Oil Prices

[Lunican]

It's too bad the Republicans are so inept that they are unable to overcome these effeminate drilling bans.

[RiversideGator]

Agreed.  Hopefully common sense will prevail and drilling will be allowed in the near future.

[jaxnative]

When are the people going to say "ENOUGH":

Junk Science: Greens Thwart Gasoline Production
Thursday, June 12, 2008

By Steven Milloy

Four-plus-dollar gasoline is forcing Americans to realize that we need increased domestic oil production to meet our ever-growing demand for affordable fuel. But even if the greens lose the political battle over drilling offshore and in places like the Arctic National Wildlife Refuge, they nevertheless are way ahead of the game as they implement a back-up plan to make sure that not a drop of that oil ever eases our gasoline crunch.

The Sierra Club and the Natural Resources Defense Council, or NRDC, successfully pressured the U.S. Environmental Protection Agency to block ConocoPhillips’ expansion of its Roxana, Ill., gasoline refinery, which processes heavy crude oil from Canada, the Wall Street Journal reported on Monday.

The project would have expanded the volume of Canadian crude processed from 60,000 barrels per day to more than 500,000 barrels a day by 2015. After the Illinois EPA had approved the expansion, the green groups petitioned the federal EPA to block it, alleging ConocoPhillips wasn’t using the best available technology for reducing emissions of sulfur dioxide and nitrogen oxides.

Apparently, the plant’s planned 95 percent reduction in sulfur dioxide emissions and 25 percent reduction in nitrogen oxides wasn’t green enough. NRDC’s opposition is quite ironic since ConocoPhillips and the activist group actually are teammates in the global warming game. Both belong to the U.S. Climate Action Partnership, a coalition of eco-activist groups and large companies that is lobbying for global warming regulation.

So even though ConocoPhillips is aiding and abetting the NRDC to achieve the green dream of absolute government control over the U.S. energy supply, the enviros still are in take-no-prisoners mode, refusing to allow the expansion of a single refinery.

Imagine what the rest of us can expect from the greens.

Meanwhile, in California, green groups are working through the state attorney general’s office to block the upgrade of the Chevron refinery in the city of Richmond. The $800 million upgrade essentially would expand the useable oil supply by permitting the refinery to process lower-quality, less-expensive crude oil.

California Attorney General, ex-Gov. and climate crusader Jerry Brown claims the upgrade will produce an additional 900,000 tons of greenhouse gas emissions per year. But Chevron says the upgrade actually will reduce the emissions by 220,000 tons.

Whose figure is closer to the truth?

It’s hard to know for sure at this point, but it’s worth noting that material false statements made by Chevron are prosecutable under the federal securities laws and California state law, while Brown and the activists pretty much can say whatever they want without legal accountability.

Whatever the facts are, Brown and the city of Richmond insist that Chevron eliminate 900,000 tons of greenhouse gas emissions so that the upgrade will be "carbon neutral." While the greens remain vehemently opposed to the project, it seems their plans for blocking the refinery might go awry as Brown and the local government eventually may side with Chevron rather than the greens, but only because the company has deep pockets and is open to being shaken down.

Brown and the city have proposed that Chevron ensure that half the total emissions-reduction projects be undertaken on-site at the refinery and the other half be done either in the city of Richmond itself or elsewhere in California.

Translating the latter part of this "offer that can’t be refused:" Chevron essentially must purchase 450,000 tons of "carbon credits" annually from the city of Richmond or the state. As the street value of carbon credits is about $10 per ton, Chevron is being "green-mailed" to the tune of perhaps $4.5 million per year to upgrade its refinery â€" amounting to perhaps a 1 percent annual "tax" on the gains in gross revenue produced by the upgrade. And the local government officials are not the least embarrassed about this extortion.

"When you’re dealing with a refinery where the project will cost close to a billion dollars and someone like Chevron with tremendous resources, that’s not a constraint, so they should do everything possible," an unidentified state official told Carbon Control News in a June 9 article.

The farcical nature of the entire transaction is underscored by that state official’s apparent lack of understanding about how greenhouse gas-induced global warming is supposed to work.

The official told Carbon Control News that the greenhouse gas emission reductions "are vital to protect low-income minority communities in the Richmond area, which already suffer disproportionate pollution impacts."

Climate alarmism, of course, is based on the notion of global emissions causing global warming, not local emissions causing local warming; moreover, the allegation that low-income minority populations are disproportionately harmed by industrial emissions â€" the basis of the so-called "environmental justice" concept of the 1990s â€" hasn’t stuck since no scientific evidence supports it.

Though green and local government shenanigans can be a source of endless amusement, let’s get back to the main point. As the 2005 hurricane season dramatized, oil production, itself, is only one factor in determining gasoline supply and prices.

Damage to Gulf Coast refineries by hurricanes Katrina and Rita reduced gasoline supplies and increased prices worldwide â€" a real problem given that U.S. refineries operate at or near capacity thanks to other green constraints.

We may produce all the oil we need, but if we can’t refine it, then it won’t do much for reducing gasoline supply problems. So while working to expand domestic drilling, we’ll simultaneously need to expand domestic refining capacity.

It will be quite the Pyrrhic victory to finally produce oil from ANWR and then not be able to do anything with it.

[RiversideGator]

More evidence that a speculative bubble is at least partially driving the increased oil prices:

Oil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania

By Michael Patterson and Elizabeth Stanton


June 13 (Bloomberg) -- The rally that drove oil to a record $139.12 a barrel last week surpassed the gains in Internet stocks that preceded the dot-com crash in 2000.

Crude rose 697 percent since trading at $17.45 a barrel on the New York Mercantile Exchange in November 2001, and reached 28 record highs this year. The last time a similar pattern was seen in equities was eight years ago, when Internet-related stocks sent the Nasdaq Composite Index up 640 percent to its highest level ever, according to data compiled by Bloomberg and Bespoke Investment Group LLC.

The Nasdaq tumbled 78 percent from its March 2000 peak, erasing about $6 trillion of market value, as investors concluded that prices weren't supported by profits at companies such as Broadcom Corp. and Amazon.com Inc. Billionaire investor George Soros and Stephen Schork, president of Schork Group Inc., say oil is ready to tumble because prices aren't justified by supply and demand.

``There's nothing different between this mania, the dot-com mania, the real estate mania, the Dow Jones mania of the 1920s, the South Sea bubble and the Dutch tulip-bulb mania,'' said Schork, whose Villanova, Pennsylvania-based firm advises the Organization of Petroleum Exporting Countries, Wall Street firms and oil companies on the outlook for energy prices. ``History repeats itself over and over and over again.''

Oil climbed on growing demand from China and India, whose economies expanded the past seven years at an average annual pace of 10.2 percent and 7.3 percent, respectively. Supply disruptions in Nigeria and Iraq and declining production in Russia also boosted prices. Investors added about $250 billion to commodity index trading strategies since 2003, according to Mike Masters, president and founder of Masters Capital Management, a St. Croix- based hedge fund.

Money Flow

Money is flowing into oil as the global economy slows. The worst U.S. housing slump since the 1930s and more than $390 billion of writedowns and credit losses at banks will slow global growth to 2.7 percent this year from 3.7 percent in 2007, according to the World Bank.

The U.S. economy's expansion may slow to 1.3 percent this year from 2.2 percent in 2007, dragging down oil demand by 240,000 barrels a day, according to economists surveyed by Bloomberg and Energy Department data. In China, the second- biggest fuel consumer after the U.S., economic growth may fall to 10.1 percent from 11.9 percent, the Bloomberg survey shows.

Supply, Demand

``I don't know if you can classify it as a bubble or not,'' said Masters. ``But there is no question that investor demand is having an effect on price. Very little of it has to do with physical supply and demand of crude oil.'' Masters testified at a Senate hearing in May on the role of speculators in commodities markets.

Gains in oil are the result of a ``bubble'' caused by speculation from index funds and a tight balance between supply and demand, Soros said in testimony before the Senate Committee on Commerce, Science and Transportation on June 3. ``The bubble is superimposed on an upward trend in oil prices that has a strong foundation in reality,'' he said.

Commodity index traders account for about 40 percent of the open interest, or outstanding contracts, in the 12 agricultural commodities for which the Commodity Futures Trading Commission reports data, according to Chicago-based Bianco Research LLC.

Crude futures more than doubled in the past year and surged $10.75 a barrel on June 6, the biggest rise on record and the largest in percentage terms since June 1996. Robert Aliber, a professor of economics emeritus at the University of Chicago Graduate School of Business, says the risk of a ``correction'' has increased because prices climbed so fast.

`Momentum Players'

``You've got speculation in a lot of commodities and that seems to be driving up the price,'' Aliber, co-author of ``Manias, Panics, and Crashes: A History of Financial Crises,'' said in an interview from Hanover, New Hampshire. ``Movements are dominated by momentum players who predict price changes from Wednesday to Friday on the basis of the price change from Monday to Wednesday.''

http://www.bloomberg.com/apps/news?pid=20601109&sid=a9wRqtCtGjZY&refer=home

[RiversideGator]

Here is a photo of the pristine area (ANWAR) which the Dems seek to protect:

[Lunican]

Good shot RG. Here are a few more everyone might enjoy.

[RiversideGator]

Is that the portion of ANWAR where drilling was proposed?  Please provide a source.

And, do you think nature should trump the needs of man?

[RiversideGator]

BTW, here is a map which shows the scale involved:


http://www.sitnews.us/1105news/110505/110505_anwr.html

[RiversideGator]

Looks like Alaskans are in favor of drilling judging by this article and the views of their elected officials:

Alaska Closer To Opening ANWR

November 05, 2005
Saturday

(SitNews) Alaska Governor Frank H. Murkowski said Friday, "Alaska's Congressional Delegation has won a great victory in the ANWR debate, bringing the United States closer to fulfilling the promise of finally opening the 1002 area."

The U.S. Senate gave final approval Thursday for oil drilling in the Arctic National Wildlife Refuge as part of a deficit-cutting budget bill and then voted overwhelmingly to prohibit exporting any of the oil pumped from the region.

The Senate voted 52-47 for a budget reconciliation bill that includes provisions to allow for drilling in the 2,000-acre portion of the Coastal Plain of ANWR. The provision to increase revenue by drilling for oil in the ANWR survived a challenge - by a vote of 51-48 the U.S. Senate defeated an amendment to remove ANWR from the bill.

Governor Murkowski said, "It is clear that the common sense views of most Alaskans regarding energy development prevailed on this issue that is so vital to the energy security of our nation." He said, "We've got good reason to believe that the small 1002 area holds the greatest prospects for the next Prudhoe Bay-sized discovery and that means jobs for Alaskans and a stable domestic source of energy for the nation."

"We should extend our thanks to Alaska's congressional delegation, the state's Washington, D.C. office, Arctic Power, and all the Alaskans whose efforts are getting us closer to opening the Coastal Plain of ANWR," Murkowski said. "This action by the Senate is a major milestone in congressional consideration of the 1002 area."

The budget reconciliation bill calls for spending cuts of about $35 billion over five years. This would cut $16 billion from education and healthcare programs and $3 billion in agricultural subsidies.

The bill adds 90,000 new employment-based green cards per year raising fees by $500 - which will net the government $251 million.

Two Democrats joined fifty Republicans in support of the bill and forty-one Democrats, five Republicans and one independent opposed.

The Senate in an 86-13 vote, also required that none of the oil from ANWR be exported.

"America needs this American oil," said Sen. Ted Stevens, R-Alaska. He said the refuge's reserves are "crucial to the nation's attempt to achieve energy independence."

President Bush praised the Senate for passage of the ANWR legislation. He said, "Increasing our domestic energy supply will help lower gasoline prices and utility bills. We can and should produce more crude oil here at home in environmentally responsible ways. The most promising site for oil in America is a 2,000 acre site in the Arctic National Wildlife Refuge, and thanks to technology, we can reach this energy with little impact on the land or wildlife. I applaud the Senate for passing legislation to improve our energy situation with this commonsense approach."

Supporters for drilling have argued that ANWR oil will provide the country more domestic oil production, leaving fewer barrels to be imported. Approximately 60 percent of the oil used in the United States today is imported.

Oil is not likely to flow from ANWR for a decade with peak production of about one-million barrels a day expected until about 2025, according to the Energy Department. Currently, the United States uses about 20 million barrels of oil daily.

In a statement Wednesday on the Senate Floor, U.S. Senator Lisa Murkowski said, "When we talk about the amount of oil that is available in the Arctic, we hear all kinds of numbers floating around. Most often, people say ANWR will amount to only a six month supply of oil for this country. The fact of the matter is, according to United State Geological Survey estimates, the Coastal Plain has a 50-50 chance of containing the second largest oil field in North America."

Speaking to the Senate Wednesday, Sen. Murkowski said, "We estimate that ANWR will generate the equivalent of what we have imported from Saudi Arabia for the past twenty-five years ­ hardly an insignificant source of oil. And, what we estimate we will be able to extract from ANWR would be enough to offset the oil that we lost when production in the Gulf of Mexico was shut down due to this year's hurricanes."

Senator Murkowski told the Senate, "The jobs that will be generated go far beyond those that are just drilling and exploration jobs in Alaska. Jobs will be created all over the country - an estimated twelve thousand jobs in Washington State, eighty thousand in California, forty thousand in New York State. ANWR means increased commerce and increased economic activity all over the country."

Senator Ted Stevens said the Arctic National Wildlife Refuge is 19 million acres. The area set aside for oil and gas exploration is 1.5 million acres. Stevens said, "Because of advances in technology, only 2,000 acres of that will be needed for production."

The bill approved by the Senate Thursday requires the Interior Department to begin selling oil leases for the coastal plain of the Alaska refuge within two years.

A House bill also includes a provision to drill for oil in the ANWR; however, the Washington Post reports that Republicans say they may have trouble approving the bill with the ANWR measure included.

http://www.sitnews.us/1105news/110505/110505_anwr.html

[Lauren]

Is that the portion of ANWAR where drilling was proposed?  Please provide a source.

And, do you think nature should trump the needs of man?

Source please.

[Midway ®]

More evidence that a speculative bubble is at least partially driving the increased oil prices:

Oil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania

[Article deleted for the sake of brevity]

[/b]

http://www.bloomberg.com/apps/news?pid=20601109&sid=a9wRqtCtGjZY&refer=home

Fine. Then raise the capital gains tax from 15% to 25% and the speculators will go away.

[gatorback]

What makes you think the speculators will  go away?  Have you been reading the newspaper again?

[Midway ®]

No, i don't know how to read. Would you read it to me?

[RiversideGator]

More evidence that a speculative bubble is at least partially driving the increased oil prices:

Oil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania

[Article deleted for the sake of brevity]

[/b]

http://www.bloomberg.com/apps/news?pid=20601109&sid=a9wRqtCtGjZY&refer=home

Fine. Then raise the capital gains tax from 15% to 25% and the speculators will go away.

That's a great idea.   

[RiversideGator]

Obama comes out in favor of higher gas prices:

Barack Obama: I think that... we have been slow to move in a better direction when it comes to energy usage. And the president, frankly, hasn't had an energy policy. And as a consequence we've been consuming energy as if it's infinite. We now know that our demand is badly outstripping supply with China and India growing as rapidly as they are.

CNBC's John Harwood: So could the (high) oil prices help us?

Barack Obama: I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing. But if we take some steps right now to help people make the adjustment, first of all by putting more money in their pockets, but also by encouraging the market to adapt to these new circumstances more rapidly, particularly U.S. automakers..

http://www.youtube.com/watch?v=Gehaf7_TBAs