Why Won't We Drill?

I've already written too much about President Obama's policies that are trying to push us toward windmills, solar panels, and plug-in cars.  He is trying to do this in spite of the fact that those sources of energy and those cars are not reliable or efficient.  That is why under his policy, electricity costs "will necessarily skyrocket."  He is using federal tax incentives and regulations to discourage drilling in the U.S.  As I've mentioned previously, tighter regulations (by the state in this case ) in western Colorado severely limited exploration for natural gas.  The low price of natural gas combined with the regulations led Halliburton to close operations in the Grand Junction area, an area that went from unemployment rates under 4% in 2008 to today's rate of over 11%.  Another example of Change You Can Believe In.  Where did those jobs go?  Take a look at the state that Yahoo named the Best State to live in - North Dakota.  High paying drilling jobs have taken the state's unemployment rate to 3.8%!  5% below the national average.  Why are companies drilling there?  The state is not regulating "fracking" like Colorado began a couple of years ago.

Fracking is not a cleaned up version of an obscenity.  It is a slang word for fracturing.  In order to release oil and natural gas from the rock formations, companies fracture the formation.  Even though the procedure has been used for decades in Texas, Oklahoma, and other oil-producing states, the state of Colorado decided the process needed more study to determine its impact on the environment, especially water supplies.  As is usually the case, the media jumped in immediately with sensational stories to influence the debate.  A family went to a Denver television station with a story about their flammable tap water.  Sure enough, video shows their tap water being lit with a cigarette lighter as it comes from their kitchen faucet.  The connection to drilling?  A new well was recently drilled 7 miles away.  The drilling company did frack the well.  The state's energy department said that flammable water from wells is actually pretty common, and was reported in several areas of the state whether gas production was present or not.  Drilling for water sometimes passes through layers of the earth with pockets of natural gas.  As a rule, the release of gas is limited to a very short time.  But of course none of that made into the news reports. So, Colorado's Department of Natural Resources used the worry about fracking as an excuse to tighten regulations on the practice.  And effectively drive Halliburton along with its jobs out of the state.


Now, with gas prices inching towards $4 a gallon, Obama is starting to feel some heat on his energy policies, starting with the offshore drilling moratorium put into effect, in spite of a federal court ruling against it, immediately following the BP disaster a year ago.  This is an issue that he should worry about.  Unemployment in the 8% to 10% range has become the "new normal."  So that probably won't get as much attention as it should in the 2012 election campaign, especially with the media spinning the "improvement" that has the rate just below 9% now.  I think the average voter will have a very difficult time accepting $4 a gallon gasoline as normal, especially when they receive a $100 reminder each time they fill up their Government Motors Tahoe!

Reading the newspaper will tell you that oil and gas production is expected to be a big issue in the next election.  As one site I read said, you can tell what worries the Demoncrats by what they attack.  And they are attacking oil and gas exploration now.  Last week's Denver Post had a front section story, page 2 if my memory serves, about the environmental impact of fracking.   On Monday, the city of Grand Junction announced the opening of the western slope's first station selling natural gas for cars and city vehicles, touting natural gas's affordability and the fact that it clean burning.  So the Demoncrats, through the Denver Post launched their attacks.  The page 2 story reported that the environmental friendliness of natural gas was overstated, when the impact of fracking was considered.  They described giant trucks lumbering over the fragile western slope, pounding the earth to release the natural gas, just like black smoke spewing dinosaurs.  When you consider the impact of the equipment's emissions, the lack of emission of natural gas burning cars is more than offset, according to the Post.  Now this is my question, not the question of the so-called journalist writing the article -  why should the environmental cost (assuming there is actually one) of fracking should be considered when choosing a natural gas powered car, but not the source of electricity for the Volt ( too bad Fiero was already taken, because this story shows Fiero would be a more appropriate name).  Clean burning coal is the source of over half the electricity needed to power the Volt.  Luckily no one is buying - either the car or the fear of environmental catastrophe.

Next came a front page of the business section article.  This article seemed to be in response to the reports of the high paying jobs that left Colorado for more friendly states like Texas, Oklahoma, the Dakotas, and New Mexico.  The Post reported that the production from the exploration of western Colorado was greatly overstated.  The Post reported that of 16 wells they studied for the report, almost "half produced 800 barrels a day, or less."  Now, I was no math major, but just assume that those 16 wells averaged 800 barrels a day.  Probably a low estimate, considering the spin the author seemed to be giving the article.  Oil is $105 a barrel as I am writing this.  Again, I was not a math major, so lets round down to $100 to make the math easier.  Mr. Haight, my 4th grade math in Gruver, TX would be proud to know that I remember that to multiply by 100, just add two zeroes to the number you are multiplying.  So using these low estimates, these wells would make $80,000 a day!  Oh yeah, times 16 wells.  That's only $1,280,000 a day.  Again, let's make the math easier by assuming that these wells belong to a good union and only work 300 days a year.  What local economy wouldn't appreciate the production of $384,000,000 in a year?  Now, my bank statement rarely shows a comma, and never has two!  But if my memory of Mr. Haight's class is correct, those six zeroes and two commas denote millions.  $384 million, by conservative estimates, in a year.  Using data from only 16 wells studied for the article.  Imagine what the real numbers for the area would be!  That might put a couple of folks in the "rich" bracket that the Demoncrats are so fond of exploiting through tax increases.

This week's Post featured a front of the Perspective section article on the "real" west.  The article disputed the Republican's claim of representing the west in the battle to ease land use regulation by the Department of the Interior.  The article quoted a poll of western voters that supported the government's "protection" of our public lands.  The problem with the poll is the same as most westerners have come election time.  The polling is skewed by the heavily populated cities of Denver, Boulder, Las Vegas, San Francisco, and Los Angeles.  The constituents that wouldn't know a wilderness area not featured on a granola box, decide the policy for millions of acres of federally controlled/regulated land and the media spins it as the opinion of average westerners.  Whether that land should be federally controlled is another issue that I wrote about last year. 

Finally, today's news reported the final shot at the oil and gas exploration-friendly area of western Colorado.  Unfortunately in Colorado, the Demoncrats still control the state government.  Even worse, it's a re-distric
ting year.  So, the legislature has announced its recommendations for a new district that would include the traditionally Republican area of Grand Junction.  The area will be merged with the San Francisco/Los Angeles of the state, Boulder and Fort Collins.  This move will assure the conservative western slope will have virtually no representation in the state government.  So the folks that made the once proud state of Colorado the first to legalize abortion in the 70's and led the state's march to legalized marijuana will now decide representation for the conservative west.

I have had a very difficult time writing this post.  It's hard to keep my thoughts on track with all the B.S. being thrown right now.  My blood pressure is probably spiking now.  Sarah Palin may not be able to see the Kremlin from her front porch, but she is right on the correct energy policy for our country - "drill, baby, drill."  Or maybe her other creed is more appropriate - "don't retreat, reload."

Hobgoblins and Community Organizers

For some reason, I don't remember a lot of quotable lines from my college literature classes.  One I do remember is from Ralph Waldo Emerson's essay, Self Reliance.  "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines."  Today, I think Emerson would add community organizers who become president to his list of those with hobgoblins. 

President Obama has shown a tendency to react from his gut.  From his first month in office when he made his off-teleprompter "it is apparent the police acted stupidly" remark, the president has to use his own words, acted stupidly and then stubbornly stood by those actions.  In the case of this remark, Obama was barely a month into office, and most of us were still giving him the benefit of the doubt.  He had no experience in a position where his every word and action was being watched and scrutinized.  So most of us gave him the chance to retract, or at least soften his remarks, especially since he admitted that he did not have "all the facts."  But, Emerson's hobgoblins got to the president.  He never backed off his comments.

Then we had Arizona passing state legislation making illegal immigration illegal in their state.  When asked for a reaction, President Obama called the legislation "misguided."  Without reading the legislation.  After learning that the law mirrored already existing federal law, the president stuck to his comments and went even further by ordering an investigation of the civil rights ramifications of the law.  A little reflection should lead "the smartest man in the room" to the conclusion that civil rights are applicable to citizens, and illegal immigrants by definition are not citizens, but the hobgoblins have struck again.  The federal government has decided to pursue legal action against the state.  Again, the president has had ample time to adjust his stance as he has learned the facts and learned the opinion of the voters.  But once again, he is remaining "foolishly consistent."

Last week Senator Jon Kyl told a town hall meeting that the president, in a private meeting, told Kyl that he had no reason to close the American borders, as citizens of border states and citizens in general, are begging him to do.  President Obama told Senator Kyl that if he closed the borders and enforced federal immigration laws, Congress would have no motivation to compromise on immigration reform, or amnesty.  Think this is a case of Kyl making up the president's quotes to advance Arizona's view?  Well once again, President Obama's got that hobgoblin issue.
 

More recently, in reaction to the British Petroleum leak in the Gulf of Mexico, the president announced a moratorium on drilling in the gulf.  Upon further review, the moratorium would do nothing but cost the region jobs, not only for the six months announced, but probably forever.  Some estimates of the loss of payroll, and tax revenue, reach the billions.  Those estimates do not include the loss caused by the leak itself.  So when a federal judge suspended the moratorium, the president had the perfect opportunity to adjust his stance and in essence, save both face and jobs.  He could have said something along the lines of "we tried, but a judge overturned our action.  That's the way checks and balances works."  He could then let the drilling continue, especially since this is the first spill in more than 4,000 wells drilled in the Gulf.  Instead of letting the judge's decision stand and moving on, within minutes of the announcement of the judge's decision, the Obama administration announced their decision to appeal the decision.  Not only is the government appealing the decision, but today Secretary of Interior Salazar announced a new moratorium!

Three days after the accident and resulting leak, the Dutch, Norwegians, and British offered to help with the clean up effort with tankers, skimmers, and booms.  The federal government declined the offers, citing the Jones Act.  The Jones Act requires all ships working between U.S. ports be American built, American flagged, and consist of American crews, all to protect unions.  While the Act has been suspended many times, the Obama administration refused to do so.  After more than two months of massive amounts of oil moving to beaches along the Gulf coast, commentators started questioning the application of the Jones Act.  The British and Dutch again offered their help with the clean up.  The president had the opportunity to exorcise his hobgoblins and suspend the Jones Act, but, once again, has acted foolishly consistently and refused the help.

We have been told that President Obama is one of most intelligent people ever to hold the office of president.  So, while is he repeatedly the victim of the hobgoblins of a little mind?  It could be that he knows all the facts, but is working to advance his agenda.  It's either part of his plan, or we were lied to all along and the president's not as intelligent as we were led to believe.  And if that's the case, what is the agenda of those who led us to believe we were electing "the smartest man in the room?"  I think we have more than hobgoblins to worry about.

Got a Funny Feeling?

Survival books, whether they be outdoor survival, or about surviving in the city, tell you to trust your instincts.  We can all sense danger, it's just that we usually ignore our instincts.  As Americans, we trust until we are given a reason not to trust.  That makes us easy targets for everything from e-mails from Nicaraguan check-cashing scams, to 9/11 terrorists taking flying lessons in our country.  Or for that matter, immigrants entering our country illegally, counting on us to let them stay.  Our trust makes us an easy target.

So, let's put a couple of things in writing and see if it gives us a "funny" feeling.  I'm not even going to list all our president's socialist/communist/maoist advisers.  That's so old that we don't even get any feeling about it.  So let's start with the president's reaction to the incident involving the D.C. police and Harvard professor Gates.  When asked for a reaction, President Obama said, "I don't have any details, but it is apparent that the police acted stupidly."  I don't have any facts, but I have a strong opinion anyway.  Kind of funny coming from the most powerful leader in the free world, huh?  

President Obama on his cap and trade legislation, changed to green job creation legislation, now changed to American energy independence legislation:  "under my plan, the cost of electricity would necessarily skyrocket."  What politician in their right mind would say his plans would make any utility cost, not just increase, but "skyrocket?"  Seems like he is not worried about our support.  It's like the issue has already been decided.  And why would he want it to take effect during the worst recession of the lifetime of the average American and before an already hotly contested midterm election?  A little funny, huh?  Then we learn that the president was the conduit for the Joyce Foundation's grant to start the only energy exchange in the United States, and that he worked on the grant while still an unknown state senator.  A little funny.  A little, very little actually, research is required to learn that other investors in the Chicago Climate Exchange are a company with Al Gore on the board (An Inconvenient Truth, huh Al?); a bank, Goldman Sachs, who not only was a major contributor to the economic recession, but also received huge taxpayer funded bailouts; and several of the board members of the Chicago Climate Exchange came from Goldman Sachs.  Funny.  

Exxon-Mobil decided a couple of years ago not to form a separate department to do research for alternate forms of energy.  They decided it was best to do what they have always done, look for oil.  Seeing how fast the world is changing, it seemed a little funny that they would not at least hedge their bets by starting to adapt to future alternative energy demands.  Fuji Films and Kodak are examples of how quickly an established company can go from the top to broke by not being on the leading edge of innovation.  But Exxon-Mobil seemed oblivious to the danger of falling behind.  Funny.

One of the president's first acts when he took office was to freeze leasing on shallow water offshore oil drilling, and a federal takeover, or much tighter restrictions of western land where drilling was planned, or already taking place.  No freeze on deepwater drilling though.  Oil companies complained a little, but were strangely quieter than you would expect about the restrictions.  Some just adapted and went to more deepwater drilling projects.  Now we all know what happened with British Petroleum's well in the Gulf of Mexico.  Strangely enough, the president was very reasonable in his early reaction.  He said BP would be responsible for the clean-up and loss of business revenue caused by the explosion and leak.  Again, strangely enough, BP has seemed relatively unconcerned about the cost of the lost rig, its eleven employees killed, the loss of sales of a minimum 5000 barrels of oil a day, at $70+ per barrel for more than 40 days and counting, that turns into real money pretty quickly.  Kind of funny how calm and reasonable BP has been about this loss, and the potential cost of the clean up.  Funny too how unconcerned about the huge decline in their stock market value they have been.

Now, all offshore drilling leases have been frozen for a minimum of 6 months.  Effectively a minimum of a year for projects off the coast of Alaska where many projects had been planned.  Land-based drilling restrictions still have not been eased to compensate.  The cap and trade bill in the senate has now been re-named an American Energy Independence bill, and it still will cause costs to skyrocket.  But little to no complaints or comments from the media or oil companies like Exxon-Mobil or British Petroleum who would potentially be hurt the most by the legislation.  Funny.

The Chicago Climate Exchange estimates business transactions of $10 trillion a year if the legislation passes.  They stand to make a boatload, make that an oil tankerload, of money if the legislation passes.  Yet, only a couple of days after the Canadian Free Press ran stories showing the suspicious links of the Exchange to the president, his backers and advisers, to Goldman Sachs, to Al Gore, and more, the founders of the Exchange sold their controlling interest.  Funny.  Sold their interest to an Atlanta based company called Intercontinental Exchange (ICE on the New York Stock Exchange).  Thirty minutes on their site and a couple of business news sites and you will learn that major shareholders in ICE include Exxon-Mobil.  Funny.  British Petroleum holds a large share.  That's funny.  Why isn't MSNBC investigating?  General Electric holds a big piece of ICE.  General Electric owns all the NBC networks.  Now that's funny.

For as long as I can remember, oil prices have gone up around Memorial Day, as Americans hit the road for summer vacations.  Oil prices traditionally go up when hurricane season arrives in June and potentially threatens to interfere with our coastal refineries and oil shipments.  Oil prices always go up with increased regulation, like the recent offshore freezes by the president.  Oil prices always go up when tension in the middle east increases, like it has with the recent incident with Israel blockade of Gaza.  So, in the past 60 days, we have had the worst offshore drilling accident in U.S. history, followed by tightened government restrictions, followed by the arrival of summer vacation season, followed by the start of hurricane season in the Gulf, topped off by extreme tension in the middle east.  Oil prices have gone down in that time.  That's funny.

That's just the oil-related funny feelings.  Throw in the funny worldwide and media reaction to Israel's defending itself against terrorist organizations whose goal is the absolute annihilation  of Israel.  Add the president's funny labeling of Arizona's immigration law as "misguided" before he, his attorney general, his Homeland Security secretary, or anyone else in the administration had even read it.  Add the continued criticism of the law even though an estimated 65% of Americans and over 70% of registered voters nationwide support the law.  Add the passage of a health care law that over 60% of registered voters oppose; a bill whose cost upon analysis by the non-partisan Congressional Budget Office keeps going up.  And finally add the seeming indifference to an unemployment rate staying near 10%, even with funny hiring practices by the Census department reducing the number of unemployed temporarily.

We should have a very funny feeling about all this.  Either they have another crisis planned that they will take advantage of to keep and increase their control, or this Democratic/Progressive Congress and President are the political equivalent of a suicide bomber that is just trying to do as much damage and leave as big a hole as possible when all this blows up.  I have a funny feeling that a large hole is not their goal.