Saturday, July 19, 2008

To Drill, or Not to Drill, That is the Question.

Speaker of the House Nancy Pelosi, (D-Moonbat City) is thwarting any vote from coming to the floor to allow states to determine if they would allow offshore drilling. The standard talking points are used, i.e. There are leases that aren't being used, so why should we give more, and it takes ten years to get the oil to market, and my favorite, "It's George Bush's fault."
Apparently, there is some massive conspiracy afoot, which is designed to drive up the price of oil, reduce world wide economic growth, resulting in higher stocks of petroleum, which then results in a drop in prices, which. . . wait a minute! That doesn't make any sense at all.
What are the facts then, are there really oil leases that aren't being used? Well, yes, but a lease is not the same as obtainable oil. It's a license to take a chance, providing that you have the money to invest in lawyers to fight the mindless enviros who oppose any drilling, no matter how small the impact.
How about the ten years to market bromide? I still can't find anyplace that can authoritatively say that. In fact, when you watch the Discovery channel, we already have the capability to drill in three mile deep water, what is the problem then? Okay, the shortage of available ships to do the job, since they are so expensive to lease. But why the ten year mantra? It kind of reminds me of the movie line: Your generation only wants instant gratification. No, that takes too long.
And what about the idea that more oil being made available will not reduce the price of gas. How in the heck is that supposed to work? More oil, means more gas, which means that it is not as scarce, which means that if one company wants to increase its market share, it lowers the costs to the consumer, which forces other companies to lower their price, which means lower cost gas, and less of an adverse impact on the economy. What am I missing, unless there is some grand secret collusion out there?
It couldn't be that there is another agenda behind this, is there? I mean if you were a real conspiracy buff, you could say that the oil companies are behind the Democrats refusal to drill, because the scarcity of available oil keeps the price up. Hmm, Democrats ostensibly for the enviros, while taking money from the oil companies at the same time. A win-win for them, so long as nobody notices.
Well, if you are willing to see further slowdown in the economy, greater unemployment, higher inflation and old folks being forced to eat dog food like in the Carter years, just keep that ban on drilling. If you are a Democrat, you could run on a platform to improve personal conditions, while at the same time, helping to keep those same horrible conditions going.
I suppose we are expected to believe that is "change we can believe in."

19 comments:

Mark T said...

I love it when conservos do econ 101 - you're saying such boneheaded stuff, and talking down to us all at once. The contrast is priceless.

Steve said...

Mark, why don't you apply Socialism 101 to the analysis and tell me where I am wrong.

Binky Griptight said...

Isn't all politics local? Somehow, I just can't see the Mill Valley Chardonnay set supporting an expansion of the oil industry off the coast of Pelosi's San Francisco district. And, the Santa Barbara Schwarzenegger squad won't be too happy, either.

Mark T said...

I also love the way conservos bandy about the word "socialism" without realizing that we live in a system where the government supports capitalistic enterprises that would otherwise fail, such as military contractors and companies dependent on endless war, not to mention those that rely on new and innovative technology. Without socialism, capitalism dies.

It takes at leasts ten years from inception to bring offshore drilling on line - drilling can take years, as enough producing wells have to be found to justify large and incredibly expensive production platforms, which also take years to build. End of story.

It's not clear that we are suffering form a supply shortage. Saudi Arabia doesn't think so, and initially rebuffed Bush's proposal that they increase supplies to the market. (They eventually buckled under political pressure.) There's no shortage of gasoline in the United States - that's not what is driving the price runup.

Still - it might be supply related in a long term sense. It's not at all clear that we have not reached Hubbert's Peak, at which point no matter the oil we find, that it will not offset the decline in reserves brought about by current use. There's not enough new oil to keep up.

We need to look ahead, something corporations are not capable of doing because doing so interferes with quarterly profits. We need new sources of energy, and to get that, we need government.

As always. Socialism, you call it, as if it were evil. You don't know what you're talking about, per usual. Most of the important innovations of the 20th century were the result of government programs. End of story II.

Andy B. Hammond said...

So Mark, how long will it take for Solar and Wind power to become viable? Haven't we already been trying for decades and it still remains ineffective??

Oil Me said...

If more oil doesn't mean lower prices, why does Pelosi favor releasing oil from the strategic oil reserves to decrease pump prices?

Steve said...

"I also love the way conservos bandy about the word "socialism" without realizing that we live in a system where the government supports capitalistic enterprises that would otherwise fail, such as military contractors and companies dependent on endless war, not to mention those that rely on new and innovative technology. Without socialism, capitalism dies."

Your premise is demonstrably false. Capitalism does not generate defense industries. Besides, they are cross invested in other products as well. Raytheon makes microwave ovens, Lockeheed is also generating products for the civilian economy. I could go on, but even you have to recognize that you are wrong on this. Endless war? How did we ever have a defense industry since 1989? And without socialism, capitalism dies? What was capitalism doing before Karl Marx? Your assertions are so broad and wrong it would normally be considered the product of an immature mind. But I know that you are older than me, so why such garbage?

"It takes at leasts ten years from inception to bring offshore drilling on line - drilling can take years, as enough producing wells have to be found to justify large and incredibly expensive production platforms, which also take years to build. End of story."

Again, where is that information found outside of the Democratic Party? Since the Chinese are drilling off the coast of Florida right now, it can’t be that hard can it? Or is this just the beginning of the story?

"It's not clear that we are suffering form a supply shortage. Saudi Arabia doesn't think so, and initially rebuffed Bush's proposal that they increase supplies to the market. (They eventually buckled under political pressure.) There's no shortage of gasoline in the United States - that's not what is driving the price runup."

There is more demand than there is available. Come on Mark, you have to do better than that! Tie in China and India and their increasing demands, and there is less of the commodity than there was ten years ago. I will give you that the run up in price has reduced demand by approximately 3%. But if you can increase gas supplies, again, the market will respond with lower prices. Your failure to cite to anything specific is further evidence that you are just following the Democratic talking points and not thinking.

"Still - it might be supply related in a long term sense. It's not at all clear that we have not reached Hubbert's Peak, at which point no matter the oil we find, that it will not offset the decline in reserves brought about by current use. There's not enough new oil to keep up."

At last, something that we could agree on. There is X amount of any oil reserves. The question is if it is economically viable to get it. Yes, we do need to work on alternative energy as well, but the two are not mutually exclusive. In fact, the low efficiency rates of alternative energy requires more oil until we can make the improvements.

"We need to look ahead, something corporations are not capable of doing because doing so interferes with quarterly profits. We need new sources of energy, and to get that, we need government."

Non Sequiter Extraordinaire! So false, it deserves no reply.

"As always. Socialism, you call it, as if it were evil. You don't know what you're talking about, per usual. Most of the important innovations of the 20th century were the result of government programs. End of story II."

Most of the important innovations of the 20th Century were the result of government programs? Give me a break! Transistors? Penicillin? CAT scans and their progeny? No Mark, you are so wrong on this that it is ridiculous. Outside of the Rural Electrification Agency, what was the last successful thing that the government has done that couldn’t have been done better by a private enterprise.
Your arrogance cannot excuse your simplemindedness. Come up with actual facts and not just bald assertions and try it again.

Mark T said...

Pardon me if I have a brief laugh at your expense …….. there. Done. CAT scanning, penicillin, and transistors were all invented outside the business sector – in fact, transistor technology – CAT's at Tufts University. Computer technology in general, including the Internet – was advanced at government expense. It’s the same with aviation advances, GPS – stuff like that. Most of the research to accomplish this stuff is government funded. That’s how it works – the government does the expensive research (with outright subsidy, or in-house programs like DARPA), and when they hit on something successful, they turn it over to the private sector for exploitation.

“Capitalism does not generate defense industries.”

That’s absurd – Southern California would not exist as it does without the Department of Defense. Entire industries are built around defense spending. Good grief.

“Besides, they are cross invested in other products as well. Raytheon makes microwave ovens, Lockeheed is also generating products for the civilian economy...

Here we go again – the microwave was invented by Raytheon while it was doing radar research for the defense department. Subsidized. Yes, it is true that many companies who depend on defense spending also do consumer products, often related to inventions spun off by defense-related activities.

“ I could go on, but even you have to recognize that you are wrong on this. Endless war? How did we ever have a defense industry since 1989?”

The United States has been at war since around 1950 – both cold and hot wars at once. There was a lag in the early 1990’s after we lost of primary enemy, and we went in search of new enemies. We now have “terrorism” instead of “communism” and are happily skipping about the globe attacking other countries and making war, just as before. We are always at war with someone.

“ And without socialism, capitalism dies? What was capitalism doing before Karl Marx? Your assertions are so broad and wrong it would normally be considered the product of an immature mind. But I know that you are older than me, so why such garbage?”

After WWII the US slipped back into deep recession – the Korean War lifted us up. Since that time, “defense” has been a huge part of the budget, and entire industries have been spawned. Subsidy is the name of the game – you may call that something else, as it is not true socialism (the government does not outright own the industries it creates). I use the term loosely. But the point is, without government subsidy, capitalism fails.

“Since the Chinese are drilling off the coast of Florida right now, it can’t be that hard can it? Or is this just the beginning of the story?”

Ooooh – scary. The Chinese want oil, the US refuses to do business with Cuba, so the Chinese do. Why does this scare you?

“There is more demand than there is available. Come on Mark, you have to do better than that! Tie in China and India and their increasing demands, and there is less of the commodity than there was ten years ago. I will give you that the run up in price has reduced demand by approximately 3%. But if you can increase gas supplies, again, the market will respond with lower prices. Your failure to cite to anything specific is further evidence that you are just following the Democratic talking points and not thinking.”

This is idle speculation – truth is, we don’t really know what the current price spike is about. Surely part of it is the devalued dollar – oil, in terms of euros, has not increased as much in price. But beyond that – for current use, there’s plenty. It’s the future that is in doubt, but markets usually aren’t pegged to future shortages. They are entirely married to the current quarter.

(BTW – in the coming few years, the Saudis are going to try to boost their daily production from 10 million BOPD to 15 million. Watch that closely – it will tell us a lot about future supplies. Many are suspicious of Saudi reserves.)

“Your arrogance cannot excuse your simplemindedness.”

I am neither arrogant nor simple-minded. I don’t pretend to know what I don’t know. But when dealing with you there is this block – simple facts are disputed. It's pointless. I wonder about your basic abilities. You're no Budge.

Steve said...

I see your technique now, you state with clarity and bravado, that which is false in order to shift the argument. Nice job by the way.
But can we start with some basic definitions: Socialism is a means of state owned or directed means of production of goods and services. In all of your examples, none of them include socialism.
Just concede the point, you were talking out of your hat on that one.

"That’s how it works – the government does the expensive research (with outright subsidy, or in-house programs like DARPA), and when they hit on something successful, they turn it over to the private sector for exploitation."

Are you saying that there is no research except for the government? Come on, Mark. That's ridiculous and you know it.

"Southern California would not exist as it does without the Department of Defense. Entire industries are built around defense spending. Good grief."

Amazing, the DoD budget is less than 25% of the total budget, and you seem to be saying that without defense spending the entire system collapses.

"The United States has been at war since around 1950 – both cold and hot wars at once. There was a lag in the early 1990’s after we lost of primary enemy, and we went in search of new enemies. We now have “terrorism” instead of “communism” and are happily skipping about the globe attacking other countries and making war, just as before. We are always at war with someone."

If your premise is correct, why weren't we at war in 1993 after the first WTC bombings, or after the embassy attacks in Africa, or the Cole attack. or Mogadishu? Your argument here is mere wishful thinking to justify your self loathing for being an American.

"“Since the Chinese are drilling off the coast of Florida right now, it can’t be that hard can it? Or is this just the beginning of the story?”

Ooooh – scary. The Chinese want oil, the US refuses to do business with Cuba, so the Chinese do. Why does this scare you?"

Again, nice attempt to shift the point. But either you have deliberately distorted, or it is indeed a waste of time to discuss with you. The premise is that it is already possible, which was meant in response to your assertion that it would take ten years. An assertion you have still not provided any evidence for other than DNC talking points.

Mark T said...

“I see your technique now, you state with clarity and bravado, that which is false in order to shift the argument. Nice job by the way. But can we start with some basic definitions: Socialism is a means of state owned or directed means of production of goods and services. In all of your examples, none of them include socialism. Just concede the point, you were talking out of your hat on that one.”

If only it were so easy for you. "Socialism”, like “fascism”, is a word that has many uses. You use it as a pejorative – you want to say that people believe in something that’s bad – anytime we say that government is a good and useful thing, you called us socialists. You called me one, and you weren’t thinking then of its proper definition. You were just calling me names.

But you are one of these market fundamentalists – I see that as your backdrop. You think markets work all by themselves and produce miracle solutions, and we who favor regulation of markets ("socialists”) are making things bad by interfering with unregulated markets.

The fact is that markets don’t work all by themselves, that when they are left unregulated, very bad things, like the current housing debacle, happen. So people before us learned to regulate markets.

But there’s something else going on that your philosophy cannot embrace – innovation and invention require risk, and most business people are risk-adverse. They want a safety net. So our forebears learned that if you want true innovation, which is risky and expensive, you’ve got to subsidize the research. Since we brag to ourselves that we are a free market economy, we disguise that R&D – we call it defense spending. It’s no accident that Raytheon, when they stumbled on microwave technology, was doing government-sponsored RADAR research. That’s where most of our innovations come from – most of our computer and aviation technology, our new drugs, metallurgy – just about everything, comes from R&D that we pay for as taxpayers.

That’s a deep, dark secret. I assume you’ll keep it to yourself and keep preaching your fanciful free market nonsense. But the world doesn’t work the way you think.

“Amazing, the DoD budget is less than 25% of the total budget, and you seem to be saying that without defense spending the entire system collapses.”

More accurate analysis puts military spending at about 54% of the federal budget. But even your 25% is a massive number.

“If your premise is correct, why weren't we at war in 1993 after the first WTC bombings, or after the embassy attacks in Africa, or the Cole attack. or Mogadishu? Your argument here is mere wishful thinking to justify your self loathing for being an American.”

Read what I wrote – I said there was a lag after the fall of the Soviet Union, which we did not plan on and certainly did not want to happen. We were in search of enemies. Now we have found them - "terrists", and it is back to business as usual, one war after another. We've got two going on now, we're thinking about a third.

“…either you have deliberately distorted, or it is indeed a waste of time to discuss with you. The premise is that it is already possible, which was meant in response to your assertion that it would take ten years. An assertion you have still not provided any evidence for other than DNC talking points.”

You’re so … ordinary. The DNC has no sway over me – do you ever read my blog? I spent the better part of my career working for oil companies and oil clients. I said ten years because that’s what it takes. Period. Reality. Deal with it.

Dave Budge said...

"Done. CAT scanning, penicillin, and transistors were all invented outside the business sector – in fact, transistor technology – CAT's at Tufts University. Computer technology in general, including the Internet – was advanced at government expense. It’s the same with aviation advances, GPS – stuff like that. Most of the research to accomplish this stuff is government funded. That’s how it works – the government does the expensive research (with outright subsidy, or in-house programs like DARPA), and when they hit on something successful, they turn it over to the private sector for exploitation."

Just a few things to take the bloviatorial wind out of your sales, Mark.

First, all computer technology is based on the integrated circuit, which was invented by Bell Labs engineers John Bardeen, William Shockley, and Walter Brattain. Look it up. The microprocessor, was invented by, and there is a dispute about who "invented it first", by Jack Kilby while working for Texas Instruments and Robert Noyce who was the co-founder of Fairchild Semiconductor. None of these were funded by tax payer dollars.

It's true that the protocol for the internet was funded, not by the military originally, but by a group of university physics departments (hence state funded) and was co-opted by the Military. But the inventors of the World Wide Web was actually employed by Center for European Nuclear Research (CERN.) They invented HTML, not as part of their regular jobs at CERN but as side avocations. It was actually Jim Clark, after founding and leaving Silicon Graphics teamed up with Mark Andreessen to found Mosaic (Netscape) - the current platform we all use to browse the Web. Also not with any government dollars.

The telephone was invented by Bell, air flight by the Wright brothers. Bell labs invented photovoltaic cells and Unix (although Unix was given to universities for free if the improvements could be owned by Bell Labs.) The television was invented outside of government, some say at Westinghouse and others by a privately funded fellow living in Utah.

Sure, government has moved forward a great deal of innovation, but government has never "invented" anything and there are examples galore of things that moved us down the field of technology that the government had noting to do with. So your assertion that "most" is funded by government is, in a word, bullshit.

"It's not clear that we are suffering form a supply shortage. Saudi Arabia doesn't think so, and initially rebuffed Bush's proposal that they increase supplies to the market. (They eventually buckled under political pressure.) There's no shortage of gasoline in the United States - that's not what is driving the price runup."

Then what is it, Mark? Could it be market expectations?

Let me say one final thing (since I'm not coming back to this) your understanding of capitalism is as uniformed as your opinion of how socialism saves it. Capitalism has the tendency to devolve into economic oligarchy - that's it's biggest danger. But it's government that enables that time after time. The FDA is the perfect example. It seems to me that you neglect the chicken or egg quandary.

Steve said...

"If only it were so easy for you. "Socialism”, like “fascism”, is a word that has many uses. You use it as a pejorative – you want to say that people believe in something that’s bad – anytime we say that government is a good and useful thing, you called us socialists. You called me one, and you weren’t thinking then of its proper definition. You were just calling me names."

Mark, you are consistent in your belief that more government will solve every problem. I asked you to give an analysis based on socialism because you are so very well versed in it. I did not call you a socialist, that is a product of your imagination. But, is there really a perjorative use of a proper descriptor? Are you denying that you believe in the principles of government control of the economy? I am curious, since you have been so consistent before.

"The fact is that markets don’t work all by themselves, that when they are left unregulated, very bad things, like the current housing debacle, happen. So people before us learned to regulate markets."

Your argument is false because it assumes that the sub-prime mess is a result of under regulation. The reality is that it was governmental influence to extend home ownership to those who would not qualify that created the subprime mess. Rational markets would view the borrowers with scepticism and require a premium to get a loan. But because so many minorities were being excluded, the government stepped in and made a mess of it.

"More accurate analysis puts military spending at about 54% of the federal budget. But even your 25% is a massive number."

What kind of accountant are you? There is a big difference between one quarter and over one half even in your analysis isn't there? Two Trillion dollar budget, DoD gets $500 billion, that is 25%. Now, if you exclude, social security, medicare, retirement, etc., and concentrate only on discretionary spending, your number may be right. But as you said it, once again, you are amazingly wrong.

"You’re so … ordinary. The DNC has no sway over me – do you ever read my blog? I spent the better part of my career working for oil companies and oil clients. I said ten years because that’s what it takes. Period. Reality. Deal with it."

Nice touch, when all else fails . . . and yes, I realize that the DNC is taken to task by you, for failing to be left enough for your tastes. But I thought you were an accountant. I didn't know that you were involved in oil exploration and the technical problems of extracting oil. How silly of me to have doubted you.

Mark T said...

Nice touch, Budge – do a hit and run. I should just ignore you, but to do so would be to give you what you seek – a pulpit. God what a coward. A pompous one too.

It is true that AT&T, while it was a regulated entity, a legal monopoly, had the ability to engage in long term research. Is that your market example? Anyway, market forces put an end to that.

Wonderful inventions came out of Bell Labs, which itself, along with Westinghouse and Raytheon and all the others, received defense subsidies in the process.

But those days are over. These days you don’t find much basic research going on in the private sector. They are relying on government.

“Sure, government has moved forward a great deal of innovation, but government has never "invented" anything and there are examples galore of things that moved us down the field of technology that the government had nothing to do with. So your assertion that "most" is funded by government is, in a word, bullshit.”

You’re completely ignoring the role of government spending on the bottom line of the industries, like GE, Westinghouse, AT&T, Boeing and McDonald Douglas, and all the others – these companies relied a great deal on government subsidy, in the form of defense contracts, to fund their activities. (Shall we also talk about the never-ending search for credible enemies to justify the spending ... naah - too advanced.) You’re relying on the appearance of a private model, which is mere pretense, mere window dressing. Your assertion that these things are not government driven is, in a word, bullshit.

“Then what is it, Mark? Could it be market expectations?”

It could be a declining dollar.

“Let me say one final thing (since I'm not coming back to this) your understanding of capitalism is as uniformed as your opinion of how socialism saves it. Capitalism has the tendency to devolve into economic oligarchy - that's its biggest danger. But it's government that enables that time after time. The FDA is the perfect example. It seems to me that you neglect the chicken or egg quandary.”

Your understanding of how people really behave, how we seek to support one another and use our government to help us (as it is “us”), is muddled by your adherence to the philosophy of the great thug of the 20th century, Freidman. You seek to rob us of the things we want to do for ourselves – you won’t let us have our own health care, regulate our markets, protect our jobs. Your doctrinal Friedmanite adherence to a philosophical system that in essence supports authoritarian rule is a quandary – right? How is it that everything you espouse to achieve can only be done at the point of a gun? (When I think of you, as I don't have much of a picture of you in my mind, I think of Boris Yeltsin standing on a tank.) Seems to me you live in a dream world, but for the rest of us, your dreams are more like nightmares.

Enough of Budge!

“Mark, you are consistent in your belief that more government will solve every problem. I asked you to give an analysis based on socialism because you are so very well versed in it. I did not call you a socialist that is a product of your imagination. But, is there really a pejorative use of a proper descriptor? Are you denying that you believe in the principles of government control of the economy? I am curious, since you have been so consistent before.”

I said “I love it when conservos do econ 101 - you're saying such boneheaded stuff, and talking down to us all at once. The contrast is priceless,” you replied “Mark, why don't you apply Socialism 101 to the analysis and tell me where I am wrong.” Now you say you didn’t call me a socialist. You said A, but deny B. Nice try.

Do I believe in a “government controlled” economy? You’re playing word games. I believe in regulated markets, as unregulated ones burn out of control – the analogy is campfires versus forest fires. One works for us, the other destroys us. That’s history 101. I recognize the value of market forces, but as our forebears realized, those forces soon burn out of control and destroy us, witness the housing debacle, where lenders were unpoliced. As with the California deregulation nightmare, every time markets burn out of control, you blame government. It’s nonsense. Man up.

“What kind of accountant are you? There is a big difference between one quarter and over one half even in your analysis isn't there? Two Trillion dollar budget, DoD gets $500 billion, that is 25%. Now, if you exclude, social security, Medicare, retirement, etc., and concentrate only on discretionary spending, your number may be right. But as you said it, once again, you are amazingly wrong.”

Not hardly. Not included in the ‘official’ military budget ($653 billion) are things like military programs run by other departments (eg Space Shuttle) past military costs like military pensions and health care for wounded veterans, the Iraq and Afghanistan wars, and interest on the debt incurred to undertake military spending. Like any good accountant, I am capable of cutting through crapola. I said 54%. I meant exactly that.

“Nice touch, when all else fails . . . and yes, I realize that the DNC is taken to task by you, for failing to be left enough for your tastes. But I thought you were an accountant. I didn't know that you were involved in oil exploration and the technical problems of extracting oil. How silly of me to have doubted you.”

Don’t embarrass yourself further.

Steve T. said...

And by the way, Steve-

The whole thing about China drilling off the coast of Florida is a lie. It's never happened, it's not going to happen.

Someone made it up and thought "This should scare the bejesus out of anyone who's not willing to check out the facts."

And whaddaya know? It worked!!

Steve said...

Fascinating, your persistence in your fallacies. Kind of makes one see how neverending the delusion goes.

Steve, I see you follow in your father's footsteps. Quit now, while you still can.


http://www.americanfreepress.net/html/china_starts_oil_drilling.html

Steve said...
This comment has been removed by the author.
Steve T. said...

Seriously? I tell you that what you're believing is a lie made up by someone on the right, and you respond by linking me to an article written on a right-wing site without ONE single quote or source? Really? I suppose next you're going to start telling me that Obama is a Muslim, huh? It's amazing how much bullshit you seem to be able to take on faith.

http://www.mcclatchydc.com/251/story/40776.html

Complete with sources and quotes. That's the kind of stuff you should be looking for.

Steve said...

So, let me get this straight, you say that it is all a lie that there is drilling offshore around Cuba. And you say this because you know how?
How do you know that your source is reliable, and someone on the right is ostensibly unreliable?

Rich said...

It's amazing how much bullshit you seem to be able to take on faith.

You too.

Are quotes from Senator Bill Nelson enough, or would you rather rely on a similar story reported on Al Jazeera?

Bill Nelson and others

Al Jazeera