Thursday, April 27, 2006

The Politics of Oil: The Discourse Must Change

The Politics of Oil:
The Discourse Must Change

Posted by The Oil Drum Editors on Thu Apr 27

Leaders of both political parties are expressing concern about the high price of gasoline. President George Bush
announced yesterday that he was suspending deliveries to the Strategic Petroleum Reserve in order to make more oil available to consumers as well as putting on hold the traditional regulations requiring additives to make fuel burn cleaner during the summer driving season.

Meanwhile, Democratic leaders have had their own response to rising gas prices. Senate Minority Leader Harry Reid
has announced his support for the Menendez Amendment, which would "provide more than $6 billion in relief directly to the American people by eliminating the federal tax for both gas and diesel for 60 days." Senator Charles Schumer recently called for a federal investigation to determine whether oil companies are withholding gasoline production, and House Minority Leader Nancy Pelosi has blamed high gas prices on the administration's cozy relationship with the oil companies, price gouging, and royalty relief.

The editors of The Oil Drum are ideologically diverse. Over the last year, we have created a forum at www.theoildrum.com to encourage an open, rational, and fact-based discussion of energy issues. While individual editors frequently express an opinion on a subject, we have never felt it necessary to take a unified position on any specific issue. That is, until today.


We strongly feel that the leaders of both political parties are not only headed in the wrong direction with respect to gas prices, but we also worry that they fundamentally misunderstand the factors behind the current situation at gasoline stations around the US. Public statements by political figures over the past several days would seem to suggest that oil companies and their record profits are the sole factor determining the price of gasoline. Not only is this untrue, but it is dangerous to give the American people the impression that only oil companies are to blame. The American people need to understand that the phenomenon of high gas prices cannot be attributed to a single source. They also need to understand that no one political party will be able to fix our current woes.

[... ]

Right now, governments should be focused on helping us cure our "addiction to oil." The answer does not lie in lowering gas prices, which will only encourage people to drive more and further waste our valuable resources. As the Department of Energy funded
Hirsch Report on Peak Oil laid out, the consequences of not taking steps to transition away from oil could be dramatic to our economic system. Appropriate solutions include large-scale research, development, and implementation programs to improve the scalability of alternative sources of energy, other projects geared towards improving mass transit and carpooling programs across the country, providing incentives to buy smaller and more fuel efficient vehicles, and promoting a campaign to increase awareness about conservation. The political discourse on this topic is simply so devoid of fact, and constructive discourse so buried and out of the mainstream, that we felt we needed to raise a voice of reason. Public officials will continue to misinform and obfuscate if we allow it.

The only solution is to educate the public about the most important problem we face as a generation. We, the citizens of the US and the world, must move our attention to this the issue of energy more than any other. We must hold our representative governments accountable for having an open and honest debate on the subject.

Simply put, we must learn more about where our energy comes from.

http://www.theoildrum.com/story/2006/4/26/121441/891


Tuesday, April 25, 2006

Gas Prices

Sunday, April 23, 2006

Heading Out on Peak Oil

Heading Out's piece on Sunday's Oil Drum is a response to an article that appeared in The Economist last week. HO's detailed anaylsis and rebuttal is the best argument for a coming liquids crisis.

http://www.theoildrum.com/story/2006/4/23/12186/9663

Saturday, April 22, 2006

Gas Prices Retail vs. Wholesale



Click on Image for larger version

Tertzakian on Iran

EnergyBulletin.net article on 4.22.06

Get link

Will Iran tighten the reins on the global petro supply?

[...]But Iran is not Iraq. Notably, Iran’s oil output is over twice that of Iraq, and as mentioned Iran is in a very strategic geographic location. As well, Iran’s bombastic leadership appears far more determined to pick a fight and play the trump cards it knows it has in its hand. Finally, Iran has a potentially oil-hungry friend in China; a relationship that makes Iran’s trump cards against the west stronger.

So, there is a major geopolitical storm brewing around oil. The winds are already up (as evidenced by rising prices) and addicted consumers of oil and petroleum products like gasoline are going to have to weather it. And if the Iranian situation isn’t threatening enough, there are storm clouds hanging over other major oil producers like Nigeria and Venezuela too. In an era where supply and demand for oil is tight, every oil producer feels it has trump cards. [...]

-Peter Tertzakian, April 2006, on EnergyBulletin.net

Friday, April 21, 2006

The Coming Gas Tax

For an excellent discussion on a proposed Gas Tax in the United States try

Jerome a Paris' Diary at The Daily Kos

http://jerome-a-paris.dailykos.com/

Jim Jubak

Jim Jubak writes a column for MSN's Money. He focuses on investment strategies and includes a heavy dose of stock analysis. He provides a very balanced look at the numbers and trends in the world of mining, energy, and oil.

Here is an index of his articles:

http://moneycentral.msn.com/Editorial/Index/homeauth.asp?c=3&a=0&d=1170

Thursday, April 20, 2006

Gasoline - Days of Inventory



Click on image for larger version

This is a chart of the United States' days of gasoline inventory on hand plotted against the average retail price of gasoline. I've taken the weekly total inventory number released by the EIA and divided it by the corresponding week's number for millions of barrels of gasoline consumed daily. Note that the left axis is not zero scaled. Price of gasoline is inflation adjusted.

Notice the gradual downward trend from a range of 25-30 days a decade ago to 20-25 days currently.

To view all charts click on "Other Charts" Link on Home Page

Sunday, April 09, 2006

Monthly Global Crude Oil Production 1995 - 2006


This chart is a recreation of the one that Stuart Staniford updates every month on The Oil Drum to track the occurrence of a peak or plateau in oil production. There is one major difference. I have included the data back to 1995, doubling the time frame covered. The production numbers are the revised numbers released by the EIA every month. I have also adopted a more horizontal layout, while Stuart's is compressed into a vertically-oriented shape. I am using a 13-month moving, centered average trendline.