Politics Over Reason

Liberals constantly and continually refuse any measure that would increase energy SUPPLY…and they continue to wonder why gas prices remain high?

Plugging Up The Pipeline

By INVESTOR’S BUSINESS DAILY | Posted Thursday, July 10, 2008 4:20 PM PT

http://www.ibdeditorials.com/IBDArticles.aspx?id=300582577325477

Energy: Anyone who’s not sure why gasoline prices are so high has the opportunity to see a real-time reason being played out in public as an environmental group sues over the expansion of a refinery.

The Natural Resources Defense Council is asking a federal judge to stop construction of BP’s planned $3.8 billion expansion — not a new facility — of its Whiting refinery in northwest Indiana. The group claims BP needs a more restrictive air permit from the state because the refinery would discharge far more pollution than what it’s been approved for.

In addition to shutting down construction, the NRDC wants BP fined $32,500 a day for each day it has been under construction without the more restrictive permit.

There hasn’t been a new oil refinery built in the U.S. since 1976, in part because of actions like those of the NRDC. The environmental lobby, which went off the rails decades ago, has resisted almost every attempt to create more energy from fossil fuels.

One particularly telling example outside of Indiana can be found in Arizona. There, construction of a new refinery was held up for almost 10 years by environmental groups using regulations from the Clean Air Act as a hammer.

The environmentalists will point out that industry executives themselves have said that refinery margins in the past 10 to 15 years have not been high enough to justify new refineries and that there will be no need to build a new one at least through 2030.

But, we submit, that’s because the industry was forced to keep up with demand by, in a sense, doing more with less.

First, the industry resorted to expansions of existing plants because it’s cheaper than building new facilities due to environmental regulations. These are the same regulations that are holding up BP’s Indiana expansion, which, according to environmental groups, isn’t needed anyway. (If that’s so, why is BP building it?).

Second, technological advances in refining let the demonized oil companies continue sending a steady supply into the market, even as refineries closed. While the number of facilities has been more than halved, from 324 in 1981 to 149 today (see chart), refining capacity over the same time has hardly dropped at all, from 18.6 millions barrels a day to only 17.5 million barrels a day now.

It should be obvious that more capacity is needed, given that as domestic refinery capacity fell, U.S. gasoline consumption jumped 42%, from 2.4 billion barrels in 1981 to 3.4 billion barrels last year. To keep our economy humming and maintain our standard of living, we need more refineries.

It’s that simple.

The environmentalists don’t see it that way, though. Their gaze is to the rear, never ahead, except for their apocalyptic visions of the future: scorched Earth, too-thick-to-see-through smog, burning rivers, oceans running with crude, dried-up lakes, naked forests and hospitals overflowing with people sickened by industry, all watched over by greedy oilmen counting their billions.

America has so far paid a small price for the radical environmentalism that grew out of a rational movement in the 1960s. The costs will eventually be deeply painful, though, if lawmakers and the courts continue to give these groups license to shut down needed energy advancements.

While the environmental groups will claim they are in no way responsible for rising gasoline prices, the fact is that, according to the National Center for Policy Analysis, almost 25% of the capital investment in refineries in the 1990s was used to comply with environmental regulations. In raw dollars, oil companies laid out more than $100 billion between 1992 and 2001 to bring their refineries into compliance with environmental rules.

Is the public supposed to believe these costs have had no impact on today’s gasoline prices? Americans need to get wise to what their “protectors” are doing to them, supposedly on their behalf.

Congress Gouges US Taxpayers on Oil Profits….hypocrisy continues

How can Congress continue to lambaste “Big Oil” and make excuses for failing the American public?  Let me make one point clear, which is that “Big Oil’s” profits pale in comparison to the taxes taken by our Congressional Robber Barons.  From 1981 to 2006, the oil industry made $867 billion in profits. Yes, that’s a lot. But over that same time, they paid total taxes of $1.2 trillion, Energy Department data show. And that doesn’t include taxes of $519 billion paid to foreign countries.  Thus you can see that Nancy Pelosi, Harry Reid and the rest of their Congressional Cronies are HYPOCRITES.

Energy Myths

By INVESTOR’S BUSINESS DAILY | Posted Thursday, July 03, 2008 4:20 PM PT

Oil: With the long July Fourth weekend, you might get a chance to see your senator or representative. If so, you should be ready to dispel a few myths politicians now have about drilling for more oil.

This is especially true of Democrats. Many in Congress seem either disconnected from reality or intentionally disingenuous about our energy crunch. They have well-honed negative responses to common-sense ideas about solving our energy crisis, particularly drilling for more oil.

These responses are based on a number of widely held myths. Sadly, they’ve become the backbone of the Democrats’ energy policy. They include:

• “We can’t drill our way out of our energy crisis.”

Actually, we can. As we’ve noted before, conservative estimates put the total amount of recoverable oil in conventional deposits at about 39 billion barrels. Offshore, we have another 89 billion barrels or so. In ANWR, 10 billion barrels.

In oil shale deposits, we have more than 1 trillion barrels of oil. In perspective, that’s about four times the total reserves of Saudi Arabia. And if estimates of shale reserves as high as 2 trillion barrels prove true, we’ll have about a 300-year supply of oil just from shale. This compares with current estimated total U.S. oil reserves of about 21 billion barrels.

ANWR alone is expected to yield 1 million barrels of oil a day. Now make the highly conservative assumption that we’re able to get a like amount of oil from the other sources — for a total increase of 3 million to 4 million barrels of oil a day.

That’s an enormous rise in oil output. Today, we produce just under 8 million barrels of oil a day from domestic sources. So we could, in effect, boost our energy output 50%, and thus our energy independence, by bringing an additional 4 million barrels of oil to thirsty world markets each and every day.

By the way, those calculations don’t include the trillions and trillions of cubic feet of natural gas found in the same locations, which, along with nuclear power, could be used to fire our power plants.

By 2030, according to the U.S. Energy Information Administration, we will need at least 30% more energy to fuel our economy. Nearly 85% of that increase will come from oil and gas, even with expected gains for alternative energy. Can’t drill our way out? In fact, it’s the only way out of our energy crisis.

• “Oil companies are sitting on 68 million acres of oil leases and refuse to drill.”

This is yet another slander of “Big Oil” by House Speaker Nancy Pelosi — one that has become a major talking point for Democrats in Congress. It’s completely dishonest.

Oil companies have spent billions of dollars for those leases. Drilling has increased by more than 66% since 2000. They are searching for oil even as you read this. Some parts of those 68 million acres will have oil, some won’t. But at $145 a barrel, you can bet oil companies have plenty of incentive to find it.

That said, 68 million acres is in fact a minuscule amount. Some 94% of federal lands — 658 million acres — remains off-limits to exploration. Another 97% — or 1.7 billion acres — of federal offshore properties likewise remains off-limits. These lands contain tens of billions of barrels of recoverable oil. It’s there for the taking, now.

How much energy is there? Federal lands, according to the American Petroleum Institute, hold 651 trillion cubic feet of natural gas, enough to fuel 60 million households for 160 years. They hold at least 116 billion barrels of oil, maybe more. That’s enough to fuel 65 million cars and provide fuel oil for 3.2 million homes for 60 years.

As such, it’s the height of irresponsibility for Congress to leave these lands off the table. It ensures we remain vulnerable to pariah petrostates like Venezuela, Saudi Arabia, Libya, Iran and others who wish us ill.

• “Even if drilling works, it’ll take a decade or more for the oil to flow.”

This is quite an argument coming from the Democratic Party, which has made keeping oil off the market a linchpin of its energy policy for decades.

If President Clinton hadn’t vetoed the idea of drilling in ANWR back in 1995, we’d have that oil on the market today. Ditto if Congress had approved ANWR drilling in 2002, when President Bush requested it.

Even so, the larger point is false anyway. New oil will be flowing in some cases within three to four years, according to industry estimates. But the impact on prices will be immediate. Why? Because markets would suddenly have to discount future oil prices for the expected gain in oil supply. That would cause oil prices, especially in futures markets, to drop.

By the way, this isn’t just conjecture. President Reagan, within a week of his inaugural in 1981, removed domestic controls on oil. Energy prices began tumbling almost immediately, with oil falling from $34 a barrel in early 1981 to just $11 by 1986.

It worked before, and it’ll work again.

• “Record profits by big oil companies are the reason for soaring prices.”

It’s true that oil company profits have never been higher. But put into perspective, oil company profits are high because the price is high. As a share of revenue, profits aren’t so high.

The average profit, as we’ve noted before, is around 8 to 9 cents to the dollar. That compares with about 7 cents to the dollar for manufacturers and more than 15 cents to the dollar for computer makers.

In short, oil profits aren’t out of whack with the rest of industry.

What doesn’t get said is that while oil companies have profit margins of about 8%, about 12% of the price of a gallon of gas goes to the government in the form of taxes. When indirect taxes are included, the share is even higher.

So who are the real price-gougers?

From 1981 to 2006, the oil industry made $867 billion in profits. Yes, that’s a lot. But over that same time, they paid total taxes of $1.2 trillion, Energy Department data show. And that doesn’t include taxes of $519 billion paid to foreign countries.

Please remember that the next time a politician vows to hit “Big Oil” with a windfall profits tax or some other idea. The tax won’t be paid by the oil company; it will be paid by you, the consumer.

In coming weeks, we’ll try to look at some of the other myths surrounding America’s energy. The problem is, there are so many that dispelling the falsehoods about energy can become a full-time occupation for a newspaper.

In the meantime, let us suggest that if you think more oil will help, you should tell your local members of Congress. They’re easy to find at the government Web site thomas.loc.gov. The only problem is, on this topic, many won’t want to be found.

Hypocrisy of the Highest Order

CONGRESSIONAL STONEWALLING ON DOMESTIC ENERGY IS BEYOND ABSURD.  WHO DO THESE POLITICIANS WORK FOR?

Fossil Fool

By INVESTOR’S BUSINESS DAILY | Posted Tuesday, July 01, 2008 4:20 PM PT

http://www.ibdeditorials.com/IBDArticles.aspx?id=299804021452063

Energy: As pressure builds to develop America’s domestic energy resources, Senate Majority Leader Harry Reid now says it’s a health issue. Coal and oil, he says, make us sick. So why does he oppose nuclear power?

The Dr. No of the drill-nothing Congress tried to deflect the issue of rising gas prices Monday by telling Fox Business News that there are costs we should worry about besides those stemming from Democratic inaction. Our guilt is supposed to replace our anger. “Coal makes us sick,” Reid said, “oil makes us sick, it’s global warming, it’s ruining our country, it’s ruining our world, we’ve got to stop using fossil fuel . . . .”

Reid et al. say they want us to use alternative energy such as wind and solar. But if it’s going to take another 10 years, as they claim, to bring ANWR, offshore oil and shale into the mix, wind and solar are going to take even longer. Even if we tripled our current output from wind, solar and geothermal, they’d produce just 2.2% of our current energy needs.

The irony here is that it’s environmentalists and Democrats who often stand in the way of alternative energy. Reid needs to talk to Ted Kennedy and John Kerry about their opposition to a wind farm off Cape Cod because it might spoil their view.

A 500-megawatt, 20,000-acre wind farm scheduled for Valley County, Mont., was stopped by environmentalists who complained that 400-foot turbines would disturb a nearby wilderness area.

The Sunrise Powerlink solar-energy project in Southern California is being fought because of a 150-mile, $1.5 billion high-voltage line connecting desert-based solar panels with the urban customers of San Diego Gas & Electric.

The problem with wind and solar, other than getting the power from where it is generated to where it is needed, is its intermittency. The electricity generated must be used immediately. It cannot be saved for that proverbial rainy day.

Nuclear power is exactly the kind of nonpolluting energy source that can handle both our growing energy needs and unexpected demand. It has its own issues with waste, but such waste can be safely stored and even reprocessed to make new fuel. It’s a renewable resource that doesn’t pollute the earth or our lungs.

Yet Sen. Reid opposes the opening of the Yucca Mountain spent-fuel repository in his home state of Nevada. On his Web site, he states that Yucca Mountain is “never going to open” because “it threatens the health and safety of Nevadans and people across the United States” through its existence and from the transportation of spent fuel from nuclear power plants to the facility.

Agreeing with Reid is his party’s presidential nominee, Sen. Barack Obama. In a primary debate in Nevada, Obama pledged: “I will end the notion of Yucca Mountain because it has not been based on the sort of sound science that can assure the people of Nevada that they’re going to be safe.”

Yucca Mountain is quite possibly the safest, most geologically stable and most studied place on the planet. It abuts Nellis Air Force Base and the Nevada Test Site. The Heritage Foundation says that the road to nuclear power goes through Yucca Mountain and that, by his opposition, Reid’s “anti-Yucca stance virtually assures that more fossil-fuel plants will be built.”

Let’s face it: Harry Reid and the Democrats want no new domestic coal, oil, natural gas or nuclear power. It’s their energy policy that makes us sick.