Wednesday, June 18, 2008

Gas Prices

As I was leaving for work this morning, the Talking Heads on the Hypnotic Box were explaining how Congress is going to legislate us to gasoline savings of up to $2.00 gallon.

Yup the same folks that have been warming seats in Washington DC, since gasoline was a $1.25 gallon, are now going to perform a miracle and do something.

I find it hilarious that the same folks that accuse me of being a commie because I believe that many industries need regulation, want to impose regulations to control the price of gasoline.

What kind of liberal commie wants the oil industry regulated? Snort, guffaw!

The ghost of Adam Smith is probably laughing his ass off now, as the invisible hand of the market bitch slaps us around.

Of course, there are lots of conspiracy theories going around, spread by people who laugh at those of us who think that our leaders make plans behind closed doors. and these same people are asking that we conspire to start another war, to kill a lot of people, to get gasoline prices down.

Obviously, every problem in America can be easily solved by bombing another country that can't fight back. I'm surprise that more people are not arguing that a war with Ethiopia can solve our imaginary Social Security and Medicaid Crisis.

But I digress... Congress is going to bring down high gas prices by approving of drilling in ANWAR. That's right, by increasing domestic oil availability by as much as 0.5%, we can get prices at the pump down by $2.00! At least until a few more Ford F250s are sold. I was going to say 1%, then I remembered that so far North, they'll only be able to pump the oil a few months out of the year. Then every spring, they'll have to repair the damage caused by the winter cold and storms. This will make the oil more expensive than oil drilled in nicer climes. Then there's the issue that China plans to buy up all of the oil produced there.

So maybe it'll provide 0% of our domestic consumption, thus dropping the price at the pump by up to $2.00 gallon...

Oh yeah, and the sale of the Iraqi oil will cover the cost of occupying Iraq...


Red State Update has their own take on this highly interesting topic.

31 Comments:

At 12:17 PM, Blogger an average patriot said...

Nothing is going to bring the price. Anything done will backfire because of the oil Companies or the speculators. I still might talk about it tomorrow but Bush and McDink both want the ban on offshore drilling lifted which would do nothing for at leasts years.
Ass hole Bush is still insisting on drilling in ANWR which won't get to market for 10 years and of course Dems are getting the blame for the oil and gas problem. Bush also harped on the shale oil again. I have written on that so many times it isn't funny. You know i write often that gas has to hit $5 at the pump before shale oil would be profitable and I see that coming quick. $2 gas is laughable. I know, they believe we are idiots!

 
At 12:39 PM, Blogger Weaseldog said...

Jim...

When gas hit's $5, then shale oil will be profitable at $7.

When gas hit's $7, then shale oil will be profitable at $10...

Don't you see. It's a carrot on a stick. It's a false hope. We're are never going to catch the carrot.

 
At 1:53 PM, Blogger Edgar Alpo said...

Awesome post Weaseldog!!

 
At 2:09 PM, Blogger an average patriot said...

Wease you're funny but right! Republican's will keep whining until the oil Industry has more work but it will not help us at all!

 
At 3:00 PM, Blogger Edgar Alpo said...

The insanity is progressing

 
At 5:50 PM, Blogger Edgar Alpo said...

Hey Weaseldog, what's up with this?

 
At 8:00 PM, Blogger Weaseldog said...

The poppies? That's business as usual. It's a continuation of Reagan's War on Other People Earning Drug Profits.

You see, Republicans want to get all of the money from the cocaine and heroin industry and lock the Democrats out.

All the best Drug Dealers are capitalists, after all. And they don't pay taxes! Obviously, they believe in Republican ideals, high profits and no taxes.

Nationalization of the oil industry? Are we communists now? OR does the oil industry want to unload at record sale prices, just before demand is killed and the US is flushed down the economic toilet?

 
At 6:19 AM, Blogger Edgar Alpo said...

The oil companies want to sell out to we the people for top dollar, that much is clear. They win either way, as they have lots of slush money too.

In other news, doin' a heckuva job!:

KABUL (Reuters) - Four U.S. helicopter engines worth more than $13 million have been stolen while they were being trucked from Afghanistan to a port in Pakistan to be shipped home, the U.S. military said.

HAHAHAHAHAHAHA!! Gasp! Chortle!

I fully expect to read this headline some day:

Five nuclear warheads stolen off truck in Iraq, Al Qaeda suspected of theft. BREEHEEHEE!!

 
At 9:57 AM, Blogger Brother Tim said...

Wease--
I would be more inclined to back drilling and exploration in ANWAR and the Coastal Areas, if the the oil companies were to start un-capping and pumping the wells that already exist.

I'm a Louisiana boy that grew up working in the oil/gas industry, as well as the commercial shrimping industry. Being in Texas, I'm sure your aware of the thousands, yes thousands, of SWs (suspended wells) and SOs (shut-offs). These are the wells that are brought in, and then capped off. Our oil reserves are probably higher than the entire Mid-East combined.

Most people don't realize, oilmen don't make money pumping MORE oil, they make their obscene profits pumping LESS oil.

Good post!

 
At 10:48 AM, Blogger Weaseldog said...

Brother Tim, I've heard rumors of these wells.

Now these just individual wells that are capped, or entire oil fields?

I know that exploratory wells are drilled and capped in order to learn about the geology and structure of a field. The oil under the capped well may be pushed by water injection to another wellhead, where it is actually pumped out.

I know some folks that buy and uncap wells of this type, but they don't get the production rates that the well originally produced and they have to account for a large water cut.

I only know of a few fields in Texas that were intentionally left fallow when prices were low, but they under development now. They aren't super giant fields by any stretch.

 
At 11:01 AM, Blogger an average patriot said...

Wease I posted on it this morning because the issue is getting ready to explode. But the idiot is finally openly pushing the shale oil McSame is backing his entire policy, and Congre4ss wants to take over the refineries and control the prices. Yeah that'll work. Hell they can't control their mouths!

 
At 11:19 AM, Blogger Weaseldog said...

Shale Oil is a giant energy loser. It's nothing by a welfare giveaway program for the lobbyists.

If it is implemented, the price of oil and gasoline will be driven upwards, as the dollar is devalued.

I fully expect to start reading arguments about the wonders of shale oil, all over the internet now.

These decisions are all about reacting from the primitive parts of our brains. We are a society that longer respects rational thought. I just watched a crazy Laura Ingraham video where she said, "Facts change all of the time."

Do you think Congress will push again to have PI rounded off to 3.0?

 
At 11:33 AM, Blogger an average patriot said...

wease
Yesterday I don't know which Senator it was but he was pretty peeved saying if they utilized all the wells they have already dug and are sitting on we would have plenty of oil then he angrily walked off. I told you Congress wants to control the refineries so they can control the oil. I wish they could be trusted. If someone other then us could put the country first we would be okay.
I just heard from my son in Iraq now he has me worried! He injured himself twice on his own. He is safer dismantling bombs. He was falling out of the truck so he grabbed on to the exhaust and burned to the bone. What a dummy! Then he was throwing wood in a dumpster and there was a spike sticking out. When the dumpster cover slammed on it, It drove the nail into his head and down it. They had to staple his head with 6 staples.
I told him I'm going to kill him! He is a mad man and the troops with him celebrate when he takes a nap. I have to laugh. I just hope he gets home safe! He got his teaching assignment in EOD school Pensacola! I will drop in on Brother when I go to see him! Did you get that Brother?

 
At 11:44 AM, Blogger an average patriot said...

wease
I wouldn't put anything past Congress that is why it is scary that they want to control refineries and oil cost. Hell nothing will turn this around. They smell Blood!

 
At 11:48 AM, Blogger Weaseldog said...

I got an email today with an article that stated that the Congress plans to put the Fed in charge of an Energy Credit System.

It's from one of the authors at Whiskey & Gunpowder.

Essentially, the Fed will grant energy usage credits like they do money. It is disguised as a part of the Cap And Trade initiative, but to me it sounds like an energy rationing program.

 
At 1:53 PM, Blogger Edgar Alpo said...

It's a vicious cycle. The more corrupt they become, the more power they want. The more they steal, the more they want to steal.

 
At 10:25 AM, Blogger an average patriot said...

They're on the climb again Wease and will not stop

 
At 5:51 AM, Blogger Larry said...

They could drill in every corner of America but prices will continue to rise while Big Oil are running/ruining the country.

 
At 2:15 PM, Blogger an average patriot said...

Just checking to see if you have anything new to say bud. Must be out in the garden. Take care!

 
At 11:02 AM, Blogger an average patriot said...

Hi Wease
Speaking of gas prices I'm wondering what you thought of bush and the BS at the oil Summit

 
At 12:45 PM, Blogger an average patriot said...

wease
I am sick of those talking head ass holes! Screw Cramer, drill more oil, leave the speculators alone, there is no agenda there, naw!
It keeps being brought up by the dems in Congress the amount of drilled wells and oil the oil company's are sitting while they cry oil poor saying they have to destroy ANWR and drill more off shore. Yeah that's safe my ass! Biden was arguing today with I forget who but every time he mentioned that 73% of the wells already drilled are capped and contain 54 billion barrels the blond Republican I can't stand from the south whose name I can't quite remember just kept smirking ignoring it and changing the subject to more drilling.
I don't see anything wrong with socialism or anything that works for any society. Whatever works for them. I think nationalizing the entire oil industry would be great if we could find some honest independent managers to operate it.
The Politicians have proven to be as corrupt or more so than big oil. They would probably screw us even more. Nothing will bring the price down. More oil too much oil not enough oil a glut, anything and everything will be used as an excuse to keep raising the price. Just wait until Iran is attacked and this entire mess really gets going.
You know, what we are seeing as we witness the end of the life cycle of our society is what happened to the Romans and everyone else. Instead of trying to save it those who can feast on it and steal what they can before they move on. Bush has sped our process up and we are bringing the world down with us!AAARRRGGGHHH! I guess I am ranting Take care!

 
At 6:25 AM, Blogger Edgar Alpo said...

I just know that high gas prices are somehow caused by them damn libruls!

 
At 6:31 AM, Blogger Edgar Alpo said...

Asked about that possibility by a potential voter in Florida during a telephone "town hall meeting," McCain said: "I don't know what would make a draft happen unless we were in an all-out World War III."..

This is how I know the empire is finished. When presidents and presidential hopefuls throw out phrases like WWIII without giving it a second thought it tells me that the end is near. Somehow "all out WWIII" will be the fault of the treehuggers too. ::Sigh::

 
At 9:40 AM, Blogger an average patriot said...

edgar
you know you are entirely right and we talk about it often. Just be prepared. the attack on Iran is getting closer every day thus WW3 Bush's forever war!

Wease just stopped by to see if there is anything new. How are you?

 
At 11:18 AM, Blogger Weaseldog said...

I'm doing good Jim.

I've been a bit busy is all.

 
At 10:13 PM, Blogger The North Coast said...

Any effort to limit fuel prices by law will only result in more consumption and/or spot shortages.

Note that gas had to hit $3.75 before people in this country started to limit their consumption enough to make a dent in the numbers.

People are still driving 40 miles to and from jobs in large cars containing only themselves. They are still giving their teens cars. They are still making trips down the highway to fetch a gallon of milk.

While waiting for the bus on a major street in Chicago's excessively dense and urban north lakefront, I noticed that the traffic to Evanston on that hectic street had not lightened one bit, in spite of the fact that Evanston has some of the best public transit in the Chicago area, including two rail lines that go directly downtown. I also noticed that at least half the autos were large gas-guzzlers and about a quarter were SUVs. This is all traffic going to Evanston, Winnetka, Wilmette- some of Chicago's most affluent near suburbs with convenient and excellent rail service.

So I figure it will take $5 a gallon to get them out of their SUVs and large cars; $6 a gallon to get them to stop driving to and from downtown, and $7 for them to get their teens out of cars and support a national minimum driving age of 18, which we should have done 40 years ago, if only to save the lives of our teens.

In the meantime, the only fair, non-coercive way to limit consumption and trigger more rational, adaptive behavior is by price. Why fight it? And why are we whining like such little crybabies anyway, when in Europe gas has been at $6, $7, and now $8 for years, without any loss of comfort or amenity to the denizens of that continent, who by and large live more comfortable lives than we do here in the US.

 
At 12:49 PM, Blogger an average patriot said...

Wease
I was hoping you had that song posted because I couldn't get the link to work. While I am here I will at least wish you a Happy 4th! Take care,

 
At 11:24 AM, Blogger fallout11 said...

Capped old wellheads, at least in Texas and Oklahoma (the only ones I know much about), are wells that have basically had all the easy to extract oil sucked out of them already. Watered out. Total output falls to the just a handful of barrels worth a day, assuming you can afford to run the grasshopper (pump) on top. At some point, the electricity cost exceeds the return. Energy returned on energy invested (EROEI) or financial return on financial investedment ($RO$I) becomes negative.

Yes, there is oil left in the deposit, often a substantial amount (up to 50%), but at some point extraction rates fall to the point that it becomes uneconomical to keep running them as 'stripper wells', and they pull out the equipment and cap the borehole to prevent pressure loss elsewhere in the field. Total recover from any given field, even with the best techniques and equipment, is only about half of "proven reserves", in much the same way that you will never squeeze all the water out of a wet sponge, and it gets steadily harder (and costlier, and more time consuming) to wring the water out.

They're still getting oil out of the East Texas field (the world's first elephant field), but it's 99% water and 1% oil.

In short, lot of sound and fury, signifying nothing. Wease is also correct regarding shale oil, it has never been economical to "mine" (which is really what is done), and never will be. Not at $40/barrel (bandied about decades ago), not at $140/barrel, and not even at $240/barrel, primarily because its natural energy density is less than that of baked potatoes.

 
At 1:33 PM, Blogger an average patriot said...

Hey Wease!
I know you are busy and you may not be interested but I have something for you on my site!

 
At 4:14 PM, Blogger Brother Tim said...

Fallout11--
You are correct in much of what you say. My experience comes from the oil fields of Louisiana.

As for capped wells, there are many different cappings. You have Shut-offs (SOs), Suspended Wells (SWs), Abandoned Wells (AWs), etc, etc.

Up until the late 80s, extraction technology could only easily recover about 25% of the reserves. These were capped as SWs. There are also thousands of wells brought in and then capped, these are the SOs. There are many in the Gulf, especially in what is known as 'the cornfield' South of Cameron, La. Since the 90s however, extraction technology has boosted the level to 50%, as you noted. So re-opening SWs that were capped at 75-80% is viable.

There has also been some writing about SOs under Gull Island in Prudhoe Bay on the Alaskan North Slope, with reserves that dwarf the Saudi fields. Some have speculated 200 years worth of consumption for the US. It is rumored to have been shut down under orders from the US Government, to hold in reserve for future wars (you can't fight a war without oil to power it). You can google Gull Island and find a wealth of info on that.

In addition to that, you have tens of millions of acres already leased out but yet to be drilled, even though it has been explored and found to have reserves.

Big oil is not just thinking about today, or even the next several years; they are planning 40, 50, 100 years into the future. That is why they want coastal waters opened up, so they can secure the leases for the long term.

With drilling technology now at well over 30,000 feet, we are discovering more and more reserves that were previously unknown. A good example of this is in the Walker Ridge field, a hundred or so miles South of Louisiana.

There are enough reserves in the U.S. to keep us supplied for hundreds of years.

 
At 12:52 PM, Blogger an average patriot said...

Happy 4th of July Bud have a nice day!

 

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