Killing the U.S. Oil Industry Since 1980

By Alan Caruba

As President Obama’s term drags into its second half, it is increasingly being compared to the failed presidency of Jimmy Carter. Having increasingly thwarted the ability of the U.S. to access its own vast reserves of oil, successive administrations now burden Americans with billions more in costs at the gas pump.

My “go-to guy” for information about the U.S. oil industry is Seldon B. Graham, Jr., the author of “Why Your Gasoline Prices are High”, a man with more than fifty years experience in the oil industry, first as a petroleum reservoir engineer and later as an oil and gas attorney.

The turmoil in Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), the oil cartel, is causing the price of a barrel of oil to rise due to the usual speculation that occurs on Wall Street and around the world by those seeking to cash in on the prospect of reduced oil production and supplies.

What it most demonstrates, however, is the inane and unnecessary dependence on foreign oil that America has imposed on itself  thirty years after former President Jimmy Carter’s energy policies began this insanity.

As Graham notes, “As to the actual price of oil, last week (Feb 13-19) the average OPEC oil was $97.20 a barrel while the average U.S. oil price was $90.13 a barrel. Let’s stop for a minute and savor the fact that U.S. oil was $7.16 cheaper than OPEC oil.”

“U.S. oil is always cheaper than OPEC oil. Most Americans don’t know that.”

There’s a lot that Americans don’t know about their domestic oil industry and for that we can thank a succession of U.S. presidents since Carter who have misled Americans on the subject. We have arrived at the latest President who, like Carter, is doing everything he can to kill the U.S. oil industry when not bowing low to the King of Saudi Arabia.

If America could drill for its own, domestic oil and replace dependence on the Middle East and other foreign sources, “it would save American gasoline consumers an estimated $28 billion annually,” says Graham, “as well as put millions of Americans to work.”

On April 2, 1980, Carter signed the Domestic Crude Oil Windfall Profits Tax, a direct attack on U.S. oil companies. “The result,” says Graham, “was that half a million oil workers lost their jobs. In January 1980, U.S. oil production was 8.7 million barrels a day. Foreign oil imports went from 2.9 million barrels of oil per day in February 1983 to the current 9 million barrels of oil per day.”

You don’t have to be a mathematical genius to understand these numbers. From 8.7 million barrels of oil a day in 1980, U.S. oil production has fallen to 5.6 million barrels of oil a day today. That’s a lot of oil that remains untapped domestically and offshore of America.

Like Carter, President Obama keeps blathering away about “alternative” or “green” energy sources such as ethanol, an additive to every gallon of gasoline that insanely burns a major food source, corn, as fuel. His administration has thrown billions at solar and wind energy producers despite the fact that coal represents half of all the electricity we use daily and despite the fact that both of these "alternative" energy sources have failed miserably in European nations that turned to them.

How crazed are Obama’s oil policies? Steve Maley, an operations manager for a shallow-water Gulf of Mexico oil and gas production company located in Lafayette, LA, noted in a Human Events.com commentary on February 18 that “Obama’s Fiscal Year 2012 Budget proposes to increase the tax liability of energy companies to the tune of $46 billion over the next ten years.”

Maley compared “recent quarter (2Q 2010) oil and gas industry profit (net income) to a sales ratio of 7.1%, versus 8.7% for all manufacturing companies. In terms of return-on-investment, oil and gas usually lag in the S&P 500.” The myth of huge oil and gas profits simply does not stand up to Obama’s State of the Union claim of “huge profits.”

Then factor in the Obama administration’s moratorium on both deep-water and shallow-water oil drilling in the Gulf of Mexico. Under the administration’s new Bureau of Ocean Energy Management, Michael Economedes, an internationally respected expert on the oil industry, notes that “offshore permitting has come to a virtual standstill”, adding that “thousands of companies in the energy sector are nearing the point of collapse after almost a year of inactivity.”

U.S. courts have twice demanded that the Obama administration end its moratorium and continued to be ignored.

The U.S. was an oil and gas producing giant before successive White House administrations declared war on this vital sector of our economy. The industry, representing the potential of millions of jobs and millions of barrels of oil and cubic feet of natural gas, has been stalled by appallingly stupid energy policies since the 1980s.

U.S. dependence on foreign oil producers, mostly state-owned in places like Russia, Saudi Arabia, Venezuela and elsewhere, makes us vulnerable to events in far-off places when we could be producing our own oil and natural gas more cheaply right here in places like the Gulf of Mexico, in Alaska’s ANWR, and off-shore of our coasts where estimates are in the billions of barrels and cubic feet of our own untapped energy reserves.

We can thank the environmental organizations whose war on America’s energy sector has been going on now since the 1970s. It is their anti-coal, anti-oil, and anti-nuclear campaigns that will literally leave America at a standstill and in the dark if they are not reversed.

© Alan Caruba, 2011

"Oil Addiction" Lies

By Alan Caruba

Next to the huge international hoax about global warming allegedly caused by carbon dioxide, the biggest lie being told to Americans these days is that we are “addicted” to oil and that we must convert our economy and society away from its use.

The first time I recall hearing this was during George W. Bush’s 2006 State of the Union Speech and, frankly, I was astounded to hear it from the son of a former President who made his fortune in oil. The latest to repeat the lie is President Barack Obama, but he is allied with environmental organizations that are anti-energy no matter what form it takes.

Americans and everyone else around the world are not “addicted” to oil or other energy sources such as coal and natural gas. They are used to maintain and enhance modern life.

Data from 2006 makes it abundantly clear that 85.5% of the electricity we use comes from carbon-based fuels. Nuclear and hydroelectric energy add over 20% of the rest. All that magical “clean” energy, solar and wind, provides 3% or less of the electricity the nation requires.

As Robert Bryce, an editor of Energy Tribune and author of several books on energy, says, “The simple unavoidable truth is that we humans cannot (and) will not quit using oil. If oil did not exist, we’d have to invent it. No other substance can compare to oil in terms of energy density, flexibility, cost, and convenience.

“About 95% of the world’s transportation fuel comes from oil,” notes Bryce. “Thus, without oil, there is no commerce.” No commerce, no world economy.

Americans are being force-fed lies about energy and the worst of them are about “clean energy research and development.” There are no viable or sensible substitutes for oil, coal, and natural gas.

According to an October 28, 2009 report by the Congressional Research Service “U.S. proven reserves of oil total 21.3 billion barrels and reserves of natural gas are 237.7 trillion cubic feet. Undiscovered technically recoverable oil in the United States is 145.4 billion barrels, and undiscovered technically recoverable natural gas is 1.162.7 trillion cubic feet. The demonstrated reserve base for coal is 489 billion short tons, of which 262 billion short tons are considered technically recoverable.”

So why has the Obama administration announced a shutdown of the auctioning of oil leases? Why have several administrations refused to allow access to the oil beneath the Alaskan National Wildlife Reserve or the potentially vast offshore Alaskan reserves?

If the ban on offshore drilling for oil and natural gas on 85% of the U.S. offshore regions is maintained, the nation will be forced to rely on foreign sources, many of whom are unfriendly, even hostile.

Think about this. Beneath a 1.5 million acre tract on the North Slope of Alaska there are an estimated three to nine billion barrels of recoverable oil. In 1987 the Department of Interior recommended development. There has been none because a succession of Congresses has refused to allow drilling on what would amount to a postage-size part of the vast Coastal Plain.

The U.S. must import the vast percentage of the oil we require, some 60%, and yet Americans are being denied the right to access, extract, refine and use the oil we have or look for more. Oil companies are routinely demonized despite the billions they must spend in exploration, extraction and refining.

Are we that stupid?

Meanwhile, Senate Majority Leader, Harry Reid, is promising to bring the Cap-and-Trade bill, an energy tax bill now called a “climate” bill, to a vote in July. Studies suggest its passage would destroy more than two million jobs nationwide.

One analysis projected that the bill would reduce gross domestic product (GDP) by $9.4 trillion over the next 25 years. The U.S. doesn’t have 25 years. Our current national debt is $13 trillion and our GDP is $12.9 trillion. Do the math!

Likewise, raising taxes on oil and natural gas companies would reduce the amount of private capital available for vitally needed investments to access our energy resources.

The big, awful oil and natural gas industry has already invested $58.4 billion to reduce greenhouse gas emissions and there is no need to reduce carbon dioxide. It plays no role whatever in a global warming that is NOT happening. The Earth has been cooling for a decade.

Significantly, an increase in carbon dioxide would yield more crops and healthier expanded forests.

Finally, let’s get a grip on reality. As bad as the leak has become, there is just one oil rig in the Gulf of Mexico leaking oil. It’s out there because environmentalists and government policies have forced oil companies to explore and drill in hazardous places.

The rest of the rigs, several hundreds, are still safely pumping oil. The BP Deepwater Horizon rig will be capped eventually. That problem will end. The spilled oil will be worked on by the forces of nature, dispersing and evaporating it. In five years, just like the Valdez spill, there will be no evidence of the spill.

The real “addiction” that threatens the United States is a Congress that will not stop borrowing and spending an unsustainable amount of money on programs that should have been abandoned or adjusted years ago.

Editor's Note: Here's an explanation for the BP oil rig disaster provided by a veteran oil industry professional. You are not likely to read this anywhere in the mainstream media, but you will find it here!

"A drilling engineer never, never, never, never replaces heavy mud with light saltwater.

That is a No-No on every well, even on dry land. The reason for the heavy mud is to overcome the high pressures found in deep reservoirs. No doubt that was what the argument was all about before the explosion—replacing heavy mud with light saltwater.

The natural gas at the top of the reservoir simply pushed the light saltwater out of the hole. When anyone sees fluid, in this case saltwater, coming out of the well, that is the clue to shut the blowout preventers.

Fluid had to be coming out of the well before the natural gas arrived at the surface. (Physics) Someone was assigned to watch this! Someone saw this! There was still time to prevent a disaster after seeing fluid coming out of the well.

Failure to close the blowout preventers when fluid was coming out of the well was fatal and caused the explosion."

© Alan Caruba, 2010

The US Government is Pushing Climate Change like a Drug

By Alan Caruba

We all know that heroin, cocaine, and methamphetamines are addictive drugs that do a great deal of harm to those addicted to them, but the U.S. government has been pushing global warming, now called climate change, to addict Americans to the belief that the Earth is threatened when it is not.

Climate change is what has been going on for the 4.5 billion of years of Earth’s existence. It has nothing to do with human behavior, energy use, or carbon dioxide, the bogyman of greenhouse gases.

So why is the National Research Council, the operating arm of the National Academy of Sciences and National Academy of Engineering, preparing to release “three new reports examining how the nation can combat the effects of global warming”?

Why does one of the reports focus “on the science that supports human-induced climate change and the others review options for limiting the magnitude and adapting to the impacts of global warming” when there is NO global warming?

The Earth has been a distinct and well-documented cooling cycle for over a decade at this point in time!

Moreover, the U.S. government has wasted some $50 billion on climate change research over the course of the last two or three decades. Do we really need three new reports—--particularly when they are going to repeat that same debunked “science” that has underwritten the greatest fraud of the modern era?

May 19 is the day when the president of the National Academy of Sciences, Ralph J. Cicerone, will deliver the opening statement and members of the several panels will commit an act of scientific charlatanism by repeating the lies that have been driving the global warming fraud for way too long.

Fortunately, if you want the truth, you can attend the speakers and panels of the 4th International Conference on Climate Change that will occur May 16-18 in Chicago. It is sponsored by The Heartland Institute

Could these three new reports have anything to do with the fact that a so-called climate bill, the Cap-and-Trade Act (since renamed) has been introduced in the Senate, having been pushed through the House in the same way as Obamacare? The bill is an economy-killer.

The Renewable Energy Scam

Could this have something to do with the U.S. Army hosting “the inaugural Renewable Energy Rodeo and Symposium” on June 8-9m at Fort Bliss? And would somebody please tell me what fighting of our nation’s wars has to do with renewable energy? Answer: It doesn’t. But when you are in the process of corrupting science while promoting the most bogus forms of energy other than oil, natural gas, and coal, using every element of the federal government to advance your agenda is obvious.

Meanwhile, the International City/County Management Association has received a $5 million award from the U.S. Department of Energy to “head a team that will work with local government leaders and stakeholders to accelerate wider adoption of solar energy. IMCA will work with the American Planning Association, the National Association of Regional Councils, and industry experts on this new project.”

The key words here are “industry experts” because, if the U.S. government was not wasting your money on solar energy, the most inefficient method of generating electricity other than wind, those in these industries would be looking for jobs waiting on tables or working a Zamboni ice smoothing machine.

Quite possibly, too, you are unaware that the National Governors Association, rather than focusing on the fact that most States are broke, will instead devote themselves to “initiatives to improve energy efficiency, promote alternative (solar and wind) energy sources, and (to) lower greenhouse gas emissions.”

What Americans are being subjected to is a campaign to enrich wind and solar energy producers and the sellers of “carbon credits” while at the same time being told that climate change is the most pressing issue facing the nation. It is a totally invented issue.

This is criminality on a massive scale because it is criminal to impoverish Americans by advocating energy schemes that ignore our dependence on the traditional sources of energy. Indeed, the entire industrialized and modern world depends on these sources.

It is criminal to advocate a bogus “climate change” whose true intent is to enrich utilities, some select large industries, and others with worthless “carbon credits” to be sold on exchanges controlled by Wall Street firms and environmental titans like Al Gore. In Europe such exchanges have generated massive fraud.

While this occurs—if it does occur—Americans will pay more for electrical energy and see a significant rise in the cost of gasoline. Manufacturing will seek friendlier nations in which to set up shop and thousands more jobs will be exported.

We must rid ourselves of the Obama administration and the Democrats in control of Congress before they achieve their goal of destroying America.

© Alan Caruba, 2010

Florida Ignores Billions in Oil/Gas Revenue

By Alan Caruba

If you were the governor of a state that had anywhere from $7 billion at the low end and $41 billion at the high end in oil and natural gas revenues, wouldn’t you want to drill for it? If you did, you would open up between 20,000 and 40,000 news jobs related to the exploration, extraction, and distribution of these vital sources of energy.

That’s the case in Florida and, in fact, along the long East, West and Gulf of Mexico coastlines of U.S. states. Is there oil out there? As Business Week reported in early September, “It may be one of the biggest oil finds of the year, if not the decade” referring to one made by British Petroleum in the western gulf of Mexico. How big? Billions of barrels of oil.

Meanwhile, on Monday, Thomas J. Pyle, president of the Institute for Energy Research (IER) personally delivered 11,816 comments from Americans to the Secretary of the Interior. They want the U.S. to drill off our outer continental shelf. At present, 85% of it is off-limits to exploration and extraction. It is unlikely that Ken Salazar will lift the ban. Like the entire Obama administration, he is opposed to accessing oil, natural gas, or coal.

For people who run around shouting that America needs “energy independence”, neither Democrat, nor Republican presidents or politicians have allowed the nation’s vast interior and offshore resources to be tapped for decades. This is a criminally stupid policy.

The main opposition, of course, comes from the many environmental organizations that want to keep everything “pristine” while the rest of us could be looking at $7-a-gallon gasoline if things heat up in the Persian Gulf or blackouts if they continue to block the building of coal-fired plants to generate electricity (coal accounts for just over half of all the electricity we use daily.)

What most Americans still don’t “get” is that the Greens lie all the time to achieve their agenda. The Sierra Club was recently found out in a lie about a 1990 “oil spill” in Tampa Bay that never happened!

Among the many lies Greens tell about offshore drilling is that there is not enough energy in the outer continental shelf to justify exploration. Interior’s own Minerals Management Services estimates that the OCS contains 86 billion barrels of oil and 420 trillion cubic feet of natural gas. Those are likely to be conservative estimates given recent oil discoveries in the Gulf of Mexico by BP and Chevron.

Then there is the canard about oil leaks. According to the U.S. Department of Interior data, offshore operators produced seven billion barrels of oil from 1985 to 2001 with a spill rate of .001 percent! According to the National Academy of Sciences, the majority of oil in the ocean, 60 percent, is the result of natural seeps through the ocean floor.

In Florida, the Greens are waging a fight to keep that state from benefiting from the oil in its OCS areas. The National Petroleum Council estimates that the eastern Gulf may hold up to 36.7 trillion cubic feet of natural gas and 5.2 billion barrels of oil. The 45,000 acre Jay and Blackjack fields in northwestern Florida, the state’s most prolific, will yield a billion barrels of oil. There are similar fields in Sunniland in Southwest Florida.

Why wouldn’t Florida want to tap all that income to fund its schools and other public facilities and programs? Texas dedicated $716 million from energy revenues to public education in 2008. In 2008 and 2009, oil and gas receipts from severance taxes in Texas generated nearly $7 billion dollars.

Why wouldn’t other coastal states want to do the same thing? Imagine what it would be like to have more national energy sources, perhaps another refinery or two, and more coal-fired and nuclear plants to produce our growing need for electricity? Imagine all the jobs that would generate?

And now try to imagine why the U.S. government has steadfastly resisted and thwarted this since the days of Jimmy Carter?