Big Oil

Rising cost of oil pushes value of the dollar down

Bloomberg reports:

Crude oil may reach a record $130 a barrel this year because pension funds are investing more in commodities, said Pierre Andurand, the chief investment officer of BlueGold Capital Management LLP, a hedge fund ... "Next year, oil may rise even further to $150 a barrel."

Okay, this is a hedge fund guy who is betting the ranch on oil and probably doing his part to drive up prices. But at the end of the day, this is an issue of fundamentals -- supply and demand:

Oil companies such as Exxon Mobil Corp., Royal Dutch Shell Plc and BP Plc are finding it tougher to replace their findings and are drilling for harder-to-reach deposits while energy demand and crude prices surge to records.

Another little-discussed factor in the run-up of oil prices is the run-down of the dollar, and with it, U.S. living standards compared to the rest of the world. Thank you so much, President Bush!

What drives climate change denial?

David and I have apparently crossed blog streams (very dangerous; never do this), but I do want to expand a bit on this basic idea: climate change skepticism has little to do with science. Rather, it is an outgrowth of the culture war.

This point seems both totally obvious and strangely unremarked. At the risk of generalizing, environmentalists tend to view climate change denialism as a top-down, money-driven phenomenon. Energy producers, auto manufacturers, oil companies, and other interested parties court politicians, buy friendly scientists, and groom armies of lawyers, lobbyists, and op-ed writers to push their agenda. Or so the theory goes. And, of course, there's a lot of merit to that theory. You don't need a compass to follow the trail of money.

But the theory only goes so far. A shrinking but significant proportion of average American citizens reject the reality of climate change. The reasons for this are surely overdetermined -- scientific confusion, media spin, hopelessness in the face of a big problem, etc. -- but it's impossible to ignore the basic cultural resentment underlying everything from Planet Gore to the regular flow of blog comments and email I get from dedicated dead-enders.

The Western Climate Initiative’s first proposal ducks biggest climate problem

The Western Climate Initiative is a path-breaking effort. Insufficient federal progress prompted seven states and two provinces to join together to reduce climate pollution by means of an economy-wide cap-and-trade program. It's a momentous opportunity, and many folks have been working hard to ensure that it's a success.

Unfortunately, there's now cause for serious concern.

Yesterday evening, WCI released its draft proposal (PDF). It proposes an initial cap that would cover less than half of the region's total emissions. Most surprisingly, WCI does not recommend including emissions from transportation fuels, by far the largest source of climate pollution in the West. [Update 3/7: The recommendation doesn't exclude transportation precisely, but rather defers the decision until further economic studies are completed.]

The proposal is at odds with WCI's own stated principles that include a commitment to cover "as many emissions sources as practical." And for an effort born of frustration with federal lawmakers, it's bizarre that the proposal is significantly smaller in scope than recent federal bills (PDF), including Leiberman-Warner.

There are no big technical challenges to including transportation fuels. In fact, the WCI admits that while there are a couple of hurdles, it's administratively feasible to include transportation emissions. So what's going on?

No one knows for sure.

Bush’s refusal to consider clean technologies could be repeated by McCain

So, who said:

With $55 oil we don't need incentives to oil and gas companies to explore. There are plenty of incentives.

Yes, that would be our president, three years ago. And yet with oil at nearly twice that price, Bush still refuses to cut subsidies and shift that money to clean technologies. And he still claims that the solution to our energy and climate problems is "technology, technology, technology, blah, blah." But, as we've seen, that is all just rhetoric or sleight of hand.

Daniel J. Weiss, Director of Energy Strategy at the Center for American Progress, has an article on the urgent need for this switch in priorities: "Unbearable cost of oil: Record prices require Senate action." As Weiss points out, this will be one more chance for McCain to do the right thing:

Do Big Oil and Big Tobacco share a similar smokescreen?

Stepping into the Heartland Institute’s “2008 International Conference on Climate Change” was like walking into an alternate reality. To the rest of us, climate science is settled, the solutions are sensible, and the time for action is now. But in the Marriott Grand Marquis Times Square, the only science comes from industry-funded think tanks; climate […]

Gas pricing, Big Oil, and carbon pricing

Apropos of British Columbia's big announcement, I have some ranting to get off my chest. One of the most frustrating things about U.S. climate policy is the reflexive fear that if we ever raise the price of gas -- or of driving generally -- people will riot in the streets or something. This makes it exceedingly difficult to rearrange the economy away from oil and its carbon contents.

But, of course, the price of gas keeps rising anyway. In fact, crude oil prices have more than tripled over the last half-dozen years, with futures closing above $100 recently.

To be sure, there's a silver lining to higher prices: they really do dampen demand, despite what you hear all the time. But it's a silver lining to a dark and ugly cloud: high energy prices mean that consumers are taking it on the chin -- and especially low-income consumers. And worse, all the revenue from the high prices goes to the energy companies. If prices had risen because of taxes or carbon fees, then the public could be reaping the windfall that big oil is raking in now.

For a decade, lawmakers have balked at the prospect of $20-per-ton carbon taxes (a figure that is sometimes kicked around as a price that would get us on the right track). Eighty dollars per ton sets off screaming and wailing. But those figures translate into an additional 20 to 78 cents, respectively, per gallon at the pump. In the time that we've all been afraid of those comparatively modest figures, the price at the pump has jumped $2 or more.

We could have been intentional about getting ourselves off oil, and about protecting consumers from price spikes. But instead, we've opted for the expensive and volatile route: we'll do nothing and hope for the best.

Now let's just hope we can figure out a cap-and-trade program that doesn't send any price signal to drivers.

Louisiana’s Sen. Landrieu votes against party, for Big Oil

When the energy bill went before the Senate yesterday morning, it had been stripped of the Renewable Energy Standard, but it still retained the tax package, which would have reversed $13.5 billion in tax breaks to oil and gas companies to help pay for $21 billion worth of investment in renewable energy. Republicans, as always, […]

Greed versus green on the energy bill

This post is by ClimateProgress guest blogger Bill Becker, Executive Director of the Presidential Climate Action Project.

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As the new energy bill hit the Senate with a thud last week, we had to ask: Is it really so easy to stall vital public policy with tired old scare tactics? Last Friday, the answer was "yes."

One of the potholes the bill has encountered is its $13 billion take-back from Big Oil. The bill proposes to repeal tax breaks given to the industry by the Republican-controlled Congress in 2004-2005 and to close some tax loopholes that allow oil companies to game the system when they report income from foreign oil and gas extraction.

Predictably, the oil industry and the White House complained about a tax increase and warned of higher prices at the pump -- two time-tested themes to trigger knee-jerk opposition from the public.

Let's break it down.

Voluntary actions didn’t get us civil rights, and they won’t fix the climate

Strange but true: Energy-efficient light bulbs and hybrid cars are hurting our nation’s budding efforts to fight global warming. More precisely, every time an activist or politician hectors the public to voluntarily reach for a new bulb or spend extra on a Prius, ExxonMobil heaves a big sigh of relief. Scientists now scream the news […]