Thursday, February 09, 2006
East Sider looks at the President’s oil policy
LOOKING AHEAD by Wally Dobelis
Despite the legend that New Yorkers don’t drive, the people of East Midtown are car users. Our cars are housed in five gigantic garages in Stuyvesant Town, with the overflow on the ST/PCV access roads and other side streets. We are also energy and environment conscious, with many buying Prius-type non-gas-guzzlers, purchased at extra cost, well before the increase in prices made everybody gasoline conscious. We have many neighbors who insist on paper bags in super markets, or bring their own, to limit the use of petroleum products.
It is disingenuous of the President of the United States, in his State of the Nation speech, to speak of the Americans’ addiction to petrol. Let’s put the burden where it belongs. American industry will not make products or produce services that are low-cost, although consumer-beneficial. Consequently, we lost most manufacturing to the Japanese and Chinese, and only recently GM and Ford voiced a shift to efficient cars, with give-backs from unions, to keep the factories from migrating to China.
Conversely, ExxonMobil, proving that high prices bring out the greedy, have shown a $36B profit for 2005, but the vultures will not be able to duplicate it, because their reserves, yeah, reserves that these people have claimed for years (check out the deniers of the Hubbert Peak theory in the Petroleum Institute), do not support production. That will push the prices even higher. The spin doctors now put the blame on the “addiction of America to oil.” If we pursue the comparison, who are the pushers that foster and feed the addiction? One sees the unbridled growth of SUVs, the unwillingness of the Congress to reduce the use of oil by demanding cars with improved mileage per hour, the exemption of passenger vehicles built on the bodies of trucks from the rule. Gas sultans and automobile giants are the Abramoffs of the energy environment that have corrupted the government, with oilmen installed in the highest positions pushing their case. And now the denial – Americans, all by themselves, have become addicted to gasoline. It is not just a farce, it is felonious.
This column, since the late 1990s, has assembled world-wide oil reserve figures, supplied by the Oil & Gas Journal and the US Geological Survey, and compared them against consumption, at the time claiming that oil reserves will be exhausted in 37 years. Exhausted means that the energy expended in extracting the product will become equal or higher than the energy generated. The oil industry spokespeople have pooh-pooed these numbers, except for British Petroleum, whose annual surveys support the scenario. A London Economist seminar suggested an even shorter term, a decade or less, for the continued practical availability of oil.
Once more, the shortsightedness of the government is surfacing. President Bush is offering to increase the funds for research of alternate products - ethanol, product of corn, sugarcane and switchgrass, hydrogen, wind and hydroelectric power. It is already proven that corn ethanol costs more in energy outlay than the gain. Hydrogen is also costly and dangerous to store and use. The others are low output. Nuclear energy – probably the unspoken resource of last resort – will require huge outlays and risks for humanity.
As for oil, US uses 20M barrels a day, 25% of the world’s production, of which we import 60% - more when our oil refineries of the Gulf of Mexico are knocked out by hurricanes. Why such limited refining capacity? Because the oil magnates are cheap, and enemies of the consumer, using refinery shortages to push up prices. The President wants to cut our dependence of MidEast oil by 75% come 2025. We are currently getting 17% of oil from these parts to which he wants to bring democracy. The 22 countries of the Arab League are dictator ruled, and overthrowing their rulers will leave them in the hands of the only other powerful organized popular groups, namely radical Islam. Will they sell oil to us, the enemy? Yeah.
How about closer to home? Venezuela’ s Hugo Chavez, in alliance with Fidel Castro and the new Bolivian coca ruler Evo Morales, is moving Latin America away from us. Washington’s calling him a Hitler helps a lot. Now Chavez has Hamas leaders visiting, and condemns Israel as an American stand-in. Sending in the marines will not fly, guys. Ditto for Iran; meanwhile the Iraqi independence has produced a government that will make a coalition with Iran, as soon as we withdraw, and we can forget about their oil. The East Saudi oil area Shiites could also break away, taking their resources out of our influence. The carefully built American oil empire, started by President FDR, is not stable. Thank goodness for Mexico, and particularly Canada, supplier of 40% of our oil imports, although their biggest reserves are the oil sands of Athabasca, in Alberta, with high extraction costs, partly locked-in by resource-hungry China.
That leaves the US, manufacturer of aircraft, agricultural products and movies, with its $400/ yr trade deficit and a flush stock market based on booming real estate prices (about to flatten out) in an unenviable position. “Americans should not fear our economic future, because we intend to shape it,” claims President Bush. One has no doubt that we will do it, but it will take some stretch.
For more, see my blog.
Despite the legend that New Yorkers don’t drive, the people of East Midtown are car users. Our cars are housed in five gigantic garages in Stuyvesant Town, with the overflow on the ST/PCV access roads and other side streets. We are also energy and environment conscious, with many buying Prius-type non-gas-guzzlers, purchased at extra cost, well before the increase in prices made everybody gasoline conscious. We have many neighbors who insist on paper bags in super markets, or bring their own, to limit the use of petroleum products.
It is disingenuous of the President of the United States, in his State of the Nation speech, to speak of the Americans’ addiction to petrol. Let’s put the burden where it belongs. American industry will not make products or produce services that are low-cost, although consumer-beneficial. Consequently, we lost most manufacturing to the Japanese and Chinese, and only recently GM and Ford voiced a shift to efficient cars, with give-backs from unions, to keep the factories from migrating to China.
Conversely, ExxonMobil, proving that high prices bring out the greedy, have shown a $36B profit for 2005, but the vultures will not be able to duplicate it, because their reserves, yeah, reserves that these people have claimed for years (check out the deniers of the Hubbert Peak theory in the Petroleum Institute), do not support production. That will push the prices even higher. The spin doctors now put the blame on the “addiction of America to oil.” If we pursue the comparison, who are the pushers that foster and feed the addiction? One sees the unbridled growth of SUVs, the unwillingness of the Congress to reduce the use of oil by demanding cars with improved mileage per hour, the exemption of passenger vehicles built on the bodies of trucks from the rule. Gas sultans and automobile giants are the Abramoffs of the energy environment that have corrupted the government, with oilmen installed in the highest positions pushing their case. And now the denial – Americans, all by themselves, have become addicted to gasoline. It is not just a farce, it is felonious.
This column, since the late 1990s, has assembled world-wide oil reserve figures, supplied by the Oil & Gas Journal and the US Geological Survey, and compared them against consumption, at the time claiming that oil reserves will be exhausted in 37 years. Exhausted means that the energy expended in extracting the product will become equal or higher than the energy generated. The oil industry spokespeople have pooh-pooed these numbers, except for British Petroleum, whose annual surveys support the scenario. A London Economist seminar suggested an even shorter term, a decade or less, for the continued practical availability of oil.
Once more, the shortsightedness of the government is surfacing. President Bush is offering to increase the funds for research of alternate products - ethanol, product of corn, sugarcane and switchgrass, hydrogen, wind and hydroelectric power. It is already proven that corn ethanol costs more in energy outlay than the gain. Hydrogen is also costly and dangerous to store and use. The others are low output. Nuclear energy – probably the unspoken resource of last resort – will require huge outlays and risks for humanity.
As for oil, US uses 20M barrels a day, 25% of the world’s production, of which we import 60% - more when our oil refineries of the Gulf of Mexico are knocked out by hurricanes. Why such limited refining capacity? Because the oil magnates are cheap, and enemies of the consumer, using refinery shortages to push up prices. The President wants to cut our dependence of MidEast oil by 75% come 2025. We are currently getting 17% of oil from these parts to which he wants to bring democracy. The 22 countries of the Arab League are dictator ruled, and overthrowing their rulers will leave them in the hands of the only other powerful organized popular groups, namely radical Islam. Will they sell oil to us, the enemy? Yeah.
How about closer to home? Venezuela’ s Hugo Chavez, in alliance with Fidel Castro and the new Bolivian coca ruler Evo Morales, is moving Latin America away from us. Washington’s calling him a Hitler helps a lot. Now Chavez has Hamas leaders visiting, and condemns Israel as an American stand-in. Sending in the marines will not fly, guys. Ditto for Iran; meanwhile the Iraqi independence has produced a government that will make a coalition with Iran, as soon as we withdraw, and we can forget about their oil. The East Saudi oil area Shiites could also break away, taking their resources out of our influence. The carefully built American oil empire, started by President FDR, is not stable. Thank goodness for Mexico, and particularly Canada, supplier of 40% of our oil imports, although their biggest reserves are the oil sands of Athabasca, in Alberta, with high extraction costs, partly locked-in by resource-hungry China.
That leaves the US, manufacturer of aircraft, agricultural products and movies, with its $400/ yr trade deficit and a flush stock market based on booming real estate prices (about to flatten out) in an unenviable position. “Americans should not fear our economic future, because we intend to shape it,” claims President Bush. One has no doubt that we will do it, but it will take some stretch.
For more, see my blog.
# posted by Wally Dobelis @ 6:15 PM 
