Discussion on:

Scoring the rhetoric on Obama's energy policies

If it weren't for the severe economic shock to millions of folks , I say oil should cost twice as much. Then maybe even the monkey could be taught to turn off the tap, turn out a light when leaving a room, drive fuel efficient vehicles, insulate buldings above required standards. Reducing demand for this stuff is our best way to reduce the environmental devastation that we are all a part of creating. Wind & Solar are now competing with coal even under severe and uneven subsidies. The attack on renewables is escalating just when we need them the most and have always been a viable alternative for the planet except for the politics against a steadfast long term national policy to protect there development.

Chris,

Bravo for your keen ability to wade through the political spin to find the facts. This is the type of thorough analysis I expect from a smart media organization. You should consider cross-publishing your work in the OilDrum and/or PolicyMic to reach a wider audience.

Keep up the great work!

Thanks for the analysis of the conflicting statements on both sides. It is clear that we will not be able to drill our way out of dependence on foreign oil and oil demand is growing in China and India causing world oil prices to rise. The political rhetoric only clouds the problem and does not present good information to the voters to make informed decisions. The information given in the article is helpful to weed out the hype and leave the actual data.

It would help for everyone to know the time period between getting an exploratory drill permit to producing oil; as well as how long it takes for the well to become depleted. Most people think that the oil is delivered to the refiners faster than reality. The oil industry can be trusted to find and produce oil although the costs of that are also increasing. New techniques for extraction also come at a higher cost that is passed onto the consumer.

My fear is that it will take a crisis before people will take action to dealing with ever increasing cost of oil. The strategic oil reserves should be left alone for future needs instead of a draw down to appease the people and letting them continue to believe that the right political party will keep oil cheap and abundant.

We need to take a hard look at a future where the cost of oil approaches the ability to pay for that oil. If our fuel prices are going up now because China and India are bidding up on oil futures and securing firm multi-year supplies. These are factors that are out of any political control. National energy policy should include research on alternative fuels, alternative ways of producing energy and ways to improve the efficiencies of energy use. There should also be a public plan on how to allocate oil for use to grow crops and balance that with heating and transportation. None of this is easy and it is much harder to do with bad information.

As monkeys are often used to denigrate certain races in our society, (Just witness any thread on the Huffington Post or the Daily Beast that mentions Michelle Obama or Serena Williams), do you honestly believe that using a photo of a monkey is an wise choice to illustrate your message?

Race is more of an issue in America than we like to pretend.

Actually, the race angle never even entered my mind. I'm sorry you interpreted it that way. My only point was that we're all primates here, and we act like it.

I will take you for your word, but that does not change the bias in how the media covers it. Or the bias of how people on this site respond to it.

This innocent slipup will never see the light of day beyond this tiny thread, but if a conservatives name were on the byline this would be splashed all over the evening news, or at least all over this site, as another racial attack on Obama.

Apparently only progressives are allowed to make innocent mistakes.

Negative votes for stating the truth. Gotta love the tolerant left.

If this were a conservative blog this monkey picture would be all over CNN and MSNBC as a racial attack on Obama.

Negative votes for stating the truth. Gotta love the tolerant left.

You are correct that it's usually probably best to avoid any misunderstanding given U.S. racial history, but the context here versus when that comparison is made in Huffington Post comment pages is very different. My colleague isn't attempting to denigrate anybody, and that should be obvious to readers.

What was the context of putting a monkey on a post about the presidents energy policy?

Are you saying his policies have all the thought capable of a monkey?

I would agree, but if that were the point than why a monkey?

I would think a babbling baboon would be more appropriate if that was the message being conveyed.

In the last sentence of the article Chris quoted a tweet that said a lot of monkeys know how to turn a tap on but they never think to turn it back off. He was comparing humans use of petroleum to a monkey turning on the tap.

Thanks @riverat1! Yeesh.

Unable to grasp the analogy and using that limitation to create an outrage with which to beat everyone over the head.

The use of baseless accusations of racism on this site to deflect criticism of the presidents policies is annoying.

Point made.

I hope I am never again the target of baseless accusations of racist intent on this site for my opposition to some of Obamas moronic policies.

The issue of race being associated with a monkey is your problem. The facts are in the eye of the beholder. It appears to me that your perception is flawed. What would the photo of a dog bring to your mind? Politically correct BS.

This is the first article I have read on this site, that didn't have hype, spin, and/or a ton of inaccuracies.

Please convince your colleagues to do the same!

i take offense, sir. please support your claims.

There are many far worse than you that came to mind when I read his post.

In fact, you did not even come to mind as having that particular malady.


We often disagree on the level of trust in the source of the facts, but you are usually informative.

...I'm the editor here. So if you see problems, don't keep 'em to yourself -- bring them to my attention! (You can use the contact form on any of my posts, or the customer service link in the site footer.)

Inaccuracies? Don't want 'em. Spin? Best left to Capitol Hill.

what we need less of on Capitol Hill is spin. What we need more of is truth and abiding by the Constitution.

The reason we may soon be all be paying more than $4/gallon is not due to inadequate production or supply, but because of 10 years of Keynesian economics; cheap monetary policy from the Federal Reserve, and trillions of dollars injected into the economy in the form of bailouts and stimulus that did not create a corresponding growth in our national wealth. Simply put, our dollars are worth much less that they were 5 years ago. Since oil is traded internationally in dollars, it is probably the clearest sign (like the unsubstantiated rise in the stock market) that our dollars are getting cheaper by the day. And unfortunately for consumers, there's no amount of domestic drilling that can keep up with this level of fiscal malfeasance.

The conservative dogma is what matters

The fact that we've created trillions of out thin air? That the cheap money that lead to the housing bubble was a good idea? That spending money that doesn't exist with utter and unsustainable abandon is working out well? That countries that trade heavily in oil have been considering dumping the dollar for something more stable?

It's not dogma. It's reality. And those who don't realize it are going to get slaughtered.

Except for the title. Don't you remember during the Bush Administration? He was personally responsible for the rise in oil prices. Personally responsible. According to the same media that gives Obama a pass and tries to tell us that now the President has nothing to do with it. They can't have it both ways. I guess they are relying on the short memory span of the average idiot voter. I distinctly remember gas at about $1.75/gal after Bush announced he was lifting restrictions on drilling just before he left office. It was over $3.00 before that. After Obama took over, gas immediately started climbing again. So, it seems to me that the President does have some influence over oil prices. Any idiot in the press that makes comments that if we increase our oil production and it not having any affect on prices is either lying or on drugs. How come the Saudis can increase or decrease their production and it affects prices, but not us? Makes no sense, but the dupes in our idiocracy buy it because they saw it in the media and therefore it must be true, right?

Thanks for pointing out the graphs that prove that political parties don't really influence energy policy here. (The monkey, though, made me wonder)...
I just want to say that we all MUST promote advanced nuclear such as LFTR (which was built and proven 50 years ago at ORNL) and advanced batteries such as the LiFePO4 (and how to make it much cheaper)! Because I want my kids to be able to drive...

The article completely ignored two basic facts about gasoline prices, though perhaps they weren't germane to the subject. Some states, like California, tie a gasoline station to a single supplier or middleman, and most oil companies take refineries offline for service when the demand increases -- summer. This artificially drives prices up. It isn't a free market; far from it.

Bob Reich on his blog last week reflected that although historically speculation accounted for 30% of oil contracts, today speculation accounts for 64%. See: http://robertreich.org/post/19353120672

He also cites CFTC commish Bart Chilton who says that oil markets are controlled by a smaller group of big players -- financial players.

Two years ago, 60 Minutes also reported that anywhere between 60 - 70% of oil contracts were held as speculation -- a figure that was provided by the Petroleum Marketers Association's Dan Gilligan. At the time, 60 Minutes determined that Goldman Sachs was one of the largest oil companies in the world, by virtue of its massive storage facilities. See: http://www.cbsnews.com/2100-18560_162-4707770.html

St. Louis Federal Reserve just released a study yesterday that places 15% of the rise in oil prices in 2008, on speculation, and is the second biggest driver of prices behind oil demand (responsible for 40% of the oil price increase). See: http://research.stlouisfed.org/publications/es/article/9179

I think the point is moot, whether Obama's rhetoric rings true or hollow. Without market reform, Wall Street profits while consumers lose, and there is no way in hell government will investigate Wall Street under Romney; Romney IS Wall Street, Inc.

With the CFTC's new regulatory powers under the Dodd-Frank Act, we could see some action on this front. Too bad then, that Republicans have threatened to overturn the provision that gives the CFTC the power to regulate speculation of oil.

I am reminded that, at the time under George Bush, Republicans insisted that markets were working, despite the signs that Enron had been manipulating energy markets. Instead, Republicans suggested that California was to blame for its own problems of high energy prices. FERC stood still while billions were stolen from Californians and other west coast residents. That is, until the media had investigated and Enron had collapsed -- at that point, FERC couldn't stand by without looking stupid.

So to point out the obvious: Regulation under Republicans is ineffective, because they refuse to regulate. This reinforces the ridiculous point that government is useless, because the truth is, government is useless only when under Republican rule.

...but we can't blame them for the sustained price. We're either willing to continue buying oil at a given price, or we aren't.

And Enron is a non sequitur: Consumer utility rates are regulated, and as prices went up, there was no need for consumers to send price information by curtailing demand. It never was a "free" market.

Again, demand is #1; speculation is #2 -- as stated by the St. Louis Fed.

Consumer utility rates are regulated for profit; most utilities have profit rates of over 6% with some at or above 10%. You're going to pay for utility costs.

...and their price manipulation game, which could not have happened in a truly "free" market. If utilities were free to price for profit (at least in the short term), then SoCal Edison & PG&E would not gave gone bankrupt.

Gasoline speculation. Which was illegal prior to 1990, but now controls almost 60% of that market.

So you have speculators driving up the cost of oil, as they have been since the dawn of the industry AND you have speculators further driving up the cost of gasoline.

In some states the gas speculator profit margin is in excess of 20 percent.

That is a 60 cents per gallon savings to consumers in those states if the government brought back the ban on speculators in the gasoline market.

Look at his first graph. Our oil production is basically steady, our coal production is basically steady, and are natural as production is absolutely sky-rocketing!

Seems like some version of the "Pickens Plan" is appropriate here. Drill-baby-drill works for natural gas. Lets replace gas with oil for the next decade or so.

Maybe when the gas runs out we can worry about all this renewable stuff. Heck, when the gas runs out, the batteries for electric cars will probably be working.

So why not drill more gas and use more gas!? Landowners make money, gas companies make money, people that drill the gas make money, and Americans save money. Seems like a win-win-win-win to me.

???We???ve quadrupled the number of operating oil rigs to a record high.???

True, but nothing to brag about"

Nothing to brag about? That's a lot of jobs on those oil rigs. You must be independently wealthy to turn your nose up and honest work.

Hi James,

Your argument fails to consider one important by product of drilling, Pollution. New oil and gas drilling techniques pump large quantities of toxic substances into the ground under high pressure, fracking. This process has the potential to pollute the countries water sources. There are several locations in PA and Wyoming where water has been rendered undrinkable. I am not against developing our energy resources, but only after the necessary precautions have been taken. Drillers must be bonded, preventing them from extracting the profit and then leaving the tax payer with the clean up. Having grown up in western PA I have seen firsthand what the last energy boom did to the idyllic landscape: Giant holes in the ground, polluted streams and lakes, and large tracks of land that don't support plant growth.
America needs a two pronged approach to energy: 1. CONSERVATION 2. Development of new energy sources, renewable and oil and gas.
Complex problems require complex solutions; if anyone tells you differently they are misinformed or lying.

Chris, I read almost all the peak commodity commentary available - from all perspectives and biases. Yours is undoubtedly the least biased and most accurately detailed of all that I read. You are SP's single most valuable asset and I would very much like to see the rest of their coverage be of the same caliber - but unfortunately it isn't yet within light years of matching yours. Hear that Andrew?

All the best,
Durwood M. Dugger, Pres.
BCI, Inc.

If $4 Billion dollars is a drop in the bucket for Oil Companies how would that impact alternative energy research if that money was given to them? Or what if alternative energy programs received the same amount of subsidies as oil, gas and coal? How fast could we really significantly lower our cost on energy? And do you have an opinion if all oil imports ended tomorrow and we did not have a choice, how fast could we solve the problem?

Regarding Gasoline
What would happen to our gas prices if we had restriction on how much gasoline was exported? And is this statement from CNNMoney below true? If it is we don't have prayer of ever lowering gasoline prices no matter what primate is in office!
NEW YORK (CNNMoney) -- The United States is awash in gasoline. So much so, in fact, that the country is exporting a record amount of it.

The country exported 430,000 more barrels of gasoline a day than it imported in September, according to the U.S. Energy Information Administration. That is about twice the amount at the start of the year, and experts and industry insiders say the trend is here to stay.

Chris,
I've read many analysis about energy use and future prospects, and this one is by far the best one. Explained in simple terms, using facts from both political camps without any bias that I could detect.

Simply, marvelous.

Unfortunately, it shows that we, as the human race, are at the brink of unimaginable economic and existential crisis ( within 20-30 years ) as energy becomes more expensive. I wonder what will our descendants think about us.

Thanks, Vule.

This is a good balanced report for the most part. The only part I have issue with is an off handed comment at the end. "As we enter the twilight years of oil, our only serious option is to reduce our consumption." I'm not buying the "twilight" years speculation unless twilight lasts 100 years. I agree with the reader who commented that it makes economic sense to fire power plants with natural gas. Industry is going that way anyway because it is so inexpensive now, but it's a bit off topic because power plants rarely use oil now. Within 20 years we will be moving to process heat and some electrical production using "Low Energy Nuclear" technology from companies like Brillioun Energy and Defkallion. Hopefully, if government doesn't get in the way, we can start to replace our aging nulear reactors with LFTRs and produce fresh water, medical isotopes and start to consume our nuclear waste. I wouldn't be surprised if Helion Energy, General Fusion and others doing private research on fusion haven't made numerous breakthoughs and are on a path to viable fusion reactors. The future of energy will be fine if government doesn't surpress it. The amount of oil in the ground is the least of our concerns.