O's Oil plan: Get ready for gas at $7 per gallon

[melensdad]

Seriously glad I invested in crude oil.

$7-a-gallon gas?
The folly of O's oil-spill 'fix'
By BEN LIEBERMAN
Last Updated: 2:49 PM, June 18, 2010
Posted: 12:02 AM, June 18, 2010

President Obama has a solution to the Gulf oil spill: $7-a-gallon gas. That's a Harvard University study's estimate of the per-gallon price of the president's global-warming agenda. And Obama made clear this week that this agenda is a part of his plan for addressing the Gulf mess.

So what does global-warming legislation have to do with the oil spill?

Good question, because such measures wouldn't do a thing to clean up the oil or fix the problems that led to the leak.

The answer can be found in Obama Chief of Staff Rahm Emanuel's now-famous words, "You never want a serious crisis to go to waste -- and what I mean by that is it's an opportunity to do things that you think you could not do before."

AFP/GETTY IMAGES
Obama: Using Gulf crisis to push unpopular cap-and-trade bill.

That sure was true of global-warming policy, and especially the cap-and-trade bill. Many observers thought the measure, introduced last year in the House by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), was dead: The American people didn't seem to think that the so-called global-warming crisis justified a price-hiking, job-killing, economy-crushing redesign of our energy supply amid a fragile recovery. Passing another major piece of legislation, one every bit as unpopular as ObamaCare, appeared unlikely in an election year.

So Obama and congressional proponents of cap-and-trade spent several months rebranding it -- downplaying the global-warming rationale and claiming that it was really a jobs bill (the so-called green jobs were supposed to spring from the new clean-energy economy) and an energy-independence bill (that will somehow stick it to OPEC).

Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) even reportedly declined to introduce their new cap-and-trade proposal in the Senate on Earth Day, because they wanted to de-emphasize the global-warming message. Instead, Kerry called the American Power Act "a plan that creates jobs and sets us on a course toward energy independence and economic resurgence."

But the new marketing strategy wasn't working. Few believe the green-jobs hype -- with good reason. In Spain, for example, green jobs have been an expensive bust, with each position created requiring, on average, $774,000 in government subsidies. And the logic of getting us off oil imports via a unilateral measure that punishes American coal, oil and natural gas never made any sense at all.

Now the president is repackaging cap-and-trade -- again -- as a long-term solution to the oil spill. But it's the same old agenda, a huge energy tax that will raise the cost of gasoline and electricity high enough so that we're forced to use less.

The logic linking cap-and-trade to the spill in the Gulf should frighten anyone who owns a car or truck. Such measures force up the price at the pump -- Harvard Kennedy School's Belfer Center for Science and International Affairs thinks it "may require gas prices greater than $7 a gallon by 2020" to meet Obama's stated goal of reducing emissions 14 percent from the transportation sector.

Of course, doing so would reduce gasoline use and also raise market share for hugely expensive alternative fuels and vehicles that could never compete otherwise. Less gasoline demand means less need for drilling and thus a slightly reduced chance of a repeat of the Deepwater Horizon spill -- but only slightly. Oil will still be a vital part of America's energy mix.

Oil-spill risks should be addressed directly -- such as finding out why the leak occurred and requiring new preventive measures or preparing an improved cleanup plan for the next incident. Cap-and-trade is no fix and would cause trillions of dollars in collateral economic damage along the way.

Emanuel was wrong. The administration shouldn't view each crisis -- including the oil spill -- as an opportunity to be exploited, but as a problem to be addressed. And America can't afford $7-a-gallon gas.


Read more: $7-a-gallon gas? - NYPOST.com​

 

[Prometheus]

Considering the price quadrupled in 10 years (when it was at it's high a year ago), I don't think the current price of $3.00~ doubling in 10 years is that far fetched.

Hmmmmm.... we know it CAN quadruple in 10 years, but don't think it will double in the next 10?

Smoke and mirrors here. Gas is going to do worse that double (or even quadruple) in the next 10 years if we don't do something to stop the inflation and upcoming hyper-inflation. We don't need any more help from barry (and both democrats and republicans, thanks GW for the quadrupling part) to get there.

All they have to do is sit on their hands at this point.

 

[Indy317]

Seriously glad I invested in crude oil.

You might want to get out...now. What do you think will happen if gas hits $7/gallon? People will demand that something be done. They will demand that it be government to be the one to do something. I see two things that could make your investment a nightmare:

#1: Government needs to give another stimulus to the "poor" people. Even if you are poor on paper, it won't matter. They will see your stocks and tax any gains at some astronomical rate. They have already admitted wanted to tax capital gains at a set minimum, then go higher based on income. The old days of getting taxed at either 20% or 29% depending on long term or short term is gone. If you are retired, living on SS, you could see a 25%ish rate. If you are still working, you could see much higher rates.

#2: The reason I have not invested in the market is because of what is happening in Venezuela. When people in this country get scared, they turn to big mommy government. They will demand that government seize control of all aspects of the oil industry, thus pushing out the need to make a profit, to turn around and pay out half billion dollar retirement packages.

The hate the rich mantra will grow exponentially, and taxes will go through the roof so folks can either get some sort of subsidized gas card, or whatever. Hell, with $7/gallon gas, I may just have to quit my job and become a load myself. I am not rich at all, though most will look at me as rich because unlike them, I saved money and didn't take a vacation every year, buy an HD flat screen TV for every room, etc..

Smoke and mirrors here. Gas is going to do worse that double (or even quadruple) in the next 10 years if we don't do something to stop the inflation and upcoming hyper-inflation.

There will be hyper-inflation, but it won't matter. When folks talk hyper-inflation, they picture themselves paying a huge price for a good which is relatively cheap. However, that won't be the case if price spikes are that great. There won't be any hyper-inflation where we are all cutting cable, cell phones, etc. to pay for gas. It just flat out won't be available. If gas companies must make a certain profit, it won't be possible to make that profit. As such, there will be no work force, unless folks are enslaved. If there is no support staff in place, the good/service won't even be available for purchase. If oil spikes to that level, there won't be any oil for citizens for the most part. Governments around the world will seize control of all oil rigs and such, and oil will only be pumped for government. Folks might get ration cards, but that is it.

I think oil investing is a good play, but I don't believe I can trust governments to not meddle if oil prices skyrocket. They will seize control, just like Chavez has. That will cause the prices of the stocks to drop like a rock. If you do decide to invest major money, only buy something which can be protected with put contracts.

 

[melensdad]

You might want to get out...now. What do you think will happen if gas hits $7/gallon?
. . .
I think oil investing is a good play, but I don't believe I can trust governments to not meddle if oil prices skyrocket. . .

Oh I'll get out at some point. I tend to get out before bubbles burst.

This president is doing everything he can to make a crisis happen so that he can step in and control that crisis by taking away more liberties.

 

[lyric911]

Gas needs to be expensive. As long as it remains cheap enough no real research will be spent to get away from it. Bring it on.

 

[melensdad]

Gas needs to be expensive. As long as it remains cheap enough no real research will be spent to get away from it. Bring it on.

Given that we have oil fields that have been deemed off limits right here in the USA, as well as just off shore that are also off limits to drilling, seems to me that before we go nuts with prices we should tap those reserves. Getting at any of them would be cheaper and safer than drilling a mile deep in the gulf of Mexico since a leak on land can be plugged easily and a leak in 100 to 500 feet of water can be plugged fairly easily.

There is plenty of oil to last for many more decades.

I've investigated solar hot water heat for my home, the largest solar company making the kits told me it didn't make economic sense for me to do it because solar is too expensive.

I've investigated wind power for electrical generation, that too is a no go unless I want to invest roughly $12,000 to save about $100 per month. Again simply too expensive. And the $12K price tag is based on using 2 of the most efficient and cost effective rotors, 1 inverter, and no battery system. Add batteries or use less efficient rotors and the costs can skyrocket.

Photovoltaics? Nope, I've looked at those too. Just as bad as wind power.

We can convert cars RIGHT NOW to run on Natural Gas, but that comes from the same oil wells as oil. There are already natural gas cars available, and there are conversion kits available. You can even get a N.G. refueling station for INSIDE YOUR GARAGE so you can refill your tank every night (which you need to do because you can only go 1/2 the distance as regular gas).

BioDiesel is a viable option but people don't want to pay $4000 to $5000 extra per vehicle for a diesel engine. Even then the best new engines can only use 5% biofuel and need 95% dino-diesel (I know because I have 3 diesels). Older engines could run 100% biofuel but didn't meet the 50 state emission standards.

Ethanol is not viable but our government is pushing it. Can't pump it through a pipeline (due to condensation and dilution issues) so it must be trucked. That means you need lots of small ethanol facilities located close to the end users. Its expensive and actually low in BTU energy ratings so very inefficient.

There is NO alternative fuel that is FINANCIALLY VIABLE unless it is supported by tax redistribution and then it is only viable in small scale. Any scheme to widely subsidize Wind/Solar/Etc would result in MASSIVE NEW TAXES to pay for it all.

 

[Indy317]

High gas prices will eventually turn people to other options, but folks should be taxed now just because "we will eventually run out of oil." I had an environmental teacher/prof in my college Geology class. I thought for sure the guy would go on a rant about oil, alternative energy, etc.. This was back in the mid-90s, so this whole global warning thing, now called climate change, was just starting to take hold. He surprised me at his comments. He said peak oil isn't an issue. He said humans will always adapt, and that once oil starts becoming rare, he predicted human ingenuity and technology would make oil a non-issue.

The thing is, in order for solar and wind to become cheap, lots of people have to be willing to buy from private companies. So the question becomes: Do we want government involved in energy, forcing higher taxation now, or do we want energy left for the most part in the private sector? I like the idea of private sector, as profit is what will drive innovation. If government gets involved in energy, advancements will take decades longer, prices/taxes won't be any cheaper to pay for it, etc..

Let the private companies deal with this. Make sane choices about where we can drill and such, not just stop all drilling all at once. Eventually everyone will be buying solar panels, batteries, and inverters for their homes. Nuclear energy will be providing electricity during times when solar isn't 100%. Nuclear will also likely be powering electric interstate transit lines, which is how goods will be moved over most of the country. Cars will still be around, but they will be electric powered. Battery innovation will continue to advance and make this a reality. All one has to do is look at cell phone batteries and how they have changed over the last 15 years.

 

[jon5212]

^^^ When people think that other people should be "taxed now" "just because" for any reason that means our country is doomed anyways with people who will put up with more and more government intrusion and more "taxes."

 

[E5RANGER375]

The answer can be found in Obama Chief of Staff Rahm Emanuel's now-famous words, "You never want a serious crisis to go to waste -- and what I mean by that is it's an opportunity to do things that you think you could not do before."

and dont think for a second that the government doesnt create or allow these "crisis" to happen to help further agenda they want. both republican and democrat presidential administrations have done it.

 

[irishfan]

Gas needs to be expensive. As long as it remains cheap enough no real research will be spent to get away from it. Bring it on.

I hate the idea of paying more for gas but you are right. If people and the economy aren't forced to look into another direction then it will never happen. In the last 2-3 years there have been great leaps in technology to get us away from oil but they fall to the side when prices stabalize. Unfortunately, it is going to take $6 gas to get people to be willing to look for other fuel sources but by then we will all be broke.

 

[Leadeye]

Every time I look at alternative energy I don't get the complete picture. What are the operating costs, maintainence, and expected life of wind turbines? You have to find the costs minus the government credits as they distort the bottom line.

Ethanol seems to be a handout to farm state politicians to get them on board other projects.

Photovoltaic cells look low maintainence but don't know thier life span, or how ther effiency changes over lifespan.

Hard to find the fact in all the promotion.

 

[NordicHeathenVinlander]

So when gas hits 7, what do you guys speculate O's approvel rating will be?


Im think 10% Just enough for the die hard liberals.

 

[indykid]

Why is it that as soon as there is a crude oil problem, the first thing attacked is the good old gasoline that our cars use? People forget that petroleum is used for other things like that computer keyboard you are typing on, many medications for burn treatment are petroleum based, plastics used in virtually everything in your house is petro based.

There is so much more that we make/use from petroleum than gasoline it isn't funny, yet every time people complain about how much petroleum we use in the USA, gasoline is the only thing mentioned? How about home heating oil mainly in the New England area? Vinyl siding on you homes?

I really am tired of seeing the automobile being a scape goat. We need gasoline powered cars that refuel quickly because we don't live in a country the size of Germany, which would fit and get lost in Texas alone. The USA is HUGE compared to most other countries, and being as advanced as we are, and as free as we are, gasoline is virtually impossible to beat in a long distance capable vehicle.

 

[3gunshooter]

I looked at solar panels for my house it was about 30,000. There is no way i could recover the cost of that. As far as gas at 7.00 a gal. not everyone has good jobs some people like myself have to drive 30 + miles to work I am lucky to have a good job but a lot of people do not. When gas got be 4.00 we all seen what happened it put a hurt on everyone. We have our own oil we just need people with balls in our government to go and get it. Who is going to buy all this green crap when nobody can afford it. That is what is typical of the morons we have in Washington they think if you pass a bill the problem goes away. As we all know it just makes thing worse

 

[match14]

I agree with 3gunshooter, if gas gets to $7.00, we'll be so poor that we won't be able to afford the new "alternative energy stuff". What I think will likely happen is that the government will, as some others have already stated, issue vouchers. I foresee vouchers/credits being issued for fuel, food, and utilities, which will just give the government a greater degree of control over people's lives.

 

[3gunshooter]

I agree with 3gunshooter, if gas gets to $7.00, we'll be so poor that we won't be able to afford the new "alternative energy stuff". What I think will likely happen is that the government will, as some others have already stated, issue vouchers. I foresee vouchers/credits being issued for fuel, food, and utilities, which will just give the government a greater degree of control over people's lives.

I think if it does happen the economy will most likely die a even quicker death. I think if vouchers where given out it would be to the wrong people as it is most all the time and the working American will pay for it. Oil companies are not evil they have big profits because they deal with a product that is a necessity to modern day life. Plus it takes a lot of capitol to seek out new places to drill since they can't get to the easy stuff. It really burns me, this is the one thing that we all use and it needs to hands off by big brother. Sorry for the rant.

 

[Indy317]

I really am tired of seeing the automobile being a scape goat. We need gasoline powered cars that refuel quickly because we don't live in a country the size of Germany, which would fit and get lost in Texas alone. The USA is HUGE compared to most other countries, and being as advanced as we are, and as free as we are, gasoline is virtually impossible to beat in a long distance capable vehicle.

Unless we do something along the lines of nuclear powered electric high speed rail, eventually you won't be able to afford traveling across the USA. While the USA maybe a bunch of nation states joined as one country, Europe is essentially the same thing with the Euro and European Union. Basically, we need to do what France has done: Build the most safest and reliable nuclear power plants. Use the military for waste recycling. Close most of our overseas bases and use that money to recycle the waste.

Unfortunately, things in a free market system won't change until there is a financial benefit to the consumer. When the government comes in and forces the change, when it isn't financially viable to the consumer, that really doesn't help. There is almost always a corresponding tax or user fee, so while the new and improved whatever might be an advancement, the end user is still paying.

Our country has been developed based mostly on payoffs, bribes, etc.. We have one truck, one container shipping cross country mostly due to auto makers, unions, and oil companies. What should happen is that the world should come together and develop one style of shipping container. It should be the kind that can be lifted from a boat and sat on a train or semi-tractor. Such containers going over mountain areas could be taken by truck to the heartland area, where the container is once again lived and placed on a train. Unfortunately we have no long rang planning in place. Our major cities allowed lots of suburban areas to pop up, so now what?

 

[Lucas156]

I've investigated solar hot water heat for my home, the largest solar company making the kits told me it didn't make economic sense for me to do it because solar is too expensive.

I've investigated wind power for electrical generation, that too is a no go unless I want to invest roughly $12,000 to save about $100 per month. Again simply too expensive. And the $12K price tag is based on using 2 of the most efficient and cost effective rotors, 1 inverter, and no battery system. Add batteries or use less efficient rotors and the costs can skyrocket.

I think you're cool guy melensdad but I'd like to throw this out there. Is it possible that less energy can be used? People complain that solar costs too much to sustain their current energy use so maybe the problem isn't with the cost but with the amount of energy use. Being self sustaining may be worth the sacrifice of using less energy.

 

[RockofStrength]

The issue of higher petroleum prices will kill you in the grocery store long before it will become economically unfeasible to drive. You think high gas prices suck for you? Imagine the farmers who use petroleum based fertilizers, diesel for tractors etc and then the distributors who ship your food from wherever to your supermarket. Get some gardens started and grab a few rabbits and chickens, folks. They'll be worth more in the years to come if things keep going as they are.

 

[miguel's sister]

The issue of higher petroleum prices will kill you in the grocery store long before it will become economically unfeasible to drive. You think high gas prices suck for you? Imagine the farmers who use petroleum based fertilizers, diesel for tractors etc and then the distributors who ship your food from wherever to your supermarket.

It isn't just the price of food that is rising, but everything else as well.

I disagree with the thought that fuel prices need to skyrocket in order to consider alternative energy sources. Let the market for this evolve naturally instead of being forced on us by the government.