Recently in Energy Category

Canadian David Warren philosophizes in the Ottawa Sun and often sees the United States America more clearly than many who live and write within our borders.

He is pessimistic about the revolution that is unfolding under Obama's direction and foresees the emerging of a new America that can't be stopped with full Democratic control of Congress and the White House.

In the middle of this economic mess, the U.S. politicians are debating not one, but two new programs of unprecedented size, without the slightest understanding of the economic consequences. One is a vast new "health care" plan, to be sold almost entirely on emotion, with President Obama's snake-oil skills. The only thing clear about it, is the intention of the people behind it: to effectively nationalize the U.S. medical system, by making every part of it report to government bureaucracies. This is what we did in Canada in the 1960s, and we've spent the decades since trying to persuade ourselves that waiting rooms are natural.

The other is the "cap and trade" legislation. At a time when it has become all but obvious that the "global warming" scare was an imposture, the U.S. government is going to war against carbon fuels, through a program that can only kill jobs, both directly and through outsourcing of American economic activity to places with lower environmental standards; while igniting protectionist trade wars over the latter.

Can it be stopped?

I don't think they can. For not only has the Democrat party - committed in the main to the "second American revolution" I began to sketch above - control of the White House and both Houses. The Republican party is pulling itself apart. Only half of it is willing to fight: the other half thinks the only way back to power is to accommodate this revolution.

He sees no solution, only disaster ahead.

July 5, 2009

The New America

By David Warren

The Dow has been tanking again, and new figures show the U.S. economy shedding jobs at an accelerating rate. One might criticize the U.S. government for the first trillion or two of "stimulus" spending, by observing that it hasn't worked. But that would be too easy.

Yes, it was crazy, in the middle of a crisis created by debt, to see how far they could run up debt. It was crazy to shore up nearly worthless assets, in the face of irresistible market forces. At a time when the entire investment system desperately needs to be de-leveraged, it was crazy to oil the gears.

Continue reading...


Congressional Motors is hard at work on the 2012 edition.

While the Obama administration is focused on windmills and solar power, China is betting that oil will be the dominant energy fuel for many, many years. As a consequence, it is doing all it can to nail down future supplies.

Brazil is a prime Chinese target: It not only is the biggest single source of iron ore in the world and the second largest exporter of foodstuff, its national oil company Petrobras has discovered perhaps the biggest new oil field found anywhere in the world in many years offshore Brazil that promises to vault Petrobras and Brazil into the top tier of oil producers.

Some may rightfully grumble that China by entering into huge contracts for future supply is interfering with the global system of free trade. What China ties up never enters into the world trading system. That means less world oil for the United States and other nations to compete for, thus guaranteeing higher prices for what's left.

Brazil is launching a multi-year offshore oil development program estimated to cost $175 billion. As a result, rating agencies have sniffily dropped Brazil's bond rating to the lowest investment grade. No worry. China is stepping up.

To finance much of this development, Brazil has turned to China. With the active support of the Chinese government, many Chinese banks are lining up to extend loans to Brazil's energy sector. Right now, there is an agreement for a Chinese consortium to lend Petrobras $10 billion. In exchange, Petrobras will eventually ship 200,000 barrels of oil per day to Chinese refineries. There are more such long-term finance supply deals in the works. . . .
The Chinese are looking well ahead into the rest of this century, and even into the 22nd century. They want to ensure their future access to a diverse global supply chain, as well as win entrée into resource-rich regions of the world for Chinese industries and support firms. . . .
Why are the Chinese receiving such a warm welcome in Brazil? According to Sergio Gabrielli, CEO of Petrobras, "The U.S. has a problem. There isn't someone in the U.S. government that we can sit down with and have the kinds of discussions we're having with the Chinese."

The present U.S. administration isn't interested in oil. The U.S. has untapped reserves that could make the U.S. independent of oil and gas suppliers outside the Western Hemisphere. But it is denying itself development of those reserves -- the only country in the world to be doing so.

It isn't even interested in oil resources in our hemisphere that it can help develop for its own future purchase potential.

Also, the U.S. has plunged itself so deeply into debt to expand government programs it has no money to invest in strategic opportunities that arise elsewhere, even in relatively friendly places such as Brazil. (Brazil, as the largest exporter of ethanol in the world, is annoyed that it cannot economically sell to the United States since the Democratic Congress maintains the 50 cents per gallon tariff on foreign ethanol imports, which kills imports from Brazil.)

For those who think oil will be of no interest ten years from now, what is happening in Brazil is of no consequence.

Brazil's National Commitment to Energy - Bankrolled by China Jun 12th, 2009 | By Byron King

Brazil is making a national commitment to develop energy resources located far offshore in the South Atlantic. Indeed, no nation has ever advanced such an ambitious plan for long-term comprehensive offshore development. And it's being bankrolled by China.

Much of Brazil's South Atlantic development will require drilling wells in waters up to two miles deep, through four-five miles of rock beneath the seabed. The prize at the end will be oil deposits with reserves estimated in the tens of billions of barrels. With access to this offshore bounty, Brazil expects to take its place among the first ranks of energy-producing nations in the world.

Brazil's state-controlled national oil company (NOC), Petroleo Brasileiro SA (Petrobras) plans to spend over $175 billion in the next five years just on offshore development. The immense investment involves buying and building dozens of new drill ships and seagoing platforms, along with many dozens more support and servicing vessels. Petrobras will lay thousands of miles of pipelines on the seafloor, connecting massive complexes of subsea equipment that will sit atop hundreds of oil wells.

To finance much of this development, Brazil has turned to China. With the active support of the Chinese government, many Chinese banks are lining up to extend loans to Brazil's energy sector. Right now, there is an agreement for a Chinese consortium to lend Petrobras $10 billion. In exchange, Petrobras will eventually ship 200,000 barrels of oil per day to Chinese refineries. There are more such long-term finance supply deals in the works.

The Chinese government has established strategic guidelines for its national firms. That is, the Chinese government has set goals for Chinese firms to supply China's long-term needs for energy and other natural resources. The Chinese are looking well ahead into the rest of this century, and even into the 22nd century. They want to ensure their future access to a diverse global supply chain, as well as win entrée into resource-rich regions of the world for Chinese industries and support firms.

Why are the Chinese receiving such a warm welcome in Brazil? According to Sergio Gabrielli, CEO of Petrobras, "The U.S. has a problem. There isn't someone in the U.S. government that we can sit down with and have the kinds of discussions we're having with the Chinese."

In other words, there is a new geopolitics of oil at work. In the olden days, it would have been large international oil companies (IOCs) like Exxon Mobil, Shell and BP walking into a room to meet with the Brazilians. The IOCs were the only game in town. They controlled the financing and the technology for large developments.

But today, the biggest deals begin with a political understanding at the top, hammered out between the highest levels of the respective governments. This top-down political deal making cuts out the IOCs, except where they have technical expertise that can be hired on a contract basis.

In essence, we are witnessing the end of the post-World War II economic construct of the world's financial system. That construct always had a Western bias. But the 2008 crash of the Western business and financial model has changed everything. It has left a barren worldwide financial landscape for large development projects. Most traditional Western financing is simply not available for large projects. And as French author Francois Rabelais (1494-1553) once noted, "Nature abhors a vacuum."

Thus has the Western financial crisis handed well-capitalized, government-backed Chinese banks and industrial firms an unmatched competitive advantage. With the traditional credit markets dry, Chinese banks have transformed into key lenders for the resource developments that will fuel the next generation of humanity. Indeed, for now, the Chinese are the world's ONLY lenders for large resource development projects.


While David Letterman was trying to explain away his pathetic obscene jokes about Governor Sarah Palin's family, she was wrapping up a momentous announcement in Texas to help secure America's energy independence. Exxon Mobil's decision to back Alaska's $30 billion pipeline project was a victory for Palin, Alaska and the United States. She had done something Alaska's public officials had been trying but failed to do for 30 years. With Exxon Mobil's heft, experience and financial resources in the mix, the pipeline will become a reality.


Alaska Governor Sarah Palin celebrates a landmark agreement between TransCanada and ExxonMobil to partner together in building Alaska's natural gas pipeline - the largest and most complex construction project in North America. Governor Palin, center, is joined by (left to right) Marty Massey, Joint interest Manager for Exxon Mobil; Alaska Department of Natural Resources Deputy Commissioner Marty Rutherford; Rich Krueger, President of Exxon Mobil Production Company; Hal Kvisle, President and CEO of TransCanada Corporation; and Dennis McConaghy, Executive Vice-President of Pipeline Strategy and Development. (Click on image for bigger picture.)

Leadership matters.

Pipeline, Not Pipe Dream: Credit Palin

By INVESTOR'S BUSINESS DAILY | Monday, June 15, 2009

Energy: Exxon Mobil's surprise decision to join Trans-Canada on a vast Alaska gas pipeline project is a big step toward making the U.S. self-sufficient in domestic energy. By defying naysayers, Sarah Palin is now vindicated.

It must be sweet vindication for Alaska's governor. Against critics who said her 1,712-mile natural gas pipeline project would never get off the ground, who should the project bag but the "big gorilla" of American energy -- Exxon Mobil.

In a major surprise, Exxon announced Thursday that it had forged a partnership with TransCanada, the Canadian pipeline company that holds the state license for Palin's $126 billion Alaska Gasoline Inducement Act project.

It's a big vote of confidence in Palin's top project from a by-the-books company known for its rigid investment standards.

"We evaluated all the options and it came down to our belief that this approach with TransCanada and Exxon Mobil was going to be the most successful project," said Marty Massey, U.S. joint interest manager of Exxon Mobil Production Co. He said Exxon might look at expanding its participation.

Rival oil firms had whispered to IBD that it would never happen. "It's gonna happen and we're very excited about this development," Palin told "Good Morning America" on Friday.

Doubters of Palin's pipeline plan were numerous.

Some said the pipeline would be too big to work, and that a rival BP/ConocoPhillips project, called Denali, would doom Palin's plan because Alaska didn't have enough natural gas for both.

Exxon's tilt toward TransCanada suggests the oil giant believes that's not true. Exxon is America's largest company, with extraction rights to a third of all Alaska's gas reserves. It can use them to fill either pipeline. "We will make a decision based on commercial reality," Massey said. "But . . . why would we put our money and not our gas in the pipeline?"

Obama administration officials who had nothing to do with this, like Energy Secretary Ken Salazar, rushed to claim credit too.What better vote of confidence could there be?

Other doubters had suggested the pipeline could never happen because of a global gas glut, making the pipeline uneconomical. But with the project slated for completion in 2018, and the need for natural gas expected to rise between 20% and 40% by 2030, it's precisely now that such a project should be built.

"I think it's very shortsighted" to assume that "market conditions are going to stay as they are today," Palin told CNN. In an interview with IBD last July when gasoline hit $4 at the pump, she noted that if drilling had started in the Arctic National Wildlife Refuge just five years ago, when policymakers were dismissing the idea of $100-a-barrel oil, "we wouldn't be in our predicament today."

This is another in a series of successful steps to build the world's largest commercial construction project. For this, credit Palin. Despite the too-hip ridicule of comedians like David Letterman, she was the one who got the pipeline past Alaska's legislature, something governors had tried -- and failed -- to do for 30 years.

Other partners are sure to join, and the near-impossible task of bringing Alaskan energy to the continental U.S. is that much closer.

If there are any doubts left, note that it's Alaska's officials giving Palin the most credit. As Deputy Natural Resources Commissioner Marty Rutherford told IBD, Palin relentlessly drove this project, walking the process through the bureaucracy, asking questions, even going to Texas on Thursday to hear from Exxon itself.

"We're sitting here and in a short two-and-a-half years we have two premier companies in the world moving this process forward," said Alaska Natural Resources Commissioner Tom Irwin. "Thank you Gov. Palin, thank you participants and thank you Alaskans."

With praise like this, maybe it's time Palin started getting some attention for helping to secure America's energy future -- and less for having to defend herself from the dirty jibes of over-the-hill comics.

For Americans tired of high energy prices and dependence on foreign energy, Palin's hitting some very big home runs indeed.


How about a little sanity and common sense when thinking "green"?

Shovel-Ready Nukes By INVESTOR'S BUSINESS DAILY | January 26, 2009

Stimulus: So-called "shovel-ready" infrastructure jobs are said to be the key to economic recovery. But rather than just roads and bridges, between work and home, why not nuke plants to power our lives at both ends?

Amazingly, with all the talk of shoveling money into infrastructure projects, no mention has been made of our energy needs, the jobs that can be created by expanding our energy infrastructure and the jobs that can be created with the additional energy provided.

While the purveyors of global warming myths are losing support for the alarmist views, they, too, should join the two-thirds of Americans who believe nukes are a good answer to our future energy needs.


The key point:

Al Gore and Barack Obama have great ambitions for conversion of existing energy sources to green ones: Gore wants all electricity to be powered by wind and solar in a decade. Obama wants our use of oil to end in ten years.

Delusional, our author says:

The historical verdict is unassailable: because of the requisite technical and infrastructural imperatives and because of numerous (and often entirely unforeseen) socio-economic adjustments, energy transitions in large economies and on a global scale are inherently protracted affairs.

That is why, barring some extraordinary commitments and actions, none of the promises for greatly accelerated energy transitions will be realized, and during the next decade none of the new energy sources and prime movers will make a major difference by capturing 20 percent to 25 percent of its respective market.

A world without fossil fuel combustion is highly desirable and, to be optimistic, our collective determination, commitment, and persistence could accelerate its arrival—but getting there will demand not only high cost but also considerable patience: coming energy transitions will unfold across decades, not years.

Unfortunately, this delusion and another one, the unproven assumption that human activity is having a significant impact on the earth’s climate, will be driving our political leaders into making expensive mistakes that will harm the national security.

The nation should have as a goal becoming independent of hostile and unstable producers of energy as soon as possible. The quickest way to that end is developing the energy resources of this country – offshore, in the Rocky Mountains’ shale, in Alaska. And all of this can be done by job-creating American companies with more environmental sensitivity than will be done in energy development almost anywhere else in the world. Ten years from now the world will be using more oil, not less, and certainly it will not be an oil-free world. To the extent elected delusionists prevent the United States from developing our own resources, they are adding to global pollution – in waters, on land and in the air as well as handicapping our drive to national security independence from overseas energy suppliers.

Pouring all money into "acceptable clean" energy development puts the goal of energy independence off longer and does not take utilize the obvious advantages we have, such as the world's largest repository of coal. Furthermore, switching to alternatives to coal, oil and natural gas will require enormous additional investment in infrastructure and the junking of trillions of dollars of investment already made. The nation needs to consider carefully the effects on our economy and national security before embracing costly, unproven assumptions that will lead to little if any good and probably do great harm.

As for what cannot be done in a decade or two, consider this.

Moore's Curse and the Great Energy Delusion

By Vaclav Smil From The American (A Magazine): Wednesday, November 19, 2008

Our transition away from fossil fuels will take decades—if it happens at all.

During the early 1970s we were told by the promoters of nuclear energy that by the year 2000 America’s coal-based electricity generation plants would be relics of the past and that all electricity would come from nuclear fission. What’s more, we were told that the first generation fission reactors would by then be on their way out, replaced by super-efficient breeder reactors that would produce more fuel than they were initially charged with.

During the early 1980s some aficionados of small-scale, distributed, “soft” (today’s “green”) energies saw America of the first decade of the 21st century drawing 30 percent to 50 percent of its energy use from renewables (solar,wind, biofuels). For the past three decades we have been told how natural gas will become the most important source of modern energy: widely cited forecasts of the early 1980s had the world deriving half of its energy from natural gas by 2000. And a decade ago the promoters of fuel cell cars were telling us that such vehicles would by now be on the road in large numbers, well on their way to displacing ancient and inefficient internal combustion engines.

These are the realities of 2008: coal-fired power plants produce half of all U.S. electricity, nuclear stations 20 percent, and there is not a single commercial breeder reactor operating anywhere in the world; in 2007 the United States derives about 1.7 percent of its energy from new renewable conversions (corn-based ethanol, wind, photovoltaic solar, geothermal); natural gas supplies about 24 percent of the world’s commercial energy—less than half the share predicted in the early 1980s and still less than coal with nearly 29 percent; and there are no fuel-cell cars.

Since July 13th we have been reporting on the vast potential of oil deposits in Rocky Mountains shale. It is estimated that the oil there -- 2 trillion barrels -- is twice as much as all the oil used in the world since the first oil discovery way back in 1859.

President Bush has just now issued an executive order opening up 2 million acres of public lands in Utah, Wyoming and Colorado to oil shale exploration. Rocky Mountains shale could make the U.S. independent of hostile and unstable oil producers for decades.

As Hugh Hewitt wonders, will this opportunity be seized upon by the Obama Administration or killed for ideological reasons at the expense of energy national security?

The same Democratic anti-drilling ideology may also block the development of the huge natural gas field in Alaska that the pipeline the Palin Administration has authorized could link to the lower 48. This gas could heat 100 million American homes for a decade.

The United States and the rest of the world will need oil and natural gas for decades to come. It will take many years to develop alternatives to fossil fuels to the point where they are a complete substitute for fossil fuels. The only rational course for the U.S. is to utilize all of its energy options. National energy security demands no less.

It has just been announced that some 85 trillion cubic feet of natural gas lies buried in Alaska's North Slope. That's almost three times our proven reserves of natural gas.

Governor Palin led Alaska into approving a $40 billion pipeline last summer, which is the ready vehicle to move that gas to the lower 48.

Obama is all for energy solutions that avoid use of carbon-based fuels, but natural gas is the cleanest of them all and alternative energy sources won't be up and running n sufficient quantities for at least a decade.

Investor's Business Daily calls on Obama to seize this opportunity to help America's drive to energy independence and to show some bipartisanship in the process.

The "Don't Drill Democrats" now have a "Don't Drill President-Elect" who is already examining Presidential Executive Orders with a view to shrinking, not expanding, drilling. And Democrats have vowed to reinstitute drilling prohibitions that expired on October 1 to prevent off-shore and other new drilling.

Meanwhile, our sensible neighbor to the south Brazil is having fantastic success in its off-shore drilling. A new report from the Financial Times (subscription may be required) indicates the new finds may lift Brazil's reserves from about 14 billion barrels (the U.S. figure is 22 billion barrels) to over 100 billion barrels, putting it about equal to Kuwait, ahead of Russia and only trailing Saudi Arabia. Canada is ahead of the U.S. and is growing its reserves as it continues exploration. (Add in Rocky Mountains shale potential oil reserves, also a Democratic blockage target, and the U.S. could be far ahead of all countries, including Saudia Arabia.)

The U.S. is the only major oil producing country that is denying itself access to its oil and gas resources. As a consequence, high oil and gasoline prices will be inflicted on the American people unnecessarily. Insofar as environmental concerns are argued as reasons for not drilling, they are bogus. American companies are the most technologically advanced and the most environmentally sensitive in their drilling operations. Drilling will go on all over the world, since oil will continue to be the most important energy fuel for many years, probably decades, to come.

So not only much higher taxes will be coming from the Obama administration but also high prices for energy, both of which will be a drag on the economy.

But Saudi Arabia will be grateful to the Obama administration.

In efforts to make the U.S. energy independent of overseas hostile and unstable suppliers, coal will play a big part. As is often said, the U.S. is the "Saudi Arabia of coal," since the U.S. has the largest reserves of coal in the world. As drilling offshore proceeds (unless Democrats block that again) and other alternatives become commercially viable, coal is the rock solid base on which energy independence will be built. More coal is used to generate electricity in this country than any other power source and that is not likely to change soon. Developing nuclear power plants will no doubt replace some coal-fired power plants, but they won't be active for a decade or longer. Natural gas is a cleaner fuel for power plants, but availability is constrained by pipeline capacity. And, of course, there are urgent research projects underway on clean coal technology. Why not use what the U.S. has the most of, particularly since there are established companies employing thousands of Americans?

Yet Obama has promised he will drive those companies out of business, putting those workers out a job. Once again, the media has neglected or deliberately refused to do its job in exposing the real Obama and his intentions. Listen to this audio from January of this year:

This is another example of Obama's extremist ideology driving him, in this case without regard of the consequences to energy independence, the cost of electricity, national priorities and the jobs of working Americans. Some 80,000 have jobs in the coal industry, with 25% of them in West Virginia.

And in that same interview, Obama also promised that "[u]nder my plan of a cap and trade system, electricity rates would necessarily skyrocket." So much for the working family trying to make ends meet.

Update: Mike Carey, President of the Ohio Coal Association, issued this statement:

Regardless of the timing or method of the release of these remarks, the message from the Democratic candidate for President could not be clearer: the Obama-Biden ticket spells disaster for America's coal industry and the tens of thousands of Americans who work in it.

These undisputed, audio-taped remarks, which include comments from Senator Obama like 'I haven't been some coal booster' and 'if they want to build [coal plants], they can, but it will bankrupt them' are extraordinarily misguided.

It's evident that this campaign has been pandering in states like Ohio,Virginia, West Virginia,Indiana and Pennsylvania to attempt to generate votes from coal supporters, while keeping his true agenda hidden from the state's voters.

Senator Obama has revealed himself to be nothing more than a short-sighted, inexperienced politician willing to say anything to get a vote. But today, the nation's coal industry and those who support it have a better understanding of his true mission, to 'bankrupt' our industry, put tens of thousands out of work and cause unprecedented increases in electricity prices.

In addition to providing an affordable, reliable source of low-cost electricity, domestic coal holds the key to our nation's long-term energy security - a goal that cannot be overlooked during this time of international instability and economic uncertainty.

Few policy areas are more important to our economic future than energy issues. As voters head to the polls tomorrow, it is essential they remember that access to reliable, affordable, domestic energy supplies is essential to economic growth and stability.


The relentless pressure by the Bush Administration, John McCain, Sarah Palin and the hardy band of House Republicans who stayed on the House floor all during the August recess to press for drilling has paid off.

In the face of a Bush Adminstration threat to veto any omnibus bill that contained an extension of the offshore drillling moratorium the Democratic leadership of the House and Senate (and Obama) buckled and gave in, finally giving the chance of some gas pump relief to American motorists. (We had forecast this showdown earlier this month.)

The trio of Pelosi/Obama/Reid had been doing all they could to serve their environmental extremist masters, but McCain/Palin/Bush were on the right side of the issue and prevailed.

Thumbnail image for 3Dems.jpg

The American people are the winners. The Democratic obstructionists are the losers.

The fight isn't over. There's a moratorium in the Gulf that remains to be lifted and a Democratic moratorium preventing drilling for oil in Rocky Mountains shale is still in effect and must be terminated. The oil in shale could move the U.S. into the number one position in the world for oil reserves. The shale oil moratorium was the idea of Colorado Democratic senator Salazar and so far has survived one Republican effort in committee to terminate it. Republicans are sure to keep the pressure on.

Not only do we have the prospect of oil flowing, there will be many new jobs for Americans in America.

Here's the story, hot off the internet one-half hour ago.

Democrats to let offshore drilling ban expire

By ANDREW TAYLOR Associated Press Writer

8:15 p.m., September 23, 2008

Democrats have decided to allow a quarter-century ban on drilling for oil off the Atlantic and Pacific coasts to expire next week, conceding defeat in a months-long battle with the White House and Republicans set off by $4 a gallon gasoline prices this summer.

House Appropriations Committee Chairman David Obey, D-Wis., told reporters Tuesday that a provision continuing the moratorium will be dropped this year from a stopgap spending bill to keep the government running after Congress recesses for the election.

Republicans have made lifting the ban a key campaign issue after gasoline prices spiked this summer and public opinion turned in favor of more drilling. President Bush lifted an executive ban on offshore drilling in July.

"If true, this capitulation by Democrats following months of Republican pressure is a big victory for Americans struggling with record gasoline prices," said House GOP leader John Boehner of Ohio.

Democrats had clung to the hope of only a partial repeal of the drilling moratorium, but the White House had promised a veto, Obey said.

The House is expected to act on the spending bill Wednesday. The Senate is likely to go along with the House.

"The White House has made it clear they will not accept anything with a drilling moratorium, and Democrats know we cannot afford to shut down the government over this," said Jim Manley, a spokesman for Senate Majority Leader Harry Reid. "We look forward to working with the next president to hammer out a final resolution of this issue."

While the House would lift the long-standing drilling moratoriums for both the Atlantic and Pacific coasts, a drilling ban in waters within 125 miles of Florida's western coast would remain in force under a law passed by Congress in 2006 that opened some new areas of the east-central Gulf to drilling.

Just last week, the House passed legislation to open waters off the Atlantic and Pacific coasts to oil and gas drilling but only 50 or more miles out to sea and only if a state agrees to energy development off its shore. It quickly became clear that measure would not get the 60 votes needed in the Senate.

Republicans called that effort a sham that would have left almost 90 percent of offshore reserves effectively off-limits.

The Interior Department estimates there are 18 billion barrels of recoverable oil beneath the Outer Continental Shelf, about half of it off California.

While the ban on energy development will be lifted if the Senate goes along with the House action, it doesn't mean any federal sale of oil and gas leases in the offshore waters — much less actual drilling — would be imminent.

The Interior Department's current five-year leasing plan includes potential leases off the Virginia coast but probably would not be pursued unless the state agrees to energy development. And the state is unlikely to do so without Congress agreeing to share federal royalties with the state.

The congressional battle over offshore drilling is far from over. Democrats are expected to press for broader energy legislation, probably next year, that would put limits on any drilling off most of the Atlantic and Pacific coasts. Republicans, meanwhile, are likely to fight any resumption of the drilling bans that have been in place since 1981.

John McCain, the Republican presidential nominee, has promised to make offshore oil drilling a priority if elected president. He has called for developing the oil and gas resources along all of Outer Continental Shelf and for the federal government to share royalties with states who go along with drilling.

Democratic presidential rival Barack Obama has said he would support limited drilling in certain areas — possibly the South Atlantic region — if it is part of a broader energy plan to shift the U.S. away from oil to alternative fuels and more energy efficiency.

The debate over offshore drilling is not expected to subside in the first months of the next presidency — no matter who sits in the White House.

Lifting the drilling ban gives considerable momentum to the underlying bill, which includes the Pentagon budget, $24 billion in aid for flood and hurricane victims and $25 billion in loans for Detroit automakers in addition to keeping the government open past the Oct. 1 start of the 2009 budget year.

But Democrats decided not to use the must-pass measure as a battering ram to carry an extension of unemployment benefits for the long-term jobless past White House veto promises, prompting grumbling among some lawmakers. Efforts to boost food stamps and give states billions of dollars to help with Medicaid bills also fell through.

But the measure would double, to $5.2 billion, funding for heating subsidies for the poor, Obey said.

The measure also would provide more than $600 billion to fund the 2009 budgets for the Pentagon, Homeland Security Department and the Veterans Affairs Department. Nine other spending bills for the 2009 budget year starting Oct. 1 remain unfinished.

Bush had threatened to veto bills that don't cut the number and cost of pet projects known as "earmarks" sought by lawmakers in half from current levels or cause agency operating budgets, taken together, to exceed his request. Obey said, however, the White House would reluctantly sign the measure.

UPDATE: Congressional Democrats now say that they will in fact defy the will of the American people and after the election this fall they will push through a new ban on offshore drilling. President Bush would be sure to veto that, as would President McCain.

Jeff Jacoby of the Boston Globe does an excellent job of taking apart Pelosi's phony Democrat energy bill that is her idea of how to save the planet while hoping Joe voter would be conned into seeing it as a pro-drilling bill, which it sure isn't.

The drilling bill that bans drilling

By Jeff Jacoby | September 21, 2008
The Boston Globe

Q: Says here the House of Representatives approved a bill to allow offshore oil drilling, but nearly all the Republicans voted against it. Weren't Republicans the ones chanting "Drill, baby, drill!" at their convention last month?

A: Yep. That's why they voted against this bill. It isn't a drilling bill, it's an anti-drilling bill. If it becomes law, nearly all the oil and gas in the Outer Continental Shelf would be off-limits forever.

Q: Huh? The story says the bill "would allow offshore drilling as close as 50 miles from the Atlantic and Pacific coasts." It quotes House Speaker Nancy Pelosi: "It's time for an oil change in America, and this bill represents that." That's anti-drilling?

A: C'mon: A few weeks ago, Pelosi was implacably opposed to letting the House vote on lifting the offshore drilling moratorium. "I'm trying to save the planet!" she told Politico. "I'm trying to save the planet!" You really think someone so sanctimoniously hostile to drilling just six weeks ago is all for it now?

Q: But this bill -

A: This bill permanently bans all drilling within 50 miles of the US coast, which just happens to be where most of the recoverable oil and gas reserves are. It permits drilling between 50 and 100 miles out only if the adjoining states agree - which they won't, since the bill denies them any share in the royalties the oil companies would have to pay, thereby eliminating any financial incentive for a state to say yes. Virtually all the oil off the California coast and beneath the Eastern Gulf of Mexico would be locked up for good. Don't be fooled: The only offshore drilling this bill really opens the door to would have to be 100 miles or more out to sea, where the oil companies have no infrastructure.

Q: But the Democrats claim they are "expanding the availability of oil by at least 2 billion barrels."

A: Do you know how much oil is out there? According to the Interior Department, the offshore areas where drilling is restricted contain more than 19 billion barrels - that's equal to 30 years of current imports from Saudi Arabia. The bill would deny Americans access to as much as nine-tenths of that oil. A good deal? I don't think so.

Q: So what are you saying? The Pelosi bill is a sham?

A: Call it a political maneuver. Democrats don't really mind high gasoline prices; more pain at the pump means reduced consumption of fossil-fuel, which they and their environmental allies blame for global warming. But with millions of constituents growing increasingly upset over $4-a-gallon gas, and with polls showing the public heavily in favor of lifting the drilling ban, they had to do something. Voila - Speaker Pelosi's bill: a feint of supporting offshore exploration that would actually make drilling more difficult.

Q: Well, I can't fault Pelosi for thinking about the planet. Maybe we need more energy, but do you really think drilling more oil wells in the ocean is good for the earth?

A: Here's a news flash: The less oil we pull out of the ground ourselves, the more we have to import from abroad. Now who do you think is more likely to injure the planet - the United States, which uses the world's most advanced and environmentally sensitive drilling technology? Or Saudi Arabia and Nigeria and other exporters that aren't nearly as fastidious about oil leaks and pollution? Think of the American oil rigs in the Gulf of Mexico. They're so well-built that not even Hurricanes Rita and Katrina caused a significant oil spill.

Q: OK, but isn't our addiction to oil the root of the problem? Don't we need to wean ourselves off oil and move to greener sources of energy?

A: In theory, sure. In reality, we'll be running on oil for decades yet. Listen:

Well, the winds of change are blowin'

And we recognize that need

But tractors, trucks, cars, and planes can't run on tomorrow's dreams

So while we're workin' on the future, we can't ignore today

'Cause who knows how much time the alternative might take?

Q: Nice - where's that from?

A: Aaron Tippin's new single.

Q: What's it called?

A: "Drill Here, Drill Now.

Speaker Pelosi pushed a sham energy bill through the House that on its face appears to authorize drilling offshore. It also has lots of money for wind and sun. But the main thing the bill does is permanently prohibit offshore drilling where the oil is, in waters within 50 miles of the coast. For example, Governor Palin of Alaska has pointed out that there are rich deposits of oil and natural gas jus off the Alaskan coast that could be providing energy to the nation in one to two years.

The good news is that there aren't 60 votes in the Senate to pass this cynical Pelosi attempt to make it look as if Democrats were doing something for energy when in fact they are doing the bidding of the environmental extremists who have a stranglehold on their party. (The president said he would veto the bill, anyway.)

Misguided Republicans in the Senate have teamed up with Democrats to sponsor a "compromise" that will ensure that the U.S. can never use the vast majority of its existing resources to achieve energy independence. That bill, too, will not be able to muster the 60 votes to pass, since Senate Minority Leader has vowed to use all his skill and power block it.

In fact, the solution to the public's demand to "drill now" is less than two weeks away. The principal ban on drilling has been renewed annually for decades. If it not renewed by September 30, it will expire. If renewal of the ban were put to a clean up and down vote, it would lose by substantial margins in both houses of Congress, because Democrats would be exposed as enemies of national energy security if they were to vote for a continuation of the ban.

You can be sure that Speaker Pelosi and Senate Majority Leader Reid are feverishly working up an omnibus budget bill that must pass before the start of the government's fiscal year on October 1 or the government will be shut down in the midst of a financial crisis. Buried in the bill will be the renewal of the drilling ban.

Democrats intend to defy the Republicans and the President, daring them to shut the government down and take the blame for it. (How stark an example can one ask for to demonstrate why the President should have the same line item veto that governors of states have.)

Since there will be a party line Democratic vote to approve the omnibus bill in the House, the showdown will come in the Senate. Senate Republicans and the President must stand firm. This is a matter of vital national security and Democrats working against the interests of the nation must be exposed and defeated. Not only are these Democratic leaders working to keep the U.S. dependent on oil producers who wish us no good, they are willing to put the nation's economy in jeopardy by paralyzing the government with a shutdown.

The drive for energy independence can start on October 1.

With access opened up to our rich resources of oil and natural gas offshore and in Rocky Mountains shale (a separate Democratic moratorium running to December 31), dependence on hostile and unstable oil producers will be dramatically cut. Legislation to authorize and provide incentives for nuclear power, clean coal, coal gasification, wind, solar, thermal and all feasible energy alternatives can then be put together. McCain and Palin, Congressional Republicans in the House by their summer-break energy information sessions on the House floor and President Bush have all made it clear that years of saying "no" must end now. (Obama sides with the environmental extremists in supporting the fakery -- and risks to the nation -- the Democrats are perpetrating.)

The showdown is at hand and the public wants, needs and deserves "All of the Above."

There is a nutty but dangerous compromise being talked about in Congress that will allow miniscule offshore drilling, put a big new tax on oil companies that will raise gas and heating oil prices and will forbid drilling in most offshore areas forever.

Shamefully, some otherwise, at least sometimes, sensible Republicans are supporting this national security disaster. Senate Minority Leader Mitch McConnell is, so far, denouncing half-way measures. This isn't even half-way. It will ensure American dependence on hostile oil producers forever.

This air-headed compromise must be blocked. To get things moving in the right direction, drill now, no ifs, ands and buts. Do the other things, too, no problem. T. Boone Pickens is wrong, We can drill our way out of our problem. (Even he says drill now.)

With new technology, the ability to obtain oil from Rocky Mountain shale along with the resources offshore Alaska and the lower 48, we have more energy resources than Saudi Arabia. We published this chart back on July 13th, courtesy of Power Line, who found it:

The chart is hard to read, but the great majority of U.S. reserves are in Rocky Mountains shale. If we allow offshore drilling, our reserves would be much, much higher. Offshore exploration has been banned for decades by Congress, so no one knows how much is out there. Take a lesson from Brazil, which is aggressively exploring off its coast; in just the past year they have found tens of billiions of new barrels of oil.

Obama says we can end dependency on oil in ten years. Nonsense, we can't, no matter if we do everything right. Oil is the best fuel for transportation and won't be replaced easily. Jet planes can't be plugged in and fly. But we have the oil to reduce our dependency on foreign producers dramatically in ten years. We can do enough in that time period so that we are relying on ourselves and our friends in Canada, Mexico and, yes, Brazil.

We need to get our head outs of the sand and our dreams out of the sky and do what we need to do. The most environmentally sensitive drilling in the world is done in the U.S. So at the same time as we draw on our own resources for national security purposes, we are ensuring that best environmental practices will be followed.

How silly -- as well as how dangerous -- is the so-called compromise from the Gang of 20?

How about this?

From LaughTech.

It really isn't funny, but the message hits home.

Whether you are Republican or Democrat or independent, contact these senators who are undercutting the cause of energy independence and tell them to knock it off. Here they are:

Amy Klobuchar
Ben Nelson
Blanche Lincoln
Bob Corker
Elizabeth Dole
Evan Bayh
John E. Sununu
John Thune
John W. Warner
Johnny Isakson
Ken Salazar
Kent Conrad
Lindsey Graham
Mark Pryor
Mary Landrieu
Norm Coleman
Saxby Chambliss
Susan Collins
Tim P. Johnson
Tom Carper

If you know any of them, contact them and tell them they are dead wrong. They are putting America at risk and why? Who are they pleasing? A substantial majority of Americans want to drill now. Why are these senators falling into the trap of satisfying environmental extremists?

Lindsey Graham is one of the instigators of this plan. He purports to be a close friend and supporter of John McCain, but he is ignoring the position taken by John McCain and the energy expertise of Sarah Palin as governor of Alaska, who says the oil is there and can begin flowing in one or two years. McCain should show tough leadership and tell Graham he's wrong and to back away.


The media coverage of Sarah Palin has focused on her all-American story, but has neglected her long, deep and active involvement in the critical matter of energy security for the United States.

As a newly elected governor, Palin hit the ground running and, not waiting for Congress to act, had the state okay the building of a 1,700-mile natural gas pipeline to serve the lower 48 states. She's pushed ahead with all the environmental paperwork so that oil from offshore Alaska can be in the pipeline in the next two or three years -- if Congress lifts its offshore drilling moratorium.

Drill now.

Palin's Importance
By Investor's Business Daily
Tuesday, September 03, 2008

Security: The impact of prolonged high oil prices is moving well beyond economics. Russia now takes license to assault Georgia, and intends worse. John McCain's Alaska running mate has the only weapon.

When Alaska governor Sarah Palin was chosen for the McCain vice presidential ticket, most attention was on her beauty-queen past and down-home North Woods family life. In reality, she's the powerful governor of Alaska, the most pivotal state in the union for energy.

John McCain understood well that it's the one state that can liberate the U.S. not just from high prices but from increasingly threatening enemies whose power derives solely from high oil prices.

Alaska was purchased in 1867 explicitly to ensure America's energy future. Palin's leadership has done much to develop Alaska's energy resources, but the state is still stonewalled by Congress.

Palin's strong Alaskan presence in Washington will change that.


Democrat Speaker of the House Pelosi seems to be reacting to the pressure by McCain and Congressional Democrats to drill now with the same slippery ploy that Obama used.

She is now open to consideration of offshore drilling as part of a larger energy package.

How cute. The 2007 energy bill took two years to put together and it was inadequate. Like Obama, she is trying to put off an up and down vote on drilling to provide relief to average Americans at the gas pump till after the election, indeed, until next year.

A simple up or down vote can eliminate the moratoriums on offshore, Rocky Mountains and ANWR drilling. Already, just the possibility of such a vote is contributing to oil prices coming down.

A great majority of Americans now say they want drilling now. McCain and the Congressional Republicans should keep the pressure up. Get an up and down vote on drilling now. If that doesn't work, don't let Pelosi-Obama-Reid try to sneak a renewal of the moratoriums through in an omnibus budget bill; any such bill should be voted down. Pelosi-Obama-Reid will be responsible for shutting down the government to avoid a vote Americans want.


Back on July 13th we published a chart showing that the oil deposits in Rocky Mountains shale would vault the U.S. into a commanding lead in the world as a producer of oil, far ahead of Saudi Arabia. Today Power Line reported that oil shale development is about to get underway -- in Jordan! Jordanian sources say Jordan can become oil-independent, become an oil exporter and satisfy its own needs for 700 years.

But Pelosi-Obama-Reid are preventing the U.S. from achieving energy independence with their ban on exploration and development offshore and in the Rocky Mountains.

Their stubborn disregard for national security and the distress high energy prices are causing average Americans is shocking, Their proposal -- to slap a profits tax on oil companies -- will punish the companies we need to produce oil and not deliver one new barrel of oil to the United States. Their environmental arguments are hogwash, since producing oil in the United States is done with more technoligical expertise and environmental sensitivity than anywhere else on the planet. Is is better for the U.S. to rely on oil production in Nigeria where oil platforms and pipelines are attacked almost daily with resulting oil spoilation of coastal waters?

While Pelosi-Obama-Reid continue to keep their heads buried in desert sand, Brazil is showing there is lots of oil in the continental shelf.

Washington Post columnist Charles Krauthammer recently marveled at the stupidity of Democrats in not doing what every sensible American wants done: Drill our way out of high prices and dependence on the Middle East and Venezauela.

American oil reserves have been in decline because Democrats in Congress have banned new exploration and development for decades.

Brazil’s oil reserves are soaring because Brazil is developing its own resources. Even its European partners are benefitting.

As new discoveries are made, the estimate of new reserves for Brazil are going up. Speculation now centers around 50 billion barrels of new oil in Brazil’s offshore region. That’s five times Brazil’s reserves as of last year (11 billion) and 2½ times all of the reserves of the U.S (21 billion).

Yet the estimates for banned areas offshore the U.S., in ANWR and in Rocky Mountain shale exceed one trillion barrels of oil or oil equivalents. The results of this failure to drill are high prices for gas, home heating oil and jet fuel and crude oil itself and unhealthy dependence on hostile and unstable oil producers.

The number one exporter of oil to the U.S. is Canada. Canada, like Brazil, has been aggressively exploring and developing its own natural resources. Canada has been building its reserves even as production in mature oil fields is flattening or declining. That’s fortunate for the U.S., since Canadian oil exports to the U.S. have been growing to help support economic growth.

Here’s the most recent news out of Brazil:

Galp Advances After Making New Oil Find in Brazil
By Joao Lima
Aug. 8 (Bloomberg) -- Galp Energia SGPS SA, Portugal's biggest oil company, rose in Lisbon trading after finding light crude oil in a deepwater well in Brazil's Santos Basin, the location of the biggest discovery in the Americas since 1976. …
Tupi is the largest oil discovery in the Americas since Mexico's Cantarell field was found in 1976, and compares with the 12 billion barrels held at Kazakhstan's Kashagan field, the largest oil find in the last three decades.
Petroleo Brasileiro SA, Brazil's state-controlled oil company, is the operator and owns 65 percent of the BM-S-11 block where both the Iara and Tupi wells were drilled. BG owns 25 percent and Galp owns 10 percent.
Estimated Reserves
``Given the discovery, recoverable reserves on block BM-S- 11 could increase to 10 billion barrels from currently 5 billion to 8 billion barrels,'' Kapadia said.
Iara is in Brazil's ``pre-salt'' offshore region, a new oil province that may contain about 50 billion barrels of oil according to Peter Wells, a director at U.K. research company Neftex Petroleum Consultants Ltd. The Iara well, which has yet to be declared commercially viable, is still being drilled in the hope of finding more oil at greater depths.
Some oil industry analysts, including David Thomas from Citigroup Global Markets Inc., have said that Tupi, Tupi Sul and Iara may be linked as part of a larger offshore deposit.
Petrobras in January said that a gas and oil discovery known as Jupiter, in the Santos Basin's BM-S-24 block, could be as big as Tupi. Petrobras owns 80 percent of Jupiter and operates the well. Galp has 20 percent of Jupiter. …


Charles Krauthammer once again nails the truth to the wall.

Democrats and the American people have been ill-served on energy by the blind, tone-deaf Democratic leadership. Congressional Democrats fled for home, looking like cowards as well as stupid and out of touch.

So Pelosi now is passing the word that her people can vote for drilling.

The problem for the Democrats is that the argument for "do everything" is not rocket science. It is common sense. Which is why House Speaker Nancy Pelosi, surveying the political rubble resulting from her insistence on not even permitting drilling to come to a floor vote, has quietly told her members that they can save their skins and vote for drilling when the pre-election Congress convenes next month. Pelosi says she wants to save the planet. Apparently saving her speakership comes first.

The Republicans who ditched their vacations to stay on the House floor demanding a vote on drilling have won. Despite Pelosi cutting off television, microphones and lights, the message got out to the American people. ThIs Democratic leadership of Pelosi-Obama-Reid, as President Clinton would have said, does not “feel your pain.”

Now they are feeling their own.

Read the brilliant Krauthammer piece.

McCain wants to drill. Obama wants sun and wind, though they won't ever do much for destroyers, fighter aircraft and plastics. And did I mention cosmetics?

Can there be a plan that joins both aims? McCain, that old guy with brains and experience, welcomes debate. So it's a good thing that Paris Hilton has stepped up to address the issue.

It's too bad that Obama has lost his nerve about meeting John McCan in a series of town meeting type debates. He said he would, now says he won't.

If Paris Hilton is willing to debate the issues, why won't Barack Obama?

Paris Hilton proposes a compromise. They may not know it in celebrity land, but she is endorsing McCain's comprehensive energy policy. Way to go, Paris.

Paris' is better looking than many alternatives.

Powered by Movable Type 4.23-en

About this Archive

This page is an archive of recent entries in the Energy category.

Economy is the previous category.

Europe is the next category.

Find recent content on the main index or look in the archives to find all content.