Archive for September, 2011

September 30, 2011

Across the Aisle: The PSA Blog » National Security Experts Launch Energy Initiative – by Nathan Sermonis

Across the Aisle: The PSA Blog » National Security Experts Launch Energy Initiative.

Last week, the highest level extra-governmental group ever convened to address any public policy challenge met in Washington, D.C. to announce the launch of their new organization – the United States Energy Security Council – formed to advance American energy security. This bipartisan group of 20 influential former cabinet officials, military personnel, retired Senators, and prominent business leaders, includes three PSA Advisory Board members – Robert C. McFarlane, former National Security Advisor, John Lehman, former Secretary of the Navy, and Gary Hart, former Senator (D – Colo.).

At their launch event, USESC founders emphasized the importance of finding solutions to the nation’s current energy dilemma and described the risk associated with America’s reliance on oil as a sole transportation fuel. Across the bipartisan panel, members agreed that, in the interest of national and economic security, America must pursue strategies to diversify the fuel sources used in transportation – eliminating the decades old monopoly that oil has enjoyed in the U.S. transportation sector and diminishing the strategic importance of this resource. McFarlane was certain to point out, however, that the group is not “anti-oil,” but more accurately “pro-fuel choice.”

September 30, 2011

Open Fuels Standard Act aims for 50% flex-fuel cars in US by 2015 : Biofuels Digest

Open Fuels Standard Act aims for 50% flex-fuel cars in US by 2015 : Biofuels Digest.

In Washington, Sen. Maria Cantwell joined Sen. Dick Lugar in introducing a bill to break oil’s monopoly over the U.S. transportation fuel industry by ensuring that most new vehicles in the United States are capable of running on a range of domestically produced alternative fuels starting in 2015.

The Open Fuels Standard Act requires that starting in 2015, 50% of new vehicles manufactured or sold in the United States be flex fuel capable – meaning able to run on non-petroleum fuels such as domestically-produced ethanol or methanol or other alcohols in addition to, or instead of, petroleum-based fuels.

September 23, 2011

OPEC’s $1 Trillion Cash Quiets Poor on Longest Ever $100 Oil

OPEC’s $1 Trillion Cash Quiets Poor on Longest Ever $100 Oil.

Sept. 20 (Bloomberg) — Saudi Arabia will spend $43 billion on its poorer citizens and religious institutions. Kuwaitis are getting free food for a year. Civil servants in Algeria received a 34 percent pay rise. Desert cities in the United Arab Emirates may soon enjoy uninterrupted electricity.

Organization of Petroleum Exporting Countries members are poised to earn an unprecedented $1 trillion this year, according to the U.S. Energy Department, as the group’s benchmark oil measure exceeded $100 a barrel for the longest period ever. They are promising to plow record amounts into public and social programs after pro-democracy movements overthrew rulers in Tunisia, Egypt and Libya and spread to Yemen and Syria.

September 21, 2011

How to Weaken the Power of Foreign Oil – NYTimes.com by R. James Woolsey and Robert C. McFarlane

How to Weaken the Power of Foreign Oil – NYTimes.com.

OUR country has just gone through a sober national retrospective on the 9/11 attacks. Apart from the heartfelt honoring of those lost — on that day and since — what seemed most striking is our seeming passivity and indifference toward the well from which our enemies draw their political strength and financial power: the strategic importance of oil, which provides the wherewithal for a generational war against us, as we mutter diplomatic niceties.

Oil’s strategic importance stems from its virtual monopoly as a transportation fuel. Today, 97 percent of all air, sea and land transportation systems in the United States have only one option: petroleum-based products. For more than 35 years we have engaged in self-delusion, saying either that we have reserves here at home large enough to meet our needs, or that the OPEC cartel will keep prices affordable out of self-interest. Neither assumption has proved valid. While the Western Hemisphere’s reserves are substantial and growing, they pale in the face of OPEC’s, which are substantial enough to effectively determine global supply and thus the global price.

September 15, 2011

Achieving $2 Gas – Robert Zubrin – National Review Online

Either we break the cartel, or the cartel breaks us. The Open Fuel Standard bill needs to be passed.

via Achieving $2 Gas – Robert Zubrin – National Review Online.

Republican presidential contender Michele Bachman has said that if she is elected, gas prices will fall to $2 per gallon. Such promises have understandably been greeted with considerable skepticism. But $2 gas is exactly what America needs. The question is, how can we get it?

We can’t do it just by expanded domestic drilling. In order for gasoline prices to fall to $2 per gallon, oil prices must be cut to $50 per barrel. And oil prices are set globally, with the dominating influence being the OPEC oil cartel. Since 1973, this cartel, which controls 80 percent of the earth’s commercially viable oil reserves, has refused to expand production, thus keeping petroleum prices artificially high. While, with a more pro-business government, the United States might conceivably be able to expand its production by a million or two barrels per day, OPEC could easily counter by cutting its production to match, or more likely, by simply continuing its non-expansion policy and letting increased Chinese demand take care of the slack.

September 14, 2011

Peak Oil Investing – Nick Hodge

Peak Oil Investing.

After the debate, I decided to see which candidates had an energy plan. Of the eight on stage that night, only four mention energy policy on their websites: Bachmann, Gingrich, Cain, and Paul.

Bachmann and Gingrich are going after the low-information voters, telling them opening up all drilling and fracking in the United States would be a panacea. Bachmann has even promised a return to $2.00 gas.

September 14, 2011

Wyoming moves forward on state energy policy

Wyoming moves forward on state energy policy.

“In the absence of a national energy policy, there are opportunities for a silent agenda to be implemented through federal agencies,” including the Department of the Interior and the Environmental Protection Agency, he told the state Legislature’s Joint Minerals, Business and Economic Development Interim Committee in Casper.

“In terms of what a state energy plan should look like, it certainly needs to be more than a bumper sticker,” he said. “But it needs to have an elegant simplicity to it. It needs to be flexible. It needs to be adaptable to technologies,” he said.

September 13, 2011

Report: Increased Energy Production Would Boost Jobs, Federal Revenue – Lachlan Markay

Report: Increased Energy Production Would Boost Jobs, Federal Revenue.

Energy research firm Wood Mackenzie released a report on Wednesday that lends weight to arguments for greater energy exploration and production in the United States. The economic effects of such a policy, the report asserts, would be uniformly positive.

The report summarizes its findings thusly:

Wood Mackenzie’s analysis found that U.S. policies which encourage the development of new and existing resources could, by 2030, increase domestic oil and natural gas production by over 10 million boed [barrels of oil equivalent per day], support an additional 1.4 million jobs, and raise over $800 billion of cumulative additional government revenue. Whereas increasing regulatory burdens on the oil and gas upstream sector will result in higher development, costs which can potentially hinder the growth of production tax revenues and job creation.

September 9, 2011

Rep. Doc Hastings Offers 10 Ideas for Creating Energy Jobs

Rep. Doc Hastings Offers 10 Ideas for Creating Energy Jobs.

House Natural Resources Committee Chairman Doc Hastings is urging President Barack Obama to consider 10 ways to create new jobs in the nation’s energy sector.

“With unemployment still near 10 percent, it’s fair to ask the question — what will be different this time?” the Washington Republican said Thursday.

September 8, 2011

Moving Beyond OPEC: Energizing the Economy with a Viable Energy Policy – Kellie Dunlap

During Spring, oil prices reached over $100 dollars per barrel­ ­̶  the highest price since 2008.  This summer, oil prices fell due to the global economic recession.  In direct correlation to the volatile oil market that followed the Spring price hikes, the U.S. domestic economy has floundered. With minimal job growth, rises in food prices and debilitating effects on the housing market, it becomes apparent just how much high oil prices  impact the U.S. economy.

Clemson University Professor David Bodde says, “What we are seeing in terms of the price [of oil] is more of a financial demand phenomenon more than a supply and demand phenomenon.”  Bodde further explains that in order for the economy to recover, oil prices need to be consistent. However, there is little the U.S.  government can do to influence the global price of oil since it is a fungible commodity and the U.S. only produces about 8% of the world’s total supply.

OPEC , the Organization of Petroleum Exporting Countries, sets the global price of oil since they are the largest petroleum producers; theoretically basing the price of oil on supply and demand.  However, history suggests that supply and demand is not the determining factor of oil prices. Gal Luft, executive director of the Institute for the Analysis of Global Security (IAGS) argues that, among other factors, the recent inter-organizational politics of OPEC may further exacerbate the unpredictability of oil prices in the near future.

In late July, Islamic Revolutionary Guards veteran Rostam Ghasemi was appointed the new petroleum minister of Iran.  Iranian President, Mahmoud Ahmadinejad explained that the nomination of Ghasemi will promote Iran’s objective to align the complex oil industry with its national interests. Iran currently holds OPEC’s  rotating presidential seat.  Therefore, Ghasemi will act as the de-facto president of OPEC in the coming months.

Ghasemi, a former Chief Commander of the Iranian Revolutionary Guard, will be sure to uphold Iranian national interests, which poses a threat to Saudi Arabia’s longstanding control of OPEC decision-making.  Luft contends that, while there is the obvious historical Sunni-Shia rift between Saudi Arabia and Iran, as well as the ideological dispute over regional hegemonic power, there is another contentious issue at hand; instead of the member states of OPEC falling in line with Saudi Arabia’s decisions as they have in the past, they are now attempting to raise the price of oil to cover their own economic needs. Both Iran and Saudi Arabia are largely dependent on oil revenues.  However, Iran would rather see the price of oil per barrel around $140 in order to balance its budget. Saudi Arabia, on the other hand, can maintain its budget with oil prices about $90 per barrel.

In June, OPEC members, for the first time in two decades, were unable to agree to an increase in output levels or establish the price of oil per barrel.  The widespread civil unrest in many Middle Eastern countries has weakened their economies, causing OPEC members to make decisions individually rather than as an organization.  These disparities, coupled with Iran and Venezuela’s insistence on higher oil prices, have divided OPEC’s members and reduced Saudi Arabia’s influence. With Rostem Ghasemi holding the reins of OPEC, the international community will likely see inflated oil prices for the remainder of the year.

2011 has illustrated that dependence on foreign oil makes the U.S. economy vulnerable- America can no longer afford to be at the whim of OPEC .  With Middle Eastern civil turmoil, revolutions, and power politics, America needs to end its dependence on foreign oil.  The government should be focusing on utilizing all available resources in order to become energy independent.  On shore and offshore drilling should be permitted; natural gas expansion should be encouraged; clean coal production for the purpose of creating fuel via methanol should also be pursued, as well as the continuing production of biomass fuel.  By acknowledging that capricious oil prices are the source of our economic problems, we can work to solve the problem by reducing our dependence on foreign oil, which will create long-term employment and help to balance the trade deficit.

As gas prices continue to range between $80-$100 dollars per barrel, Americans will pay $500 billion to OPEC and other foreign governments this year alone. While the President prepares to address Congress regarding job creation on Thursday, America should be demanding that he and Congress create an effective energy policy that will mobilize multiple sectors of the economy rather than simply promoting each party’s preferred energy sources.  Until this occurs, we can be sure to see further unemployment, a depressed economy and higher prices at the pump.

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