Wednesday, May 26, 2010

American TurmOIL

Here's a long one, primarily influenced by "The End of the Free Market" by Ian Bremmer. Don't worry, it's not what the title sounds like, and is actually very pro-America. GO BUY IT NOW, IT'S BRILLIANT!

Why Real Patriots Hate the Environment: It's time to wake up people (hahaha, what a hilariously overused, quaint phrase. Thanks Palin)! Global warming is a myth, it's largely disputed in the scientific community, it's a conspiracy run by the Emerald Cities, CCX, Al Gore, AND OBAMA! It's actually caused by a shift in the gravitational poles of the earth as prophesied by the late great EDGAR CAYCE! (Nobody's saying that, I'm just fascinated by Cayce) Oil drilling is perfectly safe, we're not actually causing ocean temperatures to rise, we're not in the middle of a mass-extinction event, and don't need to start doing everything in a more sustainable manner...

WHEN in the history of EVER was there an ANTI-environment campaign on the scale that conservatives are running today!?! This is ludicrous! Who's spreading this garbage? (that'll likely be my next post :P) Oh well, that's never going to convince anybody, so how about this: Reducing oil consumption is a matter of economic and national security! Two terms that speak clearly to all conservatives :D

Junk Stolen From Ch3 of "Free Market": The emergence of state-capitalism (read the book!) has brought about the rise of National Oil Companies (NOC)! How big are they? NOC's control 52% of the present market and 88% of all known reserves. They ARE the future! Aside from NOC's being vastly larger than private sector oil companies, they also have different motivations. Private industries are concerned with profit, whereas the NOC's use their natural resources as bargaining chips to achieve the political goals of the nation.

What does this mean for the future? As the present wells run dry and our dependence on oil grows with our population, we become vulnerable to the political whims of those controlling the NOC's. For example, Venezuela has repeatedly threatened to cut off our oil supply, and they're our third largest supplier! Oil prices are going to go up as the supply goes down, and then who gets rich, and what do you suppose they'll do with their new found wealth? Well when oil prices peaked back in 2008 Russia started a conflict with Georgia, and Iran started firing off test missiles. Also, as I mentioned in yesterday's post, China gets oil for weapons in Iran, and traded oil for nuclear programs in N. Korea! THAT is the trading power of oil. Forget dollars!

So which NOC's are the most powerful, and who owns them? Saudi Aramco, Russia's Gazprom, China's CNPC, Iran's NOC, Brasil's Petrobras, Malaysia's Petronas, and Venezuela's PDVSA make up the "new seven sisters" of oil. We have good relations with Saudi Arabia, bad relations with Iran and Venezuela, we have very shaky relations with Russia and China, and Malaysia and Brasil largely keep politics out of their oil (not to be feared or relied too heavily upon).

Our massive reliance on oil will necessarily fund nations who would love to see us fall! Despite claims to the contrary, we're NOT a socialist state, and because we love our free market so much, we will NOT be able to get in on this NOC game. Our only chip on the table is that we are and must continue to be vital to the survival of all other economies through our top notch educational institutions, innovative products, and massive consumption (...of things that don't rhyme with soil). The ONLY way to take control of our destiny is to reduce the bargaining power of oil by massively reducing our dependence on oil for energy, production, and gasoline.

One glimmer of hope resides in the fact that these NOC's are not operated as well as private multi-nationals and largely use the profits for political gain rather than for investing in new rigs and fixes. This hurts their productivity, but also limits the supply further by blocking access to other companies who could more efficiently extract the oil. This could help or hurt, depending on who is failing and who picks up the slack.

Short Term Junk: Cap and Trade will necessarily cause electric bills to "skyrocket," but if oil goes over $100/barrel again or even $200/barrel, what do you think is going to happen to our bills? Byproducts of cap and trade include cleaning our environment, developing green technologies, and Al Gore gets rich. Byproducts of continuing our reliance are we destroy the environment, lose our position as a global super power, and start speaking Chinese.

Case rested. Conservatives, please, stop with the kill the planet campaign. Archaic Libertarian greed at the moment will cause our downfall in the future, a flaw I'll likely write about soon.

~Yasu

...btw, I gave oil drilling a hard time earlier, and would like to clarify. Just because there's a disaster now doesn't mean drilling won't be a good idea once we resolve safety issues. If the anti-oil stigma is similar to the anti-nuclear stigma following Chernobyl and Three Mile Island, it will only exacerbate the problems I just outlined. It's not a popular opinion right now, but I hope and believe oil drilling should make a comeback much faster than nuclear did :\

6 comments:

Private said...

The reason oil is only $3 bocs a gallon is because 15% of the population isn't driving to work anymore. If it hits $6 bocs a gallon before inflation kicks in, the economy will collapse.

Last week Obama was praising the economic recovery. This week they're talking "double dip recession" prevention.

We should of been drilling in Alaska a long time ago. Drill baby! Drill! Alot easier to clean than Davey Jone's locker.

Regarding conservatives being anti-enviroment. It's not that, it's everything that comes with the looney Left's BIGGER government CAP & TAX scheme. If we shut down BIG OIL and go candle light to protect the enviroment, does that mean China and everyone else will do the same? Probably not. If we stop drilling for oil in the ocean, will everybody else? I doubt it.

So, we can't put OIL and nize enviroment in the same sentence. The powers that be, will be sloushing around in oil while we revert to caveman daze. FIRE!! FIRE!!

btw, Big oil is controlling technology that will enable you to zip from here to L.A. on one battery charge...and zero oil!

Free market solutions will come up with better and better electric cars, etc. But until then we need to fill the gap with home grown crude.

Wayne Yasuhara

Private said...

...forgot to mention, how are they planning to prevent that nasty 'ol double dip recession? You guessed it! ANOTHER STIMULUS BILL! Chump change....only $200 BILLION! If the $800 BILLION didn't stimulate the fridgid bitch from Icelandia, what makes them think another STIMULUS is gonna warm her up?

How many times do we have to traverse this road before we figure out it doesn't go anywhere?
Except over a cliff maybe!

Wayne Yasuhara

YASU said...

It's not about fairness, and whether the rest of the world will do it too. It's a matter of not letting China, Iran, Russia, and Venezuela have us by the BALLS! That caveman scenario of yours is EXACTLY what will happen in about 20yrs if we DON'T start converting now.

That being said, we do NOT want to over do it. If we cap and trade too much it could adversely affect business, cause rising prices and inflation, then our currency is down which is just as bad as the other scenario. And yes, we should've been drilling in Alaska a while ago, but that's not a solution, it's an enabler! Like welfare for rich people! Plus when they fuck up like NOW, it costs BILLIONS in business and tourism, plus the environmental costs are staggering.

Fun Math: I assume that 15% is unemployment including the non-work force. You're assuming we started at zero. Unemployment roughly doubled its norm of 4-5% and the non-work force numbers only increased by about 1/7x. Gasoline only accounts for 50% of our crude oil consumption, so let's say people who don't work don't drive at ALL anymore, round up to 6% increase in unemployment, then you're still only talking about less than a 3% decrease in the total oil consumption. Significant, but not a real game changing number, and hopefully temporary.

The math can explain the numbers, but I don't know what can explain your point! Yea, we're totally screwed if gas hits $6/gallon cuz that means oil is more like $200/gal! What part of that argument says I'm not right? We need to cutback! Do the conservatives have some other miracle plan for cutting our oil consumption that I don't know about? What's their cap and trade alternative? How else do we get industry to cutback?

Now you have two items on your conservative scavenger hunt. Find me a historically successful libertarian solution to a market crisis, then find me the conservative recommendation on how to cutback on our oil consumption.

My other gripe is that just as much as drugs and gangs are a part of ghetto culture, big ass cars are a part of conservative culture. Rich conservatives drive SUV's, poor conservatives drive big ass pickups! Priusesess (what's the plural of Prius? Prii?) are looked down on as tree hugger hippy foreign cars. We're getting screwed in all directions by conservatives more than the government!

Our economic recovery rate has been ridiculously fast, outpaced all estimates. Still on its way, and we have an astronomical number of bills to pay back, but we'll resume business as usual way faster than expected.

The only double dip they're talking about is due to the crash of the Euro and possibly the war in Korea which are both out of our hands (though I did see some discouraging home price article yesterday that I haven't read yet). We already helped Greece with the bailout through the IMF, and that was more than we would've liked, and gives way more credibility than I'd like to you folks who fear global governments are going to start subverting local governments. Realistically Germany should've initiated the bailout sooner, but there were some politics involved there. As for Korea, well we just wait and see. Can't expect much from China when we've been selling a TON of weapons to Taiwan in the last couple of years.

btw, look what I stumbled on this morning. Some independent task force did a report on exactly what I'm talking about back in 2006: www.cfr.org/content/publications/attachments/EnergyTFR.pdf

Private said...

The Conservative solution to the oil crisis when there is an oil crisis is to start drilling stateside, and get rid of 3rd world dependence. If we depend on looney 3rd world nations, then anytime they get their panties in a wad, our prices go UP! Unstable and high prices are bad for the economy. Do you know how much free market goodies are transported cross country in semi-trucks? If the gas price hits say $6 bocs a gallon, then you start seeing truckers parking their rigs on the side of the road. That means shortages, high prices, less purchasing, and loss of jobs, etc.

Loss of jobs means less tax dollars, which in turn means higher deficits.....Moody's gets pissed off, cuts our triple A credit rating.....Chinese no happy! Now what? Print more cash?

You think the economy is getting better? I'm looking at gold at $1,200 an ounce. Dang! Need more DOLLARS to buy one stink'n ounce of gold! More dollars = INFLATION! Two years ago, Gold was at $650 an ounce. The only thing going on is you're starting to see the LIQUIDITY tap being turned on. All those stimulus dollars propping up the Market. Each time they bring new stimulus dollars to the table, they dilute the value of the exisiting dollars. Look for $2 Snicker's bars!

NO JOBS plus INFLATION = STAGFLATION....and then DEPRESSION.

Wayne Yasuhara

Private said...

I'm sensing that the Federal Reserve is getting bored with sucking the middle class dry. If you study the guys that created the Federal Reserve, you will find that they're the same guys that created the run on banks in 1907. Big money bankers controlled the Senate, and Congress. (Kinda like Chicago politics nowdays.) The same politician's and bankers that made selling goods to American's more expensive than selling the same goods to foreigner's, are the SAME crooks that created the Federal Reserve to suck the people dry. Lobbyist are like little worker bee's for these BIG corporations, BIG banks, and the BIG money manipulators over at the Federal Reserve. These guys are so powerful that they can create runs on banks, start wars, and control stock markets. Who are the shareholdes of the "private" Federal Reserve? The BANKS! These guys sit around 24 hours a day thinking of new and exciting ways to rip you off! So why did the Federal Reserve caause a run on itself, by causing a run on the banks? Probably so they could call their man over in the Senate, or the President, and get the green light on something cool like INCOME TAXES. Or maybe one of the bankers, John D. Rockerfeller has investments in steel, and wants to benefit from some shovel ready action. COOL! Hey! I know! Lets create a WAR, and get our no bid contract action going! We'll pay the President back with some totally legal $400K speeches when he gets out of office. No problem!

Disclaimer: The Left and the Right are ripping the citizens all the time. But the Left is worse than the right because they love BIG government, and the Federal Reserve loves Leftist for all the looney schemes they come up with. I think the Left brain is the creative side? More programs = MORE MONEY! Look how rich Al Gore has gotten off Climate schemes, and look at how much dough Bill Clinton makes on speeches.

Regarding the future after NO more OIL to pump. Think magnetic rail, think electric battery vehicles, think desalianation of sea water to fresh drinking water, think aquaducts pumping fresh "sea" water to grow crops.....think electric rails with cars going in every which direction....just jump in one and GO! Technology is the bomb! 3rd World do nothing societies can't create new technologies....Capitalist greedy pigs can! It's a race between the do nothing Socialist, the Capitalist pigs, and the religious zealots, to see who will come out on top.


Wayne Yasuhara

YASU said...

ooook Dad... I am going to again request you keep your rambling rants to relevant topics only. I'm not about to start responding to the entire effing history of the Federal Reserve, the differences between Libertarian economics and real world economics, reasons why we have the income tax, the differences between left and right brain, etc... I already responded to more economics than I should have in the last comment. This is out of control!

Your Conservative Solution: Drill more, use less foreign oil, and make everything electric in the future. Super. How?

That is kind of exactly (half of) what the plan was until this BP leak. Now it's going to be VERY hard to approve more drilling. Hopefully the resulting stigma subsides and we can resume becoming more self-reliant.

The other half of the story:

1 Lack of Reserves: We outright do not have the means to be self-sufficient in oil. We do not have the necessary reserves, the NOC's do. Drilling is good, but it's just a band aid.

2 Infrastructure Issues: Even if we were to go all electric, that electricity still has to come from somewhere. Luckily, we have converted away from oil for power, primarily relying on coal (good for this argument, potentially bad for climate change), but if all the power consumed by cars (approx 71% of oil consumption) must then be supplemented by electricity, we'll have a big power shortage on our hands. Power plants take time and resources to build, and we need to start building those facilities NOW!

3 Awareness and Incentive: There's still the matter of the cultural stigma against small efficient cars. Where's the incentive to buy these overpriced hippie cars? Will people shell out the extra cash without incentive? Will the rumor that climate change is a liberal conspiracy help incentive? Another 23% of oil consumption comes from industry. How do we get industry to cutback?

1+2+3=no bueno. In the conservative scheme awareness is kept low (turning climate change into a myth/conspiracy), incentive is kept low (no cap n trade... or any other government intervention for that matter), and as a result action is kept low (thus slowing down incentive to revamp the infrastructure to support greater electricity generation). It does not sound like a matter that is being taken seriously by conservatives. If you want to explain how the conservative plan will actually work, then explain where the solutions to 1, 2 and 3 are going to come from.

As a note, when market conditions are hindering US political power, I think the US government is well justified in intervening. Our international negotiating leverage needs to be at least equal in priority to economic leverage to ensure the security of our country.