Today’s New York Times reports that US Senators – having spent a week of recess hearing about high fuel costs from angry and frightened consumers (and voters) – seem to be moving to break the Democratic gridlock which still seems to grip the House of Representatives.
The NYT reports that a bipartisan “Gang of Ten” (first noted, afaik, at the Politico) met Tuesday morning to discuss a compromise energy plan that could be enacted this year.   Sen. Susan Collins (RINO-ME) and others see the outlines of a deal including new incentives for renewable fuels, more freedom for offshore drilling (where the states involved favor it) and a potential crackdown on speculation in the oil-futures market.
Coincidentally, Senate Majority Leader Harry Reid (D-NV), previously dismissive of domestic drilling proposals, opened his Tuesday presser with this: “Let’s begin the discussion here by saying, Democrats support domestic production.â€Â Having held the line against proposals that would be at odds with positions held by putative Democratic presidential nominee Barack Obama, Reid looks to be settling for barring offshore oil discoveries from export, which would be at odds with putative GOP nominee John McCain’s past position.
While a relaxation of restrictions on domestic and offshore drilling would be welcome, the emphasis on “incentives for alternate fuels” sounds quite a bit like more subsidies for Big Ethanol. That might be fine for Obama’s big donors, but not so fine for food prices or those concerned about greenhouse gases.
If Congress looks more broadly at energy alternatives, I would note (as someone whose family did pretty well by T. Boone Pickens’s Mesa partnerships back in the day) that the Pickens Plan of wind and natural gas does seem more tailored to Pickens’s pre-existing commercial interests (natural gas, wind) and political perceptions (about peak oil and opposition to nuclear power) than to what is currently feasible from an engineering perspective.
For example, The Register recently summarized a new article for the journal Energy Policy, examining the practicality of building a large, 25+ gigawatt UK wind farm. It turns out that even as part of a European “supergrid,” output would be worst in the dead of winter – sometimes less than zero — and for long enough periods that “pumped storage” would be insufficient to cover the dead periods. The only currently feasible backup system would be a substantial increase in gas turbines.  These turbines would suffer much more wear and tear than current turbines, due to surges in wind output, jacking up maintenance and redundancy costs. The likely result wuld be a system that both costs more and emits more carbon than is generally assumed, turning into a gas system with wind used to reduce the amount of gas actually burned in the plants.
I would not be shocked to discover that T. Boone Pickens sees a similar turbine system in the US running on the same natural gas that he wants everyone to use in our automobiles.
Finally, as there are always new visitors and people new to blogs or even the Internet, when the topic turns to energy alternatives, I tend to recommend that people read some classic Steven Den Beste. Although he (understandably) no longer goes near the subject, his posts on energy independence and alternative energy, the fundamental problem of scaling alternative energy sources, and efficiency gains from technology changes, and the posts linked to them, provide a useful background from which to conclude that the most — and perhaps only — currently feasible solution is to go heavily nuclear. The obstacles to nuclear power are the current laws of politics, which can be changed more readily than the laws of physics.
“Democrats support domestic production.†.. but .. but .. oil makes you sick Senator.
You have to admire Harry Reid. He manages to stand erect without a spine!
I’m sure that Bob Dole think Bob Dole did a better job as Majority Leader of the Senate than the hapless Senator Reid, the poster boy for inept government.
711ty–
LOTS of Viagra.
The war on high energy prices is lost.
So far using the “Three days of the Condor” yardstick, we’re up to…
… from here it only gets worse Senator …
… you can wait till it gets cold in the fall and they have to fill the oil tanks and turn on their natural gas heat, just before the Novemeber elections, but with that 9 percent approval rating, I’d suggest “any and all means” short of war.
711ty–
LOTS of Viagra.
Can’t that cause permanent priapism?
#7 Only if you have the appropriate organ.
The liberal Dems for 40 years have stopped drilling, stopped coal and natural gas exploration, stopped nuclear energy and kow towed to the radical socialist enviros who hate capitalism. Boehner and the Pubs should , along with John, go on a full court press showing the voters every stop that Dems have used to prevent any new energy openings over those years. The socialist liberals would have us go back to the 19th century and forget that oil is the engine of democracy and capitalism.At least until we really do get an alternative which will not be for 50 years!
I guess that “we can’t drill out way out of this problem” schtick, peddled by Reid, Pelosi and O! got old pretty fast.
Suddenly they are “leading” where even a high school sophmore with one semester of economics can recognize… there are only two ways the price of oil will go down – decrease demand and/or increase supply. Period.
And exactly where will those futures prices go if/when the US inks serious policy for immediate domestic drilling – coastal, shale – plus commitment to bringing nuclear energy online with the goal of converting most of the country’s electrical production to nuclear?
Jimmy Carter’s sweater sure acted smug 30 years ago chastising Americans for their selfish energy consumption, but it didn’t have to contend with a modernized India and China.
Perhaps we could store that wind energy as public anger, eh, Karl?
Here’s what I want in an energy policy:
1. Freedom to sell and use any commuter vehicle that gets over 50mpg and doesn’t make a hazard to other vehicles. No more crash tests needed for this class of vehicle, just some assurance that it has the correct lights, brakes, steering, and simple stuff like that.
2. Emphasis on not wasting energy.
3. A government tax break for all stations and places that give tire air pressure checks and service for free. That will save fuel, even if it’s a boondoggle for the IRS.
4. Mandate that no group may ban solar panels, solar water heaters, or wind generators outright.
5. Plant a shitload of trees in urban areas. Fruits and nuts will come in handy.
6. Go ahead, let exploration happen in Alaska and the coasts. Won’t amount to jack shit, but it will shut some people up.
7. Lots of nuclear plants.
8. Lots of solar power.
9. Go for cleaner coal.
10. Fuck that ethanol shit. And you too, Senators from Corn.
11. Encourage the eating of dogs and cats. Fuck that PeTA crap and those Humane Society wastrels: there’s food for the taking, and some will eat it. Vegetarianism is a non-starter for too many, cows fart too much, and pigs shit too much, so lets just add one for reason to spay or neuter: you’re feeding China, beyotches!
12. Pigshit can fuel Bartertown.
13. Don’t know what Bartertown’s cars run on, but they probably get good mileage (recheck #1: it all fits in together somehow.)
You forgot the eating of vegans. You are what you eat!
Gee, it’s nice to know that if I want to influence my junior (asshat) Senator, I should look up his daughter’s My Space page and leave a few “love notes.” And here I was beginning to think it would require a “2 by 4” between the eyes.
Hey at least when Obama goes to Saudi Arabia to beg for oil we will know he REALLY means it when he holds hands with the royal family. Shit they could even pray together after.
Heh. I’ve been wondering when that shoe would drop.
Harry Reid can dress himself, find a toilet if the signs aren’t too obscure, and hit his mouth with a laden fork four tries out of five. The rest of his “thinking” is done by the casino owners and real-estate magnates in and around Clark County, with some (not much) input from the strip-mining interests in northern Nevada. If the lights go out on the Strip and California tags disappear from the Caesar’s Palace parking lot, the money to keep good ol’ Harry in the style to which he has become accustomed disappears. I reckon that while he was “listening to his constituents” during the recess, that point was made a couple of times.
There is, of course, no such group in California’s 8th District. This may be setting up for an interesting collision between the “leaders” of the House and Senate.
Regards,
Ric
Oh. Susan Collins is on the case. Thank God.
Just get on it!
Drill! Drill! Drill!
I was talking to one of my lefty friends last night, and he spent a half an hour trying to convince me that “we can’t drill our way out of this problem”.
It was cool, because I only had to repeat “That’s bullshit” about every two minutes. Not hard on the intellect at all. These peopole reallky believe that an increase in supply won’t bring prices down
If we drill and prices don’t go down, there will be many people assuming contact with our prison system.
More than any other issue currently facing our country today, this one, our energy policy, requires a wide ranging pragmatic solution.
Domestic Production: Oil, Coal and Natural Gas. Do not mess with tax incentives for exploration and R & D.
Nuclear, especially (eeeeevil) Plutonium Reactors that reuse their waste, with a goal of producing a majority of our electricity within a set time frame.
Wind as a stop gap in the right areas of the country (having been to Western ND, that would be a good place.)
Plenty O’ tax incentives to develop usefull and scaleable alternatives including a Manhatten Project style program to bang away at Fusion.
Conservation and Recycling.
Higher mileage and alternative fuel cars
Ease out of Biofuels and put the production back into, you know, FOOD!
Screw “pricing the sky” or carbon credits or anything else that makes money for the Goracle until we know for sure that carbon forcing really does heat the planet.
Be environmentally prudent but not manic!
In other words DO IT ALL AND DO IT NOW!
Is this possible? It requires a massive compromise agenda from both sides with the weight falling heavily on domestic energy production and lightly on AGW and more radicalized environmental policies.
Good luck with this spineless crew of legislatures. It may take a consumer revolt but when even Reid is starting to waver … maybe there is a chance.
“It may take a consumer revolt…”
We’re having a consumer revolt right now, BJ. I’ve said on these threads before and I’ll say it again. Gas prices have EVERYONE’S attention. If Congress continues dither or obstruct new drilling, there’s going to be some very nervous congresscritters come Nov. And if nothing is done soon, come Nov. 2010, it will be an incumbent rout in both houses.
Bullshit, kelly.
It’s just like the “approval” polls. They’ll spend the summer denying, delaying, and demagoguing, and in November they’ll all be re-elected in landslides, and nothing will be done.
Regards,
Ric
#7 Only if you have the appropriate organ.
He IS the appropriate organ.
5. Plant a shitload of trees in urban areas. Fruits and nuts will come in handy.
That is so gay!
Harry Reid is an “appropriate organ.”
Won’t the “shitload” of trees eventaully block the wind turbines and solar pannels?
Gasoline Demand (Million Barrels per Day) Gasoline Demand
Four-Week Averages…….. Year Ago | Week Ending…………… Year Ago
06/20/08 06/27/08 07/04/08 07/06/07 | 06/20/08 06/27/08 07/04/08 07/06/07
9.281… 9.338… 9.322… 9.597… | 9.334… 9.357… 9.347… 9.663
Demand: Demand is holding at a “normal” Fall consumption rate, rather than rising as it usually does in the Summer.
We’re importing about 300,000 bbls/day less too.
Days of Supply (number of days) more data
Most Recent…………………………………………… Year Ago
05/23/08 05/30/08 06/06/08 06/13/08 06/20/08 06/27/08 07/04/08 07/06/07
22.1…. 22.5…. 22.5…. 22.5…. 22.5…. 22.6…. 22.7…. 21.4
More Gasoline on hand now than this time last year.
http://tonto.eia.doe.gov/oog/info/twip/twip_gasoline.html
The Democrat Congress is so invested in make the “Bush economy” look bad that they began to believe their own tripe ..
Here’s a little reminder to congresspeople and bureaucrats:
Don’t mess with the markets in a market economy. They will slap you silly and make you look stupid(er).
This friendly reminder brought to you just in case you’ve thought about messing with the health-care market.
*sigh*
You’re probably right, Ric.
“[U.S.] demand for oil over the first five months of the year was off 2.5%* from last year.” â€â€American Petroleum Institute, June 18, 2008, Associated Press Online (*Translation: We are using approximately 525,000 fewer barrels of oil per day.)
“Iran has 15 [oil] supertankers idling in the Persian Gulf capable of storing more than 30 million barrels of crude.” â€â€Bloomberg, June 16, 2008
“Thunder Horse started pumping from a single well on Saturday…and on schedule to have the field online by yearend. Thunder Horse alone will increase overall U.S. oil and gas production by 3.6%. Add British Petroleum’s Atlantis platform that started up last year, and the boost grows to 6.4%.” â€â€Houston Chronicle, June 16, 2008
“Asian refiners cut West African crude oil imports in June. Asian imports will fall 36%* to 830,000 barrels a day this month from May’s 1.3 million barrels per day.” â€â€Bloomberg, June 17, 2008 (*Translation: Another 470,000 barrels a day of mostly light sweet crude rejected by the market.)
“Refiners across Asia said on Monday they were not likely to buy more Saudi crude at current prices, highlighting the kingdom’s challenge in attempting to contain soaring markets by promising extra barrels. The world’s top exporter is set to increase output to 9.7 million barrels per day in July. The extra 200,000 bpd, if confirmed, would come on top of the 300,000 bpd it promised to pump this month.” â€â€Livemint (part of the Wall Street Journal Digital Network), June 16, 2008 (That’s another 500,000 barrels of oil apparently not purchased.)
“Daily shipments of North Sea Brent crude…will rise 8.6% in July. Tankers are set to load 175,097 barrels a day of Brent crude next month, up from 161,300 barrels a day scheduled for June.” â€â€Bloomberg June 9, 2008
“‘[U.S.] Drivers Cut Back by 30 Billion Miles:’ Americans drove 22 billion fewer miles from November through April than during the same period in 2006-07, the biggest such drop since the Iranian revolution led to gasoline supply shortages in 1979-1980.” â€â€USA Today, June 22, 2008
“South Korea’s May Oil Consumption Falls on High Price” â€â€Bloomberg, June 20, 2008
“Faced with increasingly severe fuel shortages and the prospect of power failures during the summer air conditioning season, the Chinese government unexpectedly announced a sharp increase* late Thursday night in regulated prices for gasoline, diesel, and electricity.” â€â€The New York Times, June 20, 2008 (*Translation: Gasoline and diesel prices in China increased by 18% immediately to cool demand.)
Now, just for fun, let’s add up all of the excess oil on the market, resulting either from cutbacks in demand, as in the U.S., Asia, or Korea, or from surplus production from oil producers such as Saudi Arabia and in the Gulf of Mexico. Just in the articles I cited, it comes to 1,989,000 barrels of oil a day. That does not include the upcoming Saudi Khursaniyah field that will open in August with another 500,000 barrels per day in production. Some shortage, huh?
http://www.businessweek.com/lifestyle/content/jun2008/bw20080626_022098.htm
Demand is down. Supply is up.
RTO, your posts paint a vivid picture crossing conventional wisdom. In your opinion, why are we paying so much for gas these days? Why isn’t the price going down?
Because we aren’t paying for oil.
We are paying for Nancy Pelosi, Harry Reid, and their followers and apologists.
Regards,
Ric
So true. You’re really not paying the hooker for the sex, you’re paying for her to leave afterward.
Ric, I can’t believe they have the power to defy the capitalist law of supply and demand. There has to be more to it than that.
Kelly, love that truism!
Ours is no longer a robust economy looking to the future with great optimism and energy (no pun intended though found nevertheless). Woe is our everyday complaint. In consequence, sell the dollar, buy oil. Our politicians seem not to know how to get out of the way and allow this great engine of creativity and exchange the freedom to rev up and fly down the lane. Woe is our eternal complaint. Sell the dollar, buy oil. We apparently want our government to do more and more and yet more but do not want to pay for any of that more now. Deficit spending is our everyday condition. Sell the dollar, buy oil. Our future, they tell us, is doomed global warming run amok, utterly out of control. Doom they tell us, unless we end our economy now. End it now. Woe our complaint. Sell dollar, buy oil.
Worst of all, the thing is a comedy, it is to laugh. Sell the dollar, buy tickets.
Sdferr is right, but it goes a little differently.
Think of it as a world-wide InTrade betting that the U.S. Congress will do something stupid. Every time they actually do something stupid — which is every time they do anything — the likelihood of the next stupid action goes up, and so does the price.
Regards,
Ric
I am impressed by the fact that Susan Collins, who appears to be in pain whenever she speaks English, has deigned to come around to the prole’s position.
DRILL, MOFO! DRILL!
I wonder if the “down East” senator can understand that. I am not from her state, but I am always embarrassed that she is from New England.
Not to mention The Swimmer and Chris “waitress sandwich” Dodd.
Hmmmm…
Harry Reid has changed his position on domestic drilling?
I wonder if he is afraid of losing his seat?
This is not a man who I would enjoy sharing a beer with at the local bar. I have never hit anybody, but I don’t know if I could restrain myself when he started vomiting up his leftard malarkey.
Harry Reid is even stupider than the leftards wish Bush is (and they try mightily to pretend that Bush IS stupid)…
Sorry, blinks. Bush ain’t no dummy, much to your chagrin. If he is so stupid, how come he has kicked leftard ass in EVERY encounter he’s had with them?
DOH!…
#35 Ric, I would dearly love an InTrade contract that reads “Congress does something stupid”. It would open at about 98.
Why hasn’t the price of oil fallen even with decreased use? Many reasons. Most obvious is that there is lots of uncertainly, with much talk of peak oil and war and food prices and famine swirling about.
But most of the rise in oil prices is because of the fall in the value of the dollar. Congress is responsible for some of that mess, but I’d put most of it squarely on greedy Americans of all demographics who thought the good times would never end and actually believed that their net worth was was the credit card companies told them it was. I was like that for a long time, but I’ve since reformed myself from living on credit. Not much of this country, and certainly not the country itself, has followed suit (and I’m not going to portray myself as a poster child for responsibility, since I declared bankruptcy to get out from under my debt.) Should the country itself declare bankruptcy? Probably not, and with the direction the dollar is going, being in debt in today’s dollars might not be so onerous if inflation sets in. Sure, we won’t be able to get any new debt except at outrageous interest rates, but it might be necessary to have some pain if we’re to get under our IOUs.
There is also speculation driving up the price of oil, as commodities are more valuable than things such as groups of shady mortgages, banks that fund stuff in a market with little money to lend in an economy that is in a funk, internet companies that still haven’t figured out how to make money, car companies that aren’t necessarily going to be around in a few years, real estate that’s likely to be vastly overpriced, retail shops that aren’t having that great a time, and similar “sure things”.
RTO,
Great post. I am just confused about why prices are so high, because I do know that supply exceeds demand.
I don’t want to point at speculators, but I can’t see any other reason for prices to be so high.
I am far from an expert, but somewhere in the chain, we are getting screwed. I read all the time that speculators don’t have that much to do with it, but I have trouble believing that. I am becoming convinced that speculators are running in the Enron groove.
The market MUST collapse soon, but will it be soon enough?
I follow things a lot, and have basically seen that the speculators have been let off the hook.
Well, I for one, don’t believe it. OPEC has to sell at market prices, and, in reality, the oil companies don’t make a profit outside of the norm.
To me, that leaves the commodities traders as suspect #1.
I know a couple of traders, and their egos surpass their income (each of them makes over $200,000,000 a year). I have always wanted to be rich, but these people are disgusting in their greed. I am a conservative (for the most part), and even I am amazed at the greed of these greedy assholes. One of them used to advise the Bush I White House, and his kids were no more important to him than was his Ferarri.
Jeebus! I grew up with money, but my parents worked for everything they had. This guy is a DICK! Why would you have kids if you weren’t going to pay any attention to them, and then hire a nanny to raise them? That’s fucked up, as far as I’m concerned.
These (portrayed as right wing)idiots are giving the leftards the exact foothold that they need to stomp all over Capitalism. There are very few greedy fucks who are destroying our country, and I think they should be put into “shame rehab”. Living the good life is one thing, and a thing I strive for. Fucking your fellow citizens for your own pleasure is another. Doesn’t sound too right wing, does it? But these greedheads are screwing capitalism to the wall, and taking those of us who aren’t greedy monsters down the tubes with them. I don’t care what we do to help others, or how much compassion we have, these greedy pricks are destroying any good work that we do, and in the meantime, giving the leftards political RPGs. HOW MUCH DO YOU REALLY FUCKING NEED? ISN’T “VERY COMFORTABLE” ENOUGH FOR THESE GREEDY ASSHOLES?
No wonder corporations can’t pay a decent wage to their first tier employees. If I ever made $300,000,000, I would give about $290,000,000 of it back to the people that actually made the fucking money.
I really don’t have the facts to pursue this, but the commodities traders are the only ones left who haven’t been investigated thirty times.
Something stinks here, and it ain’t the oil companies.
But 100 people who make two or three hundred million dollars a year can have quite an effect on the idiots who represent us.
The traders need to be looked at. I think just about everything else has been ruled out. I may be wrong, but why don’t “our little pricks” in Congress take a look?
Is it because of donations? It is pretty tough to turn down someone who makes two hundred and fifty million dollars a year.
Once again. I really don’t know what is wrong here, but my nose tells me that the oil traders are emitting a singular stench.
And this is the only subject where I will break with conservatives, but it needs to be said.
A very few people’s greed is killing us. Think about it. I have no problem with making four or five million a year – not even ten million. I would LOVE to make that much.
But $250,000,000 to $300,000,000 a year?
How much does one really need?
And I hate to sound left wing, because I am not. My father was a big time business man (he built the Socony-Mobile building at 42nd and Lex, 666 Fifth Avenue, the MOMA addition, and much, much more).
He is probably rolling in his grave at the compensation that these greedy little twerps are getting, even if they drive the company nose first into the ground!
It just makes me nuts that the only way we have of controlling these people is shame, and the leftards have wiped shame off of the blackboard.
OK.
I think I have huffed and puffed enough about this.
This is just my pet peeve. These greedy little fucks are going to bring us all down. It’s too bad that the only tool we have is shame, when these pricks have obviously been taught to be beyond embarrassment – just like everybody else in government schools.
Rant, much?
jon,
Yeah. I wasn’t even thinkin g about the dollar, but I blame that on the Fed (with maybe some heat from the Bush administration). And it exacerbates all other financial problems.
Our Congress hs to be the STUPIDEST Congress in the history of this country. Ethanol? Hey! Cool! Let’s mandate that we burn our food in internal combustion engines! Smart! Smart! Smart!
In retrospect, Greenspan doesn’t quite look like the guru that he once did. But if the Fed keeps printing phony money, we are going to wind up with the same scrip that the CSA did.