oil

Cornucopian thinking about oil

There seems to be a disturbing tendency in the progressive community to blame speculators for most, if not all, of the increase in oil prices. In its most extreme form, the implication seems to be that the supply of oil is virtually limitless, and that only financial manipulation is to blame. Ironically, this mirrors the views of many mainstream economists, who have what is sometimes called a cornucopian view of the world. Julian Simon was the ultimate spokesperson for the idea that technological innovation and unlimited resources would allow for virtually any level of population and consumption.

For instance, writing in Counterpunch, Mike Whitney, who has been one of the best researchers explaining what is really going on in the financial meltdown, declares:

There is no oil shortage, not yet at least. The reason oil has skyrocketed to nearly $140 per barrel is because of rampant speculation. The peak oil doom-sayers are simply confusing the issue. This is not about shortages or scarcity; it's about gaming the system to fatten the bottom line.

(The progressive talk show host Randi Rhodes has been making similar arguments).

Whitney quotes various ministers of oil who echo his argument; meanwhile, oil company spokespersons have been giving mixed messages, and Bush's Secretary of Energy blames supply and demand. Whom to listen to? None of them. Like a group of vultures circling the carcass of the global economy, they each have their own nefarious reasons for saying what they are saying. The next time you hear something about how the increase in the price of oil is caused by speculation, consider several counter-arguments:

Aftermath of Supreme Court’s Exxon decision

Estimated time for full ecological recovery by affected species from the Exxon Valdez oil tanker spill: 15 - 30 years.

Estimated time for full financial recovery by Exxon Mobil Corp. from yesterday's Supreme Court decision: 4.5 days.

As written in yesterday's opinion:

The real problem, it seems, is the stark unpredictability of punitive awards.

Why indeed

“We have been talking about energy independence since Americans were waiting in gas lines during the 1970s. We’ve heard promises about it in every State of the Union for the last three decades. But each and every year, we become more, not less, addicted to oil — a 19th century fossil fuel that is dirty, […]

Offshore drilling has an ‘insignificant’ effect on oil prices

I am glad that so many in the energy debate have picked up on one of the two messages from my previous post (see "EIA to McCain: Drop offshore [drilling]").

But in listening to the radio and TV debates, I realize that some people have the impression that U.S. Energy Information Administration said offshore drilling might eventually lower oil prices. It did not. It found that allowing offshore drilling would have no significant effect on prices as far out into the future as the analysis projected.

My kingdom for a so-called expert

Sam Stein goes looking for an energy expert who will endorse John McCain’s contention that oil drilling will provide short-term price relief. You can guess the rest.

Saudi Arabia to host summit on high gas prices

Since when do we deal with our addiction by going to summits hosted by drug suppliers? Yet here is the Washington Post:

"Saudi Arabian Oil Summit Hopes to Isolate Cause of Price Rise"

JIDDAH, Saudi Arabia, June 21 -- Leaders from oil-producing and oil-consuming nations will meet here Sunday to try to pinpoint the reasons behind the rise in oil prices, which have doubled over the past year, and to find ways to bring them down.

Increasing oil production will not substitute as energy solution

Originally posted on the NDN Blog.

Yesterday, Saudi Arabia did what everyone -- including George W. Bush on bended knee -- has been asking it to do for months: agree to increase production. Prices closed up a dollar. The Saudi move and its non-impact on the market shows just how tight supplies remain. While it was designed in large part to offset declines in Nigerian production due to rebel violence in the oil-rich, poverty-stricken Niger Delta, it might have sent a psychological signal of easing supplies but it did not.

Meanwhile, back in Washington, another panel of oil traders told Chair Dingell's House Energy and Commerce Oversight subcommittee that speculation is driving up oil prices and tighter oversight of commodities futures markets could lower prices. Staffers released data to the effect that 70 percent of trades are now speculative, up from 30 percent not long ago.

EDF chief rejects oil drilling as response to energy woes

This is a response to this post.

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I had the pleasure of appearing on PBS' Charlie Rose last week for a wide-ranging conversation about climate change and how we can reinvent our energy economy with cap-and-trade. As Grist readers know, EDF has been pushing hard for a strong cap on greenhouse gases to fight global warming and help break our addiction to oil.

 

Obama calls for regulation of oil markets and decreased dependence on oil

On Sunday, Barack Obama promised to end unregulated oil speculation and close the “Enron loophole,” which he says are at least partly to blame for rising gasoline prices. “For the past years, our energy policy in this country has been simply to let the special interests have their way — opening up loopholes for the […]