What Happened To That Whole War For Oil?

Remember back in the heyday of the antiwar protests after our decision to invade Iraq? One of the biggest talking points from the loony left was that this was all about oil. They constantly chanted "No more war of oil" while parading around in their god awful ugly uniforms or, in the case of Code Pink when they were smearing fake blood on then-Secretary of State Condoleezza Rice.

Well if this whole thing was about oil, the US certainly got screwed in the bidding for the rights to Iraqi oil fields that was held recently.

A consortium led by Russia's private oil giant won the biggest prize of Iraq's second oil auction this year, nabbing a field initially promised them a decade ago by Saddam Hussein while other companies Saturday showed little interest in offerings outside the secure southern part of the country.

Lukoil and Norway's Statoil ASA won rights to develop the 12.88 billion barrel West Qurna Phase 2 field in the Basra region, beating out three other consortiums led by France's Total SA, Malaysia's state-run Petronas and British giant BP PLC.

In the opening round of the two-day auction Friday, an alliance grouping European giant Shell and Petronas was awarded the 12.5 billion barrel Majnoon field, also in the south.

In fact in this latest round of contracts that was awarded not a single American company was awarded a contract.

I think that is more the result of our domestic policy here at home then it is our oil companies not wanting to get in on the process. They could have still tried to get some since there is no doubt there will continue to be a world wide demand for oil products, regardless of much our current progressive inhabitants of congress and the White House wish to continue to push their cave man energy policy.

Americans Drive 12.2 Billion Fewer Miles in June, Greedy Politicians Hardest Hit

You'll notice this trend will likely continue as people struggle to pay exorbitant gas prices caused by Democrats and their refusal to drill for our own oil.

Though you'd think so many fewer miles driven would be cause for celebration that Americans are being forced to drive less, hence less pollution, more people drivings hybrids and so forth.

No, the worst thing? Less tax revenue, of course.

The downside for the government is less money to pay for highway projects and public transportation, which is funded by an 18.4 cent-per-gallon gasoline tax and a 24.4 cent-per-gallon diesel fuel tax.

"Advances in higher fuel-efficiency vehicles and alternative fuels are making the gas tax an even less sustainable support for funding roads, bridges and transit systems," said Transportation Secretary Mary Peters.

Hmm. So the federal government gets 18.4 cents a gallon for gas and 24.4 cents for diesel.

Why isn't that considered windfall profits for the government?

The evil oil companies aren't even making 10 cents profit on the gallon and are demonized daily by the Democrats. Yet the federal government is raking in 18.4 cents on the gallon for doing nothing and nobody utters a peep.

I'm sure you've all notice a steady decline in gas prices the past couple of months as demand has decreased. How come this isn't reported as much as when prices go up?

Mythical Global Warming Is Finally Good For Something: Billions of Barrels of Oil

Naturally, they have to chalk this one up to ice melting in the Arctic, which only happens every year. I'm just waiting for some jerkoff like Al Gore or Barbara Boxer to begin weeping and telling us how pristine the area is and how some animal will be threatened.

Well, Canada, Norway, Denmark and Russia don't give a shit about the polar bears and don't have to worry about Democrats blocking them from drilling there and drilling now, so we'll probably never see a drop of the estimated 90 billion barrels of oil now available.

The Arctic Circle holds an estimated 90 billion barrels of recoverable oil, enough supply to meet current world demand for almost three years, the U.S. Geological Survey forecast on Wednesday.

The forecast comes as Russia is competing with Canada, Denmark, Norway and the United States to grab a chunk of the huge energy resources in the Arctic, an area growing more accessible due to global warming melting the ice.

The government agency also said the area could contain 1,670 trillion cubic feet (Tcf) of natural gas.

Oh, did I mention some alleged endangered species?

But of course.

"Before we can make decisions about our future use of oil and gas and related decisions about protecting endangered species, native communities and the health of our planet, we need to know what's out there," said USGS Director Mark Myers.

"With this assessment, we're providing the same information to everyone in the world so that the global community can make those difficult decisions," he said.

Can we be honest here? Fuck the global community. We need oil to keep out economy humming, in case this dick Myers hasn't noticed. It's not as if we're going to barge in and rape the land clean and leave a mess in our wake. We follow every possible regulation and bend over backwards.

Heck, I'll bet every last dollar those natives are looking for work and would be glad to have some jobs helping drill. What the hell else do they have to do up there?

Frank O'Donnell, president of the nonprofit group Clean Air Watch, said not only do polar bears and other wildlife within the Arctic Circle face losing their habitat due to global warming, they would be hurt by companies searching for oil.

"On the one hand you may see this region more accessible (for getting energy supplies), but we're definitely going to pay a different kind of price...you may loose [sic] species," O'Donnell said. "The oil industry goes up there and industrializes what has been a pristine area...suddenly it becomes the new Houston."

How much longer are we going to subject ourselves to the propaganda of these environmental wackos as we watch our economy and American consumers suffer?

Will we ever get to the point where we finally ignore them and do what's right?

Forget Domestic Drilling, We Have to Worry About the Sage Grouse

If you wonder why we'll likely never see any increased domestic drilling despite overwhelming numbers of people in favor of it, blame the environmental wackos. The Democrats refuse to drill and they'll let their surrogates run interference for them.

Forget relief for the American people, forget about our ailing economy. We have to instead worry about a bird that isn't even endangered.

Unless drilling is slowed, Belinda said the chicken-sized grouse could end up on the endangered species list. That could shut down public hunting for the bird and prompt restrictions on residential development and agriculture.

So I hope everyone is happy paying four bucks a gallon. Get used to it. No, actually, once Democrats are in charge of the entire government, birds will have more rights than you and you'll pay ten bucks a gallon.

Change, baby!

Scapegoating Speculators

I know it is the current fashion to blame "speculators" for the skyrocketing oil prices. Bill O'Reilly has made this a particular cause of his. However, there appears to be no clear evidence to support this assertion:

Speculators are often scapegoats, economists say

Once again, it's open season on speculators.

The popular tale holds that with the rise of long-only commodity index funds and increased interest in commodities from pension funds and other players, speculators must be to blame for surging oil prices and have probably been the prime culprit in the steep rice in prices for food and other commodities as well. Politicians are on the war path, promising to bring speculators to heel. There's just one rub: Economists say they have yet to see the commodity markets exhibit the symptoms they would expect to find if speculators were pushing commodity prices above levels dictated by supply-and-demand fundamentals and geopolitical concerns.

You see folks, it's one thing to make a claim, it's another thing to prove it. Destructive speculation leaves tracks in the market, such as more speculators bidding prices up than down, more long positions than short positions, that kind of thing. Unfortunately for the conspiracy theorists, these indicators do not exist in the market right now.

In a recent paper, Irwin -- along with Dwight R. Sanders of Southern Illinois University and Robert Merrin of the University of Maastricht in the Netherlands -- delved into the Commodity Futures Trading Commission's weekly reports on trader commitments and other data. Their task was to gauge whether speculative players in agricultural commodity markets were trading primarily with other speculators or with farmers and commercial interests who use the futures markets to hedge risk.

Speculators are crucial to futures markets. By taking the opposite side of trades with farmers, end-users and other commercial players, they help ensure markets are liquid. Without enough speculators, markets can become illiquid and increasingly volatile.

Speculation can get out of hand, however. If speculators are primarily trading with each other, bubbles can develop, Irwin said.

But the study found that levels of speculation in the agricultural futures pits were well within historical norms, despite a surge in participation by long-only index funds and other speculators in recent years.

In other words, the rise in speculative long positions -- bets that prices will move higher -- was equaled or surpassed by an increase in short positions -- bets prices will fall -- by commercial hedgers.

I repeat, speculative long positions were equaled or surpassed by speculative short positions. So more speculators are betting that prices will drop than go up. So there is no destructive speculation artificially driving prices up. No, the reason that prices have been jumping is no more complicated than supply and demand, and in fact the speculators are figuring that supply will catch up with demand pretty quick. So to the conspiracy theorists out there, especially Bill O'Reilly, who should know better, what say you?

Why the Middle East is Afraid of Brazil

Much as been made of the discovery of some new oil fields off the coast of Brazil lately, even though they haven't started tapping into it yet, but it appears our friends in the Middle East are also very nervous about what this means for them.

America's Arab allies may be ill-advised to count on the presence of U.S. forces being permanent. America's enemies in the Middle East might foresee a day in which the Great Satan boards his ships and goes home, leaving the region to its fate.

What the author also hints at with this statement is that without the Americans fighting their battles for them the Arabs government might be in trouble without our presence.

What would cause us to get on our ships and leave? Simple, the ability to fill all of oil needs from right here in our hemisphere and no longer have to rely on the whims and volatile Arab countries for it.

The author sums it up this way.

And what would that fate be? If the main reason for America's military presence in the region has been dependence on oil, there are other oil-hungry powers. The three biggest customers for the oil of the Gulf will be China, Japan and India, and they have a keen a strategic interest in ensuring a reliable supply.

The problem is that there are three of them, and the two most populous, India and China, are developing almost inexhaustible appetites for imported oil. There is already a quiet arms race underway between them in the Indian Ocean, with China building ports that look like naval bases in Pakistan and Myanmar, and India building aircraft carriers. If the Americans turn away, and India and China rush in to fill the vacuum and secure their access to oil, the Arab world may yet come to look back on the American era in the region as a golden age.

Golden Age indeed.

I still would rather we start tapping into our own oil in the Gulf of Mexico and ANWR and, more importantly, build some more refineries. Sure we need to pursue other sources for our energy needs also but until that technology and ability is available we need to make the best use of what we have at our fingertips.

Huge Oil Field Found Off Brazil

There has apparently been a huge new oil find off Brazil.

Brazil has discovered what could be the third biggest oil reserve in the world, according to the head of the country's National Petroleum Agency.

The deep-sea find by state-run oil firm Petrobras could yield 33 billion barrels in reserves.

This is a significant event in my view for several reasons, other than the obvious.

* First, it shows that contrary to the belief of some, the world is not running out of oil any time soon. So the panic to go find some expensive alternative energy source is a waste of time and money right now. Maybe in another 50 or 100 years, but not now.

* Second, the economic laws of supply and demand still work. The higher world price of oil (and the related profits) encourages more supply and therefore more oil exploration. The solution to high energy costs is increase supply, and that is accomplished via the incentive of profit and prices.

* Third, the Congressional hearings going after oil executives is a waste of time if your interest is truly in getting energy prices lower. Rather than grandstanding on camera for the public, Congress should be encouraging the oil companies to do more exploration and doing everything they can to help them in that activity.

* Fourth, the promise of certain socialistic Presidential candidates to punish oil companies for making a profit and increasing taxes on them if elected is actually counter productive to lowering energy prices. Suppose you run an oil company and Hillary gets elected and raises your corporate taxes. What possible motivation do you have to do more oil exploration now? None. Absolutely none. In fact, you have every motivation in that scenario to leave as much oil in the ground as possible and wait for that administration to run it's course and leave office. In the world of macroeconomics, 4 or 8 years is a fairly short time.

So, the solution to high energy costs is to just let the free market and the laws of supply and demand work their magic, as so eloquently described in 1776 by Adam Smith with his "Invisible Hand" theory.

What Did They Know And When Did They Know It?

Kremlin lays claim to huge chunk of oil-rich NorthPole

Goracle? Jean-Pierre? Greenpeace? Kennedy? Reid? Pelosi? Sierra Club? Kucinich? Lugar? Shrillary?

Billions in Iraqi Oil Missing

The left will simply accuse Bush of stealing it, since that's been their canard for four years.

Still, I'm getting sick of these corrupt, thieving Iraqi pols who do nothing while we expend our treasury and manpower, while they're on the take.

Between 100,000 and 300,000 barrels a day of Iraq’s declared oil production over the past four years is unaccounted for and could have been siphoned off through corruption or smuggling, according to a draft American government report.

Using an average of $50 a barrel, the report said the discrepancy was valued at $5 million to $15 million daily.

The report does not give a final conclusion on what happened to the missing fraction of the roughly two million barrels pumped by Iraq each day, but the findings are sure to reinforce longstanding suspicions that smugglers, insurgents and corrupt officials control significant parts of the country’s oil industry.

The report also covered alternative explanations for the billions of dollars worth of discrepancies, including the possibility that Iraq has been consistently overstating its oil production.

The time is at hand for them to clean up their act or we will indeed be leaving them to fend for themselves.