Oil -- Not From Our Backyard

Should we be surprised? Obama wants oil producers to increase their production. A sensible person should be forgiven for thinnking Obama was referring to American oil producers that pay Americans for finding, pumping, refining and selling oil.

Instead, our feckless leader was imploring the Islamic oil nations that despise freedom, equality, plurality, capitalism and democracy to increase THEIR output to offset shortfalls caused by the revolts and revolutions in North Africa and the middle east that have begun to impinge on supplies. The actual decline in Libyan production and the fear that has affected the international oil market has driven oil prices to their high levels since 2008.

Rather than giving American oil companies the green light to expand domestic operations and thereby protect American consumers, Obama has offered the Islamic oil nations another opportunity to expand their influence over our economy. Inasmuch as he seems to have no credibility among muslims, his stature can only sink further as he effectively begs the Islamic nations to help the US.

Meanwhile, the chief issue affecting prices is FEAR. Not actual supply constraints. Sadly, Obama's approach ensures that Islamic oil producers will increase their capacity for generating oil-market fear. He is truly a moron.


Obama Says He Wants Oil Producers to Boost Output

Apr 26, 2011

WASHINGTON -- As the high cost of gasoline takes a toll on politics and pocket books, President Barack Obama said Tuesday he is calling on major oil producers such as Saudi Arabia to increase their oil supplies to help stabilize prices, warning starkly that lack of relief would harm the global economy.

"We are in a lot of conversations with the major oil producers like Saudi Arabia to let them know that it's not going to be good for them if our economy is hobbled because of high oil prices," Obama told a Detroit TV station.

President Obama is calling on an increase in oil production to help stabilize prices.

His remarks signaled a broad new appeal in the face of skyrocketing gasoline prices in the United States and they came as he reiterated a call for Congress to repeal oil industry tax breaks.

In interviews Tuesday with WXYZ in Detroit and in WKTR in Hampton Roads, Va., Obama said the message to major oil producers like Saudi Arabia is that an economy that buckles because of high oil prices won't grow and won't be good for them or for the U.S.

Obama acknowledged disruptions in oil production because of the war in Libya. But he said others can make up the difference and "we're pushing them to do so." Libya supplied less than 2 percent of world demand. Saudi Arabia and other OPEC countries already are covering some of that shortage by boosting production.

The president's effort to compel more overseas production echoed calls by President George W. Bush in 2008 urging Saudi Arabia to increase supplies during that year's spike in gasoline prices. The Saudis rebuffed Bush's efforts.

Obama said he has stressed the self-interest of oil producing nations, arguing that "if we're not growing, they're not going to be making money either.

"And so they need to increase supplies," he told WKTR.

Gas pump prices have climbed for 35 consecutive days. The national average rose by a penny to hit $3.87 a gallon on Tuesday, more than a dollar than a year ago. The price already has exceeded $4 a gallon in some regions of the country.

In a letter to congressional leaders Tuesday, Obama urged them to take steps to repeal oil industry tax breaks, reiterating a call he made in his 2012 budget proposal earlier this year. The White House conceded that plan would do nothing in the short term to lower gasoline prices.

The president wrote a day after House Speaker John Boehner, R-Ohio, said he was willing to "take a look at" repealing the multibillion-dollar tax subsidies enjoyed by the major oil companies. Boehner aides on Tuesday sought to clarify Boehner's stance, stressing that he was not advocating repeal of the tax breaks.

"He has said all along that he is opposed to raising taxes," Boehner spokesman Kevin Smith said. "That's his position."

Rising gas prices have become a political weight for the White House, with polls showing that as the cost rises at the pump, the president's approval ratings have slipped. Obama increasingly has sought to display action on oil, even as he acknowledges that there is no immediate way to stem costs.

"High oil and gasoline prices are weighing on the minds and pocketbooks of every American family," Obama wrote. But he also added that "there is no silver bullet to address rising gas prices in the short term."

Obama's proposal, spelled out in his past two budget plans, would eliminate a number of tax breaks for oil companies that would generate an estimated $4 billion a year in additional revenue.

The tax breaks - some in place since the 1920s - have survived multiple attempts to repeal them in the face of heavy oil industry lobbying.

The Republican response to the president's letter was dismissive.

Another Boehner spokesman, Brendan Buck, said Obama's suggestions "would simply raise taxes and increase the price at the pump." And Senate Republican leader Mitch McConnell said: "The president's latest call to raise taxes on U.S. energy is as predictable as it is counterproductive."

Obama's letter was addressed to Boehner, McConnell, House Democratic leader Nancy Pelosi, and Senate Majority Leader Harry Reid.

Blaming the subsidies on "outdated tax laws," Obama said money obtained from repealing the breaks should be spent on clean energy initiatives to reduce dependence on foreign oil.

On Monday, Boehner told ABC News that the government is low on revenues and that oil companies "ought to be paying their fair share."

"We certainly ought to take a look at it," Boehner said about repealing tax subsidies for major oil companies. "We're at a time when the federal government's short on revenues. We need to control spending but we need to have revenues to keep the government moving."

But Boehner made no commitment to repealing the subsidies. "I want to know what impact this is going to have on job creation in America," he told ABC.

Obama, in his letter, said he was "heartened" by Boehner's remarks. "Our political system has for too long avoided and ignored this important step, and I hope we can come together in a bipartisan manner to get it done."

White House spokesman Jay Carney dismissed suggestions that Obama's letter was motivated by the potential effect of rising gas prices on the president's political prospects.

"I don't think when somebody sticks the credit card in the pump or pays a cashier the cash for a tank of gas that they're thinking about an election in 2012," he said.

Oil -- Nature's Gift to Man

Let's Get Real About Renewable Energy

We can double the output of solar and wind, and double it again. We'll still depend on hydrocarbons.

During his address to Congress last week, President Barack Obama declared, "We will double this nation's supply of renewable energy in the next three years."

While that statement -- along with his pledge to impose a "cap on carbon pollution" -- drew applause, let's slow down for a moment and get realistic about this country's energy future. Consider two factors that are too-often overlooked: George W. Bush's record on renewables, and the problem of scale.

By promising to double our supply of renewables, Mr. Obama is only trying to keep pace with his predecessor. Yes, that's right: From 2005 to 2007, the former Texas oil man oversaw a near-doubling of the electrical output from solar and wind power. And between 2007 and 2008, output from those sources grew by another 30%.

Mr. Bush's record aside, the key problem facing Mr. Obama, and anyone else advocating a rapid transition away from the hydrocarbons that have dominated the world's energy mix since the dawn of the Industrial Age, is the same issue that dogs every alternative energy idea: scale.

Let's start by deciphering exactly what Mr. Obama includes in his definition of "renewable" energy. If he's including hydropower, which now provides about 2.4% of America's total primary energy needs, then the president clearly has no concept of what he is promising. Hydro now provides more than 16 times as much energy as wind and solar power combined. Yet more dams are being dismantled than built. Since 1999, more than 200 dams in the U.S. have been removed.

If Mr. Obama is only counting wind power and solar power as renewables, then his promise is clearly doable. But the unfortunate truth is that even if he matches Mr. Bush's effort by doubling wind and solar output by 2012, the contribution of those two sources to America's overall energy needs will still be almost inconsequential.

Here's why. The latest data from the U.S. Energy Information Administration show that total solar and wind output for 2008 will likely be about 45,493,000 megawatt-hours. That sounds significant until you consider this number: 4,118,198,000 megawatt-hours. That's the total amount of electricity generated during the rolling 12-month period that ended last November.

Solar and wind, in other words, produce about 1.1% of America's total electricity consumption.
Of course, you might respond that renewables need to start somewhere. True enough -- and to be clear, I'm not opposed to renewables. I have solar panels on the roof of my house here in Texas that generate 3,200 watts.

And those panels (which were heavily subsidized by Austin Energy, the city-owned utility) provide about one-third of the electricity my family of five consumes. Better still, solar panel producers like First Solar Inc. are lowering the cost of solar cells. On the day of Mr. Obama's speech, the company announced that it is now producing solar cells for $0.98 per watt, thereby breaking the important $1-per-watt price barrier.

And yet, while price reductions are important, the wind is intermittent, and so are sunny days. That means they cannot provide the baseload power, i.e., the amount of electricity required to meet minimum demand, that Americans want.

That issue aside, the scale problem persists. For the sake of convenience, let's convert the energy produced by U.S. wind and solar installations into oil equivalents.

The conversion of electricity into oil terms is straightforward: one barrel of oil contains the energy equivalent of 1.64 megawatt-hours of electricity. Thus, 45,493,000 megawatt-hours divided by 1.64 megawatt-hours per barrel of oil equals 27.7 million barrels of oil equivalent from solar and wind for all of 2008.

Now divide that 27.7 million barrels by 365 days and you find that solar and wind sources are providing the equivalent of 76,000 barrels of oil per day. America's total primary energy use is about 47.4 million barrels of oil equivalent per day.

Of that 47.4 million barrels of oil equivalent, oil itself has the biggest share -- we consume about 19 million barrels per day. Natural gas is the second-biggest contributor, supplying the equivalent of 11.9 million barrels of oil, while coal provides the equivalent of 11.5 million barrels of oil per day. The balance comes from nuclear power (about 3.8 million barrels per day), and hydropower (about 1.1 million barrels), with smaller contributions coming from wind, solar, geothermal, wood waste, and other sources.

Here's another way to consider the 76,000 barrels of oil equivalent per day that come from solar and wind: It's approximately equal to the raw energy output of one average-sized coal mine.

During his address to Congress, Mr. Obama did not mention coal -- the fuel that provides nearly a quarter of total primary energy and about half of America's electricity -- except to say that the U.S. should develop "clean coal." He didn't mention nuclear power, only "nuclear proliferation," even though nuclear power is likely the best long-term solution to policy makers' desire to cut U.S. carbon emissions. He didn't mention natural gas, even though it provides about 25% of America's total primary energy needs.

Furthermore, the U.S. has huge quantities of gas, and it's the only fuel source that can provide the stand-by generation capacity needed for wind and solar installations. Finally, he didn't mention oil, the backbone fuel of the world transportation sector, except to say that the U.S. imports too much of it.

Perhaps the president's omissions are understandable. America has an intense love-hate relationship with hydrocarbons in general, and with coal and oil in particular. And with increasing political pressure to cut carbon-dioxide emissions, that love-hate relationship has only gotten more complicated.

But the problem of scale means that these hydrocarbons just won't go away. Sure, Mr. Obama can double the output from solar and wind. And then double it again. And again. And again. But getting from 76,000 barrels of oil equivalent per day to something close to the 47.4 million barrels of oil equivalent per day needed to keep the U.S. economy running is going to take a long, long time.

It would be refreshing if the president or perhaps a few of the Democrats on Capitol Hill would admit that fact.