The oil addiction - March 12
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Obama Confronts Oil-Policy Critics
Stephen Power and Laura Meckler, Wall Street Journal
President Barack Obama on Friday countered Republican criticism that he hasn't taken steps to respond to rising oil prices, saying he supports more domestic oil production and calling on oil companies to develop leases they already hold.
Also Friday, the federal agency that regulates offshore drilling issued its second permit to drill a well in the Gulf of Mexico's deep waters since imposing new rules in the wake of the nation's worst offshore oil spill last April. The permit allows BHP Billiton to continue drilling a well that was stalled by a moratorium on deep-water drilling in May. It comes a week after the government issued a permit to Noble Energy Corp.
Still, Mr. Obama did not offer any timetable for approving additional offshore drilling permits in the Gulf of Mexico, despite pressure from Republicans and some Democrats to do so. He also declined to order a release of oil from U.S. stockpiles, though he didn't rule out the option.
(12 March 2011)
Related from NY Times: Energy Policy Defended as Gasoline Prices Rise.
"We Want More Millionaires In America": With Gas Prices Soaring, Lawmakers Call For President Obama To Stop Picking On Oil Industry
Matthew Jaffe, The Note, ABC News
With Americans feeling pain at the pump due to soaring gas prices, House Republicans today announced a plan to try to expand American energy production and end Obama administration policies that they contend are harmful both to prices and job growth.
The GOP’s effort, dubbed the American Energy Initiative, was unveiled today by House Speaker John Boehner.
“Just as with jobs, the American people recognize that Washington has been a big part of the problem when it comes to the price of energy,” Boehner said at his weekly press conference on Capitol Hill.
“If you watch what this administration has done for the last two years in their regulatory process, they’ve stopped drilling in the Gulf, they’ve slowed the number of leases coming out of the government, and they’re imposing these EPA regulations on American businesses that are going to sharply increase the cost of energy in America,” he added.
Across the Hill the Senate’s top Republican Mitch McConnell argued that the Obama administration is “actively working to prevent us from increasing our own oil production here at home.”
“Now is the time to be asking what we can do to increase domestic energy production, not proposing ways to squeeze American families even more,” he said. “And that’s why all of these actions by the administration, along with a tax hike on energy production some have proposed that will only be passed on to consumers in the form of even higher gas prices, is the last thing Americans need right now.”
Republicans are not alone in their arguments that the White House should do more to help boost domestic energy production. Some Democrats such as Louisiana Sen. Mary Landrieu have voiced frustration with the administration’s treatment of the oil industry in the Gulf of Mexico.
On Wednesday Landrieu beat back questions about why Congress continues to grant billions of dollars in tax subsidies to oil companies that are currently raking in massive profits, all at a time when Americans are spending more at the pump and the government is running up record deficits.
“Every time the companies start making money people want to tax what they get, but when they’re losing money no one wants to help them because of this sort of bias against oil and gas companies which comes from some sector, you know, of our democracy,” Landrieu said.
“We want to create more millionaires in America. We want to create more wealth in America, so we’ve got to be careful about continuing to pick on this industry every time somebody is looking for a dime around Washington, DC,” she added.
(10 March 2011)
The best legislators that money can buy. -BA
Demanding Cheaper Oil is Disastrous
Johann Hari, Independent/UK
The most popular cry in politics today is a pledge to deny reality and cut petrol prices. Give us our fix! Make it cheap! Make it now!
My name is Johann Hari, and I am an addict. If you restrict the supply of my drug, as has happened over the past month, I become panicky and angry. If you cut it off entirely, my life will fall apart. I want my fix, I want it cheap, and I want it now. My drug is called oil. I eat it: my food is driven to me. I wear it: my clothing is shipped and flown to me. I travel with it: on every bus, train and plane. But if I don't go to rehab soon, this addiction is going to ruin me. This is the inaugural meeting of Petroleum Anonymous. We're all going to need it now. There are four major symptoms to my addiction and yours, and in 2011 they are all getting worse. [ (Global Exchange)] (Global Exchange)
Symptom one: unpredictable convulsions. There is a revolution happening all around the world's biggest oil-fields, and it is getting closer to the deepest pools every day. For 60 years our governments have armed, funded and fuelled tyrants in return for them pointing the petrol pump in our direction. Just as junkies will rob their mothers and mug their grannies, we have abandoned the most basic values of our societies in pursuit of cheap oil. Initially, this created the virus of jihadism. Now some of the local populations are finally rising up in a democratic spirit against their tyrants. They are being shot at by soldiers trained at Sandhurst and with weapons stamped Made in America.
Nobody knows where this revolution will stop, but today is a declared "day of rage" in Saudi Arabia. The angriest part of the population, the marginalised and abused Shia, happen to live on top of the biggest oil-fields on Earth, and can stare across a thin patch of water to see their fellow Shia rising up in Bahrain.
(11 March 2011)
Q & A with Sally Odland (on oil)
Bill Fallon, Westfair Online
Sally Odland has worked 20 years as a geologist and project manager in mineral exploration for the U.S. Geological Survey, in oil and gas exploration for the private sector and in environmental remediation as a federal Environmental Protection Agency contractor.
She currently administers the Division of Marine Geology and Geophysics at Lamont Doherty Earth Observatory of Columbia University in Palisades. She holds advanced degrees in economic geology and business administration. Her 2006 MBA dissertation was titled: “Strategic Choices for Managing the Transition from Peak Oil to a Reduced Petroleum Economy.”
1) How many barrels of oil flow through the world’s veins in a single day?
“The world runs on 86 million to 87 million barrels of oil per day, give or take. Or a thousand barrels a second. That’s the flow we need to keep our economies going at their present rate.”
... 4) Where does it come from by volume? Middle East, Gulf of Mexico, Venezuela, Alaska?
“The top three oil countries are Russia, Saudi Arabia and the U.S. They produce about 10 million, 9 million and 7.5 million barrels per day (mbd), respectively. Iran produces about 4 mbd, then China and Canada at 3-plus mbd. Iraq, Kuwait, United Arab Emirates, Mexico, Nigeria, Norway, Venezuela, and Brazil all produce more than 2 mbd but less than 3 mbd. The 1 mbd countries like Libya, Angola and Algeria are relatively small players, though critical to world export capacity.
“The U.S. consumes so much oil that it has to import more oil than it produces domestically. Our main ‘dealers’ are Canada, Mexico, Saudi Arabia and Nigeria.”
5) The Middle East has been called, usually disparagingly, the world’s gas station. Political volatility notwithstanding, how long can that go on? Didn’t the Wikileaks scandal indicate Saudi Arabia has less oil than it has let on?
“It will go on until it doesn’t. Then we’ll know. Reported reserve numbers are unaudited and highly political. But rate is more critical than reserves. Many analysts are skeptical that the Saudis can open the spigot much further. They claim the ability to pump more than 12 mbd, but have not pumped above 10 since the 1980s. I suspect we’ll find out soon enough whether that spare capacity is really there. The Saudis are pumping about 9 mbd now, after announcing an increase to replace lost Libyan production.”
... 9) As this is being written, we are experiencing another gasoline price spike – this one apparently spurred by Libya. We saw $4 per gallon briefly a couple of years ago and now it appears to be coming back. Is there a top price that you foresee in the next decade?
“I’m not falling into your forecasting trap! Oil price depends on so many things – demand, supply, spare capacity, geopolitics, weather, the value of the dollar, where hedge funds are throwing their money. Gasoline prices reflect all that and refinery issues. What I will predict is tightening oil supplies and increasing price volatility, with periodic price shocks. Oil prices could easily double in the next decade. They tripled in the last one.
“It all hinges on spare capacity. Even before Egypt and Libya, many industry watchers were predicting the next price spike by 2012 or 2013. Now it looks like it could happen this year.”
(11 March 2011)
Should West Help Oil States Kick the Oil Habit Too?
Sami Grover, Treehugger
Oil, politics, protest and economics are big news right now. Mike already explored how Colonel Gaddafi benefits from The West's oil addiction, Matt explained how peak oil contributed to Egyptian unrest, and Brian reported on claims that Middle East unrest would boost calls for clean energy. All this got me thinking, however. If change in the world's oil states provides an impetus for us to get off oil, what happens to the (hopefully) newly democratic states once their main source of revenue disappears? And do we in the West—having propped up oil dictators for decades—have a responsibility to the Middle East to help them develop an alternative path?
Oil Producers are Dependent Too
This was a question I posed to my fellow TreeHuggers. After all, as countless lessons in history have taught us, one thing that fledgling democracies can ill afford is a sudden economic shock or cultural upheaval. If we start to wean ourselves off oil, isn't there a danger we leave the reformed yet still forming new powers-that-be in the Middle East hanging without a lifeline?
Should & Can the West Help Forge Clean Energy Paths Abroad Too?
It's not exactly news to say that The West has helped to prop up and fund countless dictators from Mubarak to Gaddafi to Saddam Hussein in the name of cheap oil and temporary stability. To that end, it seems to me that there's a moral imperative for us not just to kick the oil habit, but to also help those who have been supplying our addiction to forge a different path. This is not just an altruistic concern either—any drug addict will tell you that getting clean is a whole lot easier if your dealer isn't dealing any more. But my fellow TreeHuggers seemed to think my concerns were overblown.
Oil Money is a Poor Spreader of Wealth
When I broached this topic with Brian, he rightly pointed out that oil may have made a few people very rich, but in most nations it is hardly a universal blessing on the general population:
(10 March 2011)
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