Economics, not philosophy, will end our oil dependence

We've known for decades that our dependence on Oil has a lot of downsides for us - pollution-producing extraction processes, Middle Eastern tyrants, risks of spills, the non-sustainable nature of oil stocks, etc. - and yet we've barely made a dent in changing over to alternative sources of energy. Even technologies like hybrid cars are merely more efficient, or trade off prices at the pump for prices at a central power plant. Philosophy and long-term self interest are not doing the job of moving us to a post-oil future.

What is? Simple economics. Pepsi has just announced a new plastic bottle produces NOT from oil, but from plant byproducts. And they didn't do it for philosophical reasons. They did it because PepsiCo produces hundreds of thousands of tons of plant waste every year on their food products, which they can reuse to produce packaging. Saving them millions.

The bottle is made from switch grass, pine bark, corn husks and other materials. Ultimately, Pepsi plans to also use orange peels, oat hulls, potato scraps and other leftovers from its food business.

The new bottle looks, feels and protects the drink inside exactly the same as its current bottles, said Rocco Papalia, senior vice president of advanced research at PepsiCo.

"It's a beautiful thing to behold," he said. "It's indistinguishable."

Not Again - Another Oil Rig Explosion

Since the Gulf Oil Spill, the Obama administration has been trying to impose a ban on deep-water drilling in the Gulf of Mexico which judges have steadily stricken down. One has to wonder if that may now change since a second oil rig has exploded in the Gulf, about 200 miles away from the existing spill. The question is, are two explosions so close together in time an indication of a systemic problem with inspection/regulation? Or is it all coincidental?

Either way, I'm happy to see no one was killed by this explosion. But less happy to hear that oil slicks have been sighted by the Coast Guard.

Gulf Oil Spill drives Southerners to the Jersey Shore

It may have been inevitable as BP and the Federal Government have fiddled while the Gulf of Mexico has been fouled by the oil spill. Southern tourists who would normally vacation along the afflicted shores of the Gulf are seeking other destinations. And many are headed for the Jersey Shore. This is good news for New Jersey tourism, but may be extra-bad news for Gulf towns whose only real economy is serving tourists.

Local tourism officials can't provide hard numbers, but cars from Texas, Mississippi, Tennessee, and other states below the Mason-Dixon Line appear to be in greater supply at the Shore this summer.

"I'm hearing a lot more southern accents this year," said Susan Martin, a reservations manager at the Golden Inn in Avalon. "And I just love the sound of it."

There has been an increase in the number of Southerners booking rooms, Martin said. They don't say why they are coming, she said, but many have identified themselves as first-timers.

The newcomers are finding their way largely on their own, say those in the tourism industry. New Jersey this year eliminated its national multimillion-dollar Shore promotional campaign, leaving resort towns complaining even before the gulf disaster about their inability to compete with rivals such as Ocean City, Md.

Painfully True

From here.

The Gulf Oil Spill could still get worse

Take this one with a grain of salt, as it comes from a comment on a discussion board. But the reasoning seems sound and predicts that the broken oil well is more broken than we think and getting worse. The cusp of the argument is speculation that the break is not just at the head of the well, but that the actual pipes deep in the seabed are broken as well. This would mean the more done to cap the well, the more flow will simply come from the hidden leaks farther down the pipe.

Contrary to what most of us would think as logical to stop the oil mess, actually opening up the gushing well and making it gush more became direction BP took after confirming that there was a leak. In fact if you note their actions, that should become clear. They have shifted from stopping or restricting the gusher to opening it up and catching it. This only makes sense if they want to relieve pressure at the leak hidden down below the seabed.....and that sort of leak is one of the most dangerous and potentially damaging kind of leak there could be. It is also inaccessible which compounds our problems. There is no way to stop that leak from above, all they can do is relieve the pressure on it and the only way to do that right now is to open up the nozzle above and gush more oil into the gulf and hopefully catch it

How big is the Gulf Oil Spill *REALLY*?

This site lets you overlay the spill onto your own hometown or any address in the world. It is scary to realize just how large this thing has become.

Was the Lockerbie Bomber freed for oil?

It is said that Lord Palmerston once said, "Nations have no permanent friends or allies, they only have permanent interests." His words seem trenchant in light of new allegations out of the United Kingdom that the Lockerbie Bomber was freed, not for compassionate reasons, but in order to advance Britain's oil interests.

Gordon Brown’s government made the decision after discussions between Libya and BP over a multi-million-pound oil exploration deal had hit difficulties. These were resolved soon afterwards...Two letters dated five months apart show that Straw initially intended to exclude Megrahi from a prisoner transfer agreement with Colonel Muammar Gadaffi, under which British and Libyan prisoners could serve out their sentences in their home country...Straw then switched his position as Libya used its deal with BP as a bargaining chip to insist the Lockerbie bomber was included.

The exploration deal for oil and gas, potentially worth up to £15 billion, was announced in May 2007. Six months later the agreement was still waiting to be ratified.

It is this kind of intermarriage between ethics and business that makes so many distrust government. How can we trust faceless bureaucrats with our health, education, and wealth when we can't even trust them to punish the guilty when justice become inconvenient to business interests?

Arrrrrrgh, Matey?

We were discussing the hijacking of a Saudi oil tanker by pirates at Guys Night Out last night. I wonder if the pirates understand they'd be a perfect target for Obama to prove he is "tough in foreign policy" without actually having to wage war. Or for Bush to have something on his legacy that doesn't require Congressional approval. One detachment of marines and suddenly the vessel is "liberated" and all the USA would be doing is enforcing international law.

My advice to the pirates. Get while the getting is good.

Hilarity Ensues at the House of Representatives

This is hilarious. The Democrats don't want to vote on off-shore drilling, so they recess for the August break. Some Republicans don't want to recess until there is a vote, so they've decided to keep going. So the Democrats turned off the lights and the microphones. So the Republicans kept going and one Congressman punched a bunch of buttons into the PA system until he got the right code to turn it back on. Then the lights and microphones went dead again. So the Republicans cheered and kept going and sent out a request for a bullhorn. While this started out as a good thing, I worry that it's becoming more and more of a circus and will be look on as foolishness. Still, they haven't done up a picture of the Speaker of the House wearing a diaper like the Democrats did of Newt Gingrich. Original story here, with follow ups here and here.

People vote with their feet

Another view of the Energy Crisis

Oil or Congress on Trial?

The question is can McCain, Obama, or Clinton change this dynamic? Somehow I am doubtful.

Is the gas/oil shortage a myth?

So says Ed Wallace of Business Week. If he is right, then Congress should be grilling oil executives over a high heat until they are deeply cooked.

Gasoline reserves on hand are at the highest levels since the early 1990s, which is remarkable considering the nation's refineries have been cutting back on the production of gasoline because their margins have declined. In fact, average gasoline reserves on hand have risen since this past October, while oil reserves in this country have gone up virtually every week this year—and only fog in the Houston Ship Channel that kept oil tankers from unloading their crude one week kept it from being every week.

I have to admit, the more I learn about the oil industry, the more disgusted I become. There is so much work to manipulate prices on what is essentially a fungible resource. If this article is right, then the Republicans do deserve to lose the presidency.

Gas Prices and Inflation

This article where it talks about oil hitting $104 per barrel is a little old, given that, as of this posting, oil has hit $108.32 per barrel. The previous record (adjusted for inflation) was $103.76 per barrel. What struck me most is the actual price - $39.50 per barrel in 1980! That's a rate of 171.31% over 28 years. While the price of oil is high, the inflation rate is further proof that we must get our economy under control.

Should Iraq Pay For Its Own Reconstruction?

Iraq is sitting on a bunch of oil which is worth quite a lot these days. This has prompted Senators Carl Levin (D - Michigan) and John Warner (R - Virginia) to ask, "Where's the money?" Estimates are that Iraq will earn at least $100 million because of oil for 2007 and 2008 combined. To date, we've spend around $47 billion trying to reconstruct Iraq. Iraq can't even figure out how to spend the $10.1 billion it has allocated for reconstruction.

Is it fair to require Iraq to spend on its own reconstruction or will this just create resentment like in the post-Civil War South?

How can we enforce the requirements we've put on Iraq? On the one hand, if we say, "Do this by X date or we will leave," we've given the terrorists a timetable. We've told them that all they have to do is create enough havoc until that date. On the other hand, if we don't somehow enforce it, then we give the Iraqi government no incentive to not have us foot the bill.

I honestly believe that there are people in Iraq that want to be free, but does Iraq as a country really want to be free? Is this just a case of being under a dictator for so long that it takes a while to get the concept of freedom like post-Soviet Russia?

I believe that we want Iraq to be stable. I believe that if we leave now, we'll have sent a message that the terrorists won and we'll just have to redo what we've done before. That being said, if Iraq wants a ruler, I'm not sure I like the idea of having the U.S. holding Iraq as a territory, at least from a PR standpoint.

300K barrels of our Oil Reserve go missing

In an era of volatile oil prices and energy supplies, the Strategic Petroleum Reserve is a critical tool in ensuring an enemy can not hamstring the USA by impeding oil shipping. As the oil supply is increasingly under threat by unstable governments (Iraq, Iran, etc.), under control of hostile governments (Venezuela, etc.), and under the pressure of rising demand (India, China, etc.), you would think that the Reserve would be under a microscope by policymakers. Apparently, this is not so. A recent audit found over 300,000 barrels of oil were unaccounted for in the government's books.

This is unacceptable and yet more evidence that a coherent Energy Policy is critical for whoever wants to be our next president/