Gas soars; voters whine; oil profits boom; politicians pander
From the Wall Street Journal (subsc. req.):
Booming crude-oil prices and improved refining profits are poised to put a firecracker under Big Oil’s first-quarter earnings and set the stage for a year that could come close to rivaling the industry’s record year in 2008.
First-quarter crude prices averaged about $100 a barrel, or about 20% higher than a year ago, pushed upward by oil-supply concerns due to political unrest in the Arab World and a recovering global economy. That spike is expected to lift earnings by about 50% at Exxon Mobil Corp., and about 33% each at Chevron Corp. and ConocoPhillips, compared with a year earlier….
“Major oil companies are firing on all cylinders,” says Fadel Gheit, an analyst with Oppenheimer & Co. “Their first-quarter earnings are going to be much, much better than a year ago.”
If oil prices continue to climb, they could at least rival 2008. That year, U.S. producers reported astronomic profits as crude hit $147 a barrel for a time. Exxon that year earned $45.2 billion, more than any other U.S. publicly traded company in history.
And of course, those numbers don’t become any easier to swallow when you consider the $4 billion in subsidies that the American taxpayer coughs up each year on behalf of Big Oil. Efforts in Congress to eliminate those subsidies have failed because Republicans have cast the reform as a tax hike. So even in the midst of a deficit panic, government is required to keep on subsidizing one of the most profitable industries on the planet, a practice defended by the party that proclaims itself the champion of the free market.
Intellectually, the current situation is not that complicated. People are demanding more oil than the market can supply — an economic recovery is boosting consumption at the same time that disruptions in the Arab world threaten oil output. So the price is jumping.
However, that market-driven fact of life is hard for people to accept. With the price of gasoline approaching $4 a gallon — close to the record average of $4.11 in 2008 — consumers don’t want an explanation, they want a solution. And politicians in turn are motivated to give them one, or at least the illusion of one.
Republicans, for example, want to cast government, and more specifically the Obama administration, as the villain. They propose that the federal government drop environmental restrictions and open additional areas to oil exploration and production, suggesting that such steps will lower the price at the pump. But among energy experts, there’s really no debate. Even if we removed all environmental restrictions on domestic oil production — and last summer’s Deepwater Horizon tragedy in the Gulf suggests such a step would come with a heavy price — the amount of additional oil that could be produced in the United States would be too small to move the global market, where the price of oil is set. We may not like to acknowledge that fact — it drives home our relative helplessness — but it remains fact nonetheless.
(And of course, every additional barrel of oil pumped from beneath American territory today makes us even more dependent on foreign oil tomorrow.)
For his part, President Obama is following the futile course set by his predecessor. Last week, he announced a federal investigation into the role of speculation in driving up oil prices, just as President George W. Bush did in 2005 and 2006. Those investigations turned up little or nothing, as will this one. But politically, it gives Obama an alternative villain to whom he can point, which in his situation is important.
The uncomfortable truth is that because the need for oil is so ingrained in our economy and lifestyles, oil prices have to move a lot in order to produce even a slight decrease in demand. They have to rise high enough to make it hurt before people will curtail consumption.
So … are you hurting yet?
– Jay Bookman
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824 comments Add your comment
Southern Comfort (aka The Man)
April 25th, 2011
10:04 am
The most recent numbers I could find on the goog were from July 2010 when the average price of regular gas in the US was $2.75 a gallon. At that time the price in Saudi Arabia was $0.45 / gallon, Kuwait $0.85 / gallon, Iran $0.32 / gallon, Venezuala $0.06 per gallon.
Which of those countries fall under the category of “Net Producer” and which fall under “Net Consumer? There’s a reason that those prices are different.
Fletch
April 25th, 2011
10:05 am
jm – “and apparently the fee revenue the US government gets, the US exploration jobs, the US jobs that are implicitly part of the oil price production costs that are US jobs, and the revenue earned by US corporations mean nothing to you.”
As I stated on my first post, I am heavily invested in oil and natural gas exploration and production, primarily in the Williston Basin. In addition, my family leases the the natural gas rights from our property to the state of Montana, from which I get a pretty decent check every quarter. So yes, it DOES mean something to me.
However, as I also previously stated, unless you are advocating nationalizing the oil and gas industry, thereby giving the U.S. governmnet sole right to dictate where and how our natural resources will be used and sold, your arguments for MORE drilling are useless.
jm
April 25th, 2011
10:05 am
Jay 9:59 – Jay, you seem to ignore the benefits from the balance of payments issue, which can be almost entirely allocated to the issue of our oil imports (if one so chose).
ByteMe
April 25th, 2011
10:05 am
@Common Sense: so you’re saying that the report from the DoI that says we have more rigs looking for oil this year than last year is somehow reflected in lower prices at the pump? Uhhh…..
Really, start with facts and then look for reasonable explanations instead of starting with the Meme-of-the-day and trying to repeat it over and over.
THE TRUTH
April 25th, 2011
10:05 am
How do you like all the HOPE and CHANGE ?
poison pen
April 25th, 2011
10:06 am
ByteMe
April 25th, 2011
10:00 am
Then let him go thru Congress, whatever it takes, I don’t think the American people would be against it and the Repubs won’t be because they wouldn’t get elected to office if they tried to stop something that was good for the country.
Except that that’s not the in the long-term leases the oil companies have on the land they drill. So it would violate the Constitution and the Supremes wouldn’t allow that. So are you saying the government should violate established private property and contract law and ignore the courts just so you could fill up for a few pennies less? How would Ayn Rand feel about it? Let’s ask her.
Why can’t the Govt start now with new leases? you know like looking out for the future, do you think that this won’t happen again, your not that dumb are you?
Why not ask Granny, she has all the answers.
Aquagirl
April 25th, 2011
10:06 am
godless heathen, those countries subsidize their gas. Google “Petróleos de Venezuela” and you’ll see why gas costs 6 cents at the pump.
Saudi Arabia and Iran also subsidize their gas costs to consumers, just not quite as much as Venezuela.
Yippee
April 25th, 2011
10:06 am
The price of gasoline is more affected by speculation of future supplies than by how much crude lies in reserve deposits. If the U.S. begins an aggressive campaign to move to compressed natural gas for vehicle fuel, especially for long-haul trucking, and also opens up our domestic onshore and offshore oilfields, the oil futures markets will respond favorably relative to lower prices at the pump.
jm
April 25th, 2011
10:06 am
Fletch 10:05 – like I said, the US exports 0.38% of its crude oil. But keep handing out falsehoods. My arguments for more drilling (which I’m not a huge fan of) are perfectly sound.
Common Sense
April 25th, 2011
10:07 am
“In 2009, global oil production was 45.4 mbd. An additional 1 million barrels a day from U.S. sources would bump that to 46.4 mbd. I don’t really think that’s going to have much impact on global markets.”
And that’s why Jay is not an economist.
So what would a 2% increase in retail sales do? A 2% drop?
And ignore the impact of all those jobs being created.
A 2% increase in supply would have a tremendous impact, just as a 2% drop in consumption would.
Don’t quit your day job, Jay.
Left wing management
April 25th, 2011
10:07 am
buck@gon, I wasn’t sure from your post what exactly you were taking issue with about with me.
But when you say:
” I would gently urge you only that you be who you are, and that the more people get a glimpse of the true character of the modern liberal, the better it will be for the state and the nation as a whole”
I have to ask you, as I tend to ask frequently on this list: just what is the “modern liberal” ? It’s an honest question. I’m scanning the political scene for evidence of any, and it’s true there are a handful of good progressives who can fairly be described as “liberal” in the house and senate (Wiener, Pelosi, Sanders). But one looks in vain for anything genuinely reflecting this in the current administration or really any truly strong liberal force in the society at large right now. Perhaps the protestant churches? They’re on the wane. Unions? Also on the wane and under attack. So I just don’t see it. Perhaps you can help me out.
Fletch
April 25th, 2011
10:07 am
jm – “You are series of non-factual statements sir. Apparently you forgot the Nixon years, where price controls were defacto moves that affected where oil was allocated.”
No, I do remember that. I also remember gas lines and empty service stations while Nixon was running the show. Perhaps you’ve heard of a little blip we had back in the 70’s called the OIL EMBARGO?
jm
April 25th, 2011
10:08 am
ByteMe 10:04 – indeed, and thank heavens. Fletch is a fan of nationalization apparently.
Libertarian
April 25th, 2011
10:08 am
End all subsidies. We can no longer afford them. Farm, oil, corn, whatever it is.
Bosch
April 25th, 2011
10:08 am
“Like the lack of drilling here in the US.”
That is up to the oil companies — you know those private companies. We are drilling more domestically than ever before, so take it up with them.
Granny Godzilla
April 25th, 2011
10:08 am
poison pen
that was mean a spirited and ineffective dodge.
how can what you suggest be done contitutionally?
you said the words dude…..back them up.
I have no compassion for the weak who shoot nonsense out of their
pie holes with no ammo to back it up.
you are dismissed.
poison pen
April 25th, 2011
10:09 am
Fletch
April 25th, 2011
9:58 am
poison pen – “10 Billion profit for Exxon in 8 weeks is out of line.”
I won’t disagree with you on that. But you know as well as I do that any such move on Obamas part to mandate where and how oil will be sold would be disasterous. NO president would make a move like that.
Also, the oil and natural gas being produced is NOT owned by the United States, nor is it being produced by the Federal Government. You can’t arbitrarlity tell an independent company when, where and how they can market their product. What you suggest would be like Deal telling Coca Cola that they can only sell their product in Georgia, because this is where it’s made. It simply won’t work.
Fletch, Coca-Cola isn’t a vital product that affects our country, there is a slight difference between Coke & Oil.
ByteMe
April 25th, 2011
10:09 am
Why can’t the Govt start now with new leases? you know like looking out for the future, do you think that this won’t happen again, your not that dumb are you?
Right now, more than 50% of all existing leases are inactive. Why would anyone look to a new lease if they could just buy the rights to an existing inactive lease? We’re talking MILLIONS of acres sitting there because the oil companies don’t want to drill on them right now.
#FAIL.
UGA1999
April 25th, 2011
10:10 am
Hope and Change
Hope and Change
Hope and Change
Hope and Change
Hope and Change
What a joke!
Jay
April 25th, 2011
10:10 am
You’re right, jm. Those EIA numbers must have been discussing a subset of production. Let me rework.
Peadawg
April 25th, 2011
10:10 am
“End all subsidies. We can no longer afford them. Farm, oil, corn, whatever it is.”
Don’t forget subsidies for the poor and elderly…Medicare, Medicaid, and food stamps. We can’t afford those either.
Granny Godzilla
April 25th, 2011
10:10 am
“You can’t arbitrarlity tell an independent company when, where and how they can market their product.”
Unless you life in the magic wand world of poison pen where Obama can just make it happen….
lalalala land.
Mick
April 25th, 2011
10:11 am
No bites on the brammo electric motorcycle? Costs 10k and gets 100 mile per charge, not too bad. No good if you’re not into bikes. When I retire, I’ll most likely have one…
jm
April 25th, 2011
10:11 am
Common Sense 10:07 –
Indeed. Look at the price shift from an extra million +/- from Libya (even less than a million) or Saudi Arabia. When Demand fully taps supply, a small shift in supply changes pricing significantly.
That said, in the long run, this is a product that is going to run out and another 2.5 billion people want a better lifestyle. So any US oil production will, in the long run, be a drop in the bucket as far as prices are concerned.
poison pen
April 25th, 2011
10:12 am
Granny Godzilla
April 25th, 2011
10:08 am
poison pen
that was mean a spirited and ineffective dodge.
how can what you suggest be done contitutionally?
you said the words dude…..back them up.
I have no compassion for the weak who shoot nonsense out of their
pie holes with no ammo to back it up.
you are dismissed.
Granny, only Jay can dismiss me, if you don’t like the truth then don’t read it. You are the one who made the smug remark not me, trying to flip it won’t work, sorry.
Atlanta 1
April 25th, 2011
10:12 am
For his part, President Obama is following the futile course set by his predecessor. Last week, he announced a federal investigation into the role of speculation in driving up oil prices, just as President George W. Bush did in 2005 and 2006. Those investigations turned up little or nothing, as will this one. But politically, it gives Obama an alternative villain to whom he can point, which in his situation is important.
At least have the courage to fess up. What did the ‘left’ in this country scream for 8 years. The Bush Administration is tied to ‘big oil’ and that’s the reason gas prices are up. It’s greed, greed, greed.
The reasons then are the same reasons now, except it is worst. “Supply and demand”. T-Boone Pickens is predicting $5.00 to $6.00 a gallon? He feels that by the time we get into the fall that demand will out pace supply by 2 million barrels a week.
The other reason. A very weak dollar that will continue to weaken, thanks to this President’s ‘fed policy’ that continues to pump money into the system. Many are predicting the dollar will see an all time ‘low’ within the next year. That is basically taxing the American People on any imported product that we see ‘no benefit’ to.
WAKE UP OUT THERE! You have to understand that we have to get debt under control. This means ‘hard cuts’ in every aspect of our government (including defense). It is NOT a ‘left or right’ thing – literally means deciding our childrens and their childrens quality of life!
George W. Bush was not a good President. Neither is this one. Be honest folks – your ideology needs to take a break. Everyone needs to realize that this is serious. The U.S. Governments finanical health was actually ‘down graded’ last week. If that did not get your attention – then frankly – YOUR AN IDIOT.
Fletch
April 25th, 2011
10:12 am
poison pen – “Fletch, Coca-Cola isn’t a vital product that affects our country, there is a slight difference between Coke & Oil.”
Same theory applies. As myself and many others have posted, the government cannot arbitrarily rescind the rights of the corporation without changing the conditions under which we currently operate.
Lil' Barry Bailout
April 25th, 2011
10:14 am
I’m hoping for $10 gas. That’ll likely cause a big drop in the price for that new Tundra or Titan pickup I plan to purchase.
larry
April 25th, 2011
10:14 am
When I retire, I’ll most likely have one…
Or move to Peachtree City and get one of those golf carts.
jm
April 25th, 2011
10:14 am
Jay 10:10 – the EIA and CIA data definitely does not jive…. don’t know what that’s about.
poison pen
April 25th, 2011
10:15 am
Granny Godzilla
April 25th, 2011
10:10 am
“You can’t arbitrarlity tell an independent company when, where and how they can market their product.”
Unless you life in the magic wand world of poison pen where Obama can just make it happen….
lalalala land.
It’s our land and if Obama wants it done I assure you it can get done. There are a lot of poor people out there who have to work one day a week just to fill up their car to get to work, but why should you care you are responsible and it won’t hurt you.
ByteMe
April 25th, 2011
10:15 am
The U.S. Governments finanical health was actually ‘down graded’ last week.
You’re Welcome
AmVet - A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. ~Franklin D. Roosevelt
April 25th, 2011
10:16 am
…the $4 billion in subsidies that the American taxpayer coughs up each year on behalf of Big Oil.
FOUR BILLION DOLLARS PER YEAR?
That’s a 4, followed by nine zeroes to the left of the decimal point. It looks like this – $4,000,000,000.00/year.
What’s up with these mooches? Can’t they make it on their own, without all of the massive handouts, give aways, subsides and tax loopholes? All that blustering about swimming with the sharks and sink or swim.
These giant corporations are a tragic joke, that are leeching off the Americana taxpayer, shareholder and consumer.
It has to end.
And they MUST, along with their myopic and dangerous sycophants, be held accountable to the Three Laws of Capitalism.
Big Business is opposed to Socialism. Until it helps them. ~AmVet
larry
April 25th, 2011
10:16 am
Same theory applies. As myself and many others have posted, the government cannot arbitrarily rescind the rights of the corporation without changing the conditions under which we currently operate.
It makes me wonder if these people are for nationalizing our energy production in general.
ByteMe
April 25th, 2011
10:17 am
It’s our land and if Obama wants it done I assure you it can get done.
Short of declaring a state of emergency and suspending the Constitution… which you’d also complain about… then you’re really mistaken about how all this works.
Southern Comfort (aka The Man)
April 25th, 2011
10:17 am
Byte Me
That’s funny as hell!!!!!
Charlie
April 25th, 2011
10:17 am
OK, Jay is holding that increasing drilling won’t produce much additional oil. Yet Prudhoe Bay is already declining in production. Assets are moving out of the Gulf of Mexico. The reserves in West Texas aren’t getting any younger.
Domestic production has to remain active just to maintain where we are. By issuing road blocks to most offshore drilling, ANWAR, and frankly, just about anywhere worth drilling, we’re leaving ourselves exposed to giving a trillion dollars a year to people who want to kill us. That harms both national security and economic security.
I wrote up my proposal here:
http://www.peachpundit.com/2011/02/25/no-longer-time-to-ignore-energy-independence/
I essentially argue for an imported oil tax for oil/gasoline from non-NAFTA countries. That’s about 1/3 of our domestic consumption. It would need to be phased in over time, with an offsetting tax cut for individuals at all income levels (i.e., FICA tax reduction) to eliminate the income effect of the related gas price hike.
It’s how you keep the US oil we drill for here, as has been discussed throughout this thread. You make the oil from those who want to kill us significantly more expensive through a change in relative prices.
It also sends a strong price signal to both producers and consumers to change behavior accordingly. Consumers have incentive to become more energy efficient. Producers have incentive to keep production moving at domestic wells that have higher relative costs to produce.
Most importantly, it weens us from foreign oil over time as we continue to develop both alternative energy sources and more energy efficiency.
poison pen
April 25th, 2011
10:17 am
Fletch
April 25th, 2011
10:12 am
poison pen – “Fletch, Coca-Cola isn’t a vital product that affects our country, there is a slight difference between Coke & Oil.”
Same theory applies. As myself and many others have posted, the government cannot arbitrarily rescind the rights of the corporation without changing the conditions under which we currently operate.
Fletch, nowhere did I say that the Govt. should rescind anything.
Mick
April 25th, 2011
10:17 am
larry
I want one of those too, can’t wait to leave this fossil fuel era in the dust…
Libertarian
April 25th, 2011
10:17 am
Peadawg
Agreed. ALL subsidies.
jm
April 25th, 2011
10:18 am
Jay, maybe the CIA is engaged in propaganda and subversion of foreign oil producers….
I have no idea what’s going on…
UGA1999
April 25th, 2011
10:18 am
Mick…..you will be waiting a LONG time.
Yahtzee
April 25th, 2011
10:18 am
current oil prices are not being inflated due to a supply problem Jay
our weaking dollar is the main problem, the fed continues to print away devaluing our dollar, and the main oil producting countries out there are finally starting to see it and don’t trust our dollar
and you’re about domestic production, we have more oil on US soil and territories than the rest of the world combined..additionly we havent built a refinary in this country in 30 years, why? because the oil industry is one of the heaviest regulated industries in this country..you talk about record profits? they are also paying record taxes, because the gov runs these companies
THE TRUTH
April 25th, 2011
10:19 am
Granny, only Jay can dismiss me, if you don’t like the truth then don’t read it. You are the one who made the smug remark not me, trying to flip it won’t work, sorry.
Gosh, I could have told you Granny does not like THE TRUTH. Granny is lame’ she can not see beyond her liberal coated horn beam glasses.
ByteMe
April 25th, 2011
10:19 am
I have no idea what’s going on…
Can be said of most folks.
Blitz Wolfer
April 25th, 2011
10:20 am
Jay,
We’ve been hurting ever since Obama was elected. Democrats had full control of the House, a fillibuster-proof majority in the Senate, and the Presidency and they still couldn’t reign in the subsidies to the oil companies.
Obama and the Democrats are effet and feckless
bull
April 25th, 2011
10:21 am
do you really need 400 hp to haul your fat arse?
jm
April 25th, 2011
10:21 am
ByteMe 10:10 – touche.
Lil' Barry Bailout
April 25th, 2011
10:21 am
Jay, the Democrats controlled both houses of Congress for two years and did nothing about these “subsidies” you’re talking about. I wonder why?
BTW, the “subsidies” are simply contractual terms between the Feds and oil companies put in place during the Clinton administration which the libbtards and environmental whackos now find objectionable.
Mick
April 25th, 2011
10:22 am
UGA1999
I disagree, we are at the tip of the iceberg. The volt is the beginning of the end of gas guzzling auto’s. Ten years from now, electric cars will be the rule rather than the exception…
poison pen
April 25th, 2011
10:22 am
ByteMe
April 25th, 2011
10:09 am
Why can’t the Govt start now with new leases? you know like looking out for the future, do you think that this won’t happen again, your not that dumb are you?
Right now, more than 50% of all existing leases are inactive. Why would anyone look to a new lease if they could just buy the rights to an existing inactive lease? We’re talking MILLIONS of acres sitting there because the oil companies don’t want to drill on them right now.
#FAIL.
ByteMe, where are the leases located, in Anwhar????? and didn’t Obama put a moratorium on the Gulf?
Bill Orvis White
April 25th, 2011
10:22 am
“…the amount of additional oil that could be produced in the United States would be too small to move the global market, where the price of oil is set.”
WRONG: With various new technologies, companies like BP can use them to safely extract significant oil supplies throughout the Gulf, Atlantic, Pacific, mainland TX/OK/KS/NE and especially ANWR! The sole problem in this is environmental regulations which stifle the use of technologies with these solid, experienced oil companies. By the way, liberals like Jay scream about the so-called tax benefits “given” to these companies. These companies need all tax burdens lifted from them since they employees thousands, create new jobs by the thousands thus creating prosperity and wealth. It is a fact that oil is here to stay because it powers up our way of life and produces the plastics that we all need every single second of our modern lives. What could possibly replace oil to achieve what we already do on a daily basis? What brand of crack are you smoking, Liberal Jay? We need oil! The only reason that the prices spike is not because of the big, bad evil oil giants. It’s because Hussein Obama is weak in the Middle East with his muddled foreign policy. We also have to answer to Godless OPEC, Secular Europe, Red China, Red Russia, India and that tyrant in Venezuela! Like Mr. Trump says, “They’re laughing at us.”
When will you stupid enviro-whacko liberals get it? When we get to $10.00/gal., who will you look to for leadership? Hussein Obama? Nanny Pelosi? Hairy Reid? Bawny Frank? Now, that’s really putting your heads in the sand.
Let’s wake up and get that American oil which will make us self-sufficient and not with “alternative energy” which just doesn’t cut it!
GOOD NIGHT!
God Bless,
Bill
Jay
April 25th, 2011
10:23 am
My original EIA numbers — http://www.eia.doe.gov/forecasts/aeo/early_production.cfm — look to be roughly half the more accurate numbers, for reasons I can’t yet explain.
Anyway, with a global production of 88.3 million barrels a day in March, and U.S. production of 9 million barrels a day, an increase by the US of one or two million barrels a day — a 10 to 20 percent increase of domestic output — would translate into a 1.1 to 2.2 percent increase in global supply, not enough to move the market price much at all.
And FYI, the most likely peak production at ANWR would be 1 to 1.35 million barrels a day, and that peak could be sustained for roughly five years before falling off dramatically. Source: http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/figure4.html
bull
April 25th, 2011
10:23 am
Walk, Run, Swim
UGA1999
April 25th, 2011
10:23 am
bull…..do we need the government to tell us how much HP is too much?
Don't Tread
April 25th, 2011
10:23 am
“that market-driven fact of life”
ooooh…Jay said a bad word. Market-based anything is EVIL.
“[Oil prioces] have to rise high enough to make it hurt before people will curtail consumption.”
The left will be yelling for “gas welfare” for the poor when that happens. It is their Constitutional right to drive a car, after all, even if it is a Cadillac. (just like their “right” to free healthcare and their “right” to live wherever they want while someone else foots the bill)
UGA1999
April 25th, 2011
10:24 am
Mick….I agree the Volt is a GREAT car. However do you remember the EV1?
Southern Comfort (aka The Man)
April 25th, 2011
10:25 am
and didn’t Obama put a moratorium on the Gulf?
http://articles.cnn.com/2010-10-12/us/drilling.moratorium_1_deep-water-drilling-drilling-rig-oil-drilling?_s=PM:US
Obama administration lifts deep-water drilling moratorium
October 12, 2010|By Tom Cohen, CNN
Interior Secretary Ken Salazar issued the moratorium in May, which was overturned, then issued a second ban in June.The Obama administration is lifting the moratorium on deep-water oil drilling — put in place after the Gulf oil spill disaster — for operators who comply with tough new rules and regulations, Interior Secretary Ken Salazar announced Tuesday.
Joe
April 25th, 2011
10:25 am
What about Obama and his EPA blocking drilling on 27 billion barrells of oil in Alaska which is in a remote area… Wow what a wonderfull energy policy this genuis has…..
USMC
April 25th, 2011
10:25 am
Nancy has the answer to why oil is skyrocketing:
Nancy Pelosi blames the price of gas on the “two oilmen” in the White House
http://www.youtube.com/watch?v=lUmqMl3ksos
President Hussein
April 25th, 2011
10:25 am
This is great! Barry Soetoro (aka Obama) and I are rich. We can afford $4 gallon gas. He’ll, we can afford $10 gallon gas. Soetoro’s limo weighs like 20 tons even! And he even has his own driver! Higher prices means less traffic for me!!!
Mick
April 25th, 2011
10:27 am
bill orvis aka dinosaur man – moving backward, fossil fuels are so yesterday. Electric, hybrid cars are the future with solar recharging capability. Oil is the earth’s waste product, time to move on…
martin the calvinist
April 25th, 2011
10:27 am
Profit margins for Oil Companies haven’t changed in years. Actually, the Federal Government makes more money off of oil than oil companies do! But I do agree that the Federal Government shouldn’t be subsidizing Oil companies, along with corn, sugar, steel, autos, or radio and television, aka NPR, or planned parenthood. It’s time the gov’t stops interfering in the market unless there is a viable reason to protect consumers, other than that….hands off!
jm
April 25th, 2011
10:27 am
Jay 10:23 – either way, US production, not huge but could be of benefit.
Anyway, on a related note that is very interesting, the car industry is trying to link their future fleet MPG requirements to the price of gas, arguing demand only exists for efficient cars when gas prices are high.
This makes perfect sense to me, especially in light of the fact that Congress doesn’t have the balls to impose a higher gas tax. In a way they’re arguing: we’re happy to meet market demand, but don’t ask us to do something incredibly stupid when you’re not willing to do your part by raising the gas tax (congress).
getalife
April 25th, 2011
10:28 am
The me generation does not want change so Jay’s job is safe because all Americans do is whine and cry like the Speaker on blogs.
Walk, ride a bike or motorcycle, take a train, etc……..
Mick
April 25th, 2011
10:29 am
UGA1999
EV1? is that the experimental pick up truck that everyone who had one loved, yet were taken back and destroyed?
MPercy
April 25th, 2011
10:29 am
According to a Greenpeace list, US Govt. “subsidies” to Big Oil includes several categories, some of which might reasonably be considered “subsidies” but are in fact not for Big Oil specifically. Rather they are tax code elements that are available for any business, primarily in the realm of accelerated depreciation of capital assets. There are also loan guarantee and construction bond programs; again, these are available for all industry, not just Big Oil. Perhaps Big Oil utilizes these tax code items more frequently than other industries, but that does not make these “Big Oil subsidies”.
The biggest “subsidy” is in fact not a subsidy at all. Some years ago, the Government leased oil fields and agreed on a per barrel royalty structure. When oil was $30/BB, the royalties seemed reasonable to all parties, so the contracts were signed. In some cases, the Government failed to stipulate any royalties at all! Now, though, those royalties are a pittance and the Government wishes it had structured the royalties differently. The difference between what they are making and what they *wished* they were making is often included in the calculations of “Big Oil subsidies”. Congress has moved in the past to try to retroactively modify the contracts and demanded that the oil companies accept new leases.
Greenpeace includes a few clunkers, though. For example, they include Sales Tax breaks. Last time I checked, the US Govt. does not impose Sales Taxes on any products. But somehow that’s a Big Oil subsidy.
Greenpeace also includes several intangibles in their “Big Oil subsidies” list. Things such as
* Giving money to international financial institutions
* The U.S. Strategic Petroleum Reserve
* Construction and protection of the nation’s highway system
* Allowing the industry to pollute
Keep the nature of these fake “subsidies” in mind when discussing the issue. The “Green” industry partakes of several of these same tax code “subsidies” (e.g. Modified Accelerated Cost-Recovery System (MACRS), R&D credits, etc.), but also receive direct no-doubt-about-it subsides. Like ethanol’s $0.50/gallon production subsidy (not to mention ag subsidies used to prop up the growing of the corn that goes into ethanol, billions of dollars every year going intot he pockets of Big Ag), or EV $7500/car subsidy, solar subsides over the years.
ByteMe
April 25th, 2011
10:29 am
yteMe, where are the leases located, in Anwhar????? and didn’t Obama put a moratorium on the Gulf?
No and no.
The leases are primarily in the Gulf. And the administration did put a moratorium on deep water drilling given that the existing applications for drilling were flawed in their handling of emergency situations (remember the part where they all quoted the same procedures that turned out to be wrong and some guy who was dead?). That moratorium was lifted.
Backup to my data can be found at: http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&pageid=239255
Approximately 70% of the Undiscovered Technically Recoverable Resources currently under lease in all areas of the Federal Gulf of Mexico are not producing or not subject to approved or pending exploration or development plans.
* This includes an estimated 11.6 billion barrels of oil, and 59.2 trillion cubic feet of natural gas.
In the Gulf of Mexico, 34 million acres are under lease. However, only approximately 10 million acres have approved exploration or development plans (see Table 1).
* 6.3 million acres in the Gulf of Mexico are producing acres.
In the Central and Western Gulf of Mexico, approximately 53 million acres were offered for lease in 2009, of which 2.7 million acres were bid on and sold. In the Central Gulf, approximately 37 million acres were offered in 2010, of which 2.4 million acres were bid on and sold (see Table 2).
Lil' Barry Bailout
April 25th, 2011
10:31 am
Yeah, Obozo lifted the gulf drilling moratorium, now he’s using his little Eichmanns in the bureaucracy to bottle up drilling permits. A moratorium by other means.
Obozo: Lying fascist.
Kamchak
April 25th, 2011
10:31 am
Jay 10:23 – either way, US production, not huge but could be of benefit.
Not if other sources cut production to off-set the increase.
Charlie
April 25th, 2011
10:32 am
Mick,
How will this electricity be produced for these cars?
EPA won’t allow a coal plant to be built in GA.
Nuke under fire because of Fukushima
Wind and solar don’t provide required baseline power when the wind does’t blow and the sun doesn’t shine.
That leaves Nat Gas or diesel powered generators.
You’re back where we just started from.
ByteMe
April 25th, 2011
10:32 am
Anyway, on a related note that is very interesting, the car industry is trying to link their future fleet MPG requirements to the price of gas, arguing demand only exists for efficient cars when gas prices are high.
Their “out” is that high gas prices tend to be a short-term phenomenon, but MPG requirements are something that’s imposed 5+ years out. You can’t sync the two.
But, yes, Congress is a bunch of weenies for not putting a more logical gas tax in place and using it to fund transportation projects that will help us get off the oil drug.
jm
April 25th, 2011
10:33 am
Kamchak 10:31 – yes, even so. As I argued earlier, won’t affect price likely, but does very much help fix our gigantic current account deficit.
UGA1999
April 25th, 2011
10:33 am
Mick….wasnt a pick up truck…it was a car…..and yes they were ALL destroyed.
@@
April 25th, 2011
10:34 am
ALL subsidies? You bet. Green technology included.
President Hussein
April 25th, 2011
10:34 am
USMC, I didn’t know Barry Soetoro and “Plugs” Biden were oilmen…go figure
MPercy
April 25th, 2011
10:35 am
Granny Godzilla @9:27 am “Because every $1 of US production is 1 less dollar of imported oil.” And what guarantee is there that the oil produced in the US will be sold on the US market?
That’s not the point, and he didn’t say that. The poster was making a point about the trade imbalance.
The point was that if US production was sold domestically, it would reduce imports. If it was sold internationally, it would increase exports. In either case, the trade imbalance would improve.
jm
April 25th, 2011
10:35 am
ByteMe 10:32 – I’m sure they’re fiddling with some “formula” to deal with the issue you correctly bring up, if this actually comes to pass.
RMcCallie
April 25th, 2011
10:36 am
It all boils down to this. Oil companies and Investors in this stock
will do whatever it takes to make more money. It doesn’t matter what
happens to this supply or that supply. The truth is, there is sufficient oil to supply needs. They companies and investors will say
this economic situation or that causes prices up or down, but it all comes down to whatever it takes for profit, and it doesn’t matter to them what else happens. The oil prices are high because they want to
get more money. There can be excuses everywhere, but if the right
ones profit, that is what counts, even at the expense of world economy.
It might well backfire again and a lot will suffer again.
jm
April 25th, 2011
10:37 am
MPercy 10:35 – bingo
Aquagirl
April 25th, 2011
10:37 am
Uh, jm, we could simply use less oil, but that’s commiepinkoliberal talk for some reason. At some point refusing gluttonous piggery became Un-American. Watching the tri-state water wars provides a good example.
getalife
April 25th, 2011
10:38 am
They will wait until it runs out to get serious about alternatives but at least they started with electric cars and other alternatives.
We have a huge natural gas resource here and in governments.
Southern Comfort (aka The Man)
April 25th, 2011
10:38 am
Yeah, Obozo lifted the gulf drilling moratorium, now he’s using his little Eichmanns in the bureaucracy to bottle up drilling permits. A moratorium by other means.
Yeah, I’m sure that’s exactly what’s going on. I bet even Oil companies are saying the exact same thing.
http://www.washingtonpost.com/national/when-it-comes-to-offshore-drilling-still-treading-in-deep-water/2011/04/15/AFWrB5qD_story.html
Oil companies say the government has had trouble finding people qualified to judge permit applications and monitor the 276 deep-water wells and 46 deep-water production platforms in the Gulf of Mexico. And critics of the industry note that new wells will go deeper, testing the limits of technology that last year showed itself to be less robust than advertised. In this view, the industry and the government are like generals and admirals who have geared up to fight the last war.
[...]
The politics of drilling is especially contentious in Washington. With gas prices surging, Republicans in Congress have pushed legislation that would accelerate approvals of deep-water drilling and open up new areas off the Atlantic and Pacific coasts to oil and gas exploration. One bill passed last week by the House Natural Resources Committee would deem drilling permits to be approved automatically if the administration did not act on applications within 60 days.
pat
April 25th, 2011
10:38 am
So, when gas went throught the roof 3 years ago, it’s Bush’s fault, but when a democrat is in office, it’s the citizens fault?
When Bush drops bombs on a country, he’s a war monger who likes to kill with imputnity, when obama drops bombs on people, there was no other choice. Syria is killing it’s own people, why haven’t we started bombing them? Or Yemen?
The only issue you care about is democrats=good, republicans=bad. The rest is spin.
As for me a 1970 Chevelle with a 455 big block is the only way to roll in these times.
Quick
April 25th, 2011
10:39 am
So, Jay, you’re saying the claim North Dakota’s reserves rival Saudi Arabia is a myth?
jm
April 25th, 2011
10:39 am
FYI, natural gas is a full $1.00 per gallon equivalent cheaper to gasoline right now.
Mick
April 25th, 2011
10:40 am
charlie
It will force our hand. We can get enough energy from the sun, wind, water. We can make deep cell battery’s that can sustain a charge through solar. It’s time to move forward and unlock the secrets to these clean energy sources…oil will one day be a footnote in the history of energy, and it will be a dirty one…
THE TRUTH
April 25th, 2011
10:41 am
I pulled up to the gas pump the other day, I had HOPED for CHANGE at the gas pump, all I got was an empty pocket, a pump that would not listen to me and a future of emptiness. Sounds like the Obozo in the White House. Perhaps we could find a way to convert all the hot air coming out of the Campaigner in Chiefs mouth to fuel our vehicles. Gosh we would be able to supply the world and you know it would be cheap, because he never says anything of worth.
USMC
April 25th, 2011
10:41 am
“USMC, I didn’t know Barry Soetoro and “Plugs” Biden were oilmen…go figure”
Actually based on Obama being paid more by the Big Oil Companies than any other politician,
I believe that makes him an Oilman:-)
MPercy
April 25th, 2011
10:41 am
Having said all that about Big Oil “subsidies” I would wholeheartedly support eliminating any direct subsidies that might exist. Of course, I would remove those direct subsidies from ag., ethanol, solar, EVs, etc. too. The Government should not be trying to direct the economic viability of any particular industry or idea. Any industry, including Big Oil, Big Ag, or Big Anything for that matter, should stand on its own feet.
jm
April 25th, 2011
10:41 am
Oh, dear, appears Jay and Cynthia are switch hitting again…
http://blogs.ajc.com/cynthia-tucker/2011/04/22/furious-over-gas-prices-look-in-the-mirror/?cxntfid=blogs_cynthia_tucker
Southern Comfort (aka The Man)
April 25th, 2011
10:41 am
How will this electricity be produced for these cars?
All of the ways you mentioned. You can use a combination of sources to generate power and diversify the risk instead of putting all our eggs in one basket. Germany’s on the way to doing that with their system. They used subsidies to increase their footprint in solar to the point that during peak sun times, they have to idle plants to cut down on overloading their grid. Last I read, their grid will have to be updated to deal with the peaks and surges.
Charlie
April 25th, 2011
10:44 am
Mick,
Pretending we have technology that we don’t is as empty a solution as screaming “drill here, drill now”.
At least if we drill here, we’ll have something to show for it in 10 years.
While we must continue to improve technology, there’s no reliable scientific information that says we’ll be wind, sun, and hydro powered in 10 years.
And I might add, your crowd told us 10 years ago that we would have all that today. If we had begun drilling then, however,….
chuck
April 25th, 2011
10:45 am
What a bunch of IDIOTS!!!
It has nothing to do with “addiction” to oil. That is the stupidest thing I’ve heard lately.
jm
April 25th, 2011
10:45 am
Pickens plan, pickens plan, pickens plan. It is the only intermediate term solution.
Lil' Barry Bailout
April 25th, 2011
10:46 am
SoCo–thanks for helping make my case. Obozo is using bureaucracy as a de facto moratorium.
The Thin Guy
April 25th, 2011
10:47 am
I need my car to get to work, buy food, etc. I can’t afford MARTA (have you seen the price of AK-47s, flame throwers, bullet proof vests, brass knuckles, etc.). If I try riding a bike on I-285 they’d have to bury me in a pizza box. Horses just can’t make it to even 30 mph. Stanley steamers are over priced. Electric cars don’t have the range I need. Therefore, I will pay what it cost as long as the spondulics hold out. You don’t have to be a economist to understand supply and demand. It’s time to start drilling and forget about those stinking polar bears. The response of Jug Ears is he doesn’t care and it’s Bush’s fault anyway. So let’s start conserving Our Precious Oil. End all auto racing. Which redneck can make 500 miles of left hand turn in the shortest time is not vital to our national interest. Sell Air Force One, Two, Three and Marine Helicopter One, Two, and Three and force Øbungle and Plugs to ride mules to their fund raisers.
@@
April 25th, 2011
10:47 am
Uh, jm, we could simply use less oil, but that’s commiepinkoliberal talk for some reason.
Well, it would cause government revenue to fall. Un-patriotic?
USMC
April 25th, 2011
10:48 am
Sounds like Jay Bookman and Phil Gramm are on the same sheet of music.
http://www.youtube.com/watch?v=PBVIwO5n9hk
Mick
April 25th, 2011
10:50 am
charlie
As southern comfort stated there are countries that are doing it now. Every roof fitted with photovoltaic cells can produce electricity and be sold back to the grid. We’ll get there or rather better get there. Even saudi arabia is creating solar farms out in their deserts. We need to push harder but big oil has a firm grip on this world, it seems over you too.