Moving Toward Energy Independence

One America News posted an article today about the impact of developing America’s oil resources.

The article reports:

The Energy Information administration reports U.S. oil production reached almost 9.9 million barrels per day this month.

So what is the impact of this? America i s exporting more than 1.7 million barrels per day of oil. Hopefully this will end some of our cozy relationships with tyrants who rule oil-producing countries in other parts of the world.

The article further reports:

Energy experts say the U.S. is on track to surpass Saudi Arabia in oil output this year, and rival Russia as the world’s energy giant.

The article also notes that the increase in our oil exports give America an advantage in both international trade and diplomacy. There is a concern that the increased exports will cause fuel costs in America to rise, but the Trump administration believes that the deregulation of prices will prevent that from happening.

Energy independence is a good thing. Being able to export oil you don’t need is an even better thing!

 

What American Energy Independence Means

Yesterday Investor’s Business Daily posted an editorial about the current price of oil. Any person familiar with basic economic theory understands the law of supply and demand. When there is a  lot of something, the price goes down. When something is scarce, the price goes up. Some of our recent political leaders missed this point, but we are now seeing the principle of supply and demand at work in the oil industry.

The editorial reports:

Energy: Last week Royal Dutch Shell (RDSA) told investors that it expects oil prices to be “lower forever.” We’re still waiting for all those people who were only recently complaining about higher-forever oil prices to admit their mistake.

It wasn’t that long ago that President Obama was mocking Republicans for their “three-point plan for $2 gas: Step one is drill, step two is drill, and step three is keeping drilling.”

He went on to say that “the American people aren’t stupid. They know that’s not a plan.”

Renewable energy, he said, was the only way to solve the “problem” of high oil prices.

Of course renewable energy came with numerous government subsidies and taxes on ‘old energy.’

The editorial explains the results of ‘drill, baby, drill’:

Domestic oil production was skyrocketing even as Obama made those remarks — thanks to advanced drilling technologies that have opened up vast new domestic supplies to production.

The Energy Information Administration projects that, next year, U.S. oil production will average almost 10 billion barrels a day, which would beat the previous record of 9.6 billion in 1970. What’s more, a quarter of this production is coming from one oil field: the Permian Basin in West Texas.

Those “obscene” industry profits? They’ve fallen as well. ExxonMobil’s (XOM) revenue in 2016 was about half what it was in 2011. In its most recent quarter, the company earned $3.4 billion — or 78 cents share. In the same quarter in 2011 it earned $10.7 billion, or $2.18 a share.

Oil companies for a time even had to borrow money to pay dividends.

Low oil prices have also led to a sharp drop in the taxes paid by the industry to the federal government. In 2016, the federal government collected about $6 billion in royalties, rental costs, and other fees from oil production on federal lands. That’s down from $14 billion in 2013.

Now Shell is saying that it’s bracing for low oil prices forever.

Lower energy prices have a positive impact on the American economy–consumers have extra money to spend, it is cheaper to manufacture goods here, and tourist-related industries thrive when Americans can travel and not worry about the cost of fuel.

The article concludes:

Even if the current oil glut causes some pain to the oil industry and crimps tax revenues, it is good news for the economy, since lower energy prices reduce the cost of doing business across the board, and make the U.S. a more-attractive place to do business on a global scale.

But it does raise some important questions: Where are those people who were screaming about Big Oil? Why aren’t they being asked to explain how they could have been so wrong? And just who, exactly, was being stupid?

Economic principles work–every time they are allowed to.

The Impact Of American Oil On The World Market

Breitbart.com reported yesterday that according to a draft of its long-term strategy report, The Organization of the Petroleum Exporting Countries (OPEC) has admitted that their war on shale oil production in America has failed.

The article reports:

The current international price standard, called “Brent crude” has dropped from about $115 a barrel in June 2014 to $62 today. That is a direct result of the American shale-fracking boom adding 4.5 million barrels of oil per day to the U.S. market in the last 6 years. The U.S. standard, called “West Texas Intermediate” (WTI), sells at $57 a barrel, almost a 10 percent discount.

With revenues plummeting, most OPEC members are in a financial crisis and are forced to increase production from last year and flood the world market to financially survive.

There are a few interesting things in this article. First of all, developing America’s oil resources and decreasing America’s dependence on foreign oil will have a serious impact on American foreign policy. It should eventually allow America to support freedom and human rights in places where these are not currently practiced.

Second of all, there is an economic benefit to developing oil resources in America–not only does it bring down the cost of gasoline internationally, if the exporting of these products is allowed, it will strengthen the American economy.

Thirdly, it is interesting that OPEC did everything it could to discourage American oil production. The admission of that fact should give pause to those people who blindly signed on to the anti-fracking movement without checking their facts.

America is capable of leading the world economically. We are a country rich in resources and rich in talent. What we have lost in recent years is our morality and our work ethic. We need to regain both of those in order to achieve economic success.

When The Government Interferes With The Free Market, Bad Things Happen

Fox News is reporting today that the Ivanpah solar plant is applying for a federal grant to pay off its federal loan. Can I get another credit card to pay off my credit card?

The article reports:

The Ivanpah solar electric generating plant is owned by Google and renewable energy giant NRG, which are responsible for paying off their federal loan. If approved by the U.S. Treasury, the two corporations will not use their own money, but taxpayer cash to pay off 30 percent of the cost of their plant, but taxpayers will receive none of the millions in revenues the plant will generate over the next 30 years.

But solar is the new green energy, so what is the problem?

The article explains:

But since then the plant has not lived up to its clean energy promise. According to the U.S. Energy Information Administration, the plant produced only about a quarter of the power it’s supposed to, a disappointing 254,263 megawatt-hours of electricity from January through August, not the million megawatt-hours it promised.

A NRG spokesman blamed the weather, saying the sun didn’t shine as often as years of studies predicted. However by the four-year mark, NRG has “every confidence that the plant will function as anticipated for the life of the facility,”according to the company.

And then there is the bird issue:

The problem is that birds see the mirrors as water. As they approach, the 800º F solar beams roast any bird that happens to fly by. A recent study released by the California Energy Commission conducted by the Center for Biological Diversity called Ivanpah a “mega-trap” that will kill up to 28,000 birds a year.

And then there is the crony capitalism issue:

The plants’ owner at the time, BrightSource Energy, said it will likely kill only a thousand birds a year. BrightSource came under scrutiny by the House Oversight and Government Reform Committee and investigators found the company received direct “guidance and support from the White House” for how it obtained its $1.6 billion in federal loans.

It’s time to unelect every member of Congress who is spending money on projects such as this. No wonder we are broke.

The Cost Of A Scientific Hoax

I guess I am a global-warming denier. I am convinced that climate change is an ongoing thing that is not necessarily related to man’s activity. I really don’t think we are important enough to have a major impact on the climate of the earth. However, I do support clean air, clean water, and recycling. I just don’t support global warming as an excuse to make everyone (except the people who profit from it financially) miserable. Well, that is happening again.

Investor’s Business Daily reported today that the price of electricity is soaring due to government regulation.

The article reports:

In November, the Bureau of Labor Statistics‘ Electricity Price Index hit 202.284, an all-time record and nearly 20% higher than just six years ago.

This might strike some as strange, given the private-sector shale-fracking boom going on in the Midwest, Northeast and Texas, which has led to soaring new domestic supplies of natural gas and oil.

According to the U.S. Energy Information Administration, as recently as 2008 the U.S. produced 2.1 billion cubic feet of natural gas per day. Today, it’s 12.3 billion cubic feet and growing fast — truly astounding growth.

Meanwhile, the U.S. is on the verge of producing more oil than it ever has, and domestic sources now outstrip foreign ones. Thanks to fracking, more’s on the way.

But as energy booms, electricity prices are going up.

…Electricity is now one of the most regulated goods in the U.S. Thanks to the Environmental Protection Agency’s sweeping powers to regulate C02 — a power we can’t find anywhere in the Constitution — electricity is becoming a very expensive commodity.

And it’s about to get even more so. According to the Institute for Energy Research, EPA rules put in place to please environmentalists will remove 34,705 megawatts of coal-based energy capacity off our market.

Think about it: That’s equal to about 10% of what we now produce with coal being removed from the grid.

The new regulations are forcing coal plants to close and be replaced with less efficient and less reliable green energy–wind and solar–that are more expensive to generate. The increased cost is then passed on to the consumer–us. As the Obama Administration forces Americans down the path of green energy, our European neighbors are abandoning that path due to unreliable energy and the cost of green energy. Unfortunately, it may take us a while to learn that lesson.

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An Unbelievable Labor Contract

Yesterday Mike Antonucci at Hot Air posted a few excerpts from the current contract covering National Education Association employees.

The article reports:

About 500 people work at NEA national headquarters in Washington, DC. A handful of unions represent them, the largest being the National Education Association Staff Organization (NEASO). NEA and NEASO negotiated a 136-page collective bargaining agreement in June 2012, and it runs through the end of May 2015. I have posted the full document on EIA’s Declassified page, but to save you the energy of mining it yourself, here are a few provisions I thought were worthy of highlighting:

…NEA must assume financial liability for an employee who is prosecuted or sued “because of any act taken by him/her in the course of his/her employment.” Under these circumstances, unless the employee is guilty of “gross negligence or gross irresponsibility,” he or she “shall be paid at his/her regular hourly rate for all time spent in jail.”

…NEA is required to provide “an appropriately furnished lounge” for employees at union headquarters. The contract specifically requires NEA to “make an ice machine available to employees in the building.”

There are many other provisions, including reserved parking spaces, valet services when traveling, and other things that most of us would never expect to see in an employment contract. Most of us would love to be covered by an employment contract that covers the items this contract does, but most of us realize that if a company wants to stay in business (and thus provide us with a job), they would probably not be able to afford a contract similar to the one that covers the NEA employees. The article unintentionally points out how big the gap has become between working in the private sector and working for an agency related to the government.

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The ObamaAdministration’s War On Coal Continues

CBN News is reporting today that thousands of America‘s coal workers gathered in Washington, D.C., yesterday to protest new Environmental Protection Agency (EPA) regulations that will shut down the coal industry in America.

The article reports:

Coal worker Jim Dailer of Wheeling, W.Va., complained, “They’ve tightened down regulation after regulation down through the years and ended up with putting us out of business pretty much.”
 
More than 200 coal-fired plants have already announced they’re closing.  Dailer said it will be some 350 by the end of next year. 
 
These coal miners, workers and officials rallied on Capitol Hill because only Congress or the courts can stop the EPA.
 
“What we’re trying to do is reach the hearts and minds of the people who are in those halls in front of me,” Horton said as he looked up at the Capitol building.  “To get them to understand that coal is much more than an energy source.  It’s people.”

Just for the record, I am not in favor of air pollution–but I do believe that the government is quite capable of over-regulating. According to the U.S. Energy Information Administration, in 2012 coal provided 37 percent of the electricity generated in America. At the present time, there is not a reliable ‘green’ source of energy to replace that power. Until the ‘green’ energy industry is more reliable and more economical, we need to leave our coal plants open.

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About President Obama’s Energy Policy

This is a graph from Investors.com of energy of energy production on federal land since 2003:

The article reports:

When President Obama, in responding Tuesday to Mitt Romney‘s chiding about failing to approve the Keystone XL pipeline, claimed that his administration has added enough new oil and gas pipelines to “encircle the Earth and then some,” we felt a perfect response from Romney would have been, “You didn’t build that.”

The article further reports:

According to the Interior Department‘s Bureau of Land Management, in 2008 under President Bush a total of 55,085 oil and gas leases were in effect on federal land. In 2011 under Obama, there were just 49,174, a decrease of 11%.

Federal acreage under lease shrank from 47.2 million in 2008 to just 38.5 million, a drop of 19%. And 6,617 oil and gas permits were approved in 2008 vs. 4,244 permits in 2011, a decrease of 36%.

The Heritage Foundation‘s Nicolas Loras points out that a recent report from the EIA documents the fact that energy production fell 13% on federal lands in fiscal 2011 compared with fiscal 2010.

Although tapping domestic energy would not bring down gasoline prices tomorrow, it would impact those prices in the near future. It is time to elect a President who will allow us to become energy independent.

 

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Exposing The Lies In The President’s Energy Speech

Yesterday Investors.com posted its fact check on President Obama’s recent energy speech. They noted five lies and posted the relevant facts.

Here is the summary:

1. The President claimed that he was focused on production. Actually, the current increase in production is due to the actions of the Bush Administration before President Obama took office. President Obama has closed down exploration and slowed down the issuing of permits for offshore drilling.

2. The President stated that America has 2 percent of the world’s oil reserves, but consumes more that one fifth of the world’s oil. Actually, the U.S. has a mind-boggling 1.4 trillion barrels of oil, enough to “fuel the present needs in the U.S. for around 250 years,” according to the Institute for Energy Research. The problem is the government has put most of this supply off limits.

3. The President stated, “Because of the investments we’ve made, the use of clean, renewable energy in this country has nearly doubled.” According to the Federal Energy Information Administration (EIA), production of renewable energy increased 12% between 2008 and 2011.

4. The President stated, “We need to double-down on a clean energy industry that’s never been more promising.” According to the EIA, renewable energy will account for just 13% of U.S. energy production by 2035.

5. The President stated, “There are no short-term silver bullets when it comes to gas prices.”

The article reminds us:

Obama could drive down oil prices right now simply by announcing a more aggressive effort to boost domestic supplies. When President Bush lifted a moratorium in 2008, oil prices immediately fell $9 a barrel.

President Obama’s nose is growing.

 

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When Politics Is More Important The The Welfare Of Americans

Steven Hayward at Power Line posted an article today about the decision by the Obama administration to delay the leasing of shale gas fields in Ohio. This is an attempt by the administration to win back the environmentalists who are not happy after President Obama decided not to change the current ozone rules. Evidently when Lisa P. Jackson, the administrator of the Environmental Protection Agency, was appointed she expected to rewrite those rules quickly–now she is being told that she will have to wait until 2013 if President Obama is reelected. That is something to keep in mind–rewriting the rules in the manner that Ms. Jackson would rewrite them would cripple America’s economy and greatly decrease our domestic energy supply.

The article at Power Line reports:

If you want to get a little more of an idea of the federal permitting problem, have a look at the embedded video on this Energy Information Administration squib about the Bakken field in North Dakota and Montana.  As you will see from the animation, the bulk of activity in the early years occurred in Montana, on some old federal leases, but in recent years those fields have started to tail off while North Dakota has boomed into the fourth largest oil-producing state in the country.  Most of the activity in North Dakota is occurring on private or state land (ditto for gas production in Pennsylvania), while new exploration and production in Montana has atrophied because of the fields there are mostly on federal land, and new areas are not being opened up.

America has the ability to meet its own domestic energy needs in an environmentally safe way. Right now government interference is preventing America from doing that. However, the tide may be changing.

The article at Power Line also reports:

Mr. Brune [the current executive director]  (of the Sierra Club) acknowledged that paid membership had declined by about 100,000 in recent years, to just more than 600,000, but attributed it to financial hardship caused by the recession.

It is important to protect the environment. It is also important to understand that civilization as we know it and a clean environment can co-exist. The next presidential election will determine whether civilization as we know it will continue to exist.

 

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