good, honest government, and checks and balances,

    Bankers pursue their interest. The Fed controls the money supply. I am still trying to understand monetary policy, although I like Bernanke.

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  35. By armchair261 on April 7, 2011 at 2:19 am

    Only a few companies have the capital resources to build facilities to refine petroleum,

     

    Only about 55 in the US alone

     

    much less finance the discovery and recovery of the crude itself

     

    Only about 14,000 in the US alone

     

    I would like to ask our Floridian guest what the p/e ratio is for the US oil industry as a whole, and how it compares to other industries. It’d better be very high indeed for his commentary to hold water. Maybe he can also explain why greedy Exxon’s shares have gone up only 22% in the past 2 years, while the S&P500 is up 60%. Millions of equally (one must assume) greedy investors out there seem to disagree with FACE’s keen insight.

     

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  36. By armchair261 on April 7, 2011 at 2:22 am

    If not from nuclear, I’d expect a trend towards using the methane in the clathrates — either in fuel cells, or by burning it in power plants.

    My bet would be on LNG.

     

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  37. By armchair261 on April 7, 2011 at 2:25 am

    Study reports non-US global shale gas recoverable resources of 5,760 Tcf; global shale gas boosts total recoverable natural gas resources by 40%

     

    True enough!

    Interesting that the same industry accused of being greedy (and often conspiring to restrict supply) has seen the price of its natural gas fall by about a quarter in the last year due largely to this supply overhang. 

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  38. By paul-n on April 7, 2011 at 3:16 am

    Benny wrote;

    I am still trying to understand monetary policy, although I like Bernanke.

    Good luck with that!  Even Bernanke doesn’t understand it!

    Link here to a 6 minute video that give the best explanation of the the situation I have yet heard (watch the first one)

     

    I expect everyone in business to pursue their own interests, just as nations pursue national interests

    Yes, anyone who expects otherwise is going to be dissapointed.  Business will not pursue national interests, though it does often seem like government pursues business interests, under the guise of “national interests”

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  39. By Herm on April 7, 2011 at 4:37 am

    Benny BND Cole said:

    Excellent commentary by RR. For several elections now, the best one can do is hold one’s nose and vote.

    The R-Party is against even sensible energy conservation; the D-Party is against even sensible energy production. Neither party will back a gas tax.

    Thats why its better to vote for the R-party and then you do your part by conserving fuel.. natural price increases as the supply depletes will take care of the rest thru efficient market forces.
     

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  40. By Walt on April 7, 2011 at 6:32 am

    Paul N said:

    Benny wrote;

    I am still trying to understand monetary policy, although I like Bernanke.

    Good luck with that!  Even Bernanke doesn’t understand it!

    Link here to a 6 minute video that give the best explanation of the the situation I have yet heard (watch the first one)

     


     

    Excellent video Paul…

     

    I hear that QE3 is likey coming in June.  It will be interesting to see if the US government shuts down in less than 48 hours.  I personally think it is going to send a lot of people into frustration when they don’t get their IRS tax refund.  I was listening last night to the list of the services that stop if the government shuts down, and the list of services that continue.  My first observation was, “Interesting, who ever wrote that list made sure it made the largest impact on the government individual taxpayer and far less impact on the politicians, government bureaucrates and Goldman Sachs.”  At least the system of banking can still look forward to QE3 and a government shut down might just be the “boost” are brilliant fed chairman needs to convince the plant the can buy all the treasuries nobody else seems to want.  Like government, spend money on things that waste money and destroy real value, and as long as it is brilliant bankers people will just be impressed with the bonus payouts.

     

    Of course, anyone who make a $1-100 million bonus must be extraordinary gifted in our enconomy, but few realize when that sort of money is thrown at even a fool they are bound to push the right buttons if they are trained what to do.  The next wave of “easing” will be interesting to see how the world reacts.  I suspect another war could help absorb the liquidity…and certainly that will not be shut down with the government.  I wonder if our President will be able to spend more time on re-election doing the happy dance…?

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  41. By Walt on April 7, 2011 at 7:08 am

    Benny BND Cole said:

    Walt-

    Is this moral? Well, I think we have an amoral capitalistic society.

    I think such a society produces incredible wealth, and possibilities for corruption.


     

    Actually, the system does not produce wealth in society.  It produces debt in society.  There is a big difference.  The true wealth of society is being transferred systematically, weekly to a giant handful of criminals who argue they are doing God’s work.  They believe in their moral cause, and certainly believe they are moral (even arguing they are among the most moral on the planet attending daily studies at lunch, and in constant communication with the Almighty on their every decision) men and women.

     

    I built myself an extensive library on learning about money, debt, economics and true wealth back in 1995-1998.  I even made a point to fly to London on the weekend to study in the old books stores when I wanted to find something that was referenced in another book.  It was a bit expensive, but was how I learned to use my first “debit” card instead of credit cards.

     

    What is going on economically is pure and simple corruption at its worst.  There have been numerous books written by insiders in the system to expose this corruption and regulators turn their backs…to keep their jobs.  They know those who expose the “morally righteous” behavior will be blackballed, investigated by the IRS in some cases, and made to live either behind bars or in poverty.  Corruption breeds corruption, and once a society moves from standing on conscience doing what is right to promoting and living in corruption it will ultimately unless you are a major oil producer and exporter.  A certain Russian class is thriving due to its oil exports, and a certain American class is thriving due to our dollar exports.  The Chinese are smart to use their consumer driven economy to produce as much as possible, and buy up as many natural resource assets.  The rest of the world is not convinced the US Dollar is the best export for everyone anymore.  They need it like we need oil, but inflation is coming and it is coming quickly.  See this site for some good basic economics.  The more I read these guys, the more I think they are largely right:

     

    http://inflation.us/federalres…..veqe3.html

     

    Hold on for an interesting ride as we are pushing new economic positions taken by the fed that have never been tested.  We will all pay their price whatever the result will be, but be certain that money supply is going to make things more expensive…this you can be certain…and many know who is making the money on the inside of this corruption.  It is wide open, but you would be a fool to go up against this class of brilliant PhD’s without deep pockets or the Chinese military…or both! :)   Go east young man!

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  42. By face on April 7, 2011 at 9:57 am

    Optimist said:

    Say FACE, what is the difference between greed and capitalism? If I offered you a significantly higher salary, I suppose you’d turn me down, because you don’t want to be greedy, like the evil Big Oil.

    FACE, waste-derived fuels would indeed be a good idea. But what the #$% is HMA?


     

    Capitalism is great, don’t get me wrong. But greed is taking more than you can eat, just because you can.

    If my significantly higher salary was not being yanked out of some other poor guys pocket, you bet I’d take it! I know just what I’d do with it as well.

     

    HMA’s..Sorry for the obscure reference, Higher Mixed Alcohols.

     

    I agree with the idea that a local – centric fuel market could and would be impacted by local events that would never cause a shudder in the global marketplace…but, the other side is we could care less what is going on 15 thousand miles away, trying to befriend people that would just as soon hack our heads off, all to keep our fuel stream alive.

     

    As for being a broken record….the Truth remains the same no matter how many times it is repeated, lies on the other hand, take on a life of their own.

     

     

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  43. By face on April 7, 2011 at 10:17 am

    armchair261 said:

    Only a few companies have the capital resources to build facilities to refine petroleum,

     

    Only about 55 in the US alone

     

    much less finance the discovery and recovery of the crude itself

     

    Only about 14,000 in the US alone

     

    I would like to ask our Floridian guest what the p/e ratio is for the US oil industry as a whole, and how it compares to other industries. It’d better be very high indeed for his commentary to hold water. Maybe he can also explain why greedy Exxon’s shares have gone up only 22% in the past 2 years, while the S&P500 is up 60%. Millions of equally (one must assume) greedy investors out there seem to disagree with FACE’s keen insight.

     

    I resent the sarcasm in the first place. In the second place, I have worked in the oil industry. If you’re not big money, you will be crushed if you try to change the machine. Only huge money can make significant changes to the industry.  Money rules, and is evidenced by your own comments, P/E ratios and share performance and all.
     

    What about the G/B ratio? That’s the GOOD to BAD ratio. It’s not all about the money, it is about sustainability and responsibility to our planet. I have kids and grandkids and I want them to enjoy life more than I have.

    I do have a keen insight. It’s just a gift.

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  44. By armchair261 on April 7, 2011 at 1:09 pm

    I do have a keen insight. It’s just a gift.

    Maybe you do. But not into the petroleum industry.

    So what IS the industry p/e ratio, if it can generate profits at will, and can control oil prices? You failed to answer the question. And while you’re at it the G/B ration for oil versus other industries. Do you know, or is it just a hunch

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  45. By armchair261 on April 7, 2011 at 1:58 pm

    I resent the sarcasm in the first place.

    I’m sorry for interrupting your slander directed at hundreds of thousands of people you don’t know in an industry you so obviously don’t know anything about.

    In the second place, I have worked in the oil industry.

    And you believe that oil companies can set oil prices? That very few companies can raise capital to drill wells? That capital investment in exploration and production is invariably higher than in refining? I’m wondering what you did in your time in the oil patch… ran a convenience store? Obviously you had a bad experience there, and I’m guessing your attitude and ideology may have had something to do with that.

    If you’re not big money, you will be crushed if you try to change the machine.

    Please define “machine.” Sounds kinda like a big conspiracy? Our little company produces about 300 barrels of oil per day. Our annual income is far less than your standard utility infielder’s. And yet… and yet… we do things our own way, and I haven’t spotted any machine trying to crush us. Maybe you can tell me where it is so I can be on the lookout? :-)

    Only huge money can make significant changes to the industry. Money rules, and is evidenced by your own comments,

    Please explain. Be specific. Are you suggesting that anyone who disagrees with you must be paid to state their views?

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