Response to Obama's Idiotic Oil Claims

He completely lied through his teeth.

Hey folks,

I really didn't want to start off with this, but we have to. Obama comes out Friday and completely lied through his teeth. He said that he was not blocking Drilling. He shut it down. He cost Americans over 50,000 Jobs. He forced Companies to leave town. He is STILL preventing exploration and Drilling.

I have the transcript, but it is nonsense. It's a bunch of bunk. It matters not what he said on Friday, what matters is REALITY. What he has done and what he continues to do. It's so far out there from Reality, that it's almost hard to stomach.

So what is the Industries response? According to the President of API, Jack Gerard, Obama is not addressing the real issues. Who is API?

API represents more than 450 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports more than 9.2 million U.S. jobs and 7.5 percent of the U.S. economy, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

So they KNOW Energy. According to the President, Jack Gerard,

"Long-term problems call for short-term leadership. Suggesting that we rely on other nations to solve our energy challenges is irresponsible and will not increase our energy security. The Obama administration continues to delay or defer action on developing our domestic resources of oil and natural gas at every turn.

The trend is alarming. The administration has postponed lease sales in offshore areas. It has cancelled lease sales in onshore federal lands. It has extended permitting timelines for current leases and added unnecessary regulatory burdens. It has chosen inaction on essential energy projects that would create jobs, drive economic growth, and boost federal revenues.

The administration is well on its way toward creating higher gasoline prices for Americans.

To get more oil and gas, we need more access. Placing more government lands and waters off-limits and forcing companies to focus on areas that may show little promise even if already under lease will not solve our energy challenges.

The best thing the administration can do on gasoline prices is to encourage greater oil production and greater fuel efficiency here at home. Launching another gasoline price investigation, when it's obvious strong demand and world events are driving today's markets, is pointless."

It's POINTLESS especially when you add into the equation the inability to ADD and USE our OWN resources. Remember, we talked about this in the past. We can go from NOTHING, bring in a Drilling platform that weighs more than Ten Thousand Cars, higher than the Eiffel Tower, retrieve the Oil and ship, refine, and get to market in under two years. When done? You will never know it was there.

But you all know this. You all know that we have more Oil and Natural Gas than the entire Middle East combined. And so do they. Why else do you think that just the mere mention of us Drilling by Bush caused the price to plummet. Now they KNOW we are not doing anything about it, the Price is rising again.

Yes, World Demand and what is happening in the Middle East IS affecting the Price of Crude. But we are not going to be adding to the Supply with our own anytime soon. Not if Obama has his way.

You want the REAL facts on this, The Canadian Oil Sands, The REAL Facts on Fracking, or the reality of why we need Oil and Natural Gas, Visit our friends over at Energy Tomorrow, and the API itself.

Do not be misled folks. Obama IS causing the Price to Skyrocket. But this is no surprise. He said he would. He said he likes it too.
Peter

Sources:
Energy Tomorrow - API to White House: Long Term Solutions Require Short Term Leadership

Judge Blocks Obama's Drilling Ban

The Judge DOES live in the Real World, IS intelligent.

Hey folks,

Just yesterday I told you that it was now going to be in the hands of a Federal Judge. I said this.

We all already know why Obama put the six month moratorium. It really is crystal clear why. You do not ground all Airplanes when one crashes. You do not stop making cars and say, we need to find another way to get around, after someone dies in one. There is no reason to BAN Drilling for six months. NONE. Well, other than his agenda.

I ended Yesterday with this.

May this Judge have a modicum of intelligence to him and may HE live in the real world, where we all know, we NEED Oil. Yeah, yeah, yeah. I know, the Environuts love the ban. I know, the MMD love to report the CEO of BP is out on his yacht, the same time Obama was, uh, playing golf, watching Baseball, and uh, OH Yeah, sending a bill to BP. Yeah he's on top of things. {Sigh} I hear that Obama may actually be considering accepting some help. But he hasn't really decided yet. "FORE!!!!!"

Turns out that the Judge, Judge Martin Feldman, DOES live in reality, and DOES understand that this was insane. According to Bloomberg - Deepwater Drilling Ban Lifted by New Orleans Federal Judge

U.S. District Judge Martin Feldman yesterday granted a preliminary injunction, halting the moratorium. He also “immediately prohibited” the U.S. from enforcing the ban. Government lawyers told Feldman the ban was based on findings in a U.S. report following the sinking of the Deepwater Horizon rig off the Louisiana coast in April.

“The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium,” Feldman said in his 22-page decision. “The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.”

Of course Obama and Crew will appeal. How dare this little Judge block what Obama wants to do. Who does he think he is? Well, thankfully, he is an intelligent Judge who understands that this insanity, will do nothing but lose 150,000 plus Jobs, and Skyrocket energy costs, for no REAL benefit to anyone. He understands that this is like banning all air travel because one Plane goes down. Thankfully, U.S. District Judge Martin Feldman possesses the ability to use reason and logic. He actually said this.

"The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger."

Now our friends can get back to work. API {The American Petroleum Institute} issued the following Statement on the Judge's Ruling.

“We welcome Judge Feldman’s decision to lift the moratorium on deepwater operations in the Gulf of Mexico.

“The administration acted appropriately in its immediate steps to inspect every rig in the Gulf following the Deepwater Horizon explosion. Those inspections were necessary to assure Americans that offshore operations were safe and subject to appropriate oversight.

“In addition, the oil and natural gas industry took immediate steps to review practices and equipment to ensure safety and environmental protection, through the formation of two industry-wide task forces. The task forces provided important insights to the Department of Interior during its earliest examination of Gulf operations.

“Those task forces, and two recently created ones, are actively working to find ways to improve the safety of offshore operations, subsea well control and oil spill response. They should prove invaluable to the independent commission established by the president to investigate the Deepwater Horizon incident. Their work, and the work of the commission, will help ensure that deepwater oil and natural gas exploration and production is the safest and cleanest in the world.

“The moratorium was an initial reaction to concerns about the safety of offshore oil and natural gas operations. However, an extended moratorium would have a tremendous impact on the nation’s energy security – and cause significant harm to the region of the country that was already suffering from the spill – without raising safety or improving industry procedures.

“With this ruling, our industry and its people can get back to work to provide Americans with the energy they need, and do it safely and without harming the environment.”

So for right now, Sanity wins. Let's hope that the Appeals Court will be both as intelligent, and bold, as this Judge was. We can not Ban all drilling because on ONE accident in all the Decades we have been drilling. That is just insanity.
Peter

Oil Spill Information

Investigation is on going

Hey folks,

Happy Tuesday to you.

"You are Mr. 'From the Energy Front' right? So why no comment about the worst environmental disaster in history? And you want to drill more? Great. You people amaze me. These wind farms will kill your friends businesses. So what is a few dead animals and bankrupt fishermen. Right?"

OK. Two points here. I think. First Windmills do not work. Ask T. Boone Pickens. He invested a lot of money in Wind Farms and they failed. He changed to Natural Gas. The wind is not reliable and when the wind is not generating the electricity needed, the will be powered by? You guessed it, OIL.

Another aspect of it is that these things cost MORE to remove than they do to put up. So when time proves that this will not work, they will most likely just be abandoned and left there to rot.

As for the Rig? Sorry, the investigation is still on going. Until we have a cause, I have little to say about it. My gut tells me there is more to it then just a happenstance, accident, or mistake. These things just do not blow up, leak this much oil, and sink. They just don't. One also has to question the timing that this took place. So until we have an actual cause, I have nothing to say about it. But if you, or anyone else, may be interesting in further information. Here you go. This is from our friend Jane Van Ryan posted over at her Blog.

In effort to provide information to all Americans about oil spills and the ongoing response, here's a list of websites that might be useful:

www.energytomorrow.org - We're working to add functionality to this website so we can provide as much up-to-date information as possible. Today, the homepage contains links to safety and response information as well as to this blog.

www.api.org - For information about API's offshore safety and environmental standards, frequently-asked questions on the Deepwater Horizon tragedy and related materials, use the horizontal navigation window and highlight "Safety Response."

www.deepwaterhorizonresponse.com - This site is maintained by the U.S. Coast Guard and other parties who are responding to the oil spill. Updates, photographs, diagrams and videos are added regularly.

www.bp.com - BP posts news releases about the clean-up efforts above water as well as updates on the efforts to stop the oil below the surface.

www.epa.gov/bpspill - This site contains information about the impact of the spill on the environment.

www.oilspillinfo.org - This API-sponsored website provides basic information about oil spill prevention and response. You can find a simple diagram and animation of a blowout preventer here.

See you soon.
Peter

The Lib Agenda Carries On In The Face Of Reality

GWBS Just Silly Part 3

Hey folks,

OK. So we know GW IS BS. We know that this whole thing is just simply silly. Yet, the Liberal agenda seems to be carrying on in the face of all the FACTS that have been coming out indicating it's nothing more than a SCAM.

In the State of the Union Obama shocked everybody and came out for Off Shore Drilling, and increased funding of Nuclear Energy. This went over big.

President of API, Jack Gerard released this statement.

We are encouraged by the President's words that decisions need to be made about opening new offshore areas for oil and gas development.

These are important and necessary decisions for the American people and the American economy. Greater access to America's vast oil and natural gas resources would bring more domestic energy, thousands of American jobs, billions in government revenues and less reliance on imported energy.

We support the President on jobs and are ready to do our part putting more Americans back to work. But to create these jobs, we will need policies that allow investment and development--policies that are pro-job, pro-consumer and pro-energy.

We are ready to work with the administration to help make that happen.

However? The Minerals Management Service, which oversees Offshore Drilling, said the original Virginia leasing plan will be delayed. The Department may still decide against any energy exploration in the area. They said that they were still "reviewing it." They announced a delay until at least 2012.

What about the "safe and clean nuclear energy?" Obama talked about? It is also a SCAM. Why? The Budget proposal that Obama just submitted shuts down the storage facility for nuclear spent fuel at Yucca Mountain. After billions of dollars over the last 30 years have been spent building redundancy for safety to put nuclear waste in Yucca Mountain, it has been shut down. There's nowhere to put nuclear waste. So? With nowhere to put the waste, it could not possibly be "safe and clean nuclear energy."

So even though the President said what many wanted to hear, it is simply not true. They are STILL pushing Cap and Tax. They may tell you that it's dead, but the EPA is currently looking into a way THEY can enact it. They are still pushing to regulate every aspect of our lives based on the SCAM that is Global Warming. Even though more and more REAL Scientist are coming out and telling us that the whole thing is just plain wrong. Some are even using the terms SCAM and HOAX. Even though more and more people are looking around and seeing the exact OPPOSITE to what the Chicken Little Crowd is saying, in the face of REALITY, they are still attempting to move their insane agenda ahead. It truly is amazing to watch.
Peter

Sources:
National Review - Stuck on Yucca
Times Online - UN climate panel shamed by bogus rainforest claim
National Post - Activist-scientists cooked the books to foster
UK Guardian - Strange case of moving weather posts and a scientist under siege
UK Daily Mail- Leaked emails reveal that 'climategate' scientist 'hid' flaws in key global warming data
Canadian National Post - Wheels fall off global-warming hysteria
AFP - Netherlands adds to UN climate report controversy

Just The Facts, Energy IS More Than Just Fat Cats

REAL People, Real Money

Hey folks,

Let's get real about all this shall we? In today's From the Energy Front, I want to talk about the PEOPLE and the MONEY that are directly and indirectly involved in the Energy Field. I know this goes against the Anti-Oil agenda that says, "It's all about Evil Big Oil, and Windfall Profits."

We have already talked about "Windfall Profits." There is no such thing in the energy business. This does not stop some from attempting to convince you that they do nothing but sit back and collect "Insane Profits." We hear all the time how some in Government want to STEAL "Big Oil's" profits and spread them around. They give the impression, that YOU, who may be having a hard time paying your bills, will be sharing in the BILLIONS of dollars that those evil Oil Companies make. Do not forget, we will also "Save the Planet" with some of these profits as well.

None of this is true. YOU will get nothing. There will be NO Green Jobs created. There is nothing viable in the "Green Arena" yet, nor is there likely to be any time in the next Decade or two. What we WILL get, is HIGHER Energy costs, HIGHER Unemployment, and NOTHING in the way of "Saving the planet."

Here are some FACTS about the people and fiances involved. Some Democrats are getting it.

The Economic Impacts of the Oil and Natural Industry on the U.S. Economy




“I am communicating that in every way I know how,” said Sen. Mary Landrieu (D-La.), one of at least a half-dozen Democrats who've told the White House or their own leaders that it's time to jettison the centerpiece of their party's plan to curb global warming.

The creation of an economywide market for greenhouse gas emissions is the heart of the climate bill that cleared the House earlier this year. But with the health care fight still raging and the economy still hurting, moderate Democrats have little appetite for another sweeping initiative — especially another one likely to pass with little or no Republican support.

“We need to deal with the phenomena of global warming, but I think it’s very difficult in the kind of economic circumstances we have right now,” said Indiana Democratic Sen. Evan Bayh, who called passage of any economywide cap and trade “unlikely.”

At a meeting about health care last month, moderates pushed to table climate legislation in favor of a jobs bill that would be an easier sell during the 2010 elections, according to Senate Democratic aides.

“I’d just as soon see that set aside until we work through the economy,” said Sen. Ben Nelson (D-Neb.). “What we don’t want to do is have anything get in the way of working to resolve the problems with the economy.”

“Climate change in an election year has very poor prospects,” added Sen. Kent Conrad (D-N.D.). “I’ve told that to the leadership.”

At least some in the Democratic leadership appear to be listening.

Asked about cap and trade last week, Senate Majority Whip Dick Durbin (D-Ill.) said: “At this point I’d like to see a complete bill, but we have to be realistic."

Moderate House Democrats who voted in favor of the cap-and-trade bill just before the July 4 recess came under fire back home, and Republicans have vowed to make the issue a key line of attack during next year’s elections.

Some Democrats would prefer to deny them that target.

“I’d prefer to do energy because I think you could get a really broad consensus on a lot of energy legislation,” said Sen. Mark Pryor (D-Ark.).

But supporters of the climate bill say that cap and trade is an inextricable part of any energy package for next year.

Again, this shows you that they really DO understand that this is all based on a HOAX. Why? Because if they REALLY believed that the planet was about to die, we would NOT be debating ANYTHING. NOTHING would come before doing SOMETHING to stop the impending disaster. We would NOT have agreed in the eleventh hour of Copenhagen to, well, talk more next year, just to give the impression they accomplised something, we would have ACTUALLY DONE something. You got an astorid comming, and threat rising, all come together to STOP it, and attempt to SAVE us. Yet, nothing. Talk. Even though SOME in the Chicken Little Crowd want you to believe we only have 10 years, oops, uh 20 years, oops, uh, another 20 years,, 100 MONTHS!, uh, nevermind. We'll talk later.

The truth is, real people, and real money will be hurt and LOST, if the Kooks get Cap and Tax on top of Obamacare, that will already kill the economy. Once again, we see the difference in Dreams and Reality. Time to WAKE UP AMERICA!
Peter

Sources:
API
Politico - Senate Democrats to W.H.: Drop cap and trade

Top Ten Energy Myths

From the Energy Front 111709

Hey folks,

Happy Tuesday to you. You know, as I always say, you want the REAL facts and the TRUTH, you go right to the source. Go to the REAL EXPERTS and ask them. You know, those who actually DO whatever it is that you are inquiring about. Not the so called "experts" that CLAIM they know what they are talking about.

When you go to the so called "experts," you get myths, theories, and speculation. When you talk directly to the REAL Experts, you get the FACTS. Here is a perfect example. This is from Energy Tomorrow - New Report Debunks Top Energy Myths By Jane Van Ryan Friday 13 November 2009 Last week, the Pacific Research Institute

(PRI) released a report--"Top Ten Energy Myths"--that confronts ten common myths about America's energy sources, uses and risks, utilizing U.S. Department of Energy (DOE) and Energy Information Administration (EIA) data.

Some excerpts from the report:

•Myth: We have no choice but to import vast quantities of oil and natural gas.

•Reality: The U.S. could significantly reduce imports by expanding domestic production.

•Myth: Offshore oil production poses environmental risks.

•Reality: New technology has greatly reduced the risk of oil spills. Reducing oil reservoir pressure through extraction of petroleum will decrease the amount of oil pollution from natural seepage.

•Myth: Energy companies will not invest in clean reliable energy so we need government programs to do so.

•Reality: Energy companies are investing huge sums of money to develop cleaner and more reliable sources of energy.

The report's author, Thomas Tanton, senior fellow in Energy Studies at the PRI, says:

"There is a plethora of unexplored options for securing energy in America through domestic sources, but misled confidence in renewable technologies and increased efficiency are hampering common-sense energy policy...Energy policy must be based on facts, not myths."

For more information read the full PRI report.

I encourage you to check out the whole report. You will find what you have been hearing from the so called"experts," is usually far from the FACTS. See you all tomorrow.
Peter

Sources:

API - Website

Energy Tomorrow- Website

Energy Rallies Kick Off

We can not let up on this issue either.

Hey folks,

You may have heard Rush Limbaugh talk about the Energy Rallies starting to kick off on his Morning Update a day or so ago. He talked about how some are upset with API President Jack Gerard, and API itself and blames THEM for upset citizens that are protesting for Energy Freedom. Just like Obamacare, they do not feel that YOU are intelligent enough to actually read for yourself what is in these Bills, or have the ability to actually think about them and come to a conclusion of the end result.

No folks, you are just mindless drones, you know, like the Mainstream Media, that will simply do or say whatever you are told to by "your handlers." In your case, Rush, API, or the Health Insurance Companies. They continue to say that is it merely a small group of Kooks, like the one that asked Barney Frankly stupid, about Obamacare while holding a sign. His response? "What planet have you been living on?"

Well check out this video posted by Jane, over at Energy Tomorrow, of the first Energy Rally. Notice one of the MAIN Speakers at this rally is the head of the National Black Caucus. HARDLY a Right Wing Nut.

No folks, people are getting it. They are getting upset with it. In some cases, they are getting down right ticked off. The Left have NO IDEA what to do. They want to push their Socialistic Agendas, yet, they want to remain in power. They KNOW that if they push to hard and to far, YOU will push them out.

Yes, API, Rush, and the rest of us in the New Media, Bloggers, ETC. are informing you of what is actually in these Bills. We are telling you what the LWL {Left Wing Loons} are attempting to do right in front of your eyes. However, NONE of us, not API, not Rush, not ANYONE in the New Media can MAKE you do anything. YOU are going to these Townhalls. YOU are Protesting. YOU are writing your Representatives. YOU are doing all this. Oh, and ANY Poll you want to find out there says the same thing. YOU do NOT want Obamacare. YOU do NOT want Waxman-Markey. You DO want to Drill Here, Drill now, and of course, you want to pay less. You WANT Energy Freedom. Energy Independence. You WANT these people to LISTEN to you.

Like I keep telling you, 2010 is coming. They are SCARED TO DEATH of you and your up coming Vote. As well they should be. Obama knows this. So does the Leadership pushing all this. They know if they do not get it done BEFORE the 2010 Elections, they may NOT be able to do anything they want. YOU may change the dynamics of the House and Senate and FINALLY bring back a balance and some sanity to our Government.

The Media can keep attempting to attack you. Call you Racists, Kooks, or mindless drones all they want. The Politicians can keep insulting you and claiming what is in the Bills is NOT in there. That's like saying Jack never went up the hill in Jack and Jill. He did, it's in there. As is all the things you keep hearing are IN the Bills they are claiming are not.

They are in full retreat mode on many fronts. Now is NOT the time to get giddy, relax, or let up in anyway whatsoever. Now is the time to intensify and increase your pressure on them. Now is the time to let them know, you will not settle for them postponing it until after the Election, or claiming that they will remove this or that, that you know they will just put back once they get these things passed, but you want these things DEAD. You want SANITY back in Government and you want YOUR Representatives to start listening to YOU, instead of a handful of well financed Kooks that they have seemed to be beholden to as of late. Let them know, you will settle for nothing less.
Peter

Energy Taking A Back Seat To Health

From The Energy Front For 072809

Hey folks,

On my way to Miami for a super secret meeting. I spend all day in Miami Saturday and will spend half the day there today. I can't talk about it yet, but I will fill you in when I can.

It's Tuesday, therefore it's time to check in From the Energy Front. You know, scan, search, inquire, no matter what I do today, all I keep coming up with is Healthcare. Obamacare to be more precise. Seems our immediate need for Obamacare, AKA Socialized Medicine as all but put Waxman - Markey, or any other program that is sure to kill the economy, on the back burner. Seems all Obama, the Liberal Leadership, and some, a reducing number by the way, of the Mainstream Media, want to do is attempt to shove Obamacare down our throats.

But we can not let up on our Energy Independence. We MUST have it. California is RIGHT. Their state is bankrupt. Why? Do to Liberal Loon policies, over spending, and being beholden to LWL Kook groups. Their solution? DRILL! I'm not kidding.

"California wisely has decided to use a portion of its abundant natural resources to pay for services to its citizens. An estimated $1.8 billion in state royalty payments are expected over the life of developing these resources, and the funds will help defray the state's budget shortfall as well as increase our nation's energy security" Said Jack Gerard, President of API in his latest Blog Post.

That's right folks, California is one of the models that President Obama wants to use for America itself. It will come to the same end result as California. To help them out of the mess, they decided to DO what America SHOULD be doing. Why? Because the ANSWER is RIGHT HERE!

Some other FACTS vs Fiction?

"The United States represents 5 percent of the world's population but uses 25 percent of the world's energy."

Not true.

According to Jane VanRyan over at the API.

According to the 2009 U.S. Statistical Abstract, the United States is home to about 4.5 percent of the world's people. And an examination of other pertinent statistics shows it makes no sense to suggest that U.S. energy consumption can be attributed to each American individually. The United States is a global economic powerhouse using energy to produce goods and services that help to improve lives all over the world. In 2008, the United States used 20.4 percent of the world's energy to produce 20.6 percent of the world's Gross Domestic Product (GDP).

So imagine the impact we could have if we were using OUR OWN resources. As of right now, we are dependent on Foreign Governments that really do not like us that much. We need to take California's lead here.

What about this? "All you have to do is get a tune up, inflate your tires." Remember that? There are some that say if you conserve, drive less, you will save money. NOT TRUE. According to the Heritage Foundation - Cap and Trade’s Effect on Diesel Prices

By artificially restricting use of fossil fuels (which provide 85 percent of America’s energy), the Waxman-Markey bill will drive up energy costs of all sorts. One example is the price of diesel fuel. By 2012, the first year of the Waxman-Markey caps, diesel fuel prices are expected to have risen to $3.75. Waxman-Markey would tack on another 20 cents.

And that’s only the start. Because the legislation mandates ever-tightening restrictions on fossil fuel, the tax on diesel continues to rise. Even after adjusting for inflation, this tax will hit $1.38 by 2035.

Though diesel cost most directly affects truckers and farmers, the higher price will filter through the economy and impact all consumers.

You shop at Wal-Mart? Why? Cheap prices. Do you shop at a grocery store with a card, or some kind of membership? Why? Prices. How do you think all that stuff gets there? Trucks.

Remember when Gas was over $4.00 a gallon? EVERYTHING went up. Waxman - Markey will make these increases PERMINATE. Your Electric Bills will SKYROCKET! Obama said so. Every aspect of your life has a major potential of being effected by our LACK of Drilling and using our own resources. Put this together with Obamacare, and you can see where we are heading. Even though they have stopped talking about it. You need to KEEP talking about it. Kill Obamacare, and KILL Waxman - Markey, BEFORE they kill us.

Got to run folks, for all this and MORE FACTS from those that know, check out our friends over at API. See you all soon.
Peter

Energy Information By The Experts

New Energy Blog

Hey folks,

I have great news for those of you who are interested in FACTS and TRUTH when it comes to Energy. Our friends over at API have launched a new Blog all about energy. You can find it here over at Energy Tomorrow Blog.

The main Author will be our very own friend Jane Van Ryan, with guest writers up to and including the API President. Experts in the Energy Field Talking DIRECTLY to you, about all things on the Energy front.

"Who are we?

Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our 400 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.

What are we trying to do here?

Well, it's pretty simple. Like we explained in our inaugural post, we aim to be:

Informative: Energy issues are complicated, to say the least. We'll do our best to break down some of these complex issues in a way that's easy to understand, and we'll answer your questions in an open dialogue.

Timely: This is also where we'll provide our most up-to-date tidbits of news, information and commentary. So subscribe, bookmark - whatever your preference - to stay sharp on the day's most pressing energy issues.

Fair: Most importantly, we want to hear from you and welcome your comments on our blog posts. We're looking forward to hosting a discussion with varying positions and opinions, but we do ask that you adhere to the comment guidelines. (Basically, we just ask that you be respectful.)

What do we want from you?

We want to foster a productive debate on energy issues. With that in mind, we expect those participating in the conversation on our blog to adhere to the comment policy described below. We encourage you to weigh in with a variety of perspectives; you just have to play by the rules. Thank you in advance for doing so."

You can read all about them and the Comment Policy over at the Blog itself.

Here is just a taste of what you can expect.

Prices at the Pump Explained
Did You Know...
A new burden on American families
Climate Bill: 'Unacceptable as Drafted'
Poll Finds Support for Offshore Drilling on East Coast

That is just a small sample of what you can find at this new Blog. It is far past time when all ordinary Americans, of whom are ALL effected by the Energy Issues facing us today, have a source to go to to learn the FACTS. A place where you can talk DIRECTLY to the real Experts in the field and learn things that you will not learn anywhere else.

I encourage you all to take a few minutes to go over and sign up. Well, if you want to leave a comment you have to sign up. Check it out for yourself. Whenever you hear something about energy and want to learn more about it, the New Energy Tomorrow Blog., would be a GREAT place to start.
Peter

Off Shore Drilling Debate

We need to wake people up.

Hey folks,

You know that I am an fierce supporter of our Energy Independence. I have been advocating our need to Drill Here and Drill Now for a while now, and I have been telling you who it is standing in the way. Well, on Friday, our friend Jane over at API sent me an Email with some updated information and a way for you to become even more involved. I really do not have much to add so here it is. We'll start with part of the Email Jane sent me.

As you know, the Minerals Management Service issued its Five-Year Plan in January calling for more offshore oil and natural drilling. Despite the fact that 53% of the already submitted public comments supported increased drilling, Sec. Salazar delayed the plan’s implementation, directed Interior Department scientists to produce new reports on how much oil and gas might be found off the Atlantic and Pacific coasts, and extended the public comment period to September. He also scheduled four regional public hearings this month (in Atlantic City, NJ; New Orleans; Anchorage and San Francisco) to gauge Americans’ perspective on increased offshore drilling.

It’s important to note, however, that no one has to attend a hearing to submit a supportive comment. In fact, you and your readers can instead submit comments to MMS electronically. This link will direct you to a page on our Web site where you can click-through to comment. In addition, the page has several resources for bloggers, including a blog badge and an interactive widget that will allow you to identify your Congressional representatives, find them on Facebook, Twitter and YouTube, or simply send them an e-mail. The widget is very cool and the first of its kind. Try it out, and if you like it, please feel free to embed it in your blog.

Well I did check it out, and I agree that if you care at all about the prices of your energy use, you WILL take time out to check it out yourself. I'll even save you the trouble of clicking the link.

America needs a comprehensive energy policy that includes energy from all sources. However, a pattern seems to be emerging when it comes to developing America’s offshore oil and natural gas resources—delay. Now, more than ever, we cannot afford to delay.

A majority of Americans support domestic access. It is time to start listening to the wisdom of the American people and create energy policy that would allow increased access to our own resources and generate nearly 160,000 new, well-paying jobs, $1.7 trillion in revenues to federal, state and local governments and greater energy security.

Right now, Interior Secretary Ken Salazar is convening regional hearings to gather public input on this issue.

Let your voice be heard and tell Congress and MMS to put America’s energy to work for Americans.

Contact Congress and MMS

Use the widget below to speak up—via Facebook, Twitter, YouTube, official Web site, or e-mail—and show your support for increasing access to America’s own energy resources.






Tell Others Where You Stand
On Twitter...

Tweet your support! (E.g. - Congress: #tellmms 2 give more access 2 domestic oil & natural gas resources 2 create jobs & #energy security. http://sn.im/ff3hb)

Use #energy and #tellmms to join the conversation on Twitter.
Follow @EnergyTomorrow on Twitter to stay informed on the latest domestic access updates.

On Your Blog...
Show your support by embedding this blog badge on your site:


What is MMS, and why do I need to contact them?


According to the bureau’s Web site:

“The Minerals Management Service (MMS), a bureau in the U.S. Department of the Interior, is the Federal agency that manages the nation's natural gas, oil and other mineral resources on the outer continental shelf (OCS). The agency also collects, accounts for and disburses more than $8 billion per year in revenues from Federal offshore mineral leases and from onshore mineral leases on Federal and Indian lands.”

It is critical that both the federal MMS and members of Congress hear from you in support of the new five-year leasing program that will expand our nation’s access to the resource-rich OCS.

Use the interactive tool above (or go directly to the Partnership for America’s Energy Security site) to send an e-mail to MMS telling it to move forward with its plan to open 31 new leases for oil and natural gas exploration.

To learn more:

Explore the Interactive Leasing Timeline to get a better understanding of the MMS leasing process.

Visit this page that offers more insight into the MMS Five-Year Plan.

How much oil and natural gas is actually out there? How much of it is off limits?

According to federal government data, the U.S. has enough oil and natural gas to fuel more than 65 million cars for 60 years and enough natural gas to heat 60 million homes for 160 years. In fact, the U.S. government estimates that there are 30 billion barrels of undiscovered technically recoverable oil on federal lands currently closed to development.

To learn more:
Read this page filled with key facts about domestic access.
Pour through this comprehensive primer on access.
Take a closer look at this study about untapped U.S. oil and natural gas resources.
Try out the interactive Access Counter to see what America is using – or not using – when it comes to oil and natural gas.

We MUST fight this. We MUST come together with this, and the "Tea Party Movement," and start letting these people in Congress and the White House know that the majority of Americans are NOT willing to allow those in power to turn this country into the new USSA. That we want our Freedom. We want our Rights. We want The Constitution to be upheld and not trampled upon or ignored. You know, as a side note, isn't it funny that these are the same people that went ballistic over Bush spying on foreign communications? Yet, they are now saying it's OK for Obama and Crew to take over Private Industries, controlling what employees make, {Unless it's Fannie and Freddie, that's OK} set Oppressive Taxes, Control the Auto industries, and go around dictating to the world what THEY can and can't do. These are the same people that have no problem with the Government standing in to way of our Energy Independence. They are even starting to applaud Obama and Crew's new plan of Amnesty. {Sigh}

Congress and the White House are out of control. They are ignoring "The People." for the sake of a few Kooks that want Socialism. I encourage those of you that have Blogs yourself, to go ahead and post on this including the links for YOUR readers to check out and participate in. I hope we can get through to some of these Obamaid Drinkers and WAKE THEM UP, before it truly is too late.

Peter

Sources:
API
Energy Tomorrow

Behind The OPNTalk Screen 032209

Insider edition

Hey folks,

Welcome to the OBNTalk Blog. This is an inside look at what is new, things of old, and a time when I answer some of your questions that I have gotten over a period of time. I have not done this in a while, but I feel the time is come to offer you another inside look at me, and the OPN. {Our Opinion Network}

We have some new people checking in and are wondering everything from the basics, like what exactly DOES the OPN stand for? To some more personal information. As I have told you before, I get far more response via Emails than I ever do comments, and I do answer every question privately. As I have also told you, everything private STAYS private, unless I get express permission from the sender to publish it. Which is an answer to one of the questions all by itself.

Before we get to the questions, I what to share something new. Now you, well, some of you, already know that you can find me over at Ethepeople from time to time. I try to participate over there as much as I can. I really enjoy the folks over there and the format is extremely easy to use.

Now, I am also visiting over at the Tom Sullivan Radio show. Every post that I post here, goes there via RSS feed. I also plan on doing a blog posting from time to time there also. You know what, you can too. Just go over to Tom Sullivan's Radio Listener Club and sign up. It's free, and it's fun.

Also on the new front, per request by some of you, I have started emailing out the Sunday Preview. It goes directly to your Email address with all the links for the stuff that we talk about on the Big Sunday Edition. This way, if you are not into Politics, yet like the "Health and Science Segment," "IWA," or the "You Can't Make This Stuff Up" Segments, you can simply clink on them and go directly there, skipping all the stuff you do not want to read. If you are interested, I'm toying with the Idea of creating a mailing list to send the preview to all that wish to receive it. Simply Email me at opntalk@aim.com and I will add you to the list.

OK, to the questions.

"What exactly does OPN stand for?"

OPN stands for The "Our Opinion Network." OK, a brief history. I'm a big Radio guy. I love AM Talk Radio. I love Radio. AM FM whatever. I enjoy listening to Rush, Sullivan, Hannity, Some of the local shows and some of the Sunday shows on WABC out of New York and others. But quite a while back, I discovered that some of the shows I was listening to were almost impossible to get on. It seemed that you had to,

A- Agree with the Host.
B- Be famous or some kind of expert.
C- At least on the same side Politically as the Host.
D- Had to be a way for the Host to look better or brighter than you.

So I thought, WHY? Does not EVERYONE have an Opinion? Should not everyone have a Right to speak it? What we need is an Our Opinion Network. A place where EVERY opinion matters. No matter how insane it may be. {Smile} So I started posting various places around the Internet. I started calling some of the places back in the early days, Round Tables of Intellectual Thought. Places where true debate can take place.

Over the years I moved on to various sites. Tried new things. The OPN grew. Some in these various places even started agreeing with me that it really was like a network of debates.

Then after a couple of failed attempts, on April 19, 2006, The OPNTalk Blog right here at Blogspot.com was born. The rest is history.

"Why do you insist on name calling? Left wing loons. Idiots. Morons. ETC?"

I call it like I see it. Sorry. It is also clear WHY I am calling them what I am. At least according to MY point of view. You may of course, disagree. {Smile}

"Why can you not just give Obama a chance? Really? I already know the answer. You are just like the other Right Wingnuts. You hate the fact he won and will denounce him for everything. Including breathing I might add. Right?"

Wrong. I DID give Obama a chance. Search the archives and you will clearly see that I defended Obama a few times. I also defended Reid when some were calling him a Racist. I try to always give people the benefit of the doubt. However, when their own words and actions show us who and what they are, there is no point in the false Hope that they will be something they are not. Walk like a Socialist, yell like a Socialist, Your a Socialist.

Sorry BB, The "Dream" that is Obama is nowhere near the Nightmare that Obama actually is. Obama and the Kooks in Congress are completely out of control. They are violating the Constitution with this 90 percent tax on one certain group of people. They will not stop there. If they feel you make too much money, which is around $250,000 a year, having sent this prescient, they can now say, we will tax YOU 90 percent of whatever you make MORE than $250.000. This is not America. This is the new USSA. The United Socialist States of America. Obamerica. It is in the beginning stage, but it will happen if we all sit back and waste time "giving him a chance."

And the Million Dollar Question this round?

"Pete, fess up. You work for the Oil Industry don't you?"

{Laughing} No. Yes I post the information that the Mainstream Media does not. Yes I have friends over at API, Energy Tomorrow and Chevron. Yes I attend Conference calls with them and receive information that you will not get anywhere else. NO. I do not work for them.

So why do I do this? Because I AM passionate about this. I really do care about the energy crisis we are in. But the energy crisis we are in, is completely avoidable. We have the technology, we have the ability, to be more energy independent today, increase our National Security, and keep energy prices at a level ALL can afford. The fact that this Administration simply will not do it is insane.

We are where we are because of the Environuts, and the Liberals that are beholden to them. We do not have new Refineries, Nuclear plants, more Domestic Drilling, because of the SCAM that it will hurt the Environment. GWBS, Global Warming, uh, Bad Science {Smile} is solely about MONEY, POWER, and CONTROL. It is nothing more than a SCAM that is NOT based in REAL Science.

As a matter of fact I will be talking about some information that you will not get anywhere else in the Mainstream Media about this INSANE new taxing proposal by this Administration and the REAL effects it will have on REAL people in just a few minutes.

OK folks, that's it this time around. To all the new people, welcome again. I hope this answers some of your question about me and what I do here. If you want to be added to the group of people that receive the Preview, just let me know.

Oh, let me answer one more question that I get from time to time. Yes, please feel free to post comments here at the Blog. NO, I do not censor them. I have the authorization thingy activated for SPAM purposes ONLY. So if you have a real comment to post, and I do not agree with it, you call me names, or want to ask a question that you think I would never answer, please feel free to post it. I WILL publish it in the exact form you leave it. It may take a day or so to appear, because I am not in the Office most of the day, but it WILL appear as you leave it. Language, style, links, whatever. As long as it is not SPAM.

So there you have it. Another edition of the Behind the OPNTalk Blog Screen. Now check out the Big Sunday Edition and go over an visit my Friends at EThepeople and Tom Sullivan. I think you will enjoy your time there. Talk to you soon my friends.
Peter

Obama Rhetoric Vs Reality of Cap and Trade, and Taxes On Energy

The TRUTH about the outcome.

Hey folks,

The Obama Administration and the Congress of Pelosi and Reid want you to believe that Big Oil is making too much profit, and they are going to make things fair. They are going to put in place a better Taxation policy along with a Cap and Trade. They say that this will help create new "Green Jobs" and speed up the process of Alternative Energy production and use.

That is the Rhetoric. How about we look at the FACTS.

According to our friends over at Energy Tomorrow:

The Administration's fiscal 2010 budget proposal calls for at least $400 billion in new taxes and fees on the oil and natural gas industry, including a significant portion of the revenues that would be raised from a carbon cap-and-trade system. The tax portion of the budget proposal includes at least $80 billion in new taxes on the U.S. energy sector over the next decade.

These new taxes and fees could mean less U.S. energy production, fewer American jobs and less revenue for federal, state and local governments at a time when we desperately need all three. These punitive measures could also threaten the retirements of tens of millions of Americans with mutual funds, pensions and retirement plans that invest heavily in U.S. energy companies.

In outlining their agenda for energy and the environment, the Administration has declared that they want to reduce America’s dependence on foreign oil by creating millions of new jobs in the energy sector, encouraging the development of renewable and alternative sources of energy and promoting the responsible production of domestic oil and natural gas resources. The American oil and gas industry agrees with this approach. After all, the U.S. Department of Energy has forecast that to meet global energy demand in the coming decades, we will need to develop increasing amounts of energy from all sources, including renewables, alternatives and traditional fossil fuels like oil and natural gas.

Unfortunately, recent actions don't match the rhetoric; and too often the rhetoric is used to confuse the reality of America's energy challenges.

Lets look at some of these shall we?

RHETORIC: Taxes need to be raised to help address the growing federal deficit and stimulate job creation.

REALITY: Raising taxes in a time of economic decline is a recipe for disaster. President Hoover did it in the 1930s, President Carter did it in the 1970s and President Obama wants to do it now. This is simply the wrong choice. Tax hikes kill existing jobs and can depress future job creation. According to a preliminary estimate based on Center for American Progress data, thousands of oil and gas jobs would be destroyed by the Administration’s new taxes and fees.

RHETORIC: Taxes targeting the oil and natural gas industry are okay because they don't affect consumers or other industries.

REALITY: The Administration’s tax plan puts the economic burden on hardworking Americans and their families. Higher industry taxes could result in less, not more, job security, make health care more expensive for American workers and threaten other benefits. Higher taxes steal money from the American household and are a burden felt throughout the entire economy, discouraging business expansion, investment and job creation.

Not to mention the higher price of all FORMS of energy from the gas pump to that of powering and heating your homes.

RHETORIC: Most Americans want the federal government to pursue alternative and renewable sources of energy.

REALITY: A recent poll found that 61 percent of Americans who voted in the 2008 presidential election support increased access to offshore oil and natural gas resources. The Administration is not listening to the majority of Americans who want a stronger economy using our own vast oil and natural gas resources. While other countries are providing incentives to develop their own energy resources, the U.S. is the only country actively discouraging it. Higher taxes would also rob the industry of additional capital needed to invest in alternative and renewable fuels.

RHETORIC: The Administration says it wants to make America less dependent on foreign oil.

REALITY: Historically, higher taxes have resulted in less domestic energy – and restrained supplies often lead to higher energy costs for consumers. In today’s economy, that could stifle a recovery and make Americans more dependent on foreign oil and natural gas. New taxes will make it more expensive for oil and natural gas companies to expand or initiate new exploration and development programs, putting our nation further behind in the race for more energy.

RHETORIC: The Administration says it wants to create millions of new jobs in the energy sector.

REALITY: Saddling the industry with additional taxes would likely drive jobs overseas at a time when America needs to create jobs. The U.S. oil and natural gas industry is one of the success stories of the American economy, directly and indirectly supporting 6 million workers in good jobs that often pay well above the national average. It is not an economic recovery when the jobs of millions of industry workers in this country are placed in jeopardy.

RHETORIC: Oil and natural gas industry executives control the bulk of stocks in their respective companies and would be the only ones directly affected by higher taxes.

REALITY: Imposing new taxes on oil and natural gas companies undermines the retirement security of working people. Almost 43 percent of oil and natural gas company shares are owned by mutual funds and asset management companies. Those funds are a major retirement savings and investment tool for millions of middle-class Americans who are watching their retirement savings shrink. Billions of dollars in new taxes on U.S. oil and natural gas companies will only hurt those retirement-aged investors looking for financial stability.

As a matter of FACT, if YOU have a 401 K, you may also be one of those that PROFIT from Oil Industry Profits. YOU. Not some fat cat sitting in a mansion somewhere.

You see folks, this is why some many people are against the House setting this precedent of 90 percent taxation against just those that took bonuses from AIG. This means that the Federal Government will now have the UNCONSTITUTIONAL authority to go after whoever they want using the tax laws. Even you. You make $250,000? OK. But anything over that, they may deem unreasonable and level the 90 percent taxation on you for every penny more than that. This also means that they can now target the Energy Industry, and a few in the industry, with completely illegal and unconstitutional taxation. They can in essence STEAL the profits away from private industries, and individuals, for their own greed and or need.

Any way you chose to look at this, the FACTS are clear. The Obama plan for the Energy Industry is a completely irresponsible one that is doomed to failure. Energy Tomorrow raps this up with this.

The bottom line is that imposing additional taxes on America's oil and natural gas companies will not lower energy costs nor help produce much needed supply. In fact, increased strain on U.S. energy companies will make it more difficult for the United States to compete for energy resources in the global market and threaten jobs here at home.

Tell Congress to oppose these increased taxes and fees on the industry. Send a letter today.

I STRONGLY encourage you to do just that. Let these people in Congress that do not want to listen, that YOU understand what the TRUTH is and you want them to drop the insanity. Remind them who they actually work for. It is YOU. Let them know YOU, their Boss, do not want this. You want Gas Prices to remain reasonable. You want to be able to continue to have the Energy Costs of your home to remain reasonable. You want the 600,000 new jobs that MORE Domestic Drilling, not less, WILL create. You WANT the extra Trillion Dollars that this will also produce. You do NOT want to see even more jobs lost, revenue lost, and YOUR Retirement effected.

As I keep telling you folks, YOU have the power. Regardless of the fact they do not want to listen to you. Regardless of the fact they have an agenda. Regardless of the fact they THINK they are in total control and can do whatever they want, YOU hold the power to vote them out in less than to years. They need to start listening, or they will no longer have the job they have. YOU can make this happen. YOUR future, the future of our energy independence, and the future of our energy prices, lie in YOUR hands.
Peter

Sources:
Energy Tomorrow
API

Blogger Conference Call: Industry Earnings and Recent Oil Prices

Health and Science Segment for Sunday 110208

Hey folks,

Due to my Family Medical situation, I was unable to attend this API / Blogger Conference this time around. The following is a transcript of it. VERY interesting read. Thank you Jane. Here it is.

Blogger Conference Call: Industry Earnings and Recent Oil Prices

Summary: On Thursday, Oct. 30, API hosted a blogger conference call to discuss third-quarter industry earnings, as well as the recent decline in oil prices. Jane Van Ryan moderated the call, which was led Rayola Dougher and Ron Planting of API. Special guest Lou Pugliaresi of the Energy Policy Research Foundation was also on the call to offer additional insight for the bloggers’ questions. Fourteen bloggers dialed-in for the hour-long call, which touched a variety of topics including windfall profits tax, a potential gas tax and other policy issues, in addition to the originally scheduled topics.

Moderator:
Jane Van Ryan, Senior Communications Manager, API

Speakers:
Lou Pugliaresi, President, Energy Policy Research FoundationRayola Dougher, Senior Economic Advisor, APIRon Planting, Manager of Statistics, API

Bloggers:
Carter Wood, Shopfloor
Cindy Kilkenny, Fairly Conservative
Dave Schuler, The Glittering Eye
Devil’s Advocate, Copious Dissent
Gail Tverberg, The Oil Drum
Geoff Styles, Energy Outlook
Greg Balch, Goat's Barnyard
Joules Burn, The Oil Drum
Robert Rapier, R-Squared
Steve Atkinson, The Conservative Voice of America
Wilson Cruz, Vulcan's Hammer
Brian Westenhaus, New Energy and Fuel
Ken Moyes, Broken Government
"The Bear", The Absurd Report

00:12 RAYOLA DOUGHER: Okay, just a quick summary. We have had 14 oil companies put their third quarter earnings up, and their profit margins are averaging about 9.6 cents on every dollar of sales. That‟s the net income divided by the revenue. We‟re also tracking the Dow Jones Industrial companies, and we have 24 out of 30 companies reporting, and they‟re averaging about 10.7 cents on the dollar. So while oil is about 1.1 cent behind, we‟re waiting for one other major company to report and that‟s Chevron. In terms of prices, of course, they‟re dropping like a rock. Crude oil prices are down from about $100 a barrel about a month ago; $63 dollars the other day. They were at $67.50 last night, and I think they‟re around $65 today, but who knows what they‟ll close at or whether we‟re really at the bottom yet. Gasoline prices have followed that decline. Retail gasoline prices are averaging about $2.55 a gallon, and that‟s down from $3.09 a gallon from a month ago. And diesel fuel prices are also down about 74 cents a gallon. So that‟s a brief summary and Ron is going to talk a little bit about the supply and demand figures.

01:32 RON PLANTING: This is Ron. We‟ve had sluggish demand here in the U. S. in the last year or two because of higher prices and changes in consumer behavior, and a peak in July, as you probably know, product prices have been coming down, but the economic uncertainty has been increasing, and that has led us to fourth quarter U.S. petroleum deliveries of just 19.7 million barrels per day, according to our API data we published just a week or so ago. It‟s down 5.2% from just a year ago, and it‟s the lowest third quarter in 10 years for U.S. petroleum consumption. Gasoline consumption by itself was down 4 percent for the quarter from a year ago; that was the lowest third quarter in six years. So, you know, if it‟s not higher prices and their effects, it‟s the state of the economy. Lou, do you have something you‟d like to say?

02:30 LOU PUGLIARESI: Yeah, I mean, I think if you look at the decline over the last year, we have – most of this decline is OECD. In fact, year on, year out, I think our latest numbers showed a consumption down about one-and-a-half million barrels a day, and the non-OECD up about 200,000 barrels a day, which I think is pretty consistent with the numbers you guys have.

02:56 MR. PLANTING: We just focus on the U.S. This is Ron.

03:00 JANE VAN RYAN: Okay, we‟ve had a couple of other people join us. May I ask who came on the call and then will open this up to questions?

03:08 GAIL TVERBERG: This is Gail Tverberg from The Oil Drum.

03:10 MS. VAN RYAN: Hi, Gail. Nice to hear your voice. Who else do we have? Anybody just join us within the last two minutes? Okay, well, we‟ll move forward then. Who would like to ask the first question of our experts today?

03:29 BRIAN WESTENHAUS: Ready?

03:31 MS. VAN RYAN: We‟re ready.

03:34 MR. WESTENHAUS: I‟m ready. I noticed that diesel is not following gas down nearly as fast. When do you expect the gap to close up?

03:40 MR. PUGLIARESI: Rayola, would you like me to take a whack at that?

03:45 MS. DOUGHER: Sure, if you‟d like.

03:47 MR. PUGLIARESI: Yeah, you know. First, we are joined at the hip with the world market, and this is an interesting – I mean, this whole question of the disparity between diesel and gasoline has been going on for some time. And it‟s – there is in fact a rather substantial imbalance between diesel and gasoline demand related to – and that imbalance is the demand versus the configuration of the world refining structure capacity.

Around 2004, the Chinese pulled a lot of coal out of industrial uses and began a kind of world-wide growth in demand for the middle of the barrel. This was followed by increasing dieselization in Europe, and essentially, what‟s been happening over the last few years is that as the world refining centers move to hit the diesel targets, they are producing a lot of gasoline for which there is no local market. Now, they can swing this production 3 to 4 percent with existing capacity; but in Europe they‟re already at the limit. And we, in the U.S. are importing roughly a million barrels a day of gasoline from the finished gasoline and blend stock, mostly blend stock. And in fact, we have been exporting a distillate over the last few months. And I think last month, it might have been as 5 to 6 hundred thousand barrels a day.

And so our view is, look, this is a relatively – this is a short-term or medium-term problem which will get fixed when the world refining capacity comes more in line with the structured world demand. And of course it‟s been exacerbated even in the U.S. If you think about refineries, they‟re sort of like producing steaks and leather. You can‟t really produce more distillate without producing more gasoline. I mean, as I said, we can swing a little bit. And so what‟s happening is that, in order to meet – until we get more hydro-cracking, hydro-treating, and more distillate capacity online, and the world refining configuration can rebalance itself a bit, we‟re going to have this disparity.

06:09 MR. PLANTING: This is Ron. I think that‟s all a good description of what‟s going on, I‟d just point that what‟s being exported is not ultra-low sulfur diesel; it‟s not highway diesel. It‟s something that‟s got more sulfur in it than can be used on highway. It‟s a category for which the market has gotten a lot smaller here in the U.S. because of the –

06:34 MR. WESTENHAUS: Well, I‟ll buy it. I got it for farm uses. What‟s your time frame?

06:36 MR. PUGLIARESI: You mean how long is this going to take?

06:39 MR. WESTENHAUS: Yeah.

06:40 MR. PUGLIARESI: Well, that‟s a good question. I mean, we, you know the – some of this is going to be related to the pace at which foreign refinery centers come online. The Indians have a million barrels a day of capacity coming online, and some of their – largely aimed at the world distillate market. The – I would say, in the first quarter next year, they‟re going to be moving some of their lower-spec – let‟s say the middle of the barrel that doesn‟t quite meet the European specs – but over time they will be pulling more sulfur out of the middle of the barrel; to the extent that the U.S. refining industry can begin to make some capital investments, you know, maybe five – take as much as 10 years, it could happen as quick as three. It really depends upon whether we‟re going to get any recovery in some of these margins, and people are willing to put some risk capital to make these projects go forward.

07:43 MR. WESTENHAUS: Huge groan.

07:46 MR. WESTENHAUS: How about propane? Propane – I‟ve been watching it on the New York Merc, and it doesn‟t seem to move much. When do you expect to get some motion from propane?

07:54 MR. PUGLIARESI: You know, I think propane is – I don‟t really have a good answer; I don‟t really have a good theory for that. But, you know, propane is, it‟s really going to be related to the – if you can get the number of runs up, you can get more propane out.

08:09 MR. WESTENHAUS: Yup.

08:10 MR. PUGLIARESI: And I think we‟re going to be suffering – Look, if you‟re a refiner, and you are in the wrong spot, and you‟ve got the wrong configuration now, you‟re forced to cut runs. I don‟t know what else you can do. And your ROI is just taking a beating.

08:26 MR. WESTENHAUS: Well, propane‟s higher than gasoline with tax now. So I‟m just a little paranoid about buying propane.

08:31 MS. DOUGHER: It‟s down about 50 cents or so in the past month, but it certainly hasn‟t come down at the same rate as distillate or gasoline.

08:39 MR. PUGLIARESI: Yeah, but I think it is important and, of course, this is something I don‟t need to tell you guys about. We really have two markets here. We have the market for the feed stock, and then we have the manufacturing facilities that turn that feed stock into the whole product slate. And we have been arguing for over a year that the feed stock was way out of line, that what we saw in terms of oil prices was the result of some unique conditions in the market. And that it was not sustainable.

We just – you know, we published an article on this in July in The Oil and Gas Journal, we‟ve done a lot of presentations on this, and we just didn‟t see – we really believe that when you get up to the level of 130, 140, 150 dollars a barrel, you‟re way beyond the long-run backstop for petroleum. I know it‟s hard for a lot of people to get around that, but, I mean, you know, you could – a lot starts to happen when you go between $70 and $90 a barrel. Both in terms of alternatives, non-conventional supplies, and conservation.

09:39 MR. WESTENHAUS: How is natural gas supplied? I go through and I comparatively speak on the huge amount of natural gas in the form of anhydrous ammonia. Is it on course with the NYMEX for being price parity for oil right now?

09:53 MR. WESTENHAUS: I was quoted $1,060 for a ton of anhydrous ammonia, which is $187 two years ago, so I‟m learning to watch natural gas really close now, too.

10:06 MR. PUGLIARESI: Yeah, natural gas is – that‟s something we need to spend a lot more time on. I mean we have this big growth in natural gas production over the last few years, up about 9 percent. There appeared to be a – you know, when we saw this big decoupling between the price of natural gas and crude, where you had natural gas selling at half – at a BTU value – at half, you can say well, that‟s got to get fixed one way: Either crude‟s got to come down, or gas has got to go up. (Chuckles.)

And I do think there is a lot of evidence that the U.S. – I mean, this is an interesting issue because the U.S. may be – either we are the leading edge of a major decoupling of gas from oil, in which case we may see a real renaissance of chemical plants and fertilizer back in the U.S. – you know natural gas in the U.S. is about half the price in Europe and Asia. It‟s just amazing what‟s going on, and I think that‟s something worth looking at. Or, are we going to see the rest of the world see gas – because you know, in the U.S., gas now competes either with other gas or coal. There‟s no more resid fuel to compete against. And that‟s not quite the case in Europe or in the Asian markets yet.

11:20 MR. WESTENHAUS: Well, they‟re down almost one supplier from the east, aren‟t they?

11:23 MR. PUGLIARESI: No, actually there‟s more. I mean, there is LNG, there‟s North Sea gas, there‟s a lot more competition in the European market than you would expect if you look into more detail. The problem with the European gas market is that it‟s probably the most untransparent gas market in the world.

11:39 MR. WESTENHAUS : Oh. Okay. So we‟re not at parity yet, with natural gas and oil again?

11:45 MR. PUGLIARESI: Absolutely not. We‟re still probably a good – I mean, oil price keeps dropping; I have to go back and recalculate. But my guess is we‟re still 60 percent of the value of crude.

11:55 MR. WESTENHAUS : Okay, there‟s enough to, you know, heat the houses and stuff? The hurricane that came through has not got us behind the 8-ball, so to speak?

12:05 MR. PUGLIARESI: Yeah, I think that from that production is starting to come back on, and we still have a ways to go in the Gulf, the refining sector as well.

12:14 MR. WESTENHAUS : I don‟t need to expect a natural gas scare between now and March?

12:16 MR. PUGLIARESI: I would doubt it.

12:19 MR. WESTENHAUS: Okay, super. Thank you.

12:25 MS. TVERBERG: This is Gail Tverberg from The Oil Drum. I was going to ask about the connection between the credit crisis and the current low prices of oil and gas.

12:35 MR. PUGLIARESI: In what sense?

12:37 MS. TVERBERG: Well, I think we‟ve been seeing various indirect effects of, you know, the hedge funds selling and the rising dollar; there‟s been a variety of different – but this is affecting the oil price and such.

12:53 MR. PUGLIARESI: Yeah, I mean – You know the last time we looked at it, the swing in the price of oil just swapped. You know, I‟ve never been a big fan of – I mean, if you look between our July 1, 2008 to October 8, 2008, the dollar‟s been up about 7 percent. But crude oil prices fell by nearly 40 percent. The trouble with this dollar/crude oil issue is you never now which end – whether you‟re chasing or falling – or the dog is wagging the tail or the tail is wagging the dog. Because it‟s possible that the reason the dollar got beat up so much is because our import bill is rising so fast. The cause and effect is something I‟m not prepared to say we fully understand. But I do think that you can make a pretty strong case that 80, 85, 90 percent of the movement is driven by fundamentals. And the fundamentals here are slower economic activity and people responding to high prices. So we have what we call income effect and a price effect, right? Some guy rides his bicycle to work because the price is too high. Another guy rides his bicycle downtown because he doesn‟t have a job. Well, one of them is a price effect; the other is an income effect – (chuckles). But it‟s going to take a while to sort it out.

14:20 MS. VAN RYAN: Rayola, Ron, do you have comments on that?

14:23 MS. DOUGHER: Well, I would agree that what we‟re seeing are strong fundamentals primarily and that the credit crisis is hitting all industries and all commodities right now, not just the oil industry.

14:36 MR. PUGLIARESI: Yeah, you know there‟s a lot of discussion about being – you know, one of the things I think we‟re concerned about is this kind of – you know, we need to move to alternative fuels at any cost. You know, well, that‟s kind of – we do need to have a strategy to transition to the fuels of the future, but we shouldn‟t be silly about it. We produce, the U.S. with 5 percent of the people, produces 30 percent of the world‟s gross domestic product. And we‟re doing that with – actually more efficiently than the Middle East, China, or India. We use a lot of oil, but people keep forgetting that we also produce a lot of goods and services.

15:14 DEVIL‟S ADVOCATE: Hi, this is Devil‟s Advocate from Copious Dissent. I just have a quick question on how the recent moratorium lapse as well as the discovery of Cuba‟s new oil has impacted the price at all.

15:29 MR. PUGLIARESI: Well, this is a good question. You know, Nancy Pelosi said that we shouldn‟t do offshore leasing because it won‟t happen for 10 years and it will only have a two cents effect, and you know –

15:45 DEVIL‟S ADVOCATE: Yeah, but Cuba just discovered 20 billion barrels if –

15:46 MR. PUGLIARESI: I don‟t know what they discovered, but I do take your point, and we have argued – if you go to our website, there‟s a couple of really good pieces on there where we look at the history of price changes in the oil market. And I would argue that, going back to ‟73 and ‟74, large swings in the price of oil are driven much more by a new set of expectations on shifts in future production than what‟s happened in the current period.

So, you know, in ‟73 and ‟74, the production of oil out of the Middle East did not decline at all – it actually went up, slightly. But the expectation was that the world was going to develop its resources at a much slower pace, at a pace with much more government involvement, and so the price went up – it went up a lot. So, yeah, if the world sees these finds in Brazil and Cuba and around the world as fundamentally changing their perception on future supply, it could affect prices in the current period, but can you sort it out? It‟s pretty hard.

16:50 GEOFF STYLES: This is Geoff Styles, and I‟ve got a related question about the future supply. With the new report out of the IEA looking at really severe decline rates – I believe they‟re talking about 9 percent on the large fields – are you worried that the combination of low prices and the credit crunch could actually put us sufficiently far behind on the development curve that we might actually never catch up with the decline rate?

17:20 MR. PUGLIARESI: Yeah, well I guess the first question is, what do you think – I don‟t know the answer to this question, but I can talk about it. What do you think the major oil companies, both the -national oil companies and the international oil companies – what are they using as the hurdle-rate when they were evaluating long term projects? They were never using $140, $130, $90 a barrel.

My guess is – and I don‟t – I only know this number by rumor on the edges of conferences and talking to people – they‟re using some number between $40 and $60-$65 a barrel and maybe the tar sands or oil sands guys are using $70 to $80 – somewhere in there – thinking they can get the costs down and fuel prices fall and everything. So, in terms of the major companies, I think the existing price structure – I don‟t think it‟s affecting their willingness to go and find new prospects.

Here‟s the interesting question: Does the new dynamics – these lower prices – does it begin to change behavior in Venezuela, Russia, you know, off the African coast and even in the Gulf a bit – do people begin, you know, the kind of excessive resource nationalism we had, violation of contract sanctity – all the kinds of counterproductive behavior we saw from these national governments – is that going to start to unwind?

And I think you can see some movement already. So I‟m less concerned about these price swings than access to the resource bit. And the question – that‟s something to watch very carefully.

19:01 MR. STYLES: Right, and I certainly agree that it‟s unlikely the majors‟ price expectations have been affected much by this, but I suspect that their weighted average costs to capital have.

19:12 MR. PUGLIARESI: Yeah, okay. I mean, there‟s no doubt it‟s going up – the question is, how much. And I suspect – a lot of that is their weighted cost – for many of the majors, that‟s a number they have to make up, because they‟re operating on a retained earnings often, and –

19:30 MS. VAN RYAN: Lou, Rayola‟s got some thoughts on that as well.

19:33 MS. DOUGHER: I was just going to say that it‟s been a challenge for a lot of the smaller producers.

19:41 MR. PUGLIARESI: Absolutely. That‟s where I think the issue is.

19:41 MS. DOUGHER: And there have been a number of companies announcing delays in operations for some of the things that they were investing in to move forward, so it is having an impact on different segments of the industry and refiners and others. The credit crunch is affecting some investment, but so far, for the majors, not so much.

20:04 MR. PUGLIARESI: Yeah, I think, actually, it‟s very important to understand that the refiners face a completely different set of issues – a completely set of different problems – than the upstream oil producers. There are two different markets now. You could argue, perhaps, that some of the refining operations attached to the tar sands and oil sands is the kind of way to monetize that asset – that may be a unique way you view as part of the upstream oil production process, but for the most part, refiners face a completely different set of constraints and problems.

20:40 ROBERT RAPIER: Hi, this is Robert Rapier. I have a question, but, first, I‟ll make a comment on that price band. As I worked for a major until earlier this year, that price band you quoted is pretty accurate and there is great reluctance to move that up, because I had some deep discussions internally about moving that up because I expected oil prices higher in the future and there‟s a very conservative bent there – (audio break) – number down in the $40 range or so and do economics based on that. And I hear from friends, other companies, that that‟s pretty consistent.

21:18 MR. PUGLIARESI: Yeah, you know, here‟s the thing. I mean, I know there‟s a lot – I know there‟s a couple of peak-oil guys on the call now. (Chuckles.) I don‟t want to get into that story, but I do think it‟s – this is a good time to back away a bit and say, okay, what do we think the long-run backstop price might be for petroleum in the sense that there‟s a price out there which, you can‟t really drive it a lot higher long term because of availability of non-conventional supplies, alternative fuels, conservation, new technologies.

And, you know, I was on a conference call with a bunch of folks, with Bob Tippee and the Oil & Gas Journal when the price was like $140. And I said, does anyone think we are in – not above the long-run price of oil? And everybody said, no, we agree; we‟re way above the long-run price of oil, which I think is a really interesting view. I mean, it might be wrong. Okay, I‟m not saying we know the answer to this, but it is clear that government policy, if you look at ethanol, so all the mandates are based on some concept that the price of oil is $500 a barrel or something.

I mean, if you just look at the policies that are being rolled out now – and so, another interesting question is, how are they going to deal with that dissonance? You know, how is the policy going to deal with that dissidence as we go to a market in which the price of oil is $60 or $70 a barrel?

22:48 MR. RAPIER: Okay, my question is, I had a chance to review the API primer, “The Truth about Oil and Gasoline” befor the call. And, as you read through there, you see just an absolute disconnect between the information there and I think what the average person on the street might believe. One of the issues I wanted to touch on was on the stock buy-backs. There‟s been a lot of stories out there that oil companies are spending, you know, record amounts of money to buy back stock and the graph that was shown there was that it‟s actually lower than the average for the – the average S&P company.

But that was from 2006. My impression is, that‟s substantially gone up since then and wondered if you knew how that fares now? My feeling is, it‟s probably above S&P average now, the stock buy-back number.

23:40 MS. DOUGHER: No, we just don‟t have that number; we haven‟t compiled it so I really can‟t say for certain. But it‟s been pretty consistent since over the 10-year period from 1996 to 2006. It was below the S&P industrials, but it‟s just hard to know what 2007 data look like. This data is put together by the EIA and they always have a long lag time. I think they won‟t be updating it until probably December. And so we won‟t even have the 2007 until then and we don‟t have any other source to use. So I just don‟t have a good feel for it.

24:15 MR. RAPIER: Okay. One more question from me, a political question: If you look at political contributions, the contributions from oil companies to Republicans are – tend to outweigh those of Democrats and, subsequently, Democrats have a pretty hostile view toward oil companies. And I‟m wondering how we improve that relationship. This is one thing that‟s 10
always frustrated me, was that there just seems to be this incredible distaste from Democrats and I never understood why we don‟t open up a better relationship here with them, the Democratic leadership.

I think we‟re about to have a Democrat in the White House who‟s threatening windfall profits and all kinds of things and I can‟t understand why we don‟t sit down and open up a better dialogue with the Democratic leadership.

25:01 MR. PUGLIARESI: You know, I have a little story to tell you about that. I happen to have been in a little meeting with Bennett Johnston, the former, as you know, the former senator from Louisiana. And he‟s a Democrat. And he said, you know, he was talking about – I sort of asked him a similar question. You know, why is the Democratic Party at war with the oil industry? I mean, in 2006, it was a cash cow. It generated like $130 billion of revenue to the government. I mean, compare that to the problems they‟re having with GM. You know, they should be doing award dinners for these guys. And he said, you know, when we had Democrats from oil-producing states, we didn‟t have these problems, because then, the party was afraid – (chuckles) – to overdo it. So you may be – we may be ending up in that direction in the next year if the polls turn out the way they seem to be.

26:05 GREG BALCH: Uh, this is Greg from the Barnyard. I want to follow-up on that a little bit. Aren‟t Democrats really using energy and fuel as a means of social engineering, then, in this? Telling people where they can live, where they can work, how far they can drive – you know, on and on.

26:23 MR. PUGLIARESI: Yeah, that‟s a very sort of fundamental – I mean, that‟s sort of above my pay grade. (Laughter.) I mean, that‟s a really basic issue about, you know, how involved should the government be in these energy markets and what‟s the costs and benefits of them being involved in that. I think it‟s a debate we ought to have.

26:53 CINDY KILKENNY: This is Cindy Kilkenny from Fairly Conservative. And I trained as a political scientist and I have to say it‟s definitely a wedge issue and it‟s very insightful. And I grew up in Oklahoma. My family – my brother is still in the oil patch and he‟s been, so I see both sides of this and I know how it‟s being used and it‟s just about what it redeems for whoever wants it at that point.

Um, I have a couple of questions. One is with regard to the information that we had the link to. On page nine, there‟s a second quarter earnings by industry there. Oil and gas is at 6.8 – do you expect that to climb up on the scale, given this pretty remarkable return on the third quarter?

27:31 MS. DOUGHER: Well, I‟m sure. We already have returns from about 14 of the industries so far. And their reported earning‟s about 9.6 cents on the dollar.

27:40 MS. KILKENNY: Okay, so 9.6. There was a lot of crackling earlier, and I missed some of the numbers. I heard 10.7, but I –

27:47 MS. DOUGHER: That was for the 24 of the 30 Dow Jones –

27:50 MS. KILKENNY: Okay, Dow Jones, so on average – but we don‟t know who else is shifting around there. I suspect we‟ll see some other shifting.

27:58 MS. DOUGHER: There‟ll still be a little bit more – we do have to wait for Chevron tomorrow, but generally once we have these 14 or 15, we get a pretty good idea of the earnings and it shouldn‟t change that much from the 9.6 that we‟re reporting. It may come down a little bit; I‟m not sure which way it will go. But it probably won‟t be that much different.

26:18 MS. KILKENNY: Well, not going down is the issue here. (Chuckles.) Not moving below – okay.

28:22 MR. PUGLIARESI: By the way, this gets back to the question on, you know, prices of gasoline. You know, our data show that – people always claim that the prices go up, but they don‟t come down as fast – but actually, we show in the last quarter – the last month – that gasoline prices actually fell at a much faster rate than crude, at least in the – and I can send this to you, Rayola, if you like – we have this compression of margins and refiners gasoline prices – some data we just pulled up, but –

28:56 MS. DOUGHER: Well, at least in the past month, that was so. I mean gas prices came down much faster than crude oil prices, but the hurricanes in September did lift those products –

29:06 MR. PUGLIARESI: Right, right. Well, that‟s where you get the volatility and I think that‟s why it happened that way.

29:09 MS. DOUGHER: That just depends on which point – (background noise, inaudible) – measured.

29:15 MR. PUGLIARESI: By the way, I think another issue people aren‟t thinking a lot about now is what happens to ethanol at these lower gasoline prices. I don‟t think anyone has really – I don‟t think the Congress has really confronted this enough, because we are now going to be getting very close to where – because, you know, after you get to 2 to 3 percent of the gasoline blend up now, where we are now at 7 percent – where ethanol is going head to head with gasoline, except it gets much poorer gas mileage, save for E-85 or something.

And you may be getting to the point where you cannot produce the corn – in other words, your cost of production for the corn – you can‟t deliver it at a price that allows someone to produce and distribute ethanol cost-effectively.

30:04 MS. KILKENNY: Well, where has corn gone, in relation to oil? That would imply that the price of corn would be going down, „cause I know that commodities – but I haven‟t watched it.

30:13 MR. PUGLIARESI: Corn has dropped like a stone.

30:15 MS. DOUGHER: AAA keeps track of these prices and the current price for ethanol is about $2.75 a gallon – that‟s adjusting for the BTU content, and regular gasoline is selling for about $2.55, so about .20 a gallon more right now.

30:33 MR. PUGLIARESI: Yeah, actually, E-85, when you adjust it for MPG, always is more expensive than regular.

30:40 MS. DOUGHER: Right, well –

30:42 MR. RAPIER: Yeah, hi Robert Rapier here again. One comment on that, because I actually asked the EIA about this – the mandate – and the funny thing about ethanol is that the demand is guaranteed to go up, because it‟s mandated to go up. So even though gasoline demand is down, ethanol demand is – there‟s a floor level, and that floor level will increase on January 1st, 2010, 2011, and so forth – every year, it‟s going to increase. It doesn‟t mean anybody will make money at it, but the demand is going to go up.

31:16 MR. PUGLIARESI: Yeah, under the man – this is a really good point – under the mandate, now you have to keep moving – ethanol has to keep moving up to, what – 15, 16 billion gallons a year at 10 percent of – which the Congress thought was 10 percent of the gasoline pool. But, actually, it‟s going to exceed 10 percent of the gasoline pool within the next couple of years, depending on what happens to gasoline demand – there‟s clearly a scenario.

And if you look – if you read around, you know, well some people are saying, well maybe we should move to E-12. The problem with E-12 is there‟s a – you have a mania, first, in the boat-owners already – but if you just – there‟s like $1 trillion of small engines out there; those guys will just go crazy – they just – and the manufacturers will pull the warranties. But this is the real dilemma with that: At the extensive margin, it‟s going to be very, very expensive to get ethanol blended everywhere.

And some guys are going to say well, you know, it‟s just not worth it to me and I‟ll just pay the – I‟ll just buy some RINs. And there‟s actually some scenarios out there where some guy in the Florida Keys is buying some RINs to get his obligated parties requirement and some guy in Iowa is dumping the ethanol in the river. I mean, I just think this is an issue that has to be revisited.

32:36 MR. STYLES: In fact, aren‟t we seeing – this is Geoff Styles again – aren‟t we seeing that whole market shift right now, because of the inversion of gasoline and ethanol prices where, until pretty recently, there was an incentive for refiners to over-blend – in other words to blend more ethanol than was legally required and we‟re seeing that in the statistics. Now you‟ve got gasoline priced under ethanol again, in fact in some places by more than the amount of the blender‟s credit, and part of the fallout that we‟re already seeing is, you know, perhaps the imminent bankruptcy filing of one of the biggest ethanol producers in the country, VeraSun.

33:14 MR. PUGLIARESI: Yes, I think that this is only the beginning. This issue is going to have to be revisited.

33:20 STEVE ATKINSON: Jane, Steve Atkinson from Conservative Voice.

33:22 MS. VAN RYAN: Yes, Steve, please go ahead.

33:34 MR. ATKINSON: Yeah, I‟m going to jump in here. First of all, a previous speaker, quote, “felt optimistic” about the chances of one of these presidential candidates. I do not share that optimism. And secondly –

33:41 MR. PUGLIARESI: I missed that comment. Who made that comment?

33:45 MR. ATKINSON: Steve Atkinson.

33:46 MR. PUGLIARESI: Okay. (Chuckles.)

33:49 MR. ATKINSON: For me, Ron also threw a key phrase out there earlier that really piqued my interest and that was – and it‟s just part of a phrase – consumer changes. For me, artificiality, that‟s my key operative word. And all the discussion thus far, to me, has been one of dealing with and addressing the after-effects of something that I feel is of supreme and paramount importance.

One, number one for me, as it relates to energy especially: the troubling nature of political meddling in the affairs of corporate entities. And that, of course, may take the form of tax increases, so-called alternative energy demands – or it could also manifest itself in pressures on the auto industry as a corollary to comply with the net effects of their demands. And I believe, then, that therefore, there are no so-called magical, silver-bullet answers to most of these questions. Consequently, I think it boils down for me, at least – the question I had, for giving this statement – how much of an impediment is this to sound energy policy development in the United States?

35:16 MS. VAN RYAN: I want to be sure I understand your question and that others do. You‟re saying that the tendency, in your view, of politicians to meddle in corporate affairs, whether it be in the energy industry or in the auto industry, perhaps could be an impediment to having a sound energy policy, correct?

35:36 MR. ATKINSON: Correct. I think the industry itself is forced to deal in a, quote, in the “after-effect” manner, of dealing with all of these pressures.

35:48 MR PUGLIARESI.: Here‟s the – let me fire here – if you think about this, you want – the reason that we have prices out there is that it helps us allocate capital to its most efficient use. To the extent that government intervene – the government has a view that it should intervene in this market based on some vague notions of what energy security is, or that the market‟s unable to transition to the fuels of the future at either fast enough or it doesn‟t know – the market can‟t pick the right fuels of the future – whatever that is. And if you go back to the ‟70s, there‟s plenty of dead carcasses around from the last attempt the government did at this.

So I do think you‟re right in the sense that the real cost to this is the Congress and those people who think we have to direct how we‟re going to transition and the pace at which we‟re going to transition to the fuels of the future, they may impose very high costs on the economy – lots of inefficiencies, and ultimately, we‟re just going to grow slower as a result of that. And we‟re going to have a lot of distortions and impediments to the kinds of investments we actually need to make. But to make that argument, you really have to believe that you can somehow educate the Congress in the way that capital markets should function and stuff, and it‟s really a hard job.

37:15 MR. ATKINSON: It may be a hard job, but how about this: You were talking about the inversion of pricing vis-à-vis ethanol and gasoline earlier. Gee, isn‟t it amazing. Something Congress might want to consider is that ethanol, which is free, mind you, of the subsidization of the enhanced food prices in America; if the inversion example is true, then would there not be a net benefit to applying a different strategy that would have the net effect of reducing food prices and therefore by removing that –

37:55 MR. PUGLIARESI: Right, the mandate is obviously a misguided policy. At least the blender‟s credit gave the market a chance to adjust against the implicit subsidy in it, but the mandate is binding – it doesn‟t really allow the market to adjust at all. You know, ethanol has been used for 30 years – Getty‟s been using it forever – but they used it when it was very valuable, for 2 to 3 percent of the gasoline pool, as an oxygenator and an octane booster. It‟s only when Congress intervened and said, no, no, you have to – the benefits of reducing net demand for gasoline are some huge number – they‟re so high, we‟re willing to pay any cost to expand ethanol production. That‟s just – frankly, that‟s a crazy way to do it.

38:44 MR. STYLES: This is Geoff Styles again. Can I just throw something in there, because it seems like the missing piece of this whole discussion is climate policy, because at the end of the day, the last couple of years, a lot of the measures that have been taken on energy really have been a form of back-door regulation relative to climate. And in the next year or two, it seems like we‟re likely to see more of a front-door approach on climate. How will that change all of these back-door approaches that have been tried over the last few years?

39:17 MR. PUGLIARESI: Yeah, I mean, first, all the climate folks and everything, they should have a little humility after the ethanol debacle because most of the major environmental groups are pulling away from ethanol because they think it‟s not even reducing global greenhouse gases net-net.

But here is the interesting question from a political point of view, going into next year. We‟re going to be probably in a recession or have very, very sluggish growth. We‟re going to have a huge deficit. We‟re going to have relatively moderate gasoline prices. And so how – what‟s the Congress going to do? I mean, the idea of cap-and-trade is – I mean, I think cap-and-trade – all this Fannie Mae – all this stuff is a way -- Congress wants to do things but it doesn‟t want to pay for it. But what happens when it becomes apparent that what Congress is planning to do is to replace $2.50 gallon gasoline with $3.50 a gallon gasoline? I mean, that‟s going to be the net effect of what they‟re going to try to do. I think you might see some political resistance to that. You may see a real stretch out in the enthusiasm for a lot of these onerous strategies that deal with climate.

40:31 MR. ATKINSON: That may in fact be dealt with at, say, a Hilton hotel in London, England on this very day. (Laughter.) They have to do something though.

40:40 MS. VAN RYAN: May I ask who – is that you, Steve?

40:43 MR. ATKINSON: Yes, it is. I‟m sorry.

40:45 MS. VAN RYAN: That‟s all right.

40:46 MR. ATKINSON: I just happen to think that in London today, unless the sidewalks are shoveled clear of the earliest snowfall in their history that – I have problems when it comes to discussions on the climate. I really do.

41: 05 CARTER WOOD: This is Carter Wood at the NAM. I just note in passing that over the last week, I‟ve seen three or four pieces bringing back up the idea of a 50-cent-a-gallon gas tax or a $1.00-a-gallon gas tax. Now that the price of gas is falling again, what a wonderful opportunity it is to increase it. Most of those arguments are not environmental but are economic. That is, we can use the money, and fuel-efficiency more oriented, it seems to me. But anyway, it‟s kind of seasonal, I guess.

41:38 MR. PUGLIARESI: Right, but you know, the lower gasoline prices, Larry Goldstein, our former president of EPRI and now one of our directors, he came up with – I think it was – it depends on how you do it. But he came up with 250 to $300 billion. The lower gasoline prices may be just the liquidity and the stimulus package the economy needs.

41:59 MS. VAN RYAN: Do you have a comment on that, Rayola?

42:01 MS. DOUGHER: Oh, just in terms of API or the industry in terms of gas taxes, our policy has always been, if it is increased that it go toward the roads and that we use it in that way.

42:13 MS. KILKENNY: This is Cindy Kilkenny from Fairly Conservative. Does the industry have a response to Obama‟s plan for a windfall profits tax? Is there a written response?

42:21 MS. DOUGHER: A written one? I don‟t know if it‟s written. But we certainly don‟t approve of it. I mean, we really think that when you tax the industry, we‟ll have less money, less investment, less supply.

42:33 MS. KILKENNY: Yeah, well, I mean –

42:34 MS. DOUGHER: You set yourself up for a future with less supply and that would have its own adverse impact on prices too, probably.

42:45 MS. KILKENNY: Right, well, I mean, I know that‟s my response. But I just didn‟t know if there was anything to point to as to the industry showing history or that kind of thing.

42:54 MR. PUGLIARESI: Yeah, I suspect that they‟re going to get together and do the – this is Lou again. I mean, the industry is a huge contributor to the federal budget, huge. I was just shocked when I looked at the data last week. I‟m just surprised, all the effort in vilifying these guys, I mean –

43: 11 MS. KILKENNY: It‟s nice of you, considering how evil you are. But yeah.

43:14 MR. PUGLIARESI: Yeah, it‟s amazing. (Chuckles.)

43:18 DEVIL‟S ADVOCATE: This is Devil‟s Advocate from Copious Dissent. Just on a quick related note to that. I‟ve heard a lot of stuff that – I mean, this may end up not mattering at all over the next week, but did Sarah Palin actually have a windfall profits tax in Alaska or was it something different, because I know Larry Kudlow said it wasn‟t. And then everyone said it was. And so, I don‟t know if that would be pushed regardless of what party gets elected.

43:40 MR. PUGLIARESI: I‟m guessing she renegotiated the severance taxes. But I don‟t know the answer.

43:46 MS. KILKENNY: Yeah, I‟ve actually done some work on that, and yes. But it‟s coming of Alaska‟s oil, so that‟s the way it goes, which is different than what might be considered a windfall tax –

43:57 MR. PUGLIARESI: Here‟s a question I have on offshore leasing. Offshore leasing has the potential to generate a lot of cash to the federal government. And I‟m wondering whether the financial pressures the government is going to find itself in next year, whether that might be a main motivator to open the program up and start to look at more prospects, because if they really do go with a pay-go program, this is one of the only sources I can see out there where you can get substantial revenues in a relatively short period of time through the bonus-bid process.

44: 34 MS. DOUGHER: Well, we keep our fingers crossed. But so far this year, we spent $6.8 billion just on the bonus bids alone. So that‟s quite a bit of money just for those new leases. In terms of royalties, last year it was $8.7 billion. So states, the federal government have a lot to gain by taking a serious look at this.

I think the problem for the industry moving forward is to have certainty, legislative certainty – even though the moratorium has been lifted, we have a number of members of Congress saying they‟re going to bring it back again.

45:08 MS. KILKENNY: It does not feel certain, that‟s true, yeah.

45:09 MS. DOUGHER: So you need to have that certainty going forward to make that investment. And if we don‟t have it, you‟re going to be very hesitant about going ahead with any exploration at all.

45:18 MR. PUGLIARESI: Yeah.

45:20 MR. PUGLIARESI: The issue actually, what the Congress doesn‟t even understand is that if you want people to make commitments to drill ships, to learn petroleum engineering, to do all these long-term things, what we ought to have is the largest possible inventory of opportunities as possible, partly because the whole geologic discovery process, the information is a real force multiplier in how you do something in other basins. And the notion that we should have parcel stuff and little bits and wait to see if someone finds something before they open up a little bit more is entirely the wrongheaded way to sort of maximize the value of the exploration process, including the revenues to the government.

46:09 MS. VAN RYAN: Any additional questions involving offshore drilling or bonus bids?

46:14 MR. BALCH: Well, one thing – this is Greg from The Barnyard. One thing I know is out here in California, there is over 2,000 known natural seeps off our coast that we know where the oil is. You know, it‟s not like it would take a long time to access that or to find it.

46:29 MR. PUGLIARESI: Right, actually, I heard that the city of Santa Barbara, because of two geologic studies, voted to increase drilling because the existing studies showed that the drilling was reducing the amount of natural seeps in Santa Barbara Channel.
(Cross talk.)

46:50 MR. BALCH: Sorry, I saw where some of these seeps leaked as much as a couple hundred barrels a day into the – some of these into environmentally sensitive areas.

47:01 MR. PUGLIARESI: According to the National Academy of Sciences, 63 percent of the petroleum loading into the marine environment is from natural seeps; less than 1 percent is from offshore operations. And some of the major companies claim that it‟s actually even less than that.

47:22 MS. DOUGHER: Well, I think the MMS shows that in the Gulf of Mexico something like one one-thousandth of 1 percent. And it‟s the seepage too it‟s much greater than any of the spills that occurred and that‟s where we had most of our operations. So you don‟t get much better than nature.

47:39 JOULES BURN: This is Joules Burn of the Oil Drum. And I have – I want to jump back to the economic discussion, because a couple of assumptions that seem to be swirling around with some of the discussions is that the lower gasoline prices and oil prices are sort of here to stay for the foreseeable future. When the – it seems that the recent drop in oil prices and gasoline prices has very much to do with the decreasing demand, which may have some economic reasons, but the economy in general – but also related to the previous high prices, which drove demand down. So we‟re in a situation where we have lower prices but less people are actually – less gasoline is being used.

So trying to move forward and into a situation where the economy might be growing at some point in the future would imply an up-tick in the usage. And is there – does the API believe that production will be increasing during that period to keep the prices low? Or is there a possibility of prices again going above $3.00 a gallon and higher, just based on the fact that more people, including the developing countries and China are using more gasoline?

49:12 MS. DOUGHER: We really don‟t have any forecast for the future. If we just think back to last summer, there were a number of analysts calling for $200 a barrel oil by Christmas. And here we are at 60, 65. So I think anyone would be pretty hesitant to make a forecast right now moving forward.

49:32 MR. PUGLIARESI: Yeah, I mean, I do think you –

49:33 MS. DOUGHER: We‟re going to need the investments out there and we‟re going to need steady investment moving forward –

49:38 MR. PUGLIARESI: This is Lou again. Our view was that if you go to the beginning of the new millennium, 2002, 2003, actually you could make a forecast as to how much oil was going to be produced over the next 8 or 9 years just field-by-field analysis. And it wasn‟t that bad. And with some normally distributed errors – you might get a little bit here that fell off but a little bit of field that came on early.

And if you go through the analysis – I won‟t spend a lot of time on this – but everything that could go wrong went wrong. You know, our view is that this is a kind of silent disruption. And lots of production got hammered through a lot of different reasons – resource nationalism, civil strife, a failure of Bush to open up ANWR and the Congress, offshore leasing, the Iraq war. And so a lot of that production – so in a way, we went through a kind of disruption in terms of expectations. The path we were on – even though we have production sort of didn‟t really decline dramatically. It started to flatten out around 2006, 2007.

And of course, I agree, we were moving up a price curve in the sense that demand was expanding. But there‟s no reason – if you look sort of historically and you look at what‟s going on in the market, it‟s hard to believe that we should be up in the mid-150s range long-term. It‟s just too much that can happen below that.

51:06 MR. BURN: Well, one thing though that‟s sort of a bigger picture issue is there is a belief from certainly a lot of the voices on this call that a free-market economy is generally a stable thing. And all a government has to do is stay away and it‟s going to be this nice, stable, upwardly sailing vessel, which is just going to lift us all.

51:29 MR. PUGLIARESI: Well, I don‟t think that‟s what free-market economics says. It says that –

51:33 MR. BURN: Well, I think but there is the impression though that there will be less instability. And clearly in the last year, we‟ve had instability in all fronts. And you know, it‟s possible that instability is the norm as opposed to predicting that we‟re going to have moderate gas prices for the next year, for example. We might have big price swings in both directions again.

51:58 MR. PUGLIARESI: Of course, anything is possible. But clearly some of the instability is kind of self-inflicted. If you look at – not just the policies of the U.S. government but other governments. And obviously, probably there are more black swans out there than we expected.

52:18 MR. BURN: Well, another point is that – something that‟s not been mentioned in this call is the effect of speculation in the market, because the amount of dollars that is traded in a speculation market for oil vastly exceeds the amount of quantity that is there. I mean, by many orders of magnitude, it‟s a huge amount of money that‟s floating around looking for a place to land. And so, both moving into the market and moving out of the market can have a big impact on the price that is being paid, which feeds back into the demand. People will buy less when it‟s very expensive.

52:54 MR. PUGLIARESI: Yeah, but did you see the last CFTC report on this where they actually got all the trades? And I actually encourage people to look at that. I mean, I‟ll be very honest, our view is that these prices were driven by fundamentals of supply and demand. And the speculators didn‟t play. And remember, there‟s somebody – I don‟t quite understand. There‟s somebody on both sides of those deals. Now, maybe the bets all went one way. And they were not – I don‟t think they were quite leveraged the way the CDOs and these other things were. And the CFTC needs to show that. But it‟s really worth looking at it because they finally got all the data. And we have never been – we think the speculators might have had some modest effect at the margins here or there. But it‟s overwhelmed by the fundamentals.

53:42 MS. KILKENNY: Where would I find the data?

53:44 MR. PUGLIARESI: If you go to the CFTC website or if you e-mail me, we have a copy back at the office. And I‟ll e-mail it to you. But I think you can pull it right off the CFTC website. And it‟s a really interesting report. I mean, they finally got all the data. And then, there was a set of hearings, which also the transcriptions are worth looking at.

54:05 MR. PLANTING: This is Ron. Wasn‟t it true that they found that the so-called speculators were actually getting out of the market while prices were still rising?

54:14 MR. PUGLIARESI: Yes, yes. They have – actually got – I think they got 90-some odd percent of all the trades. It was really – it‟s really some of the best work they‟ve ever done.

54:26 MS. VAN RYAN: We‟ve been going about an hour now. Do we have any additional questions? Normally, we go about an hour and then close out the blogger conference calls. I do have a couple of questions that were sent to me by a blogger earlier who could not attend the blogger call. But we‟ve had a pretty lively discussion today, so I‟ll get back to him personally later. Is there anything else?

54:52 MS. KILKENNY: No, but if you come up with a statement on the windfall profits, do let me know.

54:57 MS. VAN RYAN: I‟ll do that. Thank you very much. Okay, we‟ll call it a day then. Thank you all for joining us. Again, we‟re going to post the audio file and transcript as quickly as we can. Thank you for joining us. Bye, everybody.

(END)

Energy Tomorrow