John Stossel on alternate energy subsidies

Is Boone Pickens "rent seeking?" I say yes.

It burns cleanly and there is a lot of it...

My question today is this: Why aren't we allowing energy companies tap into our vast natural gas resources? It's clean burning and abundant.

Every few weeks, it seems, fresh news arrives telling of impressive discoveries of oil and gas in the Gulf of Mexico, an area that, until recently, was viewed as well worked over and unlikely to yield any new bonanzas.

Last September brought word of a giant Gulf oil field reeled in by British Petroleum. And the latest Gulf headline-maker is a potentially major gas play offshore Louisiana that appears likely to add new trillions of cubic feet of gas to growing domestic reserves of the cleanest-burning carbon fuel.

Drill, drill, drill!!!

What's Your Energy IQ?

Some very sobering results from an API survey on how Americans continue to underestimate the amount of oil and natural gas we'll need in years to come. Test your energy IQ here.

HT: Jane Van Ryan

New Energy Blog

Jane Van Ryan and Jack N. Gerard have launched a new blog concentrating on domestic energy issues. So, if you want any information on energy issues or have any questions on petroluem and gas, head on over to Energy Tomorrow.

Industries Push for Free Pollution Credits

Let the lobbying begin! (Horn blast!) We can plainly see that there will be government chosen losers and winners right from the very start of any legislation capping greenhouse-gas emissions. And the biggest losers will be the American taxpayer whom also will lose mightingly when it comes time to consume energy.

Russian gas cutoff energizes nuclear comeback

With the Russians giving continental Europe a real hard time with gas supplies, nuclear power has become more attractive as a viable energy option again.This, of course, will not make European environmentalists happy but the future option of freezing in the dark pretty much overwhelms their concerns. As far as the issue of the storage of nuclear waste, countries such as Italy could do as France does and recycle its nuclear waste.

Conference call with API

Yesterday, I participated in a blogger conference call with the American Petroleum Institute. The conference was very informative. One of the issues that stood out in my mind was the issue of ethanol subsidies and the cost incurred by taxpayers particularly now since gasoline prices have plummeted quite a bit over the last several months. Right now the cost of producing ethanol and bringing it to market is simply not cost effective but because of congressional mandates, the American taxpayer basically props up an industry that can't compete with gasoline. The question that always sticks in my mind about ethanol is how long before this bad idea of subsidizing ethanol gets undone by our government? Once a government mandate starts, no matter how bad it is, it takes years to undo it--at a substantial cost to the taxpayer.

Moderator:
Jane Van Ryan, Senior Communications Manager, API

Speakers:
Lou Pugliaresi, President, Energy Policy Research Foundation
Rayola Dougher, Senior Economic Advisor, API
Ron Planting, Manager of Statistics, API

Listen to the conference call below:

Where, oh where, have the speculators gone?

Remember all the ruckus a while back about how "speculators" were manipulating the crude oil market and how they had a cruel hand in driving up prices? Now that crude oil prices have dropped like a rock, does it mean that these same speculators have decided to let us have a break at their expense? Doubtful. If prices ever head up again expect the usual bromide of blaming Wall Street speculators and Oil companies.

Pelosi's Energy News Conference Gets Overwhelmed by Pro-Drilling Americans, Then She Hops in an SUV

HT:Americans for Prosperity

Obstructionist by any other name

Pelosi and the Democrats are beholden to the radical environmentalists in their party. Hence, we get the obstruction and the usual straw man arguments regarding drilling for domestic oil supplies.

HT: Jimmy Cardoza at Liberty Pen

Environmentalists want higher gas prices just like oil companies, speculators, Wall Street robber barons...

As gas prices have started to quietly descend over the last couple of weeks, I wondered what must be the chatter be going about in “Greenie” blogs and websites ? What are their assessments and their strategy regarding lowered gas prices? Environmentalists have always wanted higher gas prices--just like in Europe, they would say--usually through a higher gas tax. The theory being that higher gas prices would force the general public into mass transit or smaller fuel efficient cars. Thus, saving the environment from unwanted carbon dioxide and shepherding new investments in clean alternative energy. You must admit, there has been a lot of schadenfreude and hand wringing hoisted on those souls who drive around in those hated SUV’s. High gas prices must have really cockled the most inner environmentalist in every Liberal and Progressive. It must have felt so good to be morally vindicated.

But what happens when gas prices go up so fast that Americans struggle to make ends meet? And then the average American starts to figure out that they can not afford to have expensive energy for the sake of environmentalist goals. Leaving billions of gallons of crude oil sitting idle off our shores has all of a sudden started to seem unreasonable.

The Democrats’ reply to domestic drilling was the same as was heard many years before—“It will take decades to get oil from off shore drilling,” “It won’t matter much to current prices,” and there is the usual, “speculators are the cause of higher oil prices.” None of these straw man arguments have dissuaded the American public however.

This is a curious development. If the prices are low, we go back to consuming more gasoline. This means less incentive for clean alternatives and more pollution but perhaps less public outcry for more domestic drilling. Higher gas prices mean…well, you know.

It seems that environmentalists and their political enablers have positioned themselves into a nasty little corner. The illogical goals of obstructing the development of proven and reliable sources of energy--particularly when those energy prices are very high and may be high for some time now or in the future--just doesn't make sense to the average person. Environmentalists and Democrats seem to want Americans to live with higher prices because that moves them closer, in their estimation, to their stated goals of clean alternative energy. Even as those supposed alternatives are far, far from being a reality; probably farther than their claim that off shore drilling will take to make a difference. Their goal is going to be mighty expensive and Americans may not be interested in their utopia.

If gas prices continue to drop, look for a call to a higher gas tax in the name of developing alternative energy or to dissuade people from driving.

American Energy Freedom Day

Will it come to pass?

HT: Andrew Roth

On No!! Exxon reports profits again!! Those evil bastards!

Exxon has reported its profits for the second quarter. I wait with baited breath (not) on how the neo-socialists howl to the heavens on the “unfairness” of it all and how Exxon and all oil companies need “investment on alternative energy.” Notwithstanding the open ended phrase that “investment on alternative energy” really is, check out how much in taxes Exxon paid along with those profits. Also, check out Carpe Diem’s post on how Exxon actually pays more taxes than the bottom 50 percent of taxpayers.

From CNN money: Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.

That profit works out to $1,485.55 a second.

That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007.

"The fundamentals of our business remain strong," Henry Hubble, Exxon's vice president of investor relations, said on a conference call. "We continue to capture the benefit of strong industry conditions."

Also, check out posts on blogs of note on Oil drilling and opposition to it.

Shaving Leviathan: Democrats oppose Oil Company Private Property Rights

The Bobo Files: Obama announces his Energy Plan

Carpe Diem: Exxon posts record $32.36 Tax payment

The world is running out of oil?

From FT.com

The Arctic holds as much as 90bn barrels of undiscovered oil and has as much undiscovered gas as all the reserves known to exist in Russia, US government scientists have said in the first governmental assessment of the region’s resources.

The report is likely to add impetus to the race among polar nations, such as Russia, the US, Denmark, Norway and Canada, for control of the region.

The US Geological Survey believes the Arctic holds 13 per cent of the world’s undiscovered oil, while 1,669,000bn cubic feet of natural gas is equivalent to 30 per cent of the world’s undiscovered gas reserves.

With large findings in the Caspian Sea, Brazil, and all the untapped reserves in the U.S.-- and now the Artic--somebody needs to challenge me on my theory that the world is not running out of oil; At least not anytime soon.

Here is another news link for this story

"Al Gore is our savior!"

Al Gore called for congress not to overturn a federal ban on offshore drilling recently. If congress had any collective wit about them, they should immediately dismiss his comments as the rantings of an unrealistic lunatic.

Mr. Gore seems to be living in a parallel universe where the average American can afford to chuck over $4 and more for a gallon of gasoline for lord knows how long--I guess until the miracle of “alternative energy” comes along full bore in 10, 15 years or more? Mr. Gore is a multi-millionaire with nary a worry about the effects of paying higher prices for energy. If ushering the era of a carbonless economy means bankrupting middle class Americans, then so be it: To indirectly suggest that Americans must sacrifice in order to usher in his radical vision of the new era--the “green” nirvana--strikes me as callous arrogance. Mr Gore suffers from a misplaced messianic complex.

Oil is discovered in Caspian Sea

So, it looks like a Swedish firm has made a nice find of oil in Russia’s north Caspian Sea. Try and guess how long it’s going to take them to start drilling. Do you think that it will take 5 years? Or perhaps it will maybe take 10 years? Nope. Try the end of September of this year. The Russians aren’t squeamish about putting their resources to work, that’s for sure.

BTW, with a major oil find off the coast of Brazil, this finding in the Caspian Sea and all the untapped potential in North America, the talk by people that constantly rail about oil running out very soon or how far past the world is from Hubbard’s Peak is sheer conspiracy babble.

Bush acts on drilling, challenging Democrats

Bush has lifted the moratorium on off-shore drilling. The ball now falls on the Democrats’ court.

U.S. lifts moratorium on new solar projects.

DENVER — Under increasing public pressure over its decision to temporarily halt all new solar development on public land, the Bureau of Land Management said Wednesday that it was lifting the freeze, barely a month after it was put into effect.

The bureau had announced on May 29 that it was no longer processing new applications to build solar power plants on land it oversees in six Western states after federal officials said they needed first to study the environmental effects of solar energy, a process that would take two years.

But amid concerns from the solar power industry, members of Congress and the general public that the freeze would stymie solar development during a particularly critical time for energy policy, the bureau abruptly reconsidered. (Read More.)

I wonder if groups that currently oppose drilling at ANWAR or off-shore would be willing to fast-track development of drilling for the same reason that this decision was reversed by the BLM; Namely, “a critical time for energy policy.” I think that the BLM made the right decision by foregoing expensive and time consuming environmental impact studies. This same approach should be adopted for oil and gas development in the lower 48 at the very least. It’s ironic that environmental impact studies would have bogged the building of environmentally friendly solar panels.

Speculators = Vampires!

Some of the theories that have been bandied about regarding oil prices and speculators have reached new levels of dogma. The little poisonous gem that I happened upon was a piece that I found (via The Liberal Journal) on the Counterpunch website titled “Gas Price Gouging,” by Mike Whitney. Here’s an excerpt:

This is not about shortages or scarcity; it's about gaming the system to fatten the bottom line. The whole scam is being executed by the same carpetbagging scoundrels who engineered the subprime fiasco; the investment bankers. The Wall Street Goliaths are using the futures market to recapitalize their flagging balance sheets after sustaining huge losses in the mortgage-backed securities boondoggle. That's the whole thing in a nutshell. Now they're on to their next swindle; distorting the futures market with gargantuan leveraged bets on food and oil.

Yes, it’s the carpet-bagging investment bankers. And don’t forget the Illuminati and the Free Masons. They have a hand in everything. Here’s another zinger:

In fact, oil is being deliberately kept off the market to keep prices high. Consider this: if supply isn't keeping up with demand then why aren't there any lines at the gas stations like there were during the '70s?

Somebody needs to tell this fellow that the reason that there was rationing of gasoline and long lines to gas stations (that would then run out of gas) was due to the implementation of price controls by President Nixon. Once wholesale prices for gasoline rose beyond what a retailer could afford to buy (they had to make some profit to pay employees, taxes, utility bills, etc), gas stations ran out of gas. This meant that there was less refined gas to go around. Somehow, Mr. Whitney believes that the lack of rationing and long lines is proof that there is plenty of gas and that prices are being manipulated. The fact that prices are allowed to rise and that it is in effect a signal of the healthy elasticity of the market - there are no long lines - is proof that the mechanism of supply and demand is working as it should. Mr. Whitney does not understand basic economics.

While the futures market is a convenient scapegoat, it is simply a price discovery mechanism. Here’s one example of how the futures market works nicely: One of the reasons that Southwest Airlines has been able to be successful in recent years, while other airlines are faltering, is due to its prescient ability to lock in lower fuel prices with the futures market: It acts as a hedge against volatility and inflation. The futures market is not without risk. If a company bets incorrectly, they could lose money. It isn’t the perfectly gamed system that Mr. Whitney and others believe it is.

Note that many commodities have spiked in price over the last couple of years. It isn’t just oil. Does that mean that corn, wheat, copper, and fertilizer are being manipulated by speculators too? Should congress make laws to meddle in the trading of those commodities as well? The rise in oil is occurring globally, not just in the U.S. Attempting to stifle speculators in U.S. financial markets will do nothing to the global price of oil.

So, what’s the answer? Why has oil jumped to its record highs? The primary answers are the weak dollar and good old supply and demand, folks. I know that this is not as sexy and as attractive as a conspiracy theory. But there it is. If the Fed ever decides to fight inflation and strengthen the dollar, commodity prices would fall like a rock. It’s as simple as that. Alan Reynolds of the Cato Institute explains it best:

There is no mystery behind the rise in oil prices. They rose too high too fast because of booming demand for oil for petrochemical products, electric power and shipping from many emerging economies (particularly China, India and the Middle East). Meanwhile, the supply of oil slipped in the US, Mexico, Venezuela, Nigeria and Russia.

Now, I’m not saying that the futures and options markets have absolutely no effect on the global price of petroleum. All I’m saying is that its effect is greatly exaggerated for political reasons.

When Congress returns from vacation expect more heated rhetoric on this issue; there are currently at least ten bills submitted by Democrats attempting to address “speculation.” I blame congress for legitimizing the arguments put forth by bloggers like Mr. Whitney: No quarter is given to facts or to the unintended consequences that may follow bad legislation.

Compact Fluorescent Bulbs are forced upon us

The Bobo Files has an interesting post on congress’ recent passing of a bill that will ban incandescent light bulbs completely by 2014.