Tuesday, April 03, 2012

How the Administration's Energy Strategy Has Contributed to Price Increases


16 Comments:

At 4/03/2012 7:18 PM, Blogger Larry G said...

"learn more at energytommorrow.org"

who owns that website?

Oh.. the American Petroleum Institute!

SHOCKING! API in bed with the Koch Brothers!

I give the right wing echo chamber credit... the propaganda spigot runs like a firehose!

 
At 4/03/2012 8:10 PM, Blogger Paul said...

Larry has taken to shouting "Koch Brothers!!" because he can't actually dispute the facts against his hero Obama. That's all he has, because that's all his Alinskyite and media masters can spoon feed him.

 
At 4/03/2012 8:48 PM, Blogger Unknown said...

I'm sorry, but this is completely pathetic.

-- 33 parcels in Utah? Wow! That's like, all of Alaska!
-- 31 drilling tracts in Utah? Ditto.
-- Oil shale leases in Colorado, Utah and Wyoming? For research purposes??? Pathetic example!! Something like that wouldn't produce commercial amounts of oil for decades!
-- The Beaufort and Chukchi Seas offshore areas also wouldn't produce commercial quantities of oil for decades, either. Even under the best of circumstances.
-- I also see about a half-dozen "proposes" something or other. Wow! Such a huge burden! I propose that we all grow our own corn in our backyards to turn into ethanol. Surely that's going to have a HUGE impact on the price of oil! /sarcasm

I piece like this is 100% pure propaganda.

 
At 4/03/2012 9:17 PM, Blogger Paul said...

" piece like this is 100% pure propaganda."

Right. Obama's war on fossil fuels exists purely in our imagination. It's not like he spends nearly every day demonizing oil companies, for example, or cancelled an 800,000 barrel a day pipeline, or declared 85% of our outer continental shelf off-limits to drilling. His Interior Secretary didn't object to drilling if gas hit $10 a gallon, and his Energy Secretary didn't declare he'd like gas prices to reach the levels of Europe.

Just propaganda.

 
At 4/03/2012 9:54 PM, Blogger Unknown said...

^
Not one thing you mentioned would have had any effect on the price of oil any time in the past 3 years, nor in the next 3 years. You have no clue how long it takes to develop offshore oil deposits. Shell is going to start drilling the Chukchi Sea this spring or summer ... but even if they make a large discovery the market is not going to see that oil for at least 10 years, and probably longer - and that would be true even if George Bush or Ronald Reagan were president. Telling everyone that an oil deposit which, even under the best circumstances, would not see the market for 10 years or more, would somehow be affecting the price of oil NOW ... is 100% pure propaganda.

As for the hot air coming out of the mouths of aforementioned cabinet members and the president himself, the market does not pay attention to hot air.

 
At 4/03/2012 10:48 PM, Blogger Evergreen Libertarian said...

I don't buy it either. I worked in the oil fields and it takes longer than 3 years to bring much of what is used in this graph to market.

I want to know what role speculators had. Especially the banks taxpayers bailed out and the decline of the dollar.

 
At 4/04/2012 4:50 AM, Blogger marmico said...

API propaganda!. Never.

The API moaners and whiners from Utah have 3947 leases and 1048 applications to drill just sitting on their books collecting dust.

The feds should triple the costs of leasing so that the API babies can't land bank ("speculate") federal commons.

Paul can fill us in on the API moaners and whiners from New Mexico, Wyoming and Colorado.

 
At 4/04/2012 5:34 AM, Blogger rjs said...

there isnt anything an american politician can do to change oil prices by more than a percent or two, and then only after years…with just 2% of the world’s known reserves, all the domestic drilling you do still wont put a dent in the world price…


if the president could command the supply of saudi arabia, then he might be able to make a dent in the price; but as oil is fungible & prices are set in a world market, an incremental increase in US production wouldnt make a difference…

NB: the Associated Press recently conducted a “statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production.” The result: “No statistical correlation between how much oil comes out of U.S. wells and the price at the pump.”

http://www.washingtonpost.com/politics/fact-check-does-more-us-drilling-ease-gas-pump-pain-math-history-show-that-hasnt-happened/2012/03/21/gIQACPQ3QS_story.html

 
At 4/04/2012 8:47 AM, Blogger Savior Faire said...

The administration is creating an environment that is promoting tighter energy supplies in a global market already very tight.

Merely releasing a 30 million barrels of oil from the SPR last year in response to supply disruptions in Libya and other countries and oil prices fell $4 a barrel.

http://www.politico.com/news/stories/0611/57620.html

 
At 4/04/2012 8:48 AM, Blogger Paul said...

"Not one thing you mentioned would have had any effect on the price of oil any time in the past 3 years, nor in the next 3 years."

Funny, I've been hearing this same song and dance from Democrats for at least 15 years. Even if you're right, why not just let it happen? Create some free jobs and call the "drill here, drill now!" crowd on their bluff?

Also, markets are forward looking. As Geoff at Energy Outlook explains, "Together with a strong, technology-neutral effort on fuel economy, a new, more expansive approach to exploiting domestic resources would affect the back end of the futures price curve, and that could start to nudge down nearer-term prices, as well."

"..but even if they make a large discovery the market is not going to see that oil for at least 10 years, and probably longer."

Yeah, maybe. How long 'til we get any dividends from Obama's taxpayer investments in algae?

Bill Clinton vetoed a GOP plan to drill in ANWR back in 98. We'd have nearly a million extra barrels a day on the world market right now according to your timeline. That alone would make some difference in the price of oil. Again with Geoff: "As with other commodities like grain and coffee, the price of oil is determined by relatively small changes in supply, demand, inventories, and in the case of oil, spare capacity. What really counts is the last few million barrels per day that are traded, whether inventories are rising or falling, and how large global spare capacity is and who owns it. The last three times that oil prices collapsed, in the mid-1980s, late-1990s, and 2008, it happened as a result of net changes in these parameters amounting to less than about 3 million bbl/day."

http://energyoutlook.blogspot.com/

 
At 4/04/2012 8:55 AM, Blogger morganovich said...

"I want to know what role speculators had. Especially the banks taxpayers bailed out and the decline of the dollar."

this statement is wrong in almost every respect.

1. speculators? really? you're going to trot out that bugbear? how do speculators keep oil prices high? you do realize that they have very little ability to store it right? buy a may oil future. that makes you a "speculator". but what are you going to do in may? take physical delivery? store it? that seems doubtful. speculators simply do not have the ability to do that in any meaningful way. it's not like gold or silver where you can put it in a vault. speculators would need to be selling too unless they were taking huge amount of oil off the market and storing it somewhere.

2. bailed the banks out? um, no. that whole phraseology is just political grandstanding. banks were loaned money that they paid back, with interest. take out freddy, fannie, and the automakers, and TARP made money. if you owned a drycleaner, and your press broke threatening your business so you went to the bank, borrowed money for a new one, operated your business and used the cash flow to pay back the loan with interest, would you call that a bailout? no. that's exactly what the banks did.

3. the decline of the dollar has not been an issue for over a year. the dollar is right where it was last march and is considerably higher than last april. the dollar is up about 6% since november (when the last oil rally started)

sure, it's off about 12% since 2009, but oil is up more like 240% in that period, so calling this a dollar issue seems pretty specious.

 
At 4/04/2012 9:07 AM, Blogger Paul said...

Marmico,

"The API moaners and whiners from Utah have 3947 leases and 1048 applications to drill just sitting on their books collecting dust."

You catch Unknown's point that it takes awhile, sometimes a decade, to start drilling on a particular lease?
Besides, the American Petroleum Institute says at most only 30% of leases have oil that can be extracted economically.

 
At 4/04/2012 11:26 AM, Blogger juandos said...

"Not one thing you mentioned would have had any effect on the price of oil any time in the past 3 years blah, blah, blah"...

What's wrong unknown kool aid put holes in your memory?

The problem of opposition to oil drilling has been ongoing for a couple of decades at least and much of the more recent opposition can be laid at the feed of George H.W. Bush and William Jefferson Clinton...

Mostly 'Progressive' Democrats Against Offshore Drilling Expansion

 
At 4/04/2012 2:47 PM, Blogger kmg said...

This is more a reflection of how stupid the American people have become.

That Obama can do all this, and still get 45-50% of the vote, is stunning.

That his intrade odds are 60% show that the population has been dumbed down and will get the reckoning they deserve.

 
At 4/05/2012 2:34 AM, Blogger Ron H. said...

Paul,

"Yeah, maybe. How long 'til we get any dividends from Obama's taxpayer investments in algae?"

I'll tell you what. If you EVER get any, let me know, and I'll mach them dollar for dollar.

How's that for confidence?

 
At 4/05/2012 12:01 PM, Blogger OBloodyHell said...

>>>>>>> wouldn't produce commercial quantities of oil for decades

>>> Funny, I've been hearing this same song and dance from Democrats for at least 15 years.

Try 35+, these bastard sacks of excreta have been making this claim for so long that their whines would have paid out by now if they'd stopped being obstructionist assholes.

More critically, and, surprisingly for an economics blog, I'm not seeing the obvious refutation of them -- which is that it doesn't matter how long it will take, just saying (and doing) "we're opening up these fields to exploration, even though they won't come online for 15 years", will immediately lower the price of oil.

Why? Because part of the built in price of oil is not just how much we have NOW, it's also how much we'll have 10,20,30 years from now. Increase the oil-base for 2030, and you'll see an immediate reduction in the price of oil TODAY.

Duh.

 

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