Posts tagged ‘Natural Gas’

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 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.

September 7, 2011

The Associated Press: Oil industry: Boost in energy could create 1M jobs – Matthew Daly

The Associated Press: Oil industry: Boost in energy could create 1M jobs.

WASHINGTON (AP) — Government policies to increase domestic energy production could create up to a million jobs over the next seven years, the oil industry says in a new report aimed at influencing the political debate over jobs.

The American Petroleum Institute says in a report being released Wednesday that proposals to expand offshore oil drilling, boost production of natural gas in New York and other states and build a Canada-to-Texas oil pipeline could boost the U.S. economy.

September 2, 2011

Stephen Moore: ‘Green Jobs’ vs. Real Energy Jobs – WSJ.com

Stephen Moore: ‘Green Jobs’ vs. Real Energy Jobs – WSJ.com.

President Obama is expected to seek another $250 billion or so in new stimulus funds next week, with plenty of money for clean energy and the creation of so-called green jobs…

So we now have a national energy policy directing our resources away from cheap, efficient and increasingly abundant fuels like coal, oil and natural gas while we channel billions of tax dollars to 500-year-old energy technologies like wind power that can’t possibly scale up to power a modern-day industrial economy. That’s a shame.

September 2, 2011

Open Fuel Standard: The Answer is Multiple Choice – Lilly Sherman

Open Fuel Standard: The Answer is Multiple Choice.

We have to stop looking for a single fuel or a single way to become energy independent. Oil is one thing. The answer will be many things. People may argue methanol is better than ethanol, or only certain ways of making fuel are acceptable, or all cars should be electric or natural gas, or hydrogen is better.

But nobody can say any one thing can replace oil. We need all these ways. And we need cars that can handle all sorts of fuel and power: A flex-fuel plug-in hybrid, for example.

August 16, 2011

Shale and its Discontents – Robert Bryce – National Review Online

Shale and its Discontents – Robert Bryce – National Review Online. The shale-gas (and shale-oil) revolution is the single most important development in the North American energy sector since the discovery of the East Texas Field in 1930. But you won’t get that story by reading the New York Times.

Instead, two recent articles by Ian Urbina, the Times’ designated reporter on shale development, claim that the shale business is overhyped.

August 15, 2011

US and Brazil to launch strategic dialogue in energy – MSN News

US and Brazil to launch strategic dialogue in energy –  . Washington, Aug 13 (PTI) As part of their effort to reduce dependence on conventional sources of energy and explore alternative forms, US and Brazil have announced to launch a Strategic Dialogue in Energy.

The Deputy Energy Secretary Daniel Poneman will lead an inter-agency delegation to Brazil on August 17, for launch of the US-Brazil Strategic Energy Dialogue, the White House has said.

The announcement in this regard was made in March by US President Barack Obama and his Brazilian counterpart Dilma Rousseff.

August 11, 2011

Oil, natural gas extraction is clean, says Gov | Colorado Statesman – Peter Marcus

Oil, natural gas extraction is clean, says Gov | Colorado Statesman. Gov. John Hickenlooper called negative reports concerning dangers associated with hydraulic fracturing “hyperbole,” arguing that there is no scientific fact to indicate that the oil and natural gas extraction process contaminates groundwater in Colorado.

The Democratic governor made his comments Aug. 2 during a keynote address at the Colorado Oil and Gas Association’s annual Energy Epicenter Conference held at the Colorado Convention Center. Hickenlooper himself is an alum of the industry, having worked as a geologist in the 1980s before he ventured into the beer crafting brewing business and later politics. The governor said he would like to see new rules in Colorado that would require the oil and gas industry to disclose ingredients used in the hydraulic fracturing process. But Hickenlooper is not encouraging the disclosure because he thinks the so-called fracking process is dangerous — he believes the public will back off their concerns when they see that the ingredients used in the process, and the process itself, is nothing to worry about in terms of contaminating groundwater.