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Congress Responsible For High Oil and Gas Prices

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May 182008

I think the explanation for why the Democrats are always on the wrong side, choosing to keep oil in the ground and punish us with higher gas prices is finally coming to light.

The Truth about Oil in America is that we have over a trillion barrels. Why then would Democrats constantly be opposed to us using any of our own fossil fuel to lower prices here? There can only be one logical answer for this. The Democrats are being paid by OPEC leaders to stop development.

Let’s look at the facts. OPEC has money, a lot of money. OPEC and the Islamic Middle East really have only one thing the world wants and that’s oil. If we take away that oil revenue and allow the USA to become “energy independent”, or even not as needful or dependent on OPEC , then OPEC and the entire Islamic Middle East are in deep do-do.

So, the logical thing for OPEC to do is spread some of that oil-money around. Just buying them a little insurance, you know?

OPEC shrugs its shoulder at the fact that Americans pay $4 a gallon for gas. Why would they care? After all, it’s not like any one’s forcing American politicians to take this money.

Crude Mistake

Energy: With the price of oil spiking above $127 a barrel, the search for scapegoats has begun. Some point to the Saudis, OPEC’s No. 1 producer. Others blame the oil companies. We have a better candidate: Congress.

As President Bush traveled to Saudi Arabia to ask the House of Saud to open the oil spigots a bit wider, Congress showed once again how clueless it is when it comes to energy policy.

Underscoring its failure to grasp the nature of our current problems, the Senate Appropriations Committee on Friday refused to end its moratorium on oil shale development in Colorado.

“If we are really serious about reducing pain at the pump,” Colorado’s senior senator, Republican Wayne Allard, said, “this is a vote that would make a difference in people’s lives.” He’s right.

But the shale proposal went down to defeat with Allard and 13 other Republican members in favor and 15 Democrats opposed. Once again, Democrats were on the wrong side, opting to keep oil in the ground and punish you with higher prices as a result.

This was no minor thing. Estimates put the amount of oil locked in shale in both Canada and the U.S. at more than 1 trillion barrels. Pulling out even a tenth of that would quadruple our current reserves.

This is the same Congress that refuses to allow drilling in Alaska’s Arctic National Wildlife Refuge, which holds up to 20 billion barrels of crude, or offshore, where another 30 billion await.

Meanwhile, Brazil — which recently made a major oil discovery almost in sight of Rio’s beaches — announced that it has leased 80% of the world’s deep-sea offshore oil rigs. In other words, Brazil unlike the U.S., isn’t dithering as prices soar. It’s drilling.

If you think Congress’ decision-making on energy couldn’t get any worse, think again. While Bush was in Riyadh urging the Saudis to pump more oil, congressional Democrats were busy undercutting him, threatening to halt arms sales to our Mideast ally.

It was a politically peevish move with consequences both for U.S. energy security and the balance of power. If we don’t sell arms to Saudi Arabia, Russia will. The result would be a loss of American leverage with the Saudis, who, like many, feel threatened by a nuclear Iran and the menace of al-Qaida.

At least Bush convinced the Saudis to boost output 300,000 barrels a day. That helps. But we still have to do more ourselves.

The U.S. uses about 21 million barrels of oil a day. But only 8 million come from our own sources. That leaves a 13-million-barrel-a-day deficit that, at $126 a barrel, will cost us $600 billion to plug this year. That’s more than two-thirds of our total trade deficit.

Congress could reduce much of our oil shortfall by drilling for more on our own territory. This would lower prices and increase security. Yet, Congress seems dead set on doing the opposite.

With its failure to tap the vast supplies in ANWR and offshore, its passage of costly global-warming legislation and now its refusal to exploit our massive resources of oil shale, Congress has set us on a path to less energy, higher prices and weakened national security.

Saudis And Democrats See No Reason To Raise Oil Production Now

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May 172008

How ironic! We ask the Saudi’s to increase their oil production and when refused Pelosi, Schumer and all the other Liberals start whining. The same bunch of Liberals won’t let us drill, produce coal, build refineries or build nuclear plants. They refuse to seek our own energy independence.

Remember this every single time you fill up your tank; with new domestic oil supplies and nuclear power YOUR PRICE AT THE PUMP WILL DROP LIKE A STONE. The people standing in our way are the Demo-Leftist-Fascists who “mandate” and “prohibit” all day long.

I think it is time that we hold hearings just to see who in Congress is taking lobby money from “Big Oil” and wacko environmentalist groups. There can be no other reason for denying us our energy independence.

Saudis see no reason to raise oil production now

Saudi Arabia’s leaders made clear Friday they see no reason to increase oil production until customers demand it, apparently rebuffing President Bush amid soaring U.S. gasoline prices.

It was Bush’s second personal appeal this year to King Abdullah, head of the monarchy that rules this desert kingdom that is a longtime prime U.S. ally and home to the world’s largest oil reserves. But Saudi officials stuck to their position that they will only pump more oil into the system when asked to by buyers, something they say is not happening now, the president’s national security adviser told reporters.

“Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy,” Stephen Hadley said on a day when oil prices rose above $127 a barrel, a record high. “What the Saudis wanted to tell us was we’re doing everything we can do … to meet this problem, but it’s a complicated problem.”

The Saudi oil minister, Ali al-Naimi, announced that the kingdom decided on May 10 to raise production by 300,000 barrels at the request of customers, including the United States. He said that increase was sufficient.

“Supply and demand are in balance today,” he told a news conference. “How much does Saudi Arabia need to do to satisfy people who are questioning our oil practices and policies?”

Bernard Picchi, an energy analyst at Wall Street Access, an independent research firm, said the 300,000-barrel Saudi production increase was “a token amount” that is not expected to have much impact on prices.

It would be different, he said, if Saudi Arabia boosted production by 1 million or 1.5 million barrels a day. The announced increase will have Saudi Arabia pumping 9.45 million barrels a day by June, Saudi officials said. That’s about 2 million barrels below its capacity.

Oil prices advanced Friday as traders, unimpressed by efforts to boost supply, kept buying on the expectation that prices would keep setting new records.

Saudi Arabia often adjusts its output to meet demand, and the increase coincides with the start of the peak driving season in the U.S. “It’s a way to raise production without raising production,” said Phil Flynn, analyst at Alaron Trading Corp. “I think it was a way to save face.”

Hadley never mentioned the Saudi’s new production in his recap with reporters. He said the Saudis briefed Bush again on their plan to increase their production capacity over time. They also argued that even an increase would be unlikely to bring down the soaring prices, driven more by uncertainty in the market, lack of refining capacity for the type of oil readily available and other complicated dynamics, he said.

Economists say prices are being driven up by increased demand, not slowed production. Energy-guzzlers China and India are stretching supplies.

As a result, Hadley suggested the White House was satisfied with — or at least accepted — the Saudi response. He added, however, the Bush administration will see if the explanation “conforms to what our experts say.”

Saudi Foreign Minister Saud al-Faisal said the discussion with Bush about oil was friendly. “He didn’t punch any tables or shout at anybody,” the minister said. “I think he was satisfied.”

High energy costs are a major drain on the U.S. economy, which is experiencing a slowdown that some think is already a recession. At the pump, gas prices rose to a national average of $3.78 per gallon on Friday, according to a survey of stations by AAA and the Oil Price Information Service.

When Bush and Abdullah met in the kingdom in mid-January, the president also sought more Saudi output in a plea that also ultimately was for naught.

Iran was the other dominant topic of Bush’s overnight visit with the king.

The two shared a concern over the recent violence in Lebanon, where Hezbollah overran Beirut neighborhoods last week in protest of measures aimed at the group by the country’s government. The display of military power by the Shiite militant group, which the U.S. considers a terrorist organization, resulted in the worst internal fighting since the end of Lebanon’s 1975-90 civil war.

With Shiite-dominated Iran backing Hezbollah, Sunni-dominated Saudi Arabia — eager to stop any advance of regional power by Tehran — joins the West in supporting Lebanon’s government. Hadley said Bush and Abdullah shared a concern that the recent events would “embolden Iran.” The U.S. and Saudi Arabia, he said, “are of one mind in condemning what Hezbollah did.”

On Thursday, Hezbollah and the government reached a deal to end the violence after Lebanon’s Cabinet reversed measures aimed at reining in the militants.

Bush’s Saudi stop was intended, in part, to celebrate 75 years of formal U.S.-Saudi relations and strengthen ties that, once strong, have frayed over the perception Washington favors Israel too much in the dispute with the Palestinians, the Iraq war and the Sept. 11, 2001 attacks. Fifteen of the 19 airline hijackers were Saudis, and Americans blamed Saudis for allowing the religious extremism that gave rise to them, an accusation that stings here.

Bush was spending the day with Abdullah at his lavish farm complex outside Riyadh, talking mostly out of public view over multiple tea services and meals. Abdullah greeted Bush warmly at the airport, and rode with him in his limousine out into the desert.

The White House hoped that new agreements formalized during Bush’s visit would give the relationship a boost.

Among them was an agreement for the U.S. to assist the kingdom in developing civilian nuclear power. Another agreement involves U.S. promises to help protect any Saudi nuclear infrastructure with training, the exchange of experts “and other support services as needed.” Hadley said it would not involve U.S. troops.

But the rising price of oil commanded attention.

When Bush first ran for president in 2000, he criticized the Clinton administration for high fuel prices and said the president must “jawbone” oil producing nations and persuade them to drop rates. At that time, oil was nearing $28 a barrel — less than a quarter what it is now.

Bush’s visit comes two days after Congress voted to temporarily halt daily shipments of 70,000 barrels of oil to the nation’s emergency reserve.

After Bush’s talks on Friday, his administration announced in Washington that it has canceled oil shipments into the reserve beginning in July, when the current purchase contract expires. Bush has refused to stop pouring oil into the Strategic Petroleum Reserve, saying the stockpile was meant for emergencies and that halting the shipments would have little or no impact on gasoline or crude oil prices.

The Democrat’s Energy Plan: When Common Sense Is Not So Common

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May 152008

So how is the Democrat’s “common sense” energy plan working? Well, as Charles Reichley points out in the six years before they took control, oil increased an average of about $5 a year. But in the 16 months the Democrats have been responsible for the nation’s energy policy, the price of oil has risen to $126. That is an increase of almost $70 a barrel or $5 each month.

He also notes that the energy bill is one of the few real “accomplishments” the Democrats have had since they took office. If $3.70 a gallon gas is an “accomplishment,” we can all hope they fail more. Their “success stories” are driving us all to the poor house.

Drilling for an energy plan

When President Bush took office in 2001, the price of oil was around $30 a barrel. Six years later the price had doubled. Democrats promised voters they had “a common sense plan to help bring down skyrocketing gas prices.” On October 20, 2006, just before the Democrats took over Congress, a barrel of oil was about $57.

So, how is the Democrat’s “common sense plan” working? In the six years before they took control, oil increased an average of about $5 a year. But in the 16 months the Democrats have been responsible for the nation’s energy policy, the price of oil has risen to $126 — an increase of almost $70 a barrel or $5 each month.

If I had a choice, I’d take $5 a year over $5 a month. Meanwhile, gas prices on the Democrat’s watch went from $2.20 a gallon to $3.67, an increase of almost 10 cents a month. The Democrat’s plan isn’t working, unless their plan was to decrease our dependence on oil by making it so expensive we can’t afford to buy it.

It’s clear the Democrats are fumbling our energy policy. Last week Speaker Nancy Pelosi urged President Bush to get Saudi Arabia to drill more oil so prices would go down. But at the same time, she rejected drilling for domestic oil, claiming that increasing domestic supplies won’t lower the price we pay.

So which is it? Do we want more oil or not? How do we decrease our dependence on foreign oil if we reject domestic oil and increase foreign oil?

While claiming oil drilling won’t help, the Democrats said we should stop filling the Strategic Petroleum Reserve, which will increase supplies by 70,000 barrels a day. They say this will decrease gas prices by up to 24 cents a gallon. Economists say the effect will be negligible.

Meanwhile, Democrats reject drilling in ANWR because they say adding a million barrels a day would only drop the oil prices about 5 cents a barrel. So 70 thousand barrels saves us 24 cents a gallon, while a million barrels won’t do a thing?

Also, Democrats want to raise taxes on oil companies. By increasing taxes, they promise the price of gasoline will drop, and the oil companies will increase supply. In reality, taxes decrease incentives to supply oil and raise the price we pay.

Of course, we are collecting a huge amount of taxes from the oil companies. The feds took over $30 billion from Exxon-Mobil last year (that’s more than the taxes paid by the bottom 50 percent of all individuals).

The Democrats also say drilling in ANWR is useless because we won’t get any oil for 10 years. But they take credit for a bill they passed which will force Americans to buy more fuel-efficient cars. Their plan requires cars to get 35 miles per gallon, by 2020 — 13 years from now. So we shouldn’t drill in ANWR because it will take 10 years before it helps us, but increasing gas mileage over 13 years is “smart energy policy.”

Meanwhile, my car gets over 45 miles per gallon today — beating their standard for 13 years from now by 30 percent. Americans could buy these cars now, but haven’t. So the Democrats will force us to.
But it won’t help as much as they claim — when cars get more efficient, gas use will increase, because people will be able to afford to drive farther.

The one thing that will make us stop using oil, and switch to alternative fuels, is if gas gets so expensive we get tired of paying the cost. The Democrats claim they want us to stop using gasoline, but they are pushing the administration to force companies to lower gas prices, which will make people use more gas.

So the Democrats want to cut gas use, but are pushing lower prices. They say Bush let prices get too high, but since they took over the price has gone up ten times as fast. They say a million barrels a day won’t make a difference, but 70 thousand a day will. They won’t drill ANWR because it will take too long, but passed fuel efficiency standards that will take longer.

The energy bill is one of the few real “accomplishments” the Democrats have had since they took office. If $3.70 a gallon gas is an “accomplishment,” I hope they fail more. We can’t afford too many more “success stories.”

ANWR Derangement Syndrome: Senate Democrats Reject Domestic Oil Drilling

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May 142008

“We can’t drill our way to lower prices,” said Sen. Dick “Head” Durbin, D-Ill.

Hey Dick, if we can’t drill our way to lower prices then why did this vote occur in the first place? If your desire is to increase the supply to the public, then why not actually increase the supply to the public?

Senate Passes Halt On Oil Stockpiling To Curb Gas Prices

A veto-proof majority in the Senate voted Tuesday to stop filling the Strategic Petroleum Reserve to try to curtail soaring gasoline prices.

The vote dealt a setback to President Bush’s policy of boosting oil stockpiles in the event of a major supply disruption. But it had a limited immediate market impact.

Crude oil spiked to $126.98 a barrel on fuel oil demand and Iran’s talk of cutting exports. Oil shed some gains on the SPR vote, but still closed up $1.57 at $125.80.

The Senate voted 97 to 1 to halt crude deliveries now averaging 70,000 barrels a day until the price of oil drops below $75. That’s less than 0.1% of global demand of 87 million barrels. A House vote was scheduled later in the day.

The Energy Information Administration estimates stockpiling 100,000 barrels a day adds $2 a barrel to the price of oil and 4-5 cents a gallon to gasoline.

House Speaker Nancy Pelosi’s office says an SPR halt could save drivers 5-24 cents a gallon.

Influential oil economist Philip Verleger told Congress in December that filling the strategic reserve “may have added as much as 10% to the light sweet crude price.”

He suggests the Energy Department sell light sweet crude stocks and fill the SPR with more-plentiful sour crude, which has a higher sulfur content. That means refiner rules would need to be relaxed in an emergency, he says.

The White House has kept boosting crude stockpiles over growing criticism. Bush argues that preparing for a national emergency trumps the negligible price declines that would result.

He proposed doubling SPR capacity to 1.5 billion barrels in his 2007 State of the Union address. The reserve now holds just over 700 million barrels, enough to cover 58 days of imports.

“Congressional tampering with presidential authority to fill the SPR may be unconstitutional,” wrote Heritage Foundation senior fellow Ariel Cohen. The move “interferes with the executive branch’s authority to conduct national security policy.”

Republican lawmakers are parting ways with Bush on the strategic reserve, but they are united in supporting more domestic drilling.

“(W)e’ve been heartened that by bringing up the SPR plan Democrats are conceding a link between increasing our supply and reducing our price at the pump,” House Minority Leader John Boehner and Republican Whip Roy Blunt said in a statement.

They noted in a letter to Pelosi that opening the Arctic National Wildlife Refuge to drilling could eventually yield 1 million barrels per day. The Senate on Tuesday voted 56 to 42 against a bid to open ANWR.

The senators also urged Congress to lift restrictions on deep-water drilling off U.S. coasts.

Meanwhile, Democrats are pushing a resolution to halt arms sales to Saudi Arabia until it ups oil output.

“If Saudi Arabia and other OPEC countries do not substantially increase production, we in Congress will block their lucrative arms deals,” said Sen. Charles Schumer, D-N.Y.

Democratic leaders haven’t backed a federal gas-tax holiday proposed by presidential contenders Sen. Hillary Clinton, D-N.Y., and Sen. John McCain, R-Ariz.

Energy Pandering: Congress Divided On Energy Plan

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May 122008

This is the way I see it; oil is both our nation’s primary strategic vulnerability and our nation’s primary corrupting influence. Congress is not a solution, it is a problem.

Here’s how I would force OPEC’s hand on both increasing their supply and limiting the price spikes. It is sort of a Mafia – Godfather solution.

1) Tap a few hundred new wells in ANWAR, The Gulf of Mexico, The Atlantic and Pacific shelf. Expand refinery capacity to handle the new influx of supply.

2) Stop all international charity to any OPEC nation, any organization who gives money to any OPEC nation or anyone allied with an OPEC nation. Yes, that means no more money to the IMF or UN. Use the savings to build a refinery.

3) Grain (corn, wheat) embargo under conditions in #2. You see, OPEC countries are loaded with oil, but most cannot grow their own food, and only two countries have the agriculture capacity to help supplement them. Guess who number one is?

Let everyone start feeling pain while we start tapping our own spigots. When a few million people start starving and rioting, then maybe things will settle down and everyone will get back onboard with who the Big Dog is.

Congress divided on energy plan

As millions of people approach the summer vacation season under the threat of $4-per-gallon gasoline, Congress is scrambling to respond. But don’t wait for anything that will drive down prices at the pump.

A Senate vote on a GOP plan is scheduled for Tuesday, and Senate Majority Leader Harry Reid has promised to bring up a Democratic package before the Memorial Day congressional recess. Except for halting the flow of oil into the government’s Strategic Petroleum Reserve, neither plan is likely to go very far. Both will be challenged by filibusters by opponents, meaning they would require 60 votes to advance.

Here is a rundown:

THE DEMOCRATIC PROPOSALS.

_Enact a windfall profits tax on oil companies.

SPIN: Oil companies are making too much money, earning $123 billion last year while motorists faced soaring gasoline costs. Imposing a 25 percent windfall profits tax on the five largest oil companies and repealing $17 billion in tax breaks could help the shift away from fossil fuels toward alternatives. Taxes could be avoided if profits are used for refinery expansion or development of wind, solar or biomass projects.

FACT: Profits are large because the companies are huge, and oil now sells for well over $120 a barrel. The taxes could spur some new alternative energy projects, but economists say they also could reduce investments in oil and gas exploration, and are unlikely to affect prices. They could do more harm than good, says Robert Hansen, senior associate dean at Dartmouth’s Tuck School of Business. “Anytime you put in a tax you create an incentive to avoid it,” says Hansen.

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_Create a law against energy price gouging and new rules to stem energy market speculation.

SPIN: The government must police the energy markets with a federal law against price gouging and new rules against market speculation. The proposal creates a federal price gouging law with civil penalties of up to $5 million during a presidentially declared energy emergency. The law would prohibit refiners, wholesalers and retailers from charging an “unconscionably excessive price.” Traders would be required to put up more cash collateral in the energy futures markets to curb speculation.

FACT: Energy price gouging laws now in 28 states are uneven and inadequate to deal with energy market abuses. Congress has considered a gouging law since 2005. Separate versions have passed both the House and Senate, but never gained final approval. Critics say gouging is ill defined and the law amounts to price controls. Bush has threatened a veto.

A former Federal Trade Commission chairman argued such a law could do consumers more harm than good and may result in higher prices if providers, fearing stiff penalties, avoid selling fuel when prices soar.

Increasing cash collateral, or margins, in energy futures trading could curb speculation, but there might be unintended consequences. Such new requirements, said a spokesman for the Commodities Futures Trading Commission, which would enforce the new rules, “may drive traders to unregulated trading or overseas” without reducing market abuses.

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_Take on the OPEC oil cartel.

SPIN: We need to stand up to the OPEC oil cartel. The Justice Department would be given authority to bring antitrust cases against countries that collude to fix prices as part of OPEC.

FACT: While politically popular, such a measure would probably not change OPEC production decisions and could provoke retaliation. Similar proposals have been debated in Congress since 2005. “It’s a catchy phrase, but it doesn’t have any substance,” says energy consultant Robert Ebel of the Center for Strategic and International Studies.

THE REPUBLICAN PROPOSALS.

_Pump oil from Alaska’s Arctic National Wildlife Refuge, now off limits.

SPIN: The coastal strip of ANWR, as the refuge is called, probably has 11 billion barrels of oil. At the rate of 1 million barrels a day, it would add to domestic production, reduce U.S. reliance on imports, lower prices and produce jobs. With modern technology wildlife and the environment can be protected.

FACT: Drilling in ANWR has been debated for 28 years and remains one of the most contentious environmental issues. Several times the House, under GOP control, has approved development; it passed Congress in 1995 only to be vetoed by President Clinton. Drilling supporters repeatedly have been unable to get the 60 votes needed to overcome filibusters and are unlikely to do so this time.

While ANWR has substantial oil, none would flow for 10 years. Even then, its impact on global production of 87 billion barrels a day will be minimal, energy experts say, as OPEC could adjust to compensate.

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_Develop vast amounts of oil and natural gas in offshore waters now off limits.

SPIN: For a quarter century, energy development has been blocked in more than 80 percent of U.S. coastal waters, depriving the country of vast oil and gas resources. States should be allowed waivers to the moratoria and get some of the revenues from development.

FACT: Most areas of federal offshore waters outside the western Gulf of Mexico and off much of Alaska have been placed off limits to drilling by a succession of presidential orders and congressional action to protect tourist industries and avoid the risk of spills and environmental damage. The House has twice approved giving states the right to opt out of the federal ban.

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_Ease permitting for new refineries.

SPIN: A shortage of refineries is fueling high gasoline and diesel prices. There has not been a new one built in 30 years, with environmental and other permitting problems contributing to the reluctance of oil companies to build new refineries.

FACT: The lack of new refinery construction has been more an issue of economics, not government regulations. While the oil industry has complained about permitting and environmental regulations, oil company executives also have said the permitting issue has not been a deciding factor over refinery expansion or construction. Refinery investments are based in expectations of increased demand.

Oil company executives, asked recently if they wanted to build new refineries, said no. In part, this is because of the growth of ethanol as a substitute for gasoline. The industry prefers to expand existing refineries.

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_Allow coal-based diesel be used as motor fuel.

SPIN: Coal is the country’s most abundant energy resource, and technology exists to produce diesel fuel from coal. A mandate to produce 6 billion gallons a year of coal-derived motor fuel by 2022 would contribute to greater energy independence and spur the industry’s development.

FACT: The process requires large amounts of energy and results in greenhouse gas emissions, running counter to efforts to combat global warming.

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