the Air Vent

Because the world needs another opinion

High gas prices have always been part of the plan

Posted by Jeff Id on March 14, 2012

For those with short memories.

Obama – “energy prices would necessarily skyrocket.”

While cap and trade auto-corruption scheme didn’t make the cut, gutting production doesn’t do terribly badly either. I recently heard the stat that the US used to produce 10 million barrels a day and now produces 6. I don’t have time to check the stat. With such massive reserves as we have, this is an insanity forced on us by the envirowhacko left.

We’re still using the oil, there can only be one reason why we don’t use our own. I really hope Americans start paying attention to people who would do something good for the country rather than the constant stupidity this albatross of a government represents. They are killing our future, one stupid policy at a time.

82 Responses to “High gas prices have always been part of the plan”

  1. Jeff, you’re getting better and better. Perhaps, if you don’t have time to check your sources, you should consider simply not blogging until you check them? Here’s US oil production by year for you:

    http://www.indexmundi.com/energy.aspx?country=us&product=oil&graph=production

    Please check when Obama became the president, and find that year on the graph. Does the shape of the graph from that year on tell you anything? Now, that’s some “plan” indeed.

  2. Don B said

    GS–
    Years are required from the start of a drilling project to the production of oil. The normal decline of aging oil fields was halted by the surge of drilling which began well before Obama took office.

  3. #2

    So? Where’s the “plan”, where’s the falling production? What does Obama even to do with the prices, why did he appear in this blog note? Apart from feeding the author’s ideological slant with rumours, that is?

  4. Jeff Condon said

    Grzegorz,

    Your graph confirms my post. So what?

  5. The data to resolve this would be distillate petroleum production rates, not gross unrefined production. It goes only to 2007. However, the comment of bringing an oil field on-line is correct; there is considerable lag involved. The other part would require knowing imports to check and make sure one is not double counting somewhere in the analysis. The economic changes to distillate price is not just immediate, it is anticipatory. This is where the gas and oil futures tend to help drive cost at the pump. There are several ways to look at the data. My favorite is that Obama stopped deep gulf drilling and paid Venezuela to drill for oil; and cancelled a pipeline so that Canadians could have more jobs and the Chinese the oil.

    More need not be said.

  6. CoRev said

    GS, Obama can’t blame Bush for the reduced oil production from potential. More importantly folks like you will credit Obama with any increase from potential on the first day of his administration. His policies on the XL pipeline and slow rolling the leases on Federal lands cost the US ~ 1.7MB to 2.0MB from potential.

    That ole rule of supply and demand has helped his administration claim that imports are down (due primarily to reduced demand from the recession), but his policies also impact supply from potential internal sources by ~30%. The price impacts for refined products are just now being felt as the economy heats up and supply are not allowed to reach potential.

    There are many more points to be made regarding the idiocy of these insane and harmful policies. Just keep coming on back, and maybe you, like Dr CHU, will learn enough to walk back prior policy positions.

  7. toto said

    The US is now a net exporter of petroleum products. I guess those evil enviro-djihadists need to work on their conspiracy skillz!

    I hear they’re using a bit more oil than they used to in Asia. Also people keep talking about this Iran thing. But never mind, the only possible reason for higher gas price must be some non-existing pipeline. Or so Mitt is telling us.

    Also:

    http://www.gasbuddy.com/gb_retail_price_chart.aspx?city1=USA%20Average&city3=&crude=y&tme=48&units=us

    Gas prices are *almost* as high as in 2008! Everybody panic!

  8. Jeff Condon said

    Toto,

    That first item is a nice link but it appears to be discussing refined oil, which is entirely different from oil from the ground.

    This comment though needs a kick in the nuts :”Gas prices are *almost* as high as in 2008! Everybody panic!” In 2008 gas prices were in large part responsible for the depth of the collapse. Lefties regularly underestimate the impact of cost on business and the result on peoples lifestyle.

  9. Michael Hart said

    While a might agree with Jeff on many things, I’m not sure that I would blame this administration more than any other recent ones [Though Obama has been a shameless political opportunist in this matter].
    Why was BP drilling for oil in the gulf of Mexico, and not Texas? Because that is where the economically recoverable oil is. It is expensive to drill under the ocean. I’m sure the oil companies would be much happier if they drill in Texas only, but much of that oil has gone. They also drill in the frozen North. Yes, the envirowhacko brigade make life harder, but oil recovery has been getting harder for a long time. If the price of oil is low, then hard-to-recover oil fields will not be developed, irrespective of other constraints. The oil companies and markets make estimates, years in advance, about future prices. Saudi Arabia has vast low cost reserves. Reserves that it can switch on and off very quickly. Saudi Arabia is the single most important player that determines the price of oil, not Greenpeace or the Oval Office.

    The Faustian bargain that US administrations make with Saudi Arabia behind closed doors is one that I do not enjoy thinking about. I’d prefer that US did not have to rely on raw material and energy sources from unstable parts of the world. Parts of the world where more US soldiers are likely to die in years to come. If the gas supply in the US can reduce dependence at a reasonable cost, then I’m for it. And much more and better nuclear power please.

  10. CoRev said

    Toto, environmental demands which result in reducing and/or delaying supply cause price increases. During the Bush administration post 2003 world demand for oil increased at very high levels, while idiot environmentalists caused supply to be limited. (But, but that was our goal, right environmentalists — See Obama’s quote above), but they seldom want to see the fuller impact.

    As Jeff points out, those high oil prices were partially the cause of the recession. Continued fight to allow crude production to reach potential has slowed economic recovery. That slowed economic recovery has negatively impacted many, many millions around the world.

    Those countries and states capable of oil and other raw resource for export are the least impacted by this recession. Whoda thunk it?

  11. stan said

    Obama pushed for cap and trade. Obama has reduced permits in the gulf. He has slowed down permitting on federal land. He continues to make the ANWR off limits. Read Bobby Jindal on Obama’s record.

    There is no doubt that lots of factors go into prices. But the factual record demonstrates conclusively that Obama has worked extremely hard to do what he can to make prices go up.

  12. Mike Mangan said

    “Obama will soon be personally responsible for preventing some 2 million barrels per day of possible North American crude oil production from reaching the American economy. The U.S. currently produces only about 6 million barrels of domestic crude oil, so that would be more than a 30 percent increase in domestic production.”

    http://www.nationalreview.com/corner/293008/how-obama-choking-us-oil-production-mario-loyola

    Compare and contrast the mass media coverage of gas prices in 2008 to today. If it was Bush’s fault then then Barry O. can catch hell now.

  13. Mike Mangan said

    Who benefits when oil prices are held artificially high by deliberately restricting supply?

  14. Kenneth Fritsch said

    The political problem for the Obama administration and its defenders is rather obvious in the latest dust up over high gasoline prices. Obama has obviously taken the course that those environmentalists on his left would want in restricting oil exploration and development on government land. He has also got it right that rising gasoline prices are a means to restricting the use of fossil fuel.

    Does that mean that Obama and even some of his eco defenders will stand by bravely and take whatever hits are required from the political immediacy and say: folks we have to look at this from the long term. No, not hardly, and, in fact, we have those on his left proudly pointing to increased fossil fuel production currently (even though that increased production comes from private lands and some of it from the eco wary, hydraulic fracturing process). Obama and his Energy Secretary, Chu, now say, counter to previous remarks, that higher gasoline prices are not desirable just now when we are concerned about a possible regression into another recession and one that might well spell defeat for their administration in the upcoming election.

    Think about how our politicians and their defenders react to the hard issues and look at them as matters of political expediency and then think long and hard how well these guys would perform attempting to carry out mitigations of AGW. In fairness, the weak kneed Republicans would probably not fare much better.

  15. omanuel said

    Hang in there, Jeff! There is no greater danger to society than this cancerous growth that grew out of sight for decades, at least from 1956, before surfacing as Climategate documents and emails in 2009.

    Hopefully I have learned how to use WordPress to show the deep roots of this problem on my abbreviated research profile.

    http://omanuel.wordpress.com/about/

  16. Lymond said

    #9 Why was BP drilling in the Gulf of Mexico and not Texas?

    Look up the Deepwater Royalty Reduction Act signed under Clinton. Bottom line, companies were encouraged to drill in the Gulf of Mexico.

    In 2008, the GAO estimated royalty relief in the 4 years between 1996 and 2000 alone to be between $21 and $53 billion.

  17. Jeff condon said

    The worst part about all of this is that mitigation is a fools errand. We WILL burn the coal and oil until something cheaper comes by. If the US manages to stop using oil, besides industrial suicide, we make it cheaper for other countries to use it and take over the industry. Essentially, the oil price becomes a wealth transfer from a free form of capitalist government to the non-functional socialist/communist governments of the world.

    Obama knows this, as does the socialist leaning environmental movement. You don’t have to be a rocket surgeon to figure it out.

  18. diogenes said

    Jeff – think about hollowing out….you can use your US reserves but what happens when they run out or get uneconomic at the stupidly low US levels of pricing? Why not use up the Saudi reserves…once they are gone, what else can Saudi contribute to the world? Meanwhile, the US still has oil reserves to tap. Just saying….

  19. Nathan said

    There’s very little cheap oil left. You need to learn about Energy Return On Energy Investment (EROI). It takes more energy (read cost) to produce each unit of energy.

    http://en.wikipedia.org/wiki/Energy_returned_on_energy_invested

    You also need to learn about the rate of new discovery.

    Both of these are to blame for your high prices.

    Sure you could open all sorts of areas to exploration, but they’ll take years to come on line. Even if Obama had opened every part of the US to exploration, none would be online yet. So your prices would be the same.

    For example Sugar Loaf Field discovered n 2007, could be the fourth largest field in the world… Still not producing.

    http://en.wikipedia.org/wiki/Sugar_Loaf_field

    But yes, I know your ideology doesn’t allow you to think objectively… Must be the fault of people you disagree with.

  20. Nathan said

    “Essentially, the oil price becomes a wealth transfer from a free form of capitalist government to the non-functional socialist/communist governments of the world.”

    Weirdly enough, most of the big oil producers are not particularly free democracies. And weirdly enough you are complaining that the policies of a freely elected president are to blame… WEIRD.

  21. Nathan said

    Wow and this field was discovere in 1981… Still not developed

    http://www.offshore-technology.com/projects/exxon_hebron/

  22. Jeff condon said

    Nathan, I think you are right, it is wierd that people would vote for this. Perhaps we should revert to the system where only those who pay net tax should be allowed to vote? Maybe only those who pay net tax and have an ID with their picture on it?

    Maybe only those who pay net tax and have an ID with their picture on it and their picture is not Donald Duck?

    Naw, that would be ducscrimination.

  23. kuhnkat said

    Nathan,

    you give us the same argument that was used against opening ANWR years ago. The oil won’t be availble immediately to affect prices so don’t do it. I think you know that ANWR is STILL not open and the oil is STILL not affecting the price, and so it goes!!

    The arguments over oil pumped are confused. Most of the new production has been on PRIVATE land. The Fed has NOT been leasing land for development. In Colorado, the largest shale oil formation known in the world is NOT being developed due to STATE gubmint blocking it. See this article?

    http://www.huffingtonpost.com/2012/03/12/oil-shale-development-colorado-hearing_n_1339161.html

    Shell has developed a method of extracting sweet light crude from this formation at about $50/bbl. It is being blocked due to the amount of water that will be required. The formation is somewhere between .5 and 1.5 TRILLION barrels. Would the large effects on the Colorado happen overnight? Of course not. The amount of water used could be controlled limiting production. Of course, that would be too sensible.

    I would also point out that both Florida and California have shown very shortsightedness in blocking drilling off their coasts. Here in my neck of the woods the amount of seepage from the ocean floor causes serious oil damage to beaches and animals at times. Drilling would actually decrease the pressure in the formations and reduce the seepage, yet, the enviros scream pollution. Yeah, right!!

    The Bakken is being developed on Private land. Most of the fracking for gas around the country is being done on PRIVATE land. Again, it is Obie’s admin that is not letting leases and is blocking development in any way possible. The EPA is currently trying to figure out how to declare Fracking an environmental hazard and allow the admin to selectively shut them down!!

    The US is actually reducing its fuel use with this downturn in the economy. Makes you wonder, with decreased demand how can we possibly be getting higher prices?? As mentioned above, the demand is there from India, China, and other areas. I should point out that Iran, China, Russia and a couple other countries are working on NOT using the US Dollar as the oil exchange. Part of the price you are seeing is the INFLATION due to this and other issues in the world exchange rates. You need to look at the prices of groceries and other goods. They are ALL going up!!!

    We are raping ourselves by electing morons who continue to give their buds our money and money they are borrowing that WE have to pay back!!!

  24. M. Simon said

    After reading Dark Alliance, I started to study the extraordinary moneymaking business that DOJ and agencies like HUD had built in enforcement that really only made sense if in fact the government was entirely complicit in narcotics trafficking and related mortgage and mortgage securities fraud.

    If you want to read more about how drug money took down the country you can read Financial Coup d’Etat. If you want the whole story you can start with the table of contents.

    Links at:

    http://classicalvalues.com/2012/03/wall-street-is-in-the-news/

    The above quoted material was written by a HUD Secretary (under Bush 1).

  25. M. Simon said

    BTW when I use my regular e-mail address the site says I have to long in. What is with that? Or maybe I don’t get it.

  26. M Simon said

    OK I logged in. All is well.

  27. M Simon said

    OK. I get it. Because R&D takes so long to produce products and so many research efforts are a waste we should quit wasting money on research.

  28. Nathan said

    Kuhnkat

    No, I didn’t make that argument. I’m not making any comment on whether we should explore for oil.

    What I am saying is that whatever Obama has done for oil exploration, it has had no effect on prices now. It may have some effect in 15 years time. Who knows. I don’t have any opinion on whether the US should explore for more oil, and I wouldn’t bother debating it here if I did.

    Jeff has made gross over simplifications in his post above, and blames ‘lefties’ and Obama for current oil prices. It’s a particularly shallow and ill-considered opinion.

    “The formation is somewhere between .5 and 1.5 TRILLION barrels.”
    Ok, but what would the RATE of production be, that is what is important, and when was production due to start? Most companies will contniue to develop the infrastructure to avoid delays. Has there been a delay?

    M Simon

    “Because R&D takes so long to produce products and so many research efforts are a waste we should quit wasting money on research.”

    This is not a suitable analogy. It doesn’t get progressively more expensive and difficult to make new research discoveries. You need to consider the EROI. So new oil discoveries progressively cost more to develop. That combined with demand increases is why oil prices go up.

    • kuhnkat said

      Nathan,

      you may a nice plea, but, you really need to include reality with your bits and pieces. When you claim that actions and proposed policies taken now will have no affect for years, you totally ignore the commercial system Oil is sold under. Speculation is a part of that system. when Obie continues wars in the ME and involves us in even more destabilizing oil producing countries the delivery of oil is affected NOW and the speculators jump in. When Obie shows that he will keep interfering in domestic production he again encourages the speculators. Since the prices are NOT being driven by domestic consumption you can’t ignore those issues as being major contributors.

      Now, consider that Obie was a Senator before becoming Prez. That means he had time to vote on issues that ARE impacting oil prices NOW outside of Speculators.

      http://www.ontheissues.org/Barack_Obama.htm

      Every issue he voted on supporting Gorebull Warming alarmism, gubmint handouts, and International stabiization issues have contributed to where we are NOW!! Not just his votes, but also his Bully Pulpit preaching to the masses gaining support for other Democrats and Republicans supporting those ignorant, destructive policies!!!

      Speculators, hedge funds, George Soros and fellow travellers.

      As KenM and probably others have pointed out, if Obie and the rest of the gubmint all got behind a policy of producing as much oil as possible including partnering with Canada and others, the prices would start dropping.

  29. steveta_uk said

    “Perhaps we should revert to the system where only those who pay net tax should be allowed to vote?”

    Perhaps a similar system where only corporations that pay net tax are allowed to lobby?

    http://oil-price.net/en/articles/How-Exxon-paid-zero-tazes-in-2009.php

  30. Jeff condon said

    “Jeff has made gross over simplifications in his post above, and blames ‘lefties’ and Obama for current oil prices. ”

    I think your complicated leftie mind Nathan has grossly oversimplified the problem. You have to be nuts to think that 3 years isn’t enough to make the futures market react. Obama doesn’t get a wash for his anti-oil policies, nor does he get a wash for the insane economic policy.

  31. page488 said

    I am so sick of lefties srceeching that exploration NOW is stupid because it would take X number of years to actually find and drill the oil.

    Seems logical to me that, given that fact, it’s imperative to explore NOW because the longer we wait, the longer it will take (their logic – actually solid, in this case).

    I didn’t run the little video of our fearless leader – seems I can’t stand the sound of his whiney voice.

    However, wheverever I want to know what Mr. Obama has to say in real time, I mute the TV and put on “closed captioning.”

    I don’t think I have had to hear his voice in months.

    Happy living with no electicity, y’all!; it will be coming!

  32. Jeff condon said

    steveta_uk ,

    That article is all mixed up about why a couple of very large companies are paying very low US tax. It notes all kinds of things like making a million one year and losing money the next being a net zero. This isn’t an unreasonable thing and is difficult to make work because if you make money one year and two years later lose money, the rule can’t be used. Decades ago I once paid 2X more tax one year than I took home the next.

    What is going on is that our government has created a system where companies can hold profits in overseas locations. Those overseas countries still tax the income at their corporate rate. Their usually crappy governments get the money. Their corporate rate is dramatically less than the US and that differential is the reason that companies don’t locate their businesses here. HongKong has a very favorable corporate tax, if this money is left in hongkong institutions, guys like panasonic, WalMart or Exxon can lower their net tax rate.

    Oddly enough, its the GE’s and Seimens who have been donating to the left to continue these destructive policies. In the rest of corporate America, small, mid and large business, the tax rate is very, very, very high. Someone has to transfer that 18% of GDP to the IRS. We take it out of our business and our educated population. If we tax things like cigarette to prevent people from using them, does it make sense to heavily tax the educated and well employed while not taxing those who don’t earn much at all? I think it only makes sense if you want votes of the undertaxed and underworked.

  33. Nathan said

    Jeff

    EROI…

    Bakken Shale was discovered in 1974… Started production in what, 2000? That’s a 26 year gap… Takes a long time to develop oil resources. And they normally have to wait for them to become economic…

    Time lag to develop oil fields… Look at the giant field in Brazil. Discovered in 2007 still not producing. Did that discovery do anything for oil futures?

    What you do, Jeff, is waffle…

    “You have to be nuts to think that 3 years isn’t enough to make the futures market react.”

    would be good if you actually had some sort of real example to show this… Why would Obama’s ‘atititude’, which from an outsiders perspective is not negative (Australia has far more stringent conditions on exploration), have any bearing on oil futures. Or rather more bearing than actual costs of production and increasing worlwide demand.

  34. Nathan said

    page488

    “I am so sick of lefties srceeching that exploration NOW is stupid because it would take X number of years to actually find and drill the oil.”

    Well, I didn’t say that. Did someone? Or did you imagine it?

    What was said is that decisions made by Obama regarding oil exploration over the last four years won’t have had any effect on the price of oil. Nor on how much has been produced over the last four years.

  35. Jeff condon said

    Another point I’ve been wanting to make is Michael Mann’s literally stupid belief that oil companies are funding climate skepticism. Even the slowest mind can grasp that climate science ‘mitigation’ efforts have driven up oil prices. Democrat forced limitation of supply drives up pricing. Oil companies aren’t selling less dollars worth, they are selling more. The only individuals harmed by the policy are the consumer and with the liberal controlled media not regularly telling liberals that they are paying more because of these policies, people don’t even get what is happening.

    Take Nathan, who isn’t stupid, he’s here telling us that I have oversimplified the matter because Obama couldn’t have harmed anything yet. Whether I agree about Obama or not, the leftist envirowhakcos have been forcing this kind of policy for decades. Source level CO2 mitigation has been a boon for profits – as long as it doesn’t become too severe. They are trying to maximize their profit curve by balancing the political system. The enviros think they are winning something, while never being satisfied. Oil usage remains high as coal grows, and costs “skyrocket” according to the Obama plan.

    It is no coincidence that Obama received the most campaign cash of any candidate through BP. I doubt it will be any different this year.

  36. Jeff condon said

    Nathan,

    Waffle?

    There are a lot of oil fields which could be developed quickly. Quickly is NOT required though. Only pursuit of reasonable policy. You are hiding behind the fact that all dollars look alike so you can maintain your leftist view of the world. The very concept that more oil is coming on line from things like Keystone, would be enough to reduce opec control – and costs. Ain’t my fault if you refuse to get it. Developing the Alaska field is a good example, but there are a lot of areas in the US mainland we aren’t allowed to touch.

    If America were free from the influence of environmentalists who force use of outside energy, it would do a lot more for our global influence and economic stability than simple pricing. By addressing the cash problems of our economy reasonably, the energy supply/demand curve would show a lot less volatility than we have seen in recent years as well.

    You are simply wrong.

  37. corev said

    Nathan said re futures markets and oil prices: “would be good if you actually had some sort of real example to show this…” Really? You are actually asking why oil prices are NOT immediately effected by supply? Then why do you think the leftist Dems are calling for release of oil from the strategic oil reserve? the last time it happened the threat of it lowered gas prices immediately.

    Diogenes also thinks the now 30+ year old policy of burning theirs before we burn our oil, some how reduces our reliance on foreign sources. Wasn’t the initial purpose of the DOE to accomplish this goal. How’s that worked out? We are one incident away from watching the oil markets shatter.

    Finally, Nathan, this is not Australia! Here, much of the exploration is done on privately held land land which includes the mineral rights. Those rights DO NOT belong to the crown. And, we should be thankful for that. Just look at the recent history of drilling and exploration on public lands

  38. Frank K. said

    I think basically Nathan is saying “Drill, Baby, Drill! But don’t blame Obama…”

    Well Obama will be leaving us in November, so the point is perhaps moot…

  39. Don B said

    Steve Goddard understands the Obama and Chu flip-flop.

    http://www.real-science.com/obama-skyrocketing-energy-prices

    Chu’s statement to the WSJ in September, 2008 that he was in favor of gasoline prices skyrocketing to European levels was no doubt an important reason Obama appointed him Secretary of Energy.

  40. corev said

    I am forever amazed by the warmist anti ACO2 arguments. Why are they so concerned over a mere 2.9% of the CO2 in the atmosphere? What is that? 2.9% of 4% of the atmosphere? And what is teh US, UK, Australian, Canadian share of that huge problem?

    Devastate industries, especially power and mining/drilling to prevent what part of that ole temp rise? The idiocy is just amazing.

  41. Frank K. said

    corev said
    March 15, 2012 at 9:23 am

    “Devastate industries, especially power and mining/drilling to prevent what part of that ole temp rise? The idiocy is just amazing.”

    CAGW climate “scientists” don’t mind devastating industries (and jobs and people’s lives), just as long as (1) their paycheck keeps coming in (+benefits), (2) their favorite organic yogurt and cracked-wheat bread shows up at their local supermarket, (3) their electricity, heat, and A/C all work in their comfortable government/academic offices and their expensive, high-tech, eco-friendly homes. Sadly, these people live in a fantasy utopia where money grows on trees and they are the smartest people who ever lived…

  42. Brian H said

    They are killing our future, one stupid policy at a time.

    Wrong. There’s a whole suite of co-ordinated stupid policies which feed on each other. It’s the classic Cloward-Piven “swarm” strategy.

  43. Tom B. said

    So, help me understand Obama’s plan. To correct the high price of gasoline now, we’re going to develop algae based energy sources to replace oil? Um, so how much will that cost for the average consumer compared to the price of a gallon of gas?

  44. page488 said

    RE: #34:

    Nathan said in #34, quoting me from # 31 where I had responded to a comment he made in #19::

    page488

    “’I am so sick of lefties srceeching that exploration NOW is stupid because it would take X number of years to actually find and drill the oil .”

    Well, I didn’t say that. Did someone? Or did you imagine it?

    What was said is that decisions made by Obama regarding oil exploration over the last four years won’t have had any effect on the price of oil. Nor on how much has been produced over the last four years.

    End of quote for #34.

    Whoaaa, Nathan.

    Let me quote you from your statement in #19:

    Sure you could open all sorts of areas to exploration, but they’ll take years to come on line. Even if Obama had opened every part of the US to exploration, none would be online yet. So your prices would be the same. (Emphasis mine)

    Now, Nathan – Just exactly what part of, “Sure you could open all sorts of areas to exploration, but they’ll take years to come on line,” did I fail to understand?

  45. Kenneth Fritsch said

    “Sure you could open all sorts of areas to exploration, but they’ll take years to come on line. Even if Obama had opened every part of the US to exploration, none would be online yet. So your prices would be the same.”

    This short/long sighted view of energy seems to be turned on and off when convenient by some of those discussing energy issues. Look far ahead for possible effects of AGW, but for fossil fuel development it appears to be: if it will not affect prices immediately do not bother. It does not seem to matter to Obama defenders that his administration shows no immediate concerns for developing sources of fossil fuel and yet we have an eco friendly President attempting to co-opt what came before him in telling everyone that will listen that we are now producing more of our own oil. Of course, part of the price of oil is determined by potential future supplies as Obama’s defenders on one hand claim in order to defend him from being responsible for higher gasoline prices, i.e. the world is running out of easily exploitable sources of oil. They then turn around and claim exploration and development will have no effects on pricing. Actually those prices would be even higher if the world economy was fully recovered from the recent severe recession.

    This kind of hypocrisy would be demonstrated daily in the MSM if it were used by climate skeptics. Unfortunately with the existing intelligentsia it is mostly ignored. When this happened under the Bush administration the MSM would not rise to defend him on the grounds that there was nothing he could do but rather pointed to the adverse political fallout that it produced. I find it ironic that those same political emotions (that I agree means they get wrong in that a sitting President has little immediate influence on prices) are now affecting Obama’s polling numbers in spite of the MSM defenses.

  46. Kenneth Fritsch said

    “What was said is that decisions made by Obama regarding oil exploration over the last four years won’t have had any effect on the price of oil. Nor on how much has been produced over the last four years.”

    So Nathan when Obama throws out the facts about current oil production in the US he is being at best devious when he implies that that oil production has something to do with what his administration has done. Based on your above statement the President’s implications must be very bothersome to you. Or perhaps you are able to somehow square all this where others might see a contradiction.

  47. Jeff

    I remember reading many years ago (20/30?) that America was going to deliberately cut its oil production and use cheap imported oil on the basis it wanted to conserve its own stocks until the price was higher and/or there were external threats to their overseas purchases. This seems a sensible and pragmatic policy but perhaps times have changed and using your own oil/shale gas in order to reduce prices would now be the most sensible strategic option.

    tonyb

  48. KenM said

    Actually, “if Obama had opened every part of the US to exploration”, the prices would tank. Immediately. It would take a long time for them to come back up, and while they were climbing back up the supply would be increasing so we’d land somewhere in the middle (which would be far lower than today’s prices). Or at least that’s what I speculate. ;)

  49. kuhnkat said

    Here is an article with US Oil production figures that probably are reasonable:

    http://www.chron.com/business/energy/article/N-American-oil-output-could-top-40-year-old-peak-2193837.php

  50. Be Green said

    Washington Post – http://goo.gl/Yci92

    With Obama’s reelection chances virtually a lock, this is the first step in a long term trend of higher gas prices. Weaning the nation off of fossil fuels won’t be pain-free.

  51. omanuel said

    “The Plan” – Domestication of humans to save the world (especially world leaders) from the danger of mutual nuclear annihilation – was adopted in 1971 by Henry Kissinger, Zhou En-Lai, Chairman Mao, Brezhnev and Nixon to Unite all Nations, conceal information about nuclear energy because:

    Hiroshima had been vaporized on 6 Aug 1945
    The Cuban Missile crisis occurred in Oct 1962

    1. Hydrogen is a solar waste product, discharged in the solar wind.
    2. The neutron-neutron interaction is repulsive, not attractive.
    3. The Sun is a benevolent force that sustains our lives.
    4. The AGW model of the Earth’s climate is flawed.
    5, The Bilderberg model of the Sun is wrong.
    6. CO2 is actually gaseous plant food.

    Henry Kissinger is the only one still alive who might offer a better explanation for the succeeding decades of government misinformation. http://omanuel.wordpress.com/about/

  52. kuhnkat said

    We have been talking about policies that could take years to actually deliver more oil. Here is an example of a change in policy/regulation that can deliver a REDUCTION in production immediately!!!

    http://junkscience.com/2012/03/15/epa-deadlines-for-emission-rules-would-stifle-new-fracking/#more-15925

    Includes a link to the API report.

  53. Greg F said

    Keep dreaming Be Green.

    http://articles.businessinsider.com/2011-03-19/markets/29992450_1_unemployment-rate-underemployment-rate-seasonal-adjustments

    People don’t vote based on distorted government numbers pushed by the media. They vote based on the reality of their personal lives.

  54. TimTheToolMan said

    Jeff writes “Oil companies aren’t selling less dollars worth, they are selling more. The only individuals harmed by the policy are the consumer ”

    Its not one company supplying oil and OPEC doesn’t control it all either. If it were possible to supply more then during periods of high prices, you’d expect production to increase to take advantage of that and yet despite these opportunities for profit, production has flatlined since 2005.

    Think a little wider than the US.

  55. The data is unlikely to support the assumption. As in most things related to politics – reality is usually the opposite of the conservative view.

    Data for US Field Production of Crude Oil.

    US Presidents and Political Party

    Not difficult to see that the the correlation that exists indicates Democratic Presidents are *more* likely to preside over increases in oil production.

  56. corev said

    Krauthammer said this: “Drill here and you stanch the hemorrhage. You keep those dollars within the U.S. economy, repatriating not just wealth but jobs and denying them to foreign unfriendlies. Drilling is the single most important thing we can do to spur growth at home while strengthening our hand abroad. ”

    In this article: http://www.washingtonpost.com/opinions/obamas-oil-flimflam/2012/03/15/gIQA7x77ES_story.html

    He concludes with: “Who do they think they’re fooling? An oil crisis looms, prices are spiking — and our president is extolling algae. After Solyndra, Keystone and promises of seaweed in their gas tanks, Americans sense a president so ideologically antipathetic to fossil fuels — which we possess in staggering abundance — that he is utterly unserious about the real world of oil in which the rest of us live.

    High gasoline prices are a major political problem for Obama. They are not just a pain at the pump, however. They are a constant reminder of three years of a rigid, fatuous, fantasy-driven energy policy that has rendered us scandalously dependent and excessively vulnerable.”

  57. @CoRev – I see you’re immune to facts and reality; I just linked to crude oil production numbers. US production fell 20% from 2000 -2008 (Bush). Production has increased 20% since 2008 (Obama).

    The reality is the President has little effect on oil production, but whatever correlation exists is the *opposite* of your fantasy worldview.

  58. Greg F said

    Mr. O’Neill,

    The only thing you have proved is you don’t understand that corilation does not equal causation.

  59. Jeff condon said

    Kevin,

    President Obama has had an effect on pricing already. What is more is that he has enacted a number of policies which have limited our future oil production, which we exchange for foreign oil. I don’t know how you have convinced yourself otherwise.

    A tiny uptick in production caused by companies working private land while being banned from drilling and shipping at every turn on federal lands, and you are all sold that the leftist way makes some form of sense. Ya gotta be kidding me man. What is more is that the effect on our economy is dramatically underestimated by the leftists of the world. We are in very very big trouble with our debt and it cannot be taxed away. Our only hope is to slash government and increase the economy.

    Of course when it all collapses you can simply blame Bush or whichever less-leftist happened to be nearby when these ignorant policies finally break our economic backs.

  60. Neil said

    What is conveniently forgotten in discussions of reducing consumption of fossil or other scarce resources is two things:

    When discussing harm or externalities, how much or many taxes or other barriers have already been put in place that increase the costs above the “free market” price?

    What are the opportunities for substitution and the associated lifecycle of the capital stock currently in use?

    In many countries I would argue that the proportion of the retail petrol or gas price that comprises tax already covers the externalities of its consumption. The fact that the price is not creating the consumption/behavior changes desired by some people is just tough. In most places it is still a free society and people have different consumption/value decisions.

    The ability to change the capital stock is a hidden cost. Think about how much depreciation you face on a car. Assume a new car purchased for $30k depreciates 50% over four years. Assume that you can save say $800pa by buying anew more efficient car, but to do this you must cross the buy sell spread on your existing car, which assumes that you have the capital avaliable to do this. This capital is not free in that it also has an opportunity cost.

    I personally would argue that absent close substitutes, with “better” characteristics, that the primary effect is extremely regressive in that it affects poorer people significantly more than richer people. Just ask Al Gore what effect a 20% lift in electricity costs would have on his consumption decisions! As a consequence, pricing externalities, where there is a barrier to substition or largely inelastic demand will do little except give governments more of our money to play with, while making people poorer.

    These effects have been manifesting themselves in many countries for a number of years now. The UK for example talks about energy poverty! The country I come from has the same problem.

    Often if you believe there is a problem such as these, it is better to progressly change standards through time. For example progressively changing building standards, safety standards and fuel efficiency standards for cars etc. My personal experience is that cap and trade has allowed smart traders to make money (some of them are my friends) while most consumers have just faced higher costs.

  61. corev said

    Righteous Kevin O’Neill said: “The reality is the President has little effect on oil production, but whatever correlation exists is the *opposite* of your fantasy worldview.”

    In the very same issue of the WaPo, we had this article: http://www.washingtonpost.com/business/economy/oil-prices-drop-after-report-of-strategic-reserve-release/2012/03/15/gIQAM5SNES_story.html

    On just the hint of presidential action:
    “On the New York Mercantile Exchange, the price of the benchmark West Texas Intermediate grade of crude oil, which had climbed to $106.18 a barrel, fell about $2 a barrel. They started climbing again in early afternoon after the White House denied the Reuters report.”

    Note they started coming back as soon as the news was denied.

    So in O’Neill-world we find that the president has no effect on prices, but in the real world we find it is just the opposite. How many times do we need to hear the same BS from leftist ignoranti?

    Kevin take an economics course or at least read a few articles. You and your ilk are truly clueless, and hopelessly brain washed.

  62. Jeff Condon said

    Neil,

    The assumption that there are external costs to fossil fuel usage is a problem in itself. It is also a convenient avenue for envirowhackos to exaggerate costs.

    Can anyone name one single identified economic damage by fossil fuel usage? I have read quite a few conjecture papers, but nothing concrete. I know the recent gulf oil spill caused economic damage but that was paid out directly to the industry and teams of scientists spent years working tirelessly to find more ‘damage’. Unfortunately for them, there wasn’t much.

  63. Neil said

    #63 Jeff, I agree and that is why I always like to point it out. The very assumption that prices need to changed further really originates from the fact that a group of “more informed or enlightened” people have decided that they don’t like the life/consumption decisions of other people. Plus there is generally very poor analysis of what magnitude of price change might be required to change the consumption decisions, if that is required and justified.

    People will argue that there are health effects etc and having lived in Bangkok I can attest to the effects of particulates! But then if I am in a country where health is privately insured, wont the insurer have already factored this into the premium? Sure there will be some averaging etc, but in determing what the best decision is, full consideration has to be taken into account of the structure of costs etc that may already be driven by what appears an unpriced externality. The fact that cause and effect may be disconnected in my health example would be worthy of some consideration, but the decision framework for an individual is extremely hard to generalise! I am a big believer in education over force. For example making appliance manufacturers publish the energy and water efficiency of their products. The lack of information on this historically meant that as a consumer even if I was concerned, I could not make a decision. Now I can often chose a more efficient appliance at the same price as a less efficient. The same with electricity consumption. I know that there is a big backlash to the big brother implications of smart metering, with some reason I might add, but the level of understanding about what drives home energy costs for many people is very low. As a result you see the stupid stuff about energy efficient light bulbs etc rather than a focus on say increasing the insulation standards of houses through time. Plus what generally has been happening is the that proliferation of energy consuming devices in the home is generally keeping pace with any increases in efficiency. Of course the enviro control freaks cant handle this because they fundamentally beleive we should all be doing without, as what we are doing is excessive (in their eyes).

  64. stan said

    http://mjperry.blogspot.com/2012/03/fossil-fuel-production-on-federal-lands.html

    “Fossil Fuel Production (Coal, Oil, Gas) on Federal Lands Falls to Lowest Level in 9 Years, Since 2003″

  65. kuhnkat said

    Kevin and Nathan,

    one of you is arguing that the President’s policies can’t have caused a rise in gas prices because the decisions that INCREASE PRODUCTION have to be made years in advance!!

    The other argues that Presidential Decisions IMMEDIATELY increased production with his taking office.

    You two loons need to go and get this straight and then come back and try again!!!

    A couple of helpful hints, increasing and decreasing production do not necessarily equate to decreasing and increasing price.

    Price changes can be driven by expected changes in future production and consumption.

    Etc.

  66. Genghis said

    The dirty little secret is that it isn’t about production of oil at all and it doesn’t matter where the oil is produced. It is about the PRICE of oil and Obama and the Fed have been doing everything they can to devalue the dollar. Oil in terms of Silver or Gold is still relatively cheap. The hammer will fall as soon as the Dollar is no longer the worlds reserve currency and that is Obama’s and the Statist Assholes (environmentalists, liberals) goal.

    Obama, The Oil producers, Bureaucrats, Bankers, Statist Assholes, etc. must be doubled over laughing watching us arguing about CO2, drilling, nuclear power, etc.

  67. @kuhnkat”The other argues that Presidential Decisions IMMEDIATELY increased production with his taking office.”

    The data shows production decreased under Bush and increased under Obama. I neither implied nor attributed either instance to decisions made by the President. What I actually wrote was: “The reality is the President has little effect on oil production…..”

    Learn to read – or work on comprehension.

    • kuhnkat said

      Kevin,

      O, I’ll take the shot for incomprehension this time. Since you claim that there is little the Prez can do to affect prices then you must agree that he is LYING when he suggests that he IS working on that??

      Naaah, I know you don’t meant that either so, Bushes policies never changed production. Clinton’s policies never changed production. Reagan’s policies…

      HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

      Thanks for clarifying how little you understand, or are willing to admit you understand, about oil production and prices. I would suggest that argument from ignorance is not a very strong position, especially when what you actually are saying is simply incorrect. As has been pointed out, mostly by others, Obie’s policies have affected both production and prices.

      As shoulf be obvious to those who pay attention the fact that production was dropping through the Bush regime was due to policies from the previous regime. The fact that it is rising now under Obie is due to the development being done on PRIVATE land that is less under the control of the sitting regime and policies from Bush era.

      Before you call me more names you better remember that Obie shut down Gulf operations completely during and for a while after the spill and even now has kept operations at a lower level than previously, but hey, if you want to believe he can’t affect production continue in your ignorance.

  68. Jeff, “Our only hope is to slash government and increase the economy.”

    Yeah, ask all the countries that have embarked on your prescription of ‘austerity’ in the wake of the financial meltdown how it’s working out. Not well. But ignoring the actual data appears to be a habit with some ideologies.

  69. Conservatives live in a fantasy world. Their myths are etched in stone and actual facts can never sway them from their beliefs.

    For instance: “Per Capita Government Spending by President: Ranking since Johnson (starting in 1968), and using the first-quarter comparisons, and calculating growth under Obama through 2011Q4, Clinton is the most austere, followed by Obama. The most spendthrift are (1) Nixon-Ford, (2) Reagan, and (3) Bush II. ”

    Now, can a conservative deal with those facts? No. They stick to their myth that liberals are the big spenders. Yet history tells us that Democratic Presidents have been *far* more fiscally responsible than Republicans.

    • kuhnkat said

      Kevin touts Clinton as being the most austere.

      Hey Kevy BAAAAABEEEE, ya think the Clinton’s gutting our military by not producing much in the way of new weapons systems, not replacing systems wearing, out, and retiring systems didn’t help in that austerity?? OH yeah, we never DID recover from that with all of Bushes spending and now Obie is suggesting we do WORSE!!

      Kevy BAAAAAAAYBEEEE, ya think that the Republicrats who were in control of both houses of Congress just MIGHT have had something to do with also FORCING Clintoon to cut back on the handouts so they were able to actually balance the budget by ONLY borrowing every penny from SS and the other funds??

      HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

      Kevy BAAAAAAAYBEEEE, your argument from ignorance idea is hilarious. What area are you going to try next???

  70. Kan said

    Kevin,
    Nice link, pretty chart. The author failed to provide any reference to the source of the numbers or definition of spending. Feel free to back it up with your own.

  71. corev said

    Kevin@70, you’ve lost the argument on oil/Obama you now change to a totally unrelated subject while attacking. Liberals are so transparent and predictable.

    Perhaps you should come back on topic..

  72. Greg F said

    I neither implied nor attributed either instance to decisions made by the President.

    In your first comment # 56 you wrote:

    Not difficult to see that the the correlation that exists indicates Democratic Presidents are *more* likely to preside over increases in oil production.

    Please stop the BS. You clearly made the implication with your first post.

  73. cm said

    Kan @ 71: The clue is in the URL. It’s Mark Thoma:

    http://economistsview.typepad.com/economistsview/2012/03/per-capita-government-spending-by-president.html

  74. M Simon said

    With Obama’s reelection chances virtually a lock, this is the first step in a long term trend of higher gas prices. Weaning the nation off of fossil fuels won’t be pain-free.

    Ah. So the marginal – those favorites of the left – will be hurt worst. OTOH lower energy prices – favored by the evil Republicans – will help the marginal quite a bit. Interesting.

  75. Kan said

    Cm,
    The post was from an email that evidently Mark Thoma received, (author unknown – Paul Krugman?). That does not answer the question about the data used, or the definitions. I did see the email content referenced a commentary by Paul Krugman. Krugman talks a lot.

    I get tired of people flipping links around to things they have not read or do not know the details about. First it was Nathan (Fram Strait) , then Barry (Tamino’s Trick), and now Kevin.

    If you want to persuade me, get your facts in order.

    So Kevin, please fill in the details for us.

  76. CM said

    Kan, I followed up on the follow-up thread here:

    http://noconsensus.wordpress.com/2012/03/17/conservative-fantasy-world/#comment-71851

    ***

    On the original topic, I’m wondering what provoked the post? Because the Economist’s US correspondent got a very interesting email along the same lines, and wrote some thoughtful commentary here:

    http://www.economist.com/blogs/lexington/2012/03/petrol-price-war

    [Quoting the WaPo] “Critics say the president’s policies have caused the recent price hike, but experts suggest he has less control over the current cost of oil than people generally think. With that in mind, he probably deserves less blame for existing pain at the pump, as well as less credit for the increased production he likes to brag about.”

    … which is pretty much in line with the analysis from the industry insiders here:

    Tallying up where the Obama administration has pushed for more production:

    http://www.platts.com/weblog/oilblog/2012/02/24/gasoline_price.html

    What is North America going to do with all this oil?

    http://www.platts.com/weblog/oilblog/2012/02/29/what_is_north_a.html

    Gas is $6+ in Shanghai. What are you going to do with all those Canadian crude imports?

    ftp://ftp.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

    (Hint: refiners want to export it. America can’t contain it, or Canada will just pipe it to the coasts and ship it. Are you ready to mass tanks at the border?)

  77. Jeff Condon said

    We’re going to drill it either way. Drill it now, let the numbers work themselves out.

  78. CM said

    (I should add, the yuan exchange rate is a possible lever. The trade and budget deficits need to go down first, though.)

  79. CM said

    “Drill it now”

    Two problems: the fields are tight (read: expensive), and what do you do when they run out?

    Sooner or later, higher US oil prices are a given unless (a) the US majors can find remote fields to exploit (IIRC, Angola, Nigeria, Tanzania, Sudan, and former Soviet Union seem to be the favourites at the moment), and can (b) prevent exporting them to where demand is higher.

    (a) will happen. (b) won’t. Global markets do this.

    It’s better to get ahead of the game, and the US has the technological know-how to do it. (The politics are messier.)

    I personally think Pielke Jr has the right line on this. US energy intensity is way high. It needs to come down somehow, or you’re going to be crushed by the economics.

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