Posts Tagged ‘Oil’
In Europe, “green” policies to eliminate nuclear and coal power for “green” alternatives worked so well that desperate Greeks and Germans resorted to stealing firewood from local forests to keep warm this winter.
Sadly, it doesn’t appear that Obama’s nominee has learned from their mistake. He insists that skyrocketing energy prices are just what we need to force people away from fossil fuels towards a gloriously “green,” utopian future:
President Obama’s Energy secretary nominee regards a carbon tax as one of the simplest ways to move the energy industry towards clean technologies, though he notes that government would have to come up with a plan to mitigate the burden this tax places on poor people, who would pay the most.
“Ultimately, it has to be cheaper to capture and store it than to release it and pay a price,” MIT professor and Energy nominee Ernest Moniz told the Switch Energy Project in an interview last year. “If we start really squeezing down on carbon dioxide over the next few decades, well, that could double; it could eventually triple. I think inevitably if we squeeze down on carbon, we squeeze up on the cost, it brings along with it a push toward efficiency; it brings along with it a push towards clean technologies in a conventional pollution sense; it brings along with it a push towards security. Because after all, the security issues revolve around carbon bearing fuels.”
Moniz position is not far from that of Energy Secretary Steven Chu before he took a job in the Obama administration. “We have to figure out how to boost the price of gasoline to the levels in Europe,” Chu said in 2008. Last year, gas hit $9 a gallon in Greece.
As if poor and middle class families aren’t hurting enough trying to make ends meet as it is.
If it’s successful, convenient, inexpensive, and makes our lives better, environmentalists want to kill it. They won’t be happy until we’re all back in utopian bark hut villages, walking on dirt paths, illuminated only by moonlight.
Oregon’s Environmental Quality Commission voted 4-1 today to require fuel distributors to begin reporting the carbon content of car and truck fuel used in the state.
Now, the 2013 Legislature will decide whether to take the next step: Requiring those same companies to cut the carbon content of fuel 10 percent a gallon by 2025.
The “clean fuels” initiative, similar to California’s newly implemented program, favors gasoline and diesel alternatives, such as ethanol, biodiesel, natural gas and electricity. It’s aimed at curbing climate change, with transportation generating a third of Oregon’s greenhouse gas emissions, and at boosting in-state biofuels producers.
Opponents, including petroleum, trucking and farm groups, say it could increase gas prices and put Oregon companies at a competitive disadvantage.
Read more at the Oregonian
“A Low Carbon Fuel Standard will raise fuel costs, slow the state’s economic recovery, and create unnecessary overlap and confusion between Oregon’s existing alternative fuels programs,” cautioned Mike Salsgiver, Executive Director of the Oregon Columbia Chapter of Associated General Contractors.
“There is no doubt in our minds that an LCFS will increase the cost of fuel for Oregonians,” added Debra Dunn, President of the Oregon Trucking Associations. “Not only will increased fuel prices have an adverse impact on Oregon’s trucking industry but it will also harm Oregon’s economy as the trucking industry transports the vast majority of the freight in our state.”
A coalition has been formed to oppose implementation of these job-killing regulations:
We’ve lost 113,000 jobs in our state from 2007 through 2011. Tax revenues to fund our state’s schools and services are not keeping pace. More cuts may be necessary as the prospect for another economic downturn looms.
And yet regulators are now seriously considering emulating California’s new “Low Carbon Fuel Standards” regulations that will cost between 9,000 and 29,000 Oregon jobs, will cost Oregon families up to $1,200 per year in fuel costs, and decrease state economic activity by a minimum of $600 million.
In short, it’s another unnecessary obstacle for Oregon’s slow economic recovery.
The proposed Clean Fuel Program will only expose Oregonians to volatile price increases at the pump, additional government regulations of small businesses, and increase our already aggressive blending requirements for ethanol and other forms of bio diesel.
The power to stop these regulations rests with the Oregon legislature, which means ultimately, it rests with you. That’s why a group of fuel users, consumers and business organizations opposed to the adoption of the proposed Clean Fuels Program in Oregon has banded together to form Oregonians for Sound Fuel Policy.
It’s an environmentalist wacko’s dream come true, and it will drive up energy prices, making it difficult for the poor to afford electricity and heat. Yet these are the people who claim to be the “compassionate” party of the “common man.”
Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc.
A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates. “Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said.
So much for what’s left of our manufacturing. And they wonder why these industries are moving offshore?
First they cut the defense budget. Now they want to convert our navy to run on a $26 per gallon fuel.
Meanwhile, China is in the middle of a massive military build-up, Russia is restarting the Cold War, and Iran is on the verge of a nuclear weapon. Priorities??
Just when you thought the Obama administration could not do any further damage to the military that it already has, now we learn the he is forcing his “green energy” agenda upon the U.S. Navy by forcing all non-nuclear powered vessels to use “bio-fuel.”
This month, a carrier strike group that is headed to the Pacific for a six-week multinational naval exercise off the coast of Hawaii, will have its non-nuclear powered escort vessels, which include a destroyer and a tanker, use a newly formulated 50-50 mixture of standard [diesel] fuel, and a cocktail of seeds, algae and chicken fat, according toa July 2, 2012 FOXNews article.
A Navy official stated that operating the so-called “Great Green Fleet” on this blend of alternative and conventional fuel is part of Navy Secretary Ray Mabus’ plan to have half the Navy fleet on alternative fuel by 2020.
The Navy official answered…
Investments in biofuel will produce a competitively priced — and domestically produced — alternative to conventional fuel. Such investments help the Navy and the nation become less dependent on foreign oil and thus less subject to volatility in oil prices that directly affect our readiness.
Not so fast.
What will really ‘affect the readiness’ of our Navy is it having to file for bankruptcy–because this biofuel mixture was confirmed to cost $26 a gallon–more than seven times the $3.60 a gallon cost for conventional fuel.
Like food prices aren’t hurting American families enough already!
Campaigning in Missouri Valley, Iowa, yesterday, President Obama announced yet another government spending program — this time designed to inflate meat prices in Midwest swing states. “Today the Department of Agriculture announced that it will buy up to $100 million worth of pork products, $50 million worth of chicken, and $20 million worth of lamb and farm-raised catfish,” Obama explained to reporters in front of a drought-stricken cornfield.
“Prices are low, farmers and ranchers need help, so it makes sense,” Obama explained. “It makes sense for farmers who get to sell more of their product, and it makes sense for taxpayers who will save money because we’re getting food we would have bought anyway at a better price.”
None of this makes sense. In fact, Obama’s move only harms American consumers while protecting a corrupt federal program.
A drought is currently driving down corn production. The shortage of feed is forcing livestock producers to slaughter animals early, putting downward pressure on meat prices in the short run and guaranteeing shortages and higher prices next year. But nature is not the biggest factor in this crisis — the government is. Specifically, the federal government’s ethanol mandate, which requires that 13.2 billion gallons of corn-based ethanol be produced in 2012.
Thanks to the ethanol mandate, more than 40 percent of the nation’s corn crop now goes into the production of a useless fuel that hardly anyone would buy if the government didn’t require it. That’s up from just 17 percent in 2005, before the mandate went into effect. Only 36 percent of the corn crop now goes for feed, and 24 percent goes for food.
Obama could solve this problem instantly by suspending the federal ethanol mandate — something his EPA actually can do unilaterally and legally. Instead, Obama will buy up meat — a move that meat producers say won’t help them much anyway. “It doesn’t solve the problem of having enough affordable corn next summer,” industry analyst Steve Meyer told Reuters. “Without changing the ethanol program, nothing can be done,” he said.
The higher corn prices caused by the mandate and the drought have also driven up the price of ethanol by 33 percent since May, which means — again, thanks to the mandate — higher gas prices at the pump.
For years, the US Dept. of Agriculture has subsidized corn to keep the price artificially low, which is why so many products use High Fructose Corn Syrup and so many farmers use it for livestock feed (as opposed to grasses, which they are naturally designed to eat instead). It’s why grass-fed beef and other natural foods cost so much more than those that have become dependent on corn. If not for federal interference in the the corn market, many farmers and companies would have already moved towards alternatives and would not be so vulnerable to the current shortage.
The federal mandates for ethanol only exacerbate the problem further.
This has been a cruel season for America’s agricultural economy. It was partly unavoidable, as our nation’s farmers are being devastated by this summer’s brutal and worsening drought. The farm economy has withered along with the crops, and the American consumer, once again, will pay for it with higher food prices.
One of the hardest-hit commodities, corn, plays a critical role in our food chain. This year’s crop yield could be the worst in 15 years, and corn prices have already hit record high levels.
But aggravating the problem and adding to the crisis is the U.S. government’s Renewable Fuel Standard (RFS), which requires that a certain volume of ethanol (15.2 billion gallons in 2012, mainly derived from corn) be blended into gasoline. This is an arbitrary figure, set irrespective of market supplies, demands or price. It applies to corn that’s desperately needed for livestock feed and food for consumers.
The RFS has diverted so much corn as a questionable substitute for gasoline that in the face of this drought-depleted harvest, major food-producing companies such as Smithfield are being forced to seek alternative markets for grain to meet the demands of their livestock and at more affordable prices. Ironically, if the ethanol mandate did not exist, even this year’s drought-depleted corn crop would have been more than enough to meet the requirements for livestock feed and food production at decent prices.
To give you some idea of the magnitude of the problem, look at Smithfield. We’re the world’s largest pork producer. We purchase roughly 128 million bushels of corn and corn equivalents a year from U.S. farmers to feed our 16 million pigs on farms across 12 states. This makes us one of the largest consumers of corn in the country. In addition, we contract with about 2,135 U.S. hog producers.
This year, the double whammy of a drought that’s ravaging crops and ethanol demand has pushed corn prices to what are now record-high levels of over $8 per bushel, a quadrupling of prices in less than a decade. This has compelled food producers like Smithfield to find ways to control skyrocketing feed costs. For the first time in memory, corn is cheaper when it’s delivered to the U.S. from abroad than if it’s purchased from domestic suppliers. Smithfield was forced to take the unfortunate but absolutely necessary step of buying corn from Brazil—spending money that under normal circumstances would have gone to U.S. farmers.
This is what happens when the corn market, which already has to count on the whims of Mother Nature and is governed by the laws of supply and demand, is victimized by the whims of Washington and the unintended consequences of the diversion of food to fuel.
This has nothing to do with protecting the environment or promoting energy independence. It has EVERYTHING to do with corrupt leftists abusing unconstitutional powers to target specific industries they ideologically oppose simply because they exist at all.
This abuse of power demonstrates why such unelected, unaccountable, and unconstitutional agencies and departments need to be completely abolished.
It’s bad enough that government regulations and environmental legal defense groups have prevented us from building oil refineries for over 30 years. It’s even worse when the existing ones are forced to blend fuel mixtures that don’t exist.
We are all painfully aware of the Soviet style mandate that requires 10% of petroleum to be comprised of ethanol. This unconstitutional mandate has killed jobs, driven up the cost of fuel and food, lowered gas mileage, and damaged car engines – all to benefit corporate cronies in Big Ag. This odious fuel source is primarily made from corn. But since 2010, the EPA has mandated the blending of more than 20 million gallons of cellulosic biofuel into the nation’s fuel supply. The problem is that while creating efficacious fuel from grass, wood, and algae might sound great in theory, it doesn’t exist on the commercial fuel market.
On December 19, 2007, President Bush signed a disastrous socialist energy bill that contained numerous green energy mandates and subsidies. It also banned the sale of incandescent light bulbs. The “Energy Independence and Security Act of 2007” passed with support from 39 Republican senators and 95 Republican congressmen. It created a Renewable Fuels Mandate requiring that 22 billion gallons of renewables be blended into our gasoline supply by 2016 and 36 billion gallons by 2022. The bill also created a few sub-mandates, one of which required a blend of 100 million gallons of cellulosic biofuel by 2010, rising to 250 million in 2011, 500 million in 2012, and 16 billion by 2022. The bill also established a tax credit of $1.01 per gallon produced.
Despite the tremendous tailwinds of tax credits and the boot of the government used to force fuel blenders to purchase cellulosic fuels, the industry has failed to perform magic and become commercially viable during the past 5 years. Some of the plants that were given subsidies to produce this phantom fuel were never even built. Yes – this is a scandal far worse than Solyndra.
What is even more scandalous is that oil companies are forced to pay a tax for not blending this phantom fuel!
Because oil companies are deemed to be in violation of the renewable fuels mandate, they are forced to purchase waiver credits from the EPA or face large fines. Oil companies have been forced to pay $14 million in these credits so far (more than all the green energy companies have paid in taxes). Yes, indeed we already have a cap and trade program in place.
At present, there is a pending lawsuit against the EPA over the phantom fuel mandate filed through the D.C. Circuit Court by industry groups. However, we cannot count on the courts to uphold the Constitution. After all, liberal judges hold that government can regulate inactivity, presumably, even if that activity doesn’t exist.
Morris discusses “Screwed” on Hannity
View on YouTube
If Obama loses the November election, he and his fellow Democrats will have nothing to lose. They’ll be extremely motivated to ram through whatever damaging agenda items they can in the two month Lame Duck period before the new president, congress and senate are sworn in. You can guarantee these items will top their list!
President Obama and Secretary of State Hillary Clinton are entering negotiations over — or seeking ratification of — five treaties that could radically limit our national sovereignty and the reach of our democratic institutions. Particularly scary is that the treaties, once signed and ratified, have the same status as constitutional law and cannot be altered or eclipsed by Congress or state legislatures. And their provisions must be enforced by U.S. courts.
Those who wish to preserve our sovereignty and democratic control over our future must rally to block these treaties, either by pressing Obama and Clinton not to sign them or by blocking their ratification.
• International Criminal Court — Clinton has reversed George W. Bush’s policy and entered into negotiations over U.S. participation in the court. Specifically, the leftists who are sponsoring the court wish to create a new crime of “aggression,” which is essentially going to war without the approval of the United Nations. If we submit to the court’s jurisdiction, our presidents and Cabinet officials could be prosecuted criminally for going to war without U.N. approval. This would, of course, give Russia and China a veto over our military actions. Clinton says she will stop our military’s hands from being tied, but we all must realize that once we accept the International Criminal Court, we go down a slippery slope. The court could even prosecute Americans who have been cleared by our own judicial system.
• The Law of the Sea Treaty (LOST) has been signed, and the Obama administration — with the aid of RINO Sen. Richard Lugar (Ind.) — will push for its ratification as soon as Lugar’s primary in Indiana is over this year. LOST requires that the United States pay an international body half of its royalties from offshore drilling. The body would then distribute the funds as it sees fit to whichever nations it chooses. The United States would only have one vote out of 160 regarding where the money goes. LOST will also oblige us to hand over our offshore drilling technology to any nation that wants it … for free.
• Small-arms control — Clinton is about to negotiate on a global ban on export of small arms. It would only apply to private citizens but, of course, most small-arms deals come not from individuals or private firms but from governments, specifically those of the United States, Russia, China and Israel. The treaty would require each nation to adopt measures to stop exportation of small arms. It is easy to see how this could be a backdoor way to require national registration of all guns and to assert federal regulation over firearms. It would also require the registration of all ammunition to track its source once a gun is fired. The Second Amendment be damned!
• Outer Space Code of Conduct — Under the guise of stopping debris from accumulating in outer space, the European Union has enlisted Clinton in negotiations over a code of conduct. The code would prohibit activities that are likely to generate debris in outer space — space littering. The code might inhibit or prohibit the United States from deploying anti-missile missiles on platforms in space, denying us the key weapon we need to counter Iranian, Chinese and North Korean missile threats. European leftists reacted angrily when G.W. Bush opted out of the ABM treaty banning defensive weapons. Now they seek to reimpose it under the guise of a code of conduct.
• Rights of the Child — Even more fanciful is a treaty Clinton plans to negotiate setting forth a code of rights for children, to be administered by a 14-member court set up for the purpose. The draft treaty obliges rich nations to provide funds for shelter, food, clothing and education for children in poor nations. This provision could create grounds to litigate to challenge the level of foreign aid we give as inadequate to meet our treaty obligations. Already, leftists in the United Kingdom are using the treaty to attack welfare cuts by the Cameron government.
European liberalism is advancing — masked — by way of these treaties. Defenders of liberty must say no!
Mark Levin felt that Dick Morris’ new book, Screwed!, isn’t getting the attention it deserves and had him on the show Friday to discuss it. And after listening to the interview, what Morris has to say is pretty dang scary. Basically, Obama, before he loses in November, wants to push through treaties in the Senate that would:
- Force redistribution of wealth of 50% of our royalties from oil and gas drilling outside the 200 miles continental shelf to third world countries
- Prohibit US exportation of handguns and small arms to other countries (backdoor gun control)
- Force the US to join the International Criminal Court which would make Bush liable for the international crime of Aggression, going to war without the express permission of the UN Security Council
Morris says these treaties could be ratified with the help of RINOs like Dick Lugar, so this is a real threat.
Sockin’ it to the very people they claim to be helping – a leftist trademark!
Obama’s War on Coal has already taken a remarkable toll on coal-fired power plants in America.
Last week the U.S. Energy Information Administration reported a shocking drop in power sector coal consumption in the first quarter of 2012. Coal-fired power plants are now generating just 36 percent of U.S. electricity, versus 44.6 percent just one year ago.
It’s the result of an unprecedented regulatory assault on coal that will leave us all much poorer.
Last week PJM Interconnection, the company that operates the electric grid for 13 states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia) held its 2015 capacity auction. These are the first real, market prices that take Obama’s most recent anti-coal regulations into account, and they prove that he is keeping his 2008 campaign promise to make electricity prices “necessarily skyrocket.”
The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt. That’s eight times higher than the price for 2012, which was just $16 per megawatt. In the mid-Atlantic area covering New Jersey, Delaware, Pennsylvania, and DC the new price is $167 per megawatt. For the northern Ohio territory served by FirstEnergy, the price is a shocking $357 per megawatt.
Why the massive price increases? Andy Ott from PJM stated the obvious: “Capacity prices were higher than last year’s because of retirements of existing coal-fired generation resulting largely from environmental regulations which go into effect in 2015.” Northern Ohio is suffering from more forced coal-plant retirements than the rest of the region, hence the even higher price.
These are not computer models or projections or estimates. These are the actual prices that electric distributors have agreed to pay for new capacity. The costs will be passed on to consumers at the retail level.
House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) aptly explained: “The PJM auction forecasts a dim future where Americans will be paying more to keep the lights on. We are seeing more and more coal plants fall victim to EPA’s destructive regulatory agenda, and as a result, we are seeing more job losses and higher electricity prices.”
The only thing that can stop this massive price hike now is an all-out effort to end Obama’s War on Coal and repeal this destructive regulatory agenda.
A global redistribution scheme that surrenders US sovereignty to foreign nations: Obama’s dream come true!
The administration begins the push for ratification of a 1982 treaty that would end America’s sovereignty on the high seas, limit our freedoms on land and speed up the global redistribution of wealth and power.
Defense Secretary Leon Panetta told Sen. John Kerry’s Senate Foreign Relations Committee last Wednesday that the freedom of the sea once guaranteed by the British Royal Navy and then the U.S. Navy should be in the hands of United Nations bureaucrats in Montego Bay, Jamaica, enforcers of the Law of the Sea Treaty (LOST) he said we must ratify.
[…] LOST would codify the “global test” Kerry uses to assess the validity of U.S. activities. For example, Communist China, a LOST signatory, contends the treaty bans the Proliferation Security Initiative under which we can stop and search ships on the high seas suspected of transporting WMDs on behalf of or for use by terrorists.
What would we do if China’s claim to undisputed sovereignty over the 1 million square miles of the South China Sea were honored by this new international body to which we would be subservient? Would the U.S. Navy quietly keep off their grass?LOST establishes an International Seabed Authority with the power to regulate 70% of the earth’s surface, placing seabed mining, fishing rights, deep-sea oil exploration and even the activities of the U.S. Navy under control of a global bureaucracy.
It even provides for a global tax that would be paid directly to the ISA by companies seeking to develop resources in and under the world’s oceans.
The treaty was originally finalized in the 1980s but rejected by Reagan over concerns it would cede U.S. sovereignty to the ISA and could force the United States to hand over sensitive technology to Soviet-allied states.
“One of the more nefarious and insidious of its provisions is Article 82, which requires the U.S. to forfeit royalties generated from oil and gas development on the continental shelf beyond 200 nautical miles — an area known as the ‘extended continental shelf,'” notes the Heritage Foundation’s Mike Brownfield.
EPA Official Resigns Following Crucify Comment
View on YouTube
Al Armendariz is being thrown under the bus because he was stupid enough to get caught saying how the Left thinks out loud and on tape. It’s hardly a victory because the EPA is still being run by an administration who will continue to use the agency to “crucify” industries that don’t fit into their radical environmentalist ideology.
One of President Obama’s radical eco-bureaucrats has apologized for confirming an indelible truth: This White House treats politically incorrect private industries as public enemies who deserve regulatory death sentences.
Environmental Protection Agency administrator Al Armendariz, an avowed greenie on leave from Southern Methodist University, gave a little-noticed speech in 2010 outlining his sadistic philosophy. “I was in a meeting once, and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting, but I’ll go ahead and tell you what I said,” he began. In a video obtained and released by Sen. James Inhofe (R., Okla.), Armendariz then shared his bloody analogy:
It was kind of like how the Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw, and they would crucify them. And then you know that town was really easy to manage for the next few years. . . . So, that’s our general philosophy.
Echoing President Obama’s “punch back twice as hard” treatment of his political enemies, Armendariz explained to his underlings: “You hit them as hard as you can, and you make examples out of them, and there is a deterrent effect there. And, companies that are smart see that, they don’t want to play that game, and they decide at that point that it’s time to clean up.”
In other words: Suck up, fly left, or face prosecution. The goal isn’t a cleaner environment. The goal is political incitement of fear.
Washington, D.C. – Senator James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works, delivered a speech today on the Senate floor announcing that he has launched an investigation into the Obama-EPA’s apparent “crucify them” strategy targeted at American energy producers. This investigation will look into EPA’s actions towards domestic energy production specifically in light of the agency’s recent efforts relating to hydraulic fracturing.
Senator Inhofe’s announcement today follows several questionable statements from top EPA officials, including comments released in a little-watched video from 2010, which reveals EPA Region VI Administrator Al Armendariz admitting that EPA’s “general philosophy” is to “crucify” and “make examples” of oil and gas companies.
Not long after Administrator Armendariz made these comments, EPA targeted US natural gas producers in Pennsylvania, Texas and Wyoming. In all three of these cases, EPA initially made headline-grabbing statements either insinuating or proclaiming outright that the use of hydraulic fracturing by American energy producers was the cause of water contamination, but in each case their comments were contrived – and despite their best efforts, they have been unable to find any definitive evidence to make this link. When EPA’s investigations did not turn out the way they had hoped, the agency quietly released several late-night statements reversing their earlier assertions during holidays and while Congress was out of town.
As part of his efforts to launch an oversight investigation into the Obama-EPA’s actions, Senator Inhofe sent a letter today to EPA Administrator Lisa Jackson asking for answers regarding the events surrounding EPA Region 6 and their recently withdrawn administrative order in Parker County, Texas – apparently the first of EPA’s “crucifixion” victims.
View on YouTube
Back in 2008, Democrat Congresswoman Maxine Waters threatened to nationalize the oil industry, just as Hugo Chavez has done in Venezuela:
View on YouTube
This week, Obama went one step closer to making that Marxist dream a reality.
President Obama on Tuesday urged Congress to help strengthen federal supervision of international oil markets, amid pressure from U.S. voters to take action on rising gasoline prices.
The president wants Congress to increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions. […]
Many Democrats blame speculators for the high cost of gasoline. They would not go as far as to say that market manipulation is responsible for rising gas prices, but the officials said they wanted to curtail the ability of speculators to take unlawful advantage of oil price volatility.
At issue is the increasing role of investment in oil futures contracts by pension funds, mutual funds, hedge funds, exchange traded funds and other investors. Much of that money is betting that oil prices will rise. Analysts say it is possible that such speculation has somewhat inflated the price of oil.
At the same time, investors can also bet that prices will go down — indeed, speculators have been credited for low natural gas prices. Studies of the effects of speculation on oil markets indicate that it probably increases volatility, but doesn’t have a major effect on average prices.
David Sheppard at Reuters warns that Obama’s plan could increase volatility in the market, driving prices even higher:
U.S. President Barack Obama’s bid to dampen the influence of oil speculators by having regulators set trading margins could backfire, potentially making prices even more volatile and leaving crude dominated only by those with the deepest pockets.
Under Obama’s request to Congress, the Commodity Futures Trading Commission (CFTC) would determine how much speculators need to pay to trade U.S. crude oil futures, in theory increasing the amount when prices move too far, too fast.
But economists and traders cautioned that pushing smaller investors out of markets would only hand greater influence to the largest hedge funds and Wall Street banks. Ultimately, there may not be enough traders left to do business with oil producers and consumers looking to hedge their needs.
“Reduced liquidity often means greater volatility,” said broker Jay Levine at Enerjay LLC in Maine.
“That’s the exact opposite of (Obama’s plan’s) purpose”.
Exchange-operator CME Group, which currently sets margin requirements for the benchmark U.S. crude oil contract, on Tuesday called the president’s plan “misplaced”, and said speculation should not be confused market manipulation.
As a true Alinsky disciple, Obama’s specialty is to create a crisis through government policies, blame the private sector for the results, and then take further government control of the industry. Lather, rinse, repeat.
It should be clear by now that Obama is not the least bit concerned with how his policies are hurting the average American, so long as the “green” agenda of the “smarter than you” Leftist ruling class is implemented. Unfortunately, the facts and reality don’t match up with their Utopian fantasy.
This is what happens when you allow government to grab unlawful and inappropriate levels of power. We now have a president who is waging war against one of our largest, most crucial industries – and industry upon which our very national security depends.
In a speech last month in Miami, Fla., President Obama promoted his national energy agenda of oil, gas, wind, solar, nuclear and biomass fuels.
Specifically he addressed rising gas prices, which he referred to as a “tax straight out of their (consumers’) paychecks.”
In his defense, the president boasted that “under my administration, America is producing more oil today than at any time in the last eight years.”
What the president failed to mention, however, is that the increases in domestic oil drilling are largely because of the pro-energy policies of his predecessors, Presidents Clinton and Bush, and the significant increases in production on state and private lands.
Furthermore, the president insisted that he will not “cede” green technology, solar, wind and battery power to the People’s Republic of China.
Under the president’s FY 2013 proposed budget, the politically favored “green” energy sector gets preferential treatment over the fossil fuels industries, with numerous tax subsidies, tax credits, public expenditures, procurement preferences and grants.
How do the U.S. oil and natural gas sectors fare under the president’s FY 2013 proposed budget?
In stark contrast, the administration’s FY13 budget will burden the oil and natural gas sectors with almost $86 billion in higher taxes over the next 10 years, according to estimates by the American Petroleum Institute.
Based on the Obama administration’s strident emphasis on developing “alternative” energy sources as the future of an America no longer dependent on foreign sources of fossil energy the average American would believe that the nation’s need for substantial nuclear fuel, oil, natural gas, and coal will soon be a distant memory. The reality, however, is quite different.
In 2010, the U.S. Department of Energy (DOE) in its Annual Energy Outlook 2012 estimated that fossil fuel consumption will decline only modestly, from 83% of total U.S. energy demand currently, to 77% in 2035.
And this estimate does not include new potential oil and natural gas reserves identified in the U.S. over the last couple of years.
Moreover, it was estimated by the DOE’s Energy Information Administration, that roughly one-third of total U.S. delivered energy is consumed by the all-important, job-creating manufacturing sector, with two-thirds of this energy-intensive manufacturing in bulk chemicals, oil refining, paper products, iron and steel, aluminum, food, glass and cement.
Additionally, total industrial demand for delivered energy is expected to increase 16% by 2035, from 23.4 quadrillion BTUs in 2010 to 27.0 quadrillion BTUs in 2035.
Therefore, the reality is that fossil fuel energy sources will continue to play a dominant role in providing stable supplies of affordable energy to America’s factories for decades to come, despite Obama’s claim that oil is the “fuel of the past.”