Thank You For Expensive Oil!

12 Comment(s)

1. I don’t own a car so i take the bus and trolley to school and work. Not only do I save money, I’m doing something good for the environment by not driving. I think high oil prices will decrease demand for energy and foreign oil and we will be able to start doing something positive for the environment. We have known for years that we need to modify our lifestyles in order to save our environment.I think the high oil prices are finally making people realize that we need to change. So people should drive less and walk more and or use the MTS transit systems.

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   In response, on September 3, 2008, John said:

   Wow. Loren, I have agreed with the title of your blog since I first heard it being plugged. Now that I finally decided to read it I’ll have to admit you did invoke my response.

   Yes, we should be thankful for the high cost of oil but not for organic food or the lost bison but for the basic foundation of the American Way! A far better analogy could be based on the Japanese bombing Pearl Harbor and forcing the mighty United States of America into World War II. Ultimately the country came together with the resolve to create icons like Rosie the Riveter and through our ingenuity developed the Sherman Tank, the Liberty Ships and the Atomic Bomb.

   The new model year cars are hitting the market right now and the push is to get rid of the gas guzzlers of last year before the advertising of the far better gas sippers flood the market. The same is happening in the trucking industry along with the commercial digging and excavating equipment. The RV industry is all but wiped out by the economy and 10,000 RVs is liquidating its inventory as it’s going out of business, (a long term San Diego company).

   Regular folks like me are buying more fuel efficient cars and leaving the guzzlers parked. In my house we took day trips for vacation and never strayed further than 80 miles from home and I can assure you that very little money was spent to help the local economy.

   Yes we can be thankful that due to the high price of oil will ultimately improve the efficiency of our transportation and reduce our needs for fossil fuel. However this is coming at a high cost to society. Around the country Americans are cutting back just like during World War II or maybe even the depression years. As for our children, the collage funds are getting lower with the higher costs of surviving as the tuitions are getting higher.

   That grass fed bison is sounding pretty tasty right now and if I eat any more chicken I’m gonna grow feathers!

   J Mac

   Giovanna | Jul 31, 2008

2. It troubles me to think how anyone working for minimum wage is impacted by these high gas prices. It is hard for people to just get by. That makes it a little difficult to swallow the notion that it’s good for America. At the same time, if we don’t start preparing for a shift away from petroleum-based energy, we are in for much deeper trouble. It is truly a national security issue; an issue that requires the muscle of government to solve. If we made it a national priority, the government could create policies that support the development of reliable, affordable alternative energy sources by the private sector. Instead, our government supports the status quo and the preservation of an economic power structure that is ensconced in oil.

   If anybody reads into my comments that I am suggesting government subsidies for developing alternative energy, I say absolutely yes! Do you think the petroleum industry doesn’t get huge government subsidies? What do you call the billions and billions we have spent on military operations in the Middle East? Like it or not, that is a form of subsidy to ensure the flow of oil back to the US. Ironically though, it also ensures the flow of billions of dollars back to the Middle East where it funds terrorist groups.

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   JD | Aug 2, 2008

3. Among the many fine ideas and efforts individuals and organizations are pouring through trying to provide solutions to the worldwide energy issue one is so painfully obvious, the benefits so large and returns so immediate I find it amazing there is not the slightest mention of it anywhere. Of course I’m talking about the dismal system we have for regulating traffic. So much raw energy is wasted, so much unnecessary wear and tear is put on our vehicles, or schedules and our physical beings that even a partial repair would have gains in more than just the economy but in the very quality of our existence.

   Here are a few numbers derived from the web, bibliographies available, that point up the issue and what role intelligent traffic control may make in alleviating part of the mess.

   • The amount of power to accelerate a 3750 pound car from 0 to 45 mph = 2 kilowatt hours.
   • The number of traffic signals across the USA = 330,000 (this figure seems low to me but it’s all I can verify at this time)
   • If signals operate 14 hours a day with a 4 minute cycle directing 10 cars per cycle (some are a lot more, some a lot less so I’m calling this an average) the cars controlled per light, per day = 2100.
   • If a 30% increase in efficiency were obtainable, meaning 1/3rd the number of cars would be required to stop, then 700 cars, per intersection, per day would not have to burn that 2 kWh to get back up to speed for a savings of 1400 kWh per light, per day.
   • This crunches down to total energy saved per day, per signal across the nation of 462,000,000 kWh.

   Now how does this translate into dollars?

   • A 42 gallon barrel of crude light can have 19.5 gallons of gasoline extracted from it.
   • A gallon of gasoline contains 36.6 kilowatt hours of energy.
   • This means a $120- barrel contains 713.7 kWh of gasoline energy.
   • Divide 462 million kWh by 713.7 and the number of barrels saved daily nationally would be 647,330.

   I’ll be the first one admit this simple formula doesn’t take into account motor efficiencies, cost of converting oil to gas and many other things but it also doesn’t account for buses, trucks and gas guzzlers.

   The huge thing that it does account for is the $77,679,697- that could be saved every single day.

   How do we get this 30% decrease in unnecessary traffic stops? I’ve been a mechanical and manufacturing engineer my whole life and I know there are methods. Perhaps not unlike work in process controls used by technically savvy industries around the world whose established systems would be a good investigative starting point. Traffic control systems using advanced algorithms covering entire communities and linking to adjacent communities could easily out perform our current antiquated signal lights with their first come, first served or worse, timed sequence mentalities. In my opinion 30% would just be a start.
   Some new technologies would have to be developed. If you go to the largest traffic signal manufacturers websites the biggest advances in signal technology over the past ten years have been solid state controls and using LEDs instead of incandescent lights. Truly marginal advances that do nothing to enhance the state of regional traffic in any real terms.
   We as a nation need a new way of conducting our commuting business for these gains to be realized.
   How do I get this message out in front of those who can bring it to visibility on the national stage?

   Sincerely,
   George Cornell

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   George Cornell | Aug 5, 2008

4. George
   My hat goes off to you for such a detailed analysis. Could you now please do one on water? I am in total agreement that the price of gas should be put to some painful level to force us to conserve and for the auto industry to stop producing these huge vehicles. But my deal is water.
   If all SD citizens were to comply with the voluntary “20 Gallon Challenge” and save 20 gallons each per day, how much energy would we save? Think about all the KW hours of power used to pump water out of Lake Havasu, over mountains and across desserts to our homes. How much power does it take to deliver water to us from the Sierras?
   While you’re at this calculation, don’t forget to keep your speed down to 55 mph like we did in the 70’s.
   Look forward to your reply.

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   In response, on August 8, 2008, George Cornell said:

   Hi Rob,

   Thanks for the kind observation about my analysis. It is intended to start a national conversation about nuances that can affect the consumption rather than the sledgehammer approach of just adding more oil. There are many ways we could run our society more efficiently. I don’t propose that the price of oil be put to some “painful level” and wholly disagree in anybody forcing the public to change their habits through government manipulation. I feel we should look to embracing the green movement, the thoughtful and deliberate conservation of resources along the same emotional level as patriotism. If people really cared and felt they could have an actual effect on waste at home there would be no need to impose artificial and painful restrictions. The market will take care of that by itself. Now, if I were only convinced that it is doing it by itself I’d sleep better.
   It’s like those HOV lanes down the middle of I-15. The government thought that it could retrain the populous by making available a fast track (paid for with your money whether you use it or not) and everyone would suddenly carpool. Based on the volume of traffic it enjoys daily compared to the regular traffic lanes, it is a dismal failure. So, of course, they’re extending it. If only we got the government we paid for.
   My point is that retraining won’t work. We need to identify our constraints and work within them. We need only to exist smarter.
   As for the pending water crisis, I’m a 55 year old San Diego native. This has been a topic of avoidance even longer than Lindberg Field. It’s simple math that seems to be beyond the scope of our hired administrators.
   Sorry, you got me started.

   George Cornell
   Fallbrook, CA.

   Rob Pink | Aug 5, 2008

5. August 9, 2008
   Exclusive: Games Environmentalists Play
   Rael Jean Isaac
   Nancy Pelosi was appealing to the Democrat Party’s important environmentalist constituency when she explained her refusal to allow the House of Representatives to vote on lifting the moratorium on drilling on the continental shelf and in the Arctic National Wildlife Refuge: “I’m trying to save the planet; I’m trying to save the planet.” Obama appeals to that same base with his current vow “to build a new energy economy,” with energy independence in a few years through subsidies for “renewal alternatives.”

   But although alternative energy, above all solar power, is the shibboleth of the environmental movement, what Pelosi and Obama themselves probably fail to realize is that the core organizations of that movement are opposed not just to fuels that leave a “carbon imprint” (supposedly contributing to global warming) but to all large-scale energy development. And until Americans understand the roots of anti-drilling sentiment, which is really anti-energy sentiment, they will be in no position to counter the games self-styled environmentalists play in their war against all energy development.

   The roots go back to the 1970s when the political utopians of the 1960s (remember the New Left?) coalesced with the burgeoning environmental movement. Capitalism - above all the energy that fueled it - became the common target. The political utopians of what was broadly known as “the Movement” envisioned transforming society into small scale units practicing participatory democracy. The Institute for Policy Studies, which served as the Movement’s informal hub, summed up the ideal energy system in its proposal for an Encyclopedia for Social Reconstruction: “The energy will be produced and disseminated through small scale technology…We simply would have got rid of most of the extra high voltage wires strung around the country; closed up the coal mines, oil and gas fields; taken down oil refineries and much of the petro-chemical establishment.” The newly emerging environmental movement saw capitalism as problematic because it was compelled to produce ever more products which people did not need to satisfy basic wants, and was thus inherently destructive of the environment.

   Although unremembered today, the environmental movement began in an apocalyptic panic with rhetoric and emotion very similar to today’s global warming hysteria. The panic struck in 1970. The earth, up to then a comfortable dwelling place, suddenly was deemed in imminent danger of becoming uninhabitable. “We are already 5 years into the biosphere self-destruct era” read a sign in the Berkeley office of Ecology Action, one of the two hundred environmental groups that mushroomed in the San Francisco area alone during the panic. “The generations now on earth may be the last” read the cover of The Dying Generations, a book of readings published in 1971.

   Public emotion reached its peak with Earth Day, on April 22, 1970, in which millions of Americans took part. Congress closed down as its members fanned out to make speeches on the environment to their constituents. Traffic was sealed off in downtown New York and reporters estimated that a hundred thousand people poured into Union Square at 14th Street for exhibits and songs. With the level of sophistication typical of apocalyptic fevers, then Mayor John Lindsay addressed the throng, announcing that the issue could be summed up simply: “Do we want to live or die?

   Then, as now, “renewable” energy, above all solar power, was the buzzword. Only the big corporations, it was argued, fearful of losing their profits, stood between the individual and this universally available source of energy. Published in 1973, E.F Schumacher’s Small is Beautiful became scripture for much of the environmental movement. Schumacher called for an end to both fossil fuel and nuclear power and reliance instead on what he variously called “intermediate” and “appropriate” technology. As he put it in the book’s most famous line “Man is small, therefore, small is beautiful.” According to Schumacher, all that man needs to consume he should be able to produce himself from beginning to end or jointly with others in the same locality, preferably from renewable resources.

   For politically motivated “Movement” and environmental activists alike, energy was the key to the transformation of society. And since what they rejected was market-controlled industrial civilization, and that civilization ran on energy, it was crucial that energy not only be decentralized, but be in short supply. Amory Lovins, a guru of the movement, declared: “It would be little short of disastrous for us to discover a source of clean cheap abundant energy because of what we might do with it.” (Lovins is still at it, presently touting a hugely expensive hypercar of his design that he says, with typical modesty, “will probably spell the end of the car, oil, steel, aluminum, nuclear and coal industries as we know them.”) Similarly Paul Ehrlich, of zero population growth fame, warned: “Giving society cheap abundant energy…would be the equivalent of giving an idiot child a machine gun.”

   Thus both environmental and political utopians were opposed to further development of all forms of economically viable power. The Natural Resources Defense Council brought suit against projects involving nuclear, coal, oil and hydroelectric power. However, for political radicals in the 1970s, the single most important attraction of the environmental movement was its possession of an issue capable of mobilizing masses to action - the issue of nuclear power. Like the Vietnam War (then winding down), the nuclear issue could provide a lever to undermine faith in established authority and to instill a willingness to defy that authority through civil disobedience and even violent action. And nuclear energy had the virtue of serving as the symbol of centralized economic, political and military power - everything that barred the road to achievement of the utopian community of communities of which the political radicals dreamed.

   The advantage of nuclear power, as psychiatrist Robert DuPont has pointed out, is that it lends itself to phobic fears. It is strange; its dangers are invisible; there is a long and uncertain delay between exposure to radiation and resulting health problems; and there is an association in the collective consciousness with nuclear bombs. Anti-nuclear activists fostered these fears by jumping from one “what if” scenario to another. What if radiation leaked, what if waste disposal is impossible, what if terrorists steal nuclear material, what if there is a meltdown of the reactor core? (And, a favorite since 9/11, what if terrorists fly planes into nuclear power plants?)

   The campaign against nuclear power was hugely successful. Not a single new plant has been ordered in 30 years. While much of the publicity at the time focused on the demonstrations and euphemistically styled “direct action” by ad hoc environmentalist groups with names like Clamshell, Palmetto, Shad, and Bailly, by far the single most effective outfit was contributed by the political utopians – the Institute for Policy Studies’ Government Accountability Project. (Typical of IPS projects, it would eventually spin off from the parent.) Its MO was to exploit the regulatory process and legal system. The game plan was simple: when the plant was virtually complete, GAP would go to the media with accusations of defective welds and inadequate paperwork, known in the trade as “quality assurance,” and demand the Nuclear Regulatory Commission issue a stop-work order until a full investigation of all safety-related issues could be completed. (The NRC never failed to play GAP’s game, dutifully launching last minute investigations in plant after plant even though GAP’s allegations were repeatedly found to be inaccurate or of no consequence for safety.)

   GAP’s hope was that the millions in interest the utility would be forced to pay at this last minute stage of construction would force it to abandon the plant before such a study could even be undertaken. While this worked at Cincinnati Gas and Electric’s Zimmer plant (the utility threw in the towel although the plant was 97% complete), in most other cases, while the plant eventually went on line, GAP achieved significant delays that hugely drove up costs, created a climate of fear and distrust of nuclear power among the public to be served by the plant and convinced utilities throughout the country that nuclear plants involved far too much uncertainty, expense and adverse publicity to be worth building.

   Given GAP’s small budget (its staff at the time consisted of three poorly paid lawyers and a community organizer), it was enormously cost effective. Merely investigating one relatively minor GAP charge at Consumers’ Midland plant (in Michigan) cost the Nuclear Regulatory Commission $800,000 and overall GAP cost the nuclear industry (and ultimately the consumer) many billions of dollars. This does not count the much larger damage only now becoming apparent from the loss of all the plants that would have been built and now be providing cheap and much needed electricity. Much of GAP’s success owed to its deceptive persona. Thus in a statement to the Nuclear Regulatory Commission GAP insisted “the Project [GAP] is not an ‘anti-nuclear’ organization”; its purpose is “to prevent health and safety dangers, corruption, fraud and other abuses.” Americans are loath to assign bad faith to groups claiming to pursue the public interest and the media swallowed GAP’s line whole. This was crucial for GAP because local media were essential in arousing the public and politicians, forcing the NRC to bend over backwards in its dealings with GAP. In the hundreds of stories on GAP’s activities that this writer read in local papers near GAP-targeted plants at the time, not one described GAP as an anti-nuclear group. It was an “environmental watchdog group,” a “government watchdog group,” a “national public interest organization.” Even specifically business-oriented national media were no more probing. The Wall Street Journal referred to GAP as “a private watchdog group” and Business Week described it as a “public interest group.

   Writer Peter Metzger coined the term “coercive utopians” to apply to the assorted groups who, in pursuit of their vision of an ideal society, are prepared to undermine our economic system. Decades ago he pointed out that environmentalists are enthusiastic for energy sources as long as they do not exist - and predicted a rapid loss of enthusiasm for alternative energy, including solar power, once it becomes viable on a large scale.

   Can any serious person doubt that the organized “environmental base” of the Democrat Party that politicians like Pelosi and Obama seek to appease by opposing drilling and mining will be on the ground running to fight specific proposals for alternative energy? Can anyone believe that environmental organizations will welcome actual implementation of T. Boone Pickens proposal for massive construction of turbines through a Midwest wind corridor that Pickens claims can provide 20% of our electricity needs? Years ago, when the Department of Energy and NASA proposed developing a $2.5 trillion system of solar collection satellites to beam microwave energy from the sun to collectors on earth, environmental groups promptly banded together in a Coalition against Satellite Power Systems. As for nuclear energy, while the environmental movement may divide on the issue because of its current obsession with alleged man-made global warming, there will be plenty of environmentalist groups dreaming up imaginative new ways to halt new construction. In short, any proposal to develop alternative energy on a large scale (whether sensible or crazy boondoggle won’t matter) is bound to meet enormous resistance from the very environmentalists who so enthusiastically promote its virtues.

   What can the ordinary citizen, more concerned with saving the family budget than mythical dangers to the planet, do? As The Wall Street Journal editorial of August 6 points out, “just because Mr. Obama’s plan is wildly unrealistic doesn’t mean that a program of vast new taxes, subsidies and mandates wouldn’t be destructive.” At this point, the best thing ordinary citizens can do is insist that they will withhold their vote from any candidate who does not commit himself to work vigorously to remove regulatory and legislative obstacles to drilling on and off shore and to promote all forms of domestic energy production - including solar, wind and water, in so far as they are economically viable.

   Note: Some of the material in this essay is drawn from The Coercive Utopians by Rael Jean Isaac and Erich Isaac (Regnery, 1983) and by Rael Jean Isaac “Games Anti-Nukes Play,” The American Spectator, November 1985.
   Family Security Matters Contributing Editor Rael Jean Isaac is the editor of Outpost and the author of Madness in the Streets: How Psychiatry and the Law Abandoned the MentallyIll(with Virginia Armat). Feedback: editorialdirector@familysecuritymatters.org.

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   Greg | Aug 11, 2008

6. Anyone who advocates that expensive gasoline is somehow good for us shows a complete lack of compassion for that family that scraped together everything they had to buy an “affordable” home in Temecula or elsewhere, knowing that it meant a 50-60 mile commute each way. These folks sacrificed a lot to own a little piece of the American dream, and they are now being hit with the double whammy of plummeting home values and exorbitant fuel costs.

   The argument that high fuel prices will act as a catalyst for the rapid development of alternative fuels ignores the fact that fuel costs in Europe have long exceeded $4/gallon, yet virtually all of their vehicles are still fueled by gasoline and diesel. The simple fact of the matter is that there has long been incentive to develop alternative fuels, yet we lack the technological know-how to do it affordably. Until we have that expertise, encouraging conservation while taking responsible steps to increase supply will help moderate the cost of gasoline. Keep in mind that US conservation efforts do nothing to stem the demand for fuel by China and India. If anything, it probably helps keep demand high in those countries.

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   In response, on August 14, 2008, Dorota said:

   The difference, Steve, between here and Europe is that although most cars are still fueled by gasoline and diesel, small and fuel efficient cars dominate the streets over there. You do not see many gas sucking SUVs or minivans and, if you drove a Hummer, people would spit on you. Europe has a widely developed public transportation system and you can practically get from any A to any B using electric tram, subway or train. People walk a lot, because the centers of the European cities are condensed, unlike post oil American sprawls. People bike to work: i did every day. Here I can’t, because I would be killed by a speeding motorist in a matter of days or weeks due to lack of proper bike lanes and lack of respect for cyclists. Unlike in Europe, most of traffic intersections do not have motion detectors installed, so cars keep burning gas while waiting. The technology exists, but obviously gas companies want people to burn more gas to contribute to their profits.
   I hope that high gas prices will push our government to develop alternatives: public transportation, alternative fuel sources. Bring back the electric car!!!!
   http://www.whokilledtheelectriccar.com/

   In response, on August 15, 2008, Greg said:

   Dorota

   The real difference between the US and Europe is called CAPITALISM! Also, we have domestic resources of energy available that they don’t. We need to utilize all available energy resources oil, natural gas, wind, solar and nuclear. You can’t conserve your way out and drive the economy back in time to the Stone Age.
   High gas prices don’t help anything and governments don’t produce anything BUSINESS DOES!
   The biggest beneficiaries of gasoline sales are federal and state governments, not the oil industry…..the U.S. government took in more than $7 billion [in income tax] from ExxonMobil during the first quarter of 2006, a jump of more than $2 billion from the same time period in 2005. And that doesn’t count the more than $7.6 billion in excise taxes — the gas tax — that ExxonMobil collected for the government during the same quarter. Plus another $11 billion in ‘other taxes’ and ExxonMobil sent the government more than $25 billion in the first quarter of 2006.

   As for the electric car, when business solves the battery problem, size, storage, weight and price it will be back. No thanks to government!

   Powered by Capitalism!

   In response, on August 15, 2008, Dorota said:

   Dear Greg,

   We do not have to utilize all available energy resources, because some of them produce pollution, which causes global warming, asthma, cancer etc. Solar is cleaner than oil, yet isnot widely utilized in our sunny California (cloudy Germany is way ahead of us). If you cry for utilizing them all, why not wind and solar? Why being hooked on just one, dirty oil?
   Your argument that “the real difference between the US and Europe is called CAPITALISM” is totally ridiculous: most of European countries have free capitalistic markets and are far away from the Stone Age, as you imply, which makes me think that you had no chance to visit the Old Continent yet. You should, that would change your introverted perspective. Actually, going back to the Stone Age would not be such a bad idea: I could breathe clean air and drink from a stream.
   7 billion in taxes? Are you kidding me? That’s nothing compared to the profits oil companies make: “Exxon broke the record it previously had set for profits by a U.S. corporation, earning $40.6 billion last year. It earned $11.7 billion in the fourth quarter, or $2.13 a share, up 14 percent from the fourth quarter of 2006. Revenue for the quarter rose 30 percent, to $116.64 billion. Exxon’s profit for the year came to $4.6 million an hour”.

   http://www.washingtonpost.com/wp-dyn/content/
   article/2007/02/01/AR2007020100714.html

   POWERED BY GREED!

   In response, on August 15, 2008, Dorota said:

   Oh, and one more thing Greg: you claim that “we have domestic resources of energy available that they (Europeans) don’t. The U.S. does not have much oil! We burn 25% of the world’s oil here in the U.S., but we have only 3% of the world’s oil reserves. Most of oil is imported from Middle East, which causes costly wars, like the one in Iraq. I would not call oil a “domestic source of energy”.

   In response, on August 18, 2008, Greg said:

   Dorata

   Wind and solar in the US are great sources of power but they make up less than 3% of electric power generation.
   German wind and solar is not any better.

   “The German Energy Agency recently projected the consequences of this trend and reports that Germany is not only in danger of facing a shortage in the power supply, but also that increasingly scarce capacity will force substantial price increases.
   Renewable energy sources, such as water, wind and solar power, will hardly be able to fill these energy gaps looming in the foreseeable future. Even the federal government’s plan to secure around 30 percent of the power supply from such sources by the year 2020 is extremely ambitious — and expensive”. http://www.spiegel.de/internat.....67,00.html
   http://www.eia.doe.gov/emeu/cabs/Germany/Full.html

   Oil doesn’t just power our cars it touches everything in our lives.

   “Oil has created the world’s greatest economy. It has created the world’s leading country because of the infrastructure that has been built, the natural resources that have been put to work and we will continue to need it for decades to come. You can’t fly a plane on wind power or solar power, not yet. And you can’t really replace the trucking system in this country nor can you replace what the Department of Defense needs…
   In the next zero to 10 years, we have no choice but to increase hydrocarbon production. And anybody who says we don’t doesn’t understand the American economy or how the infrastructure works. We cannot wean ourselves off of the use of oil over the next zero to 10 years.
   And anybody who resists drilling says we should just see economic growth go into decline because that’s what they’re really saying”. John Hofmeister Citizens for affordable energy.

   Just because they make money doesn’t make them evil as you imply. It even sounds like you would redistribute their profits or nationalize them———–isn’t that Marxism? Didn’t that fail in “The Old Continent”?

   The Washington Post article you mentioned left out some information about the BAD OIL COMPINES!

   May 2, 2008

   Record Taxes Paid before Record Oil Profits

   by Scott A. Hodge
   ExxonMobil’s recent announcement of first quarter profits of $10.9 billion has prompted the predictable political demagoguery about “obscene” profits and the need for a new windfall profits tax. Exxon does not need our help to defend itself against such charges but I remain amazed that none of the major news outlets have highlighted the fact that these are net profits, meaning profits after taxes.
   If reporters were to dig just a bit deeper into the company’s earnings statement they would find that Exxon—like all the major domestic oil companies—directly pays or remits a staggering amount of taxes to governments both here and abroad. Before taxes, Exxon had income of $20 billion on total world-wide revenue of $116 billion. Its earnings statement shows that the company paid $9.3 billion in income taxes to governments here and abroad. This amounts to an effective tax rate of more than 46 percent, 10 percentage points higher than the U.S. statutory rate of 35 percent.
   In addition to income taxes, the table below shows that Exxon paid or remitted $20 billion in various sales taxes, excise taxes, severance taxes, and property taxes. This brings the total amount of taxes the company paid or remitted to $29.3 billion, nearly three times the net profits it earned for shareholders.
   The financial statements of two other large U.S.-based oil companies, ConocoPhillips and ChevronTexaco, show similar large tax payments. Indeed, these three companies paid or remitted a combined $47.8 billion in taxes in the first quarter of 2008, nearly $28 billion more than they earned in net profits.
   Of course, these firms are multinational so many of these taxes are paid to foreign governments not just to Uncle Sam. But the point critics and the media need to recognize is that governments in general are bigger beneficiaries of oil industry sales than are shareholders.

   As for going back to the Stone Age to live……no thanks. Hydrocarbon fuel will be around for awhile.
   “America remains the world’s only oil-producing nation that has placed a significant amount of its reserves off-limits. Yet the lawmakers behind these misguided “energy” bills seem more than happy to keep it that way.
   Make no mistake, there is still plenty of oil to be found here. A recent Interior Department study estimates 21 billion barrels of oil lie untapped beneath federally controlled lands, mostly in the West and Alaska. That equals 30 years of current imports from Saudi Arabia.
   There’s a lot of natural gas as well. Unfortunately, the department found “just 3 percent of onshore federal oil and 13 percent onshore Federal gas are accessible under standard lease terms.” In other words, only this tiny percentage of energy can be produced without serious legal or regulatory impediments. Some of the rest is accessible, but only if energy companies wade through all the red tape.
   Most disturbing of all, “51 percent of oil and 27 percent of the natural gas are presently closed to leasing” - or completely off-limits.

   And your global warming comment, there is absolutely no correlation between the use of fossil fuels and global temperatures. The list of scientists who’ve signed a petition stating their opposition to the ‘consensus’ of global warming theory is now 31,000 strong and growing…9000 of whom are PHD’s. You can visit the site at http://www.oism.org/pproject

   Steve | Aug 11, 2008

7. Oh my, what will you argue next, Lauren? Perhaps that tornadoes are good because they start the building-materials-recycling process? Or perhaps Katrina was needed in order to encourage civic improvement in New Orleans? Optimism should have no limits, but your argument that high gas prices are good for us is just too desparate an attempt to make lemonade out of lemons. I respect your right to posit the thought, but let’s throw a cold bucket of reality on the whole issue. The rising price of oil predominantly raised awareness in America of how dependant we are upon other nations for our very survival–nations for the most part who would love to see us destroyed. What is most troubling now is that, even with this raised awareness, there seems to be no national commitment to do anything about it. Our leadership, including upcoming new leadership, appears reactionary at best. They certainly are not committed to energy independence; both parties appear to just patronize the issue. There are even some influential people, like Rush Limbaugh, who claim that energy independence is impossible, impractical, even foolish. (This is the same thinking fomented by those who thought Jack Kennedy was nuts to direct us to the moon and commit the nation to get it done in less than a decade.) High oil prices good for the nation? Hell yes, IF we do something constructive about it. But we have seen time and time again that higher oil prices just means living with higher oil prices. Remember the outrage when gas climbed above $1 per gallon? What did that lead to? The furor blows over and, as a society, we go back to studying what Paris Hilton is doing. This nation is “at risk” until we become energy independent. Every day we delay embarking upon that mission places the USA a day closer to elimination as a world power. Arguments that high gas prices are good for us hopefully are not taken seriously, but rather provide comic relief while we catch our breath and focus on what truly needs to be done…now.

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   Robert Campbell | Aug 11, 2008

8. I am one of few words.

   Our whole problem can be reduced to one word
   “GREED”.

   Some of us want the bigger, the best and the over the top things,because we can. Well that cost is paid out in many ways. It effects our communities, our economy and our environment.

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   annie | Aug 14, 2008

9. A is for Axiom, your home sweet home. B is for Buy N Large, GREG’S very best friend.

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   In response, on August 17, 2008, bob said:

   WALL*E

   bob | Aug 17, 2008

10. Dear Loren,

    Thank you for your-always-to-the-point comments regarding the recent increase in gas prices. I also enjoyed reading Dorota’s prompt
    responses to Greg’s usual rebuttals of any argument that makes sense.

    Like Dorota, I highly recommend that Greg and all his “think-alikes” make an effort to travel to Europe or even better, New Zealand, and check things out.

    Europeans & New Zealanders have been paying much higher prices for fossil fuels, but they have/are preparing themselves for a future without fossil fuels! New Zealand is the first truly Green Country. I’m sorry to give you the bad news Greg. New Zealand has a booming economy despite its reluctance to use fossil fuels & drilling offshore!

    Last, but not least, the real threat to the US, which may cause its demise one day, is “savage capitalism” as George Soros warned, the unsatiable greed of oil corporations and the lack of true visionary politicians like John Adams and Thomas Jefferson.

    Marjane

    [Reply to this comment]

    In response, on August 24, 2008, Greg said:

    Marjane,

    Here are a few things I found about Soros, NZ taxation and NZ offshore oil drilling.

    Is this an example of ‘savage capitalism’ or just a good investment? Maybe insatiable greed!

    Article in Bloomburg. Soros investment in Brazilian Oil.

    August 21, 2008

    Rank hypocrisy from George Soros

    Rick Moran
    Liberal financier and backer of far left groups like Moveon.org George Soros has been caught in one of those “Do as I say not as I do” moments.

    It seems that Soros, who is a huge proponent of global warming theory, purchased an $800 million stake in a Brazilian oil company. From the Wall Street Journal:

    But as one of the world’s most successful investors and speculators, Mr. Soros seems to have a different set of standards when it comes to his own wallet. His moral indignation takes a back seat to the profit motive. To wit, the billionaire do-gooder has purchased an $811 million stake in Petrobras, “making the Brazilian state-controlled oil company,” according to Bloomberg News on Friday, “his investment fund’s largest holding.”

    It’s not only that Petrobras is a fossil fuel company. The more interesting aspect of the Soros investment is that Mr. Soros’s Petrobras investment cannot be profitable if the company does not exploit its Tupi oil field, the largest offshore find in the hemisphere. Indeed, Petrobras is rapidly emerging as a world leader in technology to exploit such no-no reserves, while Brazil has thousands of miles of pristine coastline and a large indigenous population. Is Mr. Soros not outraged that he will be funding corporate interests that threaten these? Apparently not as long as there is money to be made that will go into his own pocket.

    New Zealand’s Tax rate is 8th highest in world. The Tax Foundation.

    ‘It is worth remembering just how incompetent New Zealand’s past was. From 1975 to 1984 the Muldoon government increased protectionism through export subsidies, import controls, high progressive taxation, price and wage controls and large government debt. An enormous public works programme known as ‘Think Big’ was intended to make New Zealand self-sufficient in energy, but was an expensive disaster.
    By 1984 New Zealand was of the brink of bankruptcy, and it took nine painful years of reform before the economy began to grow again. Since then New Zealand’s economic performance has greatly improved, with an average growth rate of 3.4% from 1992 to 2005 compared to 3.75% in Australia over the same period.
    Yet this improvement has been nowhere near fast enough to close the gap, and the current government’s policies are not helping New Zealand catch up.
    Most international surveys of the business environment rank New Zealand and Australia about the same, but the direction of policy is just as important as the static picture. In recent years the government has introduced complicated new laws governing energy, telecommunications, accident compensation, savings, climate change, employment and holiday law. All of these things have increased investor uncertainty at a time when Australia has been consistently opening up their economy.
    Perhaps the biggest policy difference between the countries is the level of tax. Australians pay 31% of GDP in tax compared to 37% in New Zealand, and the difference in direction is stark. The government increased taxes in 2000 and has spent the last seven years fighting tooth and nail against tax cuts, despite huge budget surpluses.
    Meanwhile, once the next round of Australian tax cuts are implemented a worker on the average wage will be paying twice as much tax in New Zealand as they would across the Tasman, which will only add to the tide of migration’.

    http://www.cis.org.au/executiv.....54207.html

    This article from the NZ Herald is interesting. The NZ government owns about 12% of Tui and they are drilling!

    ‘New Zealand Oil and Gas reports Tui Oil Field (OFFSHORE) is going strong.

    The information is included in an “activities report” released this morning for quarter ended June 30.
    Tui began production almost exactly one year ago, on July 30, 2007, and so far had produced more than 15.2 million barrels of oil, NZOG said.
    The field’s initial proven and probable reserves were upgraded twice during the quarter; first to 47 million barrels and then to 50.1 million barrels.
    For the three months to the end of June, NZOG’s revenue was $80.9m.
    Tui’s expected production for the 2008/09 financial year had been upgraded from 6 to 9 million barrels of oil, of which NZOG’s share would be 1.125 million barrels.
    That would provide continuing strong revenue and cash flows ahead of commercial production starting in mid-2009’.

    The fact is that New Zealand is not yet ‘truly green’. They might be working on it, but hydrocarbons will be around and must be until other solutions can replace them.

    Last, the real threat to our system is the ‘far left’ and the redistribution of wealth.

    But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.
    John Adams

    That government is best which governs the least, because its people discipline themselves.
    Thomas Jefferson

    Marjane | Aug 23, 2008

11. Keeping things simple. Speaking for myself. I have read a lot. I am not a PHD. It certainly doesn’t look like the CO2 in the atmosphere causing global warming is a consensus among intelligent contributors. I am going to do whatever is cheapest. I need a car. Gasoline looks like it will be cheapest for at least another decade. So there. I don’t care what other countries are doing. Most of my friends have moved to the USA from other countries. I don’t see it as a philosophical issue. It is an economic issue. Live for today. I will vote for whatever makes transportation cheapest for me and my car, so no special taxes. I have no way of knowing the truth but the evidence I collect from my friends and unbiased sources make me think I am part of the vast majority. I am willing to allow private enterprise to solve this problem. Get me around where I need to go faster and cheaper. Super simple.

    [Reply to this comment]

    Mike | Aug 24, 2008

12. Greg,

    It seems the only thing we agree on is your famous quotes of Adams & Jefferson, which aren’t really relevant to what I talked about!

    I wish you would be as zealous about travelling to New Zealand & Western Europe, and see up close the quality of life there, than just regurgitating economic facts & figures from the Internet!

    If your measure of a people’s and a country’s wellbeing and success is just a number (how much investment a country allows), there’s no point in me even attempting to argue with you. It’s like talking about colors to a person who is born blind. Believe me, you’re very blind and you don’t even realize it!

    What you said about Soros is partially true. He became very rich using “savage capitalism.”

    However, he realized that such a system is self-destructive and dangerous to world stability in the long run, and chose to warn the world about it.

    You really need to open your eyes and see! I wish you goo luck. Some people are born blind,
    and they die even blinder!

    Marjane

    [Reply to this comment]

    Marjane | Aug 26, 2008

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