Do you live near a railroad line? How about a pipeline? You might want to check into your proximity to those things.
Because America is the new Saudi Arabia, soon to be the world’s number one oil producer, the infrastructure that used to carry our energy products around is straining to meet the demand created by the new production.
A federal pipeline safety official admitted on camera recently that he made a point of ensuring his home wasn’t in the path of any pipelines before buying it, and that he wouldn’t advise anyone to build in the path of a pipeline. …
“Here is what I did when I bought my house – I looked on all the maps, I looked for all the well holes. I found there is nothing around me but dry holes and no pipelines. And it’s not because I’m afraid of pipelines, it’s not because I think something will happen. It’s because something could happen. … You’re always better off, if you have a choice….”
Taken together with natural gas, the US is awash in domestic fossil fuels that are largely stranded in North America, and is now in a position to reconsider its scarcity-based energy policies.
Should the export ban be lifted, there will be even more pressure on the energy transportation infrastructure and, hence, more danger for Americans living near pipelines, rail lines and roads where there will be increased truck traffic.
Who cares about the temper tantrums being thrown by the pampered media because they didn’t get to meet Tiger Woods? The real story is that while 50,000 people were at the White House asking the president to address climate change by cracking down on the fossil fuel industry, he was spending the weekend with a guy who is the epitome of Big Oil and much much more.
No wonder he was keeping the destination secret before this trip. Intended or not, it was a big F U to the people who had planned for months to travel to Washington to protest the critical cause of climate change. Worse, there has been no response whatsoever to the tens of thousands of protesters who came to his house on Sunday, nor to the many many more who were at coordinating marches in cities across the country and untold numbers of people who were there with them in spirit.
Well maybe there was another reason why the identity of Obama’s host was kept secret in the weeks leading up to the trip. The Tiger Woods golf date captured a lot of media attention, but the real story, in my opinion, is Jim Crane, the man who owned the Floridian country club and resort, who hosted the president for the long weekend, and who has a long, sordid history.
The price of gas at the pump has risen sharply since the beginning of the year and is expected to continue to rise through the summer. The demand for oil and refined products has fallen over the last year, there is a surplus of oil on the market and the United States is exporting more gasoline than it’s importing. In the absence of supply and demands, the main factor is speculation on the world market that has been driven by the latest threat of military action in the Middle East and other smaller factors like the growth of emerging countries such as China and India.
Since oil prices are the biggest component in the price of gasoline, pump prices are soaring. AAA said Tuesday that the nationwide average price for a gallon of gasoline stood at $3.57, compared with $3.38 a month ago and $3.17 a year ago. It takes about $6 more to fill up the tank than it did this time last year – and last year’s gasoline-price surge helped take the steam out of the economic recovery.
Defining what percentage of today’s high oil and gasoline prices is due to excessive speculation, driven by Iran fears, is something of a guessing game.
“I put the Iran security premium at about $8 to $10 (a barrel) at this point, which still puts crude at about $90 or $95,” said John Kilduff, a veteran energy analyst at AgainCapital in New York.
The fear premium is the froth above what prices would be absent fears of a supply disruption – somewhere in the $80 to $85 range for a barrel of crude oil. It means that even with the extra cost put on oil from Iran fears, prices are at least another $10 higher than what demand fundamentals would dictate.
Why? Financial speculators.
What should the price of oil be if left to conventional supply and demand market fundamentals? Canada’s the largest supplier of imported oil to the United States, which now actually produces more than half of the oil it consumes. Production and delivery costs for a barrel of oil from Canada are about $75 a barrel. The market-fundamentals cost for a barrel of oil is in that ballpark; above that, speculation sets the prices.
“It’s as simple as that,” said Gheit, who has testified before Congress and called for regulatory limits on speculation in commodities markets.
Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it’s almost the reverse.
President Obama barely mentioned this in his energy speech this week and his energy policy offered no solutions to controlling the speculators.
Most of the ongoing increases in gas prices can be traced to geopolitical concerns and rampant financial speculation that have run up the cost of crude oil. And yet, if U.S. refiners limited themselves to domestic sales, there would be a glut on the market, and diesel and gasoline prices would inevitably drop.
“The other countries are willing to pay more than we would,” said James Hamilton, an economics professor and blogger at the University of California, San Diego. “And that’s the price we pay, too, what they’re willing to pay.”
Hamilton said that’s how things work in a global market. “If you are a refiner and you’ve got gasoline to sell, you want to sell it where you can get the highest price,” he said. “If Mexico is willing to pay a higher price to Americans, you’re going to want to sell it to them instead of Americans.” [..]
“I do not support an outright ban of exports,” said Tyson Slocum, director of the energy program for the consumer watchdog group Public Citizen. “And I don’t want to see the government regulating retail prices. But I don’t think that it is in our best interests to be exporting at the rate at which we are.”
Slocum suggests that exports of petroleum products “should go through a regulatory barrier to assure that they aren’t resulting in higher prices for Americans, or otherwise hurting the economy.”
That’s what happens now with U.S.-produced crude oil. Oil companies aren’t allowed to export crude without permission from the Department of Commerce, which, by law, checks to make sure “that the proposed export is consistent with the national interest”. [..]
Any attempt to limit exports would, of course, be met by ferocious resistance from the refiners. Their profit margins would drop, and refiners would inevitably warn that with less money to reinvest, there could be shortages in the future.
But the many refineries owned by large, vertically integrated oil companies that own the oil production facilities as well are hardly hurting for money. In fact, when oil prices go up, as they are now, their profits go up as well; it doesn’t cost them any more to get the oil out of the ground — somewhere around $30 a barrel — but they get to charge as much as the market will bear.
No politician, not even the President, wants to stop the flow and profits to these “oil-garchs” and the flow of cash to their campaign coffers. That said, another solution that can be done is to temper the war mongering in the Middle East. Instead of threats of military intervention with Iran which even our military and national security advisers agree would be disastrous, a more reasoned diplomatic approach could go a long way to curbing the speculators. When President Obama meets with Israeli Prime Minister Benjamin Netenyahu at the White house next month, he needs to stress the need to temper the saber rattling.
This was written by Ellen Brown back on April 14. We shall see a few years from now whether Libyans will still be cheering and throwing flowers like Iraqis and Afghanis and Bahraini’s are now…
Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own central bank – this before they even had a government. Robert Wenzel wrote in the Economic Policy Journal:
I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.
Alex Newman wrote in the New American:
In a statement released last week, the rebels reported on the results of a meeting held on March 19. Among other things, the supposed rag-tag revolutionaries announced the “[d]esignation of the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and appointment of a Governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.”
The stock market came tumbling this morning on the bad news that started yesterday with Federal Reserve Chairman Ben Bernanke’s bleak economic outlook. With the news that there were higher than expected new unemployment claims, a drop in new housing sales and the announcement from the International Energy Agency that they would release 60 million barrels oil, sent stocks, oil and gold prices in to a downward spiral.
This isn’t necessarily all bad news. Lower the price of oil that has been driven wholly by speculators that have “no skin in the game” has been a major cause of the economic slow down. As the price of fuel drops, the price of transportation and goods fall, people have more money to spend or invest.
The United States will lead an international effort to release 60 million barrels of petroleum reserves to world markets, replacing some of the oil production lost because of the conflict in Libya, the International Energy Agency announced in Paris on Thursday.
The action is aimed at reducing energy prices for businesses and consumers, and in early trading futures contracts for West Texas intermediate crude oil were down $4.50 a barrel to around $91.
The United States will release half of the total amount from the Strategic Petroleum Reserve, with the rest of the oil to be provided by other nations among the international agency’s 28 member states. Negotiations for the coordinated response have been going on in secret for weeks, according to a person involved in the talks. Similar unified action was taken in 1991 at the outbreak of the first Persian Gulf War.
The Dow Jones industrial average fell sharply and energy stocks declined more than 2 percent on Wall Street on Thursday after a report that the United States would release some oil from its Strategic Petroleum Reserve. Crude oil prices also fell.
The International Energy Agency announced in Paris on Thursday that the United States will release half of the 60 million barrels of petroleum reserves to world markets, with other nations releasing the rest, replacing some of the oil production lost due to the conflict in Libya.
More Americans than forecast filed first-time claims for unemployment insurance payments last week, showing companies are less confident about the expansion than they were earlier this year.
Applications for jobless benefits increased 9,000 in the week ended June 18 to 429,000, Labor Department figures showed today. The level of claims exceeded the highest estimate in a Bloomberg News survey in which the median projection called for 415,000 filings. The number of people on benefit rolls was little changed, while those getting extended payments rose.
Unemployment claims have swelled after dropping to an almost three-year low at the end of February, indicating businesses may be reluctant to hire until demand strengthens. The data underscore Federal Reserve Chairman Ben S. Bernanke’s comment yesterday that job growth is “frustratingly” slow, a reason policy makers pledged to maintain monetary stimulus.
(Reuters) – Sales of new U.S. single family homes fell for the first time in three months in May, but inventories of new homes for sale reached record lows and the median sales price rose slightly, a government report showed on Thursday.
Gold futures plunged the most in seven weeks as a slowing U.S. economy and slumping oil prices eased the risk of inflation, while the dollar rallied on signs the Federal Reserve won’t add more stimulus measures.
The economy is recovering at a “moderate pace, though somewhat more slowly” than the central bank had expected, Fed Chairman Ben S. Bernanke said yesterday. The dollar gained as much as 1.4 percent versus six major currencies, while oil prices dropped to a four-month low after the International Energy Agency said its members would release crude from strategic reserves.
“It’s basically down on what the chairman said yesterday,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “Also, crude is sharply down, while the dollar has risen.”
Treasuries rose as U.S. initial jobless claims climbed last week more than economists forecast and European Central Bank President Jean-Claude Trichet said the sovereign-debt crisis threatens to infect banks.
Yields on 10-year notes dropped toward the lowest level this year a day after the Federal Reserve said it will maintain monetary stimulus after its $600 billion program of debt buying ends this month, with policy makers lowering their forecasts for economic growth and employment.
“It’s just uncertainty,” said Dan Mulholland, a Treasury trader in New York at Royal Bank of Canada, one of 20 primary dealers that trade with the Fed. “Jobless claims provided the latest pop. Treasuries are the beneficiary.”
. . the administration would begin to hold annual auctions for oil and gas leases in the Alaska National Petroleum Reserve, a 23-million-acre tract on the North Slope of Alaska.
. . accelerate a review of the potential environmental impact of drilling off the southern and central Atlantic coast and will consider making some areas available for exploration. The move is a change from current policy, which puts the entire Atlantic Seaboard off limits to drilling until at least 2018.
. . provide incentives for oil companies to more quickly exploit leases they already hold. Tens of millions of acres onshore and offshore are under lease but have not been developed.
Not one of these actions will lower the price of gas at the pump or create jobs or cure our dependency on foreign oil, most of which comes from our northern neighbor, Canada. The cost of gas at the pumps is under direct control of the oil companies that are still being subsidized by tax payers even as they rake in billions in profits and use tax loop holes to pay no US taxes, instead they are receiving refunds. Crude oil prices are manipulated by speculation on the open market with little regulatory control by the government or the SEC. That so-called “revolutionary” Financial Regulation Bill is a sham. Just look at rising banking fees and your credit card bill, look at your shrinking pay check and the rise in cost of food, clothing and health care. I suggest you have a bucket handy.
Yes, tax payers are angry about the price of gas but we are also opposed to more drilling for limited resources that will not solve the immediate problem. Long term, we need to be investing in green energy, renewable solutions not investing in the oil companies. Short term, rein in the oil companies and speculators.
Americans are angry at the President for not regulating the speculators and oil companies. Americans are angry at for gouging at the pump.
Asked who is to blame, most Americans point to speculators and oil companies for the recent increase in gas prices, and three-quarters say that oil companies profits are too high.
Sixty-one percent of respondents say oil companies deserve a great deal of blame for prices, while 27% say they deserve some blame. Oil speculators also figure prominently in the blame game, with 59% saying they deserve a great deal of blame, while 31% say they deserve some blame.
Americans are angry with President Obama because again caves to the right and corporatists while ignoring what the American people are telling him and congress. Ignore us at your peril.
I sighed uneasy relief with everyone else when BP finally stopped Deepwater Horizon from emptying itself in the Gulf. Yes, I knew it was temporary. Yes, I knew it could blow up again any minute. But there was, nevertheless, a relief. For a short time anyway, BP would stop turning the Gulf of Mexico into a disgusting oil gumbo garnished with oil soaked pelicans and dead dolphins.
A wellhead in southeastern Louisiana was spewing a mist of oil and gas up to 100 feet into the air after being hit by a tug boat early Tuesday morning, officials said. It is at least the third unrelated oil leak in the area since the Deepwater Horizon spill began 99 days earlier.
The well is about 65 miles south of New Orleans in Barataria Bay, which is surrounded by wildlife-rich wetlands and was a fertile area for fishermen, shrimpers and oystermen before the BP spill. By Tuesday afternoon, a reddish brown sheen 50 yards by one mile long was spotted near the well, according to a spokeswoman for the Coast Guard.
The Coast Guard said the well was owned by Cedyco, a company based in Houston.
The wellhead burst at 1 a.m. local time Tuesday after being hit by a tug boat, the Pere Ana C, that was pushing a dredge barge, Captain Buford Berry, though details were still being investigated.
So, not to put too fine a point on it, there is more oil and gas being deposited in the Gulf as you read this. And they haven’t started stopping it yet, and are booming. Booming. Booming with 6000 feet of boom. Pardon me, but didn’t we all decide in the past 3 months that that is worthless. Oh, but excuse me again, this is a new day. And a new leak. And so we get to try stuff that didn’t work before all over again. Because we’re crazy and think it’ll be different this time.
And then we have this gem:
No specific flow rate has been determined, officials said.
Mama mia. Oy gevalt.
And this, dear reader, is why I find myself shrieking. And uttering strings of profanity. Join me.
President Obama in his Saturday address to the nation, 
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