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I don't know whose votes the White House thinks it's going to win with this strategy:

President Obama will move aggressively this week to deflect blame for rising gas prices.

Republicans are accusing the administration of exacerbating pain at the pump with policies that raise energy costs.

Obama will visit the University of Miami on Thursday to discuss steps the administration has taken to increase domestic oil and gas production, senior administration officials said Tuesday.

He will highlight the fact that production is up and imports have fallen, and will note additional steps the nation can take to deal with higher gas prices, the officials said.

This tactic is mind-bogglingly dense, but typical of the Obama Administration's strategy of tacking so far to right on hot-button issues that they try to take the Republicans' best arguments away from them. It doesn't work, of course. Hardcore anti-immigrant racists aren't going to care how many poor Latinos the Obama Administration deports. They're going to vote against the President, anyway. In the same vein, the "drill here, drill now" crowd is going to vote against the President and against the Democrats, anyway. There's not much to be gained by talking about how much more gas and oil we're drilling now.

Meanwhile, anyone who cares about the facts knows that oil is sold on a world market, which means that producing more oil domestically doesn't mean we get to keep our hands on that lovely crude. We don't. It pumps out to the world market, where its influence on world oil prices (and thus gas prices) is basically nothing. Pumping more oil out of America makes practically zero difference to gas prices. Depending on whom you listen to, gas and oil prices are a function of two things: commodity futures speculation, and unrelenting increased demand from India and China. Neither of those are affected by the piddling amount of domestic oil being extracted now. The Canada tar sands may make a difference many, many years down the line assuming it's refined inexpensively, and assuming there are major shortages in the Middle East. And speaking of the Middle East, even if North American oil production were to increase in such a way as to affect overall supply enough to drive down prices (impossible given the numbers involved), OPEC could simply reduce its own production quotas to keep prices artificially high.

In other words, reality-based people know that domestic production has zero effect on prices, and wouldn't be able to even if it tried.

And then, of course, there's the President's utter abrogation of his base--not just among progressives, but among anyone tilting even slightly to the left on the national spectrum. There are huge numbers of Americans who are deeply concerned about climate change, about the effect of drilling and fracking on the coastal and mainland environments, and about moving to a future based on renewable energy. By highlighting his Administration's oil drilling credentials, the President leaves his entire putative voting base cold and abandoned.

Facing a summer of high gas prices, the President and his advisers had two options:

1) They could use the issue as an opportunity to go after Wall Street speculators, do a little demagoguery against Middle Eastern OPEC oil regimes, attack greedy and unpopular domestic oil corporations, make clear for the first time in American politics that drilling more oil does nothing to bring down prices, and use the issue as a launching pad for a jobs-producing American renewable energy Apollo Program;


2) Try to outdo the Republicans on "drill, baby, drill" while conceding to the right wing every fallacious argument about the relationship between domestic energy production and global energy prices.

Choice number two is such resoundingly bad politics that it matters little whether the decision was made out of a desire to please the big money on Wall Street, or whether it was made in a misguided attempt to win "centrist" voters. It's an academic argument.

Whether the President wins re-election in 2012 or not, the terms of the debate itself will set this country and the world back on the wrong track for years if not decades.

Cross-posted from Hullabaloo

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Comment Preferences

  •  Drill Baby Drill (1+ / 0-)
    Recommended by:

    who would have thought we'd adopt this pathetic, disgusting saying...

    I didn't abandon the fight, I abandoned the Party that abandoned the fight...

    by Jazzenterprises on Wed Feb 22, 2012 at 03:08:35 PM PST

  •  Agreed. (5+ / 0-)

    Option #1 is politically preferable. It has the added advantage of truth.....

    Dear Ayn Rand fans: Please, would each of you just go all John Galt, immediately? Thank you.

    by CitizenJoe on Wed Feb 22, 2012 at 03:08:56 PM PST

  •  Why not wait until you hear what is said? (12+ / 0-)

    And you talk about reality-based people knowing better, but drill baby drill was pretty damn popular, so I see this as more nipping that in the bud by correctly pointing out that domestic production is at record highs, and demand is at 5-6 year lows.  

    I think that does lead to the idea that there is something more than just supply and demand at work.  

    •  It is much easier (5+ / 0-)

      to get hysterical about something -- Obama refers to what the administration has done -- I learned in grammar school that "has done" is past tensish.  Then it is best to create some crazy far right assertion of -- something.

      There's plenty of reasons I spend less time on this site -- this is a perfect example -- and I'm hardly an Obama apologist.  

      Vi er alle norske " My faith in the Constitution is whole; it is complete; it is total." Barbara Jordan, 1974

      by gchaucer2 on Wed Feb 22, 2012 at 03:22:00 PM PST

      [ Parent ]

    •  There isn't something more... (3+ / 0-)

      ...than supply and demand here. The idea that 'fixing' this problem can occur with some kind of intervention in the financial markets or better regulation is total delusion.

      Americans are just going to have to suck it up and use less gas, one way or another. That's the long and short of it, but no one (of any economic strata) wants to hear that.

      Reality and physics don't give a shit, though. Using less gas (maybe a lot less) is the way of the future no matter what people want.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Wed Feb 22, 2012 at 03:27:27 PM PST

      [ Parent ]

      •  read some matt taibbi or kevin drum (0+ / 0-)

        and then come back to me.

        •  You should be reading... (4+ / 0-)

          ...The Oil Drum (composed of real petroleum geologists and economists) as opposed to Kevin Drum who is just some guy with no expertise in the area.

          Spouting populist nonsense that this is some conspiracy by the 1% makes you and this site less credible, which is a shame considering my respect for you and the fact that I generally agree with your policy prescriptions.

          People need to be given the hard truth rather than fostering delusions that Happy Motoring is going to go on indefinitely as long as we keep the banksters in line. It won't. People need to start learning to use less gas now because reality won't give a rats ass later, no matter how much ranting about banksters goes on.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Wed Feb 22, 2012 at 04:00:01 PM PST

          [ Parent ]

          •  You can still limit speculation. (2+ / 0-)
            Recommended by:
            Leftcandid, Larsstephens

            You can make a rule that N% of all contracts must be for final delivery.  Speculation loses a bit of it's luster when someone drops 50,000 barrels on your front porch.

            If markets are intended to discover prices, let them discover prices.

            -7.75 -4.67

            "Freedom's just another word for nothing left to lose."

            There are no Christians in foxholes.

            by Odysseus on Wed Feb 22, 2012 at 06:14:52 PM PST

            [ Parent ]

            •  Why would you want to do that? (0+ / 0-)

              To decrease market liquidity? For what?

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Wed Feb 22, 2012 at 07:41:33 PM PST

              [ Parent ]

              •  To reduce market manipulation by Goldman Sachs (1+ / 0-)
                Recommended by:

                and the Koch Bros.

                However, you are fundamentally correct. Speculators are anticipating a supply problem in Iran. Raising prices and storing oil is a rational and stabilizing action in this situation.

                look for my eSci diary series Thursday evening.

                by FishOutofWater on Thu Feb 23, 2012 at 06:45:58 AM PST

                [ Parent ]

          •  I agree that scarcity will raise prices eventually (2+ / 0-)
            Recommended by:
            leftykook, Larsstephens

            but what we've got here is sadly NOT driven by simple supply & demand dynamics.

            Gas prices should be high because of taxes that benefit the commons & sustainable energy, not because private entities figure out ways to manipulate the market & pocket massive profits via speculation.

            Before elections have their consequences, Activism has consequences for elections.

            by Leftcandid on Wed Feb 22, 2012 at 07:27:14 PM PST

            [ Parent ]

            •  Re (0+ / 0-)
              but what we've got here is sadly NOT driven by simple supply & demand dynamics.
              Evidence for this assertion?

              Don't ever confuse hyperventilating around here for fact.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Wed Feb 22, 2012 at 07:36:12 PM PST

              [ Parent ]

              •  There's evidence that speculation is a substantial (0+ / 0-)

                portion of the price increase.

                Trading by entities that never take delivery of oil does not accurately reflect actual supply/demand issues.  The just-released McClatchy report shows that 64% of oil future trades are done by such entities.  Goldman Sachs takes notice of the overvaluation of oil futures by market players.

                Long term projections of supply vs demand, & the fulfillment of such projections over time, are responsible for the gradual increase in the value of oil, & geopolitics + global economics of course influence supply & demand.  There's also the pseudo-supply dynamic of oil companies deliberately reducing refining capacity so that even with an oil glut, the gasoline output will be lower; it's not a "natural" supply dynamic, but it could be represented as such.  Lastly the exporting of gas reduces local supply.

                But the current price volatility is clearly best represented by the most volatile influence, which is Wall Street's ability to trade huge numbers of futures in a short term.  There is no other existing factor of similar volatility.  

                Before elections have their consequences, Activism has consequences for elections.

                by Leftcandid on Fri Feb 24, 2012 at 11:24:50 AM PST

                [ Parent ]

        •  taibbi and drum are hardly oil and gas experts (0+ / 0-)

          These are partisan advocates for progressive public policy, which is fine, but these folks are not experts in oil and gas.  

          "let's talk about that"

          by VClib on Wed Feb 22, 2012 at 11:21:34 PM PST

          [ Parent ]

      •  in this respect (3+ / 0-)

        the problem should be phrased otherwise round. Gas prices are high, and american domestic demand shrinks. That is a very positive development. It says that the people react in the right manner to the signal. It was always clear that there would eventually come a price level that would force people off oil, and if this level now finally comes in sight, then that is to be welcomed.

  •  So? He just took domestic policies off the table (6+ / 0-)

    leaving only the real culprits (speculators) to blame.  Let the republicans do the dirty work.

    You're mixing up strategic political rhetoric with actual policy.

    Profoundly humbled by DKos generosity of spirit and selflessness of nature. Forever grateful beyond measure.

    by wretchedhive on Wed Feb 22, 2012 at 03:11:13 PM PST

  •  WTF? (12+ / 0-)

    What is "Tacks Hard Right" by simply describing the increases in oil and gas production?

    "Tacks hard right" equals doing something like running down to Hilary's office and pounding the table for the State Dept to approve the pipeline deal with Canada, or running down to the Dept of the Interior and pounding the table for them to approve oil and gas drilling leases off the California coast...

    Hyperbole much?

    "Ronald Reagan is DEAD! His policies live on but we're doing something about THAT!"

    by leftykook on Wed Feb 22, 2012 at 03:12:26 PM PST

  •  You jumped a shark (11+ / 0-)

    The President is doing exactly what he should do. oil production is up. Drill baby, drill won't stop this.

    You're finding a fight where there isn't one to be had.

    To these statements:

    Meanwhile, anyone who cares about the facts knows that oil is sold on a world market, which means that producing more oil domestically doesn't mean we get to keep our hands on that lovely crude.
    In other words, reality-based people know that domestic production has zero effect on prices, and wouldn't be able to even if it tried.
    I counter: a poll taken a couple of years ago showed 1 in 3 Americans believing in man-made global warming.

    So, I'm sorry if the President is insulting your informed intelligence, but you err in thinking that these "obvious" facts you present are obvious to most Americans.

    Americans keep saying they want to be spoken to as if they were adults. No they don't: they can't handle it. Certainly the tea party can't. And geez, talking to some on the left about PPACA, I get the same feeling.

    President Obama's Job Number 1 between now and November is simple: get elected. Let the Republican noise machine convince the American people that he's hurting their gas prices, or Keystone would have solved the problem, or whatever, and he fails Job Number 1.

    We'll sure have a lot more to whine about if the GOP wins, but...not thank you.

    •  so when and who should actually (5+ / 0-)

      tell the truth about this issue to the American People? Because if nobody does, it doesn't really matter who wins the presidency on this issue, because climate change will be ignored and drilling will expand regardless.

      •  He has told the truth (3+ / 0-)
        Recommended by:
        palantir, Andrew F Cockburn, Odysseus


        I see him saying it all the time.

        You err in thinking that there's a real bully pulpit any longer, particularly regarding something not about sex or war. There isn't.

        In the days of yore (even to Reagan), a President could command an audience many times more than that which he can today, and without a parade of nattering know-nothing spin doctors rewriting his every word to fit their agenda. Hell, Gilligan''s Island had a bigger audience every week than Oprah got on her biggest shows in her prime.

        With information so scattered, the idea of top-down information is all but neutered.

        President Obama has INCREASED CAFE standards rather dramatically, particularly given the nation's new love-affair with 500 hp muscle cars. He's also invested tens of billions into green energy at a time of deep recession and with the Republicans hammering him every inch of the way.

        And again, he speaks about alternative energy, clean renewable energy ALL THE DAMNED TIME.

        •  Due to Jevon's Paradox... (0+ / 0-)

          ...(look up in wiki), it is likely that increased CAFE standards merely have increased, not decreased, total gasoline consumption.

          The only thing that decreases total consumption of gas is high prices. Every other 'solution' tends to fail.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Wed Feb 22, 2012 at 04:28:10 PM PST

          [ Parent ]

  •  Moderates care more about gas than the environment (2+ / 0-)
    Recommended by:
    BelloBass, MrSandman

    Really, the "average voter" who doesn't know much about the issues...that voter might realize that screwing up our environment sucks, that voter might realize that we need to move away from oil.

    But that voter cares more about the psychological factor of seeing "$4.00" at the gas station.

    You raise some very good points, but honestly, the average voter isn't going to know or care about them. They will care if Obama says "oil production up, trying to keep gas prices down." Sad, but true.

    So really, I don't think this is "tacking hard right." He's just describing what's being the way he needs to, with average voters.

    And yeah, we need to see what he actually says, first...but it reads more like he's going to rehash/overview what we already know. We'll see.

    •  This is true and... (2+ / 0-)
      Recommended by:
      holeworm, Larsstephens

      The Obama folks also need to repeatedly point out a little history:
      When gas prices were well over $4 a gallon under Bush, Republicans were quick to point out that a President has little control over gas prices - world markets, events in the Middle East, etc., effect the price.  
      But now those same people are now falling over themselves blaming Obama.  The Obama team would do well to point out the obvious hypocrisy.

      Personally, I'd like to see more action on efforts to control "speculation".  This is probably the biggest issue.  Just look at the current situation..... there is no problem right now with Iran, but there might be... sometime in the future, maybe, perhaps this might cause a production problem, someday.  So, we all need to pay more at the pump right now.  Cripes.

      When fascism comes to America, it will be wrapped in the flag, carrying a cross. - Sinclair Lewis

      by BelloBass on Wed Feb 22, 2012 at 03:56:33 PM PST

      [ Parent ]

      •  Speculation... (0+ / 0-)

        My thoughts on controlling that are mixed. I don't like the idea of just controlling oil speculation, and I don't think even expanding that out to speculation on all commodities would be a good idea. (Or if it would even work, especially for mostly-imported resources like oil. We can't control speculation on the global markets...)

        Personally I'd like to restrict most forms of speculation, but I don't know enough about the markets to have a proper opinion on what's feasible and what isn't. :)

  •  It didn't work the first second or third (0+ / 0-)

    time they tried it...

    the only question is do they maintain the status quo if elected....

    "But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower." - President Obama, 12-07-2010

    by justmy2 on Wed Feb 22, 2012 at 03:25:56 PM PST

  •  My grandchildren will piss on their graves. (1+ / 0-)
    Recommended by:
    Andrew F Cockburn

    Of every Republican that started this "drill, baby drill" insanity.

    Our oil fields are petering out. So they want to speed up the exhaustion of what little oil we have left.

    Yes, that might press gas prices down in the near future.

    But my grandchildren will piss on Sarah Palin's grave.

    •  we'll all be lucky to *have* grandchildren (1+ / 0-)
      Recommended by:

      The media says 10 billion humans  in 2050, but I think more likely 1 billion than 10. Depletion of oil is a major issue. Even most posters here don't realize how serious the situation is (or they wouldn't be complaining about speculators raising the price).

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Wed Feb 22, 2012 at 04:12:14 PM PST

      [ Parent ]

  •  bzzzt. Wrong. (4+ / 0-)

    He's not trying to win votes, He's defending himself from right-wing baseless attacks.

    Precisely what people were screaming at him to do last year. and the year before.

    Congress makes laws, even laws about where and when corporations and people can drill for oil. The President is the enforcer of the laws. He makes sure that the drillers are following the rules. He took an immense risk when the BP blowout happened by suspending new drilling permits. He can only act in such a manner when there are emergencies. Which he did. Not that he got any credit for it.

    By law, oil companies are allowed to drill for oil. If you don't like it, then elect enough people to Congress to stop the drilling and quit attacking the President for doing his job.

    OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

    by hillbrook green on Wed Feb 22, 2012 at 03:34:21 PM PST

    •  It was the president who opened up vast... (6+ / 0-) areas for offshore drilling, tens of millions of acres worth. He didn't go to Congress for that authority. He already had it. He could have chosen not to open up a single additional acre.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Wed Feb 22, 2012 at 03:48:26 PM PST

      [ Parent ]

      •  at what price? (0+ / 0-)

        remember, no good deed goes unpunished.

        For instance, where is the uproar that should have resulted from resuming permitting in the Gulf after the BP blowout?

        It's just not there. Gas prices are high and the overwhelming majority of Americans are not opposed to offshore drilling...

        UNLESS they can see it from "their" particular shoreline.

        UNLESS the oil spill ruins "their" particular shore for a significant length of time.

        As nice as it would be if everyone agreed with us about the environmental cost of offshore drilling, in fact they do not. Why anger the majority and open yourself up to attacks by your opponents without the support of at least a plurality and better yet, a solid majority??

        OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

        by hillbrook green on Wed Feb 22, 2012 at 05:11:24 PM PST

        [ Parent ]

        •  Because that's what leaders do. They lead... (2+ / 0-)
          Recommended by:
          melfunction, marsanges

          ...even when the polls are against them. They explain and they lead. But my point was contra your implication that the president is somehow compelled to open up new areas to drilling. Not the case.

          Don't tell me what you believe, show me what you do and I will tell you what you believe.

          by Meteor Blades on Wed Feb 22, 2012 at 07:12:48 PM PST

          [ Parent ]

          •  fair enough (0+ / 0-)

            let me just state that I agree that I think there are areas that shouldn't be disturbed and there are places that are too dangerous for extractive processes.

            I trained for a career in mineral exploration and extraction and I never pursued it because I just can't stomach the attitudes and people in that industry.

            However, this is another issue like gun control. We are just never going to win the fight against drilling just like we are never going to be able to enact meaningful gun control. Too many people want oil and too many people want guns.

            I respect you immensely mb, but I must respectfully disagree that every fight can be won. As satisfying as it would be to believe that, I've read way too much history to allow myself to delude myself.

            Obama is a pragmatist. But I've decided, after a couple of years of railing about his policies and non-policies, that he is a hell of a lot better than GBII, Clinton, GBI, Reagan, Carter, Ford Nixon, Johnson and Kennedy - all the other presidents that I have known in my adult life.

            And I want him re-elected.

            And so I am going to work as hard as I can toward that goal. And when people try to portray him as some sneaky right-winger (which is what this particular diarist was trying), I'm going to defend Obama.

            Having said that, I can't argue your point. Yes, he had some discretion. He could have made a decision that we would have thought was better. However, in making the decision he did, he has covered his ass on this particular issue - drill, baby, drill - that the Repubs are trying to exploit to keep him out of office. Hopefully he can focus in on some of the other stuff we like now, but even if he can't he is still my choice for President and I'm going to defend him in any way I can that my conscience will allow.

            It's been a pleasure communicating with you.

            OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

            by hillbrook green on Thu Feb 23, 2012 at 11:04:58 AM PST

            [ Parent ]

  •  Actually if you go by polling (2+ / 0-)
    Recommended by:
    lilsky, rcnewton

    the American public overwhelmingly favors increasing domestic oil production, at least according to the poll Gallup did on this subject last March.  According to the March 2011 Gallup poll, 60 percent of Americans favored increasing offshore drilling for oil and gas.  And remember, that was just a year after the Gulf oil spill.

    So in this case I don't think the President is tacking hard right in some futile attempt to win Republicans over so much as going where the American public already is.  I'm not saying the administration or the American public is right about this subject, but it is what it is.

    Yeah, it would be nice if President Obama decided to say "damn public opinion" but he's a politician in an election year, so what do you expect?  He already stuck his neck out somewhat on rejecting the Keystone XL pipeline, the construction of which Americans overwhelmingly favored, so he's probably looking to not appear too out of sync with what Americans think about the issue of oil/gas at a time when gas prices are rising sharply.

    What I think the President should/could do, which also would be politically popular, would be to go after oil speculators in his speech tomorrow.  And I think a kind word or two about increasing clean energy, and perhaps emphasizing that oil production is not a magic bullet solution to our energy problems.

    "In the long run, Americans will always do the right thing — after exploring all other alternatives." - Winston Churchill

    by puakev on Wed Feb 22, 2012 at 03:45:52 PM PST

  •  I sympathize with your anger, but (0+ / 1-)
    Recommended by:
    Hidden by:

    racists and working families that are slaves to gas prices are a different group and we need the latter's votes.

    Those working families in the middle don't care about ecosystems or global warming very much.

    It's fascinating how Iran and oil are always the last ditch strategy for Republicans to unseat a liberal like Carter or Obama.

    Somehow Iran and the oil industry always seem to help out Republicans when there's someone in the WH that they see as a threat to their monopoly on energy production.

    Funny how that works.

    In any case, I understand Obama catering to ignorant white working families suffering in this economy who need to drive to work.

    I don't like it. But I like losing elections to Republicans far less.

  •  It's blackmail. The oil companies are going to (0+ / 0-)

    keep raising prices until Obama gives them their publicly-funded oil acquisition war in Iran. Once they get their war, and Iran's oil, they will...continue to raise gas prices in the hope that enough voters will blame Obama and vote for somebody else.

  •  Ban Speculation (0+ / 0-)

    and gas would instantly fall below $2 a gallon.

  •  "The Canada tar sands may make a difference" (0+ / 0-)
    As of 2006, output of oil sands production had increased to 1.126 million barrels per day (179,000 m3/d). Oil sands were the source of 62% of Alberta's total oil production and 47% of all oil produced in Canada. The Alberta government believes this level of production could reach 3 Mbbl/d (480,000 m3/d) by 2020 and possibly 5 Mbbl/d (790,000 m3/d) by 2030.[10]

    The planned production of five million barrels per day might be almost enough to fuel all the personal vehicles in the US in 2030 if Obama's CAFE standards are enforced.

    •  250,000 barrels/human (0+ / 0-)
      these oil sand deposits lie under 141,000 square kilometres (54,000 sq mi) of sparsely populated boreal forest and muskeg (peat bogs) and contain about 1.7 trillion barrels (270×10^9 m3) of bitumen in-place, comparable in magnitude to the world's total proven reserves of conventional petroleum.
      That's about 10 barrels/day/human for all 7 billion humans for their lifetime.

      That's about 420 gallons/day/human for all 7 billion humans for their lifetime.

      Each of the seven billion humans on Earth would have to drive a three miles/gallon vehicle non-stop 24 hours a day each and every day their entire life to use up the oil in the Canadian oil sands.

    •  250 barrels/human (0+ / 0-)

      Sorry about the BIG ERROR

      That's 10,500/gallons/human

      In a 20mpg vehicle, the Canadian oil sands oil is enough for 210,000 miles/human.

      In a 40mpg vehicle, Canadian oil sands oil is enough for 420,000 miles/human.

    •  Canadian oil sands ~270 years of US consumption (1+ / 0-)
      Recommended by:

      The US consumes about 17 million barrels/day of oil.

      The 1.7 trillion barrels of Candian oil sands oil would last 100,000 days, or about 270 years.

  •  something changed in the US (3+ / 0-)

    just looking up a few arguments. Source is an American Government Agency.

    "Ban speculation and price would fall below 2 § per gallon"?

    this is the Oklahoma Oil (WTI) spot price:

    one can see that the price becan to climb steadily from about 2000-2002 on. And one can see that this secular rise is punctuated by short term fluctuations, the most obvious one the 2008 megaspike, collapse, and collapse correction. It is tempting to put these fluctuations down to speculation. But by the same argument, one can also see that there is an overall "base level" rise since the early 2000´s - this rise carries on unabated through the 2008 speculation feature. So, speculation is kind of the high frequency noise, piggybacked on a secular rising trend, not unlike the high frequency weather oscillations piggybacked on the secular rise of global temperatures. (Ironic, in a way). So banning speculation doesnt get rid of the price rise. Unless there is some sinister worldwide megaspeculation going on (commonly known as CT) that is now already in its tenth or twelfth year. Maybe we can put speculation aside.

    But maybe there´s speculation iwth the actual US retail price irrespective of global crude price?
    We can check that:


    So that seems not to be the case, the actual retail price does generally follow the international crude price, although there are here and there not insignificant - but very short term - deviations such as in 2005-2007. These might be a little bit US-domestic speculation but just as well genuine US-domestic market circumstances (such as refinery circumstances). I think overall, one can not say that speculation is responsible for the high prices in general, even though it very probably plays a role in the little wiggles.

    So what is that now since 2000s? How does this now relate to US domestic drilling & production if at all? One can look at the US imports:


    Aha apparently the US imports have pretty much no relation to the price .. until somewhere in 2007. It is very hard in the import statistics to even find back traces of the 2001 recessions or even the 2008 event, though that may be there. Apparently all the short term price fluctuations dont matter that much because whats needed to be consumed gets consumed irregardless of what must be paid for it?

    But then what happened in 2007? Maybe US internal drilling kicked in there so that imports could get less and that might be beneficial somehow? We can check. This is the actual consumption :


    Now there at least the 2008 kick in the stomach to the consumer shows up pretty well. But whats also clear is that there has been a steady rise, quite independent of price, until somewhere in 2007, since when the consumption is in decline, also quite irrespective of short term "speculatory" price movement.

    There are two notable things about this 2007 break in US consumption behaviour:

    - it does predate the 2008 speculation price spike, so was not caused by it

    - it does predate the September 2008 Lehman crisis, so is not due to the shock in the financial world being handed through to the "main street§ consumers;

    rather it coincides with the at the time unanimously unnoticed actual beginning of the recession in 2007 which eventually caused the financial shocks and subesequent troubles.

    So, from these graphs, I would argue that there is a secular worldwide rise in oil product price, which is pretty independent of speculation, and that in 2007, it reached the point where consumers in the US (and worldwide by the way) couldnt take it anymore, and since then it´s downhill.

    but thats just me speculating. But I think this here pretty much conclusively shows that current high prices cant be put down to speculation, and that any Administration remarks about increased American domestic drilling likewise have little to do with whats actually going on. Which they, assuming they´re competent, must be aware of.

    OK .. this was my first attempt to use embedded figures in a post so if it comes out wrong please forgive me.

  •  Iran sanctions should drive price up (0+ / 0-)

    basically we've made oil from one of the world's major exporter off-limits to a lot of the world.

    so price of what remains goes up.

    this should not be a surprise.

    It's unfortunate the admin does not use these "teaching moments" to advance a different narrative, one based in reality, that petroleum will never be cheap for long periods again.

    An ambulance can only go so fast - Neil Young

    by mightymouse on Wed Feb 22, 2012 at 06:21:33 PM PST

  •  If you point out the facts, that's not (1+ / 0-)
    Recommended by:

    "going hard right".  He's not making policy announcements, he's just stating the facts.

    Then the obvious conclusion is that speculators and the oil companies are manipulating the price for political purposes.

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Wed Feb 22, 2012 at 09:54:56 PM PST

  •  You're being mean to the President. Bad spoon! n/t (0+ / 0-)

    "Those who can make you believe absurdities can make you commit atrocities." - Voltaire

    by Greyhound on Thu Feb 23, 2012 at 12:14:58 AM PST

  •  The US is now the largest exporter of (0+ / 0-)

    gasoline in the world. Its more profitable to sell it to latin America.

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