Welcome to Saudi Albany? - NYTimes.com

Welcome to Saudi Albany? - NYTimes.com: "If there is an uneasy equilibrium, right now, between environmentally concerned citizens and pro-fracking industrial groups, what will the political balance be like in a decade? What pressures will be on state legislatures and regulators if the projections are true and the millions of workers in Pennsylvania, Ohio, West Virginia and maybe New York will owe their jobs to fracking. There will be trillions of dollars of new wealth. Will environmental and health concerns have any chance against that juggernaut?"

Some pretend that the producers should pay the full price of the fracking revolution  Consumers always pay the cost of goods and services. That's the way it should be in our economy. 

It's to everyone's benefit to keep these costs rational and consistent with environmental and health protection but not bloated by unnecessary constraints and huge new government bureaucracies.

Gas prices sink Obama’s ratings on economy; bring parity to race for White House - The Washington Post

Somewhere out there in the media cloud we'll read some speculation that high gas prices is a Republican plot from Big Oil interests designed to unseat TeamObama. Nasty speculators are obviously trying to orchestrate his defeat in this rabid election year.


Or, that Obama secretly likes high gas prices so that alternative energy zealots and environmentalists will be mollified and more subsidies can flow to the renewables industry to save the planet while more campaign contributions will flow to Obama's re-election coffers.
OTH, perhaps it's part of a normal economic cycle of supply and increasing world demand exacerbated by threats that the flow from Iran will be disrupted either by boycotts or military actions.


Ahhhh...the politics of economics, a never ending clash of campaign reality with the dismal science and fodder for pundits.

"Disapproval of President Obama’s handling of the economy is heading higher — alongside gasoline prices — as a record number of Americans now give the president “strongly” negative reviews on the 2012 presidential campaign’s most important issue, according to a new Washington Post-ABC News poll.
Increasingly pessimistic views of Obama’s performance on the economy — and on the federal budget deficit — come despite a steadily brightening employment picture and other signs of economic improvement, and they highlight the political sensitivity of rising gas prices."

U.S. Energy Policy Sen. Leahy Correspondence

March 11, 2011

Dear Sen. Leahy,

Thanks for keeping me informed about your Senate votes and views on energy policy.

I respectfully disagree with your anti-fossil fuel stance. It's abundantly clear that oil, gas and coal will remain the primary energy sources in this country in our children's and grandchildren's lifetimes.

Advocating for more costly renewables that, if implemented with today's expensive and relatively inefficient technologies, will raise the energy bill for Vermont and the nation is an unsound trade-off while we seek an economic recovery. In my view, the promise of 'green jobs' is more political rhetoric than reality.

We have abundant supplies of fossil fuels on this continent and to deny their use is not in the best interests of this nation. The real technological advances have been in the oil and gas industries which accounts for the recent dramatic increase in domestic oil and natural gas production.  In the US, the oil and gas extraction sector grew at a rate of 4.5 per cent in 2011 compared to an overall GDP growth rate of 1.7 per cent. With a multiplier effect of ~3:1, that means this sector created 150,000 jobs. The sector’s highly skilled workforce is also well-paid compared to other sectors. That's a good thing but your policies would slow down that growth.

If you advocate that renewables will positively affect climate change by reducing carbon dioxide emissions, then please let us know what the average global temperature should be, how much it will cost the world to get there, and what is our 'fair share.' Otherwise, you're simply whistling in the wind apparently for political rather than practical reasons.

If you're truly concerned about reducing CO2 emissions, we should build more nuclear power plants and you should persuade Sen. Reid that Yucca Mountain is a necessary repository for wastes. But an even better solution is recycling used nuclear materials where France has shown the way.

So, to sum up. Your views diverge from mine on energy policy and it's time we stop throwing subsidy dollars around rather than encouraging investments in a sound energy infrastructure, including the Keystone pipeline project.

Where we do agree is that efficiency has the best near term pay-off to reduce the nation's energy bill.

Respectfully,

David Usher

On Fri, Mar 9, 2012 at 17:08, Senator Leahy  wrote:

Dear Mr. Usher: Because of your interest in the debate on national energy policy and the proposed Keystone XL pipeline to carry oil refined from dirty tar sands in Canada, I thought you would want to know of the latest developments on Capitol Hill.  Yesterday the Senate defeated two Keystone-related amendments to the bill to reauthorize federal highway system investments, the Moving Ahead for Progress in the 21st Century Act of 2011.  These amendments – misleadingly described by their proponents as a remedy to the current run-up of fuel prices -- would have short-circuited the review and approval process to fast-track the Keystone XL pipeline.  Both would have halted any further environmental impact studies, despite the fact that the route around a critical aquifer in Nebraska has yet to be identified.  I voted against both of these amendments, and I am glad to be able to report that both of them failed.  Instead of focusing on the short-term jobs from the Keystone XL pipeline, we should be investing in sustainable energy sources that create long-term jobs in the emerging renewable energy economy in areas like manufacturing, transmission, research and development.  For our national security, the health of our environment, our family budgets and the strong economy we want and need, we must reduce our dependence not only on foreign oil, but on all fossil fuels.  For decades we have been putting too many eggs in the fossil fuels energy basket, to our detriment.  At a time when domestic oil production is at its highest in almost a decade and foreign oil imports are at their lowest in 16 years, it is clear that speculation and world markets are driving up the price of oil.  We must forge and implement energy solutions and policies that reduce our reliance on fossil fuels by increasing fuel efficiency, developing renewable energy sources and curbing abuses by speculators who are unnecessarily driving up oil prices for their own short-term profits.  The answer is not pipelines and more of the same flawed choices that sacrifice our health, our safety, our environment and our future economic vitality. Sincerely, PATRICK LEAHY United States Senator

BP abandons solar quest - MarketWatch First Take - MarketWatch

Smart business people make rational economic decisions. Kudos to BP. Meanwhile, politicians pander to the alternative energy proponents and spend our tax dollars to do it. A lump of coal for them this Christmas.

"...Despite all the negative fallout from its 2010 Gulf of Mexico oil spill, BP has had huge success developing deepwater oil fields around the world. This, combined with high oil prices, is the engine driving BP’s profits.
Bob Dudley, the current American-born CEO of London-based BP, is clearly taking the company back to its roots in the oil patch. And when sizing up China, vanishing government funding and a world apparently more alarmed about the economy than the environment, he’s found it hard to justify BP’s dabbling in solar power.
Some day the oil industry will have to revisit alternative energy in a big way. They all know it. But, just like in government, it’s easier to kick that can down the road for future generations to deal with.
But for the time being, old fashioned oil-field profits are just too good to get sidetracked by all that solar stuff. Besides, it will likely be many years before history shows whose vision was the right one -- Browne’s, Dudley’s or China’s..."

U.S.Now a Net Exporter of Oil-Based Fuels

[This story is behind the WSJ paywall, so access may be limited]

An interesting and potent development for the U.S., a net importer of refined oil-based products for more than 60 years. I wonder about the economics of this. We are still a huge importer of crude oil at 9 million barrels per day. Yet, after refining, we turn an increasingly larger portion of that into exported products like gasoline and diesel fuel.

Does it make economic sense to ship crude oil here and then turn around and ship refined products abroad? If the prices remain high for refined products, transportation costs must be of less consequence than previously with efficient and massive supertankers. The exports to developing economies must be priced high enough to turn a profit or companies would not do it . Intuitively it seems to make more sense to build and operate refineries closer to the source of the crude oil supplies and the customers for refined products, for maximum efficiency and profitability.

"U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years.
A combination of booming demand from emerging markets and faltering domestic activity means the U.S. is exporting more fuel than it imports, upending the historical norm.
According to data released by the U.S. Energy Information Administration on Tuesday, the U.S. sent abroad 753.4 million barrels of everything from gasoline to jet fuel in the first nine months of this year, while it imported 689.4 million barrels.
That the U.S. is shipping out more fuel than it brings in is significant because the nation has for decades been a voracious energy consumer. It took in huge quantities of not only crude oil from the Middle East but also refined fuels from Europe, Latin America and elsewhere to help run its factories and cars."
"As recently as 2005, the U.S. imported nearly 900 million barrels more of petroleum products than it exported. Since then the deficit has been steadily shrinking until finally disappearing last fall, and analysts say the country will not lose its "net exporter" tag anytime soon."

Obama Administration Delays Decision on Keystone XL Pipeline - NYTimes.com

TeamObama punts an important decision, seemingly for political reasons. Will the real leaders please stand up?

"“I support the State Department’s announcement today regarding the need to seek additional information about the Keystone XL pipeline proposal,” the president said in a statement. “Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood.”"

'via Blog this'

Exxon, U.S. Government Duel Over Huge Oil Find - WSJ.com

What a wonderful saga this will be in in the 2012 political campaign. TeamObama against 'big oil.' This will be tasty fodder for the talking heads in the coming months.

Here's the compromise: The Exxon part of the Julia field discovery becomes part of the Strategic Oil Reserve and TeamObama takes credit for the millions of tons of carbon dioxide sequestered that will mitigate global warming <grin>.

"The massive Gulf of Mexico discovery contains an estimated one billion barrels of recoverable oil, the company says. The Interior Department, which regulates offshore drilling, says Exxon's leases have expired and the company hasn't met the requirements for an extension. Exxon has sued to retain the leases.

The court battle is playing out at a time in which the Obama administration has made an issue of unused leases, which deprive the Treasury of valuable taxes. It also comes as regulators are being careful not to be seen as lax in their dealings with large energy companies in the wake of last year's BP PLC spill.

The stakes are high: Under federal law, the leases—and all the oil underneath—could revert to the government if Exxon doesn't win in court."

Gulf May Have Avoided Direst Predictions After Spill - NYTimes.com

Gulf May Have Avoided Direst Predictions After Spill - NYTimes.com

More opinion that the Gulf is recovering much better and faster from the BP mess than predicted when the well was still gushing oil. Nature has effective ways of repairing itself even when the situation is overblown by the media and the scientists they often feature who hold extreme opinions.

"...Separately, scientists are arguing heatedly about how fast a large plume of dispersed oil more than a half-mile below the surface of the gulf is breaking down and how great a threat it poses to sea life.

Yet as the weeks pass, evidence is increasing that through a combination of luck (a fortunate shift in ocean currents that kept much of the oil away from shore) and ecological circumstance (the relatively warm waters that increased the breakdown rate of the oil), the gulf region appears to have escaped the direst predictions of the spring.

While its findings were disputed by some, the National Oceanic and Atmospheric Administration reported several weeks ago that the oil was breaking down and dispersing rapidly, probably limiting future damage from the spill.

And preliminary reports from scientists studying the effects on marshes, wildlife and the gulf itself suggest that the damage already done by the spill may also be significantly less than was feared — less, in fact, than the destruction from the much smaller Exxon Valdez spill in Alaska in 1989..."

Bacteria are eating the oil plume in the Gulf - SmartPlanet

Bacteria are eating the oil plume in the Gulf - SmartPlanet

More good news from the Gulf of Mexico. The oil plume is being eaten voraciously by bacteria according to Lawrence Livermore National Laboratory. The catastrophe seems to have been avoided. Everyone should be pleased with this result...except many researchers depending on grants to measure the extent of the expected long-lived catastrophe.

What? Is the Catastophe in The Gulf Overblown?

The first inkling I heard of this possibility that the Gulf oil leak from Deepwater Horizon was that some oil spill cleanup workers would be laid off because there was no work for them. This Time story suggests that things are not nearly as bad as they have been made out to be by the catastrophe-driven TV talking heads and TeamObama.

They cite these reasons why things may not be as bad as we have been led to believe:

"...four basic reasons the initial eco-fears seem overblown.

First, the Deepwater oil, unlike the black glop from the Valdez, is unusually light and degradable, which is why the slick in the Gulf is dissolving surprisingly rapidly now that the gusher has been capped.

Second, the Gulf of Mexico, unlike Alaska's Prince William Sound, is very warm, which has helped bacteria break down the oil.

Third, heavy flows of Mississippi River water have helped keep the oil away from the coast, where it can do much more damage.

And finally, Mother Nature can be incredibly resilient."

Read more: http://www.time.com/time/nation/article/0,8599,2007202,00.html#ixzz0vAVI2mZX

Efforts to Stop the Leaking Oil in the Gulf of Mexico - Graphic - NYTimes.com

Efforts to Stop the Leaking Oil in the Gulf of Mexico - Graphic - NYTimes.com

A wonderful graphic from the NY Times describes in the detail this engineer loves the various blowout containment attempts leading up to the apparently successful containment of the oil leak from the Macondo Prospect well.

Considering the complex engineering and fabrication work in the background and the complicated logistics of managing this effort a mile underwater under the threat of the hurricane season and intense public criticism, BP deserves some appreciation for getting this done... finally.

The TV talking heads cannot possibly deliver this level of detailed reporting and most of the public could care less how they stopped the leak.

Many Will Make Money From the Gulf Disaster

With adversity there is always opportunity in a reasonably free global marketplace for energy and related services.

While you might not want to own BP stock or Transocean shares right now, this fellow offers some advice for investors about companies and sectors that may well benefit from the Gulf mess and the reasons why.

BP Oil Spill Analysis

The Gulf oil debacle provides not much to smile about, but this amusing video clip could only be done by Brits!

Vermont's Lone Congressman on Fox News

Vermont Congressman Welch's call for BP, (a worldwide company based in Great Britain) to eliminate stock dividends and stop advertising (assuming only in the U.S.) meets strong resistance from Neil Cavuto at Fox News.

Is this a typical political ploy by the politician, Welch, to attract attention or does he really believe that the U.S. Congress should be in control of decisions that are legitimately made by a worldwide company's board of directors?

Watch the video and see if you believe that Welch's arguments are economically or legally valid. Cavuto may be baiting Welch, but Welch's arguments seem feeble.

America's Unrealistic Expectations of Government

BP Says 'Top Kill' Failed to Stop Gulf Leak - NYTimes.com

America's frustration increases as we watch the live video feed of petroleum gushing into the Gulf of Mexico. Meanwhile, journalists and talking heads play politics around TeamObama's leadership as we are deluged with the notion, born of frustration, that the government should be able to fix this and (and every other conceivable ill).

This excerpt from today's NY Times is but one example of the pervasive and corrosive belief that the government is the answer to all our problems.

"...The latest failure will undoubtedly put more pressure — both politically and from the public — on the Obama administration to take some sort of action, perhaps taking control of the repair effort completely from BP..."

This ill-conceived notion surfaces because people have been led to believe that government can solve all our problems. I believe this belief springs from a cultural 'victim mentality' often fostered by the entrenched political and bureaucratic class inside the Beltway and echoed by the media.

Unfortunately, in recent years the Federal government has become so large and pervasive from excessive spending that we have come to expect it to solve all our woes. This impossible dream if not shattered with an occasional dose of reality could lead to virtual bankruptcy because "Washington must borrow 43 cents of every dollar it spends" (Kathleen Parker in today's Burlington Free Press).

This unrealistic 'fix-it' expectation is on display in the BP Gulf catastrophe. Rational actions should not be spawned from frustration. We simply cannot continue to believe that government has unlimited capacity. BP and the oil industry must fix this. The Federal government has no expertise or capacity to stop this gusher. BP and its engineering partners, as well other companies with undersea deep drilling experience are the ones to stop the flow of oil.

'Federalizing the effort' would be a huge mistake. Moreover, Obama should not be held responsible for something the government cannot fix.

But Peggy Noonan on May 29 in WSJ has this to say:

"Mr. Obama himself, when running for president, made much of Bush administration distraction and detachment during Katrina. Now the Republican Party will, understandably, go to town on Mr. Obama's having gone before this week only once to the gulf, and the fund-raiser in San Francisco that seemed to take precedence, and the EPA chief who decided to cancel a New York fund-raiser only after the press reported that she planned to attend.

But Republicans should beware, and even mute their mischief. We're in the middle of an actual disaster. When they win back the presidency, they'll probably get the big California earthquake. And they'll probably blow it. Because, ironically enough, of a hard core of truth within their own philosophy: When you ask a government far away in Washington to handle everything, it will handle nothing well."

Horizon Oil Rig Explosion

Here are some pictures of the Horizon oil rig ...what it looked like when it was new and during the fires following the explosion earlier in April. What a mess! Don't know where these originated, but they have been floating around the web since the explosion.

Exxon Makes the Case for Oil

At Exxon, Making the Case for Oil - NYTimes.com:

This story about Exxon, the world's largest company, is instructive. Like it or not and mostly not...at least in Vermont... petroleum and coal hydrocarbons will be the dominant energy source in the world in 2030. It's difficult to argue with an industry and the vast infrastructure investment required to fuel the world's economies.

While 'green' has many adherents and will attract significant investment, people severely underestimate the transition period from hydrocarbons to something else. Policy makers, please understand this! It's not to say alternative energy sources should not be pursued and developed, but let's be realistic about their impact.

"According to Exxon’s own outlook, global oil demand is set to reach 116 million barrels a day by 2030, up sharply from 86 million barrels a day today.

Meanwhile, renewable fuels, like solar, wind and biofuels, will grow at a brisk pace but they will account for just 2 percent of the world’s energy supplies by then, according to Exxon, while oil, gas and coal will represent 80 percent of global energy needs by 2030.

“For the foreseeable future — and in my horizon that is to the middle of the century — the world will continue to rely dominantly on hydrocarbons to fuel its economy,” Mr. Tillerson [Exxon CEO] says."

Average gasoline prices fall below $2.20 a gallon - MarketWatch

Average gasoline prices fall below $2.20 a gallon - MarketWatch

Vermont's prices, at least in Chittenden County, are in the $2.40 range. What gives? Gouging? Where's the outcry?

IEA doesn't see peak oil by 2030 but warns of under-investment - MarketWatch

IEA doesn't see peak oil by 2030 but warns of under-investment - MarketWatch:

The debate about U.S. petroleum and the argument that we should use less (to save the planet?) often rages around the notion of 'peak oil.' Yet few truly understand the term. The Wikipedia discussion is a useful read ("It is important to note that peak oil is not about running out of oil, but the peaking and subsequent decline of the production rate of oil.")

If 'peak oil' means that point in the future when the rate of production, i.e., pumping it out of the ground, in barrels/day, is consistently less this year than last, then that says nothing about the cost of production, thus the price of the product. With this definition, peak oil may occur when the price is too high, certainly not that the world reserves are diminished.

If peak oil means the amount consumed this year is less than last year on a consistent basis, that may be affected by a host of other factors including world government policies around taxation, support for alternative sources of fuel, etc.

The discussion is fascinating, but the real issue is price, not reserves, for energy usage.

If governments wish to apply a 'tax' to carbon fuels, the tax should be applied at the consumer level, not via some obscure cap-and-trade scheme that seems to be the policy du jour. By applying a carbon tax at the consumer level, we have transparency that taxes are being applied, thus we (theoretically) have a vote in how those tax dollars will be spent and applied to energy.

The counter argument is that cap-and-trade allows markets to work. But I submit that cap and trade will have a large component of 'financial engineering' not unlike what we are going through with the manipulation of the mortgage market. I believe these same risks are present in cap and trade because the amounts of money in play are likely to be enormous and that fact alone attracts the n'eer-do-wells of finance.







"http://www.energybulletin.net/node/39308"

Vermonters Paying Too Much for Gasoline

Vermonters are paying more for gasoline than all but three states, Alsaka, Hawaii, and Schwarzennegers's Caleefornia. Why is that? Seems very strange to me.

A friend who owns a gas station tells me that no one in the area wants to be the first to cut prices because they are trying to make up for claimed losses in sales volume when prices spiked a few months ago.

Seems like price gouging to me!!

http://www.fuelgaugereport.com/sbsavg.asp