Video: Palinmania! Update: Supporters of drilling are “blowing smoke,” says Ahnuld

posted at 5:00 pm on June 26, 2008 by Allahpundit

Eight minutes on ANWR, taxing “windfalls,” and her VP prospects from last night’s “Kudlow & Company.” Nothing surprising here in light of her recent letter to Reid, but it’s the first chance I’ve had to see her talking politics in an extended segment and so I figured it’s probably yours, too. Is that what an Alaskan accent sounds like? Not quite Canadian, not quite North Dakotan.

Most precious moment: Kudlow and Palin agreeing that the solution to the energy crisis is deregulating oil companies. Good luck with that in this political climate, kids.

Update: Palin as Linda Hamilton:

Departing from prepared remarks, he indirectly criticized Crist’s announcement last week in support of oil drilling off Florida’s coast.

“America is so addicted to oil that it will take years to ween ourselves from it,” Schwarzenegger said. “To look for new ways to feed our addiction is not the answer.”

“Anyone who tells you this would bring down gas prices anytime soon is blowing smoke,” he added.

Update: Via Hotline, congressional “insiders” rate their support for various energy measures on scales of 1 to 10. The ANWR averages: 9.0 for Republicans, 0.9 for Democrats. Offshore drilling numbers are similar in both cases.


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Big S on June 26, 2008 at 6:50 PM

Foolish, you are seriously FOOLISH!

She is rigging or building the start of something that was done ONCE in this country and going to be done again under a different project never tried! Have you ever had to work exclusively with Oil Companies? I totally understand where she is and why! She is to the point and direct and get her point across. She has an education… so freaking WHAT if it is Journalism?!?! Most people who work in today’s society do NOT work in what they went to collage for!

The Natrual Gas Pipeline (so help me GOD it won’t go through CANADA) would also be a BOOM for IL, WI, MI and a few other States in that area.

You, my little cynical friend, have NO clue about oil, industry, economics and what it takes to get that damned piece of plastic you are typing on to you. How many jobs does it take you? 100, 300, 1000?

1 million barrels, who knows if it is more or less, is still better in the long run for AMERICANS then sitting on our butts with our hands under out asses!

upinak on June 26, 2008 at 6:57 PM

I think alternative fuels are the answer…just don’t ask me what alternative fuels are and where we will get them.
I think alternative energy sources are the answer…just don’t ask me what alternative energy sources there are and where we could get them.
Watch me become a liberal environmentalist that cares about the earth and its environment, and solve the energy problems all in one sentence.
Here it is:
Are you ready?
On the edge of your seats?
You won’t believe how simple it is.
Here goes….
*
I do not think drilling is the answer, I think we should explore alternative fuel sources and energy…thank you.
*
I will pick up by Nobel Peace Prize in person…

right2bright on June 26, 2008 at 6:59 PM

Palin’s “accent” is exactly the same as here in the Seattle area, which means she has no accent at all (heh).

I like Palin a lot, but it would be a mistake of elephantine proportions to add her to the ticket right now. Obama’s lack of experience is one of the biggest hammers McCain has to pound him with. Put Palin on the ticket and McCain has to leave that hammer in the shop.

I think that’s why Palin said there’s no possibility — because there is no possibility.

Splashman on June 26, 2008 at 7:02 PM

You know who’s addicted to oil? Arnold

What a jackass.

The_Freeze on June 26, 2008 at 7:02 PM

It’s Ok. Gas goes up another $1 here in Kaleefornia and Arnie can kiss his ass goodbye on becoming US Senator.

A conservative here is a liberal who just filled up his/her gas tank.

$4.60 gallon and rising.

GarandFan on June 26, 2008 at 7:10 PM

So, 6-8 years for drilling to take effect… I question that, but I’ll accept it for argument’s sake.

What’s the timeframe to build new power plants, new transmission lines, grid upgrades, and replace existing cars with electric cars (Schwarzenegger’s “better answer”)?

Obviously less than 6-8 years. I didn’t realize that California was in the process of building new plants and upgrading the power grid to get this done in the next couple of years. I recall the rolling brownout reports from their existing grid a few years back, but I didn’t realize they were increasing their grid to double to handle all car based electricity.

And of course I can presume this is renewable energy into the grid, not the nasty carbon based one… who knew they were that far along on their upgrades?

It would be the act of a moron to call a 6-8 solution unworkable while proposing a 2-3 decade (or never considering NIMBY issues) solution as better, wouldn’t it?

Obviously Schwarzenegger is further along than anyone had realized in a new power grid, and a full switchover to renewables. Why hasn’t that been reported anywhere?

gekkobear on June 26, 2008 at 7:11 PM

She’s my VP choice!

JellyToast on June 26, 2008 at 7:12 PM

GarandFan on June 26, 2008 at 7:10 PM

Where are you? L.A., S.F.?

upinak on June 26, 2008 at 7:18 PM

“America is so addicted to oil that it will take years to ween ourselves from it,” Schwarzenegger said. “To look for new ways to feed our addiction is not the answer.”

right Arnie…commutes to work in a jet and basically invented the consumer Hummer

that is some serious chutzpah

windansea on June 26, 2008 at 7:23 PM

Who the hell cares what Arnold says California deserves $20.00 a gallon gas just for karma for the crap that comes out of that cesspool. Let Mexico have that damn state and the lefty libs that inhabit it.

dhunter on June 26, 2008 at 6:30 PM

Easy there, dhunter, there are quite a few good conservatives in CA, we’ve just already fled the Bayarrhea, Hollywood, and Humboldt. You’d be surprised just how many of us there are but we’ve been gerrymandered out of any sort of political power.

Thanks for the discounting of the “addiction to oil” canard, aero.

I don’t know if Palin is ready for VP, but I sure hope she’s up in a high position somewhere once we WIN this election.

BTW, I’m right between LA and SF and we’ve seen prices go from $4.69 to $4.53 in the past week. I’m not sure if that’s local competition (a new gas station just opened) or what. The price still sucks.

NTWR on June 26, 2008 at 7:26 PM

You, my little cynical friend, have NO clue about oil, industry, economics and what it takes to get that damned piece of plastic you are typing on to you. How many jobs does it take you? 100, 300, 1000?

1 million barrels, who knows if it is more or less, is still better in the long run for AMERICANS then sitting on our butts with our hands under out asses!

upinak on June 26, 2008 at 6:57 PM

Actually, I’m a chemist, and I know a fair bit about oil. Also, in my line of work, we study equilibrium for a living. Economics is also largely the study of equilibrium, so I think I’m on a pretty strong footing. I do not disagree with drilling for more oil domestically. I do, however, disagree with the idea that a few small increases in production will alleviate price pressures and go a long way towards solving our problems. Most people supporting increased drilling as an answer to our problems are using unrealistic elasticity coefficients in their calculations.

Big S on June 26, 2008 at 7:35 PM

She’s trying to build support for something that would help her state’s economy a great deal, but would only make a tiny dent in the country’s energy problems. Those are two separate issues, but her conservative fans are conflating the two of them.

Big S on June 26, 2008 at 6:50 PM

ANWR is estimated to have about 15 billion barrels of oil. That is equivalent to about 20 years worth of imports from Saudi Arabia. That is 20 years of NOT funding terrorism and 20 years of money going to AMERICAN workers rather than Arab workers. That goes a long way toward security and goes a long way toward increasing American tax revenues and goes a long way toward offsetting the American trade deficit.

Not to mention the fact that 15 billion barrels will fill a lot of American gas tanks.

Maxx on June 26, 2008 at 7:42 PM

“America is so addicted to oil that it will take years to ween ourselves from it,” Schwarzenegger said. “To look for new ways to feed our addiction is not the answer.”

Arnold, when you use less oil than I do maybe, just maybe, you can preach to me. Until that day comes, fat chance of you ever even coming remotely close, why don’t you just go bugger off you blathering dumbkoff.

MB4 on June 26, 2008 at 7:44 PM

Big S on June 26, 2008 at 7:35 PM

Jesus Big, how the hell do you know what is under the formations if they haven’t drilled? Drilling for Oil is just like fishing. You never know how much there is until you pull it OUT!

You can’t estimate everything either, which includes people and money. Speculation is one thing, but the fact that is is real is another. You should understand speculation very well being a chemist! You go off a theory and work with it until you have the right about of whatever. But as you know that doesn’t always work in every instand and it can be more then what you were expecting.

Statistics are a great method to go off of when you need to work at something, but getting the job done and finding out that you were right, wrong or off the scale is totally another story! You have to try before you get the damned answer.

Am I right or wrong?

upinak on June 26, 2008 at 7:46 PM

ANWR is estimated to have about 15 billion barrels of oil. That is equivalent to about 20 years worth of imports from Saudi Arabia. That is 20 years of NOT funding terrorism and 20 years of money going to AMERICAN workers rather than Arab workers. That goes a long way toward security and goes a long way toward increasing American tax revenues and goes a long way toward offsetting the American trade deficit.

Not to mention the fact that 15 billion barrels will fill a lot of American gas tanks.

Maxx on June 26, 2008 at 7:42 PM

Look here:

With respect to the world oil price impact, projected ANWR oil production constitutes between 0.4 and 1.2 percent of total world oil consumption in 2030, based on the low and high resource cases, respectively.17 Consequently, ANWR oil production is not projected to have a large impact on world oil prices. Relative to the AEO2008 reference case, ANWR oil production is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light (LSL) crude oil18 prices of $0.41 per barrel (2006 dollars) in 2026 in the low oil resource case, $0.75 per barrel in 2025 in the mean oil resource case, and $1.44 per barrel in 2027 in the high oil resource case. Assuming that world oil markets continue to work as they do today, the Organization of Petroleum Exporting Countries (OPEC) could neutralize any potential price impact of ANWR oil production by reducing its oil exports by an equal amount.

Big S on June 26, 2008 at 7:49 PM

GarandFan on June 26, 2008 at 7:10 PM

Ditto.

upinak on June 26, 2008 at 7:18 PM

Between $4.58 and $4.89 in San Diego County. At the current rate, we’ll hit $5.00 here within the next week or two.

There needs to be a multipronged approach. It’s not all electric cars or just drill. There are some great things around the corner being researched in LA & SD in particular. Drilling will yield tangible results within 5-8 years. The other option will not take 2 years – more like 10 or so. We need to drill now while these other possibilities are being researched. It’s that simple.

What really gets me is, let’s say we come out with all electric cars in the next few years. Who’s going to pay for the additional infrastructure required to support them? Who’s going to pay for all the new power plants that will be needed? Have any of these geniuses given any thought to what it will do to the average family’s electric bill?

We’ve already had rolling blackouts in SD County, and summer’s barely started. Imagine the impact from thousands of electric cars being plugged in. There haven’t been significant upgrades to the grid here in a long time. The city & county don’t want to pay for it. To top it off the greens have been trying everything to kill the Sunrise Powerlink here. Do you really think the enviromentalists will allow more power plants to be built here? Not likely.

Suihei Deloi on June 26, 2008 at 7:52 PM

Big S on June 26, 2008 at 7:49 PM

So. How is 800,000 bbl/day from the Saudis going to make a big impact, but 1,000,000 bbl/day from ANWR not?

And. We should just not drill the oil? Ever?

misterpeasea on June 26, 2008 at 7:55 PM

Suihei Deloi on June 26, 2008 at 7:52 PM

I wonder how much more natural gas it is going to take to run these plants. Or Dam’s?

Sui if I were you get the hell out of Cali. Before the greens start killing each other because someone isn’t green enough.

upinak on June 26, 2008 at 7:56 PM

Big S on June 26, 2008 at 7:49 PM

Fine. What’s your opinion on offshore drilling?

Suihei Deloi on June 26, 2008 at 7:58 PM

Fine. What’s your opinion on offshore drilling?

Suihei Deloi on June 26, 2008 at 7:58 PM

I’m fine with drilling in ANWR and offshore. However, I do not think, based on numbers like those that I cited above, that people should be promoting such projects as a solution to high oil prices. Palin’s proposals are great for Alaskans, and will have some small yet tangible benefit for the rest of the country. Elevating her to VP material based on a somewhat dishonest reading of the benefits of drilling in ANWR seems foolish to me.

Big S on June 26, 2008 at 8:02 PM

Consequently, ANWR oil production is not projected to have a large impact on world oil prices.
(OPEC) could neutralize any potential price impact of ANWR oil production by reducing its oil exports by an equal amount.

I think this all depends on how much we can supply to America from America. If we were allowed to develop the oil shale we have at the same time we began drilling in ANWR and building new refineries we could start becoming really independent from foreign oil.
Right now huge efforts are going on in the gov’t to get biofuels online and cost effective. Their timelines run until past 2012 for any sort of real effect. So that’s 1 or 2 years sooner than oil…if it works. We need help NOW. If we begin exploration and infrastructure development now OPEC will (hopefully) stop being able to ratchet up prices in 1 or 2 years.

Saying we shouldn’t drill because it will take too long and might not be enough is like saying we shouldn’t go to the store for groceries because it will take too long to turn them into dinner and we might still be hungry afterward.

NTWR on June 26, 2008 at 8:05 PM

upinak on June 26, 2008 at 7:56 PM

I can’t. My wife is in experimental chemotherapy. There are no options for treatment if we leave now. There are about 8 others with her condition. On Earth. At least we’re not one of the ones stuck in the Candadian system.

It’s why I work where I do. I can at least make my own little impact in the Long War from a desk if not the front line. Since I can’t leave anyway, I might as well make life miserable for the enviro-nutcases while I’m here. At least if they really lose their minds I can go down swinging.

Suihei Deloi on June 26, 2008 at 8:06 PM

Big S on June 26, 2008 at 7:49 PM

The only way to bring down oil prices is to increase supply. It’s called supply and demand. Prices go high when demand is high and supply is short. Prices go low when demand is low and supply is high.

You cannot increase supply without drilling and bringing more oil to market. We don’t care how much that oil represents on a world scale because it will be American oil and we can decide whether to export it or not. Let the OPECKers reduce their oil, we don’t care if China runs out of oil. If we have our own oil, who cares?

And you completely set aside all the other advantages I named which were, NOT funding terrorism, money going to AMERICAN workers i.e. more jobs, security, increased tax revenue and decreasing the American trade deficit.

Maxx on June 26, 2008 at 8:07 PM

Suihei Deloi on June 26, 2008 at 8:06 PM

Oops. Canadian system. I’m doing good today aren’t I ; )

Suihei Deloi on June 26, 2008 at 8:08 PM

Is there a way around the ANWR lockout? Is the oil-rich area near the perimeter of the refuge, so that the drilling operation could take place outside the official boundary and reached with angled-drilling methods? I’d love to get it out of the fed’s hands somehow.

innominatus on June 26, 2008 at 8:09 PM

The effect on speculators , that knew that there was a country that would open the doors for new production, would be what?…… Any intelligent person would say…. “Let us produce our own crude for the short term and develop the alternative sources in the interim.” You can cry all you want about environment and such, but all you are surrounded with in your home is oil based goods. You can espouse the “greening” but you’re not going to follow the ALGORE to success. Oh , and spare me the 10 year prediction of that production…. most specialists say it’s 3 to 5 years.

MNDavenotPC on June 26, 2008 at 8:11 PM

Mmmmmmmmmmmmmmmmmm….

So lets-not-drill as it won’t matter because…
a) The Saudis could cut production
b) It won’t change the price of gas

OK. Fine. No drill. Not ANWR. Not the coasts. Not the oil shales or the tar sands.

So now
a) The Saudis cut production or
b) The straits are closed

How exactly does NOT having wells in operation help us again?

Limerick on June 26, 2008 at 8:11 PM

[Big S on June 26, 2008 at 7:49 PM]

So what. ANWR will creates hundreds of jobs, more during construction. Good paying jobs. Some workers will be Alaskans, other from around the country, all sending money not overseas but to their local towns and cities and be spent there. Lots of money will be spent in Alaska helping alaskans and filling the government coffers. The Feds will collect additional revenues. The money will be spent here. The money will be generated here and spent here.

So the Saudi’s lower production. Drill another well off the coast, and another and another. Let the Saudi’s keep lowering production until they aren’t producing. Our balance of payments will go down. There’ll be pressure on the dollar to go up and everything will be cheaper.

Let OPEC states become paupers via high prices and low volume. We’ll be richer than ever before. In the meantime the better tech will slowly come on line and we can sell the oil to foreign buyers and make even more money.

Dusty on June 26, 2008 at 8:12 PM

Suihei Deloi on June 26, 2008 at 8:13 PM

As with any mandate: If it’s such a good idea, why does there have to be a mandate?

misterpeasea on June 26, 2008 at 8:30 PM

Big S on June 26, 2008 at 7:49 PM

Why did we stop filling the Strategic Petroleum Reserve(SPR) again?

(Cough.. Cough..)

Chakra Hammer on June 26, 2008 at 8:34 PM

Would it work?

What kind of a stupid question is that? Of course it would work! You drill, you hit oil, you pump oil, you transport oil, and you have more FReepin’ oil! This ain’t rocket science!

Another thing… About 35% of the run-up in the US oil price is due to the declining dollar. As the dollar loses value, we have to send more out for each barrel, even if the World price remains the same. The oil market is no longer traded exclusively in dollars. One reason the dollar is so weak is our huge imbalance or trade. A large part of that imbalance is our importation of fuels.

If we drill more, we import less, we send out fewer dollars and the dollar gains strength. Thus we have to pay less for each barrel of oil we do import. It is a virtuous cycle that can save us a lot of money as a country and at the pump.

gridlock2 on June 26, 2008 at 8:36 PM

Mmmmmmmmmmmmmmmmmm….

So lets-not-drill as it won’t matter because…
a) The Saudis could cut production
b) It won’t change the price of gas

OK. Fine. No drill. Not ANWR. Not the coasts. Not the oil shales or the tar sands.

So now
a) The Saudis cut production or
b) The straits are closed

How exactly does NOT having wells in operation help us again?

Limerick on June 26, 2008 at 8:11 PM

Libs don’t like to plan anything out, they think magic can solve things.

Chakra Hammer on June 26, 2008 at 8:37 PM

gridlock2 on June 26, 2008 at 8:36 PM

Also, speculation since they KNOW for a fact they we cannot drill here in the United States.. IF that policy were to change maybe some of the speculation would change also, couldn’t hurt.

Chakra Hammer on June 26, 2008 at 8:41 PM

I like to think of it strategically. I’d rather be able to take care of ourselves when it comes to basic survival needs. Food, water, fuel, ect… I would rather pay 5.00 for a gallon of US gas, than 5.00 for a gallon of middle east gas. I’m all about free markets and global trade, but like I said, on a basic survival level, as a country, we need to be able to take care of ourselves in the event of an emergecy. The Dems keep talking about how drilling won’t bring prices down. I think prices are not really the main issue we should be worried about.

gator70 on June 26, 2008 at 8:56 PM

So what. ANWR will creates hundreds of jobs, more during construction. Good paying jobs.

Actually, it’s hundreds of thousands of jobs, when you consider infrastructure and downstream operations.

rokemronnie on June 26, 2008 at 9:20 PM

HOT!

SouthernGent on June 26, 2008 at 9:25 PM

Back to Palin: That gal is sharp, articulate, and she exudes optimism, the can-do American spirit. What’s not to like? The beauty part is that she is genuine, not a slick veneer of double-talk.

onlineanalyst on June 26, 2008 at 9:30 PM

How exactly does NOT having wells in operation help us again?

Limerick on June 26, 2008 at 8:11 PM

It helps us because the microscopic nannobacteria that live at 8000′ depth will not have their beauty sleep disturbed.

Some species of them are cerainly endangered!

Oh… how does it help us? Hmm. I’ll get back to you later, after I donate plasma to pay for my 23 gallons of gas.

TexasJew on June 26, 2008 at 9:31 PM

So the Saudi’s lower production. Drill another well off the coast, and another and another. Let the Saudi’s keep lowering production until they aren’t producing. Our balance of payments will go down. There’ll be pressure on the dollar to go up and everything will be cheaper.

We have about 25 billion barrels of oil in proven reserves. The Saudis have more than 10 times that, and the rest of OPEC has a whole lot more. We don’t have enough leverage to play that kind of game with the Saudis, let alone OPEC as a whole. This is what I was talking about when I was referring to “scaling” above.

Big S on June 26, 2008 at 10:12 PM

We have about 25 billion barrels of oil in proven reserves. The Saudis have more than 10 times that, and the rest of OPEC has a whole lot more. We don’t have enough leverage to play that kind of game with the Saudis, let alone OPEC as a whole. This is what I was talking about when I was referring to “scaling” above.

Big S on June 26, 2008 at 10:12 PM

25 billion barrels of proven reserves. Gee, if only there was some way to increase our amount of proven reserves. I’m exploring my brain, trying to find new sources of ideas. I’m drilling into my reservoir of accumulated experience and knowledge.

Nope, nothing.

And. Saudi Arabia is not going to reduce the amount of oil they export without limits. They need to export that oil. They need the money. The global market for sand is not encouraging.

misterpeasea on June 26, 2008 at 10:23 PM

[Repeating, cuz I stupidly posted this last night in the wrong thread. Not profound, but might as well put it where it belongs.]

By the way, I heard Sarah Palin on CNBC tonight talking about drilling in ANWAR. She flat out told the dude on at the 7 pm hour that McCain was WRONG on ANWAR. HEHE. Unfortunately, that probably moves her down in the consideration list. Sigh. She would be good for this ticket.
karenhasfreedom on June 25, 2008 at 9:47 PM

This could be the prelude to Senator McCain making a quick trip to Alaska to see ANWR in person, with Sarah the Governess, and then declaring, “By golly, I see now that drilling here isn’t going to harm a doggone thing except a few mosquitos, and I’m going to support Sarah on this!”

Could be. If McCain had half the sense he was born with.

MrLynn on June 26, 2008 at 10:45 PM

$4.60 gallon and rising.

GarandFan on June 26, 2008 at 7:10 PM

Up $5 a barrel today! Go eff yourself Ahnode, you liberal twit.

Jaibones on June 26, 2008 at 10:46 PM

Disclaminer: I’ve lived almost all my life in the oil fields of West Texas, talked to worked with, had for neighbors and friends that eat, sleep, work and bleed oil.

Most for all of their lives.

They will tell you that oil is where you find it. But they will also tell you that if you don’t look, drill and spend large amounts of money, you have zero chance of finding oil.

“Proven Reserves” Well, that is good from the accountant side, you need those to get loans from the bank and to show them that you did at least a few times actually find oil.

But that is not what this business is about. It is about the work, the journey to find oil. Once it is found, you go looking for more. And I can tell you that if the government be it a city, county or Federal tells them that they can’t get a lease or leases, it really pisses them off. Because that is what they do, like a race car driver, they want to win. Their race is run against Mother Nature and the pitfalls of the work, and lady luck.

And they are damn good at winning the race. Not every time, not sometimes every tenth time they drill, but enough that millions of people can have a good life and enjoy the wonders of oil. Its not easy but there would be no “proven reserves” if the effort and the money was not spent to begin with.

The oil people I know are convinced that the world’s oil supply has only just been sampled, they are convinced that there are trillions (with a capital T) barrels of oil just waiting to be discovered. They all may not be in reach of current teck, but in the oil field, teck is improving each and every year.

All of the above is just for your consideration if you have never been around the oil field or oil people. They are hard working, hard playing, smart and tough men and women.

If governments would just get out of the way and hold back the greenies, we would have more oil than fifty new refinerys could process.

Papa Ray
West Texas
USA

Papa Ray on June 26, 2008 at 11:03 PM

We should start drilling everywhere. Especially in ANWR just to po the liberals. When I say everywhere, I mean off the coasts of FL and CA and anywhere else on the offshore coastal shelf.

Then we should be converting coal to oil(gas) and mining and refining the oil shale out in UT, CO, and WY.

Also, reference Maxx’s post earlier where (s)he talks about the money staying here in the USA and working for us.

This is not that hard to figure out.

Oh yeah, she’s hot.

cjs1943 on June 26, 2008 at 11:03 PM

We should start drilling everywhere. Especially in ANWR just to po the liberals. When I say everywhere, I mean off the coasts of FL and CA and anywhere else on the offshore coastal shelf.

Then we should be converting coal to oil(gas) and mining and refining the oil shale out in UT, CO, and WY.

Also, reference Maxx’s post earlier where (s)he talks about the money staying here in the USA and working for us.

This is not that hard to figure out.

Oh yeah, she’s hot.

cjs1943 on June 26, 2008 at 11:03 PM

We can also do Nuclear, clean coal, and the wind stuff, and the plug-in cars etc…

all that..

It’s called an Energy Portfolio. we don’t need all our eggs in one basket.

And I dang sure don’t want to be dependent on OPEC and these others forever.

Chakra Hammer on June 26, 2008 at 11:17 PM

Sarah Palin = Rock Starlette

Smart, Personable, Humble, Attractive…..

Mallard T. Drake on June 26, 2008 at 11:33 PM

Is Kudlow hitting the sauce?

mylegsareswollen on June 27, 2008 at 12:04 AM

Palin rocks. If she is VP I am a McCain backer.

Dawnsblood on June 27, 2008 at 12:17 AM

Papa Ray on June 26, 2008 at 11:03 PM

Now let’s not get too rational here.
We’re talking about nasty old oil, you know..

Eeeeevil oilmen like JR Ewing and John D. Rockefeller and “There Will Be Blood” and Jett Rink and on and on..

Only The Obamessiah and Al “low-flush toilet” Gore can lead us carbon-belching sinners to a bright clean and (the key phrase here) RENEWABLE energy future.

TexasJew on June 27, 2008 at 12:32 AM

TexasJew on June 27, 2008 at 12:32 AM

LMFAO J.R. Ewing HAHAHAAAA OMG Not DALLAS!

I thought I would check this before I dragged my tired butt to bed.

Now off to bed to be up at 3 am my time to work out and get some stuff done.

Expect to hear more on Sarah in the upcoming days. :)

upinak on June 27, 2008 at 12:41 AM

Is that what an Alaskan accent sounds like? Not quite Canadian, not quite North Dakotan.

Youse gotta prob’em wit Nort Dakoota axcents AP?

Hoser.

:)

Actually she has much less of an accent than I would normally hear in North Dakota…some places in WI and MN.

And now that I think of it, it’s the rest of the country that sounds funny.

91Veteran on June 27, 2008 at 2:04 AM

Shoulda added…she’s a pretty good lookin hammer!

91Veteran on June 27, 2008 at 2:07 AM

Now, I’ll be the very first to admit that when it comes to economics, I’m not even a neophyte…sort of a protophyte, I expect.

So, request a gentle reality-check here: “Speculation” is about trading in risk, buying into the probabilities of some given commodity increasing or decreasing in value over time. Check?

The alarming proximity between the values of Supply and Demand in the current global oil market is one of the factors which has driven the very brisk “long” (i.e., projected to increase) purchases of oil futures, which in turn amplify the upward drive in prices. Demand continues to increase, while supply is subject to a variety of all-too-plausible scenarios for interruption, with very little slack before it is outstripped by demand. Seems a safe bet that “up” will outweigh “down,” by a pretty wide margin. Check?

The US taking active, concrete, and visible steps toward introducing more oil from domestic sources, while simultaneously incentivizing development of alternative energy and fuel sources will start a very public clock ticking toward the supply:demand ratio undergoing a considerable realignment. [False dichotomy to illustrate the ends of what would actually be a spectrum:]Either domestically produced American oil will be used domestically (and so take a proportion of American demand off-line in the global market, leaving more available supply from foreign sources), or that domestic oil will be sold on that global market, with the same net effect. Check?

Futures traders will see this clock ticking, observe the conservation and alternative energy/fuel efforts underway, take the measure of the American zeitgeist, and may begin to judge that the future of betting on a consistent rise in petro-prices is not so bright. Long orders would decrease, and along with them the upward pressure on prices…before a drop of oil is actually extracted from the ground. Check?

So the question of what immediate benefit there would be from beginning exploration and exploitation efforts on domestic fields is tending to be interpreted too narrowly if the effects on the market of the efforts themselves are not being taken into account. Check?

Bonus round: Palin is marvelous, but it would be a mistake to decant her before 2012. Check?

Noocyte on June 27, 2008 at 3:42 AM

There are 2 ways to fix this. Increase supply or reduce demand period. Obama is an reduce demand type, McCain seems to slowly be coming around to being an increase supply type and Gov Palin is an unabashed increase supply type. I am with Sarah.

Dawnsblood on June 27, 2008 at 5:48 AM

I expect we’ll be seeing alot of these in California soon:

Lonetown on June 27, 2008 at 5:54 AM

We need to leave the likes of Palin and Jindal in place to nuture the state Republican aparatus.

davod on June 27, 2008 at 8:25 AM

So intelligent. So genuine. So confident. So beautiful. So…….. fertile.

Nature’s Perfect Woman discovered in Alaska?

Of course, we shouldn’t nominate Palin for Veep. She’s too young and inexperienced. They wouldn’t be able to attack Obama on that issue. Like Hillary did with so much success.

Mr. Wednesday Night on June 27, 2008 at 8:43 AM

The price of gas is terrible and the price may not go down appreciably if we drill. However, energy security may be more important than price.

Look to the 70′s for an example of what an OPEC oil embargo and bad US government policy does for the man in the street and the economy. Look more recently at Russia’s attempts to blackmail the EU and the East European states with supplies of natural gas (normally happens around winter time).

Defuse Russia’s energy weapon Pipeline politics.

Ukraine warns of energy blackmail.

We should start extracting, and refining, our raw energy materials while it is still a luxury to do so.

davod on June 27, 2008 at 8:46 AM

Noocyte on June 27, 2008 at 3:42 AM

So, request a gentle reality-check here: “Speculation” is about trading in risk, buying into the probabilities of some given commodity increasing or decreasing in value over time. Check?

Yes.

The alarming proximity between the values of Supply and Demand in the current global oil market is one of the factors which has driven the very brisk “long” (i.e., projected to increase) purchases of oil futures, which in turn amplify the upward drive in prices.

If you’re saying that the long purchases are driving up prices, I’m going to have to disagree. These transactions are bets, basically, on what the investor thinks the price will do. Betting on the outcome of an event doesn’t change the probabilities of the outcome. If supply rises and demand falls, the price will drop, no matter what the speculators bet.

misterpeasea on June 27, 2008 at 10:38 AM

You think that’s a ‘Northern’ accent?

Go up to Da U.P. of Michagan, and you’ll need a translator.

cntrlfrk on June 27, 2008 at 10:39 AM

If you’re saying that the long purchases are driving up prices, I’m going to have to disagree. These transactions are bets, basically, on what the investor thinks the price will do. Betting on the outcome of an event doesn’t change the probabilities of the outcome. If supply rises and demand falls, the price will drop, no matter what the speculators bet.

Hmmm. I get the concept, but I guess where I’m coming from is wondering if there might not be a kind of positive feedback here, where people see other people betting almost exclusively one way (which is about the real status of the supply of and demand for real oil), which in turn makes them more likely to bet the same way (which might be about a more “psychological” effect, a kind of ‘flocking’ behavior which is subject to perceptions, no?)

Noocyte on June 27, 2008 at 10:58 AM

And furthermore, is there some mechanism whereby the price could be affected by such betting? Is there some ‘connective tissue’ between the market for futures in oil and the market for oil itself? (see? Protophyte.)

Noocyte on June 27, 2008 at 11:01 AM

Noocyte on June 27, 2008 at 3:42 AM

Just the effect of renewed, aggressive drilling and other energy development will surely ease fears of future shortages, and thus should bring down the futures price.

If a large component of the futures price is the result of institutional (non-user) money looking for good bets in commodities, though, it is likely that some of the regulations proposed by Democrats (believe it or not!) might help curb the rising prices. Read this letter from one of Benny Peiser’s correspondents:

(9) RE: OIL CRISIS AND OFFSHORE DRILLING

Hi again, Benny,

I don’t intend to become your penpal on this subject, but I thought maybe there’d be some value in devoting a few more words to the current oil price situation.

Despite the pejorative texture of the word, a speculator in the oil futures market is simply a trader–a pension fund, say, or a sovereign wealth fund–who hasn’t the intention or the capacity to physically receive oil. Their barrels are ‘paper barrels.’ Originally, futures were employed by heavy users of petroleum products, like refiners or airlines, to hedge their physical commodity exposure, and they are important for that reason. Some speculative capital is needed for adequate liquidity, but the recent huge influx has overweighted the physical hedgers. Speculators now account for about 70% of all benchmark crude trading on the New York Mercantile Exchange, up from 37% in 2000.

In effect, these investors are hedging dollars, whose weakness has been driven by the Fed’s lengthy monetary expansion. With the drying-up of investment vehicles associated with the sub-prime market, vast sums were left hungry for new feeding grounds. Thus, for example, in an April report, Lehman Brothers said the price of oil had been pushed to inflated levels by a $40bn inflow into commodity index funds this year, much of it coming from Mid-East sovereign wealth funds. The result of all this is the chaotic market we see every day, with a distorted price-discovery mechanism, and prices uncoupled from physical supply.

There is now legislation afoot to rein-in some of this. Among the proposed remedies are increased margin requirements for non-physical hedgers (perhaps to the 50% already required for stocks), position limits for speculators, better disclosure of positions, and, perhaps, preventing pension funds and investment banks from owning commodities at all. A panel of oil analysis experts, testifying earlier this week before a sub-committee of the House Energy and Commerce Committee, felt such measures might quickly drop the oil price to $65 to $75 a barrel. Even doubters among the Republican congressmen seemed more inclined to question the feasibility of such measures than their desirability.

All of the panelists favored offshore drilling for the long term (one mentioned energy security), but were unanimous that, at present, big oil would be unwilling to develop such remote sites, since oil industry executives themselves consider the current oil price to be fundamentally unsustainable (plus of course current supplies are meeting current demand). This is consistent with a Bloomberg report on Monday that insiders at the big refiners, like Valero and Tesoro, are buying more of their own stock than at any time since 2000, in anticipation of a drop in the oil price. We’ll see.

If that panel’s testimony is still available at C-Span’s website (6/23, Bart Stupak, D-MI, presiding; it’s the first panel, comprising Fadel Gheit of Oppenheimer & Co., Roger Diwan of PFC Energy Consultants, Michael Masters of Masters Capital Management, and Dr. Edward Krapels of Energy Security Analysis), I heartily recommend it as a great three-hour window into the complexities of the oil market, and the limited applicability thereto of the homilies of lemonade-stand economics. My own view is we need to act immediately on speculation, because $4 gasoline and $5 diesel is killing our economy (and others), and perhaps these prices could be halved by Labor Day. Later, we can debate the value of developing U.S. domestic reserves to come onstream five to ten years from now. It would be a tragedy to hold Americans hostage by trying to conflate these two approaches into a single piece of legislation, since the latter is controversial while the former is not.

Best regards,

Burton Golden

Benny Peiser’s CCNet is an enormously valuable e-list on energy and climate catastrophism: “CCNet is a scholarly electronic network edited by Benny Peiser. To subscribe, send an e-mail to listserver@livjm.ac.uk (“subscribe cambridge-conference”).”

MrLynn on June 27, 2008 at 11:15 AM

Palin for Veep!

Dscw66 on June 27, 2008 at 11:38 AM

I guess Ahnuuld’s steroids have finally worn off. It’s pretty plain they’ve done some damage to his brain cells.
Hey, Ahnuuld – let’s drain the steroid polluted blood out of your veins and see how you deal with your addiction to blood. Oil is the blood that flows through America’s veins, it is not an addiction. Get it straight.

abcurtis on June 27, 2008 at 11:57 AM

Thus, for example, in an April report, Lehman Brothers said the price of oil had been pushed to inflated levels by a $40bn inflow into commodity index funds this year, much of it coming from Mid-East sovereign wealth funds. The result of all this is the chaotic market we see every day, with a distorted price-discovery mechanism, and prices uncoupled from physical supply.

OK, that sounds like there is a set of circumstances –including but not limited to futures markets– which is acting to “uncouple” prices from supply. Interesting.

Now, could someone explain as they would to an idiot or a small child what is meant by this “margin requirements for non-physical hedgers” business? I think I can kind of see the outlines of it, but a few more dots would be helpful. I am wary of any idea which has government blundering in to further distort –by legislative fiat– an already-distorted market. Would legislating a change in the “margin requirements” be a case of that?

Noocyte on June 27, 2008 at 12:41 PM

. . . much of it coming from Mid-East sovereign wealth funds

This phrase caught my attention. Do we have here a nice positive-feedback mechanism for the oil sheiks of the MidEast? They pour money into futures, prices rise, they sell oil for more, and pour more money into futures.

Neat trick, if it’s true. Can we decouple that? How?

MrLynn on June 27, 2008 at 12:57 PM

Big S: your argument strikes me as short-sighted.

Liberals for years have been arguing for “energy independence”, saying that would lessen our reliance on Mid-East oil, and hence our geopolitical interest in that part of the world.’ We went to war (first Gulf war) precisely to secure the supply of Gulf Oil and prevent Saddam from holding it hostage, remember?)

At the same time eco-weenies worship at the altar of Saint Gaia, telling we can’t drill here because of the health of “the planet”.

NOW, we’re told that CO2, which is essential to all plant and animal life on earth, is a pollutant, and that we need to restrict “our” (American, not Chinese or Indian) use of oil, natural gas and coal — and restricting new exploration and drilling is a step in that direction.

It’s all very convenient, because now, NO MATTER WHAT the counter-argument, liberals will say there’s either no point to drilling for oil domestically, or it is harmful to “the planet”, or we need to restrict its supply “for our own good”.

IOW

*”energy independence” has been swept under the bus. Lib/weenies now arguing Global Warming is the bigger problem —except when they don’t.

* potentially 15 billion barrels of domestic oil from ANWR is now useless — even though we would not be exporting bazillions of $$$$$ to the Mid-East to pay for the same amount of oil, thus decreasing our balance of trade deficit, creating domestic wealth (hundreds of thousands of people and pension funds own Big Oil stock) AND alleviating downward pressure on the $$$.

* we need to develop “alternative” energy sources—never mind that we went through the failed Synfuels “initiative” under Carterca and can already see the ethanol debacle unfolding in front of us. And never mind that there are no guarantees that such alternative energy sources are anywhere near commerical realization — call it “faith – based research”, if you will.

Never mind that the only non-CO2 generating power source that could make a real dent in coal/oil/natural gas consumption —- and provide the ONLY source of hydrogen that doesn’t generate more CO2 and/or provides an economically “positive” balance in resultant energy in producing H2 or powering batteries vs the energy needed to produce it —- is off-limits! (that would be “nuclear power”).

* you say OPEC can decrease their oil prices to keep them high world-wide, which of course will have the positive benefit of spurring research those alternative energy sources lib-weenies love so much, WHILE encouraging India and China to burn more coal — a negative consquence to global warming zealots.

In short, there are trade-offs no matter what we do, but none of them is WORSE than doing nothing (short of hoping for a miracle), which is what the eco-weenies argue we should do.

fulldroolcup on June 27, 2008 at 2:52 PM

. . . In short, there are trade-offs no matter what we do, but none of them is WORSE than doing nothing (short of hoping for a miracle), which is what the eco-weenies argue we should do.

fulldroolcup on June 27, 2008 at 2:52 PM

Excellent summary of the situation. Thanks!

MrLynn on June 27, 2008 at 6:01 PM

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