From Ace of Spades: Surprise! 9th Circuit Blocks Drilling In One of Few Places Congress Permits It

[UK Telegraph] To win allies and forge an anti-American front, Mr Chavez sells oil to friendly countries at low prices. Ironically, the only big customer buying Venezuelan oil at the full market price is the United States, which the president routinely denounces as the “Empire”.

“As production falls, the sales to the US become more important,” said Pietro Donatello, an oil analyst from Latin Petroleum in the capital, Caracas. “Only the US is paying the full amount for Venezuelan oil and in cash, the rest are in some kind of barter agreements.”

Venezuela ranks fourth in American oil imports behind Canada, Saudi Arabia, and Mexico. And they’re admitting they purposely punish Americans who are too foolish to drill their own oil.

Forget that nonsense drilling opponents claim about the U.S. only holding “3 percent of the world’s proven oil reserves.” That word “proven” is the key. How the heck would we ever know what our true oil reserves are when we don’t bother exploring and drilling for oil on our own territory?

Instead we ship between $400-$700 billion annually (the latter being the same price of that bank bailout) to other countries for their oil, which many drilled off our own shores, including those like Venezuela who are purposely gouging us.

China, Venzuela, Spain, India, Vietnam, Malaysia, Canada, Cuba, India, etc., are drilling for oil in that same Gulf of Mexico that we label too “pristine” to touch.

Foreign Policy magazine (which is not a conservative tilted medium) has a list of Barack Obama’s ten worst ideas. (McCain’s 10 worst are here).

FP put this one at #8 but I’d say it should be ranked even higher.

Taxing Oil Companies Extra

What he said: “I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills.” —Speech in Raleigh, N.C., June 9, 2008

Why it’s a bad idea: He’s attacking the symptom, not the disease. It’s certainly hard to defend oil companies making record profits while consumers are struggling to fill their tanks, but Big Oil has very little control over day-to-day gas prices, which are set by global supply and demand and, of course, OPEC. By discouraging oil companies from making big profits, such a tax could potentially discourage them from making investments in new refineries and finding new oil sources, resulting in fewer jobs and even higher prices at the pump. Jimmy Carter tried this in 1980, and it only increased U.S. dependence on foreign oil. Singling out one particular industry for punishment because it is politically unpopular doesn’t make much economic sense, either.

What’s particularly dumb about this idea is that the American oil companies, what Obama and Democrats love to call “Big Oil,” are just a infant amongst massive state-owned oil conglomerates who dictate the price of fuel, an affect the American economy far more than do American companies, because we import so much of our oil.

The Democrats favorite punching bag, Exxon-Mobile, is only the 14th largest oil company globally (courtesy PLB).

John Hinderaker explained once, “With 94% of the world’s oil supply locked up by foreign governments, most of which are hostile to the United States, the relatively puny American oil companies do not have access to enough crude oil to significantly affect the market and help bring prices down. Thus, Exxon Mobil, a small oil company, buys 90% of the crude oil that it refines for the U.S. market from the big players, i.e, mostly-hostile foreign governments. The price at the U.S. pump is rising because the price the big oil companies charge Exxon Mobil and the other small American companies for crude oil is going up.”

Or, if you rather, The Economist said about the same a couple years ago.

And, according to other rankings, 14th is best case scenario. PetroStrategies, Inc., lists Exxon-Mobile at the 17th largest oil company.

Here’s the top 16 (from 2006):

Here are some quick hits via the Club for Growth:

1. A Cato Institute report on economic freedom finds that the U.S. has slipped from the second most economically free in 2000 to the eighth most free. Cato found that only Zimbabwe, Argentina, Niger, Venezuela, and Guyana had a bigger slip during that period. While 8th place is still good it does underscore the protectionist attitudes that the U.S. Congress and even Bush administration have enforced. Cato explains its scoring as follows: “Economic Freedom of the World ranks 141 countries on a range of factors in five broad areas: 1) size of government; 2) legal structure and security of property rights; 3) access to sound money; 4) freedom to trade internationally; and 5) regulation of credit, labor and business.”

2. According to the Heritage Foundation, entrepreneurs give the most to charity. Entrepreneurs is a fancy way of saying “small business owners,” many of whom fall into the L.L.C., sole proprietor, partnership, or “S” type corporation (that is, taxed as individuals). So, one could reasonably expect that should a new administration decide to raise taxes (whether income taxes, payroll taxes, or in Obama’s case, both) it will affect these entrepreneurs in the form of reduced expenses, and thus decline their level of charitable giving. In other words, higher taxes kill charities.

3. Regulation leads to bailouts. Sheesh. The shell game never ends.

Here’s CFG:

Late last year, Congress passed an energy bill raising CAFE standards on automobiles. This obviously increased costs on the auto industry. So what does Congress plan to do? Give them tax dollars to help them pay for it.

Indeed. Call it what it is: A bipartisan pork fest. The New York Times has some exploration:

Both presidential candidates, Senator John McCain of Arizona and Senator Barack Obama of Illinois, have voiced support for the loan guarantees — an unsurprising stance given the critical importance of the main auto-producing states, Michigan and Ohio, to the electoral map this fall.

The chief executives of the three big American automakers — General Motors, Ford and Chrysler — met on Wednesday afternoon with House Speaker Nancy Pelosi.

When they emerged, they expressed optimism that the loan guarantees would be included as part of a budget resolution that is needed to finance government operations through the end of the year.

… Still, some fiscal conservatives reacted angrily to the prospect of more taxpayer money being used to prop up private companies.

“The federal government’s propensity to bail out failing companies in struggling industries ought to be troubling to all taxpayers,” said Representative Jeff Flake, Republican of Arizona. “Aside from the fiscal impact of spending money that the federal government doesn’t have, these bailouts will likely have the opposite of their intended effect.”

Mr. Flake added: “Federal bailouts may stave off short-term economic damage, but the long-term economic outlook will be much worse if the market is not allowed to make its own adjustments. While the Bush administration certainly shares blame for these bailouts, this Congress may designate itself as the ‘Bailout Congress’ if we follow through on a rumored bailout of the auto industry.”

Ho-hum. Welcome to the People’s Republic of Congress.

The Club for Growth adds: “It is important to make a distinction between the bailout of financial institutions whose failures might cause systemic devastation to the country’s financial system and those that won’t. Reasonable people can debate the merits of the former, but it is indefensible to put taxpayers on the hook for a bailout of an industry that poses no systemic risk to the American economy as a whole.”

4. And, lastly, here’s an excerpt of White House reaction to the Congress’ passage of one sham of an energy bill.

(1) imposing targeted tax increases on energy companies, which would reduce domestic production, increase energy costs, reduce the competitiveness of American companies doing business abroad, and hurt the U.S. economy; (2) imposing a one-size-fits-all national renewable power mandate that ignores regional differences, effectively overriding the individual mandates or policies established by more than 25 states, and increasing electricity costs in States where there are relatively few renewable resources; (3) drawing down the oil in the Strategic Petroleum Reserve simply to manipulate prices, and reducing our ability to respond to severe energy supply disruptions (demonstrated most recently during Hurricanes Gustav and Ike) and thereby jeopardizing the Nation’s energy security; (4) forcing holders of certain deepwater oil and gas leases issued in 1998 and 1999 by the Clinton Administration to renegotiate the terms of their leases or pay an excessive fee in order to remain eligible to bid on new leases; and (5) expanding the application of Davis-Bacon Act prevailing wage requirements contrary to the Administration’s long-standing policy of opposing statutory attempts to expand or contract the Davis-Bacon Act.

Why, after all the assistance we’ve given to Iraq over the past five years, was the first major Iraqi oil deal signed with China and not with an American or even a western company? The answer is, in part, because three Democratic senators [Senators Chuck Schumer, John Kerry, and Claire McCaskill] intervened in Iraqi domestic politics earlier this year to prevent Iraq from signing short-term agreements with Exxon Mobil, Shell, Total, Chevron, and BP.

– Fred Kagan.

Read the rest.

Funny how everyone wants to split hairs with everything that comes out of Palin’s mouth, because, you know, she’s one heartbeat away from the presidency. Well, what about the person that is constitutionally two heartbeats away from the presidency: the leader of the House of Representatives, Nancy Pelosi?

[Heritage Foundation] The day before the Democratic National Convention Speaker Nancy Pelosi (D-CA) went on Meet the Press and told Tom Brokaw:

“I’m, I’m, I’m investing in something I believe in. I believe in natural gas as a clean, cheap alternative to fossil fuels. … These investments in wind, in solar and biofuels and focus on natural gas, these are the real alternatives.”

As we pointed out at the time, natural gas is not an alternative to fossil fuels … it is a fossil fuel. And as the “Energy Kids Page” of the Energy Information Administration (EIA) explains, it is a fossil fuel that needs to be drilled for.

A map of where Congress allows offshore drilling from CNN here.

Back in June, Gateway Pundit published a map from Sen. Larry Craig’s office (yes, that Larry Craig) showing about the same. It was appropriately titled “The No Zone.”

Isn’t it interesting that Congress allows offshore drilling only in the region of the United States that is most prone to hurricanes? Isn’t such an approach, by design, destined for failure?

Not by coincidence, it’s also where Congress allows refineries.

The economy is slow, for sure, especially from inflation, energy prices and housing. Nonetheless, Keith Marsden shows from the data below that the U.S. economy is not nearly as bad as Democrats complain, and compared to other countries and past presidents, quite good.

How does the performance of the U.S. economy really compare with other advanced economies over the eight years of George Bush’s presidency? Data published by the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), the World Bank, the International Comparison Program (ICP) (a cooperative venture coordinated by the World Bank) and the U.S. Census Bureau allow a nonpartisan, factual assessment. Here are some of the findings:

- Economic growth. U.S. output has expanded faster than in most advanced economies since 2000. The IMF reports that real U.S. gross domestic product (GDP) grew at an average annual rate of 2.2% over the period 2001-2008 (including its forecast for the current year). President Bush will leave to his successor an economy 19% larger than the one he inherited from President Clinton. This U.S. expansion compares with 14% by France, 13% by Japan and just 8% by Italy and Germany over the same period.

The latest ICP findings, published by the World Bank in its World Development Indicators 2008, also show that GDP per capita in the U.S. reached $41,813 (in purchasing power parity dollars) in 2005. This was a third higher than the United Kingdom’s, 37% above Germany’s and 38% more than Japan’s.

- Household consumption. The ICP study found that the average per-capita consumption of the U.S. population (citizens and illegal immigrants combined) was second only to Luxembourg’s, out of 146 countries covered in 2005. The U.S. average was $32,045. This was well above the levels in the UK ($25,155), Canada ($23,526), France ($23,027) and Germany ($21,742). China stood at $1,751.

- Health services. The U.S. spends easily the highest amount per capita ($6,657 in 2005) on health, more than double that in Britain. But because of private funding (55% of the total) the burden on the U.S. taxpayer (9.1% of GDP) is kept to similar levels as France and Germany. The U.S. Census Bureau reports that 84.7% of the U.S. population was covered by health insurance in 2007, an increase of 3.6 million people over 2006. The uninsured can receive treatment in hospitals at the expense of private insurance holders.

While life expectancy is influenced by lifestyles and not just access to health services, the World Bank nevertheless reports that average life expectancy in the U.S. rose to 78 years in 2006 (the same as Germany’s), from 77 in 2000.

- Income and wealth distribution. The latest World Bank estimates show that the richest 20% of U.S. households had a 45.8% share of total income in 2000, similar to the levels in the U.K. (44.0%) and Israel (44.9%). In 65 other countries the richest quintile had a larger share than in the U.S.

Investment has been buoyant under President Bush. According to the ICP, outlays on additions to the fixed assets (machinery and buildings, etc.) of the U.S. economy amounted to $8,018 per capita in 2005 compared to $4,963 in Germany and $4,937 in the U.K. Higher taxes on the upper-income Americans, as proposed by Mr. Obama, are likely to result in lower saving and investment, less entrepreneurial activity and reduced availability of bank credit. Lower-income Americans would be among the losers.

When considering the distribution of income and wealth in the U.S., another factor that should be taken into account is the sharp rise in the number of immigrants. The stock of international migrants (those born in other countries) in the U.S. grew by nearly 10 million from 1995 to 2005, reaching a total of 38.5 million according to the World Bank.

The inflow of migrants may have restrained the growth of average income levels in the bottom quintiles. Nevertheless, their earnings still allowed immigrants to remit $42 billion to their families abroad in 2006, double the level in 1995. So the benefits are widely spread among the families of immigrants remaining abroad — an important U.S. contribution to the reduction of poverty in these countries.

- Employment. The U.S. employment rate, measured by the percentage of people of working age (16-65 years) in jobs, has remained high by international standards. The latest OECD figures show a rate of 71.7% in 2006. This was more than five percentage points above the average for the euro area.

The U.S. unemployment rate averaged 4.7% from 2001-2007. This compares with a 5.2% average rate during President Clinton’s term of office, and is well below the euro zone average of 8.3% since 2000.

- Debt interest payments. The IMF reports that the interest cost of servicing general government debt in the U.S. has averaged 2.0% of GDP annually from 2001-2008, compared with 2.7% in the euro zone. It averaged 3.2% annually when President Clinton was in office.

The cost of the wars in Iraq and Afghanistan has been largely absorbed in a relatively small increase in the defense budget (to 4.1% of GDP in 2006 from 3.8% in 1995). A much higher proportion of U.S. income was devoted to the military during World War II and the Korean War.

I have mixed feelings on the internal strife in the Democratic Party that is supposedly causing a notable percentage of Hillary backers to openly support John McCain for president.

[Wall Street Journal] Clinton supporters, disillusioned by their candidate’s narrow loss, have been showing up in the McCain camp, and Sen. McCain has stepped up his effort to woo more — including strategists who worked for the Democrat. One former Clinton aide is helping the Republicans identify and win over former Clinton voters. The Republican National Committee even held a “Happy Hour for Hillary” in Denver where McCain volunteers mingled with disgruntled Clinton backers.

…There were signs that even some party luminaries loyal to Sen. Clinton were less than passionately committed to the nominee-in-waiting. Several high-level Clinton fund-raisers, including former campaign chairman Terry McAuliffe, plan to leave Denver before Sen. Obama delivers his anticipated acceptance speech before 75,000 people in a football stadium. Mr. McAuliffe said he was heading home for his daughter’s birthday.

The August Wall Street Journal/NBC News poll4 found just 52% of Clinton primary voters now say they plan to vote for Sen. Obama. An additional 21% say they will support Republican Sen. McCain, with the rest undecided or not planning to vote.

On the one hand, I’m thinking Republicans and the McCain camp need to not overplay their hand. If they get too brazen in their attempt to keep the Democrats split it could backfire. And, frankly, I don’t yet believe that come election day Obama is going to lose 48% of Clinton backers. Oh sure, they’re complaining now, but I just don’t see them either not showing or pulling the lever for McCain come election day.

Then, on the other hand, I worry that they do, and if they do, what does that say about the conservative character of John McCain, and what does that say of the very nature of the Republican party?

I’m a little uncomfortable that so many Democrats could be so comfortable putting a supposed conservative in office. Yes, there’s their boneheaded strategy that Hillary could run again sooner (2012 as opposed to 2016, if at all), and there’s the fact that Ronald Reagan — a former Democrat turned Republican who famously quipped that his party “left him” and not vice versa — won two landslides in part with votes from lifelong Democrats.

But even so, when I post a lenghty rant (yesterday) ridiculing the lack of science behind global warming, only to read today that my Republican party might do the same as Democrats, during its convention next week, by providing “a first-ever plank on global warming,” stating that, “While the scope and long term consequences of this warming effect are the subject of ongoing research, we believe the United States should take measured and reasonable steps today,” I just want to hurl my breakfast.

A party platform of “Hey there’s some very debatable science here, but let’s go ahead and foul up the economy anyway with a bunch of growth-retarding carbon trading policies” (the precautionary principle) shouldn’t be high on any fiscally conservative’s mind.

Couple that with McCain’s typically populist language of “taking on big oil, and drug companies” — two entities that have done more to empower the wealth and health ability of Americans than any politician has ever done — or shopping Sen. Joseph Lieberman as a potential running mate, and one has to wonder just what kind of Republican brand might take office. (I love Lieberman’s no nonsense moral clarity on foreign policy, but were he ever to become president it would take decades to undo his economic damage to fiscal conservatives, not to mention what the federal judicial appointees or Supreme Court might become).

This election doesn’t seem to be between the Republican versus Democrats, but between the Republicrats or Demoicans versus the Obamanation Socialist party.

One of my favorite quotes retorting the “We can’t drill our way out” of our energy problems came from Dennis Miller a few weeks ago, who retorted, “We can’t ceiling fan our way out of it either.”

In principle, I’m all for anyone who thinks they have a solution or who thinks we should diversify our energy sources. But like it or not nuclear, oil and coal (all the things Democrats block) offer the most bang for the buck, especially nuclear.

Take, for example, oil magnate T. Boone Pickens’ suggestion that our Midwest could become the “Saudi Arabia” of wind power and “20% of America’s electricity can come from wind.” Sounds great, and Mr. Pickens is putting a lot of money into his project.

But that’s where the pie in the sky ends.

First political problem (the usual one): the environmental extremists will block any serious attempt to create a massive wind farm project. Kills birds.

[Heartland Institute] Between four and five million birds are killed every year in collisions with stationary, generally solitary, communications towers. One can conservatively estimate that three times as many wind turbines will cause three times as many bird deaths: between 12 and 15 million.

A wind turbine with long, rotating blades (regardless of whether those blades have been slowed) clearly will kill more birds than a smaller, stationary communications tower. A 295-foot tall wind turbine can be viewed as a “communications tower” with an additional bird-killing surface area of 21,113 square feet. That is an area almost half the size of a football field.

Catalogue that in your file labeled, “Bet you didn’t know wind farms were more environmentally damaging than drilling in ANWR.”

Next problem (as stated above): No bang for the buck, or, “Damn, that’s a lot of windmills.”

[William Tucker, National Review {$}] Pound for pound, coal contains twice as much energy as wood, and gasoline and natural gas contain four times as much. The Industrial Revolution became possible only when these denser forms of solar energy were developed.

Now, as we begin to run up against the natural limits of fossil fuels, it is important to consider the energy density of anything we might use in their place. Wind, water, biofuels, and the direct use of sunlight are anywhere from 5 to 50 times more dilute than fossil fuels. There is only one way to compensate for their low density, and that is to consume huge amounts of land in gathering them.

This is the Achilles heel of every form of “alternative energy.” When first introduced in the 1970s, alternative energy came with the slogan “Small is beautiful.” Prophets such as Amory Lovins, David Brower, and Lester Brown pictured a post-industrial world of backyard windmills, rooftop solar collects, and organic gardens where small plots would be set aside for biofuels that would run hyper-efficient cars. Self-sufficiency was the theme. It all sounded charming and romantic.

The reality has been anything but. We now use one-quarter of America’s corn crop for biofuels in order to replace less than 4 percent of our oil. GreenFuel Technologies, a Massachusetts startup, has a plan to grow photosynthesizing algae that will consume the carbon emissions from coal plants, and can be turned into biodiesel to run cars. It sounds like a great idea, except that the pools required for gathering sunlight to convert 40 percent of the exhausts from a single power plant will occupy 15 square miles.

Third problem: N.I.M.B.Y. (Not in my back yard)

[Heartland Institute] The Department of Energy’s “Wind Energy Initiative” calls for obtaining 5 percent of our nation’s electricity from wind turbines by the year 2020. To meet that goal will require the planting of more than 132,000 new wind turbines—a figure three times greater than the number of existing communication towers in the U.S.

Remember, the 132,000 windmills estimate comes from a 5% plan. So, trying to get 20% as Pickens suggests would logically require four times that 132,000 windmill figure.

Continues Tucker:

A standard wind farm built to generate 1,000 MW — the capacity of an average coal or nuclear plant — would occupy about 125 square miles. [T. Boone] Pickens wants to space his windmills a little wider — five to the square mile instead of eight — so for his 4,000 MW he will need 800 square miles.

But that 4,000 MW is only the “nameplate capacity.” Because wind blows so irregularly, even the best wind farms now generate electricity at only 30 percent of their theoretical capacity. (By contrast, nuclear reactors run at 92 percent capacity.) That means he will need 1,200 square miles of windmills to equal the output of three or four coal or nuclear plants, each of which occupies only a square mile. Factoring in the land required for mining adds several square miles for coal, and much less for uranium.

…If Pickens’s dream is realized, you will probably be able to drive from Texas to North Dakota without ever being out of sight of a windmill — just as they are visible everywhere in western Denmark. The one oasis may be Pickens’s own 68,000-acre property in the Texas panhandle. “I’m not going to have the windmills on my ranch,” he told Fast Company. “They’re ugly.”

Oh, there’s one more rub. Bringing windmills online will require building a whole new cross-country transmission system. While wind energy is concentrated in the Midwest, consumer demand is mostly on the East and West Coasts. Normal transmission lines — of 138 kilovolts (kV) and 345 kV — lose about 10 to 15 percent of their wattage every 1,000 miles, which is not a problem when the power is generated close to the consumer. But transmitting electricity halfway across the country will require a completely new infrastructure of 765 kV lines that cover long distances without losing power. This could be an enormous problem, because utility executives now say the only thing more difficult than siting a power plant is building new transmission lines, since every property owner and municipal jurisdiction in the path gets to have a say. Ranchers who are as just as picky as Pickens about what they permit on their land could pose huge obstacles.

So, let’s summarize — environmentalists will block it anyway, nobody wants their landscape littered with windmills, and it’s not cost effective.

Yeah, not sounding like such a hot idea anymore, is it.

That’s probably why, Tucker cites, “over the last decade, grid operators in Denmark, Japan, and Ireland have all refused to accept more wind energy” and “Denmark — the world leader in wind generation — stopped building windmills altogether in 2007.”

Meanwhile, as I’ve noted before, we ironically have an energy policy that is far more radically left-wing than France (which gets a whopping 80% of its electricity from nuclear power).

[Tucker] The energy released from splitting a uranium atom is 2 million times greater than the energy released by breaking a carbon-hydrogen bond in coal.

The tremendous energy density in uranium produces an extraordinarily smaller environmental footprint. It explains why uranium can be mined at a few isolated sites, while coal must be extracted by digging whole cities underground or ripping the tops off mountains, as is being done in West Virginia. It explains why a 1,000 MW coal plant must be fed by a 110-car coal train arriving every day, while a nuclear reactor is refueled by a single tractor-trailer delivering a batch of new fuel rods once every 18 months. It explains why France can take all the waste from 25 years of producing 75 percent of its electricity with nuclear reactors and store it beneath the floor of one room at La Hague. The incredible energy density in the nucleus of the atom is the greatest environmental benefaction ever bestowed upon humanity.

The solution to our electrical generating problem (which might in turn power cars) seems obvious. But don’t expect anything but more “China Syndrome” hysteria from the left.