Stand back for a minute. Did you ever think that the mighty United States of America would be crushed by a dozen or so OPEC nations?
As a gallon of regular unleaded gas climbs to $5.00 per gallon, with no ceiling in sight, the domino effect is killing this country (and the rest of the free world). Every industry is impacted as evidenced by truckers lining up to block major roads as they recently did in the UK where diesel (in US dollars) reached $9 per gallon.
“Black gold” is a vital part of our economy. Every US president over the past 30 years has talked about energy independence yet they all failed to deliver on that challenge.
Let me take you back to when life began for me in the late 1930’s.
Do you know the real reason for Japan’s attack of Pearl Harbor?
As I enjoy studying world history here are a few thoughts that I have been following. These come courtesy of the Internet: “Japan attacked Pearl Harbor because the U.S. enacted an embargo on all oil supplies to Japan.” Another entry reads: “The Japanese attacked Pearl Harbor for a number of reasons, the main being President Roosevelt banning all exports of scrap iron, steel and oil to Japan. Japan had lost more than 90% of its oil supply).” One last opinion reads: “Two principal reasons stand out though; oil and pre-emptive war: 1 Japan needed oil to prosecute its war in Asia. The US had stopped providing oil but, if defeated, could be a good source of this vital resource. 2 At the time of the attack, the US had come under persistent pressure (from the British and from many within political and military circles in the USA) to join the war. US supplies to Britain and its Commonwealth allies had increased steadily and there was no longer any pretext of US independence.”
OK Larry. Where are you going with this story? This is a tough call. How much longer are we going to sit back and let the “free market” destroy our economy?
Some argue that we need to switch to electric, hybrid or solar vehicles. Get real here. There are 250 million vehicles on the roads of America. Are we to park them all, continue to pay off the leases or loans, and wait for the next fleet/technology to arrive?
And how long with that take? It will create a new industry. Our scrap yards will be overflowing.
While I am not suggesting we send US Marines to take over Saudi Arabia’s vast oil fields but you never know what desperate people may decide to do in desperate times. “According to the Oil and Gas Journal, Saudi Arabia contains about 260 billion barrels of proven oil reserves (including 2.5 billion barrels in the Saudi-Kuwaiti Divided, or “Neutral” Zone), or around one-fifth of proven, conventional world oil reserves.” I would argue that King Abdullah bin Abdul Aziz and the Saudi Royal family owes this nation some relief. As evidenced by his recent Middle East trip, president George W Bush has no leverage as he concludes his final months in office.
Isn’t is ironic that the first Gulf War was to liberate Kuwait from the Iraqi invasion. Really? How about stopping Saddam from conquering the rest of the region with Saudi Arabia just south of Kuwait.
As the primary election season comes to a close, and the energy crisis continues to worsen, I thought this post might stimulate some creative proposals.
Email reply:
In an attempt to avoid being political, which political party kowtows to the environmentalists and will not let the United States oil industry go after some of the major reserves in the world which are in our country or on our offshore continental shelves? Which political party has taxed each gallon of gas or diesel fuel nearly four times more than the oil companies make in profit? Which political party has blocked the construction of refineries in the United States? We need electrical energy but which political party has not allowed construction of the nuclear power plants which are safe and clean and could greatly reduce the creation of electricity through coal burning methods? These unmentioned politicos have convinced the misguided voters in believing they are doing it to save the environment. In fact, everything mentioned above costs these same misguided voters a lot more than they are aware in both dollars and good sense. …………….
I don’t know if we can really blame OPEC. We saw this coming and did nothing. How long has Matt Simmons been harping 24/7 over depletion rates in Saudia Arabia. And yet the big SUVs still got their section 179 preferential depreciation.
On Saudia Arabia, can the produce more? Every field goes into decline. Let’s face it, despite the billions poured into new fields in KSA, it has not really help over come the depletion of Gahnwar. They are supposed to have 500,00 barrels of new oil come on line though that should have started in May (I think I have the date correct.) But a lot of good that does when Russia and Mexico declined that much.
Larry, you should ask Debbie Cook her opinion. I think she may be the most knowldgeable person around town in regard to oil issues.
*Sorry guys..you are both wrong! You should have been watching the Senate Energy Committee earlier this week. You should have read our article for the OC Juice “A Goldman-Sachs gas station near you!” The truth is: Drilling, Production and Refinery cost for a barrel of oil is $40 dollars!
The difference is because of the rush of banking
speculators that are making a killing of the panic buying! Read the article..we were only reporting the truth!
Go Larry Go !!
You have the idea. We are mad as hell and we are not going to take it anymore.
This election is quickly developing into “it’s the energy stupid!”
The party that shows that it will develope a sane energy policy will take the day.
We may be in Iraq to protect the supply of oil, but it is the wacko environmentalists that have forced us there.
Go Larry Go !!
On top of all our economic woes, from housing to energy, Senators Lieberman and Warner have introduced into Congress a Climate bill that slashes greenhouse gases and doubles our energy costs. What do we have to do to make Congress feel our pain?
Ron and Anna, I am not buying the anything a Senator says. I have seen some houses down along the ocean in Laguna Beach that don’t look like the cost of construction was too much, and yet the price is astronomical. The factor is that there is a limited supply of ocean front property.
If supply is 85 Million barrels per day and demand is 86.5 Million we have to get into equalibrium while at the same time giving an incentive to the producers to go deep in trying to find new supplies to meet growing demand.
Andy –
#1 rule of real estate: location, location, location. With oil, it’s demand, demand, demand.
SMS
I hate to sound like a broken record, but this whole mess looks and smells like a market game played by large speculators who are trying to make major coin and some may desire to cause major damage to economies around the globe. Frankly, it looks and smells like a George Soros market move. Even if I have tried diligently to find the evidence of it, I cannot, only shadows and smoke. References to him investing in distribution late last year, but not directly to the futures markets recently. It is the futures market that is driving this.
While his organization has been relatively silent on their own moves in the market, he recently spoke before congressional investigators and spoke out about the funds. As well as private investors, the funds are playing in the commodities market very heavily. It’s all a part of the same movements that caused the collapse in the mortgage industry, running for the hills when things started to look bad, intrest rates rose and because they all ran with loses, they need to bring their funds back up to par quickly. Hence the movement into the lucrative but volatile commodities markets. Sort of like a gambler low on his stake, playing the roulette wheel to get back into the game. The winning can be big, but so can the loses.
The real gamblers are not in Las Vegas or Monte Carlo, the real gamblers are in charge of pension funds, banks and a few very large private investment groups, like Soros. My gut tells me that in the short term we may not see much downward movement in the prices, but at some point, probably near the election or shortly after, we will witness a profit taking and sell off like we saw in the mortgage industry, the wave of losers once again whining, asking for help, while winners roll off with their bonuses and bragging rights for their crystal balls, for another round of screw your neighbor.
I am a great believer in the free market system, but I also believe that power corrupts and absolute power corrupts absolutely. What we are seeing now, I believe is part of what Ron/Ann are speaking of in “Interest Rates 101” posted above this one. The European banks are probably hip deep in this mess too. They need to get well on their balance sheets and this may very well be how they are trying to go about making their books balance. Of course all of this is coming right out of our pockets and into theirs.
Sarah is right as well, as long as we all feed at the same trough, we are eligible for the mess and headaches of dependency. We need to develop and use the resources we have domestically, while working on better alternative sources as well. Perhaps we need to pass simple and easy to understand incentives to kick the solar market into gear. The programs we have now are neither.
We need to realize too not all energy development is bad or especially hazardous to the environment. The nimbyism must go however if we are going to forward together.
Carl, Edison and all the Energy big boys..need to go Nuclear. Seven plants in the next few years. 2ndly, do as the French do and when someone buys an SUV…they pay $8 grand in Green House Gas Taxes for the privilege! The Auto makers need to raise the CAFE Standard independently…without the aid of tax write-offs from Congress to 60 MPG for all new vehicles sold in the US. The Congress needs to set the highest standards possible for trucks, buses and Public Transportation vehicles including Trains and Planes! Congress also needs to recend the “Enron Investment Exception of 2000” that was attached to the 2000 Farm Bill and opened up this wound.
We launched a Man to the Moon…this energy stuff is academic! Carl, you are right on everything else!
Ron and Anna,
We don’t need to panalize the SUVs because they are more efficient when hauling a lot. But we should not give them preferential tax benefits in my humble opinion. As a CPA I can attest that the write off has resulted in A LOT more SUV sales to people who really did not need that large of a car. “Andy, I don’t care about the price of gas, I just want my tax deduction now” was a phrase I have heard, many, many times. Granted now that gas prices are high, I don’t hear that any more.
Andy,
When are you going to join my blog team? I cannot think of a better way for you to raise your profile and bring your ideas to the people of Orange County! Please do consider this. We really need a Libertarian on our team!
What is the world coming too?
I would not wait for the BIG government or the BIG oil or other BIG market controling groups to bail us out.
#6 if you would stop with the emotional name calling maybe we could better judge sane environmentalists from the wacky ones. By sticking to specific positions you judge to be too extreme you encourage discussion and negotiation instead of a power struggle. By writing off the entire environmental movement under the title “wacky environmentalists” you ensure that no consideration of your position is possible.
I also find the notion that refinery capacity is supressed only because of environmentalists to be ludicrous in the extreme. Standard Oil began the “oil shortage” strategy to raise prices in CA early last century and variations of it have existed ever since. The Enronn manipulation in the CA energy crisis was merely a variation on the same theme.
Folks. Not to boggle the mind with more numbers but these jump off the page. In the US we consume 400 million gallons of gasoline every day. Multiply that huge number by 365 days. We therefore consume 146 billion gallons every year.
At an event with Assemblyman Chuck DeVore this morning, that I plan to post shortly, we discussed the energy issue. Chuck pointed out the recent decline in usage by Americans with many taking shorter trips or long distance driving vacations.
Others, owning two vehicles, are using their smaller cars. He pointed out that with the current reduction in US consumption some of the “speculators” may take a financial hit.
Let me throw out a few more numbers.
Last year the average price of regular gas was $2.80 while last month it was $3.78. I just passed two neighborhood stations with one at $4.51 and the other at $4.39. As such those with their hands in this commodity have gouged us for over $150 billion dollars last year alone.
And while the local cost have virtually doubled in the past two years our state continues to take state taxes and we kick in for the Measure M extension. Larry, don’t rant about Measure M that vote ended almost two years ago.
Art, I know I should join the team. But I am too inconsistent in the time I could give to it.
Anon #13, was that directed at me? I don’t understand your post. I am the most green candidate out there. I would bet I have invested more in green technology companies than any other local candidate out there. I got endorsed by the Surfrider Foundation two years ago.
No Andy I was responding to part of #4’s comment. I liked what you had to say – except for the Cook slam. I don’t agree that owning energy stocks is the same as being anti-environmental yet you make that charge without any proof over and over. We get it. You don’t like Cook and you’re a little extreme. Great! Lets move on.
To Anon, #16. I think there is some confusion. I defended Debbie against Greenhut’s slam way back two months ago or when ever it was. I am a huge fan of Debbie’s which is why I posted above that it would be nice to get her views because I think she is knowledgeble.
Sorry about an typos here. I am not going to pasted it into word for a spell check.