On Thu, 01 May 2008 10:48:30 +0530, John Galt wrote:
>
> "Larry Hewitt" <larryhewi@[EMAIL PROTECTED]
> wrote in message
> news:fvb5tt$h6l$1@[EMAIL PROTECTED]
>>
>> "John Galt" <whoisjohngalt@[EMAIL PROTECTED]
> wrote in message
>> news:9u5Sj.117458$6i4.15628@[EMAIL PROTECTED]
>>>
>>> "Larry Hewitt" <larryhewi@[EMAIL PROTECTED]
> wrote in message
>>> news:fva97k$kc8$1@[EMAIL PROTECTED]
>>>>
>>>> "John Galt" <whoisjohngalt@[EMAIL PROTECTED]
> wrote in message
>>>> news:AgWRj.123983$Tj3.106837@[EMAIL PROTECTED]
>>>>>
http://www.realclearpolitics.com/articles/2008/04/start_drilling.html
>>>>>
>>>>> Article Highlights (well, almost all of it is a "highlight"):
>>>>>
>>>>> (...) The truth is that we're almost powerless to influence today's
>>>>> prices. We are because we didn't take sensible actions 10 or 20
years
>>>>> ago. If we persist, we will be even worse off in a decade or two.
The
>>>>> first thing to do: Start drilling.
>>>>> It may surprise Americans to discover that the United States is the
>>>>> third-largest oil producer, behind Saudi Arabia and Russia. We could
be
>>>>> producing more, but Congress has put large areas of potential supply
>>>>> off-limits. These include the Atlantic and Pacific coasts and parts
of
>>>>> Alaska and the Gulf of Mexico. By government estimates, these areas
may
>>>>> contain 25-30 billion barrels of oil (against about 30 billion of
>>>>> proven U.S. reserves today) and 80 trillion cubic feet or more of
>>>>> natural gas (compared with about 200 tcf of proven reserves).
>>>>>
>>>>> What keeps these areas closed are exaggerated environmental fears,
>>>>> strong prejudice against oil companies, and sheer stupidity.
Americans
>>>>> favor both "energy independence" and cheap fuel. They deplore
>>>>> im****ts -- who wants to pay foreigners? -- but oppose more
production
>>>>> in the United States. Got it? The result is a "no-pain energy agenda
>>>>> that sounds appealing but has no basis in reality," writes Robert
Bryce
>>>>> in "Gusher of Lies: The Dangerous Delusions of 'Energy
Independence.'"
>>>>>
>>>>> Unsurprisingly, all three major presidential candidates tout "energy
>>>>> independence." This reflects either ignorance (unlikely) or
pandering
>>>>> (probable). The United States now im****ts about 60 percent of its
oil,
>>>>> up from 42 percent in 1990. We'll im****t lots more for the
foreseeable
>>>>> future. The world uses 86 million barrels of oil a day, up from 67
mbd
>>>>> in 1990. (...)
>>>>>
>>>>> The best we can do is to try to influence the global balance of
supply
>>>>> and demand. Increase our supply. Restrain our demand. (...)
Thus far, argued Ronald Reagan and the neoconomists, it is far cheaper to
buy the oil than to drill our own. And with our military superiority we
need not concern ourselves with some backward flea bitten regimes refusing
to "sell" us the oil for our government backed paper. Well... I suppose
that works -- to just steal their oil --, but it isn't in the realm of
economics I don't think.
>>>>> Increasing production also is im****tant. Output from older fields,
>>>>> including Alaska's North Slope, is declining. Although production
from
>>>>> restricted areas won't make the U.S. self-sufficient, it might
>>>>> stabilize output or even reduce im****ts. No one knows exactly what's
in
>>>>> these areas, because the exploratory work is old. Estimates indicate
>>>>> that production from the Arctic National Wildlife Refuge might equal
>>>>> almost 5 percent of present U.S. oil use.
Big deal.....
>>>>> Members of Congress complain loudly about high oil profits ($40.6
>>>>> billion for ExxonMobil last year) but frustrate those companies from
>>>>> using those profits to explore and produce in the United States.
They have an incentive to increase their profits but they can do that by
not doing anything at all other than making certain that Congress does
not nationalize the American Oil. The oil companies and the politicians
put on a good show but that is all it is. What should happen on this deal
is that all Americans should receive citizen dividends for the oil just
like the Alaskans do. The oil belongs to all Americans regardless of
where they live in the sovereignty. That may or may not result in a huge
increase in the price of fuel. But it does make people accountable for
their use of the fuel while rewarding those who conserve. The oil
companies are contractors that develop the oil fields and if they damage
the ANWR they need to be held accountable for it.
>>>>> Getting access to oil elsewhere is increasingly difficult.
Governments
>>>>> own three-quarters or more of proven reserves. Higher prices
perversely
>>>>> discourage other countries from approving new projects. Flush with
oil
>>>>> revenues, countries have less need to expand production. Undersupply
>>>>> and high prices then feed on each other.
Please note the difference here: The other countries whose leaders may
or may not actually represent the real owners of the oil (the people) are
not all that interested in harming the current golden goose. But the oil
companies are billed as being all for reducing the prices by poking more
holes in the ground. I will say that to the extent that the oil companies
do not have locked in leases or owner****p of proven or prospective
reserves then to that extend are they motivated to increase the supply by
providing oilfield services. If they do not and cannot "own the oil" and
do not and cannot "own the rights to pump the oil" (and this is not the
case in current deals between government and oil companies), then to that
extent are they encouraged to actually do the services that will bring
more oil to market. Granting further rights to "own" the oil to the
current oil companies is a huge rip off of the American people just like
the huge rip off that is currently being attempted in Iraq.
>>>>> But it's hard for the United States to complain that other countries
>>>>> limit access to their reserves when we're doing the same. If higher
>>>>> U.S. production reduced world prices, other countries might expand
>>>>> production. What they couldn't get from prices they'd try to get
from
>>>>> greater sales.
If the king is in deep **** with his subjects and really needs to give
them more stuff based on the oil revenues then there may be some logic to
this increasing production idea in the face of more supply.
Unfortunately, that is not realistic. The demand is increasing far
faster than the supply and poking holes in the ANWR isn't going to do
anything other than increase the wealth of the OWNERS of the oil. That,
and the accountability for the environment are the issues.
>>>>> On environmental grounds, the alternatives to more drilling are
usually
>>>>> worse. Subsidies to ethanol made from corn have increased food
prices
>>>>> and used scarce water, with few benefits. If oil is im****ted, it's
>>>>> vulnerable to tanker spills. By contrast, local production is
probably
>>>>> safer. There were 4,000 platforms operating in the Gulf of Mexico
when
>>>>> hurricanes Katrina and Rita hit. Despite extensive damage, there
were
>>>>> no major spills, says Robbie Diamond of Securing America's Future
>>>>> Energy, an advocacy group.
And if the oil companies are held accountable for the damage then they
will do the necessary care taking. Did Exxon ever pay up in full for that
crap they created in Valdez?
>>>>> Perhaps oil prices will drop when some long-delayed projects begin
>>>>> production or if demand slackens. But the basic problem will remain.
>>>>> Though dependent on foreign oil, we might conceivably curb the power
of
>>>>> foreign producers. But this is not a task of a month or a year. It
is a
>>>>> task of decades; new production projects take that long. If we don't
>>>>> start now, our future dependence and its dangers will grow. Count on
>>>>> it.
>>>>>
>>>>>
>>>>
>>>> This author is being misleading.
>>>>
>>>> First, his claim that, because some exploration of untapped reserves
is
>>>> old the estimates may be off is totally bogus. It isn't like an oil
>>>> field is like a bathtub capable of filling or emptying.
>>>
>>> Larry, the technology used to estimate these reserves improves all the
>>> time. That's one of the reasons that Houston (IIRC) has more
>>> supercomputing capacity than anyplace in the world --- the companies
work
>>> overtime on these capabilities.
>>>
>>> Now, GRANTED, the old estimates might be spot on, as you argue below.
All
>>> Samuelson is saying is that they're old, and since they were taken
with
>>> old technology, MAY be off.
>>>
>>
>> Exp;oration is a very simple. relatively low technology process.
>>
>> Holes are dug, samples taken, oil density calculated, and aa map of
rock
>> strata made.
>>
>> Adjustments to known fields is mostly from experience with pumping.
Maybe
>> the extent of hte field is found to be different than inital estimates.
Or
>> maybe new technology can extract more oil than originally planned.
>>
>> The former cannot be detected by exploration, the latter does not need
>> exploration.
>>
>> Intrestingly, from the EIA data, adjustments are pretty much a wash.
>>
>>>> UNless he is claiming that new technology (forget it) can be used,
the
>>>> estiimates are stable. Check the adjustments in reserves at
>>>> http://tonto.eia.doe.gov/dnav/pet/pet_crd_pres_dcu_NUS_a.htm
>>>> Net changes in total reserves are less than a tenth of a percent.
>>>>
>>>> Note also that, despite the rhetoric, new ex****ation and tapping of
new
>>>> fields _does_ occur every year, especially in the Gulf.
>>>>
>>>> Despite what this author stated.
>>>>
>>>> And again, despite what this author asserts, proven reserves are not
>>>> that great. Despite his assertion that there are untapped reserves
equal
>>>> to current known reserves, the EIA doesn''t believe that. They put
>>>> untapped reserves at about 20% of tapped reserves. Most of that is in
>>>> producing fields and will require secondary extraction techniques, is
>>>> too small to be of significant interest (fields in Arizona,
Missouri,
>>>> Nevada, New York, South Dakota, Tennessee, and Virginia), f ex., or
for
>>>> other reasons (quality) is not exciting commercial interest.
>>>> http://tonto.eia.doe.gov/dnav/pet/pet_crd_pres_dcu_NUS_a.htm
>>>>
>>>> This is a key factor of the author's exaggeration.
>>>>
>>>> Much of what he claims to be "reserves" is tied up in tar sands. But,
as
>>>> the Canadians are finding out, extraction is an expensive, energy
>>>> intensive process adn the net ouput is small, trading huge amounts of
>>>> coal for the low quality oil. Add the massive investments for minimal
>>>> profits, even at $120 a barrel, and it is understandable why the oil
>>>> companies are silent.
>>>
>>> That is quite correct, BUT remember his prime premise -- that $120 is
>>> likely to look cheap in a few years. The cost of extraction won't
change,
>>> the price per barrel will. If the price per barrell goes
>>> up........well........
>>
>> Except even the oil companies are betting against this.
>>
>> In congressional tstimpny oil execs indicated no desire to increase
>> capacity, indicating that they expect alternative fuels and
conservation
>> to reduce demand to the poijt that new capacity would be unnecessary.
They are actually correct in this, or should be correct on this if we can
get proper government,
>>>>
>>>> Even at full production of known, untapped fields, the effect on
world
>>>> markets would be small. The loss in Iraqi production due to the war
is
>>>> about the same amount.
>>>
>>> Yes, BUT (again) his point is simply to say that we need to exploit
all
>>> known sources or quit whining about prices (of course, stability in
the
>>> Middle East, Nigeria, and less sabre rattling by Iran and Venezuela
would
>>> of course help as well.)
>>
>> I agree, quit whining.
>>
>> But there is no indication that even increased supplies will reduce
>> proices.
>>
>> Jus tlike economists are saying about the McCain/ CLinton gas tax
hiliday,
>> lower prices/increased supply will do o more than increase demand,
forcing
>> prices up again. The net result wpuld merely be more moeny for he oil
>> companies.
Yes.... It is a big circus.
>>>>
>>>> And all of this begs the central question of why oil/gas prices are
so
>>>> high.
>>>>
>>>> Note that world demand, because of the failing US economy, is
actually
>>>> falling and recently has lead to an easing of crude prices. Yet
despite
>>>> the reduction in cost of a barrel of oil gasoline prices continue to
set
>>>> records.
>>>>
>>>> In truth, factors other than supply and demand are behind the high
oil
>>>> proces, which is why little can be done in the short term to lower
them.
You are leaving out the devaluation of dollars. The Oil producers and the
other economic participants of Earth are realizing the oil can be more
honestly traded with money that will buy actual stuff like TV sets,
tractors, plows, nail guns, saws and green beans. We produce green house
g***** and fear and hate. Not much of a consumer market for that.
>>> I'm in India right now. In June, Tata will go to market with their
$2000
>>> auto. It gets great gas mileage, but its target market will be
>>> autorickshaws (which get even better mileage, and often use propane or
>>> LPG), motobikers (who will also go to a vehicle with poorer gas
mileage
>>> than their bikes) and **new users**, of which there are hundreds of
>>> millions about to stop using their legs to get around over the next
few
>>> years. This is a significant supply-and-demand factor that I have yet
to
>>> see modeled in any economists forecasts ---- and then the Tata car oes
to
>>> China, Indonesia, Malaysia........
>>>
>>
>> That specific example, noo.
>>
>> But forecasts _do_ prioject significant increased demand in countries
>> like CHina, India, and Braxil (despite their huge ethanol program).
>>
>>> It's not wrong to say that currency is an issue. However, it's
misleading
>>> to not note that worldwide usage is fated to skyrocket as the
developing
>>> world continues to come "online."
>>>
>>
>> Except rising prices lower demand.
>>
>> AS prices rise, unfortunately, poor countires/peoples stop burning oil.
>> Already we are seeing conversions from oil to wood --- or nothing ---
in
>> parts of Africa and centrral asia. Yeah, the amounts are small.
>>
>> But as prices rise more changes will lessen demand.
>>
>> Larry
>
> Larry, you're chewing up bandwidth. You're throwing all sorts of **** up
on
> the wall instead of making concise points, and as result, I'm not sure
what
> point you're trying to make, other than you don't want to drill for oil.
>
> Here's what we all know:
>
> 1) Cheap and available energy is a requirement for nations to develop,
and
> for developed nations to maintain their level of development.
Proper framing and language might help:
1) Prosperous societies are the societies where labor is less and
satisfaction is more. Energy may be supplied by slaves or by sun, wind,
oil, or low toil agriculture (fungus, algae, or whatever). Note that
leisure is the actual measure of economic success.
> 2) We have no viable energy alternatives today that can come even close
to
> meeting our requirements, nor are any expected to contribute
substantively
> over the next few decades.
Huge amounts of oil are not a "requirement" for a very prosperous society.
Especially in a nation where the people to natural resource ratio is as
good as it is in the United States. We could do with a lot less
privatized economic rent and a lot more redistributed economic rent.
> Given those two very simple factoids, it seems intuitive that in the
short
> term, we must maximize the use of our own resources WHILE (to address
the
> concerns of envrionmentalists and peak oil adherents) funding a
Manhattan
> Project of sorts to determine how our energy needs will be met in the
second
> half of this century going forward. (In fact, I've heard MANY people
from
> the left side of the political spectrum blaming people like Reagan for
not
> doing exactly that on the heels of the Arab Embargo. I assume such folks
are
> still in favor of such types of projects.)
Yep.
> As an aside, I find it interesting that the people who like to trashtalk
the
> GOP (the same people who tend to be suspicious, if not hostile, to free
> markets) defending the free market position on this issue, which is to
allow
> the price to increase until demand subsides.
The "free market" is free of privatized economic rent. The Republicans
seek the maximization of privatized economic rent in the belief that the
very rich are more capable and more inclined to "invest" in such a way as
to increase everyone's prosperity. It hasn't worked and it won't work.
> The problem with $7 gasoline, however, is who it harms:
Yes.... The oil itself (not the oil companies) must be nationalized and
the dollars that would go to private economic rent must be dispensed in an
egalitarian manner. If that is the case then the gluttons are harmed and
those that conserve are rewarded (or subsidized if you like that word
better).
> The upper middle class and the rich in the developed nations will trade
in
> an SUV for a Mini convertable or that neat new BMW 1 Series and buy
slighly
> cheaper wine with their dinners. The middle class in the same nations
will
> get squeezed, some painfully, and some will lose their jobs as a
casualty of
> diminished economic activity. The lower class in the US will hurt badly,
> perhaps to the point where hunger returns to being a serious problem in
the
> US.
It doesn't have to be that way: Economic rent redistribution cures the
problem. Without it there is no actual "free market".
> However, the biggest point is overseas, where people in developed
nations
> will die.
>
> People who are suspicious of free markets are ill advised to suddenly
become
> laissez-faire capitalists on this issue. Nobody is more free market than
I,
> and even I have no problem admitting that the free market can be a harsh
> mistress as it lurches from pole to pole attempting to find efficiency.
In a
> matter such as this, I can tell you that the market will be like a
drunken
> elephant in a roomfull of people. We can do better for the world than
let
> that elephant crush millions.
Charity begins at home. We can care for others as we can and will. The
end of sovereignty may come some day but it ain't gonna happen next week.
> Let get behind a national program to determine how we go forward as a
nation
> and as a world. Let's build wind farms, nuke plants, some geothermal
> infrastructure, work to improve solar efficiency. Hell, I read a paper
the
> other day that theorized how some turbines on the ocean floor off South
> Florida could pull so much kinetic power from the Gulf Stream to light
up
> the entire Southeast. Let's decide if the autos of the future are going
to
> use biofuel (looking bad as a choice), biodiesel (looking better), fuel
> cells, whatever. Let's get all our smart guys in a room and lock the
door
> and leave them there until we have a roadmap for the future laid out.
Shame on you!!! You are talking about a government that actually acts
like a government.
> But in the meantime, let's DRILL FOR OIL. If we don't, it's just a
****tion
> of our wealth at stake.
>
> But over here in India, and elsewhere, if we don't, people will die.
>
> JG
>
>
>
>>
>>
>>> JG
>>>
>>>
>>>>
>>>> According to economists and the oil ministers of OPEC, for ex, 20% or
>>>> more of hte cost of a barrel is because of Bush's weak dollar policy
>>>> that has put the dollar in free fall. With the dollar continuing to
set
>>>> record lows against foreign currencies oil producers add in a hedge
>>>> against loss of wealth as the dollar continues its free fall.
>>>>
>>>> The second biggest factor, accounting for as much as a quarter of teh
>>>> the cost of a barrel, is the US financial crisis caused by Bush 's
and
>>>> the Fed's economic policies. AS mortgage investments died and
investors
>>>> got hinckey about investing in complex funds, and as US interest
rates
>>>> plummeted, money has flown from stocks to commodities. This explains
>>>> why the cost continues to remain high, even increase, while demand
>>>> falls. Too many dollars betting oil and gas will continue to go up
in
>>>> price.
>>>>
>>>> In truth world demand and supply is very similar to waht it was when
oil
>>>> was selling for half of what it is today.
>>>>
>>>> Larry
>>>>
>>>> Larry
>>>>
>>>>>
>>>>
>>>>
>>>
>>>
>>
>>
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend
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