Posted on 07/15/2008 2:44:18 PM PDT by rob777
In a dramatic move yesterday President Bush removed the executive-branch moratorium on offshore drilling. Today, at a news conference, Bush repeated his new position, and slammed the Democratic Congress for not removing the congressional moratorium on the Outer Continental Shelf and elsewhere. Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.
Now isn’t this interesting?
Democrats keep saying that it will take 10 years or longer to produce oil from the offshore areas. And they say that oil prices won’t decline for at least that long. And they, along with Obama and McCain, bash so-called oil speculators. And today we had a real-world example as to why they are wrong. All of them. Reid, Pelosi, Obama, McCain — all of them.
Traders took a look at a feisty and aggressive George Bush and started selling the market well before a single new drop of oil has been lifted. What does this tell us? Well, if Congress moves to seal the deal, oil prices will probably keep on falling. That’s the way traders work. They discount the future. Psychology and expectations can turn on a dime.
The congressional ban on offshore drilling expires September 30, so that becomes a key date. A new report from Wall Street research house Sanford C. Bernstein says that California actually could start producing new oil within one year if the moratorium were lifted. The California oil is under shallow water and already has been explored. Drilling platforms have been in place since before the moratorium. They’re talking about 10 billion barrels worth off the coast of California.
There’s also a “gang of 10” in the Senate, five Republicans and five Democrats, that is trying to work a compromise deal on lifting the moratorium. So it’s possible a lot of action on this front could occur much sooner than people seem to think.
So I repeat: Drill, drill, drill. Deregulate, decontrol, and unleash the American energy industry. Those hated traders will then keep selling oil as the laws of supply and demand and free markets keep working.
Bravo for Bush. Bravo for the traders.
We need to look at the whole picture of course. Add in China, South America, Europe, where GM products are selling very strongly. The power grid can be enhanced as the electric cars proliferate. It won’t be overnight.
Thank you. I can only surmise a tree fell in the forest before even Mr. Bernanke’s speech.
I wonder how popular they will be in Alaska or anywhere else where -40 is a fact of life.
Plus, they will still need a good shot of electricity to keep them moving. I can't wait to laugh when all the greenies in California buy on and all plug them in to recharge at the same time. We'll know when that happens, SFgate indynews sites will all go offline due to the brownouts.
This is Kudlow we're talking about... ;)
We also need more plants like this one. Last year, they paid the government (which was unable to run the plant at a proft) nearly $40 million in a profit sharing agreement that was part of the pruchase agreement entered into back in 1988. The government was just going to junk the plant, and was happy to find a sucker buyer for it.
The Synfuels Plant is the only commercial-scale coal gasification plant in the United States that manufactures natural gas. Located five miles northwest of Beulah, ND, the Synfuels Plant has been owned and operated by Dakota Gas since 1988.
...the Synfuels Plant gasifies lignite coal to produce valuable gases and liquids. The average daily production is about 160 million cubic feet of natural gas, the majority of which is piped to Ventura, IA, for distribution in the eastern United States. Many byproducts are also produced and marketed in the United States and worldwide. A portion of the gas produced is used to make some of the byproducts.
The Synfuels Plant daily consumes about 18,000 tons of lignite supplied from the nearby Freedom Mine.
Byproducts:
Ammonium sulfate...from flue gas... Approximately 110,000 tons annually
Anhydrous ammonia about 400,000 tons per year
Carbon dioxide is used for enhanced oil recovery. About 40.2 billion standard cubic feet are produced annually. (Mostly sold to Canadian oil fileds)
Dephenolized cresylic acid About 33 million pounds annually.
Krypton and xenon gases About 3.1 million liters of krypton-xenon annually
Liquid nitrogen about 24 million gallons annually
Naphtha about 7 million gallons annually
Phenol 33 million pounds annually.
I am sure there are some Dems with a clue who agree with the GOP on drilling now. Unfortunately, they don’t want to oppose the Madame and Steny. They’re afraid to get their cujones cut off.
The hybrids have been operating here for a couple years at least. They are surprisingly popular and no complaints about running them in the 40 below. Everybody plugs in during the winter, anything below about +20 anyway, so it looks like these electrics will do okay within the flight envelope. They will need an interior heater to keep the windshield defrosted.
The power grid can be enhanced as the electric cars proliferate. It won’t be overnight.
Agreed, and I'm right there with you. And that was the point I was trying to make... I see where all these issues intersect, or rather, can intersect perfectly, economically balancing within the U.S.; and, not horrifically or uber dramatically, altering a balance within the "global" economy.
(Unless Democrats are in charge. Then the balancing matrix between new and oil goes to hell right quick. The little uptight prudes are single lobers who've bent themselves into little teeny whiners, demanding that they be in charge of everything, as opposed to letting the free market work.)
Singler lobers cannot multi-task, mentally or visually. One note sambas is what they do, and if given reign to do so, alternative energies, current energy practices will go helter-skelter at onset of Dem policies.
The reason why so much of the oil is shipped out rather than used here is because of the EPA. Much of domestic oil is high-sulfur.
Notice that diesel, which used to be cheaper than gasoline, is now much more expensive? Look no further than the diesel pump at the gas station, at the sticker that explains that low-sulfur diesel is now mandated for vehicles made after 2007 model year. So now we can't use high-sulfur domestic oil, have to ship it out to places without our sulfur regulations, and spend money to import low-sulfur oil instead
Don’t forget that after the oil companies lease a site, they have to get permits and that can take years. This whole system has to be thrown out. Lease it and drill it. One step. NO COURT INTERFERANCE ALLOWED!
This is why I like Wegener’s announcement today. It was one of three announcement of a major nature, any or all of which could impact oil price. But, having the auto industry actually gearing up to flood the market with electrics and hybrids is very powerful. Private industry can get it done.
Hybrids still have an engine to make heat. Defrosting the windshield and keeping the occupants warm will take a lot of electricity in an all electric vehicle.
They (hybrids) may be ok for urban living, but they aren't so popular among commuters in these parts. Too expensive and not any savings on fuel at all.
Nice to see someone agrees with me:
http://www.freerepublic.com/focus/news/2040497/posts?page=37#37
Of course, I worked out there for most of my professional career, and actually mapped many of the fields in question myself (and worked on most of the others, in one capacity or another, over the course of 20 years), so maybe it's not surprising.
But it's still nice when Wall Street acknowledges the simple truth...
I hate the color green!
Ed Morrisey of Hot Air is one of the featured conservative AOL Hot Seat poll moderator/hosts. He should ask the question “DO YOU BELIEVE THE DEMOCRATS ARE PREVENTING THE PROGRESS OF DRILLING FOR OIL AND ALSO FOR OTHER ALTERNATIVE ENERGY SOURCES LIKE COAL, NATURAL GAS, AND NUCLEAR POWER?”. I am pretty sure it would show that most people will blame the Rats.
My neighbor has a hybrid, I forget which but it isn’t Toyota. He commutes from Fairbanks to Greeley, which is 60 miles or more. It gets downright cold down the Richardson Highway and he is entirely pleased with the car and the mileage. I don’t know how the car and the battery would be heated without some kind of fueled heater. Probably Fairbanks will favor hybrids because of that, but all-electric would work in some applications such as if you don’t need more than 40 miles a day and something creative can take care of the heating situation.
In January of this year I did a self-directed study of the industry. My jaw was on the floor at learning how much of the American economy depends upon the petroleum by-products. You are right: only a small portion of each barrel is actually used in the sale of gasoline (for automotive use).
As crude quality becomes heavier and heavier, the need for combustible fuels will continue to grow.
As it stands now with the ethanol/gas situation, heptane, to my knowledge is the magic ingredient for quickening those heavier crudes but without burning out the more latent qualities of the crude, making it go farther, and without igniting fast/hot fires in accelerating the crude.
So? Where's the oil? Now the natural gas, that pretty much has to come here, unless they have a LNG plant offshore and are sending that to Pacific rim Asian countries as well...
Thank you, I didn’t know this. And, I’ve wondered about the high price of diesel. Used to be, a mere 10 years ago, the diesel auto owners were the smug ones...
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