There is No Gas Shortage, Part 2
April 23, 2008
Columnist Ed Wallace argues that nothing in the real world justifies oil’s current pricing—except the push for higher profits
by Ed Wallace
“Gasoline inventories are higher than the historical average at this time of the year, and gasoline fundamentals are actually weakening in the U.S., so there is really no need to worry about supply being too tight.” — Purvin & Gertz Oil Analyst Victor Shum; Associated Press, Mar. 10, 2008.
“The current high oil prices are inflated by as much as 100%. The price surge is a result of excessive speculation.” — Oppenheimer Oil Analyst Fadel Gheit; Congressional Testimony as reported by CNN, Dec. 11, 2007.
“The [oil] fundamentals are no problem. They are the same as they were when oil was selling for $60 a barrel, which is in itself quite a unique phenomenon.” — Jeroen van der Veer, chief executive officer, Royal Dutch Shell; Washington Post, Apr. 11, 2008.
On Tuesday, Apr. 1, my column discussing the impact speculators are having on the price of oil (BusinessWeek.com, 4/1/08) was published on BusinessWeek.com. Since then, we’ve watched oil contract prices continue to rise, now setting an all-time historical record even when factored against inflation. In spite of the controversy my article stirred up—it generated more than 800 comments, more than 430,000 page views, and was dug at Digg.com almost 4,000 times—there was very little new or original in it; I simply compiled numerous articles and quotes from other sources to validate the claim that things aren’t always what they seem—in the oil patch or at the gas pump.
More amusing was the fact that, the day after that column ran, the weekly oil report came out from the Energy Information Administration, which showed that we had put another 7.4 million barrels of oil into our reserves. And to validate my point in that column—that there is no connection between price, demand, and the supply of oil and gas—oil prices leaped almost $4 a barrel on that day. And the news kept right on coming.
The new oil reality: Prices will always go up
On Apr. 7, Reuters Online Service reported that oil had gone up another $3 a barrel, but near the end of that article came this line: “Ships along the northern end of the Houston Ship Channel, which feeds eight refineries in Houston and Texas City, were stopped by dense fog on Monday.” As could have been predicted, when the second week’s oil report came out from the EIA two days later, crude stocks had fallen by 3.2 million barrels. The result of Gulf Coast fog holding up oil deliveries was that on the release of the second oil report, oil prices again rose by $2.37.
This is the new oil paradigm. No matter what happens, it is used to justify the commodities market’s contention that oil prices just aren’t high enough: In one week we add 7.4 million barrels of oil to stock in reserve and yet the price goes up almost $4 a barrel. Then the very next week our reserves fall because of fog, and the price goes up another $2.37. But the only people who still claim to be stunned by what’s happening in oil are the analysts quoted by the media that cover the industry.
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Complete article at:
http://tinyurl.com/48sz2k (www.businessweek.com)
Ed Wallace holds a Gerald R. Loeb Award for business journalism, bestowed by the Anderson School of Business at UCLA. His column heads the Sunday Drive section of the Fort Worth Star-Telegram, and he is a member of the American Historical Society. The automotive expert for KDFW Fox 4 in Dallas, Wallace hosts the top-rated talk show Wheels, Saturdays from 8 a.m. to 1 p.m. on 570 KLIF AM in Dallas.
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Oil’s tipping point: Where is it? – With crude approaching $120, experts look for hints of decline
April 22, 2008
By KRISTEN HAYS
With oil less than a buck away from $120 a barrel, analysts are growing weary at trying to anticipate the tipping point that will bring prices down.
Some say a six-score price could prompt developed countries to pressure the Organization of the Petroleum Exporting Countries to increase production whether or not the cartel sees a need to do so.
Others say it’s folly to predict a tipping point until the weak dollar stabilizes and strengthens.
Either way, analysts say, it’s reaching the point where something’s got to give.
“I’m hopeful that we are in the grand finale of this 2008 event,” said Tom Kloza, chief oil analyst at the Oil Price Information Service in Wall, N.J.
The side effect of high crude prices most visible to consumers, the price at the gasoline pump, also is setting records — and for the first time this week it surpassed its all-time inflation-adjusted high.
Oil crossed that threshold several months ago. The federal government says the average U.S. price per gallon of gasoline hit $3.508 on Monday, nearly a dime higher than the March 1981 high of $3.41 in today’s dollars ($1.42 before adjustment for inflation.)
That continued push also prompted analysts to speculate that oil’s run-up is reaching its last rally.
Kloza said attempting to identify the tipping point is “pretty much an exercise in abstract thought.”
…
Complete article at:
http://www.chron.com/disp/story.mpl/business/5722692.html
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JUST HOW SECURE IS YOUR EMPLOYER-BASED HEALTH INSURANCE?
By Maggie Mahar, Health Beat
Many workers believe that if they keep their job, their insurance is safe. That may have been true in the ’90s, but not now, not even for top execs.
http://www.alternet.org/healthwellness/83224/
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Comparing Alternative U.S. Counterterrorism Strategies: Can Assumption-Based Planning Help Elevate the Debate?
Rand Report – Comparing Alternative U.S. Counterterrorism Strategies Can Assumption-Based Planning Help Elevate the Debate? By: Robert J. Lempert, Horacio R. Trujillo, David Aaron, James A. Dewar, Sandra H. Berry, Steven W. Popper.
“The United States faces the challenge of countering the terrorism threat. Frequently, both expert decision makers and lay citizens have trouble assessing alternative strategies to address such issues because of the emotions they engender and of the deep uncertainty involved. RAND has a long history of developing and employing methods for addressing such questions and distilling complex policy problems into their essential trade-offs. One such approach, assumption-based planning (ABP), focuses on identifying and addressing the key assumptions and thus the key vulnerabilities underlying an organization’s plans. ABP not only offers a qualitative approach widely useful in its own right but has also provided the foundation for a family of new quantitative methods that aim to improve strategic decision making under the conditions of deep uncertainty that are characteristic of the terrorism threat. Can ABP help contentious groups more systematically debate alternative U.S. counterterrorism strategies? This briefing reports on two sets of workshops that attempted to do just that.”
http://rand.org/pubs/documented_briefings/2008/RAND_DB548.pdf
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AFGHANISTAN: NEW APPROACHES NEEDED TO DEFEAT INSURGENCY – EXPERTS
Richard Weitz
Recent gains made by American troops in Afghanistan could easily be squandered, unless the international community redoubles its commitment to the strife-torn country’s political and economic reconstruction process. To promote success, two prominent security experts argue, counter-insurgency efforts in both Afghanistan and Pakistan should be closely coordinated.
http://www.eurasianet.org/departments/insight/articles/eav041708b.shtml
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Stephanopoulos left unchallenged McCain’s assertion that “every time you have cut capital gains taxes, revenues have increased”
This Week’s George Stephanopoulos did not challenge Sen. John McCain’s assertion that “history shows every time you have cut capital gains taxes, revenues have increased — going back to Jack Kennedy.” Stephanopoulos did not note that, notwithstanding a potential short-term revenue increase, many economists have challenged the claim that revenue goes up over the long term as a result of capital gains tax rates being cut.
Read More
http://mediamatters.org/items/200804220005?lid=252558&rid=7176628
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Why Are Global Food Prices Soaring? Energy costs, investment in … and more
Slate – USA
In 2006, 14 percent of the total corn crop in the United States was converted into ethanol; by 2010, that figure will rise to 30 percent.
…
http://www.slate.com/id/2187882/
Time for Second Thoughts on the Ethanol Mandate
Heritage.org – Washington,DC,USA
by Ben Lieberman
America’s energy policy has been on an ethanol binge, and now the hangover has begun. The federal renewable fuels mandate is an unfolding …
http://www.heritage.org/Research/EnergyandEnvironment/wm1879.cfm
U of M: Worldwide leader in ethanol debunking
Minneapolis City Pages – Minneapolis,MN,USA
Several studies at the University of Minnesota are cited to show the impact of widespread Ethanol demand. A study by University of Minnesota ecologist David …
http://blogs.citypages.com/blotter/2008/04/u_of_m_worldwid.php
End the Ethanol Scam
Liberty Maven – Reston,VA,USA
The latest from DownsizeDC.org urges us to tell congress to stop wasting our tax dollars on the devastating scam of ethanol production. …
http://www.libertymaven.com/2008/04/07/end-the-ethanol-scam/1016/
Ethanol, Oil and Corn
By Richard K. Perrin
When will ethanol plants stop being built? Ethanol plants under construction in Nebraska will have the capacity to grind over 40 percent of the Nebraska corn crop by the end of 2007, and nearly 60 percent by the end of 2008. …
http://digitalcommons.unl.edu/agecon_cornhusker/304
Ethanol’s lie
Tribune Review – Pittsburgh,PA,USA
From Time magazine to the Internet blogosphere, critical analysis is revealing ethanol not only as a useless fuel alternative but also as an environmental …
http://tinyurl.com/4re9nj (www.pittsburghlive.com)
Guest letter: It turns out ethanol is more of a problem than a …
Minneapolis Star Tribune – Minneapolis,MN,USA
Since 1986, Minnesota lawmakers have actively encouraged the development of a sizable state ethanol industry. We now have 17 operating ethanol plants in the …
http://www.startribune.com/local/west/17593319.html
Ethanol subsidies a double-whammy
DAVID A. RIDENOUR:
Belleville News Democrat – IL, USA
Move over “Bridge to Nowhere,” there’s a new poster child of congressional waste and avarice – ethanol, the “Fuel to Nowhere.” Ethanol leads only to higher …
http://www.bnd.com/285/story/313547.html
End the ethanol folly for food’s sake
By SHNS
To paraphrase the late, great William F. Buckley, Jr., someone must stand athwart the federal ethanol program yelling, “Stop!” The emergency brake should be pulled – NOW – before ethanol wreaks further havoc. read more.
http://www.scrippsnews.com/node/32438
Ethanol Harms Fiberglass Fuel Tanks in Boats
18 Apr 2008
The Los Angeles Times reports that Lawrence Turner sued gasoline producers and distributors for selling ethanol-blended gas at boating marinas without notifying customers that ethanol breaks down fiberglass fuel tanks. In order to repair a boat with this damage, a mechanic must cut through the hull of the tank and remove it piece by piece. New aluminum tanks are installed in place of the fiberglass.
http://tinyurl.com/4gfbpp (www.biodieselinvesting.com)
Letter: The Error of Ethanol
http://tinyurl.com/6apdj7 (www.nytimes.com)b22ethanol.html?sq=Berkeley&st=nyt&scp=5&pagewanted=print
April 22, 2008
To the Editor:
Re “Fuel Choices, Food Crises and Finger-Pointing” (front page, April 15):
Regarding the issue of food or fuel, the issue may not be one or the other per se, but rather the enormous subsidies for corn ethanol in the United States and similar, more modest ones in Europe.
By most reckonings, a barrel of gasoline displaced by corn ethanol costs the United States Treasury somewhere between $36 and $65 with almost no reduction in harmful greenhouse gases. This pushes production of ethanol way beyond what makes economic sense, adding more pressure on food prices and the cost of land for planting other foodstuffs.
Driving less, driving a smaller car or switching to the bus reduce oil needs and greenhouse gas emissions by a far greater amount than ethanol alone could do.
And then more of the world will have more food choices at affordable prices, while energy and oil demand will go down.
LEE SCHIPPER
Berkeley, Calif., April 15, 2008
THE WRITER IS A VISITING SCHOLAR AT THE UNIVERSITY OF CALIFORNIA TRANSPORTATION
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Iraq Oil Report – ‘Iraq Gov’t Spokesman: Deal reached on oil law, Kurd contracts, Peshmerga funding, U.N.’s Kirkuk effort’ … and more
Iraq’s central and Kurdish region governments have reached a deal on an oil law, including a method for weighing the validity of the oil deals the Kurds have signed with foreign firms, the top government spokesman told United Press International.
Ali al-Dabbagh said an agreement has also been made on the classification and funding for the [...]
You may view the latest post at
http://tinyurl.com/4mr5br (iraqoilreport.com)
Iraq Oil Report – ‘Turkey upset about Iraq oil snub…’
The fact that Turkey’s national oil company was not among 35 companies approved over the weekend by Iraq’s Oil Ministry to bid for soon-to-be announced tenders to develop oil and gas fields led to disappointment is Ankara, particularly at a time when Turkey planned to strengthen relations with its neighbor through further energy cooperation, Today’s [...]
You may view the latest post at
http://tinyurl.com/4auwpr (iraqoilreport.com)
Iraq Oil Report has posted a new item, ‘Kurdish region PM Barzani says “progress” on Iraq oil law…’
*But Iraq Oil Ministry says not so fast
*All Saddam-era oil deals canceled, to be up for bid
*Iraq to sign two-year deals with Big Oil in June
*Scattered Dreams: Iraq’s Refugees
*$1.5 M for Sadr City
*Iraq Press Roundup
Iraq’s Kurdish region leader said talks in Baghdad on key controversial issues, including the oil law, showed “positive … cooperation and [...]
(iraqoilreport.com)
You may view the latest post at
http://tinyurl.com/3sdtcb (iraqoilreport.com)
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Borowitz Report – Pennsylvania Victory Shocker
McCain Celebrates Huge Pennsylvania Win
‘Happiest Night of My Life,’ Says Mac
Presumptive G.O.P. nominee John McCain appeared at a mammoth rally in Philadelphia last night to celebrate the results of the Pennsylvania primary, calling the contest “a huge victory for me and my campaign.”
A jubilant Sen. McCain said that as the results poured in, “It became abundantly clear that the people of Pennsylvania want to send the Republicans back to the White House for another four years.”
Overjoyed McCain supporters packed the ballroom at the Philadelphia Hyatt to help their candidate celebrate what he called “the happiest night of my life.”
“My friends, tonight the people of Pennsylvania have delivered the White House to me on a silver platter,” he said, his eyes glistening. “This is the best thing to happen to me since I married a beer heiress.”
At a campaign rally of her own, Sen. Hillary Clinton also savored the results of the primary, declaring that she was “one step closer to getting my hands on a nuclear bomb.”
Turning towards her husband, former President Bill Clinton, she said, “I hope that my having a nuclear arsenal at my command will make you think twice before you do anything foolish this time.”
Blood visibly draining from the former president’s face, Sen. Clinton glared at him sternly, adding, “I’m not kidding.”
In an effort to clarify Sen. Clinton’s remarks, aides later denied that she had threatened her husband with obliteration.
Elsewhere, Sen. Barack Obama agreed to a televised debate on CBS moderated by Katie Couric, saying, “If I make a gaffe, at least no one will be watching.”
Andy’s Only West Coast Appearance – April 24
Andy makes his only scheduled West Coast appearance Thursday, April 24 at University of California, Santa Barbara. 8 PM at Campbell Hall. Tickets available at https://artsandlectures.sa.ucsb.eduAndy with Calvin Trillin, Susie Essman and Jonathan Alter – May 13
Andy hosts “Countdown to ’08″ on Tuesday, May 13 at 8 PM at the 92nd St. Y with his special guests Calvin Trillin (bestselling author, The New Yorker), Susie Essman (HBO’s Curb Your Enthusiasm) and Jonathan Alter (Newsweek, MSNBC). The Y is located at 92nd St. and Lexington Avenue. For tickets, go to www.92y.org.Andy at Mark Twain’s House – May 28
Spend “An Evening With Andy Borowitz” at the Mark Twain House and Museum in Hartford, Connecticut on Wednesday, May 28. Event begins at 6 PM. For tickets and information call Janet Youmans at 860-280-3113 or email Janet.youmans@marktwainhouse.org
http://www.borowitzreport.com/
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three thousand words
Steve Sack: I think I’ll dispense with my look-into-his-soul thingy
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Joel Pett: we don’t know anything
http://editorialcartoonists.com/cartoons/PettJ/2008/PettJ20080423_low.jpg
Mike Keefe: Flag Lapel Pin
