oil

Rebels slash production production take hostages in Nigeria.

Everyone's favorite fungible commodity is causing some real trouble in Nigeria, where rebels claiming to represent "ethnic Ijaw communities" are laying siege to property owned by Royal Dutch Shell, the Guardian reports. There's even a hostage crisis brewing:

The group of three Americans, two Thais, two Egyptians, a Filipino, and a Briton -- John Hudspith -- were seized by up to 40 gunmen who stormed a pipe-laying barge. In emails to news agencies, the Movement for the Emancipation of the Niger Delta (Mend) said its goal was to punish oil corporations and the government for siphoning off the region's wealth without returning anything to its impoverished ethnic Ijaw communities; as well as saying the hostages' fate had yet to be decided, the movement also warned that they might end up being killed in crossfire with the army.

The rebels managed to halt about a fifth of supply in Nigeria, which according to the Wall Street Journal is "Africa's leading oil exporter and the U.S.'s fifth-largest supplier, usually exporting 2.5 million barrels daily." Crude surged past the $60/barrel mark on the news.

I wonder what ol' Shotgun Dick Cheney thinks of all this.

Jon Stewart interviews an oil analyst, who basically blows it

A couple days ago, Jon Stewart interviewed Peter Tertzakian, author of A Thousand Barrels a Second: The Coming Oil Break Point and the Challenges Facing an Energy Dependent World. (You can watch the interview here.)

I haven't read the book, so I don't know what Tertzakian's general outlook is, but I can tell you that on television his outlook is boooring. It's highly unfortunate: The Daily Show reaches an extremely influential demographic, and the peak-oil issue desperately needs a higher profile on the cultural scene. A Daily Show interview is not the time for measured analysis; it's the time to be funny and flamboyant and, OK, a little alarmist. We need people to pay attention.

But Tertzakian was soporific, droning on about energy "break points" and how we've weathered the previous ones pretty well, and how even though there's no obvious alternative, we'll muddle through, blah blah zzzz ... I suspect he hasn't been on TV much.

My one substantive critique was that he referred several times to the lack of an alternative energy source that could scale to oil's breadth and depth. But what the public needs to understand is that we don't need a single, silver-bullet alternative. What can replace oil is a diversity of small-scale sources (wind, solar, biothermal, hydro, cogeneration) appropriate to local conditions. We need to replace a single, concentrated source of power -- both physical and political power -- with a decentralized multiplicity of sources. This will be a boon -- again, both physically and politically.

I wish everyone talking publicly about oil could at least get on the same page on that one talking point.

Maybe oil from elsewhere?

In an earlier post, I calculated (based on 2004 figures -- I may update them shortly) that Bush's "great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025" would involve lowering U.S. oil consumption by 10.5% over 19 years. Not very ambitious.

But it's worth noting that even there I may be giving Bush too much credit. I'm assuming that he means to "replace" the Middle Eastern oil with alternatives -- biofuels, electric cars, hydrogen cars, whatnot.

It's at least possible, though, that he means to replace Middle Eastern oil with non-Middle Eastern oil. I'm no oil geologist, so I don't have a good sense of whether this is possible. But it's not outrageous to think we could cover that amount (10.5% of our oil use) by increasing imports from Canada, Mexico, Venezuela, and Nigeria -- and by increasing domestic production (read: drilling in Alaska and off the coasts). Since Canadian tar sands are under furious production, it's likely that Canadian imports are going to rise anyway.

So, it's possible that Bush's "great goal" could be accomplished without reducing U.S. oil consumption at all. We could, to use his own addiction metaphor, get our fix elsewhere.

But even I'm not that cynical.

The cat is out of the bag

Despite the modesty -- not to say wimpiness -- the Bush's proposed energy initiative, the real news of the night will be this line:

America is addicted to oil, which is often imported from unstable parts of the world.

I don't know if this is Nixon-goes-to-China territory, but it's every bit as significant as Clinton acknowledging that "the era of big government is over." This kind of cat cannot be put back in the bag.

Humorously, Bush tried to put it back in the bag with his very next line:

The best way to break this addiction is through technology.

Those who know how to parse Bushese will understand this sentiment immediately. Translation: "The best way to respond to this problem is to hand out some public money to corporate interests." This is, here as so many other places, terrible public policy. Matt Yglesias concisely captures why:

Big profits, little ethics

Exxon Mobil Corp., you may have heard, just ended the most profitable year ever, for any American corporation. Ever. To the tune of $34 billion.

That means Exxon pulled down about $1,110 a second last year.

Nonetheless, as Carl Pope extensively documents, the company remains one of the biggest deadbeats in the world, still digging in its heels about paying victims of the Exxon Valdez oil spill (2,000 of which are dead -- and their surviving family members have no standing in the case, and will never receive anything). Then there's the matter of oil and gas royalties, which -- despite the skyrocketing cost of oil and gas, and subsequent industry profits -- have remained level over the past few years. All that profit is going directly into corporate coffers.

"Without a shadow of a doubt, Exxon has the best management in the oil industry,"' said Doug Leggate, an analyst at Citigroup Inc. in New York.

Yeah, I guess you could say that. If you were a soulless fuckwit.

Anyhoo, the point of all this is that ExxposeExxon has a new video up lampooning Exxon, and it's kinda funny.

(Also, here's my tribute to departing Exxon CEO Lee Raymond, from August '05.)

Iran and oil

So, let's return to a familiar subject: The use of oil as a political tool in international relations.

Iran's heading toward nukes. The U.S. wants to prevent it. So the U.S. is threatening economic sanctions -- specifically, threatening to restrict Iran's major export, oil.

But, ahem, don't we need that oil? Points out Iranian President Mahmoud Ahmadinejad, "You need us more than we need you. All of you today need the Iranian nation."

Kevin Drum asks, and Stuart Staniford answers, the obvious question: Could cutting off, or even slowing down, Iranian oil exports really do that much damage to us, or to the world economy?

The short answer is: Yes.

So the next time somebody's calculating the economic cost of Kyoto, or a carbon tax, or emissions caps, I hope that in the "continuing the status quo" column they don't forget to include, "inability to prevent a large Middle Eastern country headed by maniacs from acquiring nuclear weapons." How much does that run these days?

Sen. Ted Stevens: Crybaby

Sen. Ted Stevens (R-Alaska) has spent the last week or so -- nay, the last 25 years -- attempting to circumvent the clearly and repeatedly expressed preferences of a majority of U.S. citizens by allowing oil drilling to take place in the Arctic National Wildlife Refuge. The latest attempt involved attaching drilling to the defense appropriations bill, in effect holding military funding hostage in the middle of an armed conflict.

We have perhaps become numbed by the sheer repetition and persistence of these efforts, but it's worth pausing, stepping back, and noting just how utterly venal and anti-democratic they are. The country would not benefit from Refuge oil. It would be sold on the world market just like any other oil. Oil companies and the state of Alaska would benefit. For that, Stevens is willing to make a mockery of legislative procedure and tradition.

Stevens' latest defeat produced a self-pitying, thumb-sucking tantrum on the floor of the Senate. He said it was the "saddest day of his life." He also threatened his fellow Senators, Sen. Maria Cantwell (D-Wash.) in particular:

"I'm going to go to every one of your states, and I'm going to tell them what you've done," he told colleagues who voted against the measure. "You've taken away from homeland security the one source of revenue that was new ... I'm sure that the senator from Washington [Cantwell] will enjoy my visits to Washington."

He also, in effect, threatened to quit, saying "It's a day I don't want to remember. I say goodbye to the Senate tonight. Thank you very much." You can watch a little bit of the pathetic performance here (via Atrios).

(It's worth noting that when Refuge drilling came out of the defense bill, so did assistance for low-income people to heat their houses. The LIHEAP program will receive less funding this year than last year, despite record high heating prices. Maybe Stevens should shed a tear over that.)

Gas prices

It's an open question how much gasoline prices affect gasoline consumption. But apparently gas prices are pretty tightly correlated with something else. Click to find out what.

(Via Tapped)

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