It's Not About the People

Once again we are being fed the lie that our intervention in Libya is about the poor "freedom fighters" if it really was about the people then we would  intervene in places like Bahrain and Cote D'Ivoire where there has been violence at least or maybe worse than that in Libya. Never, ever forget that Libya has oil and that is what this is really about.

Oil reserves in Libya are the largest in Africa and the ninth largest in the world with 41.5 billion barrels (6.60×10^9 m3) as of 2007. Oil production was 1.8 million barrels per day (290×10^3 m3/d) as of 2006, giving Libya 63 years of reserves at current production rates if no new reserves were to be found. Libya is considered a highly attractive oil area due to its low cost of oil production (as low as $1 per barrel at some fields), and proximity to European markets. Libya would like to increase production from 1.8 Mbbl/d (290×10^3 m3/d) in 2006 to 3 Mbbl/d (480×10^3 m3/d) by 2010–13 but with existing oil fields undergoing a 7–8% decline rate, Libya's challenge is maintaining production at mature fields, while finding and developing new oil fields. Most of Libya remains unexplored as a result of past sanctions and disagreements with foreign oil companies.

We are once again going to war based on bullshit and we doing it because some of our masters (Exxon and BP for starters) want the oil. This exercise has nothing to do with humanitarianism and people need to disabuse themselves of this crap.

Let's hope that Qaddafi is sufficiently cowed and that he backs down quickly. If he doesn't then we middle class and poor are going to have to come up with a little more of that good old fashioned "sacrifice" that we have been so good at providing.  Maybe we don't really need public education after all and all those people getting Medicare will just end up dying in the end anyway.

What About the Other Gulf Oil Platforms?

Is it just me or have I missed the discussion? No one seems to be talking about the other oil platforms extant in the Gulf of Mexico and whether some immediate program to insure they are properly prepared and protected from a blowout like the most recent one. As of 2006 there were 3,858 oil rigs in the Gulf. Are any of them equipped as the ones in Noway with the ability to remotely shut them off if necessary? Are they all equipped with the proven ineffective 'blow out preventers'? Shouldn't we be talking about an emergency program to do just that? I know everyone's focus is on cutting the flow from the Deepwater Horizon but it seems like the powers that be ought to be looking forward a bit more. Yes, they are talking about splitting up the MMS now but that is a little like the proverbial 'shutting the barn door' thing. It just seems like everyone is behaving like this is some giant 'one off' and could never happen again. Just saying.

BP Has Limited Liability for This Spill

According to the Great Orange Satan 

Matthew Wald of The New York Times reports the details of the previously obscure Oil Spill Liability Trust Fund, a $1.6 billion fund financed by a minuscule tax on oil -- eight cents per barrel, which Wald says is roughly 0.1%. According to Wald, the fund is designed to pay damage claims resulting from oil spills, though not cleanup and containment costs. But that's not all it does. It also limits the liability of oil companies like BP.

Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government, although they are responsible for the cost of containing and cleaning up the spill.
The fund was set up by Congress in 1986 but not financed until after the Exxon Valdez ran aground in Alaska in 1989. In exchange for the limits on liability, the Oil Pollution Act of 1990 imposed a tax on oil companies, currently 8 cents for every barrel they produce in this country or import.
The tax adds roughly one tenth of a percent to the price of oil. Another source of revenue is fines and civil penalties from companies that spill oil.

That's a pretty good deal the oil companies negotiated back then...for the opportunity to make unlimited profits and lobby the government with unlimited money(BP spent 16 million on lobbying last year) the get a limit on the liability they face to the tune of 75 million. 75 mil is chump change to someone like BP. We ar so screwed.

Obama Makes Another Misstep

Obama has modified his stance on offshore drilling:

Barack Obama said Friday that he would be willing to compromise on his position against offshore oil drilling if it were part of a more overarching strategy to lower energy costs.

“My interest is in making sure we’ve got the kind of comprehensive energy policy that can bring down gas prices,” Obama told The Palm Beach Post early into a two-day swing through Florida.

“If, in order to get that passed, we have to compromise in terms of a careful, well thought-out drilling strategy that was carefully circumscribed to avoid significant environmental damage – I don’t want to be so rigid that we can’t get something done,” Obama said.

I know that there are people who are suffering because of high gas prices. It is not hurting me as a percentage of my income as hard as it is hitting millions of people in the U.S. right now and not nearly as hard as it has hit people in the Europe and the U.K. for years. I want to see the price of gas come down as much as the next guy when it is my turn at the pump but the reality is that we need to recognize that it is a finite resource and it is going to run out some day. They aren't making any more! Not only is it a finite resource but it is a dirty one and we are choking on it and will soon be roasting ourselves because of it.

Here is the thing...I don’t want to see gas prices come down because we’re drilling and finding more. We in the United States are finally getting a taste of what it’s been like in Europe and the rest of the world for a long time. The result of the high gas prices in Europe is cleaner cities, abundant and affordable public transportation and far less dependence on foreign oil.
My problem with this is that I think democrats should be solidly be on the side of finding alternative energy. Rising gas prices have made a difference. I’ve noticed a lot more people riding MARTA in Atlanta – a LOT more. I’d be willing to bet many of these people were like me, before I made a commitment to figuring out the system and how to make it work. Pain works.

There will never be improvements made in mass transit, no one will ever start investing in wind energy, and no one will be pushing for plug-in hybrids or electric cars if gas remains cheap and by European standards $4.00 gas is cheap, cheap. Now with gas at $4.00, we’re starting to seriously talk about alternative energy sources. We’ve even got T. Boone Pickens, a big-time oil guy, completely investing himself in it. Yeah, I know he thinks he’ll make a fortune off it but I really don’t care as long as we all get to benefit. If he’s the one who makes it happen, then I’ll pay him instead of some Arab sheik . We cannot drill our way out of this mess and the sooner we bite the bullet and start on the path to alternative energy the better.

Again, I would like to see the price of oil come down, but NOT because we’re drilling an pumping more of it. I want to see it come down because we don’t need it and we let that nasty old law of supply and demand kick in.

Obama’s new position is wrong. We Democrats need to stand up and insist that we turn our backs on foreign oil and end our dependence. There should be no compromise. Drilling for oil along our coasts at great expense, environmental risk and marginal reward still 20 or more years down the road is insane at best and stupid at worst. Drilling for more oil is a false god that will lead us away from the true path which is finding non-polluting and renewable energy resources.

Selling Our Souls for Easy Oil

Let's talk a little reality about opening up our coasts to oil drilling. The reality is that there are roughly 70 million acres of leases already in the greedy little hands of oil companies that they aren't drilling. Why? It is expensive oil. It is in deep water and the costs to get it to market are very high even with prices at $135 or so a barrel. Guess what? Near in shore, shallow water oil is a lot cheaper to bring to market. Why should the oil companies dip into their record profits to extract the expensive oil in the leases they already own when it looks like the panic over high gas prices is going to release millions of acres of "cheap oil"?
From CNN :

The oil industry is correct about not hoarding oil, said Oppenheimer analyst Fadel Gheit. With prices at $135 dollars a barrel, everyone is trying to pump as much as they can, he said.

But fearing oil prices will eventually fall, the industry is leery about making too many investments in the fields it has - many of which are in deepwater areas that can be pricey to develop.

Instead, they're holding out, hoping the government will open areas closer to shore that would be cheaper to work on.

Gheit hasn't seen the legislation proposed by Markey and others, but he thinks the government should revise the leasing process to encourage more drilling on existing areas before it puts more acres up for bid.

"Government agencies should hold their feet to the fire," he said. And oil companies "should finish what's on their plate before they do back in line."

We really need to keep coastal areas clear and free of the oil companies. Sure it is cheaper to drill but with the oil companies making record profits I don't see any reason they shouldn't invest in some of the deeper water resources before we commit our shores to the horrors of even a single spill. Of course the real answer is to invest in finding alternative sources for our continually increasing need for energy but panic and close in shore drilling is the last thing we need.

A Man Can Change His Mind

You gotta wonder when McSame is going to get a dog named Barney...

The Washington Post’s Dana Milbank writes:

During his last run for the presidency, in 1999, McCain supported the drilling moratorium, and he scolded the “special interests in Washington” that sought offshore drilling leases. Yesterday, he announced that those very same “moratoria should be lifted” and proposed incentives for the states “in the form of tangible financial rewards, if the states decide to lift those moratoriums.”

In 2000, McCain promised to “never lose sight” of fundamental principles on the issue.

That same McSame yesterday...

As McCain revealed Monday, his speech today includes a proposal to end a federal ban on offshore drilling in the eastern Gulf of Mexico and much of the the oceanic coasts, giving states the option to approve oil production within their waters.

h/t ThinkProgress

Drilling off all our beaches and nature preserves sounds familiar doesn't it. From 2001...

The Bush administration has unveiled plans to extend drilling for oil and gas in the Gulf of Mexico as part of its controversial energy policy...President George W Bush has long argued that the US needs to drill for more oil and gas, including in its coastal waters, to make it less dependent on foreign energy suppliers.

I guess we're not supposed to remember 7 years ago...

It's Getting Very Expensive

Just to put the price of gas into perspective here is a bit from Tom Kloza. Tom is Chief Oil Analyst at OPIS (Oil Price Information Service) and has his own blog. This particular quote is from a guest post at CNBC

Today’s back-of-the-envelope estimated bill, calculated against a national average price of $3.787 gal, is $1.486-billion. When we get to $3.82 gal nationally, we’ll cross $1.5-billion. That level is a virtual certainty based on recent wholesale price advances. It may even occur this weekend.

How does this compare to previous years?

The per diem charges Memorial Day last year saw motorists pay about $1.285-billion. In 2006, the cost was $1.122-billion; and in 2005, it was $832-million. If one goes back to 2002, the daily cost of gasoline was about $534-million. Before prices top out, we could be making $1-billion more per day in gasoline payments than we made six years ago.

Now that's inflation!

Washington Said Gas Prices Fell Last Month

Do you think it is possible to believe any number that comes out of Washington especially in Shrub World? It takes some real cajones to put out a report like this.

According to the Bush Labor Department.

WASHINGTON (AP) -- Inflation pressures eased a bit in April despite the biggest jump in food prices in 18 years.

The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.

The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.

The unchanged reading for energy reflected a big 4.8 percent jump in natural gas prices, offset by a 2 percent decline in gasoline costs.

The reported drop in gasoline prices reflected the government's accounting process, which discounts expected seasonal price changes.

Since gasoline prices normally rise significantly in April, the 5.6 percent rise in prices for the month turned into a 2 percent drop after the government adjusted for normal seasonal changes. That was little comfort for motorists now paying record prices at the pump, which are nearing $4 per gallon.

Enough to Give You Gas

Update: Kvatch has a good post on the same subject with some interesting numbers over at Ragebot

While I wait for my files to FTP over I have a few minutes to talk about a subject that is getting nearer and dearer to our hearts and that is gasoline.

Yesterday, Goldman Sachs analyst Arjun Murti predicted that the price of crude oil could hit $150 to $200 a barrel sometime in the next 24 months and maybe even as quickly as 6 months. On his comments crude oil in New York quickly jumped to as high as $122.73 a barrel before closing at $121.84.

What does it mean to us regular folks if crude oil goes to $150 or $200? What does that do to prices at the gas pump? There is a rule of thumb that says for every dollar increase in crude prices gas at the pump goes up a nickel. If we start from yesterday’s national average price of $3.61, a crude price of $150 means about $5 a gallon at retail. Ouch! If we go a little further to $200 a barrel for crude then we are looking at $7.50 or so at the pump. Double Ouch! How much will it cost you to fill up your car at $7.50 a gallon? I think my Hyundai Azera holds about 18 gallons and filling it up would whack me for $135.

We all see the price of gas in personal terms because it is our wallets most affected but the picture is really much broader than that. Nationally, in just the first 4 months of 2008, we spent $757.24 million more a day than we did in the first 4 months of 2002 according to Peter Beutel of Cameron-Hanover . Just to put this into perspective we are spending about $720 million a day in Iraq.

We are all feeling the pressure from increasing energy costs and not just at the filling station. Prices for everything are being impacted by oil costs and especially food. Everything that moves by highway is absorbing the increased cost of diesel fuel which is now handily above $4 a gallon most everywhere.

There are other things that are a little more subtle. Airlines are already struggling. What will a doubling of fuel costs do to them? What about American auto manufacturers? Chrysler is already in deep trouble and unless the Americans can retool quickly and start producing the kind of fuel efficient cars other countries already have they are toast and that means thousands more American jobs lost. Transportation costs are going to affect virtually every facet of our society and I fear it going to be painful. Even the waitress in a restaurant in a tourist destination town is going to feel the pinch as fewer and fewer people can afford to travel and she loses customers and tips.

Hold on for a bumpy ride.

Falling Snow and Dollar, Rising Oil

Snow flurries in Atlanta this morning and real snow a bit north. Not much good news on the economic front either. The dollar fell through a very important support level yesterday $1.50 = €1 and if the dollar doesn't recover quickly this could mean the free fall that many have been predicting. Not making my April trip to the UK any brighter. Ouch! This situation with the exchange rate comes on stop of yesterday's inflation (stagflation) report courtesy of high energy costs.

More bad news on the energy front as well. Oil hit yet another new high, breaking through the $101 level. While it could drop back into the $80 range there is also no reason it won't climb even more. There seems to be more upside pressure than down. Now that the $100 support level has been tested and met it will be much easier for it to go up further. These bits of further bad economic news are brought to you solely by the Shrub and his boys. This bad management needs to be a major campaign issue for the Democrats as McCain tries to take over for Bush.

Taking Another Swing

Hold your breath because it looks like the House is going to make another attempt at fixing some of the gaps in the energy bill.

Congressional Democrats will try again next week to take away tax breaks for oil companies in order to finance renewable-energy and building efficiency projects, but success remains elusive amid a shortage of votes in the Senate.

The U.S. House of Representatives is tentatively set to vote on Wednesday on the bill, which would repeal more than $17.6 billion in tax breaks for oil and gas producers over 10 years. Consumers would gain new tax breaks for buying plug-in hybrid cars. Companies would be able to continue taking tax credits for wind, solar and other renewable-energy projects, extending breaks that expire at the end of 2008.

If these fixes make it out of the House then there is a great likelihood that it will face the " automatic filibuster" that has become the standard in the Senate since the GOP lost the majority and it will be hard to move past that. They votes are probably not there. The Senate Republicans have done everything they can to safeguard the the battered oil companies and their pitiful soaring profits. The Republicans don't care what it will cost the taxpayers now or in the future and the sure as hell don't care abut the environment.

The current tax breaks given to the oil companies are the premier example of Republican (and some Democratic) legislators placing big money contributors ahead of the interests of the American people Nothing is more important than protecting Exxon-Mobil's $40 billion bottom line. Never mind the soaring national debt. Ignore that Global warming claptrap. The wealthiest getting wealthier on the backs of the American taxpayer...priceless.

If these changes fail then under the current tax law, the tax breaks for many oil companies are set to rise in 2010.

Halliburton Hell, Again

Grace over at Scriptoids has the scoop on the "real deal" in Kosovo and Serbia. If you think the Serbs are just mad because we are happy to welcome Kosovo in to the world of nations and all that happy new democracy crap then you aren't paying attention to the oil, Halliburton, Brown&Root, Deadeye Dick Cheney and all the rest.

If you can't figure out why we are building the biggest military camp constructed since Viet Nam in Kosovo and why Camp Bondsteel will sit astride a major new trans Balkan oil pipeline then we need to talk.

Grace has the poop and some very informative links.