Energy Musings

I'm not advocating cheap oil. Price signals are the best stimulus for change and we will gradually move away from our reliance on traditional petroleum for transportation. But we shouldn't underestimate the time it will take to change the transportation fuel infrastructure.For example, people are experimenting with hydrogen powered cars but the delivery and storage problems are BIG. The answer for transportation will be a mix of fuel/energy sources, but petroleum will be the biggest component by far throughout my lifetime.

Today, energy sources are not wholly interchangeable. Major reworking of our infrastructure, culture and economy will be necessary for that to happen. For example, electricity from 'clean' coal is not a direct substitute for petroleum until electric cars become far more widespread and they can be charged when and where needed. We'll get far quicker petroleum savings from millions of cars that get 40-50 mpg. Europe does it now. We can and should, too. We need far more low-sulfur diesel fueled autos.

Too many people believe that wind and solar are the answer to our electricity needs when 'clean' coal and nuclear are the only viable sources to meet baseload electricity demand which will increase under my scenario. I'll bet you my fuel cell powered wheelchair that wind and solar combined will contribute less than 5% of our total energy/fuel use by 2040!

I believe we can conserve and become more efficient in things that use all forms of energy by ~15% in the near term. However, despite our best efficiency efforts, demand will continue to grow as population increases in an electronic age.

I certainly agree that we would be better off ensuring our energy future than fighting in Iraq, but if "it's all about oil" as many contend, the Middle East will be critical to our energy supply for a long, long time. If we should not be there militarily, how would we ensure that supply continues?

My point is we must wean ourselves off Middle East, and probably African oil, too, for transportation needs, but that will not happen quickly despite our best efforts.

American Energy Policy, Asleep at the Spigot - NYTimes.com

American Energy Policy, Asleep at the Spigot - NYTimes.com:

This Times story is well worth a read for a summary of the forces at work that have brought us to $4.00+ gasoline prices and the collapse of the American airline and automobile industries. What isn't clear is the future solutions and when they will arrive, if ever.

Given the mpg attainment of autos is Europe ( We were in Italy recently and had rented a diesel powered car that got 35-40 mpg with four people and their luggage.), there is no reason that American manufacturers can do the same. Given the sudden collapse in consumer demand for gas guzzlers, they will be forced to deliver vehicles with better fuel efficiency or cede the market for automobiles to Asia and European manufacturers. Can they quickly turn their production capacity? Probably, but it will take 3-4 years, I think.

While blame for this crisis is flowing freely, we simply must increase petroleum supply while at the same time slow demand for petroleum as a transportation fuel. There's no other practical alternative in the next few years that I can see. Alternative sources of transportation fuel, attractive though they may be, simply cannot take up the slack at the scale needed.

Fuel from food grains is a very bad idea, as we are now coming to realize.

"Congress, meanwhile, in its bid to explain the run-up in fuel prices, is examining the role of speculation and the increased flow of investor money into commodities. Most energy economists emphasize the fundamental issue of supply and demand, rather than market manipulation, but financial factors like the weak dollar are also exacerbating the situation. Stephen P. A. Brown, director of energy economics and microeconomic policy analysis at the Federal Reserve Bank of Dallas, estimates that a little more than 20 percent of the price of oil today can be attributed to the dollar’s fall against the euro and other currencies.

Another financial factor behind the price rise that hasn’t been talked about much on Capitol Hill or elsewhere is reduced hedging by oil companies on futures markets, says Larry Goldstein, a longtime energy analyst. In the past, crude producers would offer buyers a portion of their energy output in future years in order to protect themselves if prices pulled back. But energy companies got burned as prices kept rising during the last two years and have since cut back on selling untapped production — forcing prices for energy futures even higher.

Now, the prospect of a perpetual climb in oil prices has become part of market psychology, which is notoriously hard to change. William H. Brown III, a former Wall Street energy analyst who now consults for hedge funds and financial institutions, says investors have become convinced that the White House and Congress are unlikely to do anything dramatic to bring down prices."

"...

Others say that although the push to blame market speculators rather than discuss economic realities is likely to intensify on Capitol Hill as the presidential election draws near, they believe that what the world is confronting is a momentous shift in energy supply and demand.

“Speculation and manipulation are two different things,” says Mr. O’Reilly of Chevron. “Most of where we are is because of fundamentals and concern about the future.”

Obama Fuels Debate on Iraq Pullout With Remarks - NYTimes.com

Obama Fuels Debate on Iraq Pullout With Remarks - NYTimes.com

It is almost comical, but sad, that the Times reporter goes to great lengths trying to nuance what is clearly becoming another Obama flip-flop, this time on the Iraq war. While campaigning for the Democratic nomination he was "the" anti-war candidate. End the war and bring the troops home in 16 months was the mantra when it suited him politically. He was obviously pandering to people. Perhaps his nickname should be the 'Pandering Flip-Flopper.'

The Democrats, including Obama, have consistently refused to acknowledge that significant progress has been made in Iraq by our military (for our troops and their leaders I am thankful) and the 'surge' strategy by any measure must be judged successful. But the Democrats are invested in defeat, it seems, because that suits their political agenda. How is it that any thinking voter cannot see this obvious political pandering by Obama. Change is his mantra, but flip-flop is his demonstrated style.

Even the Times editorial writers are not happy with the Pandering Flip-Flopper. Today they had this to say:

We are not shocked when a candidate moves to the center for the general election. But Mr. Obama’s shifts are striking because he was the candidate who proposed to change the face of politics, the man of passionate convictions who did not play old political games.

Another story in the Times describes his flip-flop on the FISA surveillance issue. He now suppoerts the proposed FISA bill including a provision that would grant telecom companies immunity for their role in post-9/11 surveillance activities. I support immunity, but thousands of his supporters do not and are unhappy with Obama's flip-flop on that issue, too. Character matters!

I have said that I am not satisfied with the choices we are presented for Presidential candidates this year. But of the two, Obama is the one I would see as worse for our country. The ability to inspire via syrupy rhetoric is important, but I prefer substance and character. He, unlike McCain, has shown me neither.

New FISA Bill

Why has the liberal opposition gone almost silent on the new FISA bill? Does no vocal opposition mean they have changed their views on the seriousness of the terrorist threat facing this country or is the silence merely a political ploy to not be seen as soft on terrorists? Or does the proposal contain some requirements and procedures that would render it toothless against terrorists?

Let's hear from Leahy, Sanders and Welch if they support it or oppose it and why!

Senator Leahy's statement is here. He opposes the new bill.

Senator Sanders has this to say:

Wiretap Law “I happen to believe that with strong law enforcement, with a strong and effective judiciary, with a Congress working diligently, we can be vigorous and successful in protecting the American people against terrorism and we can do it in a way that does not undermine the constitutional rights which people have fought for hundreds of years to protect--the Constitution, which today remains one of the greatest documents ever written in the history of humanity,” Sanders told colleague during debate on House-passed bill that also would gave telephone companies immunity from about 40 pending lawsuits over their role in a Bush administration surveillance program instituted after the terrorist attacks of Sept. 11, 2001. “If we grant them retroactive immunity, what it really says to future presidents is, ‘I am the law because I'm the president and I will tell you what you can do and because I tell you what to do or ask you what to do that is, by definition, legal.’ “That is a very bad precedent,” Sanders continued.

I surmise he opposes the new law.

Representative Welch also opposes the new FISA law. His statement is here.

They all sound the same horn of 'accountability.' This reads to me as not much more than an anti-Bush political statement. None of them provide any insight into what the new law would actually do to change what they oppose. Instead they all want to see the telecom companies dragged into court and pay $millions, if not $billions, all because the companies did what the President asked them to do.

It's clear they are most interested in Bush-bashing while wrapping themselves in the mantle of protecting freedoms. My freedoms have not been infringed. I prefer to see our terrorist enemies and their collaborators stopped. Surveillance is a tool to do that. Why should I be afraid if I'm not a terrorist or a sympathizer?

Lock and Load - Editorial - NYTimes.com

Editorial - Lock and Load - NYTimes.com

Predictably, the New York Times whines about the Supreme Court's decision yesterday affirming Americans' prsonal right to keep and bear arms. The Times would have you believe that guns are the problem rather than the people who misuse them. It's all but certain the Times would sponsor confiscation of firearms. Guns don't kill people, people do that.

The Supreme Court was right to affirm the Second Amendment, albeit the left wing of the court would reinterpret the Constitution.

Meanwhile, over at the Wall Street Journal, they had this to say:

"Justice Scalia shreds the collective interpretation as a matter of both common law and Constitutional history. He writes that the Founders, as well as nearly all Constitutional scholars over the decades, believed in the individual right. Many Supreme Court opinions invoke the Founders, but this one is refreshing in its resort to first American principles and its affirmation of a basic liberty. It's not too much to say that Heller is every bit as important to the Second Amendment as Near v. Minnesota (prior restraint) or N.Y. Times v. Sullivan (libel) are to the First Amendment.

Which makes it all the more troubling that no less than four Justices were willing to explain this right away. These are the same four liberal Justices who routinely invoke the "right to privacy" – which is nowhere in the text of the Constitution – as a justification for asserting various social rights. Yet in his dissent, Justice John Paul Stevens argues that a right to bear arms that is plainly in the text adheres to an individual only if he is sanctioned by government."

Op-Ed Columnist - Mr. Bush, Lead or Leave - Op-Ed - NYTimes.com

Thomas Friedman - Mr. Bush, Lead or Leave - Op-Ed - NYTimes.com

Writing from his considerable frustration, Thomas Friedman makes it seem so simple. A realistic energy policy is far more complex than his simplistic rant suggests.

Here are some common sense elements (a work in progress) in no particular priority order of a realistic energy policy :

• Recognize that market prices will direct investment in new energy research and sources. If market prices for petroleum remain at current prices or higher, other alternatives, including hydrogen and electricity will emerge profitably.

• Government subsidies and sponsored research are a realistic means to change our economy's energy sources in the long term. Good research takes time and is expensive; subsidies are costly and risk distorting the marketplace.

• Don't assume that electricity is fungible, irrespective of price, with petroleum products for transportation or heating.

• Understand that oil will not soon disappear from our energy diet. Enormous and costly infrastructure is devoted to petroleum and natural gas that will not be abandoned quickly. Financial realities and the economic effects of a shift to alternate sources of energy must be seriously considered and absorbed with minimum disruption to our economy.

• Don't clutter the debate about energy with climate change. Energy efficiency is a much more realistic goal which will have the desirable side effect on greenhouse gas emissions. Recognize that energy efficiency measures have limits that will only mitigate demand when population grows.

• A healthy economy requires a healthy energy industry.

• Don't spend time on blaming bogeymen for the cost of energy. Public policy is better crafted on facts and realities. Plain talk is more productive that disparagement."Big Oil" as a derogatory term best left out of the discussion. The fact is we need energy companies with substantial resources to invest in our energy future. It's senseless to alienate companies that can help solve the problem of energy supply and costs in our economy. The same goes for "Windfall Profits" The emotional appeal of notion of the 'big guy desiring to screw the little guy' is the cheap fodder of opportunistic politicians which does not move the issue forward. The same is true of suggestions that the oil industry should be nationalized.

• Wind and solar generated electricity supplement but do do not substitute for reliable baseload sources such as hydro, nuclear and coal.

• "Energy independence" is unlikely within 50-100 years in a global economy. Nevertheless, we should optimize our own energy resources.

Op-Ed Columnist David Brooks- The Two Obamas - NYTimes.com

David Brooks nails the truth once more. Obama is a two-faced, not-to-be-trusted Chicago politician as Brooks aptly describes. But do those Americans who vote their emotions rather than their minds and facts care? I certainly hope so, but I doubt that this will matter to many of his rabid supporters.

Obama's blatant renouncing of public campaign funding reveals his true colors given his history on the issue. The Republicans should have a field day with this, but the media reaction is predictably tame.

With this flip-flop, Obama has shown clearly that he cannot be trusted. This issue should be in his face cointinually by the media, but they won't do it.

Op-Ed Columnist - The Two Obamas - Op-Ed - NYTimes.com

New Jobs in Vermont - All Government

This simple table published by the Vermont group Public Assets, should reveal to any observer, assuming they're not Socialists, what's wrong with Vermont's economy. Negative job growth in the private sector during the last 7 years. All new job growth (4,500) is in the government sector (state, federal and local).

Wonder why your taxes continue to rise? It's no secret.

Court Says Guantanamo Detainees Have Right to Challenge Detention - washingtonpost.com

The Supreme Court erred. Of course, true to form, the New York Times applauds the decision from their ivory tower. But Justice Scalia in opposing this bad decision has it right:

"America is at war with radical Islamists," Scalia wrote, adding that the decision "will almost certainly cause more Americans to be killed."

When will our country wake up to the fact that these terrorists are first and foremost sworn enemies of the United States who wish to see us and our way or life defeated. They are not people with civil rights like you and I under our Constitution. Why is that so difficult to grasp?

I hope this bad decision will not encourage our military to 'take no prisoners.'

Court Says Guantanamo Detainees Have Right to Challenge Detention - washingtonpost.com

Wonder Land - WSJ.com

Drill! Drill! Drill!

by Daniel Henniger

June 12, 2008; Page A15

Henniger's piece below exposes the truth about liberal America's policies. They have this 'castle in the sky' notion that the U.S. can become energy independent and not drill to produce more oil and gas at the same time. This is a foolish belief and a dangerous policy guaranteed to keep prices high for the foreseeable future as long as the major oil/gas suppliers choose not to increase supply and environmentalists oppose the construction of new U.S. refineries.

We should use the energy resources we have while at the same time developing new ones. Our primary motivation should be economic health and efficient use of energy so we can get more bang for the buck. Our present course is unsustainable and Congress may soon find that Americas will not stand for their do-nothingness. There is plenty of blame to go around, but unless we recognize this as a supply/demand issue rather than wasting time finding someone to blame, we will make little headway.

Charles de Gaulle once wrote off the nation of Brazil in six words: "Brazil is not a serious country." How much time is left before someone says the same of the United States?

One thing Brazil and the U.S. have in common is the price of oil: It is priced in dollars, and everyone in the world now knows what the price is. Another commonality is that each country has vast oil reserves in waters off their coastlines.

Wonder Land columnist Daniel Henninger says America needs to get serious about its oil and gas resources. (June 11)

Here we may draw a line in the waves between the serious and the unserious.

Brazil discovered only yesterday (November) that billions of barrels of oil sit in difficult water beneath a swath of the Santos Basin, 180 miles offshore from Rio de Janeiro and Sao Paulo. The U.S. has known for decades that at least 8.5 billion proven barrels of oil sit off its Pacific, Atlantic and Gulf coasts, with the Interior Department estimating 86 billion barrels of undiscovered oil resources.

When Brazil made this find last November, did its legislature announce that, for fear of oil spills hitting Rio's beaches or altering the climate, it would forgo exploiting these fields?

Of course it didn't. Guilherme Estrella, director of exploration and production for the Brazilian oil company Petrobras, said, "It's an extraordinary position for Brazil to be in." Indeed it is.

At this point in time, is there another country on the face of the earth that would possess the oil and gas reserves held by the United States and refuse to exploit them? Only technical incompetence, as in Mexico, would hold anyone back.

But not us. We won't drill.

California won't drill for the estimated 1.3 billion barrels of recoverable oil off its coast because of bad memories of the Santa Barbara oil spill – in 1969.

We won't drill for the estimated 5.6 billion to 16 billion barrels of oil in the moonscape known as the Arctic National Wildlife Refuge (ANWR) because of – the caribou.

In 1990, George H.W. Bush, calling himself "the environmental president," signed an order putting virtually all the U.S. outer continental shelf's oil and gas reserves in the deep freeze. Bill Clinton extended that lockup until 2013. A Clinton veto also threw away the key to ANWR's oil 13 years ago.

Our waters may hold 60 trillion untapped cubic feet of natural gas. As in Brazil, these are surely conservative estimates.

AP

While Brazilians proudly embrace Petrobras, yelling "We're Going to Be No. 1," the U.S.'s Democratic nominee for president, Barack Obama, promises to impose an "excess profits tax" on American oil producers.

We live in a world in which Russia's Vladimir Putin and Venezuela's Hugo Chávez use their vast oil and gas reserves as instruments of state power. Here, Nancy Pelosi and Harry Reid use their control of Congress to spend a week debating a "climate-change" bill. This they did fresh off their subsidized (and bipartisan) ethanol fiasco.

One may assume that Mr. Putin and the Chinese have noticed the policy obsessions of our political class. While other nations use their oil reserves to attain world status, we give ours up. Why shouldn't they conclude that, long term, these people can be taken? Nikita Khrushchev said, "We will bury you." Forget that. We'll do it ourselves.

Putin intimidates Ukraine, Georgia, the Baltic states and Poland with oil and gas cutoffs, while Chávez uses petrodollars to bankroll Colombian terrorists. Cuba plans to exploit its Caribbean oil fields within a long tee shot of the Florida Keys with help from India, Spain, Venezuela, Canada, Norway, Malaysia, even Vietnam. But America won't drill. Democratic Sen. Bill Nelson of Florida said just last month he's afraid of an oil spill. Katrina wrecked the oil rigs in the Gulf with no significant damage from leaking oil.

Some portion of the current $4-per-gallon gasoline may be attributable to the Federal Reserve's inflationary monetary policy or even speculators. But we can wave goodbye to the $1.25/gallon gasoline that in 1990 allowed a President Bush to airily lock away the nation's oil and gas jewels. This isn't your father's world of energy. New world powers are coming online fast, and they need energy. We need to get back in the game.

The goal shouldn't be "energy independence," a ridiculous notion in an economically integrated world. It's about admitting the need to strike a balance between the energy and security realities of the here-and-now and the potentialities of the future. Some of our best and brightest want to pursue alternative energy technologies, and they should be encouraged to do so, inside market disciplines. But let's at least stop pretending the rest of the world is going to play along with our environmentalist moralisms.

The Democrats' climate-change bill collapsed last week under the weight of brutal cost realities. It was a wake-up call. This is the year Americans joined the real world of energy costs. Now someone needs to explain to them why we – and we alone – are sitting on an ocean of energy but won't drill for it.

You'd think the "national security" nominee, John McCain, would get this. He's clueless – a don't-drill zombie. We may mark this down as the year the U.S. tired of being a serious country.

Wonder Land - WSJ.com