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Nozzle Rage
July 30, 2008 1:00pm by Barry Ritholtz
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Ever notice how it’s always the SUV drivers that have American flag stickers on the backs of their cars? I’ve always found this ironic, that Saudi flags would be more appropriate. I even entertained vigilante daydreams of printing up some Saudi flag stickers to slap on top of the US flags the SUV crowd loves so much.
Everyone wants freedom from OPEC.
But the question remains:
To drill, or not to drill.
fiting given the sector rotation going on today
If crude oil rallies during September and October, that could have an influence in a few close races in the House and Senate (i.e., the anti-drillers versus the pro-drillers).
I say, go ahead and allow the oil companies to drill in currently restricted offshore areas. They WON’T drill. They will wait for a President McCain to push for more oil subsidies – paid by the middle class and the poor – because we Americans have tapped out our easy oil on this continent, and future exploration here will be EXPENSIVE. (Has anybody paid attention to how much future Brazilian drilling in their supposedly huge 30 billion barrel oil find will use ultra-expensive, largely untested technology? Does anybody realize that 30 billion barrels of oil represents less than 11 months of global oil consumption?) Anybody who thinks we can gain energy independence from OPEC by drilling here has been watching too much Kudlow & Company and not spending enough time researching the history of oil, geology, oil services technology, and the fundamentals of energy (don’t even dare dispute me if you don’t know the difference between primary energy and energy vectors, you puds) and our energy options.
Additionally, to blame the Arabs for our problems is to target an easy scapegoat. I agree with mappo, stick on the Saudi flags on those SUVs.
Fellow Americans, please wake up and approach our problems honestly and with thought, knowledge, and intelligence. Or just vote for Barack Obama and 60 Democratic Senators and let them figure things out. Thanks.
from above >>>
“Ever notice how it’s always the SUV drivers that have American flag stickers on the backs of their cars?”
they also have Support the Troop ribbons next to the flag.
they calculate their mileage in how many troops died per gallon.
Might want to add a button for 1) Fed 2) Wall Street 3) Goldman 4) Morgan Stanley 5) Speculators too — those nozzles will be very sharp and the fuel will be super-charged!
Why does everyone complain about the Arabic countries? Don’t Exxon, Mobil, etc. all pump oil out of the ground too? If Saudia Arabia is funding terrorist operations, then shouldn’t they be sanctioned and their oil illegal to import? It’s really a huge hipocracy.
It’s like a junkie complaining about their drug dealer who buys guns and abuses women.
The finger should be pointed at US.
In other words, we’ve made our bed and now we have to sleep in it. Sweet dreams!
Yo Mappo:
I hope those apropos hose dispensers find you out there filling your small death trap ethanol ridden Gremlin and give you their version of the 79 virgins treatment!
I love this very succinct, poignant, and metaphorical commercial of our times.
BR, thanks for sharing! Keep up the good market takes and your laser-like insightfull blogging.
Dr. Cojones
Well, it appears to me that much of the oil crisis could come to an early end….
IF….Toyota, Nissan, even GM truly come up with an affordable plug in electric that will get 80 miles on a recharge, then if they are available, say by 2010…alternative methods of providing electric power… nuclear, coal, nat gas, wind, cow pattie generated methane, you name it…could make a very different future in a very short time…
Bruce in Tennessee
CNBC Sucks @ 2:12:54 PM
It’s not an “either/or” proposition. We can give the oil companies access to restricted areas, and AT THE SAME TIME pursue other options. I would be fine with putting energy policy in the hands of Obama/Reid/Pilosi, PROVIDED that they let the oil companies drill.
Why not put a little Bush Stetson on at least one of them, and dropping dollar flag on the SUV?
BR – here’s a great article from Cumberland Advisors…
How safe is your bank?
http://www.cumber.com/commentary.aspx?file=072508.asp&n=l_mc
The only thing you can be sure of is that both parties will make the wrong choices until it’s too late. Then they’ll do something smart that won’t matter.
This is how it works. Thinking Obama is going to solve anything at all — energy or otherwise — is asking for intense disillusionment. The guy’s just a politician, and he’s more style than substance. Always has been. But as ineffectual as he would be, he will sound great as long as he has a teleprompter and his speechwriters.
McCain won’t be any better, probably, but such are the choices we get in America. There really should be a lever in the voting booth for None of the Above. I bet NOTA would win a lot of elections.
I wasn’t being facetious when I said “let them drill”. On my own blog, I have written that we will probably need to drill even at ANWR at some point anyway. We will need oil whether we use it for ground transportation fuel or not. What I don’t want is for the Republicans to hoodwink the public into thinking we have tons of oil off our own shores and that it’s a cheap silver bullet. More than anything, I KNOW that the Republicans want taxpayers to pay for much of the exploration and development, because the required investment will be huge, even beyond what the profit-rich oil companies can afford on their own. People don’t seem to get that oil companies are getting nationalized because oil is just that investment intensive. I just don’t want America to go bankrupt – with the poor subsidizing the rich – looking for oil that is either not there or will be extremely expensive, just because they take what the Republicans say at face value (just like all the things that BR covers: inflation, asset prices, etc.).
Don’t believe the cynical obfuscation about the two “similarly bad candidates”, people. In one thread, Obama is too inexperienced (http://bigpicture.typepad.com/comments/2008/07/wsj-nbc-poll-su.html#comments). Now, he is just another politician. Let’s just settle this once and for all and agree Obama is too black. Do your homework, register, and vote. If you don’t want to vote for either candidate, vote for Bob Barr.
CNBC Sucks @ 3:30:09 PM
Maybe you’re right about the taxpayers paying for E&P. But don’t we send 700 billion dollars per year to the oil exporting countries? And if we develop wind farms, subsidies will be required for the turbines, and for the transmission lines (not that I’m necessarily opposed to that). But in any case, payments by the taxpayers have to be put in the context of the alternatives.
someone should do a comparison between the witch-hunt in the time of the pioneers, and today’s witch-hunt for the cause of energy prices…it’s easy to say american’s look for easy answers to their problems, but in reality, it’s human nature…just as god was invented as a way for humans to cope with their finite existence, so too we see americans looking everywhere except in the mirror for the cause of their problems…
pointing fingers solves nothing..
Actually this is a fairly typical bit of narcissism up there with Freedom Fries. Why is it that most dedicated advocates of free market principles get mad with the Arabs or Chavez for getting as much for their oil as they can. These numbers are much quoted but at the risk of boring people the US has about 4.5% of the world’s population and consumes about 25% of it’s oil which is ultimately a finite resource. In a world where countries like China (1.5billion people) and India(1 billion) and Brazil (300 million?) are rapidly industrializing, creating their own middle classes, etc. it must be obvious to even the most narcissistic that this state of affairs can’t continue. Basically the US has to adjust it’s oil consumption to the size of it demographic and industrial footprint. The substitute energy sources are available like wind and nuclear power, and we have to drastically curtail consumption which means more Priuses and less Suburbans, and the development of fully integrated mass transit systems. None of this is rocket science, it’s all known technology. The problem is the American people. They are completely self absorbed and in thrall to a lot of simplistic myths and shibboleths of a largely exceptionalist/nationalist/individualist/
unfettered free enterprise flavor. Since these are the the common linguistics of a polarized political system geared to stasis, don’t hold your breath. Only when disaster strikes will something happen. It’s the American way.
John @ 4:24:45 PM
“…the U.S. has about 4.5% of the world’s population and consumes about 25% of its oil…”
What matters is the relative size of the GDP, not the population. That said, I do favor higher taxes on energy (if and only if accompanied by lower taxes on income).
We can give the oil companies access to restricted areas, and AT THE SAME TIME pursue other options.
We can give our crack addict friend an eight ball of crack and a place to smoke it AND AT THE SAME TIME give them a pamphlet which lists area Narcotics Anonymous meetings.
Works like a charm, it does.
Thanks, DL, for putting the ball on the tee so I can nail this f-er with the 1 wood.
When we send $700 billion per year to the oil exporting countries, we can expect with just about 99.999999999999 percent confidence that we will get back 5.83 billion barrels of oil (at $120 per barrel). For now, we KNOW the Arabs, Venezuelans, Nigerians have oil.
Just for illustration (I don’t want to get into scale up economics, limitations on wind resources, and marginal returns, but you will find my rough math not too far off from the Pickens Plan), if we extrapolate Boone Pickens’ $10 billion investment in wind power to produce 12,000 GWh per year of electricity, we could with a ONE-TIME wind power investment of $700 billion perhaps generate 840,000 GWh per year of electricity, which is 20.5% of present US electricity generation at 4.1 million GWh per year. We KNOW with good confidence that we have wind to turn the turbines (unless climate change screws up our wind and solar resources).
Now, for the JOHN McCAIN / REPUBLICAN PLAN. Our PROVEN domestic oil reserves are 21 billion barrels, or less than 3 years of US consumption. That is after EIGHT, NINE, TEN DECADES of drilling over 2 million oil wells all over the United States. Remember that global oil discovery peaked in the 1960s and US global oil PRODUCTION in the US peaked in the 1970s. We didn’t start buying foreign oil on a whim or because we liked Arabs…we were running out of domestic oil that we can extract economically. Also remember that the oil companies did not stop drilling in US territories after we started importing oil (they won’t drill as much as we would like now in 68 million acres of non-restricted areas because it’s too expensive to fund the drilling on their own). The chances of discovering even 2 – 3 years worth (20 billion barrels) of US oil consumption might be as low as 10%, something the oil industry calls P10. (The HUGE HOOPLA in Brazil was for 30, count ’em, 30 billion barrels, STILL UNCONFIRMED.) Meanwhile, the IEA’s estimated required investment for global exploration and development is $5.4 trillion for oil we need through 2030; let’s use your number and say $700 billion of that bogey is ours although I say we Americans will be asked to pay for MOST of the $5.4 trillion since we need it the most (and we are always ready to subsidize GLOBAL oil consumption with our military anyway). So, your $700 billion in domestic drilling might have as low as a 10% shot of providing us 2 – 3 years worth of oil. (And you still have to pay at the pump for that gas.) In other words, I expect the Republicans to ask taxpayers to subsidize as much as your $700 billion and probably more for a sustained oil exploration and development program and we DON’T KNOW if all that will result in even a single drop of oil.
The Republicans expect to win your vote because you are uninformed, can’t do the math to make proper comparisons, or have too little technical knowledge. But at least, when Larry Kudlow says we have 2 trillion barrels of oil in the US and calls the US “the Saudi Arabia of oil”, you should have enough sense / common sense / innate instinct to run, hide, and vote for Barack Obama and STRAIGHT Democratic tickets the next 20 years.
Bruce In Tennessee,
“IF…….Toyota, Nissan, even GM truly come up with an affordable plug in electric that will get 80 miles on a recharge…”
Sadly, it’s not a matter of “if” GM can produce it…they DID! And then, at the behest of Big Oil and our own Federal Government, they took them back…and destroyed them!!
http://www.sonyclassics.com/whokilledtheelectriccar/
http://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F
That 4th sentence in the 4th paragraph should read: “Remember that global oil discovery peaked in the 1960s and US oil PRODUCTION peaked in the 1970s.” It’s a pain trying to fight energy misinformation by blogging and commenting on blogs, so you won’t hear as much from me moving forward. Honestly, I pray that this country will make the right decision in November (I mean, VOTE DEMOCRATIC) or there will be a huge energy security risk here in the next 8 years. Think about millions of hungry Americans with guns.
I think that’s the first time I’ve really laughed out loud at something on TBP.
IMO the salient note to take is the sound of the bicycle bell ringing at the end. Tell those Saudis to get on their bike by getting on yours.
Can someone explain to me how drilling in ANWR is going to bring down the price of gas when it was reported today that companies are cutting production because the price of gas has fallen too far?
Even though I won and operate a transport/construction business, I welcome the increase in pricing of oil/diesel. If you think drilling here and now is going to bring down prices to $2.00 per gal think again. It’s the new reality $5.00+- is the new norm. Let’s get busy conserving and being more efficient. And buildings as much as vehicles need to be addressed. Quit yer bitchn and get busy innovating.
Posted by: neljmar | Jul 30, 2008 9:32:37 PM
—
Well said. Thank you. I remember in 1991 when compact fluorescent light bulbs were almost impossible to find and cost $12 apiece. Now they are ubiquitous and priced competitively with energy hog incandescents. Pollution is wasted energy, raw materials, and intellectual laziness. Would you invest in that?
Every time I hear one of these guys saying we need get drilling in “restricted areas, I wonder if these are the same people who tapped their HELOCs for every cent they could get and then maxed out their credit cards. SAVING IS FOR SUCKERS!
BTW, do you really think the oil companies are so weak that they couldn’t get these areas released if there was that much oil to be had?
Is it really that hard to recognize a political device?
What is all this yapping about how electric cars are going to solve the energy crisis?
This isn’t over until we get electric TANKS, electric planes, electric APCs, electric trucks, etc.
Patrick,
I have already pretty much said my goodbyes to this blog, but your post merited a final response. The whole point is that we do need oil for tanks, planes, APCs, trucks, and MOST IMPORTANTLY, agriculture. We will probably ALWAYS need some form of hydrocarbon material for the basic functions of human life. That is precisely the reason why we need to shift people’s transportation (cars) as much away from gasoline as we can. We need to conserve as much of the precious remaining oil as we can that allows us to EAT rather than squander it burning it as cheap fuel (and it remains VERY, VERY cheap, folks) in our SUVs. Our government made a brilliant policy move getting as much oil as possible off the table for electricty generation in the late 1970s. We need to do the same now with cars.
Do some of you people just not GET IT? If you want to manage against the risk of food riots and disorder in America sometime in your future, you will NOT vote for John McCain.