Speculation, decreasing dollar value, increasing world demand
or oil supply security premium? (Iraq and saber rattling at Iran)
What is causing the current destructive spike in crude oil and gas prices?
I admit I find the whole thing confusing. Except for the one simple truth that should be uncontroversial but isn't, given the GOP's predilection to keep low information voters misinformed. That we can't drill our way out of the problem by increasing domestic production to make any sort of dent in our oil imports or have any significant effect on the market price of oil.
Speaking of low information voters, is there any harm in Obama reminding folks that crude oil was at $30/barrel in Mar of 2003 (now $140+/barrel) gas was around $1.65/gallon (now north of $4/gallon) and the Euro was in near parity at $1.078 per Euro (now $1.578 per Euro)?
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What is causing the current destructive spike in crude oil and gas prices?
Honestly, I don't see the destructive part of it. What is it destroying, the habit of buying Hummers?
Really, we need to change our energy matrix, and the way our economy works, we need a price signal to do it. Here it is. I welcome it. Been nicer if it had been more gradual, but it was coming sooner or later. Even if prices retreat as they often do, they'll be back.
Sure, the republicans think energy is stuff you get out of the ground and burn, and they will be perfectly happy to tear up the whole planet to get it. But this can only delay the inevitable mismatch between growing demand and a finite supply. It can never solve the problem.
We need technology for that.
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)You're from Hawaii, IIRC.
Up here in upstate NY, not to mention New England, where fuel oil is the main heating fuel, there are an awful lot of people who are going to be looking at a choice between staying warm and eating regularly.
I want to see the US (and the rest of the world) move away from carbon-based fuels as much as anyone. But if the demand drops because of severe economic malaise or collapse, then a lot of people are going to suffer and even die.
Does this mean I want to see a return to $2/gal gasoline? No. Americans are going to need to make some major changes to how they live and work and travel between the two. And I'll admit that it's a bit ironic to this old center-left guy that market forces are forcing much of this change. I hope we can figure out a way to soften the landing.
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| parent )Called New York home for 17 years, including some upstate near Albany.
New York State has had a rather good energy standard for new construction since the 1980's. Unless a house is really large, it should be fairly efficient. If it's large I'm sure the people in it can afford it, not that anybody has been moving into properties they can't pay for, or anything...
Actually, the larger homes have multiple zones. Worse comes to worse you heat the part you actually live in, when you are actually there.
That leaves older construction, which frequently houses lower income people. Sounds like an excellent time to get the state to help these people with insulation, new windows, more efficient furnaces, smart thermostats, and so on. There are a number of ways to accomplish this, from low-interest loans to tax credits to plain old technical assistance (a lot of people might not know what the most cost-effective steps are). As a bonus, local air quality would improve.
It's June, plenty of time for our forward-looking leaders to do something.
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| parent )of my industry, aviation. And it will be destructive to many others too. Unlike Europe the US economy is predicated on cheap energy and if the current price does not abate things will get very bad quite quickly.
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| parent )I don't see Boeing or Airbus stuck with plane inventory. They each have several years worth of orders. I don't see the GA manufacturers with that problem either. If anything, the need for efficiency makes a better business case for buying new aircraft.
I see airlines in trouble, a different matter, and one that hardly qualifies as new. They've been floating in and out of insolvency since deregulation, which they wanted, and the really well run airlines, like Southwest, are doing fine.
Color me skeptical.
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| parent )especially the legacy carriers. As you point out many were in a world of hurt and seeking to consolidate due to adverse economic factors of their own making well before the recent dramatic increase in fuel prices, which are exacerbating the situation but did not cause the underlying structural problems in the airline industry.
It should be noted that the airline industry and aircraft manufacturers are separate industries and a significant lag exists between factors affect one leading to effects on the other. The same situation exists with respect to GA (private/business) operators and manufacturers. United recently announced it is grounding 100 aircraft in response to the worsening economic situation. Replacing these with more fuel efficient aircraft at around $75M a pop that equates to a whopping $750 billion investment. They simply don't have the cash on hand to do that and who is going to finance such a purchase on anything like terms that make economic sense for the parties involved?
If fuel prices are sustained at current levels I can assure you that the more efficient aircraft available cannot make up the difference and return the industry to sustainability.
Southwest has a very different business model than the legacy 'network' carriers and its success has meant they have been able to hedge against rising fuel costs and gain a competitive edge, up to now. However, the airline industry and its transportation network would be a pale shadow of what it is today if all airlines were to follow Southwest's business model and with no transportation network other than the Federal highway system to replace it the structural change to the economy would be dramatic, costly and self defeating in terms of conservation and efforts to combat global warming. We will see how successful Southwest remaingoing forward as those hedges become due for renewal.
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| parent )Part of the problem here is that I don't know what "sustainable" means in the airline industry, because it's always in trouble.
I do think you've got Southwest backward: they didn't hedge because they were doing well, they've done well because they think about this stuff to begin with.
the structural change to the economy would be dramatic, costly and self defeating in terms of conservation and efforts to combat global warming
You seem to be saying people will drive so much more they will generate more CO2 than the planes they replace. Is this so? Given that the worst jets are the ones being retired, I suspect it's going to be roughly equivalent.
Anyway, at my company, which is global, I'm not seeing a drop in travel yet. If I do, I'll let you know.
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| parent )of the airline business that all carriers attempt to hedge it to the best of their ability. Southwest is simply better able to hedge because it makes a profit and is financially sound enough to enter into long term contracts. The legacy carriers not so much.
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| parent )You think it your way, I'll think it my way.
Either way, we both agree the majors are in trouble for many reasons, not just oil.
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| parent )is that the "hedge against rising fuel costs" that you mention here is generally called "speculation" when people complain about higher oil prices. Two sides of the same coin.
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| parent )oxes and goring come to mind.
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| parent )did you ever think who those contracts are with?
Then there is "private aviation".
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
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| parent )...which is why today most major foreign airlines have more modern fleets than ours do.
Outside the US, the airline industry is pretty far from collapsing. You are confusing a particular shock with a self-reinforcing management problem. It takes a decade or more to get into the situation where your planes are too old. Don't blame oil.
For example, private aviation is booming in part because the wealthy avoid airlines like the plague. Why is that?
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| parent )before the recent fuel crisis, not so much anymore.
The operation I work for has a fuel factor of $3/gallon of JetA factored into trip quotations but we have been forced to quote fuel surcharges averaging an additional $3/gallon depending on destination. That's a 100% increase in fuel cost and represents a jump of around 25-30% in quoted trip costs that has significantly affected bookings as our customers reassess their discretionary travel needs.
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| parent )I'd consider the notion that the real problem is that your customers are looking at shrinking stock portfolios, real estate holdings, and income.
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| parent )it's a little of both.
--GW Bush, leading contender for worst President ever.
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| parent ). . .they should really cut it out--private planes are deathtraps. I can think of four US Senators who died in private plane crashes in the past twenty years--and I'm probably missing someone.* If the insanely unlikely happens and I become filthy rich, I will either use public airlines--I hear first class is quite comfortable--or I'll find a safer way to travel than private planes. . .like maybe a faithful re-creation of the Hindenburg. Ain't nobody gonna be writing a song about me going down in a private plane crash.
* Buddy Holly et al., Rocky Marciano, Thurman Munson, Cory Lidle. . .if Santayana was alive today, he'd be talking about people who failed to learn from celebrities' obituaries.
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| parent )this comment was made tongue in cheek.
'Private' aircraft run the whole gamut from this to this and thus isn't a very useful classification on which to base one's discretionary travel requirements.
--GW Bush, leading contender for worst President ever.
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| parent )I understand how it could impact the aviation industry, especially since most of those modern fleets are leased.
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
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| parent )...outside the US.
I'll concede that a sustained rise could cause problems, but I think at some point reduced demand will slow this thing, and reverse somewhat.
Leasing works out fine if you think that new planes compete with old planes, not with nothing. High oil could reduce the size of the active fleet, but would cut into the old aircraft. High oil makes new planes relatively cheaper than old ones. Boeing made a really good call to pursue efficiency with the 787. In this environment, the Sonic Cruiser would have been a disaster.
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| parent )I will provide the following
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )Boeing was hit hard by the loss of the Air Force tanker deal, and the original 787 schedule was considered aggressive (in other words, unrealistic) pretty much from the start. They tried to rush it because they wasted time with the Sonic Cruiser nobody wanted, while at the time Airbus looked set to take over the world with the A380.
So the stock ain't doing so well? Hardly a surprise. Perhaps a good time to buy.
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| parent )have also talked about splitting atoms as well as microbiology JFTR.
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )If you subsidize big oil, you make it harder on these kinds of folks to have a business case. $140 oil is putting wind in their sails.
If the GOP stops the Exxon subsidies, then I'll listen to their talk. And, JFTR, I'll be the first to admit that the Democrats are just marginally less myopic.
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| parent )that.
Exxon gets subsidies? It certainly doesn't show up in their financial margins. BTW which party is running Congress?
How about a prize to move the party along rapidly. I'm also happy to run with "take or pay contracts".
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )But he's really good at it.
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| parent )Which red state wants the waste repository?
--GW Bush, leading contender for worst President ever.
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| parent )Yucca Mountain is it, whether Reid likes it or not. I live surrounded by bases that are big enough targets that the entire Island will incinerated if someone makes a full-scale attack on them. It doesn't bother me; just part of life in a country that's chosen to maintain the ability to defend itself. Which state isn't going to play NIMBY with a nuclear waste disposal site if we make it a popularity contest?
More than a decade of study went into determining that Yucca Mountain is overall the safest practical place to store nuclear waste, and it was supposed to open twelve years ago. It's on Federal land, not subject to Nevada laws. Delaying the opening indefinitely while politicking for yet more studies is just another passive-aggressive way to delay construction of nuke plants in this country while liberal politicians like Reid lie about supporting them.
Time to just get on with it so maybe one of these new plants will actually be online in our lifetimes.
--In the land of the blind, the one-eyed man is king.
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| parent )If the Republicans don't raise that as a rallying cry against Democratic obstructionism on domestic energy production, they will deserve any losses they suffer as a result.
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| parent )BTW, we have a waste repository.
And we have to do it to save the planet, so I've been told.
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )or drink yourself out of thirst, I guess. But if you're hungry now, you might want to plant some crops so that you might have some bread in the not-too-distant future. Likewise with carving yourself a dowsing rod and digging a well or two before the beer runs out.
The trite "can't drill yourself out of gas prices" completely ignores the fact that environmentalists, backed largely by Dems and Clinton's vetoes, blocked exploration and exploitation that likely would have resulted in millions of barrels of domestic production being online now. Even a ten percent reduction in our purchase of foreign oil would be a huge change from a variety of viewpoints. now, in the most transparent bootstrapping, Dems essentially are saying that we don't have the domestic capacity now because they blocked it back then, so there's no need to ever revisit the subject.
The GOP misinformation machine can't be that effective a foil to the MSM, given that yesterday the NYT outed another secret terrorist program, this one aimed at rat-trapping OBL in Pakistan. The MSM can get out any message it wants whenever it wants to, and awards itself brownie points if the story bashes Republicans or hurts the Bush Admin in the process. So you're barking up the wrong tree here; instead, join the hundreds of thousands who have canceled their subscriptions to the LAT, the Boston Globe and similar birdcage liners to show them what you think of the holes in their coverage.
To answer your question, I think Obama's way too smart to focus heavily on gas prices, lest his own record on that and related subjects ("let's study nuclear power for another twenty years") gets a spotlight shined on it. I guarantee it'll come up in the debates, though, despite what I predict will be a full-court press by BO's handlers to avoid open-format questions by any Tim Russert wannabes. Chris (thrill up the leg" Matthews, yes; Chris Wallace, no way Jose. If he were a military officer, Obama'd want to fight only set-piece battles - none of these messy skirmishes that you can't script. The guy just doesn't do spontaneity.
PS I don't get your link, which looked like yet another Peak Oil prognostication, and a ten year old one at that. To the extent I could make any sense from the few charts that showed North American oil and gas production, none of them took into account exploitation of ANWR, the Gulf of Mexico, offshore from either coast, coal gasification, oil shale extraction, or similar issues. What did I miss?
--In the land of the blind, the one-eyed man is king.
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)extracted from drilling in and around the US command in the market?
--GW Bush, leading contender for worst President ever.
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| parent )Plus, as I said here and elsewhere, there's more to increased domestic production than temporary respite on prices, even if that's all we get in that arena. Lots more. Long-term benefits from energy self-sufficiency that will be felt long after people either get used to the prices or there is some respite.
--In the land of the blind, the one-eyed man is king.
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| parent )It depends on the going market rate.
You think big oil is going to sell its oil to US consumers for less than what it can get on the open market? The volume of additional US production (perhaps 5% to 10% of US demand) won't be enough to reduce world demand or affect the market price and that's assuming OPEC won't just match what we produce with production cuts to maintain the same market price.
--GW Bush, leading contender for worst President ever.
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| parent )If they require 100% of the product to be sold in the US (and they damn well better) and some form of controls are placed on what our own oil can be sold back to us for, there will be an effect; its magnitude probably can't be known until the system actually begins producing oil from domestic reserves. And if the OPEC countries can in fact afford to cut their own income proportionately, let them do so. Looking at some of the extravagant public works projects going on in the Arab world, I don't think they can.
This is a one-way street. Even a one percent per annum reduction in the plunder OPEC gets from us will start to hurt them within two presidential terms. They have lots of other markets, but none in which a stranglehold gives them the enormous power they have with the US.
--In the land of the blind, the one-eyed man is king.
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| parent )some form of price controls and nationalization of the oil industry? Are you sure you are a conservative?
--GW Bush, leading contender for worst President ever.
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| parent )I'm saying the citizens of the country own the oil reserves that are on federal land; our representatives can be charged with negotiating any conditions we like as a prerequisite to exploiting the reserves there. We already impose ecological and land restoration requirements as a condition, e.g. It doesn't have to be an American company that wins the bidding. And if the growing number of peak oil prognosticators are correct, there will be a large number of bidders, even if the oil has to be sold to US refineries for consumption in the US only, and at indexed prices. (I like "indexed"; "price controls" are so, well, Carterish.)
If that makes me a pinko, so be it. Where's my 39 cent/gal gas? %^>
--In the land of the blind, the one-eyed man is king.
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| parent )I have never heard of a lease that has that requirement, and I doubt the oil companies would sign such a lease. They already have plenty of leases that they're not using, I doubt this is about anything other than panicking the rubes into giving them a better deal than they would normally get.
OPEC has a much bigger stranglehold on Japan than the US, I don't believe Japan has any domestic oil reserves. There may be other countries as dependent on OPEC, but they're the first ones that come to mind.
--I blame it all on the Internet
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| parent )One of the components of the political deal that made the Alaska Pipeline possible was the commitment of all that oil to the US West Coast market.
That rule remained in place until the mid 1990s when Clinton and others finally got it relaxed. Alaskan Crude was sold to refiners in Asia for a brief time before a West Coast gasoline price spike got everybody all worked up about where American crude was being sold. The producers reached a gentlemen's agreement and volunteered to direct Alaskan supplies solely to the Lower 48. The West Coast only deal hasn't hurt Alaskan producers as they feared it would (by flooding the market); the State of Alaska is enjoying record oil-related revenues (last year they spent $5.6B on schools, roads, everything; this year they expect $15.6B in revenues).
With expanding refinery capacity in Asia, Alaskan exporters may decide to rethink the deal. We'll see.
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| parent )You're missing the point. Drilling in ANWR (or your backyard) won't change the fact that, thanks in large part* to the disastrous fiscal policies of the Bush League, the dollar is worth about the same as an old sneaker and an Oreo cookie. That is what, in large part, is making the price of oil shoot up. I do not think demand has climbed as the same rate as prices.
*But, to be fair, not entirely
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| parent )Like I said, I'm easily fooled on this stuff. But that said, there are many other reasons why the country would benefit by even the limited degree of self-sufficiency a ten percent decrease in purchase of foreign oil would mean. (Even better if we get to pick the exporter who that ten percent gets taken from.)
AFA demand climbing at as compared to price increases, I hope that's not true for this country, but know it will be so for the Chinese and the Indians for the next decade or more, as they make all the same mistakes we made from the '50's forward. Another reason to have some degree of home production; we don't want to bid against them, or to need it anywhere near as bad as they do.
To show my elementarianism a bit further, I'll ask this: what are currency values and stability like in the big oil-producing countries?
--In the land of the blind, the one-eyed man is king.
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| parent )If the goal of increased drilling is to allow Joe Suburbia to keep his Hummer, then forget it.
Truth is, it would take at least a decade for any new discoveries to start producing, assuming we have the refining capacity to handle it. Which we don't.
What we should be doing is restoring and developing passenger rail, and investing in non-fossil fueled power sources, including nuclear. Thanks to Shrub and his enablers in the GOP Congresses of the past few years, we probably can't afford to do that.
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| parent )but I'm not reminding people of what i actually drive because last time some laughed at me.
Like I said above, the price issue is the smaller part of the problem. If there's price relief, we'll be happy; if not, we'll still survive. But right now the country could be decimated by another OPEC embargo, a closure of the Strait of Hormuz, a major terror attack on Saudi refineries, the sinking of a half-dozen supertankers, or any other one of a number of disaster scenarios. There's no way we can cut back demand here so drastically that it would defuse those situations in any reasonable time frame. So an element of national energy self-sufficiency has to be a substantial petroleum production capability that can go online in days.
AFA affording or not affording nuclear energy, you can't honestly blame Bush for that. You can, however, blame a part of his Administration, the Bureau of Land Management, for putting an insane two-year moratorium on solar power development on Federal land. Something I'll diarise when I have more of the pieces, but what should be a national scandal.
--In the land of the blind, the one-eyed man is king.
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| parent )Tomsyl questioned by the local cops regarding the unusual odor eminating from his Pacer.
--Me: We! -- Ali
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| parent )Tried it last time I was stopped. No joy, even with Bob Marley's "Jamming" on the radio.
Before I correct the record regarding my alleged ownership of a POS AMC, I need to ask whether you believe those stories from Japan about several new owners committing seppuku when their new Pontiac Azteks were delivered and they saw what the car looked like.
--In the land of the blind, the one-eyed man is king.
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| parent )Might have seen one once. I'm all worried because the Tata I ordered from India is seriously backordered. I was going to buy two Tatas, but I thought I'd try one out first. The more I think about it, one Tata will simply not do. I need two Tatas. Must have Tatas.
--Me: We! -- Ali
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| parent )The excuse Democrats have been making for twelve years now.
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| parent )that the laws of physics and biology, not to mention engineering principles, can be influenced by right-wing ideology.
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| parent )A) If it takes a decade to get the stuff through the pipes and we'd like to have an immediate effect, we should have been doing it a decade ago.
B) Further, if we take the obvious point that both the demand and supply curves for oil are fairly steep (a point Krugman has used in arguing that we're not looking at a speculative bubble), that is, supply and demand are relatively price-inelastic, then forcing some additonal supply on-line should have a disproportionate effect on prices.
C) And finally, the decline in the dollar was and remains a requirement if you're going to bring the trade deficit closer to balance, because it's the only way to kill demand for imports (including demand destruction for oil) while increasing demand for exports. All of which amounts to a wealth transfer towards those working in manufacturing vs. the rest of us. You know, those clowns the Democrats call constituents.
I don't know why Democrats keep thinking they can bend causality and logic to their lefty ideological silliness.
--The ultimate result of shielding man from the effects of folly is to people the world with fools. -Herbert Spencer
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| parent )A) Did anyone accurately predict the need for an immediate effect today a decade ago? Has Big Oil been screaming to exploit known reserves or merely pursuing a strategy to accumulate oil lease portfolios on the most advantageous terms. Assets that will be exploited as and when market conditions are optimized to maximize profits and returns to shareholders?
B) It will, the question is do we have the analytical tools necessary to accurately measure the minor effects the relatively small quantities available or proposed will have on overall supply and the market price.
C) "wealth transfer towards those working in manufacturing" - surely you jest, unless you are only taking into account executive pay?
--GW Bush, leading contender for worst President ever.
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| parent )A2) The Peak Oilers have been going on about it for years. As to "conditions are optimized to maximize profits and returns to shareholders", I'd say oil north of $60 counts. You can't have it both ways. Either the price was unsustainably (and unprofitably) low and they'll be moving in the direction of drilling now that it's well and firmly above the $60 level, or it wasn't and they can't possibly have been hoarding undrilled stakes in the expectation of never-to-materialize better pricing.
B2) "It will, the question is do we have the analytical tools necessary to accurately measure the minor effects the relatively small quantities available or proposed will have on overall supply and the market price."
Not an argument against it at all, merely a punt in the direction of "how much". Thank you for the easy victory. Next up, my estimate for elasticity.
C2) Not at all. If mfg continues to expand, the skilled and semi-skilled labor required to run a modern factory will get a bid. This process is pushed along by the weakening dollar, as it makes exports more competitive and domestics more attractive as compared to imports.
--The ultimate result of shielding man from the effects of folly is to people the world with fools. -Herbert Spencer
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| parent )A) Not from big oil's perspective. What counts is the difference between what it costs to extract the oil and what they can sell it for. There is no incentive to concentrate production resources to extract reserves that have become marginally profitable because of the high market price. On the contrary, resources will be concentrated where extraction costs are lowest and profits maximized.
B) How much? negligible. You may need a dictionary for this one.
C) US manufacturing is expanding?
--GW Bush, leading contender for worst President ever.
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| parent ). . .who brought up the "decade" argument. The decade would be over for two years now, but for Democratic obstructionism. If the RNC has any sense, that theme will be appearing in a lot of ads this year.
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| parent )I asked Tomsyl. At what price would such oil be offered to US consumers?
--GW Bush, leading contender for worst President ever.
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| parent )effects on price:
At $.75, it's time to start looking at opportunity costs.
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| parent )facts just get in the way of bashing Democrats.
--I blame it all on the Internet
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| parent )Democrats in Congress seem to be able to come up with an excuse to block any and all new domestic energy production. What's the old saying--"A billion here, a billion there--pretty soon you're talking about real money?" The Democratic response to renewed domestic exploration has been a resounding "NO" for over a decade now. It's time to call them on it.
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| parent )The oil shale myth is a nice way for conservatives to try to score political points but it's not going to help much from an energy perspective. The EROEI is just to crappy to get much out of it.
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| parent )only
Democrats
oppose
offshore
drilling.
Or ANWR, for that matter.
--I blame it all on the Internet
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| parent )Waffle has certainly taken a shinning to it.
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )content free gum bumping with no supporting links.
--I blame it all on the Internet
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| parent )JFTR
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )Looks like production is increasing.
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| parent )This is conventional drilling to extract such oil as exists in a liquid state within the shale beds. The kind of shale oil being talked about is similar to extracting oil from tar sands ie from the shale rock itself, only much more difficult and expensive.
--GW Bush, leading contender for worst President ever.
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| parent )The Senate has been obstructing further development.
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| parent )Energy in v energy out. If industry thought they could recover oil economically from oil shale there would be a pilot plant operating already.
--GW Bush, leading contender for worst President ever.
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| parent )and Shell, just to name two in this country
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )#100898 and my answer to Tomsyl #100849
--GW Bush, leading contender for worst President ever.
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| parent )an unanswered question. Complete the due diligence and oil shale is worth a closer look.
--Fence post turtles -- They don't get up there by themselves, some moron had to put 'em there.
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| parent )now Bill what exactly are you talking about?
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )of water that the water poor American West lacks.
Colorado, Utah and other states are reluctant to allow massive projects without these little details addressed even if M Scott says its "merely" Democratic obstruction.
--Fence post turtles -- They don't get up there by themselves, some moron had to put 'em there.
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| parent )Bill you need to keep up the new technology.
BTW, it is the Democrats in the Senate which are holding this up, not the states that you mentioned.
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )The due diligence hasn't been done yet.
--Fence post turtles -- They don't get up there by themselves, some moron had to put 'em there.
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| parent )Exon/Mobil, what they need is some take or pay contracts to create some price floors, something about Rifle, CO and the 80s.
Oil Tech, Inc also has a process which recycles water.
BTW all the water is owned in CO, if you need it you have to buy it.
--“Let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
John F. Kennedy
January 20, 1961
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| parent )before the real impacts are understood. Good business, bad for Green River Basin residents.
--Before you criticize someone, you should walk a mile in their shoes. That way when you criticize them, you're a mile away and you have their shoes. -JH
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| parent )And your assertion in response is unprovable--thanks to Democratic obstructionism. We'll see if the voters keep putting up with it.
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| parent )Big bad Democrats and enviros wouldn't let him drill, even when the GOP controlled Congress and the permanent majority looked like a sure thing?
--GW Bush, leading contender for worst President ever.
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| parent )As I'm sure you know.
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| parent )dubya could invade and occupy another country on false premises but he couldn't overcome objections to domestic drilling, outlaw abortion or kill off SS.
--GW Bush, leading contender for worst President ever.
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| parent )Translation: "Can't win an argument about the filibuster--time to whine about the war some more."
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| parent )You were right ANWAR was filibustered.
--GW Bush, leading contender for worst President ever.
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| parent ). . .you're admitting that your "what's Dubya's excuse?" argument was put forward in bad faith? Considerate of you.
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| parent )for not being able to break the filibuster when he was quite capable of selling a war on false premises?
Perhaps his heart wasn't really in it, which being the oilman that he is, would mean that Big Oil's heart is not really in any more domestic US drilling. But it does make a great sounding campaign issue for Republicans at very little cost to their enthusiastic backers in Big Oil, especially given all the government subsidies.
--GW Bush, leading contender for worst President ever.
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| parent ). . .who voted for the war but not to allow drilling. I'm sure they could explain it to you.
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| parent )as "foreign oil", it's a fungible commodity with a worldwide market. The additional production would show up in the balance of trade payments, but from what I've been able to determine full production from all proposed sites would at most add up to about 5% of domestic demand.
--I blame it all on the Internet
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| parent )is the leading cause of spiking oil prices. Add to that increasing demand from China and India, and the probability that peak production has come and gone, and I don't see prices coming down much any time soon.
I'm more and more convinced that President Obama's first job will be to oversee the attempted repair of the American economy. It won't be pretty.
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)the weakening dollar/strengthening Euro accounts for $44 of the current $140 market cost of a barrel of oil. Leaving $66 as the premium attributable to other causes above the $30/barrel price that prevailed immediately prior to the launch of the Messinpotamia.
At todays exchange rate (1.578) you would need to spend 89 Euros on the dollars required to purchase a barrel of oil priced at $140/barrel. In early 2003 it would have taken 28 Euros to purchase a barrel of oil priced at the then $30/barrel and 1.078 exchange rate. Over this period the dollar price has risen by 367% while the equivalent price in Euros has only risen by 219%. Given that gas in early 2003 was around $1.65/gallon and now its north of $4/gallon, would gas be more like $3/gallon today if not for the weak dollar? and would it be considerably less than that without the risk premium of the Messinpotamia and continued saber rattling within the region?
I'm waiting for one of our resident economic experts/rocket scientists to explain how I have got this all wrong and how hitting the GOP and the McSame campaign over the head with these simple facts will backfire.
--GW Bush, leading contender for worst President ever.
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| parent )to support another comment in a thread on the same topic recently.
A little out of date, but consistent with your math.
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| parent )I'd forgotten about that diary. Nice to see the numbers are comparable. Until some senior economists drops by I'm going to take that as verification.
--GW Bush, leading contender for worst President ever.
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| parent )an economics expert to intelligently answer your question, but it seems to me the real potential for disaster comes if OPEC decides to price oil in Euros. That would do more harm to the US than 9/11 ever did.
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| parent )and I believe one of Ken White's oft stated justifications for the Messinpotamia was that the US army is there to prevent that very same thing from happening.
One of the things that really disappoints me in this whole argument is that the GOP misinformation campaign to the effect that we can drill our way out of our dependence on foreign oil isn't being countered by the simple fact that such a policy, even assuming it were possible - which it isn't, would put the OPEC countries in the catbird seat in respect to the control of the global supply of oil and thus the market price. OPEC can co-ordinate among its members to reduce production matching any increased US production and maintain whatever market price they deem justified far more easily than they can hope to stabilize the market price of oil by increasing production as we are currently exhorting them to do.
--GW Bush, leading contender for worst President ever.
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| parent )