08 May 2011

Gasoline prices are rising. There seems to be no end to the almost daily increases. At week end, the average US price of a gallon of regular gasoline was almost $4.00. For many, this is an ugly slap in the face. For others, it is another sign of the vanishing American dream. There are some important lessons, however, wrapped up in this situation. First, most of us do not have a clue how the price of gasoline is established in the first place. We show up at the gas station and there is a price on the machine. Pay it or go without. But, how did it get so high? We are told that the price of gasoline is rising, due to this reason or that. The simplest answer is to look at oil prices. The higher oil prices rise, voila, higher gasoline prices go. While this is basically true there is much more to the story. For example, supply and demand can explain rising oil prices. Oil producing countries deliberately determine how much oil is available. Co...

21 Mar 2011

This doesn’t make much sense… he’s applauding the Brazilians for doing things he is constantly at odds with the oil industry in the U.S. for.

From Bloomberg:

The U.S. president highlighted Brazil’s recent offshore oil discoveries, the largest in the Americas since 1976, as an area where the two countries can vastly expand their economic relations.

“We want to help you with the technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” he said.

Why is drilling for oil offsea in Brazil good, but doing so off our own coasts is bad?

21 Feb 2011

By Noah Fisher In the recent State of the Union Address, President Obama called for an end to oil and gas subsidies, the third time he has done so since taking office in 2009.  The President’s FY 2012 budget, submitted today, includes the elimination of nearly $4 billion of incentives annually for the oil, gas and coal industries. Unfortunately, all previous attempts to reduce or eliminate these incentives have met the same fate: bipartisan opposition and heavy lobbying from fossil fuel groups. In spite of the uphill nature of the battle, the President hopes that current demand for reduced spending will result in a different outcome. In addition to competing with the large dollar discrepancy between industry incentives, most renewable energy subsidies face annual reauthorization debates in Congress, whereas fossil fuels have for years been expressly written into law.  For example, the extremely successful1603 Cash Grant faced serious oppositio...

30 Dec 2010

I do try to find examples of agreement with those who I diametrically oppose philosophically. It doesn't happen often with hard core Libertarians, but a post by Larry Elder (found via Booker Rising) on Townhall just caught my eye. In his book Wingnuts: How the Lunatic Fringe is Hijacking America, John Avlon comes up with the term of Bush Derangement syndrome for a list of strange beliefs that the left invented to attack George W. Bush and his administration. Much of this has died down since Obama took office (making way for the rise of Obama derangement syndrome on the right), but there are still signs that it is still alive and well in the minds of lefties everywhere. Elder points out the hypocrisy of the left assaulting Bush and company for supposedly being behind a nefarious plot to inflate oil prices. Obama even suggested the FTC investigate oil companies to see if price manipulation was going on. But low and behold... when prices rise to ...

30 Nov 2010

Here's a story that will hopefully make some waves. Apparently there is a five cent tax on each barrel of oil that is supposed to go towards preparing for big oil disasters. How bad could Congress have screwed this one up? This bad: Specifically, in 1990, shortly after Exxon’s 750,000-barrel Alaska catastrophe, Congress passed the Oil Pollution Act to funnel up to $28 million in research money annually to pre-empt and respond to possible disasters, as the oil industry “pushed the frontier of deepwater drilling.” This money wouldn’t come from the general coffers, but rather a trust fund, covered by a 5-cent per-barrel tax collected from the oil industry. But over the ensuing 20 years, the report states, the piggy bank got raided: Congress never appropriated even half the $28 million, shifting the money elsewhere, leaving the the Coast Guard, Minerals Management Services, the National Oceanic and Atmospheric Administration, and the Environmenta...