Posts tagged with: oil

Last week President Obama gave an address outlining his new energy policy. In light of the tragic events in Japan, the speech was much anticipated especially considering the president’s prior commitment to nuclear energy.

As expected President Obama continued advocating for a greener energy policy while continuing to push for the country’s independence from oil. However, the President’s speech, an article by Reuters points out, was “short on details on how to curb U.S. energy demand.”

Furthermore, the President’s call for a path towards greener energy and energy independence will not be easy. The New York Times appropriately states, “The path to that independence — or at least an end to dependence on the Mideast — could well be dirty, expensive and politically explosive.”

President Obama continues to voice his support for alternative fuels and green energy. He argued for energy from wind, solar, natural gas, biofuels, natural gas, and nuclear. However, as I have argued in the past, these alternative fuels have costly subsidies, unintended consequences, are not cost effective, and have proven to be largely inefficient (I address the unintended consequences of ethanol here, here, and here and the unintended consequences with wind turbines here).

The president is calling for more government regulation. He gave a glimpse of a new energy standard he is going to pursue this summer, “This summer, we’re going to propose the first-ever fuel efficiency standards for heavy-duty trucks. And this fall, we’ll announce the next round of fuel standards for cars that build on what we’ve already done” he said. In an economy that is looking to rebound from a recession, businesses do not need another costly government mandate forcing them to change their transportation fleet. Instead, the President should rely on the market. Businesses will upgrade their transportation fleet naturally through the market when it is efficient and more cost effective for them to utilize heavy-duty trucks that are more fuel efficient.

The president also stated that we need to look to other countries, such as Brazil, for oil. However, an article published by Real Clear Markets is very critical of the President’s pursuit of Brazilian oil:

Now, with a seven-year offshore drilling ban in effect off of both coasts, on Alaska’s continental shelf and in much of the Gulf of Mexico – and a de facto moratorium covering the rest – Obama tells the Brazilians:

“We want to help you with the technology and support to develop these oil reserves safely. And when you’re ready to start selling, we want to be one of your best customers.”

Obama wants to develop Brazilian offshore oil to help the Brazilian economy create jobs for Brazilian workers while Americans are left unemployed in the face of skyrocketing energy prices by an administration that despises fossil fuels as a threat to the environment and wants to increase our dependency on foreign oil.

Furthermore President Obama’s talk of expediting drilling permits is not wholly accurate. The Obama Administration has not been friendly to offshore domestic drilling since the BP disaster last year. As the above quoted article from Real Clear Markets explains, there has been a seven-year offshore drilling ban on Alaska’s continental shelf and in much of the Gulf of Mexico. That has not changed under the Obama Administration. The Heritage Foundation pointed out in February:

Putting aside calls from some who want to increase domestic exploration to areas in Alaska and elsewhere, President Obama has completely shut down the existing oil drilling infrastructure in the U.S. At least 103 permits are awaiting review by the Bureau of Ocean Energy Management, Regulation and Enforcement. The federal government has not approved a single new exploratory drilling plan in the Gulf of Mexico since Obama “lifted” his deepwater drilling moratorium in October 2010. Obama also reversed an earlier decision by his administration to open access to coastal waters for exploration, instead placing a seven-year ban on drilling in the Atlantic and Pacific Coasts and Eastern Gulf of Mexico as part of the government’s 2012-2017 Outer Continental Shelf Program.

As expected the president’s energy speech is not receiving much praise from the oil industry. Obama claimed that the oil industry is sitting on leases instead of using these for oil production. Ken Cohen, Exxon Mobile Corp.’s vice president of public and government affairs addressed the President’s claims and reflected on his speech in a Wall Street Journal article:

Said Mr. Cohen: “90% of the words sound relatively right in line with what you’d hear us say,” in terms of enhanced use of natural gas, increasing energy efficiency, more research and development and more domestic production. But the speech didn’t address policies that Mr. Cohen said are hampering oil development, such as opening areas that are off limits to the industry, and insisted on uneconomic mandates for renewable fuel. Moreover, the mention that oil companies are hoarding unexploited leases is off the mark, he said.

“The notion that there’s some economic incentive to sit on a lease is wrong,” Mr. Cohen said, particularly when oil prices are above $100 a barrel.

Despite the recent tragic events of Japan’s nuclear power disaster, it was relieving to see the president not call a halt to nuclear energy. While it will most likely take time for nuclear energy to rebound from the catastrophic events, the president looked at the situation pragmatically by continuing to voice support for nuclear energy while requesting a Nuclear Regulator Commission safety review to make sure all existing nuclear energy facilities are safe.

Despite the criticism, it is still important to keep in mind that we are all stewards of the Earth and need to take care of the planet God has given us. We do not get a replacement and we must see that future generations have a planet they can live in without problems created by our generation. The President’s call to not waste energy should be applauded, and advice we should all heed. However, as the United States continues to define its energy policy it is also equally important to keep in mind we are called to not just be environmental stewards, but also financial stewards. Our energy policy should be for the well-being of the planet but also economically feasible without being burdened with costly subsidies and unintended consequence.

Full text from President Obama’s speech can be found here.

The American Enterprise Institute also provides and insightful critique on the President’s speech which can be found here.

My commentary this week touches on the spiritual and cultural significance of the largest U.S. oil spill in history. I was a resident of the Mississippi Gulf Coast for 11 and a half years. I worked in the Gulfport district office of U.S. Congressman Gene Taylor (D-Miss) before leaving for seminary. I was a Katrina evacuee and returned to see unbelievable decimation. It reminded me of the pictures of Hiroshima in textbooks after the dropping of the nuclear bomb. I always think it is fascinating when I hear people observe the Gulf Coast on the news after a tragedy and say how the people should just move. I wonder where they would go when the water is such an integral part of their subsistence and heritage? The people on the Gulf have much more culturally in common with individuals on the Gulf in neighboring states than they do with those living inland in their own state. Louisiana, especially, has one one of the most uniquely diverse cultures in this country. A key theme in my piece is that BP can compensate them economically, but there is an important cultural and spiritual aspect to their labor that is above financial compensation. The text of my piece is also printed below:

Spiritual Labor and the Big Spill

by Ray Nothstine

Many Americans are proud of where they come from; this is no less true of the people of the Gulf Coast. Human interest stories have gripped viewers and readers following the news about the BP oil spill, which often highlights the locals’ pride in their roots. Sal Sunseri, the owner of P&J Oysters in New Orleans says it well: “The history and culture of the seafood industry in Louisiana is part of the fabric of who we are. The world should not take this lightly.”

Sunseri brings to life an important point about the spiritual and cultural aspect of work that is especially rich on the Gulf Coast. Work in a free economy is an expression of our creativity, virtue, and response to a calling. Christian authors Gerard Berghoef and Lester DeKoster note that “God so arranges work that it develops the soul.”

BP is airing a commercial in which it vows to compensate fishermen and others for the loss of income until the cleanup is completed. This is a good start. But it also serves as a reminder that earnings are secondary to fishermen whose very labor is the preservation of heritage. It is not uncommon to hear fishing crews speaking Cajun French off the coast and in the bayous and marshes of Louisiana. Cajun French, an endangered language, was at one time banned in Louisiana schools. The spill is another threat to communities and a way of life for generations of a proud and sometimes marginalized people.

Vietnamese shrimpers, too, proudly work these waters, many of them refugees from communist aggression. They flourish at shrimping, a trade that generations of families practiced in Vietnam. The Vietnamese were among the first communities to rebuild their lives after Hurricane Katrina, often not waiting for government aid. The Washington Post, in a story on the Vietnamese community, echoed this fact and explained how the spill was especially tragic as a resilient community was forced to await assistance.

BP would be wise to continue to hire as many local crews as possible for cleaning up this disaster. Locals have an extra incentive to assist in a thorough effort since they are most tied to the water. BP needs to be concerned not only with repairing its brand; the company has a clear moral obligation to follow promises with action.

The oil industry in the Gulf Coast accounts for almost a third of all U.S. oil production. The oil company’s contribution to the nation’s energy supply is invaluable, but they have been fighting public relations battles for years. Seen largely as a benefit to the community before the spill, they are now being battered by doubts from many in the region who repeat a common line: “We have made a deal with the devil.”

But many residents and local leaders understand that the oil industry is essential to Louisiana’s economic well being. The governor and legislators have fought a bipartisan battle to preserve jobs while the federal government seeks a moratorium on offshore deep-water drilling.

Many in Mississippi and Louisiana are also understandably weary of an often unresponsive federal bureaucracy. United States Congressman Gene Taylor (D-Miss), who represents the seacoast, said of the federal response, “I’m having Katrina flashbacks,” and called the current administration’s efforts “incompetent.” In a particularly harsh quip Florida Senator George Lemieux (R-Fla) added: “It’s not just oil that’s washing ashore Mr. President, it’s failure.” Asked about the biggest frustration with the federal response, Governor Bobby Jindal (R-La) on day 73 of the spill lamented, “There’s just no sense of urgency.”

There is dismay that a nation that once landed men on the moon, liberated nations, and fed and rebuilt its enemies has few answers: the “yes we can” mantra has not materialized for the Gulf. Out of the darkened waters, there is an opening for an oil company to do the right thing and repair trust with an understandably outraged populace.

The men and women of the Gulf Coast who take to the water to practice their trade deserve the opportunity to flourish in the vast wonder of creation. The many Christians among them are keenly aware of the passage from John 21, when the resurrected Christ from afar tells the disciples to cast their net on the right side of the boat and they are rewarded in abundance. The passage is a reminder that Christ has an intimate knowledge of and concern for even the creatures under the sea. It is a source of hope that the cooperation of private enterprise, government, and local ingenuity can bring healing and the rejuvenation of a treasured way of life.

Blog author: jballor
Tuesday, July 13, 2010

Here’s OpenMarket:

Plain and simple economics — not the alleged machinations of Big Oil or Congress’s unwillingness to put a price on carbon – explains why America remains dependent on petroleum.

We are still not beyond petroleum. In fact, we’re quite a ways away.

Blog author: jballor
Friday, February 12, 2010

When it comes to energy policy, there is no perfect fuel. But in these debates, as elsewhere, the imaginary perfect fuel cannot become the enemy of the good.

And for the first time in recent memory, this means that nuclear energy, by all accounts a good alternative for the scale of demand we face, might be getting a seat at the table. Coal, which still provides more than half of the energy for the American grid, is cheap and plentiful, but environmentally and politically costly. And according to Popular Mechanics, it can only be “cleaned” up so much. That leaves a huge gap for other sources to fill.

As James B. Meigs writes,

Coal will never be clean. It is possible to make coal emissions cleaner. In fact, we’ve come a long way since the ’70s in finding ways to reduce sulfur–dioxide and nitrogen-oxide emissions, and more progress can be made. But the nut of the clean-coal sales pitch is that we can also bottle up the CO2 produced when coal is burned, most likely by burying it deep in the earth. That may be possible in theory, but it’s devilishly difficult in practice.

The rest of the piece goes on to argue how we’re really talking about “cleaner” coal, rather than “clean” coal. Remember that debate over whether it was appropriate to call sex with various forms of birth control “safe” or “safer”? We might well see a similar shift in language about coal from “clean” to “cleaner.”

But what about so-called “alternative” energy sources, like geothermal, wind, and solar? Well, as John Whitehead over at the Environmental Economics blog concludes, “…potential supplies of wind and solar don’t appear to be large enough to completely replace oil and coal in the foreseeable future. If that is the purpose, then no, alternative energy can not effectively replace fossil fuels.”

So for the foreseeable future what we’re looking at in terms of the sources of our energy, in the face of growing global demand, is a mélange; coal, oil, natural gas, and yes, wind and solar, all have their place. But so does nuclear, and that’s one of the positive takeaways from President Obama’s State of the Union address, in which he commended “building a new generation of safe, clean nuclear power plants in this country.”

The challenging for existing energy firms will be to adjust to providing the right sources in this mixture. One way to do this is to be cognizant of the alternatives and their relative costs and benefits. ExxonMobil’s “Energy Outlook” released at the end of last year predicted that the growth of some of the newer sources, like wind and solar, would grow faster than some of the conventional sources, like oil and coal.

This means that a focus on innovation and efficiency will move some surprising players to fill the demand for cleaner energy, and the vision of increasingly transient reliance on fossil fuels might indeed come to pass.

As I wrote in 2006, “The human stewardship of oil and other petroleum-based fuels entails a responsibility to use the economic opportunities they afford to find and integrate other renewable, sustainable, and cleaner sources of energy, especially represented by the promise of nuclear power, into our long-term supply.”

Saleem H. Ali, a ‘pro-consumption environmentalist’ at the University of Vermont “argues that sometimes a nation has to extract a nonrenewable resource like oil, or tricky-to-recycle metals and gems, in order to leapfrog from dire poverty to a more diversified economy.”

“Money from oil wealth can be used to invest in other sectors. And that in turn can yield sustainable development,” Ali says.

Awhile back I sketched very briefly a view of the theological purpose of fossil fuels. On this view, “fossil fuels would thus have the created purpose of providing relatively cheap and pervasive sources of energy. These limited and finite resources help raise the standard of living and economic situation of societies to the point where technological research is capable of finding even cheaper, more efficient, renewable, and cleaner sources of energy.”

This meshes nicely with the Cornwall Declaration’s statement that “A clean environment is a costly good; consequently, growing affluence, technological innovation, and the application of human and material capital are integral to environmental improvement. The tendency among some to oppose economic progress in the name of environmental stewardship is often sadly self-defeating.”

Everyone seems to be going ga-ga over nationalization in the US these days, and why not? Heck, it seems to be working pretty well for Hugo Chavez in Venezuela.

Blast from the not-so-recent past: Maxine Waters on the domestic oil industry

Blog author: kschmiesing
Wednesday, July 23, 2008

Skyrocketing energy costs have, among other effects, led to interesting political maneuvering. Specifically, the question of expanding of domestic energy resources (e.g., offshore drilling) has become live for this first time in decades. For that to happen in the current Congress, of course, requires that there be at least a certain measure of bipartisan consensus. As Michael Franc explains on NRO today, there have indeed been a few Democratic defections to the pro-drilling side. These Democrats are caught between the popularity of expanded oil and gas exploration on one side and, on the other, both the traditional Democratic allegiance to the enviornmental lobby as well as the unyielding stance of the Party’s leadership.

Lifting restrictions on drilling will assist the market in creating additional supply, even as demand has already been affected by rising prices. It is important that environmental concerns not be tossed to the wind in a rush to relieve the strain on American pocketbooks, but that seems unlikely in the current political environment. In fact, the negative environmental impact of drilling in places like ANWR has always appeared questionable. It seems more likely that opposition to offshore and other drilling was fueled by NIMBY sentiment rather than demonstrably significant environmental damage.

There is the argument that offshore drilling will have little impact on prices, at least or especially in the near future. It is important that the potential for such sources be assessed realistically and not exaggerated, but the “10 years from now” objection is not compelling. If it’s a good thing to do, then we should start. Not doing so simply pushes the horizon ten years further down the road.

By no means can I claim the ability to weigh accurately the costs and benefits of expanding domestic energy exploration. That’s why it’s important to let the price mechanism operate freely and let the market respond in turn. If lifting drilling restrictions moves us in that direction, then I favor it.

First Maxine Waters suggested that she might just want to nationalize the US oil industry; now Maurice Hinchey of New York is jumping on that bandwagon. And why wouldn’t they? It’s all the rage these days. Just look at Venezuela, which is rapidly emerging as a South American hellhole paradise after Hugo Chavez started nationalizing everything. Why should we be left behind?

It turns out that there are a number of very good reasons to avoid that particular bandwagon. Dr. Jay Richards discussed them last night on KKLA in Los Angeles on the Frank Pastore Show. Listen in and decide for yourself whether the US should nationalize the oil industry.

Why yes, yes she did:


Via Hot Air.

Blog author: jballor
Wednesday, December 27, 2006

Our series on the year in review continues with the second quarter:


“Surprise! Evangelical Politics Isn’t Univocal,” Jordan J. Ballor

So from issues like immigration to global warming, the press is eager to find the fault lines of evangelical politics. And moving beyond the typical Jim Wallis-Jerry Falwell dichotomy, there are real and honest disagreements among evangelicals on any number of political issues….


“How Do You Spell Relief?” Jordan J. Ballor

If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely?…


“There are more environmentalist misanthropes than you think,” Jay Richards

But anyone who reads widely in the environmental literature knows that suggestions such as Pianka’s are not uncommon. In fact, the desire for mass human death follows logically from the anti-human beliefs of some radical environmentalists. Some are more consistent in their beliefs than others. But Pianka is by no means the only person to express such opinions….