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Oil Price Fairness

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In 2008, Department of Energy (DOE) Secretary, Dr. Steven Chu said that American energy policy should be calibrated to drive the cost of gasoline to the same level as Europe in order to produce more demand for alternative energy production. Chu told The Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”

When questioned by Rep. Alan Nunnelee (R-MS), Chu was asked: “But is the overall goal to get our price of gasoline down? “No,” responded Chu. The overall goal is to decrease our dependency on oil, to build and strengthen our economy. We think that if you consider all these energy policies, including energy efficiency, we think that we can go a long way to becoming less dependent on oil and [diversifying] our supply and we’ll help the American economy and the American consumers.” We’re still waiting…

Well, the President Barack Hussein Obama administration may have found a way to achieve Secretary Chu’s goal (which Chu retracted on March 13, 2012).

Heather Zichal, deputy assistant to Obama for energy and climate change, when asked if eliminating oil company subsidies would do anything to lower the price of gas, or if it was about fairness, said, “From our perspective, it’s a fairness issue. At a time when we’re making difficult decisions about the budget and where to make investments and where to cut, the fact that oil and gas companies are making record profits and at the same time getting $4 billion in subsidies annually, those subsidies should be repealed.”

The definition of “subsidy” has been discussed here ad nauseam. Let’s see: are subsidies received by oil and gas companies available to any and all companies? Yes, yes, they are! Are subsidies being given by DOE to green/clean/alternative energy companies (that keep filing for bankruptcy) available to any and all companies? No, no, they are not.

Anyway, in an effort to be “fair,” Obama wants to close tax loopholes and end subsidies for oil and gas companies. And just how does Obama (and his team of economic advisors) think that move will lower the price of gasoline? Does Obama have Chu’s 2008 goal in mind? Does Obama really believe that higher tax costs will not be passed on to consumers? And how does Obama consider this to be a fairness issue? And specifically to whom is he being fair?

A Washington Post/ABC News poll released last Monday said that 65 percent of US citizens disapprove of how Obama is handling the price of gasoline, while 26 percent approve. In truth, the president has little effect on gasoline price, but the public perception is that he can have a major effect because the MSM hounded George Walker Bush to do something? Remember? What goes around, comes around.

But (and there is always a but) there just may be something Obama can do about gasoline prices. The cited source discusses the role of speculators. Neither the Democrats or Obama or his economic advisors appear to have a clue how markets work. Obama and many politicians seem unable to understand that what speculators do is smooth out wild swings in prices. Speculators make profits by buying oil when the price is low and selling it when it is high. Speculators are taking a real risk with their own money. Few Democrats are going to shed tears over the money if speculators lose money. Obama and Democrats claim that there is nothing that can be done immediately to reduce oil prices, saying that if drilling in the US started today, it would take years before we would actually see it. But lower future prices do lower current prices. Obama blames speculators for driving gasoline prices higher and straining American consumers, saying there was enough oil in world markets to meet demand. It seems as if nothing is ever his fault.

Let’s examine some of Obama’s policies concerning domestic energy and its production:

So, to be “fair,” all gasoline consumers will have to bear the brunt of Obama’s lunacy, er, to achieve Chu’s goal, and to further Obama’s policies.

About

  • Glenn Contrarian

    Warren –

    You apparently feel this is ‘proof’ that Obama is engaging in lunacy:

    He has stated, “Anybody who tells you that we can just drill our way out of this problem does not know what they’re talking about, or they’re not telling you the truth – one or the other.”

    Lunacy, Warren, is claiming that we can drill our way to energy independence DESPITE the fact that we’re not even close to energy independence even though we’re ALREADY producing so much oil that we’re ALREADY an oil-exporting nation.

    YOUR problem, sir, is that you don’t grasp that the way the world oil market is set up, even if we had a working and producing oil well in every freaking back yard in America, we’d NEVER – repeat, NEVER – become energy independent. Why? Because with very few exceptions, ALL oil is put on the world market as soon as it is pumped out of the ground…and the Big Oil companies buy and sell what makes them the most money REGARDLESS OF WHERE IT’S DRILLED.

    But don’t let any of this stop you from believing in “drill-baby-drill”, now, because Thou Shalt Believe that the Head Muslim in Charge MUST be trying to destroy America, and that Big Oil always has America’s best interests at heart. Beeeeeelllliiiiieeeeeevvvvveeeeee!!!!

  • Evalyn B. Kanser

    We have contract for active solar gravity array to be used at Bright Source in the Mohave, since we already have a new home office there.

  • http://www.squidoo.com/lensmasters/IanMayfield Dr Hussein Walker Herbert Wilson Earl Milhouse Baines Dreadful

    “In truth, the president has little effect on gasoline price, but the public perception is that he can have a major effect because the MSM hounded George Walker Bush to do something? Remember?”

    No. And your link doesn’t help.

  • Igor

    IMO Warren is less interested in solving a real energy/business/economics problem than he is in visiting calumny upon Obama, which casts his whole argument in a light that makes it unworthy of serious consideration.

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    You can always tell what’s coming and the bias of the writer when that Hussein is made a point of in the President of the United State’s name.

    For Christ’s sake get over it.

    In September 2011, the United States exported 430,000 more barrels of gasoline a day than it imported, according to the U.S. Energy Information Administration. That is about twice what it exported at the start of the year, and “experts and industry insiders say the trend is here to stay,” reported CNN Money.

    The reason gas at the pump is so high is because of oil company greed not political bias. It’s more profitible to sell gasoline over seas and soak the American public by creating artificial shortages due to exporting.

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    If you want to read something based on facts instead of opinion polls then click here

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    FACT: In DeSoto Parish, Louisiana the 2008 discovery of the Haynesville Shale – a layer of rock infused with natural gas 10,000 feet underground – has been a windfall for local governme

    Extra tax dollars paid for the three football fields, at nearly $2 million apiece, as well as road and water projects. For the last two years, the school district has doled out annual bonuses to its 750 employees of $8,500 each, a notable sum in a parish where the median household income was $36,890 in 2010, according to U.S. Census figures, well below Louisiana and national averages.

    But in recent months, the hotels and RV parks that were built to accommodate energy workers have sat half-empty. Restaurants have seen their sales collapse. Local landowners have seen their royalty checks from drilling companies fall by half in some cases.

    Why?
    FACT: There is so much natural gas on the market that the price has plunged, because the GOP and oil companies oppose research on running cars and busses on… natural gas.

    =======================

    FACT: Parts of Texas, Arkansas and Pennsylvania are beginning to suffer as companies move their drilling rigs elsewhere to hunt for oil, which is more lucrative in Texas, Oklahoma and Ohio than natural gas. Local economies buoyed by gas drilling are facing steep drop-offs in revenue from sales taxes and a tax on gas production called severance tax.

    =======================

    FACT: In Wyoming, which gets much of its revenue from natural-gas royalties and severance taxes, the plunge in prices prompted state economists in January to scale back their revenue projections by $155 million through 2014. This probably will lead to cuts in education and social services, officials say.

    “Natural gas is just killing us right now,” said Bill Mai, co-chairman of the committee that forecasts Wyoming’s revenues. “The bigger problem is we don’t foresee a quick turnaround, unless pretty much the whole country goes into an ice age at this point.”

  • Keith Barnes

    Nobody is buying his bullshit Jet, calm down before you give yourself a coronary!

  • troll

    …while out of respect for Igor I must disclose that I am not an academically trained economist and therefore haven’t a clue what the guy is talking about – there is a series of interest on bubbles in oil pricing by industry insider Chris Cook over on nakedcapitalism who predicts a “flash crash”

  • roger nowosielski

    @3

    Sure they have! MSM was on GW’s back for virtually anything, so you’re either a liar or suffer from selective memory. And taking refuge in Warren’s link is no excuse.

    Just another example of liberal bias passing for clear thinking.

  • http://www.squidoo.com/lensmasters/IanMayfield Dr Dreadful

    A lecture from you about clear thinking, Roger, is like a cockroach complaining to the city about sanitation.

    Memory is notoriously unreliable, as you should know perfectly well. That’s why I expected some substantial backup from that link for Warren’s claim. Instead I find I have to go hunting for it myself.

    Try going to Google News, type in “gas prices” and limit your search to 2008 (when prices were at a (then) all-time high.

    The only thing I found blaming anything or anybody was a piece pinning responsibility on Hurricane Gustav.

  • Glenn Contrarian

    Roger –

    I remember when gas prices spiked during the Bush administration – and while some liberals griped that we should use the national reserve of gas, I don’t recall any accusations blaming Bush for the high gas prices. I do remember the conservatives howling that we need to drill and drill some more – you can see that in the BC articles written then…but there was NOTHING like the attacks being leveled now against Obama for the gas prices that he can’t do squat about.

    FURTHERMORE, Roger, it’s a blatantly false comparison to try to justify the attacks on Obama by the attacks on Bush – because Obama didn’t knowingly invade a nation on false pretenses. Obama didn’t publicly support TORTURE. Obama didn’t obstruct and cover up outright treason committed by his vice president. Obama didn’t take the biggest surplus in this nation’s history and flush it down the tube with tax cuts for the wealthy, Medicare Part D (a HUGE giveaway to Big Pharma), and two wars which – for the first time in our nation’s history – were NOT paid for by tax increases, but by loans from other nations.

    No, Roger, you canNOT justify the attacks on Obama by the attacks on Bush – because Dubya DESERVED them. Bush was the worst president since Woodrow Wilson. Obama’s clearly of a better caliber by almost any metric you care to use.

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    Argue with this Warren… if you dare. This is based on facts not opinion poles…

    FACT:
    U.S. exports of gasoline, diesel and other fuels will more than double in the next three years as refiners take advantage of a growing supply of domestic crudes and ship more fuel to emerging markets, according to UK research firm Wood Mackenzie.

    Exports will rise by 450,000 barrels a day by 2015 as domestic demand shrinks and more products are sent to Latin America, Africa and other regions where fuel use is increasing, says Alan Gelder, head of downstream consulting at Edinburgh-based Wood Mackenzie.

    Where is the fuel shortage that’s got pump prices so high and everyone screaming drill baby drill?
    FACT:
    The U.S. exported more gasoline, diesel and other fuels than it imported in 2011 for the first time since 1949, according to the Energy Information Administration. Shipments abroad of petroleum products exceeded imports by 439,000 barrels a day last year.

    “U.S. gasoline demand is going one way, and that’s down,” Gelder says. “So to the question of can the U.S. transform into a global export center, we say yes. That can be done.”

    Shipments outside the U.S. will increase at a rate of 60,000 to 80,000 barrels a day in the years after 2015, Gelder says.

    U.S. fuel demand will drop 0.4% to 18.77 million barrels a day in 2012, the EIA forecast last month in its Short-Term Energy Outlook. Consumption of oil and petroleum products dropped 7.8% between 2005 and 2010, and Mexico’s use of U.S.-made gasoline was 44% higher last year than in 2010.

  • Glenn Contrarian

    And what happens when we ship oil overseas, Warren? The local inventory goes down. And what happens when the local inventory goes down? The prices go UP.

    And what has Obama got to do with that? SQUAT. Big Oil ships more oil overseas to those who pay more, they decrease the inventory here, and Americans pay more. To Big Oil.

    But none of that matters to you. All that matters in Warren World is blaming Obama for everything and REFUSING to lay the blame where it really belongs…because if you did so, you’d have to admit to yourself how you and every other Republican has been suckered and led by the nose for the greater glory of Big Oil.

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    That Glenn, and that the President’s middle name is Hussein.

  • http://rwno.limewebs.com Warren Beatty

    I could not help but notice that NO ONE addressed the fairness issue, or the fact that oil and natural gas production is up in spite of Obama’s policies.

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    This from the man who still thinks Fox News is fair and balanced. Fairness is a matter of opinion, you can’t address the facts, so that’s all you have to hold on…

    you poor thing

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    He lives in one of those bubbles that Bill Maher talks about. No facts in-no facts out.

  • Glenn Contrarian

    Now Jet, let’s be nice to Warren and address his REALLY IMPORTANT fairness issue:

    Anyway, in an effort to be “fair,” Obama wants to close tax loopholes and end subsidies for oil and gas companies. And just how does Obama (and his team of economic advisors) think that move will lower the price of gasoline?

    Warren, I’m not sure if you noticed, but Obama’s been wanting to close the loopholes and end the subsidies for Big Oil LONG before gasoline prices began spiking during his administration. Obama’s desire to stop throwing taxpayer money to Big Oil when Big Oil does NOT need it (since they make billions not just every year, but every QUARTER). Big. Oil. Does. NOT. Need. Taxpayer. Dollars.

    They DO, however, need to pay their taxes just like every mom-and-pop store do. I know that probably sounds downright communist to you, the very idea that Big Oil would have to play by the same rules as Pat’s Cookie Jar down on Main Street…but that’s what Obama’s trying to make happen.

    Now you’re insinuating in your article that if Obama takes away those tax breaks and subsidies from Big Oil, then the price of oil will (gasp!) go up! So…does that mean that in your eyes that we should keep giving billions of dollars of taxpayer funding to Big Oil every year so that they’ll keep the prices down? Tell me, Warren – exactly how is what you’re saying really any different from “wealth redistribution”, hm? What are you – some kind of communist, that you want to take people’s taxpayer dollars and distribute them so people can have gas that’s a few pennies cheaper per gallon?

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    But Glennnnnnnnnnn, all of Obama’s are wall street fat-cats and the republicans are jealous because no GOP president has ever been able to talk a fat-cat wall streeter into advising him.

    Why do you think Bush screwed up so bad and left Obama Hussein that financial mess that republican’ts say he should have fixed instantly????

    NO wall street advisers!

  • roger nowosielski

    Don’t be ridiculous, Dreadful. That was no lecture; besides, I wouldn’t waste time.

    Only pointed out how a definite bias can make such a clear-headed and esteemed thinker as you so blind.

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    The problem with them Roger is that they can’t resist labeling blatant opinions as facts.

    And their fellow idiots agree with them… which makes them so proud.

  • http://www.RosesSpanishBoots.com Christopher Rose

    Roger, despite numerous requests, I don’t recall you ever saying why you are so negatively oriented towards liberalism, which seems so much more appealing than other alternatives.

    What and why do you have against it and what would you see as a better, more enlightened perspective?

  • http://brokebackmountaintribute.blogspot.com/ Jet Gardner

    Chris, it’s easier dealing with people that are all alike rather than if they’re all different.

    It’s less intellectually challenging

  • roger nowosielski

    Wow, Jet, that’s surely a pearl of wisdom coming from you. And I love that third person address! Care to look at the mirror yourself?

    Chris, simply put, liberalism is a dangerous ideology. I’ll be more than happy, however, to field any question you might have in the context of the series of essays I embarked upon. I’m about to submit section X, serving as it were a summation, and I’d hope to see you on that thread. It would be a far more felicitous environment to engage in a discussion that any drive-by comment I might post either here or elsewhere.

  • http://www.RosesSpanishBoots.com Christopher Rose

    That’s not really a very satisfactory response, Roger.

    I don’t see liberalism as dangerous to anyone but control freaks, dictators and fascists so I don’t really have any other questions than repeating my request for you to explain what you mean with your casual if sweeping remark.

  • troll

    hopefully Roger has written his summation to his series in a manner accessible to all so that it can serve as a base for discussion of this important question

  • roger nowosielski

    It’s rather difficult, troll, having to condense the works of Hobbes to three or four pages. I grant the articles submitted thus far don’t make for easy reading, but I can assure you, they were even more difficult to write.

    I take it as inevitable that some work on the part of the reader is a must, if they be willing to examine the prejudices and biases that govern their thinking. And if they are not, well … there’s nothing I can do about that.

    One could of course try to write a critique of liberalism in a novel form, a la Ayn Rand, but that’s not in the cards right now.

  • Glenn Contrarian

    In other words, “It takes a bit of work on the part of the reader to decipher the tea leaves splattered among the digital diarrhea I’ve deposited over the past few months, but I can’t really boil it down more succinctly than that. If the reader isn’t willing to go to the effort, well, there’s nothing I can do about that”.

    Roger, even most undergrad students are able to describe the concepts of Einstein’s general relativity in just a few sentences, and somehow I’m disinclined to believe that you’re unable to do the same for something that I doubt is as complicated as relativity. Unwilling, perhaps, but not unable.

  • roger nowosielski

    Don’t waste your breath, Glenn. Thinking has never been your forte, especially abstract thinking. As to your change of subject, you may be versatile in relativity theory, but when it comes to sociological or political analysis, you suck.

    In any case, I’m not about to convince hard-core liberals. I’ve given up on that project long ago. If anything, I’m writing for my own self-edification, which ought to be the main reason behind any kind of writing, participate in it or not.

    Sorry I couldn’t be any more positive about my response, if that’s what you were looking for. As far as I’m concerned, I’ve been spoon-feeding you all along. If you refuse to regurgitate Gerber food, I can’t help it.

    I can’t be a nanny forever.

  • Jordan Richardson

    I’m writing for my own self-edification…

    Noooo, really?

  • http://jetspolitics.blogspot.com/ Jet Gardner

    Obama Hussein is really a lousy president anyway. After all he needs to get off of his lazy ass and at least have an affair with a White House intern, or be photographed holding hands with a Saudi King, or been caught in a shady real estate deal, or at least have the Republican National Commitee’s offices bugged.

    What fun is it when his wife and two daughters are devoted to him and no one can dig up any personal dirt on the man?

    I betcha just before the election, some GOP-paid staffer will reveal that Michelle has been caught having a lesbian affair with Ellen Degeneres and was blackmailed into giving the Chinese her secret formula for fertilizer in the White House vegetable Garden and that she’s been smuggling drugs in her cuccumbers and squashes.

    Oh the scandal…

  • roger nowosielski

    @31

    Such a strange idea, Jordan, that it never crossed your mind?

    Do you really think it’s more rewarding to be writing for edification such as you and company?

  • troll

    Roger – you haven’t spoon fed anyone anything…you need to cut the crap if you intend to have a meaningful discussion about liberalism with anyone

    you don’t seem to understand that your audience isn’t entirely made up of students of philosophy who have studied Hobbes

    your attitude is alienating and annoying

  • Glenn Contrarian

    Roger –

    If anything, I’m writing for my own self-edification, which ought to be the main reason behind any kind of writing, participate in it or not.

    If you were a poet, I’d agree with you. But IMO poets are not generally happy people. That’s something you might want to think about. And I have never said or implied that I was ‘versatile’ with or that I had much more than a layman’s understanding of relativity – that’s simply you reading meanings into my words that was never there.

    Now if you’ll excuse me, I’ll go back to being the greatest threat to democracy – see? It says it right there on the abstract….

  • http://jetspolitics.blogspot.com/ Jet Gardner

    Glenn I must’ve missed the memo-congrats!

  • troll

    btw – the answer to Igor’s #10 (since he seems to have reneged on his promise to answer it) is “fear” to quote Prof Wolff

    in particular fear of European style critical thinking and fear for their academic positions in the US

  • roger nowosielski

    I said, troll, I’m not about to write an Ayn Rand novel. I work hard for my understanding, always have, so I don’t see why I should give anyone a pass. And yes, I am spoon-feeding the bastards, providing ‘em with the reader’s digest. They should be grateful, and if they’re not, fuck ‘em.

    In any case, I don’t expect much of a dialogue with anyone one, not anymore. The academics are too much into their own shit, too conceited to talk to you unless you have their kind of credentials; and ordinary mortals, I have far better lack and success talking to them face to face. So yes, I’m in a kind of limbo, I admit it.

    My last hope was you and Cindy. Cindy’s disengagement at present I can well understand; and as far as Ana is concerned, she’s not into “political theory,” she says.

    But that’s quite alright. I’ve learned over the years to go it alone. I wasn’t the first one, and I won’t be the last. So long as I have the strength, I’ll do my bit and I’ll be grateful.

  • troll

    …yer kill’n me Roger – in my case you’re preaching to the choir but there are liberals – Chris in particular – who have expressed interest in and a lack of understanding of your proposal and who could carry on a decent argument if you could agree on a ‘language’ to use

    there’s my 2 cents and I await your summation…btw folks – it helps to follow Roger’s series if you put it all into one document

  • Glenn Contrarian

    Roger –

    The academics are too much into their own shit, too conceited to talk to you unless you have their kind of credentials

    Says the academic who writes for his own edification who is sure that the reader is unable to comprehend the abstract in his writing.

  • roger nowosielski

    @39

    Not really. Internet communications are a joke, can’t tell who is who anymore.

    Witness recent exchange on TD with Ozark, and that’s after a series of meaningful, or so I thought, exchanges. Doesn’t make fucking sense.

    In any case, should be getting my angioplasty come next week, so I’ll be firing on full four again, for a year or so. Perhaps that’s why I was being so indolent and down. But don’t expect me to be glued to this site. Once I move back to CA, I’ll certainly have better things to do. All told, it’s been a bummer, an experience in unreality.

    You’ll always be welcome to keep in touch.

  • Glenn Contrarian

    In any case, should be getting my angioplasty come next week, so I’ll be firing on full four again, for a year or so. Perhaps that’s why I was being so indolent and down. But don’t expect me to be glued to this site. Once I move back to CA, I’ll certainly have better things to do. All told, it’s been a bummer, an experience in unreality.

    I hope your surgery is very successful, and that you’ll feel much better afterwards, Roger – and I think you’ll feel MUCH better in California. I really do wish you the best of luck.

  • roger nowosielski

    Thank you.

  • troll

    …sorry to hear about the ticker Rog – and good luck with surgery

    don’t take OzarkM’s fun and games so seriously…he was just goofing around methinks

  • roger nowosielski

    Should get five more years or so of productive living, unless there be a mishap. One way or another, I’ll be ready to fold it.

  • http://jetspolitics.blogspot.com/ Jet Gardner

    Roger, I’ve had angioplasty, 3 stents and a triple bypass and have a pacemaker-believe me it’s a piece of cake and it’s over before you know it.

    In my angioplasty they went up through my groin, so you have to be awake through the whole thing. the doctor stopped a chamber so I could feel what a heart attack felt like and your arm really does hurt, but it’s nothing.

    word of experience

  • Jordan Richardson

    Roger, everytime I’ve mentioned the thought that you write only for self-edification, you denied it. Good to see you catching up with reality.

    As for your angioplasty and dreams of California, I wish you the very best. Give ‘em hell like only you can, pal.

  • Glenn Contrarian

    California –

    Hollywood, Disneyworld, and Malibu – but the only thing I really wish I could have seen was the corner of Haight and Asbury in the Summer of Love. I finally did make it there on a port visit in the late 80′s…but it was nothing like it was supposed to have been back in the late ’60′s.

  • Zingzing

    Hope everything goes well with your surgery, Roger.

  • roger nowosielski

    thanx, guys.