Wednesday, 27 August 2008
Democrats Ridiculous Energy Policy
« Boswell's Money Problems Continue To Haunt His Campaign | Main | Shocker: Beshear's Approval Numbers Still In Toilet »I always find it amusing to watch the Democratic convention. They bring up one speaker after another. All of whom whine about how government hasn't done something to help them. No where is there any talk about self responsibility. Only what government can do for you. I can usually laugh off their incessant whining, invocations of class warfare, protectionism, and litany's of other failed liberal policies.
But there is one issue I can't let go. And that is the Democrat's ridiculous policy on energy independence. They want to make America energy independent in 10 years. An honorable goal. The only problem is they have no clue how to get there.
They talk about wind power, solar energy, and electric cars. But is it realistic? How are we going to power all of these plug in cars? Wind and solar power have been around a long time and they still aren't viable for primary electricty generation. Should we risk our future economy on the "hope" that we can develop renewable energy sources in 10 years? Are we going to gamble our way of life on technologies that are unproven?
The bottom line is we have no idea if we can make these technologies work in the next 10 years. If we fail, energy prices will skyrocket to levels that make today look paltry. That is the sacrifice that Democrats wish us to bear. A solution that will cripple our economy and destroy our quality of life. Do we want to roll the dice with our economy and way of life? I know I don't.
We can be energy independent, and we don't have to hope for the wind. Fact. We have enough oil off our shores, in Alaska, and in shale oil to meet our energy needs for the next 100 years. We can meet our expanding electricity needs by using another proven technology. Nuclear power. If we start now we can build plants within 10 years that are clean and can handle all of our electricity needs for the future.
All we have to do is tap into our natural resources and develop proven technologies and we will give ourselves the time necessary to build a reliable and cost effective renewable energy source. Make no doubt about it, we need to find renewable sources, but it makes no sense to put all our eggs in one basket. A basket that has shown little promise to deliver.
We need energy independence, but we need a policy rooted in reality and not in fantasy. A policy that we can easily achieve in ten years and not one that asks our citizens to sacrifice needlessly. Oil and Nuclear power are not a hope. They are real. All we have to do is to remove roadblocks and make it easier to tap into these resource and the private sector will do the rest. In the process we can create millions of new jobs and move our country forward. It will make us energy indpenedent. It will buy us the time necessary for viable free market alternative energies to be developed without unduly burdening our economy.
It is the right thing to do and it is the thing we should have started ten years ago. All we have to do is get the Democrats out of the way and we can have the energy independence our country needs and deserves.
It is true that the price of oil is determined as a commodity on a world wide level.
The problem is we are not talking about a 2-4% increase. If we can produce enough oil for our usage and we use 25% of the worlds oil then we are increasing the world's supply by 25% for the next 100 years. That would drive prices back into the $2 a gallon range (in current dollars) for the foreseeable future.
In addition since what America buys will come almost exclusively from our Oil companies or those of our partners (Mexico and Canada) the money will stay in Northern America rather than travel to foreign countries. In the process it will create new jobs. So no, it isn't a scam.
One more thing. I agree with you that it will take time to fully mobilize the use of our resources. It may take 5 - 10 years for it to be realized. But what is the alternative?
Wait for technologies that don't currently exist? That isn't a plan. That is a pipe dream. One that could severely damage our economy and standard of living.
Our country has tremendous natural resources. We need to tap into them until technology can advance to the point that we no longer need to rely on our natural resources. But, we must act now rather than waiting and hoping for the wind.
The rational for your rebuttal revolves aroud the word "if".
"If we can produce enough oil for our usage and we use 25% of the worlds oil then we are increasing the world's supply by 25% for the next 100 years"
That "if" is a mighty tall order and isn't consistent with any expectations I'm familiar with. ANWR for example has an expectation of about 1 million barrels a day and is forecasted to last 10 to 15 years before it runs dry. I'm not following your 100 year prediction. The outer shell is only speculation and doesn't support any real scientific numbers as to the output.
I question your assessment on gas dropping back to $2 a gallon. By what stretch of imagination can you suggest that Exxon et al. wil want to invest huge amounts of cash into drilling only to produce smaller returns to its stockholders? They're accustomed to making $40 billion plus profits a year. It's usually an expectation for companies to shoot for higher profits than lower. They can set whatever prices they want based on threats of war, holiday driving, stormy weather, or if a bird pooped on one of their oil rigs. The cost of drilling, like any cost to any business, will be passed on to the consumer. This drilling scam simply doesn't hold water. It's simply exploiting the consumer with a cruel insinuation that they will somehow get cheaper gas. Ain't gonna happen.
From wikipedia on Oil Shale...
A 2005 estimate set the total world resources of oil shale at 411 gigatons — enough to yield 2.8 to 3.3 trillion barrels of shale oil. This exceeds the world's proven conventional oil reserves, estimated at 1.317 trillion barrels (209.4×109 m3), as of 1 January 2007.[22] The largest deposits in the world occur in the United States in the Green River basin, which covers portions of Colorado, Utah, and Wyoming; about 70% of this resource is located on federally owned or managed land. Deposits in the United States constitute 62% of world resources;
We have almost as much oil stored in shale as the rest of the world's oil reserve. If we find anything on the OCS, like Brazil did, we will have more oil than the current world wide oil reserve.
Secondly, Exxon is making record profits because they are selling record amounts of oil. They have a profit margin around 8 to 9%. Which is in line with the average of the S&P 500. (See CNN article).
While they are making record profits it is because they are doing more business and not sticking it to the "regular" guy. If you want to look at obscene profits look at Google and Microsoft who have profit margins greater than 25%.
Why would they want $2 a gallon prices? Because they will sell more product. Simple supply and demand principles.
The last few comments I've left have not been posted so I'll not go into great detail again.
Briefly, shale oil doesn’t come with a simple spigot that can be turned on and off. It’s extremely expensive to extract and has about 10% the energy as crude oil. It may be quite possible that shale oil would never see a refinery but would more than likely be used in power plants as a coal alternative (shale has about 1/6 the energy of coal). This isn’t to say that’s a bad thing but it doesn’t truly address the real issue of misleading people into thinking it will bring down the price of gas at the pump.
It’s beyond me how or why some people are so defensive of the obscene profits of oil companies. I honestly don’t care if they make .09%, 9%, or 99%. That’s absolutely irrelevant. What is relevant is that while people pay record prices at the pumps, Exxon profits $40 billion a year, more profits than any company in the history of the world. If all the drinking water in the world was owned by a small group of people and we had to pay $4 a gallon while they were making world record profits, it would be the same thing.
More facts on Shale Oil as a means of producing oil:
According to a survey conducted by the RAND Corporation, the cost of producing a barrel of oil at a surface retorting complex in the United States (comprising a mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation), would range between US$70–95.
This estimate considers varying levels of kerogen quality and extraction efficiency. In order for the operation to be profitable, the price of crude oil would need to remain above these levels. The analysis also discusses the expectation that processing costs would drop after the complex was established.
The hypothetical unit would see a cost reduction of 35–70% after its first 500 million barrels were produced. Assuming an increase in output of 25 thousand barrels per day during each year after the start of commercial production, the costs would then be expected to decline to $35–48 per barrel within 12 years.
After achieving the milestone of 1 billion barrels, its costs would decline further to $30–40 per barrel.
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It seems to me that the costs of Oil Shale are less than a current barrel of oil. All we have to is let the private sector access it.
When did profits become such an evil word? Yes, they are making large profits. All I did was demonstrate that they are not doing it in an unethical way. They are making a fair profit on a product they are supplying to us. As you know, they can't do a dang thing about the cost per barrel. What do you want them to do? Lose money because the cost per barrel is so high? Is that what a company should do? Lose money for the good of everyone?
How would that help the thousands of people employed by "Big Oil"? How would that help out stock holders of the company? Which by the way is everyone who has a 401K.
I don't understand your point.
"Fact. We have enough oil off our shores, in Alaska, and in shale oil to meet our energy needs for the next 100 years.
That statement implies that the oil would somehow go directly from the well to U.S. refineries and from there to the pumps. By what reasoning can you conclude that it would bypass foreign inverters? Anyone with any knowledge of marketing understands that this is a commodity that's in world demand and accordingly would be sold to the highest bidder (I think you agree with and understad free marketing). What this means is that the approximate 2%-4% increase in world supply would (or could depending on the many contingencies that can alter prices) lower the price of gas at the pump by about $.07 to $.14 a gallon. Of course that would be in the 7-10 or however many years it takes to get it in the market. Once again, the drilling hoax is simply deceptive political posturing that will make Republican campaign contributors tons of money while doing nothing at all for the consumer.