The Frantic Conclusion of An Administration of Greed

Senator Ken Salazar injects some wisdom into the debate over energy policy with this editorial, and he reveals a simple grain of truth--the Bush Administration isn't interested in sound energy policy. It's only interested in making sure it can hand out freebies before they are driven from office in shame. This is the last gasp of a administration of greed and incompetence, trying to give their friends a few of the crumbs still left on the table.

According to Senator Salazar, the lure of quick profits from oil shale deposits has been with us for decades:

Bush and his fellow oil shale boosters claim that if only Western communities would stand aside, energy companies could begin extracting more than 500 billion barrels of recoverable oil from domestic shale deposits. If only the federal government immediately offered even more public lands for development, the technology to extract oil from rock would suddenly ripen, oil supplies would rise and gas prices would fall.

If only.

Since the 19th century, we in the West have been trying to extract oil from the vast oil shale riches that lie under our feet. It is no easy task, and past efforts have failed miserably. Commercial oil shale development would require not only immense financial investments but also an undetermined quantity of (scarce) water from the Colorado River basin and the construction of several multibillion-dollar power plants.

Sometimes it seems that we are getting close to overcoming these barriers. But each time we near a boom, we bust. The last bust, the infamous "Black Sunday" of 1982, left Western communities holding the bill long after the speculators, Beltway boosters and energy companies had taken off.

Sound familiar? The defense establishment has been paid off with a profitable war. Enron and MCI Worldcom got theirs and left everyone holding the bill. The environmental laws have been gutted to let the polluters have a free pass. The mortage industry got their handout and we're seeing that bailout happen before our eyes. Halliburton isn't through getting your money. The developers are getting theirs in New Orleans in the form of football condos for Alabama football boosters. The oil companies are going to get their offshore drilling rights, come hell or high water. The treasury is busted wide open and the vault is long empty. The rich have their tax cuts. The cronies are already out of the administration and raking in the dollars at whatever wingnut welfare job they could get before the dam bursts and releases tens of thousands of ideologically driven Bushies back into the real world. Who's left to get theirs? Fat young Republicans who haven't quite gotten out of college yet must be salivating at the ridiculous notion of a McCain Presidency--if they don't get in on all of this handout action soon, they're going to actually have to find jobs, and no one is prepared for that outcome.

Be prepared for the sickening final spectacle of the last Republican being dragged out of the building feet first, engorged and bloated, screaming for the last handout as the grease runs from his chin and the money falls out of his pockets.

--WS

Common Sense Ideas from 'Burban Mom

Dry your clothes on what we used to call a "clothes line."

Now that you've switched your energy supplier to a renewable source, let's get started on some energy saving changes. Otherwise, you might end up with a higher bill than usual. Yes, the winds of change do cost a bit more, but by changing some wasteful habits at home, you'll actually see a significant reduction in your monthly bill.

I started rack and line drying my clothes this past spring and was amazed by how much money I saved on the electric bill. It really shouldn't come as much surprise, though, considering that a dryer is one of the most energy-sucking appliances in the home. My particular model uses about 3 kWh per load to dry. Multiply that by approximately 20 loads per month (or more) and you're looking at over a $6.00 savings for one simple change.

I'm old enough to remember hanging out clothes to dry, young enough to wonder why I stopped.

--WS

Flashback: I was ranting about energy before ranting about energy was cool

Honest. I was. And I have the archives to prove my claim has validity.

I'm busy today. There will be a quiz later, so click the links and read the archives. When I get all science-y, it stands the test of time.

~~BG

Oil Trading and the Fallacy of Offshore Drilling

CBS News attempts to get a handle on what is really driving the so-called oil shortage:

As gas prices skyrocket, attention has turned to public "pits," where brokers trade "oil futures" - the right to buy or sell crude oil at a specific price, on a future date.

But far away from the hue and cry, hundreds of millions of barrels of oil futures contracts are traded electronically every day, CBS News chief investigative correspondent Armen Keteyian reports.

More than 30 percent, experts say, exchanged in so-called "dark markets," the exact size and scope unknown to U.S. regulators.

"If you can trade out of the sight of U.S. regulators, you can manipulate these markets," said Michael Greenberger, a former top staffer at the Commodities Futures Trading Commission, or CFTC, which regulates the trading of commodities like oil in this country.

He recently told Congress that speculation is placing a huge premium on the price of oil.

"How much per barrel?" Keteyian asked.

"Well, there have been various estimates - anywhere from 25 percent to 50 percent," Greenberger said.

"People can actually corner the market and drive up the price," said Sen. Maria Cantwell, D-Wash. "When there is no policeman on the beat, you know that crime can go up."

More and more fingers are pointing at one of the least-known but most powerful foreign exchanges - the InterContinental Exchange, or ICE.

By the end of 2007, the all-electronic exchange accounted for nearly a 50 percent market share of all global oil futures contracts, a total of 138.5 million contracts - up 49 percent from 2006.

I don't know about you, but the idea that 50% of the price may be from speculation alone indicates to me that the industrialized countries of the world better get a firm grip on this issue and put a stop to it. When speculators run up prices like this, the bursting of the bubble that invariably happens on the other side of this thing is usually very painful.

Thank God we have an oil man in charge who knows the issues:

President Bush plans to make a renewed push Wednesday to get Congress to end a long-standing ban on offshore oil and gas drilling, echoing a call by GOP presidential candidate John McCain.

Congressional Democrats have opposed lifting the prohibitions on energy development on nearly all federal Outer Continental Shelf waters for more than a quarter-century, including waters along both the East and West coasts.

With oil prices soaring and motorists paying $4 a gallon for gasoline, political pressures have been growing for more domestic oil and gas production.

You mean the $4 a gallon he didn't see coming? You mean, instead of using less oil that drilling for for more oil is the solution? Except that it isn't because there isn't enough oil that could be pumped out to make a difference?

Get control of the speculation and you'll bring the prices down, considerably. And while we're doing that, we need to figure out how to reduce our dependence down to zero by using less, not by ruining the environment, trying to pump a small amount that won't solve the problem.

--WS

No one has the political courage to take the actions to bring relief at the pump

"We can't solve problems by using the same kind of thinking
we used when we created them." ~~Albert Einstein

As gas prices head toward five bucks a gallon, the republicans crank up the noise machine in support of drilling in ANWR to solve our energy woes (for about three months in ten years at a prohibitive cost to the environment - they conveniently forget that part). McCain is still stuck on his "gas tax holiday" nonsense, rather like an old, old man or a young, young toddler who has decided he wants pudding and isn't going to shut up about it until he gets it. Never mind that the odds seem pretty good that such an action would likely prove counterproductive by encouraging consumption.

Everyone has ideas that will offer some measure of relief eventually, not one of them has the political courage to advocate for any of the three steps that would offer immediate relief. Not bu$h, not McCain, not even Obama.

From McClatchy:

Perhaps the quickest action, the experts said, would be ordering curbs on financial speculation. Financial industry heavyweights have acknowledged in recent testimony before Congress that such speculation is driving oil prices higher.

Pension funds, endowments and other big institutional investors are pumping big money into index funds linked to commodities, including oil, driving up demand — and prices. The popular Goldman Sachs Commodities Index attracted $260 billion in investment last year, compared to $13 billion five years earlier.

Complicating any effort to harness that, about 30 percent of the trading in crude oil is done in "dark areas" — markets in London and Dubai — that aren't regulated by the U.S. Commodity Futures Trading Commission (CFTC).

President Bush could order the CFTC to regulate U.S. investments in those markets with a snap of his fingers, said Michael Greenberger, a law professor at the University of Maryland and a former director of trading for the CFTC.

"Essentially this could be ended this afternoon if the Bush administration had the stomach to do it," he said. "Those abdications of responsibility and allowing these exchanges to trade in 'dark' markets ... provides an environment for speculators to thrive."

The CFTC is investigating the link between speculation and oil prices but hasn't scheduled any action.

A second partial solution would be to boost the supply of oil available on the market by releasing as much as 1 million barrels a day of oil now held in the nation's Strategic Petroleum Reserve. That step is being pushed by, among others, the Center for American Progress, a Democratic think tank run by several former Clinton administration officials.

Do that for 90 days — through the summer driving season when consumer demand for gasoline is highest — and the reserve would lose less than 15 percent of the oil held in case of national emergency.

"Put that on the market, and the price of oil will fall," said Daniel J. Weiss, a senior fellow at the center.

It's not entirely clear that U.S. refineries could handle all that extra oil, but it would signal to traders of oil contracts that the U.S. market is adequately supplied.

Finally, the Federal Reserve could act to boost the weak dollar, which has led oil producers to demand higher prices for oil, because oil generally is traded in dollars. Oil producers want higher prices to offset the cost of converting dollars into euros and other currencies that have grown stronger against the dollar.

The best way to bolster a currency is to boost interest rates, but the Federal Reserve has been reluctant to do that with America teetering on the brink of recession. The central bank in Europe, where growth is more robust, is poised to raise rates, however. That could weaken the dollar further, and drive oil prices even higher.

Later today, the Senate will try to muster the 60 votes necessary to thwart republican obstructionists led by Mitch McCionnell to move forward legislation that would mandate CFTF regulators require investors to put up more of their own wealth if they want to speculate on oil markets.

Obama, speaking at a campaign rally in Raleigh, North Carolina yesterday repeated his calls for a windfall tax on oil companies. "I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," he said.

in the long term, however, Obama said the only answers were to increase the use of alternatives such as solar, wind, biodiesel, and even clean coal - coupled with tougher CAFE standards for vehicles and development of plug-in hybrid vehicles.

By contrast, McCain would just go after less accessible (off shore) and less desirable (sand-tar) oil deposits, and puts no emphasis on alternative energy production or technological developments.

And isn't that something of a puzzler, coming from the guy who insists that his willingness to deal with global warming sets him apart from der chimpenfurher?