To date this 12 months America’s dependence on Saudi Arabian oil has elevated by 20 %, according to a front-page article in the new York Instances (“U.S. Reliance On Saudi Oil Goes Again Up” 08.17.12). After nearly 4 years in workplace, that the United States is even more dependent on Middle East oil is shocking testimony to the failure of the Obama Administration’s vitality insurance policies.
We are presently importing some 1.45 million barrels of oil per day from the Saudis and at the present U.S. value for crude at $96/bbl, transferring $138 million/day to a regime that treats its women as mere chattel and has transferred billions to Wahhabi madrassas and prayer halls to propagate their poisonous anti-Western fundamentalism — as but one instance, the Occasions of London had the attention-opening headline “Saudis Fund Balkan Muslims Spreading Hate of the West” (please see “Should you See One thing Say One thing’ – The Failed Times Square Bombing and The price of Oil” 05.13.10).
Ironically, a lot of our dependence on Saudi oil provide could be eliminated by the completion of the Keystone XL pipeline from Western Canada to the U.S. Gulf. The President, seemingly aware of strident environmentalist criticism to the sourcing of Athabasca tar sands oil, has withheld approval of the pipeline despite the fact that Canada is proceeding with the extraction project and can direct the output to other markets on the Pacific Rim if the US continues to demur. A clear instance how this administration has it priorities upside down. But there are various other examples of the comprehensive failure of policies referring to energy these near four years past.
– In February of 2009, a month into the Obama presidency, the worth of crude oil touched the mid $30/barrel and gasoline below $2.00/gallon. At present we are choking at prices of $96/bbl oil and near $4.00/gallon gasoline. A misguided performance that speaks for itself, particularly in that it has change into clear that the U.S. may have been on the cusp of being power self-reliant.
– Near 4 years into this Administration, we are still with no coherent coverage to access our huge reservoirs of oil and fuel offshore, on federal lands and Alaska.
– Instead tons of of millions, if not billions, have been spent on failed various vitality initiatives such as Solyndra and tax holidays for different vitality sources similar to windmills. Alternative power needs be a focus but not to the detriment of energy independence and rational vitality pricing. Consider the big advantages that might have accrued to the economic system and our national security had even a portion of the funds and focus expended on alternative vitality been allocated to creating environmentally secure fracking methods giving us unfettered access to our huge holdings of shale gas and shale (tight) oil.
– The problematic appointment of Steven Chu as Secretary of the Division of Vitality. A brilliant physicist however hardly geared up to deal with the rough and tumble of the oil patch, Chu’s leanings had been made clear in feedback to the Wall Street Journal in 2008: “By some means now we have to spice up the value of gasoline to the degrees in Europe.” That may have meant round $eight a gallon. (please see “Vitality Secretary Chu and the price You’re Paying For Gasoline” 04.Sixteen.12). Middle America would have stated a heartfelt thanks. Coal Carbonization Equipment Sadly, it’s a mindset that has permitted costs to increase nearly threefold during his tenure without problem or push back.
– No far-seeing insurance policies to harness the extraordinarily enormous deposits of shale gasoline to wean us off our dependency on oil by reworking our gasoline-powered transportation fleet to compressed natural gas The place are the government incentives for consumers, manufacturers and distributors alike to undertake this core transformation? With as we speak’s worth for natural fuel at $2.70 mmbtu, crude oil would have to be priced at $18/bbl to compete with pure fuel to ship the same part of energy, not to speak of gas’ significantly lower carbon footprint. For those who query whether or not it may be achieved, know that in the distant land of Armenia, some 75% of its car and truck fleet is propelled by compressed pure gas. (please see “Aspen Ideas, Natural Gas, Armenia Unheralded” 07.09.12)
– In 2008 the Washington Put up reported “A number of Speculators Dominate Huge Marketplace for Oil Trading”. It was determined that eighty one percent of the NYMEX contracts was held by monetary companies speculating for their purchasers or their very own account (Please see “Time to Dismiss the CFTC Chairman and His Commissioners” 12.27.10). For the reason that inception of the Obama Administration, just about nothing has been completed to mitigate nor corral the wild buying and selling of oil contracts on the exchanges. The CFTC is endlessly holding hearings or asking for commentary from the sector, an elegant means for doing nothing. This whereas the President who had an awakening second from his reverie on this problem again in April 2011, when the Justice Division was given the mandate to form the “The Oil and Value Fraud Working Group,” from which we haven’t heard a single peep now one and a half years later. Pointedly and materially the nefarious impression of oil futures buying and selling on the worth of oil was highlighted in Congressional testimony in Might of last yr (please see “Are our Leaders Listening to Exxon Mobil CEO Tillerson?” 05.17.Eleven) of none apart from Rex Tillerson, Chairman and CEO of the world’s largest publicly held oil company, stating categorically that hypothesis was adding $30 to $40 to the value of every barrel of oil. Coming from someone of his stature and authority in the sector, one would have thought action would be forthcoming. We shouldn’t have held our breath.
– Over the previous 8 weeks the price of oil quoted on the commodity exchanges has elevated some 25 percent or some $20/bbl, costing U.S. consumers alone close to half a billion dollars a day (daily US consumption of 19.5 million barrels x $20), a worth increase that has gone far past issues of supply and demand and far past potential flare-ups with Iran. But we have over 700 million barrels of oil in our Strategic Petroleum Reserve during which we made an enormous funding and which is doing us little good other than having made oil more expensive while it was being stuffed and taken off the market. It’s an asset for which we obtain little or no profit and for whose draw-down there isn’t any coherent policy. There isn’t a realization on this Administration that a broadcast willingness to release some oil from the SPR to counter abnormal value movements reminiscent of that which now we have seen these previous eight weeks — not essentially very much — would ship the speculators scrambling to the hills and bring a level of rationality to the buying and selling floors of the exchanges, as a substitute of the one way bets that invite ever extra speculation.
– Lastly, what’s sorely missing is a hard negotiating stance with our oil suppliers, particularly these within the Center East. The American public is laying out actually tons of of millions of dollars a day conserving a large naval taskforce in the Persian Gulf and close to and in regards to the Strait of Hormuz. The taskforce keeps the shipping lanes open for the Gulf States of Kuwait, Qatar, Bahrain, the U.A.E. and naturally Saudi Arabia, all charter members of OPEC, to freely ship their cargoes of oil to a world clientele from China to the U.S. Our armada additionally retains them safe from the rapacious ambitions of their Iranian neighbor. We pay while they play. Only we pay twice — once by the OPEC cartel, induced and manipulated price of oil, and again by the huge sums to keep a large portion of our naval fleet to stand bodyguard. Something is very off base in this equation and it’s lengthy previous due that our authorities took the issue in hand and arrived at a extra equitable association, or possibly just sail away.
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