Guest post by Alec Rawls
“President no longer worried about CO2!” That’s what the headlines should have read last week after Obama presented an elaborate argument that alternative energy is the only viable response to high energy prices without ever once mentioning CO2, global warming or climate change. Instead, he presented the need to lessen our reliance on oil purely as an economic imperative.
Back when he thought that global warming was a winning concern Obama used to acknowledge that his anti-CO2 policies were going to cause high energy prices (forcing them to “necessarily skyrocket“). Now he is trying to use the high energy prices that he intentionally caused as a reason to get away from fossil energy. But if we are no longer worried about climate, how about just undoing the anti-fossil-fuel policies that drove prices up in the first place?
Obama’s silence on climate is a testament to how thoroughly the alarmists have lost the climate debate in the eyes of the voting public. Obama can’t even mention climate change (never mind global warming), even in a speech about his own climate-driven policies.
To make his economic argument, Obama puts forward two glaring lies. Let’s take these whoppers one at a time.
The lie that we are already aggressively developing our fossil resources
From the President’s March 15th energy policy speech at Prince George’s Community College in Largo, Maryland:
Under my administration, America is producing more oil today than at any time in the last eight years. (Applause.) Any time. That’s a fact. That’s a fact. We’ve quadrupled the number of operating oil rigs to a record high. I want everybody to listen to that — we have more oil rigs operating now than ever. That’s a fact. We’ve approved dozens of new pipelines to move oil across the country. We announced our support for a new one in Oklahoma that will help get more oil down to refineries on the Gulf Coast.
Over the last three years, my administration has opened millions of acres of land in 23 different states for oil and gas exploration. (Applause.) Offshore, I’ve directed my administration to open up more than 75 percent of our potential oil resources. That includes an area in the Gulf of Mexico we opened up a few months ago that could produce more than 400 million barrels of oil.
So do not tell me that we’re not drilling. (Applause.) We’re drilling all over this country.
That’s chutzpah, bragging about opening up drilling in the Gulf after using the Deep Horizon spill as an excuse for wiping out the Gulf drilling industry with an illegal moratorium.
Everyone knows about the big anti-oil moves from Obama and the Democrats, like rejecting the Keystone pipeline and continuing to block drilling in ANWR, but if you want a picture of how systematic and extreme their anti-fossil-energy policies have been, take a look at the list compiled by House Natural Resources Committee Chairman Doc Hastings. As soon as they got in the Obamatons started revoking all the permits that were in the pipeline: for exploration, for mining, for drilling, for building power plants. Everything was shut down to almost nothing, and that is the way it has stayed.
Speaker John Bohner put a few of the highlights onto a timeline along with gas prices. Cause and effect:
What about that record amount of oil production? From Tina Korbe:
Energy experts say the president’s rhetoric isn’t exactly forthright. It’s unfair for the president to take credit for record high oil production. Not only does it take oil three to five years to come online, which means the previous administration was responsible for approving the exploration and drilling permits that led to increased production, but oil production on federal lands actually declined from 2010 to 2011. Oil production on private lands is responsible for the increase.
She quotes CNS for the specifics:
As CNSNews.com has reported, oil production on federal lands declined in fiscal year 2011 from fiscal year 2010 by 11 percent, and natural gas production on federal lands dropped by 6 percent during the same timeframe.
In contrast, oil production on private and state lands accounted for the entire increase, reported the IER, as production was up 14 percent from 2010 to 2011. Natural gas also was up 12 percent from 2010 to 2011.
The energy boom from advances in fracking technology are so massive that Obama has not been able to suppress them entirely, but he sure is trying, and we know why. Energy Secretary Stephen Chu was up-front about this as recently as two weeks ago when he testified before the House Appropriations committee:
“Is the overall goal to get our price [of gasoline] down,” Nunnelee began. “No,” interrupted Chu, “the overall goal is to decrease our dependency on oil, to build and strengthen our economy.”
Chu’s goal is less oil consumption, which of course requires higher prices, “to strengthen our economy.” (Note that Chu is a physicist, not an economist.) Chu has been saying for years that:
Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.
That’s $7 to $9 per gallon. Under duress he recanted last week and said that he no longer wants higher prices, but that just stripped away his last remaining virtue, which was his honesty.
Lie number 2: that America is energy poor, so there is not much we can gain by drilling anyway
Someone who knows absolute nothing about anything might find this Obama riff compelling:
There’s a problem with a strategy that only relies on drilling and that is, America uses more than 20 percent of the world’s oil. If we drilled every square inch of this country — so we went to your house and we went to the National Mall and we put up those rigs everywhere — we’d still have only 2 percent of the world’s known oil reserves. Let’s say we miss something — maybe it’s 3 percent instead of 2. We’re using 20; we have 2.
Now, you don’t need to be getting an excellent education at Prince George’s Community College to know that we’ve got a math problem here. (Laughter and applause.) I help out Sasha occasionally with her math homework and I know that if you’ve got 2 and you’ve got 20, there’s a gap. (Laughter.) There’s a gap, right? …
We will not fully be in control of our energy future if our strategy is only to drill for the 2 percent but we still have to buy the 20 percent.
Obama’s 2% figure refers to “proven reserves,” and the smallness of this particular number is actually a measure, not of our resources, but of how little they have been developed. Investors Business Daily explains:
The U.S. has 22.3 billion barrels of proved reserves, a little less than 2% of the entire world’s proved reserves, according to the Energy Information Administration. But as the EIA explains, proved reserves “are a small subset of recoverable resources,” because they only count oil that companies are currently drilling for in existing fields.
We have very little “proved reserves” because we have developed only a small fraction of our resources into active fields. The relevant number to look at is the amount of oil we could produce if it were allowed, and here we are proverbial thousand pound gorilla. Again, from IDB:
We actually have the world’s largest fossil energy resources, and the “recoverable” part is rapidly expanding as the technology for extracting it advances. Estimates for technically recoverable shale gas reserves increased 134% in 2010, and we’ve hardly begun on shale oil. Then there are methane hydrates, which according to the Department of Energy contain “more energy potential … than all other fossil energy resources combined.”
In short, the United States, and the entire world, have only been tapping the planet’s most easily accessible fossil energy supplies, and even those are far from running out, while vastly larger resources wait in store. Obama’s claims about the impossibility of relying on fossil energy are a fairy tale for childish green adults who want to see themselves as saving the planet. They dream of going “forward” to windmills and absorbing solar radiation like a snake on a rock, yet none of them have enough confidence in the saving-the-planet part to even mention it anymore.
The war on CO2 is over! Tell the EPA!
Obama’s lies about fossil resources are just supporting lies. His big lie is his pretense that his anti-CO2 policies are not about CO2. So take him at face value. He has apparently surrendered his claim that CO2 is dangerous. From his energy-policy speech, it seems that global warming is no longer a motivating concern.
THAT is a big story. Quick, tell the EPA. With this change in the administration’s position there should be no more regulation of CO2 and Obama should rescind his promise to bankrupt the coal industry:
So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.
That war against coal is proceeding apace, every bit as much as Obama’s drive for higher gas prices. And all for nothing, since even Obama is no longer worried about CO2.
At some point—long before we run out of fossil energy—a cheaper source of energy will be developed and fossil fuels will go by the wayside. The only reason to interdict that natural progression and try to go backwards to wind and solar is a belief that fossil fuels imperil the planet. For that to be true, human effects on climate would have to dominate natural effects, a hypothesis that has already been falsified by 15 years of no warming. The only people who believe it at this point are the paid shills of our lavishly funded climate-alarm industry and their anti-capitalist allies. It has actually become unmentionable, which really does warrant some mention.
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Fact is no need for subsidy or direction, economics rules.
Example, a 500,000 bbl train to produce oil sands in Canada cost, I believe, usd 4 billion. At the time, the price of oil was 150 per barrel. Thats 75 million per day or 2.25 billion per month. Thus the whole process train paid for itself in 60 days. Thus real cost, is just the daily cost of operation. Same applies to frakking. Price estimates always ignore the real world.
The fudge factor, is how they choose to write off the start up cost.
When the Spanish Portola Expedition discovered the Los Angeles valley in 1769 they were amazed at the 350F black geysers at the La Brea (Spanish for tar) tar pits. This super-heated discharge continued until drilling of oil wells at Long Beach in the early 1900’s. Hydrocarbons are a natural by-product of fission prduced ‘elemental’ atoms under high temperature and high pressure which form ‘elemental’ molecules and eventually elemental compounds. This is described in “Fossil Fuel is Nuclear Waste”. Speaking of waste….there’s no free lunch in the eco-energy market either. Solar cells work by molecular erosion, a one-time, one-way flow of direct current that creates less energy than reqired for production. Photovoltaic, like bio-fuels are a net energy loser. For more on this read “Green Prince of Darkness”. Those who would lie about your mothers warm breath on your baby face being a toxin….will lie about everything. There are six times the proven reserves of Methane Hydrate in tundra and ten times the proven reserves of Methane Calthrates at the ocean floor. Find and share Truth.
Spector says:
March 19, 2012 at 10:11 pm
………… With tar-sands and oil shale, the problem is Energy Return on Energy Invested, (EREOI) that is the energy left over after energy has been expended in its extraction.
=========================================================
Gee, I wonder if the Canadians have figured that out? Maybe you should call them and impart your wisdom to them. Them poor bastards probably have never heard of that before!!! Turns out, our technology has advanced since the days of poking holes in the ground and hoping oil comes out.
Here, read this …… I don’t entirely agree with the guy, but, he also knows we’re not running out anytime soon……. http://www.europeanenergyreview.eu/site/pagina.php?id=3316
Here’s the take away…..
DirkH says:
March 19, 2012 at 10:17 pm
“Why did he block the Keystone XL pipeline, then?’
He blocked it because the approval period was way too short, as was the stated reason. It takes a little longer than sixty days to work out the kinks in a proposal of that magnitude.
I don’t think Mr. Hansen makes any sense either, but that doesn’t change the fact that a major pipeline project needs a reasonable time for approval. The Republican Governor of Nebraska agrees with this.
Claude Harvey says:
March 19, 2012 at 10:06 pm
” It would appear that the current administration is intent on strapping the American public with ruinous energy prices regardless of a factual record that indicates such draconian measures are unnecessary. One can only ponder the question: ‘why?'”
We have already covered the fact that new domestic oil production is not going to alleviate “ruinous energy prices,” especially when they are at about half of what Europeans pay.
As far as such “draconian measures” being “unnecessary”: oil production is not a trifling matter, as a matter of fact is often a rather massive undertaking. There are environmental impacts, and it is prudent and appropriate to consider them before permits are issued. Sorry to break the news to you, but this is not Pennsylvania in the 1860s. Let it be mentioned that a country like Norway produces plenty of oil and gas, but the permitting process is far more stringent than in the U.S.
It is not an either-or.
“For that to be true, human effects on climate would have to dominate natural effects, a hypothesis that has already been falsified by 15 years of no warming. The only people who believe it at this point are the paid shills of our lavishly funded climate-alarm industry and their anti-capitalist allies. It has actually become unmentionable, which really does warrant some mention.”
Succinctly put Mr Rawls….. and it is a message that the voters are becoming more and more informed about.
Torgeir says:
Obama is not a convert. He’s a liar. When he pretends that his long-professed anti-CO2 policies have nothing to do with CO2, he is not telling the truth. But you just keep smoothing your panties Torgeir. Whatever makes you feel good.
Owen in Ga says (March 19, 2012 at 9:01 pm): “Pretty much whatever Mr. Obama says I look for the deception, because the guy hasn’t played it straight with anyone yet. I am not even sure he knows when he is prevaricating.”
Well I know when Obama’s lying:
His lips move.
(Oh come on, somebody had to say it!)
[Moderator’s Note: This comment is acceptable. Please remember, however, that we are talking about the President of the United States and there are some lines that will not be crossed. Please exercise… shall we say, discretion? in comments. Thank you for your cooperation. -REP]
Keystone will be approved right after the election, and Obama strongly supports the new pipeline to move Canadian oil while Keystone gets built.
Also, why can’t we take winning for an answer? Global warming is scientifically invalid and we need to accept we won the argument and quit vilifying the other side for actual agreement with us.
Ummm, and BTW, we do need alternative energy sources, oil won’t last forever and we need to leave some for future generations to use for making plastics and the like instead of burning it all.
As for Hansen, I will be amazed if he holds his job after the election, the issue for Obama is if he moves Hansen now the left will go insane before the election.
James Sexton says:
March 19, 2012 at 10:26 pm
blather, blather, bs….
You guys and gals really need to quit pretending we don’t have it within our power to significantly effect oil prices. Combined with shale oil we’re sitting on over a trillion barrels of oil. More than anyone else.
blather, blather, bs…
So, now I have a question. Are you misguided or are you intentionally misleading people? BTW, your idiotic blathering about condoms is another complete and utter falsehood. Typical leftist.
End of blather, blather, bs…
—————
Dear Mr. Sexton:
You have a commendable mastery of argument. Belittle, belittle some more, for then to make an utterly untenable argument. Mr. Sexton, oil is a world commodity. Do you for a second believe that an American oil company will sell at a discount to Americans, if wholesale prices dictate otherwise? Don’t you get it? World demand sets oil prices, period. Chevron, Exxon, Shell and the rest are in business to maximize profits, and they do it by applying the parachute principle: gasoline prices rise quickly, and come down slowly. You can mutter until you are blue in the face, but that is the unalterable fact.
Do I agree that the issue is politically sensitive for Obama? Absolutely. Fine, let him approve it in his second term, which he is sure to get, due to the insufficiency of the alternatives. No big loss. It will be built, and possibly with a new route through the Sand Hills region in Nebraska, and farther away from the Ogallala aquifer, so that Republican Governor David Heinemann can get on board.
And do I really believe that Rick Santorum wants to use condoms for oil transportation? Yes, I really, really do, you typical dyspeptic. And don’t saddle me with Mr. Hansen’s “game over” fantasies either. I believe that as much as you do.
Alec Rawls says:
March 19, 2012 at 11:12 pm
“Obama is not a convert. He’s a liar. When he pretends that his long-professed anti-CO2 policies have nothing to do with CO2, he is not telling the truth. But you just keep smoothing your panties Torgeir. Whatever makes you feel good.”
Dear Mr. Rawls:
Governments lie. Get used to it.
What I find remarkable is that if you can’t see that the Obama Administration backing off its CAGW views has major benefits, your mind is clouded with too much protest.
That’s a win, Alec. Take it, and save your disparagement for a better occasion.
RE: DirkH: (March 19, 2012 at 10:20 pm)
REF: “There’s No Tomorrow”
“They show a lot of graphs in that film. None of the graphs has numbers on the y scale.
It’s a propaganda film. They pretend to have data when they have none. If they had data, they could put numbers on the scales”
.
Yes, like most presentations of this type, it is propaganda, however, even David Archibald presented a graph showing that the rate of oil extraction (production) was exceeding the rate of new oil being found by a large margin. I take this as an indication that we should be looking to develop a new sustainable high-density energy resource, as I do not believe that natural energy will ever support anything like our current population level.
peak oil is not about “running out of oil.” it’s about running out of cheap, affordable oil. and we’re already there, otherwise, why would the price of oil have doubled — twice — in just the last decade? saudi arabia, once the world’s swing producer, is pretty much producing a maximum right now, and regardless of all the shale/tar sands oil & gas we can produce in the u.s and canada, we are still very close to a deficit in liquid fuels. the best estimates by the u.s. military and iea and other respected monitors of world oil supply indicate that we will be off the 8-year plateau of hubbert’s peak that the world’s been on within another year or 2 or 3 — then world oil supply will rapidly go into a tailspin, with dramatic gasoline price increases and, in the not too distant future, actual shortages at the pump. i am flabbergasted to see such uninformed and completely unsophisticated opinion about the reality of peak oil among such an otherwise erudite crowd as frequents WUWT. suggest a trip to theoildrum.com, and, additionally listen to a few interviews (on youtube) with the highly respected oil analyst dr. robert hirsch, author of the 2005 “hirsch report,” which was commissioned by the u.s. gov’t and then suppressed. i found “there’s no tomorrow” to be an excellent film — even with the unenumerated y axes.
Torgeir Hansson says:
March 19, 2012 at 11:33 pm
Dear Mr. Sexton:
You have a commendable mastery of argument. Belittle, belittle some more, for then to make an utterly untenable argument. Mr. Sexton, oil is a world commodity. Do you for a second believe that an American oil company will sell at a discount to Americans, if wholesale prices dictate otherwise? Don’t you get it? World demand sets oil prices, period. Chevron, Exxon, Shell and the rest are in business to maximize profits, and they do it by applying the parachute principle: gasoline prices rise quickly, and come down slowly. You can mutter until you are blue in the face, but that is the unalterable fact……..
==================================================
Look, I won’t belittle if you don’t intentionally try to deceive people. And, if you want to make snide off-topic political commentary, then you better be ready for some snide comments back. It turns out, I know of a blog that would be happy to have your idiotic talking point about trying to force uninvolved parties pay for others sexual habits to discuss. http://suyts.wordpress.com
Yes, I understand oil is a global commodity. I thought I made that clear with my statements about reserves and consumption, but instead of implying, I’ll be explicit.
The U.S. has enough reserves of normal crude and shale oil to out produce any other nation in the world, so much so as to have a large surplus even as the world’s largest oil consumers. Do you believe 30% of the global market in both consumption and production isn’t sufficient to alter the price?
Continuing, this isn’t Europe we’re talking about. Their cost is of their own making. There’s no reason for it to be that expensive other than governmental interference.
And, the current price of oil and gasoline has absolutely nothing to do with the current supply or demand. The production/consumption/reserves is essentially the same as when the price was $40-$50 a barrel. The reason for the price spike is twofold, one, they’re worried about the stability of source of oil ….. the Mideast, and secondly they’re worried about the lack of increasing capacity. As economies grow, more oil is needed, meaning the capacity has to expand. The U.S.’s unwillingness to significantly do this or even give impetus to Canada to do so has and will continue to adversely effect the price of oil.
By simply making a noticeable commitment to expanding production capacity from stable nations would dramatically drop the price of oil today.
p.s. i’ve long been a great admirer of mr. watts, and this blog, and agree wholeheartedly with the thesis that co2-caused AGW is complete bunk. but it’s distressing to see the same highly discerning skeptics regarding agw react in such kneejerk fashion to a problem that is all to real, and has already bitten us ($147/barrel oil directly precipitated the 2008 financial crash) and, like a boa constrictor, will continue to tighten around the world economy for the foreseeable future, with predictably dire consequences. as far as oil prices are concerned, notice that each spike in oil prices is followed by a financial crash, ensuing demand destruction, which then temporarily lowers the price of oil … which then creeps back up again. and these cycles are getting closer and closer together. suggest some more research before dismissing the reality of peak oil. no matter how much we “drill baby drill” in the u.s. and offshore, we’ll never come anywhere close to meeting our current domestic needs for liquid fuels without lots imported oil. also, as the oil exporting countries continue to siphon more and more of their oil to quell domestic demand, there’ll be less and less available for export. china and india alone will be absorning much of this exported oil anyway.
peak oil is real, and may be the most serious problem the advanced industrial world faces for the foreseeable future.
Torgeir: Obama’s unwillingness to mention climate is only a win if it can be exposed, which is what I am trying to do. Yet you are against this “belittling.” I don’t think you are being consistent.
” If we drilled every square inch of this country — so we went to your house and we went to the National Mall and we put up those rigs everywhere — we’d still have only 2 percent of the world’s known oil reserves.”
The operative word is ‘known’. Whenever there is a desire to limit the supplies available the reserve is reduced to what is ‘known’ (proven etc). Whenever there is a desire to inflate the amount they are termed ‘reserves’ or ‘disciveries’ or ‘estimated’. Both sides place this game: those who pretend we are running out and those who pretend they know there will be more.
As abiotic oil exploration is only seriously practised in Russia where 50% of current exports are from ‘non-fossil sources’ it is very unclear what anyone’s ‘known oil reserves’ are because we have not even started looking properly yet.
Whatever you dear readers think about the tussles over energy that must be going on behind the scenes in the Office of the President, one this is obvious to us ‘furriners’: the USA has started looking for energy a lot closer to home and stopped grabbing derricks in foreign lands. That is credited to the President, like it or not, true or not, just as the previous acquisitive behaviour is rightly or wrongly attributed to the previous one. Stop dissing your own CIC.
One more thing, the chart of reserves is laughable as a picture of available energy. Africa is barely explored and it seems every time someone trips over a mango tree root, oil pops up. Keep your eye on the Congo basin.
Alec Rawls says:
March 20, 2012 at 12:20 am
“Torgeir: Obama’s unwillingness to mention climate is only a win if it can be exposed, which is what I am trying to do. Yet you are against this “belittling.” I don’t think you are being consistent.”
—————–
Dear Alec:
I think it is great to analyze Obama’s statements, and expose the shift in attitude that is in evidence. I find the name-calling unhelpful. This Administration is presenting its current thinking in the best possible light, like any other Administration would. I am not so sure this shift needs to be “exposed” as much as it needs to be highlighted. They are coming around, for heaven’s sake.
Tiger Woods Leg says:
March 19, 2012 at 11:28 pm
Keystone will be approved right after the election, and Obama strongly supports the new pipeline to move Canadian oil while Keystone gets built.
Also, why can’t we take winning for an answer? Global warming is scientifically invalid and we need to accept we won the argument and quit vilifying the other side for actual agreement with us.
”
What makes you believe all of this? Saying Hansen will get fired and all of that seems suspect. I wouldn’t be shocked to see the Keystone approved even if he gets re e-elected, but outside of that it’s hard to believe the rest of what you’re saying.
RE: James Sexton says: (March 19, 2012 at 10:55 pm)
“Turns out, our technology has advanced since the days of poking holes in the ground and hoping oil comes out.”
The point is that all the extra processing takes energy. That is why we/they have never exploited these resources before. This is an indication that we have used up all the good stuff that was easy to get and now we are forced to use more energy to get what’s left. Thus oil in the ground is not the same as oil in the truck because some of that oil in the ground had to be used, figuratively, to power the process of extraction. That is what is meant by EROEI. It’s like a tax levied by nature on petroleum trapped in sand, shale or mud. We may have a few centuries left, but after that according to the Olduvai Theory, its back to the stone age unless we develop a new primary energy source.
Dear Mr. Sexton:
I understand that the U.S. has reserves to outproduce any other country in the world.
Yet U.S. oil production has fallen most years since 1980. During the Bush II Administration it fell every year. EVERY year, under the tutelage of the Arbusto President. The first sharp upticks in production happened in 2009 and 2010. Those were Obama years, but I am willing to accept the notion that these increases happened due to decisions made towards the end of the Bush Administration, although it would be nice to see confirmation for it.
As a matter of fact we only saw an increase in U.S. oil production in 7 out of 30 years in the period between 1980 and 2010. This was a time when Republicans controlled government for 18 out of 30 years. During the Reagan Administration U.S. oil production fell for 5 out of 8 years.
It seems to me that this data shows that U.S. oil production does not depend on which party occupies the White House or Congress.
What is your explanation for the decline in production? I understand that new technology may have altered the picture, but we can’t forget that there are political and environmental considerations in the picture as well.
SAS writes:
What causes the oil price spikes is our failure to develop our fossil resources. In particular, when we leave supply in the hands of a cartel, they are going to periodically succeed in getting their cartel act together, restricting supply and raising prices.
We could easily produce enough oil to bust up their cartel action. Just keep the price low enough to where the kingdoms and dictatorships have to sell MORE to pay their bills and they will unravel, allowing us to pump them dry for pittance a barrel. Then we can be done with them, while still enjoying our own plentiful supplies.
So called Oil Markets are a financial casino not a true market. The prices set have nothing to do with cost of production, supply or demand. That is why we have silly prices.
If Oil “contracts” consisted of real oil that had to be collected, you would see prices tumble.
One more thing, Mr. Sexton:
European governments tax oil to regulate behavior, just like we tax cigarettes to regulate behavior. Same thing.