Posts tagged ‘OPEC’

December 6, 2011

Methanol Wins – Robert Zubrin – National Review Online

Methanol Wins – Robert Zubrin – National Review Online.

On August 2, I published an open wager on National Review Online. I offered to bet up to ten people $10,000 each that I could take my 2007 Chevy Cobalt, which is not a flex-fuel car, and, running it on 100 percent methanol, get at least 24 miles per gallon on the highway. Since methanol averages less than half the price of gasoline — and can readily be made from coal, natural gas, or any kind of biomass without exception — this would demonstrate superior transportation economy from a non-petroleum fuel that is producible from plentiful American resources.

Unfortunately, no one took the bet. That fact alone says a lot. Of the 7 billion people on this planet, there are about a million or so who know a great deal about cars. Clearly, not one of them was sufficiently doubtful that it could be done to put his money on the line. Although it left me short a nice chunk of easy cash, the refusal of anyone to accept my challenge should have settled the matter. But some people, while refusing to take the bet, still demanded that I conduct the test anyway. I did, and here are the results.

September 23, 2011

OPEC’s $1 Trillion Cash Quiets Poor on Longest Ever $100 Oil

OPEC’s $1 Trillion Cash Quiets Poor on Longest Ever $100 Oil.

Sept. 20 (Bloomberg) — Saudi Arabia will spend $43 billion on its poorer citizens and religious institutions. Kuwaitis are getting free food for a year. Civil servants in Algeria received a 34 percent pay rise. Desert cities in the United Arab Emirates may soon enjoy uninterrupted electricity.

Organization of Petroleum Exporting Countries members are poised to earn an unprecedented $1 trillion this year, according to the U.S. Energy Department, as the group’s benchmark oil measure exceeded $100 a barrel for the longest period ever. They are promising to plow record amounts into public and social programs after pro-democracy movements overthrew rulers in Tunisia, Egypt and Libya and spread to Yemen and Syria.

September 21, 2011

How to Weaken the Power of Foreign Oil – NYTimes.com by R. James Woolsey and Robert C. McFarlane

How to Weaken the Power of Foreign Oil – NYTimes.com.

OUR country has just gone through a sober national retrospective on the 9/11 attacks. Apart from the heartfelt honoring of those lost — on that day and since — what seemed most striking is our seeming passivity and indifference toward the well from which our enemies draw their political strength and financial power: the strategic importance of oil, which provides the wherewithal for a generational war against us, as we mutter diplomatic niceties.

Oil’s strategic importance stems from its virtual monopoly as a transportation fuel. Today, 97 percent of all air, sea and land transportation systems in the United States have only one option: petroleum-based products. For more than 35 years we have engaged in self-delusion, saying either that we have reserves here at home large enough to meet our needs, or that the OPEC cartel will keep prices affordable out of self-interest. Neither assumption has proved valid. While the Western Hemisphere’s reserves are substantial and growing, they pale in the face of OPEC’s, which are substantial enough to effectively determine global supply and thus the global price.

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.

August 31, 2011

Open Fuel Standard: Defeating Al Qaeda: The Energy Offensive – Kellie Dunlap

Open Fuel Standard: Defeating Al Qaeda: The Energy Offensive.

In the aftermath of the siege and death of Osama bin Laden, counter-terrorism officials prepare for Al-Qaeda’s response. The home front is on alert with heightened awareness for both soft and hard target attacks. There have been numerous false alarms, including the foiled terrorist plot in New York City a couple weeks ago. Intelligence analysts assert that Al-Qaeda is seeking to conduct a large-scale attack, proving to their enemies the group’s resilience and adaptive modus operandi, while rallying support from affiliates.

In the last decade, however, the elimination of key individuals within the terrorist network has left Al Qaeda on the defensive, forcing the remaining operatives into hiding and reducing their effectiveness. Furthermore, intelligence gathering and dissemination has improved tremendously since 9/11. Law enforcement officials have thwarted numerous attacks by radical individuals such as the cases involving Bryant Neal Vinas and Najibullah Zazi, two men who, on separate occasions, traveled from the United States to Pakistan, and underwent weapons and explosives training in Al-Qaeda’s training camps, but were foiled by the FBI before they were able to carry out their missions.

August 24, 2011

Political Notes: Bartlett Supports Alternative Fuel Research -The Frederick News-Post Online – Bethany Rodgers

The Frederick News-Post Online – Frederick County Maryland Daily Newspaper.

The U.S. congressman who represents the district including Frederick County recently released a statement encouraging support of a bill to increase production of cars that run on non-petroleum fuels.

Rep. Roscoe Bartlett, R-6th, also criticized a U.S. Department of Energy report about federal subsidies of energy sources, saying it should have centered more on transportation than electricity. While the country has many ways of generating electricity, oil prices are pinching the wallets of many Americans, he said.

August 18, 2011

Biodiesel industry producing record volumes, fueling job creation – Biodiesel Magazine | biodieselmagazine.com

Biodiesel Magazine | biodieselmagazine.com. U.S. biodiesel production reached a new monthly high of 81 million gallons in June, according to the latest EPA statistics, marking a third consecutive month of record volumes and continuing a remarkable turnaround in which biodiesel production in the first half of 2011 has already eclipsed production for all of 2010.

Despite the weak economy, the biodiesel industry is on track to produce at least 800 million gallons this year, more than double biodiesel production of 315 million gallons last year, when Congress allowed the biodiesel tax incentive to temporarily lapse. According to a recent economic study, this year’s rejuvenated production will support more than 31,000 U.S. jobs and generate income of nearly $1.7 billion to be circulated throughout the economy. It also is expected to generate an estimated $345 million in federal tax revenue and $283 million in state and local tax revenues.

August 17, 2011

OPEC Under New Management; Iran’s Management – Gal Luft

OPEC Under New Management; Iran’s Management. The recent appointment of Islamic Revolutionary Guards veteran Rostam Ghasemi as Iran’s new petroleum minister is not only the Islamic Republic’s latest poke in America’s eye but it is also harbinger of things to come with respect to Iran’s petro-politics.

Ghasemi, a notorious hardliner and the head of the economic wing of the Guards, is personally sanctioned by both the EU and the US. In his new position he will be able to do exactly what his patron Mahmoud Ahmadinejad explained in his nomination support speech before the Majlis: “transform this complex [oil industry] in line with national interests.”