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

Offshore Drilling OR North Dakota

Uff da!

Landowners in western North Dakota have a much better chance of striking it rich from oil than they do playing the lottery, say the Stohlers. Some of their neighbors in the town of about 120, from bar tenders to Tupperware salespeople, have become "overnight millionaires" from oil royalty payments.

"It's the easiest money we've ever made," said Lorene Stohler, who worked for decades as a sales clerk at a small department store.

State and industry officials say North Dakota is on pace to set a state oil-production record this year, surpassing the 52.6 million barrels produced in 1984. A record number of drill rigs are piercing the prairie and North Dakota has nearly 4,000 active oil wells.

The drilling frenzy has led companies to search for oil using horizontal drilling beneath Parshall, a town of about 980 in Mountrail County, and under Lake Sakakawea, 180-mile-long reservoir on the Missouri River.

"I have heard, anecdotally, that there is a millionaire a day being created in North Dakota," said Ron Ness, president of the North Dakota Petroleum Council.

Kathy Strombeck, a state Tax Department analyst, said the number of "income millionaires" in North Dakota is rising.

The number of taxpayers reporting adjusted gross income of more than $1 million in North Dakota rose from 266 in 2005 to 388 in 2006, Strombeck said. The 2007 numbers won't be known until October, she said.

Well that's great. But remember. The United States consumes about twenty million barrels of oil per day. So we're not even up to a week's worth of oil coming out of North Dakota. But it's a start, isn't it? Especially if some of those millionaires get wise and invest in wind and solar technology for their new abodes.

--WS

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?

Is the World Really Running Out of Oil?

Stories like this break your heart. It's a good idea to be "self-sufficient." It's another thing to be stampeded into that kind of a lifestyle out of fear and ignorance.

A few years ago, Kathleen Breault was just another suburban grandma, driving countless hours every week, stopping for lunch at McDonald's, buying clothes at the mall, watching TV in the evenings.

That was before Breault heard an author talk about the bleak future of the world's oil supply. Now, she's preparing for the world as we know it to disappear.

Breault cut her driving time in half. She switched to a diet of locally grown foods near her upstate New York home and lost 70 pounds. She sliced up her credit cards, banished her television and swore off plane travel. She began relying on a wood-burning stove.

"I was panic-stricken," the 50-year-old recalled, her voice shaking. "Devastated. Depressed. Afraid. Vulnerable. Weak. Alone. Just terrible."

Convinced the planet's oil supply is dwindling and the world's economies are heading for a crash, some people around the country are moving onto homesteads, learning to live off their land, conserving fuel and, in some cases, stocking up on guns they expect to use to defend themselves and their supplies from desperate crowds of people who didn't prepare.

[SNIP]

The couple have gotten rid of their TV and instead have been reading dusty old books published in their grandparents' era, books that explain the simpler lifestyle they are trying to revive. Lynn-Marie has been teaching herself how to make soap. Her husband, concerned about one day being unable to get medications, has been training to become an herbalist.

By 2012, they expect to power their property with solar panels, and produce their own meat, milk and vegetables. When things start to fall apart, they expect their children and grandchildren will come back home and help them work the land. She envisions a day when the family may have to decide whether to turn needy people away from their door.

"People will be unprepared," she said. "And we can imagine marauding hordes."

So can Peter Laskowski. Living in a woodsy area outside of Montpelier, Vt., the 57-year-old retiree has become the local constable and a deputy sheriff for his county, as well as an emergency medical technician.

"I decided there was nothing like getting the training myself to deal with insurrections, if that's a possibility," said the former executive recruiter.

Do we really need to talk about turning away the needy and insurrection?

My favorite part of all of that is the part about "the stockpiling of guns" because that's exactly what we need to do whenever there is a crisis--succumb to fear and arm ourselves to the teeth so that every single desperate, uninformed person has a gun readily available for use without thinking.


One should always be armed in some way with a firearm. If a person feels the need to "stockpile" a gun, they don't know much about guns in the first place. Repeatedly firing a gun until it wears out, forcing someone to go their reserve gun, and then replacing that when it wears out is the scenario envisioned by the gun stockpiler. Having extra barrels helps. A supply of several hundred thousand rounds of ammunition is always a good thing as well. One can never run out of bullets when defending their home against whatever has forced them to wear out several guns.

The problem with that scenario is this--if you are firing your gun so much that it "wears out" and forces you to go to one of the guns you have "stockpiled" then you aren't in a bad situation. You are in a shooting gallery, and nothing--no amount of preparation and no amount of personal armament--is going to save you.

Instead of stockpiling guns, have a reliable firearm handy that you can use. Ensure you have enough ammunition. Enough means what it really should mean--about three or four hundred rounds is probably enough, but you can be the judge of that. If you are arming yourself for the apocalypse, or the First Battle of the Somme, then the apocalypse and the German machine gunners are going to find you.

We need to have faith in technology and the free market. Technology has gotten us out of plenty of "shortages" of oil. During World War I, it was theorized that the United States had pumped all of the oil it was ever going to pump and that we had arrived at a "peak oil" moment. Since then, we have been through countless panics and scares.

The world is not running out of oil, but it is getting more expensive to pull it out of the ground. We are not running out of it, at least not for another hundred years, if then. We need to cut our dependence on it, and make it last longer but we're not running out of it. Or natural gas. Or hydrogen. Or nitrogen. Everything has a finite supply, but we're not going to run out of these things. The world is also not running out of wind or solar or hydroelectric power. We need better technology to take advantage of these technologies to reduce our dependence on fossil fuels and eliminate them altogether to slow down or reverse, if possible, global warming.

We can, calmly and rationally, work our way out of this mess. We don't need fear. We need heavy investment in technology and education. We don't need wars for scarce resources. We need a smarter way of getting what we have to work more efficiently.

For an old woman to live in fear right now is sad, however. A sad indication of just how uninformed people are, and of how a simple issue can be demagogued to death. There is "too much information" out there. Too many people screaming and getting hysterical. The world isn't going to hell in a handbasket nearly as fast as we think it is. But if we're smart, we can do things--reasonable things--to make the trip in that handbasket fairly pleasant.

The Multi-decade Endgame of US Ascendancy

Change is on the way for the United States. Change is always around the corner, but it may be arriving faster than we think. Is it a new austerity? A new mindset? Something more humble and realistic, given the rapidly changing nature of our environment and our world? Or will there be a backlash against any kind of reordering of the American way of life?

Kevin Phillips looks at recent American history and sees parallels which should concern us all:

Premature fears have also dogged the United States. The decades after the 1968 election were marked by waves of a new national apprehension: that U.S. post-World War II global hegemony was in danger. The first, in 1968-72, involved a toxic mix of global trade and currency crises and the breakdown of the U.S. foreign policy consensus over Southeast Asia. Books emerged with titles such as "Retreat From Empire?" and "The End of the American Era." More national malaise followed Watergate and the fall of Saigon. Stage three came in the late 1980s, when a resurgent Japan seemed to be challenging U.S. preeminence in manufacturing and possibly even finance. In 1991, Democratic presidential aspirant Paul Tsongas observed that "the Cold War is over. . . . Germany and Japan won." Well, not quite.

In 2008, we can mark another perilous decade: the tech mania of 1997-2000, morphing into a bubble and market crash; the Sept. 11, 2001, terrorist attacks; imperial hubris and the Bush administration's bungled 2003 invasion of Iraq. These were followed by OPEC's abandoning its $22-$28 price range for oil, with the cost per barrel rising over five years to more than $100; the collapse of global respect for the United States over the Iraq war; the imploding U.S. housing market and debt bubble; and the almost 50 percent decline of the U.S. dollar against the euro since 2002. Small wonder a global financial crisis is in the air.

Here, then, is the unnerving possibility: that another, imminent global crisis could make the half-century between the 1970s and the 2020s the equivalent for the United States of what the half-century before 1950 was for Britain. This may well be the Big One: the multi-decade endgame of U.S. ascendancy. The chronology makes historical sense -- four decades of premature jitters segueing into unhappy reality.

The most chilling parallel with the failures of the old powers is the United States' unhealthy reliance on the financial sector as the engine of its growth. In the 18th century, the Dutch thought they could replace their declining industry and physical commerce with grand money-lending schemes to foreign nations and princes. But a series of crashes and bankruptcies in the 1760s and 1770s crippled Holland's economy. In the early 1900s, one apprehensive minister argued that Britain could not thrive as a "hoarder of invested securities" because "banking is not the creator of our prosperity but the creation of it." By the late 1940s, the debt loads of two world wars proved the point, and British global economic leadership became history.

Any change or reordering of the way Americans live would affect vast areas of the country that were designed entirely for car travel and have almost nothing in the way of a public transportation infrastructure. Paul Krugman compares Atlanta and Berlin--to cities virtually identical in size. Berlin has subways, trains and bike riding areas and Atlanta has cars and very little else. The reality of rising energy prices means that suburban Atlanta could be isolated or abandoned in favor of living in a more densely populated area, served by public transportation. Krugman says that change is going to be difficult:

Changing the geography of American metropolitan areas will be hard. For one thing, houses last a lot longer than cars. Long after today’s S.U.V.’s have become antique collectors’ items, millions of people will still be living in subdivisions built when gas was $1.50 or less a gallon.

Infrastructure is another problem. Public transit, in particular, faces a chicken-and-egg problem: it’s hard to justify transit systems unless there’s sufficient population density, yet it’s hard to persuade people to live in denser neighborhoods unless they come with the advantage of transit access.

And there are, as always in America, the issues of race and class. Despite the gentrification that has taken place in some inner cities, and the plunge in national crime rates to levels not seen in decades, it will be hard to shake the longstanding American association of higher-density living with poverty and personal danger.

Still, if we’re heading for a prolonged era of scarce, expensive oil, Americans will face increasingly strong incentives to start living like Europeans — maybe not today, and maybe not tomorrow, but soon, and for the rest of our lives.

One thing that will likely change is the notion of extreme commuting, or living so far away from work that it is next to impossible to see how the costs of transportation could be covered by any reasonable salary:

It is said that doctors, when they ask you how much you drink, will take the answer and double it. When a commuter says, “It’s an hour, door-to-door,” tack on twenty minutes.

Seven hours is extraordinary, but four hours, increasingly, is not. Roughly one out of every six American workers commutes more than forty-five minutes, each way. People travel between counties the way they used to travel between neighborhoods. The number of commuters who travel ninety minutes or more each way—known to the Census Bureau as “extreme commuters”—has reached 3.5 million, almost double the number in 1990. They’re the fastest-growing category, the vanguard in a land of stagnant wages, low interest rates, and ever-radiating sprawl. They’re the talk-radio listeners, billboard glimpsers, gas guzzlers, and swing voters, and they don’t—can’t—watch the evening news. Some take on long commutes by choice, and some out of necessity, although the difference between one and the other can be hard to discern. A commute is a distillation of a life’s main ingredients, a product of fundamental values and choices. And time is the vital currency: how much of it you spend—and how you spend it—reveals a great deal about how much you think it is worth.

Resistance to any kind of change or rethinking of how to commute, how to improve our lives, and how to deal with new economic realities can best be explained by looking at the hysterical headlines from websites, such as the Drudge Report:



This headline, in underlined RED text while everything else is in regular black text, is designed to appeal to readers who might be offended that a Presidential candidate would suggest that Americans need to change their thinking about certain things. It is not designed to appeal to anyone who might agree with Obama, hence, the prominent position on the page (upper left, first story), the highlighting of the red text, and the out-of-context quote:

Pitching his message to Oregon's environmentally-conscious voters, Obama called on the United States to "lead by example" on global warming, and develop new technologies at home which could be exported to developing countries.

"We can't drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times ... and then just expect that other countries are going to say OK," Obama said.

"That's not leadership. That's not going to happen," he added.

There may be new change and some form of austerity forced on Americans, but it won't happen quietly.

Say Hello To a $5 Gallon of Gas

MSNBC.COM - BREAKING NEWS: White House says Saudi Arabia does not see a reason to increase oil production

Translation: The President has no powers of persuasion, nor does he have any influence with a country that has been aligned with his family for decades.

Not all biofuels are evil, you know...

Marginal areas where there is limited opportunity to grow food could be in use right now--growing alternatives to corn and soybeans and helping solve our energy problems. While these options are the whole answer, they give us something to think about now that we're seeing a growth in food prices.

Those seeking alternatives are looking to algae and cellulose-based plants, like switchgrass. These plants don't cut into with food production because they are not based on grains. In addition, they can be grown in conditions unsuitable for most crops, so they don't use needed agricultural land.

Algae and switchgrass might do what corn-based ethanol was supposed to: reduce U.S. dependence on foreign oil and cut CO2 emissions that could cause climate change. Some scientists in the biofuels industry promote algae as a viable alternative to gasoline because it can help curb global warming. Algae require CO2 and sunlight for photosynthesis. Since algae feed on CO2, growing algae goes hand-in-hand with reducing CO2 emissions.

Ted Aulich, a process chemist at the Energy and Environmental Research Center at the Univ. of North Dakota gives algae a glowing recommendation. "Algae represent a better feedstock than just about anything else out there in terms of its CO2 balance," he said, "and also I guess the potential for developing much more economical fuel pathways."

One reason is algae's ability to grow under conditions unsuitable for most crops, Aulich said. Algae can grow in the desert, for example. It can also grow in saline or polluted water that's unusable for anything else.

Besides algae, there's our old friend switchgrass:

Another biofuel considered to have great potential is cellulosic ethanol, made from plants with high cellulose contents -- notably switchgrass. Like algae, switchgrass isn't a food-based crop. It can also grow on marginal land.

Joachim von Braun, director general of the International Food Policy Research Institute, called for an end to food-based biofuel production last week. His institute supports a move toward non-grain crops.

But questions still remain. "We have been saying that there should be a switch to using plant residues or switchgrass or whatever," said the IFPRI spokesman Michael Rubinstein, "but we can't say yet what the impact would -- be because the technology isn't there. Nobody's proven yet that these technologies work."

Yet, some firms have developed working technology to convert algae and switchgrass into fuels. As with many other green energy solutions, the major obstacle for both algae and switchgrass biofuels is not technology but cost.

"We have to figure out a better way to get high yields of algae more economically," Aulich said. He says this means developing technology that will allow more algae to be exposed to as much sunlight as possible.

As for switchgrass, Aulich says the costs of production and transportation are still too high. "It's fairly expensive to harvest and transport switchgrass," he said. "It's not a very energy-dense material. … If we're looking at crops like swichgrass and cellulose crops, what we need is a good way to densify those materials -- increase their energy density." The idea is to get more energy out of less switchgrass, increasing efficiency and cutting costs.

I'm sure there are drawbacks, but one of the things we have to change our mindset about is definitely "whether we can do this." We have to do this. We have to look at wind and solar power, and we have to look at algae and switchgrass.

Meanwhile, the Oil Companies Get Richer

What a heartbreak...

Exxon Mobil Corp., the world’s largest publicly traded oil company, said Thursday record crude prices helped its first-quarter profit climb 17 percent to $10.9 billion — the second biggest U.S. quarterly corporate profit ever.

But the results still fell short of Wall Street’s lofty forecasts, and its shares fell more than 4 percent in morning trading.

The company’s refining operations limited the company’s overall earnings growth because crude prices for crude oil rose even faster than the rise in prices that drivers see at the gasoline pump.

It's tough to make obscene profits from the misery of others.

But even at $10.9 billion, the profit ranks as the second biggest for a U.S. company — the only bigger result in a three-month period was the $11.7 billion Exxon Mobil posted in the final three months of 2007.

Ouch! That's gotta suck. And remember--this is a profit from something we don't make here. This is a profit from selling something bought somewhere else. It's a sad day when the biggest profit ever is from something that forces us to keep our troops stuck in the Middle East. It's a sad day when America doesn't make anything except for debt anymore.

Already, record crude prices have produced bountiful first-quarter profits for several of the other major oil companies, despite higher costs and lower results from refining.

BP PLC and Royal Dutch Shell PLC, Europe’s two biggest oil producers, posted combined profits of $17 billion earlier this week — $9.08 billion for Shell, $7.6 billion for BP.

BP’s earnings surged 63 percent from a year ago; Shell’s rose 25 percent.

Last week, ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. oil outfit far outpaced industry expectations.

Chevron Corp., the No. 2 U.S. oil company, is expected to continue the trend. It is scheduled to report first-quarter results Friday.

You'd think they'd feel the need to start cutting their profit margins so that consumers could keep buying their products. Don't hold your breath.

Remember when the oil company executives were called to Capitol Hill? Remember when there was a controversy about whether or not they should raise their hands and swear to tell the truth? I think we need another trip to the Hill to explain why they're making so much money when they should be making a more modest profit. Hell, by my way of thinking, these guys should be losing money or breaking even--and begging for cars that get better mileage.

Exactly What We Don't Need (Today's edition)

This is why I'd rather just not pay attention to the news some days...

WASHINGTON (Reuters) - President George W. Bush said on Monday he had agreed the United States would help modernize the Polish military as part of a U.S. plan to base components of a global missile defense shield in Poland.

Bush made the announcement after White House talks with Polish Prime Minister Donald Tusk, whose government had demanded that Washington boost its military assistance in exchange for allowing the basing of 10 missile interceptors in Poland.

"The United States recognizes the need for Polish forces to be modernized," Bush told reporters. He said "before my watch is over" -- he leaves office in January 2009 -- U.S. experts will have assessed those needs.

HEY! Do you think it would be a good idea to modernize our own military? Do you think it would be a good idea to make sure our own troops have the gear they need and the weapons that will protect this country BEFORE you arm and modernize another nation?

In the wake of the dismissal of the US Ambassador to Belarus--you know, that country that sits immediately to the right of Poland--that is under the control of a tyrant right now, the election of a new leader in Russia, and the need for us to modernize out own goddamned military--why is this being done? Who is stupid enough to modernize the Polish military, in light of the fact that they face no threat whatsoever, except for maybe economic sanction from Russia? Do we really need to give the Russians a reason to squeeze Europe on energy prices? Is that our way of going after the Euro?

This isn't diplomacy--this is malpractice.

Lets Talk About Port Security

Like it or not, our economy - and way of life - is largely based on imported energy products such as crude oil, liquefied natural gas (LNG), and refined products such as gasoline and jet fuel – and those products come into United States ports in tankers – about 8.5 million barrels per day. This supply chain of energy commodities is vulnerable to attack and disruption at many points, both here and abroad, as evidenced by successful attacks overseas against both ships and facilities.

In assessing the vulnerability of the supply chain, the GAO assessed three areas in a review that spanned several foreign and domestic ports. Multiple steps were taken to analyze data and opinions gathered from agencies and stakeholders, and reported to the House Committee on Energy and Commerce.

The three areas reviewed were:

1. The types of threats to tankers, and the consequences of a successful attack
2. Measures taken to protect tankers, and the challenges faced by federal agencies in making these actions effective.
3. Plans in place for responding to a successful attack and potential challenges stakeholders face in responding.

The GAO determined that the supply lines face threats from three different types of attack:

1. Suicide attack by explosives-laden boats
2. Stand-off attacks involving rockets fired from a sufficient distance to allow the attackers to evade defensive fire.
   
3. Assault by armed commandos.

The volatile and combustible nature of energy commodities mean the contents of tankers carries a potential for combustion, or, in a less likely scenario, explosion. This explosive capacity represents a significant threat to public safety. The chemical nature of the material transported by tanker represents a high risk of negative environmental impact in the event of an attack. Additionally, the disruption of the supply lines could have a severe economic impact.

The GAO determined that while many steps have been taken, both internationally and domestically, to protect tankers and facilities, many significant challenges remain. For example, in spite of international agreements that detail specific protective steps, in reality many disparities exist in their implementation. The United States is limited in the ability to increase compliance abroad, as well as in ensuring safe passage of tankers traversing vulnerable transport routes.

The global supply chain involves many players, and has three main components, each presenting it's own vulnerabilities. First, the materials are loaded in the country of origin, then it is transported across the open ocean, and ultimately unloaded at a facility in this country. Facilities where tankers are loaded overseas might be owned by private entities, governments, or combinations of the two. Foreign governments are primarily responsible for overseeing the security of energy export operations, and the vessels aboard which energy commodities are loaded are likewise owned by many different companies, some with multi-national ownership interests. Transportation routes involve crossing open, international waters, where there is no government control. Of approximately 3,550 oil tankers and 200 LNG tankers, most are registered in countries other than the United States, which means the United States has minimal oversight authority over these vessels’ crews or condition until they enter U.S. waters. Once an oil or LNG tanker arrives at it's US destination, it is unloaded at terminals that may be on the Atlantic, Pacific or Gulf coasts. LNG is currently limited to five facilities, but demand for natural gas is growing, and the number of terminals for unloading LNG is expected to increase. The Federal Energy Regulatory Commission must approve each new LNG terminal. Eleven new facilities are currently approved and dozens are pending approval.

On the domestic front, the Coast Guard, the federal agency responsible for maritime security, reports that it lacks adequate resources to meet its own self-imposed security protocols. Those protocols involve escorting ships carrying LNG. As LNG facilities are added, the workload of many units are likely to increase. The Coast Guard has not developed plans for shifting resources and spreading workload among units. According to the data obtained by the GAO, and discussions held with field unit officials, resource shortfalls were the primary reasons for not meeting these responsibilities.

Although multiple attack response plans have been established to address an attack, three main challenges are faced by the stakeholders in their implementation. Primarily, the plans for responding to a spill, versus responding to a terrorist threat are disparate processes, and ports have rarely exercised these plans in concert to see if they work effectively together. Second, ports are generally lacking in plans for dealing with economic issues, such as the prioritizing of the movement of vessels after an affected port reopens. Finally, some ports report difficulty in even acquiring response resources to carry out planned actions.

Federal grants allocated for port security have in general been geared toward preventing attacks, rather than responding to them, but a more comprehensive risk-based approach is in the planning stages.

Now comes the inevitable Catch-22. Decisions about the need for enhanced response capabilities are hindered by a lack of performance metrics tying resource needs to response effectiveness.

The supply chain of energy commodities is not only critical, it is vulnerable to disruption by terrorist attack. Ports are inherently vulnerable because they must be accessible by both land and sea, and because they are sprawling installations, frequently in close proximity to population centers. The ships themselves are vulnerable because they travel direct routes that are known in advance, and for much of the journey, they are afloat on waters that do not afford evasive maneuvers to avoid possible attack. Because there are so many links in the chain, terrorists have the luxury of examining the chain for the weakest link.

In spite of the increased security presence since the terrorist attacks of September 11, 2001, terrorists have managed to carry out several attacks on this supply chain. These attacks have included attempts to damage tankers, and to disrupt the loading operations at facilities overseas. In 2004, terrorists managed to coordinate two offshore oil terminals in Iraq where tankers were taking on oil, and in 2002, terrorists succeeded in conducting a suicide attack against the French supertanker Limburg in international waters off the coast of Yemen. (pictured)

The successful attacks overseas illustrate that tankers face several major threats, and if carried out domestically, serious consequences would likely result. Terrorists have demonstrated the ability to carry out three types of attack - suicide, stand-off, and commando raid - but overall, the suicide boat presents the greatest concern. It was a suicide boat that disabled the Limburg in October 2002. That attack killed one, injured 17, and spilled 90,000 barrels of oil.

To date, no such attacks have occurred on tankers in U.S. waters or on loading facilities in U.S. ports, but the successful attacks abroad, coupled with the expressed desire by terrorists to target U.S. economic interests, and the potential outcome of a terrorist attack on a tanker have led to the conclusion that protective efforts are warranted.

A successful attack against an energy commodity tanker, port facility or terminal carries the potential for significant public safety, environmental and economic consequences, which vary by commodity. A highly combustible commodity like LNG has the potential to burn, or (less likely) explode. An explosion at a port facility, near a population center, would pose a threat to public safety. Crude oil and heavy petroleum products remain in the environment after they are spilled, and must be removed. Spills pose the risk of significant environmental damage. The economic consequences of a major attack could be as mild as a temporary price spike, associated with apprehension about future attacks or supply disruptions with delays of shipments. While the loss of one cargo shipment would probably not have a significant price impact by itself, if an attack shut down a port for days - or even weeks - price responses and higher costs could mean losses that, when figured across the entire spectrum of effect, could run into billions of dollars.

Much is being done, both internationally and domestically, to protect the supply lines, but much more remains to be done. GAO recommends that cognizant agencies

1. plan for meeting a growing security workload for protecting liquefied natural gas shipments,
2. help ensure that ports plan for dealing with economic consequences of an attack,
3. integrate terrorism and spill response plans at the national and local level, &
4. work to develop performance measures for emergency response.

The agencies generally agreed with the GAO recommendations, but the Department of Homeland Security stopped short of endorsing them and "took the final recommendation under advisement."