To Oil or Not to Oil

[denuseri]

The Thread is all about Oil and anything associated to it.

Here is something I found from Liz Sidoti of the AP:

What do these things have in common? Libyan leader Moammar Gadhafi. The Japanese earthquake and tsunami. Wall Street volatility. A cranky, even angry American populace.

Answer: They all have something to do with gasoline. No matter what happens in the world today, just about everything points back to fuel and the tricky politics that emerge when prices spike.

Is it any wonder, then, that a recent Associated Press-GfK poll shows a correlation between the country's more pessimistic outlook and rising gas prices.

The issue also has taken on greater importance to Americans. They rank it above subjects including Iraq, Afghanistan, immigration, terrorism and taxes. Last fall, 54 percent called gas prices a highly important issue to them personally, but 77 percent said that in the latest poll.

Many don't expect relief from soaring gas costs anytime soon: Two-thirds say they expect the higher prices will cause financial hardship for them or their families in the next six months. That group includes more than a third who say gas cost spikes will cause serious financial hardship. And that is on top of a still-poor economy.

Most are changing the way they live. Three-fourths are cutting back on other expenses, two-thirds are driving less, half plan to vacation closer to home, and almost as many have thought seriously about buying a more fuel-efficient vehicle. Most also are bypassing the most convenient gas station to bargain shop for the lowest prices.

GfK Roper Public Affairs and Corporate Communications conducted the poll from March 24-28. It involved landline and cell phone interviews with 1,001 adults nationwide and had a margin of sampling error of plus or minus 4.2 percentage points.

The underlying links between current events aren't lost on President Barack Obama, and for good reason. Like death and taxes, this cycle is a certainty: Prices at the pump rise, the public's mood falls and the president gets punished.

Listen to him when he pressed recently for reducing the nation's oil imports by one-third by 2025.

"Obviously, the situation in the Middle East implicates our energy security. The situation in Japan leads us to ask questions about our energy sources. In an economy that relies so heavily on oil, rising prices at the pump affect everybody," Obama said. "Businesses see rising prices at the pump hurt their bottom line. Families feel the pinch when they fill up their tank. And for Americans that are already struggling to get by, a hike in gas prices really makes their lives that much harder. It hurts."

Sure, that's true. But there's also much more to it. In an era in which globalization is a given, gas prices are the most obvious, most closely felt connection between the daily lives of Americans and the larger world.

"Whenever gasoline prices spike, there is enormous political consternation because it's a highly invasive issue," said Pietro Nivola, a senior fellow at the Brookings Institution who studies energy policy and American politics.

Has there been a time in modern history when that's been more apparent than the past few weeks?

Look at what's happened.

_Populist uprisings swept across oil-rich North Africa, from Tunisia to Egypt and now to Libya, where rebels are in a standoff with Gadhafi that has shut down much of the country's 1.5 million barrels a day of crude exports. Energy traders fear unrest will spread further across the region and disrupt shipments from bigger producers like Saudi Arabia and Iran. That could limit supply when demand is high, boosting costs.

_An earthquake and tsunami in Japan last month triggered a nuclear emergency, with the Fukushima Dai-ichi nuclear plant leaking radiation. The reactor's near meltdown has renewed debate in the United States over nuclear fuel and raised questions about the vulnerability of some U.S. plants.

_Oil surged to a 30-month high — more than $100 a barrel — as investors worried that the unrest in Libya and elsewhere would keep crude exports from oil-producing nations off the market longer than expected. On Wall Street, key indexes fluctuated as oil prices soared.

_Consumer confidence dropped at a troublesome time, just as the post-recession economy was struggling to recover. Gas costs were the reason. Experts say if people are forced to pay more for gasoline, they're likely not to spend elsewhere and that could further slow already sluggish economic growth.

And none of that even takes into account last year's Gulf Coast oil spill.

Even if there's no proven cause and effect between the latest turn of events, there's a commonality that's not lost on experts and consumers alike.

"It's a combination of trends and luck that have put energy repeatedly at the forefront," said Michael Levi, director of the program on energy security and climate change at the Council on Foreign Relations. "We always are going to be dealing with energy in some form or another because it's the lifeblood of society."

The poll also indicated a disconnect between expectations and reality. Consumers on average said $2.36 per gallon was a fair price for gas, but the national average was $3.65 during the week the survey was taken.

Albert Mercado, a restaurant employee from Wallingford, Pa., is among those feeling more than just a pinch.

"When I swipe my card at the gas pump, it stops at $75 and I'm nowhere near full," says the owner of a 2004 Ford Explorer, who lives outside Philadelphia. He adds: "I have not been driving as much." He now limits his travels to and from work, his son's day care and their home. He saves rather than spends. He hasn't visited his parents, who live a three-hour drive away in New York, for a long time.

And Mercado, 44, has little hope that costs will fall anytime soon. After all, he says, he once worked at a gas station and knows how the price game is played. "Something's got to change. I doubt it will," he said.

So far, Obama's overall political standing isn't suffering; it's held steady for months at about 50 percent. Even so, his job performance rating on handling the issue of gas prices is at just 36 percent, his lowest rating on any issue tracked in the poll.

"What's different this time is the U.S. economy is still fragile," Nivola said. "If we had a sustained gasoline hike, it would be like imposing a substantial tax on the economy at a very inopportune moment."

Eventually, consumers will look for someone to fault if gas prices remain high. Obama's the likely target, and Republicans are trying to hasten the blame game.

"His war on domestic oil and gas exploration and production has caused us pain at the pump, endangered our already sluggish economic recovery, and threatened our national security," said Sarah Palin, the former Alaska governor and 2008 vice presidential candidate who is considering a White House run of her own. "The good news is there is nothing wrong with America's energy policy that another good old-fashioned election can't solve. 2012 is just around the corner."

History, however, offers no certainty that a different president would dramatically change how Americans deal with energy.

For decades, a national energy policy has proven elusive because Republicans and Democrats sharply differ over how to make America closer to energy independent. Progress has been impeded by not-in-my-backyard fights over nuclear plants and wind farms, battles over drilling in the Arctic National Wildlife Refuge and nuclear waste disposal at Yucca Mountain, and election-year sloganeering.

The same cycle has persisted. Gas prices rise, Americans complain and politicians raise alarms.

Consider the words that came out of one president's mouth: "This country needs to regain its independence from foreign sources of energy, and the sooner the better." That was Republican Gerald Ford — in 1975.

Nearly four decades later, Obama said: "As long as our economy depends on foreign oil, we'll always be subject to price spikes."

He's probably not the last president who will give voice to that notion, given the complexities of the issue. As Levi puts it: "The nature of energy is that it matters because it gets entangled with so many other things. But those other entanglements are what make it precisely so difficult to deal with."

[denuseri]

CHI-CHI ZHANG of the Ap had this to say:



Beneath the lush, green hills of eastern Utah's Uinta Basin, where elk, bear and bison outnumber people, the soil is saturated with a sticky tar that may soon provide a new domestic source of petroleum for the United States. It would be a first-of-its kind project in the country that some fear could be a slippery slope toward widespread wilderness destruction.

With crude prices surging beyond $100 a barrel, and politicians preaching the need to reduce America's reliance on foreign supplies, companies are now looking for more local sources. One Canadian firm says it's found it in the tar sands of Utah's Book Cliffs.

Alberta-based Earth Energy Resources Inc. aims to start with a roughly 62-acre mine here to produce bitumen, a tar-like form of petroleum, from oil-soaked sands. For decades, other Utah operators have used oil sands as a poor-man's asphalt, and Canada has been wringing oil from the ground for years, but nobody has yet tried to produce petroleum from U.S. soil on such a scale.

And it could be just the beginning. The company has over 7,800 acres of Utah state land under lease, with plans to acquire more, and estimates its current holdings contain more than 250 million barrels of recoverable oil.

"This is not just a 62-acre project that will last seven years. We are looking at a 30,000-acre project that will destroy the environment in this area over many years," said John Weisheit, a Colorado River guide and founder of the Moab, Utah-based environmental group Living Rivers.

Weisheit worries that shortsightedness and the rush to feed America's insatiable appetite for oil could trump reason at the expense of other precious natural resources.

The Bureau of Land Management says Utah has an estimated 12 to 19 billion barrels of oil buried in its tar sands, mostly in the eastern part of the state, though not all of that would be accessible.

Weisheit says if Earth Energy is allowed to mine the land, he fears others may not be far behind.

"We used hear that it's not lucrative to extract oil from tar sands unless oil prices were above $60 barrel," he said. "But now that prices have risen, we're definitely seeing companies take advantage of the situation."

Living Rivers is challenging this project's approval and contends it would dig up fragile topsoil, destroy limestone plateaus formed over thousands of years and pollute groundwater downstream that flows into the Colorado River. The group claims the Utah Division of Water Quality didn't accurately assess the potential for widespread environmental damage from the PR Springs mine. A hearing is set for May 25.

While tar sands projects are relatively new in the U.S., Canada has been a major producer for years, and in doing so, has become the No. 1 foreign supplier of oil to America. Alberta's sprawling oil sands deposits are the second largest oil reserves in the world outside of Saudi Arabia. The region produces about 1.2 million barrels of oil a day with an estimated 174 billion barrels in reserve.

But it comes at a cost. The oil sands operations, including extraction and processing, are responsible for up to 4 percent of Canada's greenhouse gas emissions, and that's expected to triple to 12 percent by 2020.

Unconventional oil — petroleum in any form other than fluid — has been eyed by the industry for years but largely considered not economically viable until recently. The major source of unconventional oil in the U.S. is shale, rock with all the necessary ingredients that wasn't buried under the right conditions to produce oil. But it's all getting a fresh look now as the untapped reserves are being seen as part of the future of domestic supplies.

And while companies are still determining whether shale production makes economic sense, Canada's booming oil sands industry has eyebrows raised and wallets open. Generally, oil from oil sand costs roughly $20 a barrel to produce, about a few dollars more than pumping liquid oil.

The initial Utah mine would be Earth Energy's first commercial effort at extracting oil from sands. It's unclear why the company chose Utah instead of staying closer to home where oil sands are bountiful. The company declined to say, but officials insist the project won't pollute anything and will leave Utah's oil sands as clean as beach sand after processing with a citrus-based solvent.

"We are insuring that we won't pollute by complying with the regulations and as indicated with the project being approved," said company CFO Glen Snarr.

Environmentalists aren't buying it and don't want any part of it in this country.

They've been fighting a 1,900-mile pipeline proposed by another Canadian company that would carry crude extracted from Alberta's tar sands to refineries in Texas. The Keystone XL pipeline would double the capacity of an existing pipeline from Canada, delivering more than 500,000 barrels a day. According to a report commissioned by the Obama administration, the pipeline, coupled with a reduction in overall U.S. oil demand, "could essentially eliminate Middle East crude imports longer term."

Susan Casey-Lefkowitz, director of the International Program at the Natural Resources Defense Council, says the rewards simply aren't worth the risks.

"Refining the oil (from tar sands) creates more greenhouse gases than traditional crude," said Casey-Lefkowitz. "With projects such as Keystone, we have concerns such as pipeline leaks due to the corrosive nature of the bitumen and the high temperatures in which it would be transported."

Oil sand is like black tar melded onto sand and clay. Reserves are found in Utah and a few other U.S. states, but America's neighbor to the north has by far the continent's largest deposits.

And while most oil sands are easy to get to by strip mining similar to digging out coal, separating the oil from the sand takes a lot of water and energy. In Canada, there's even been talk of building a nuclear power plant simply to supply the industry, a move conservationists there have been fighting.

Environmentalists in the U.S. say they don't want to see a Canadian-style oil sands industry crop up here, and are concerned that water pollution generated in the process could poison underground aquifers and wildlife in the region.

In 2008, more than 1,600 ducks died after landing on a northern Alberta toxic waste pond that contained pollution generated in the oil sands separation process. Dozens of such toxic pools have been building up over 40 years in the region.

Earth Energy says it will deploy a "revolutionary" new extraction process in Utah using a citrus-based solvent that "leaves behind no toxic chemicals" or the need for retention ponds, ensuring it doesn't harm wildlife or other natural resources.

Still, environmentalists fighting the project believe the strip mining could cause just as much harm.

Rob Dubuc, a lawyer working with Living Rivers, said the group is concerned about groundwater and downstream pollution.

"Rain will ... wash pollution from the sands into the ground further tainting the porous soil and groundwater," Weisheit said.

The state Division of Water Quality hasn't yet responded to the group's appeal. But Rob Herbert, a manager in the agency's Ground Water Protection unit, said the project qualified for a permit, in large part, because of the citrus-based solvent the company says it will use. He said the area also lacks substantial groundwater, meaning there would be little risk of aquifer pollution.

"They are still obligated to protect groundwater and it does not absolve Earth Energy Resources from that responsibility," Herbert said.

In the end, despite all the debate, experts say projects like the proposed Utah mine are an afterthought when it comes to satisfying the U.S. demand for oil.

"If this project only produces 2,000 barrels of oil a day, it's irrelevant in terms of the 19 million barrels the U.S. consumes a day. It's not contributing anything to national security," said Richard Fineberg, a pipeline analyst with Ester, Alaska-based Research Associates. "With the cost, energy and amount of water that is used, it does not seem economically feasible, whereas investment into conservation and alternative energy is renewable each year."

[Snark]

Drill, baby, drill!!!!

[StrictMasterD]

And the Majority of Oil the United States uses comes from Canada, we buy less then 1% of the world supply and 0% from Libya

[denuseri]

According to the US Energy Information Administration:

The USA imports 9,013,000 barrels/day of which Canada supplies 1,943,000 barrels/day making it the top US supplier in so far as individual Countries go.

Opec however supplies the majority of crude oil imports to the US with 5,954,000 barrels/day.

[Snark]

DRILLl, BABY, DRILL !!!!!

[DuncanONeil]

Um! Do you realize that Venezuela is part of OPEC. Three of the top four countries we import from are in the Western Hemisphere!

[denuseri]

And what are those other countries?

[denuseri]

More from the Ap:


With the first anniversary of the onset of the BP oil spill coming up next week, spill-weary Gulf natives have a fresh reminder of how the oil giant has devoted itself to studiously downplaying the damage of the disaster: A recently leaked body of internal company correspondence shows senior BP brass trying to spin scientific research produced by company-paid researchers in order to minimize the scale of the spill's destruction in the public mind.
The news doesn't exactly come as a shock to many in the Gulf region. After all, when the Mobile Press-Register first reported last summer (http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/SIG=12592s53e/*http://blog.al.com/live/2010/07/bp_buys_up_gulf_scientists_for.html) that BP was contracting to hire a battery of coastal scientists (http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/SIG=12vr17m84/*http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/07/bp_buying_up_gulf_scientists_f.html), many theorized that some such initiative was afoot. And now the internal BP emails obtained by Greenpeace through the Freedom of Information Act (FOIA) appear to bear such worries out (http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/SIG=12l0bb8sb/*http://www.guardian.co.uk/environment/2011/apr/15/bp-control-science-gulf-oil-spill).
As The Guardian reports today (http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/SIG=12l0bb8sb/*http://www.guardian.co.uk/environment/2011/apr/15/bp-control-science-gulf-oil-spill), BP officials sought to tailor the findings of company-funded research. Last May, BP announced that it was ponying up $500 million (http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/SIG=12argjlp7/*http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7062370) to fund "an open research program studying the impact of the Deepwater Horizon incident." That mega-project is now known as the Gulf of Mexico Research Institute (GRI) (http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/SIG=10nqh875k/*http://www.gomri.org/). And to judge by the emails released via Greenpeace, company leaders were deeply concerned with how to spin to the group's findings given they footed its research bills.
"Can we 'direct' GRI funding to a specific study (as we now see the governor's offices trying to do)," BP environmental official Russell Putt asked in a June 2010 email. "What influence do we have over the vessels/equipment driving the studies vs the questions?"
Another email written by a BP environmental officer, Karen Ragoonanan-Jalim, indicates that company officials met in Houma, Louisiana, to discuss how they might "steer the research" to best serve the oil company's interests, writing that officials discussed how "BP can influence this long-term research programme" to "undertake the studies we believe will be useful."
The emails also reveal dissension among U.S. government leaders over the spill, specifically over the White House's controversial, and ultimately disproved (http://us.rd.yahoo.com/dailynews/news/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/*http://news.yahoo.com/s/yblog_upshot/20100817/bs_yblog_upshot/two-studies-cast-doubt-on-governments-claim-that-vast-majority-of-oil-is-gone), claims that the "vast majority" (http://us.rd.yahoo.com/dailynews/news/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/*http://news.yahoo.com/s/yblog_upshot/20100804/sc_yblog_upshot/white-house-vast-majority-of-oil-in-gulf-is-gone) of the spilled oil had vanished from the Gulf (http://us.rd.yahoo.com/dailynews/news/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/*http://news.yahoo.com/s/yblog_upshot/20100730/bs_yblog_upshot/many-outraged-over-reports-of-oil-in-gulf-vanishing).
Reports the Guardian's Suzanne Goldenberg (http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/bp-plotted-to-influence-what-scientists-say-about-oil-spills-impact-internal-emails-reveal/41100505/SIG=12l0bb8sb/*http://www.guardian.co.uk/environment/2011/apr/15/bp-control-science-gulf-oil-spill):

The White House clashed with officials from the National Oceanic and Atmospheric Administration (NOAA) and the Environmental Protection Agency (EPA) last summer when drafting the administration's account of what has happened to the spilled oil.

On 4 August, Jane Lubchenco, the NOAA administrator, demanded that the White House issue a correction after it claimed that the "vast majority" of BP oil was gone from the Gulf.

A few days earlier, Lisa Jackson, the head of the EPA, and her deputy, Bob Perciasepe, had also objected to the White House estimates of the amount of oil dispersed in the gulf. "These calculations are extremely rough estimates yet when they are put into the press, which we want to happen, they will take on a life of their own," Perciasepe wrote.
It should be noted that no evidence has yet surfaced to suggest that BP succeeded in compromising the integrity of the research carried out by any of the scientists working with the GCI.

[DuncanONeil]

And what are those other countries?

Canada, Mexico, & Venezuela!

[Snark]

There are far better things to do with oil OTHER than to light a match to it. But in the short term we have to get to work (well, other people do. Most of us have to at least go to the grocery store.)

Let's take a look at some alternatives:
Motor transport fuel: Electricity - batteries are expensive, heavy and require re-charging. Contrary to what Presbo might try to convince his acolytes of, this country does not have the electrical grid infrastructure to charge them, nor will people pay for the battery cost without serious subsidy. Who pays for it?
LPG: Liquid PETROLEUM gas. Must be drilled for, converted out of the product of drilling. Somewhere. If not here, then there is continued dependence on foreign sources. LPG is presently the same price as diesel (#2 heating oil) but road taxes, etc. skew actual btuh costs.
CNG: We have natural gas. Compressing it is expensive, requiring substantial costs to compress it. Requires HEAVY tanks to contain it. Since there is no infrastructure to distribute it, all that would have to be added. Who pays? The customer, of course. Unless the government subsidizes it. Then we all do. I remember something about a national debt rearing it's ugly head. Infrastructure to provide even 20% of the coverage that gas and diesel have will costs in the hundreds of billions. Plus you have to allow fracking to provide for the additional supply. Oh, yes. And...drilling.
Ethanol: Even the inventor of the internet has finally agreed: Burning food as fuel is a bad idea. Ethanol is great fuel if you drive an Indycar. But while it provides a lot of horsepower, it is not very efficient.
Biodiesel: Possible. There are a lot of sources of wasted nitrogen that can be fed to algae to produce hydrocarbons, and a lot of wasted or available organic hydrocarbon sources. Hemp comes to mind....OH, yeah the DEA says we can't grow hemp. Never mind!
Hydrogen: Contrary to what some people think, hydrogen is a not actually a fuel, in so far as it isn't mined or grown nor occurs in any natural free state in sufficient quantity
to matter. It is extracted from water by electrolysis, so the cost depends on the cost of the electricity to extract it. Add the cost of compression, storage of a difficult to store product; transport or extraction station construction costs and it is a rather expensive way to store electricity. Makes nice water, though.

Stationary sources.

Wind: A large wind turbine produces 2 mega watts. A small to medium size coal plant produces 1000 megawatts. Projects in Spain and England prove that both land and ocean based projects a: cost FAR MORE than predicted. and b: produce FAR LESS than predicted. So 500 hundred bird shredders for one medium size coal plant. Oh, the coal plant produces power when the wind doesn't blow. Oh, yeah, the environmentalist are okay with them as long as they are placed somewhere else. (Mars, maybe. Got a long cord?) They have fought them in NC and MA. We will likely need a couple of terawatts more in a few years. Do the math.
Solar Photovoltaic Panels: will eventually reach a cost benefit price that will appeal to those making less than $500k per year without state and federal subsidies. Until then each of us is subsidizing all those who have them. Probably another 10 or so years out. And then they will be made by the Chinese who don't have the EPA, IRS, and who knows who to answer to.
Solar hot water panels. (Domestic) Doable now...but the payback is long and variable depending on the availability of sunlight and other fuels, such as natural gas. Not for the short term budget minded. (Industrial)- expensive, less reliable and require maintenance. Specific applications can work.
Solar concentrator: Possibly feasible. Project plants are in place but the longevity is still under analysis.
Waste biofuels: Some potential, but expensive to implement. Hog manure in NC is being used to generate methane fueled generators. Expensive, looong payback and then if natural gas is available not competitive without subsidy.
Tidal action: Ok on the coast, but like the surf, it sucks in Dallas or Chicago. Just has an unknown payback at this time.
Hydro: Wonderful...but oh yeah, you gotta have a dam. And lots of CONTROLLABLE water.
Geothermal: Fine if you have it. Just not many convenient locations.
Nuclear: We have both the fuel and the technology. Gen 4 units are self regulating and do not require pumps or a lot of water to cool them. Discarded fuel rods can be recycled...but not in this country; Thank You, Jimmie Carter! If we had spent the same amount of money on nukes that have been poured into Iraq (much less Iraq AND Afghanistan. Did I hear something about...Libya?) we could have practically ended our foreign oil dependence by now; at least eliminated the amount that goes into producing electricity and a bunch more. A typical older model produces 1200-1500 megawatts. Newer gen models 2000+ megawatts. Do the math.

For transport needs it's going to be gasoline or diesel for quite a while.
Stationary should be nuclear, natural gas combined cycle supercritical steam and the new generation supercritical coal fired plants. They can produce clean, reliable, safe electricity at reasonable prices. We have plenty of in country sources of petroleum in both liquid and semi-solid to solid forms.

We just have to FREAKIN' DRILL! Government is the problem....NOT the answer!

[denuseri]

Exxon earned nearly $11 billion in the first quarter, a performance likely to land it in the center of the national debate over high gasoline prices.
The world's largest publicly traded company said Thursday that higher oil prices boosted profits 69 percent from a year ago. The result was Exxon's best since earning a record $14.83 billion in 2008's third quarter.
Wall Street had been expecting sharply higher earnings for oil companies. Oil prices rose 17 percent in the quarter. But huge oil profits will aggravate drivers with gasoline prices averaging $3.89 per gallon nationally. President Obama wants to cut into some of those earnings by eliminating $4 billion in taxpayer subsidies for oil companies.
Exxon is taking steps to dilute any potential furor over the results. On a company blog Wednesday, the company said that it has little control over the price of oil, which is now near $113 per barrel. It also noted that less than 3 cents of every dollar it earns comes from the sale of gasoline and diesel fuel.
That may not appease many motorists and politicians, however. The price of a gallon of gas is already above $4 in 8 states and the District of Columbia. And on Thursday, the Commerce Department said economic growth slowed sharply in the first quarter, partly because of high gas prices.
On the blog, Ken Cohen, Exxon Mobil Corp.'s vice president of public and government affairs, said the company was anticipating "the inevitable headlines and sound bites about high gasoline prices and what to do about them" after the earnings were reported. In addition to the routine post-earnings conference call with analysts, Exxon is making Cohen available this afternoon for a separate call with members of the media.
Exxon's results followed strong profit gains by other oil companies.
Europe's largest oil company, Royal Dutch Shell PLC, reported $8.78 billion in first-quarter profits, up 60 percent from a year ago. BP PLC's quarterly earnings rose 16 percent to $7.2 billion. ConocoPhillips said net income grew 43 percent to $3 billion and Occidental Petroleum Corp. said earnings climbed 46 percent to $1.55 billion.
Chevron Corp., the second-biggest U.S. oil company, is expected Friday to report a 25 percent increase to $5.69 billion.
Argus Research analyst Phil Weiss said oil companies will struggle to win over people as long as they're making billions of dollars every quarter, even though he thinks the industry makes a reasonable argument.
"They really don't have a lot of control" over the price of gasoline, Weiss said. "But then they get these high profits and people get upset. That's what politicians respond to."
Exxon reported net income of $10.65 billion, or $2.14 per share, for the first three months of the year. That compares with $6.3 billion, or 1.33 per share a year ago. Revenue increased 26 percent to $114 billion.
The results beat Wall Street estimates of $2.04 per share on sales of $112.6 billion, according to FactSet. Shares fell for Exxon and other oil companies, however, on expectations for a continued drop in U.S. gasoline demand. On Wednesday, the Department of Energy said demand for gasoline over the past four weeks was 1.6 percent lower than a year earlier.
Exxon shares lost 44 cents to $87.34 in morning trading.
Exxon increased earnings even though it produced less oil and natural gas liquids. Benchmark crude prices rose 20 percent from a year ago.
The company has increasingly focused on producing natural gas. Exxon expects natural gas to displace coal as the second most important fuel source within the next decade. Last year it acquired XTO Energy to become the largest U.S. natural gas producer.
Exxon's natural gas output rose 24 percent in the quarter, but prices declined as other companies followed its lead and rushed to develop underground shale gas deposits in North America. Natural gas prices fell nearly 16 percent from a year ago.
Earnings grew across the company's business segments. Income from its exploration and production business gained 49 percent to $8.7 billion while the company's downstream business, which includes refineries, posted a huge 30-fold jump to more than $1.1 billion.

[Snark]

As the Fed pours money into the system the dollar loses value. Too many dollars chasing too few goods is called inflation. As the dollar loses value the price of any commodity priced in dollars increases. Commodity traders typically aren't stupid and know this. So the price of the commodities on both the current and futures markets go up. Wheat is also tripled. Look for everything to follow. The days of Jimmie Carter may begin to look good.

[denuseri]

All while the corperate big wigs rake in reccord profits too...seems awfully fishy to me that things could be so bad while they make sooo much money, with one group pointing the finger of blame to the other and no real solutions being allowed to floursih.

[StrictMasterD]

And interestly enough we get more of our Oil from Cananda, we get Nnoefrom Lydia, and little from the Mid East, China uses more Mid East Oil the any other Country and asa Nation, what we get from the Mid East Totsal i believeis less then 15% of our entire usage

[Snark]

All while the corperate big wigs rake in reccord profits too...seems awfully fishy to me that things could be so bad while they make sooo much money, with one group pointing the finger of blame to the other and no real solutions being allowed to floursih.

One more time in three part harmony at the top of our lungs...DRILL, BABY, DRILL!!!

[denuseri]

What for, to purpetuate a system where the only ones seeing any real benifit are the people at the top?

[Snark]

Sure. They are the only people who get to drive cars or heat their homes with #2 or get to fly in airplanes or have anything that might be delivered by rail. Just the evil greedy "corperate" ceo's are the only people to get to drive to the grocery store, to work or to church. No one else has any use for petroleum products. And unless you have some magic way of sticking a straw 20K feet into the earth, pulling up a thick, gooey substance and a magic wand to turn it into a clean, usable product they will continue to do so. Try pulling a 200 car string down a track with mules. I'll loan you the shovel to clean up after them. Besides, the government needs the 60% of the dollars that ring up at the pump. Otherwise they'll have to borrow it from China or somewhere. Wouldn't want that to happen, do we?

[denuseri]

And what happens once you have sucked the last little drop out of the ground?

[Snark]

Well, in a few hundred years, if then, alternatives will have been found. On the other hand, The Russians determined over a century ago, that most oil is NOT composed of ancient plants and dinosaur bodies. The depths of extraction now are far below the levels of the prehistoric jungles. Chemical analysis also concurs with that, as does the Second Law of Thermodynamics. That is one reason that so many estimates of available resources in existing wells doesn't fall nearly as fast as "expected". The reserves are being replenished from below. The Russians refer to it as "juvenile planet fluid"; that is, a component of the original creation of the planet trapped deep in the mantle, being forced out by tectonic pressures. There are no estimates of the possible reserves, the question is how to get to them since the replenishment pathways move with the plates. As an aside, so do geothermal resources. The Supercaldera under Yellowstone has moved from the Montana/Dakota boundary area to it's present location in Wyoming by that action. We are extracting fluid oil faster than can be replenished in many areas, fracking for oil as well as gas is an option in some areas. But we have more than enough energy resources for centuries IF WE JUST DEVELOP them! Use gen 4 or 5 nuclear for electric, gas for peaking. Supercritical new gen coal in areas too close to seismic areas. We have the technology now, eventually we may even have fusion. What we need is to get the government out of the way!

[Thorne]

The Russians determined over a century ago, that most oil is NOT composed of ancient plants and dinosaur bodies. The depths of extraction now are far below the levels of the prehistoric jungles. Chemical analysis also concurs with that, as does the Second Law of Thermodynamics.... The reserves are being replenished from below. The Russians refer to it as "juvenile planet fluid"; that is, a component of the original creation of the planet trapped deep in the mantle, being forced out by tectonic pressures.
I have to admit, this is the first time I've heard of such a thing. Can you give a source for this info? And what the hell does the Second Law of Thermodynamics have to do with it?


The Supercaldera under Yellowstone has moved from the Montana/Dakota boundary area to it's present location in Wyoming by that action.
Actually, it's more accurate to say that the plate has moved over the hotspot which causes the caldera. If memory serves, the hotspot remains stationary, or relatively so, while the plate moves new areas of the crust across it, similar to the mechanism which has formed the Hawaiian Island chain.


Use gen 4 or 5 nuclear for electric, gas for peaking. Supercritical new gen coal in areas too close to seismic areas. We have the technology now, eventually we may even have fusion. What we need is to get the government out of the way!
The problem is that too many people don't see the solution as using everything in combinations. They want to see ONLY nuclear, or ONLY renewable, or ONLY coal.

And while they can readily grasp improvements in cell phone technology, the idea that there can be improvements in power generation technology seems utterly alien to them. They see, for example, Three Mile Island, Chernobyl and now Fukushima as evidence that nuclear power is utterly unsafe, rather than as mistakes which we can learn from. They don't seem to want to understand the lessons that scientists and engineers have learned from these incidents, which have been, and will continue to be, incorporated in newer reactors.

Overall, though, I have to agree with you. Get the government out of the way and let the industry do what it's supposed to do.

[Snark]

I'll do some mining of my archives for the Russian oil theory. The Second Law defines how unorganized materials will not turn themselves into organized materials spontaneously. Collections of disparate organic matter doesn't condense into very specific substances. While it can happen, it takes both extremely unusual timing, energy and conditions that are highly unlikely to occur over large areas of the world at about the same time. Nature supports greater chaos, not lesser.

Found it! http://en.wikipedia.org/wiki/Thomas_Gold. A rather brilliant individual who liked to shake things up. While frequently called a crackpot, was just as frequently found to be correct.

The hotspot and the path to the surface are both in transit. As to which is the more mobile and which the more stationary, to me the point is moot - geothermal resources are not either stable nor stationary.

Both TMI and Chernobyl are textbook examples of "if you try to break it, you will succeed." Both plants were undergoing tests by operators who were unprepared to run them. In both instances the reactions that resulted were predictable but unknown to the dimbulbs doing the testing. Fukishima #3 was in the process of being decommissioned, all of those plants are of designs that are now way past obsolete. The plants were not unsafe. Richter #9+ earthquakes and 70foot tsunamis are unsafe. Go to: http://mitnse.com/, the nuclear engineering site of MIT (that technical college in Massachusetts.) They also have an excellent comparison between TMI and Chernobyl.

I have no problem with solar or wind. But they are not replacements and they are not competitive. Fuel costs are not the driving issue in the cost of delivered energy. They do have an impact, true, but are not the sole determinant of the cost of the delivered erg or btu or watt or horsepower or jule or whatever unit of energy measure chosen. Regardless of what "progressives" (who changed their name to 'Democrat' due to the association with communists in the early 20th century) try to imagine, the laws of physics don't really lend themselves to congressional change or presidential veto.

[Thorne]

Found it! Thomas_Gold. A rather brilliant individual who liked to shake things up. While frequently called a crackpot, was just as frequently found to be correct.
Apparently not (http://en.wikipedia.org/wiki/Abiogenic_petroleum_origin), in this case. It seems this hypothesis has been discredited. I don't claim to be a geologist but what little I remember of my chemistry and astronomy, the idea of complex hydrocarbons forming in this way is unlikely. Simple compounds, such as methane and ethane, have been detected in space, of course, but I haven't found anything about much more complex compounds.

[denuseri]

Add to that that we have allready reached peak oil aquisition some time ago in most parts of the world and the "planet makes its own oil as if by magic all on it's own" hypothesis doesnt have a leg to stand on.

[Thorne]

Add to that that we have allready reached peak oil aquisition some time ago in most parts of the world and the "planet makes its own oil as if by magic all on it's own" hypothesis doesnt have a leg to stand on.
I don't know about the "peak oil" story. A lot of that has to do with drilling bans, especially by the US, which don't allow the oil companies to establish new resources, raising the price of existing reserves. And the bans on refineries which limit the amount of gasoline which can be produced, thereby inflating the prices.

[denuseri]

Are you quite certian of that assumption Thorne?

You may wish to give this: http://en.wikipedia.org/wiki/Peak_oil

.... a gander and look at some of the cross referenced scources, do enough reaserch on this and you may just change your mind like many of us did about global warming once we looked at the actual statistics.

[Thorne]

look at some of the cross referenced scources, do enough reaserch on this and you may just change your mind like many of us did about global warming once we looked at the actual statistics.
I wasn't making an assumption, just speculating. Check the criticism on that Wiki page you referenced. Granted, it's based on an oil executive's comments, but many of those comments are fairly accurate. In fact, the peak oil hypothesis makes several assumptions which I am skeptical of. They assume that there are no major deposits left to be found, leaving only limited small deposits for the future. I'm not sure how he arrives at that assumption, other than wishful thinking.

But I don't believe that we can continue burning oil at a prodigious rate for the next thousand years, either. In fact I support alternative energy sources, if for no other reason than to minimize CO2 emissions and to minimize oil company profits. But telling the oil companies that they can't drill into known deposits then blaming rising prices on shortages is just nuts. Let the oil companies drill, let them build refineries, and then see how much oil is really there.

[denuseri]

I wasn't making an assumption, just speculating. Check the criticism on that Wiki page you referenced. Granted, it's based on an oil executive's comments, but many of those comments are fairly accurate.

Are they? I think they have been caerfully designed to look that way and defend the intrests of those he works for, some of the points he makes are valid but also misleading and leave out the whole story , they also have holes in them when you look into the details. For instance, one reason we were not exploiting the oil sand approach for so long was the cost of fuel wasn't high enough to validate it. Now as if by magic it is?

In fact, the peak oil hypothesis makes several assumptions which I am skeptical of. They assume that there are no major deposits left to be found, leaving only limited small deposits for the future. I'm not sure how he arrives at that assumption, other than wishful thinking.

It was a careful examination of just how oil is made in the geological proccess of acreation, cross referenced with where its been located, by us and sucked out. Coal, gas and oil both all come from trapped carbonniferous matieral thats been under heat and pressure for long periods of time, there is only so much of it cuase its all made from former living remains, those remains have to be under just right conditions to turn into the resources we are using today, and its takes a longy longy longy time for the earth to make it, and we are sucking it out of the ground at a rate that far far superseeds that natural acreation proccess. The Oil in paticular comes from remains in what used to be swampy coastal regions; know where those were in relationship to the land massess we have today and how they got there and compare it to the location of the current oil fields (The more recent Oil fields located by geologists with increadibly unbelievable accuracy using the same exact method) and you would be surprised at the results of such cross disiplinary efforts. Fractals are a wonderful thing for this kind of reaserch.

But I don't believe that we can continue burning oil at a prodigious rate for the next thousand years, either. In fact I support alternative energy sources, if for no other reason than to minimize CO2 emissions and to minimize oil company profits. But telling the oil companies that they can't drill into known deposits then blaming rising prices on shortages is just nuts. Let the oil companies drill, let them build refineries, and then see how much oil is really there.

Do we Let them make prices go up so they can continue to exploit us? Just so they can get to the more expensive to reach places? Do we let them continue to destroy surface enviroments with abandon like they did all over the third world countries ebfore they got kicked out of them?

Or is it perhaps time to put more money into alternative renewable resources before its too late for us to switch over when we eaither run out of oil and stop letting big oil take us for fools. Its not going to take too much longer at current rates of exponential rescoure exploitation rates to have added so much CO2 to the atmospshere and put so many pollutants into the fresh water supply that we are all quite litterally going to be fucked by ourselves if we are not part of the piveleged wealth holding elite who will be able to wall themselvs off in the enclaves of the future.

A thousand years huh?.....I will give it maby another 2 hundred at best, though in the next 50 I predeict wide spread famine and war over whats left as production continues to decline with no replacments being allowed by the oil and coal lobbies who control our politicians.