http://online.wsj.com/article/SB121055427930584069.html?mod=opinion_main_review_and_outlooks

So we tax oil companies, but heavily subsidize solar and wind to the point of $23.00+ per mega watt hour (or 2.3 cents per kwh.

“The wind and solar lobbies are currently moaning that they don’t get their fair share of the subsidy pie. They also argue that subsidies per unit of energy are always higher at an early stage of development, before innovation makes large-scale production possible. But wind and solar have been on the subsidy take for years, and they still account for less than 1% of total net electricity generation. Would it make any difference if the federal subsidy for wind were $50 per megawatt hour, or even $100? Almost certainly not without a technological breakthrough.

By contrast, nuclear power provides 20% of U.S. base electricity production, yet it is subsidized about 15 times less than wind. We prefer an energy policy that lets markets determine which energy source dominates. But if you believe in subsidies, then nuclear power gets a lot more power for the buck than other “alternatives.”

The same study also looked at federal subsidies for non-electrical energy production, such as for fuel. It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids.

All of this shows that there is a reason fossil fuels continue to dominate American energy production: They are extremely cost-effective. That’s a reality to keep in mind the next time you hear a politician talk about creating millions of “green jobs.” Those jobs won’t come cheap, and you’ll be paying for them.”

ultracon on May 12, 2008 at 3:01 PM

Your percentages hold true for what they are producing now. If they increase oil by 20%, that doesn’t mean they produce “lubricants” by 20%. That just happens to be the percentages now.
Over 80% of a gallon of oil (over 40 gallons out of a 55 gallaon barrel) can be directly converted to diesel, if we had a new diesel refinery plant in the U.S.
If congress said they agreed to aggressively drill in ANWR, and fast trac the opening of two refineries in the U.S., the price of oil, diesel, gasoline, would drop in half overnight…plus the added benefit of a few speculators jumping out of their penthouses.

The Associated Press runs down their arguments and finds them … well, let’s just say factually deficient

……

There’s a huge deposit of shale oil there, but people are wary of shale oil because efforts to extract it in the 1970’s went bust after the price came down in the 1980’s. It’s estimated that shale oil costs about $60/barrel to extract these days, but oil companies could definitely turn a profit with foreign oil at $120/barrel.

Trouble is, most of the area is Federal land, which President Clinton put off-limits with an Executive Order. Since President Bush is blamed by the mainstream media anyway as being in cahoots with the oil indrustry, why not undo Clinton’s Executive Order and bring down the price of oil, for which many drivers will be very grateful?

Oh yeah, those eeeeeeevil oil companies will make money, but so will American workers in the Rockies, instead of using oil money to fund madrassas that teach young boys to blow up Americans for Allah.

I often wonder if the libs would have taking more economics classes, instead of liberal arts, they may have a better understanding of how to combat economic issues.

chief on May 12, 2008 at 2:00 PM

We let the Democrats off too easy when we call them dumb. Their plan is to drive America into socialism and their plan is working beautifully.

I have often wondered at these Greenies/Do Gooders. Why don’t they use their creativities, passions and energy on the drug wars/warlords? Just have ads telling kids/adults “Don’t Do Drugs” did absolutely nothing.

http://www.renewamerica.us/columns/childress/080510

Bottom line: if we want lower gas prices, we’d better start producing our own oil in greater quantity, as well as refining it ourselves.

Or, we could work to reduce demand. We need some kind of Manhattan project to develop an automobile that is every bit as capable as a gasoline-powered car and can be brought to market at a similar price point but does not run on gasoline or any oil product. I’m thinking hydrogen fuel cell or something like that. I know GM has been toying with these things for years, so something is preventing their introduction. If even 20% of US drivers switched to a non-oil consuming vehicle, that would send the price into a tailspin.

Maxx on May 12, 2008 at 1:10 PM

Don’t forget also that demand is up since the Iron Curtain fell and China switched to Capitalism.

But from a certain perspective, that’s the better way isn’t it? I mean, we’ve been sucking OPEC dry for the last, what, 60 years or something?

apollyonbob on May 12, 2008 at 12:33 PM

Looking at it that way, we can have the last laugh when OPEC has no more oil and we’ve got it all.

Of course, none of us will still be alive by that time.

The Southern Ledger Read more »…

On January 28, one week after we [Reagan Administration] began operations, the President ordered the complete deregulation of petroleum prices, which had been under federal controls for a decade. On the following day, he signed an order eliminating all activities of the Council on Wage and Price Stability—abolishing virtually all vestiges of the federal price controls which had distorted supply and demand in the 1970s and led to ruinous shortages for the country. (Natural gas, under different legislation, was still subject to controls.) The thrust of these actions was both obvious and consistent with the President’s pledges—to free the economy from excessive regulation. The reaction from the Washington establishment was prompt, and loud. Sen. Howard Metzenbaum (D-Ohio) denounced the deregulation of petroleum prices, saying it would raise the price of gasoline to $2 a gallon. The real effect, of course, was just the opposite. Renewed production under decontrol broke the back of the OPEC cartel and drove prices down (they were actually lower in 1991 than a decade earlier). With this stroke of the pen, the President ended the “energy crisis” of the 1970s.

Edwin Meese, Counsellor to the the President, 1981-1985
Attorney General, 1985-1989 From his book: “With Reagan”
page 75

Now consider this, we are currently sitting on the HIGHEST accumulation of known oil reserves in history, yet we have the highest price for oil in history. Something has distorted the relationship of supply and demand.

If we have more oil than we have ever had before, and we do, then oil prices SHOULD be at an all time low, not an all time high. Clearly, current oil prices are artificially high for whatever reason. What’s causing it?

We all know that futures trading can and does in some instances distort market pricing. But futures trading is regulated… right? So that can’t happen… right?

But it seems there is a “backdoor” to futures trading that is completely unregulated. I didn’t know this myself until I read the article linked below. The writer, F. William Engdahl just might have the reason why we are awash in oil but still paying through the nose for it.

But to believe Engdahl’s theory, you would have to believe our government watchdogs have failed us again. But how hard is that to believe?

In the 1970’s the Democrats pushed the price of oil through the roof with over regulation, could it be that this time they have accomplished the same thing by neglecting to regulate a part of the futures market?

I don’t know, but take a look this, it’s worth a read.

The article is long so let me give you one of it’s most salient points, which is that oil prices began to increase dramatically shortly after this loophole for “futures” trading was opened.

A glance at the price for Brent and WTI futures prices since January 2006 indicates the remarkable correlation between skyrocketing oil prices and the unregulated trade in ICE oil futures in US markets. Keep in mind that ICE Futures in London is owned and controlled by a USA company based in Atlanta Georgia.

In January 2006 when the CFTC allowed the ICE Futures the gaping exception, oil prices were trading in the range of $59-60 a barrel. Today some two years later we see prices tapping $120 and trend upwards. This is not an OPEC problem, it is a US Government regulatory problem of malign neglect.

By not requiring the ICE to file daily reports of large trades of energy commodities, it is not able to detect and deter price manipulation. As the Senate report noted, “The CFTC’s ability to detect and deter energy price manipulation is suffering from critical information gaps, because traders on OTC electronic exchanges and the London ICE Futures are currently exempt from CFTC reporting requirements. Large trader reporting is also essential to analyze the effect of speculation on energy prices.”

F. William Engdahl – 3 May 2008

A mild criticism of Democrats and something of value from Dartmouth- all in the same AP article?

Who’da thunk it?

drjohn on May 12, 2008 at 11:56 AM

I’m guessing an editor unwittingly assigned the story, without realizing that there was no way to write it without making the Dems look … well, stupid. Even the obligatory dash to a Tuck School lefty economist couldn’t get them what they needed.

Can’t believe the story made it to press.

Don’t choke on the oil company gnat and swallow the traders’ camel.

Pelosi/Reid: ‘Problem, what problem? Do you see a problem?’