Has OPEC Lost Control?
OPEC wants to prop up the dive-bombing price of oil, to keep their bank accounts flush with fresh cash. Russia is also feeling the pinch, as the rest of the world decides it _can_ live on less oil than previously consumed. OPEC would like Russia to join them in cutting output, in an effort to bring prices up.
Opec has been eagerly trying to recruit Russia to join its efforts and analysts say together the two could announce a further reduction of as much as 3m barrels a day of oil production within the next week.
Chakib Khelil, Algeria’s oil minister and Opec’s president, told state radio on Thursday there was a consensus among Opec members to reduce production when they met in the Algerian seaside town of Oran on December 17. He said: “The Oran meeting will decide a severe production cut to stabilise the oil market.”
Time will tell if they can woo the worlds consumers back to heavy consumption at the same time they bring prices back to “normal” profitability. If they are successful at turning this train around, then it’s likely the run-up and recovery of recent history were always under OPEC control - then what does it say about their intentions, as America teetered on the brink of the housing investment crisis in an election year…
What do you think?
OPEC Promises “Significant” Cuts - Again.
OPEC is to meet again on December 17th to mandate their members turn back their production output valves, in an effort to bring the price of oil up from it’s current lows.
OPEC President Chakib Khelil, who is also Algeria’s minister for energy and mines, told the Associated Press that a consensus has emerged among OPEC producers that a “significant reduction” is warranted by the current price slide.
Khelil would not discuss specifically how deep the cut might be. But he used the word “severe,” and noted that some analysts have predicted cuts of as much as two million barrels a day.
OPEC previously announced a 1.5-million-barrel-a-day reduction in October, but the decision failed to halt the fall in prices and markets have been expecting another cut at the Dec. 17 summit.
Why not keep OPEC on the run - regardless the price of oil - conserve as much fuel as possible w/o degrading your standard of living. Use resources like FuelClinic.com ( http://www.fuelclinic.com ) to learn to conserve and track your progress.
Continue to demand alternative sources of energy for your personal transportation. Demand “future-proof” FLEX-FUEL capable cars to take advantage of ethanol and methanol mix fuels w/o expensive new equipment, demand plug-in hybrids that charge overnight using clean electricity, demand small clean diesel engines that can run on bio-diesel that can be produced from algae.
Consumers cut consumption as a result of summers painful fuel costs - and pulled the rug from under OPEC, causing oil to “crash” back down to market value. Keep it going even lower by continuing to curb consumption, and keep pressuring government and industry to bring to market ways we can _replace_ most of oil from our transportation requirements.
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A Real Plan for Automakers and America
Congress will likely consider a “bailout” for the auto-industry today, Monday, Dec. 8, 2008. It is an opportunity for Flex-Fuel legislation (Open Fuel Standard Act) to pass as well.
Congress should require that new cars run on any mix of gasoline and ethanol and methanol. As a reminder, in the war on oil-dependence, this would be a game-changer.
The facts:
1) Flex-fuel is an inexpensive, proven technology.
a. Cost is $100 per vehicle for new cars.
b. The original flex-fuel vehicle was the Model-T (for 17 years).
c. The US auto industry currently has over 4.4 million flex-fuel cars on US roads (but few would know it).
d. Brazil consumes ethanol (from sugar-cane) for over 50% of its fuel requirements.
2) The cost of oil will rise again
a. OPEC has already cut production by 1.5 million barrels per day.
b. And is considering an additional cut of more than 2.5 million additional barrels per day (later this week).
c. Demand for oil from China and India, with vastly growing middle-classes, inevitably will rise again.
d. The easiest to extract oil on earth has been tapped, and it gets more difficult as time goes on.
e. Oil is still $30/barrel higher than its 10 year historic low.
3) National-security demands that we reduce our dependence.
a. Russia, Venezuela, and OPEC are repressive, regressive, and often anti-American oil exporters.
b. We fund their misbehaviors and we end up supporting terrorism.
c. We cannot hope to modify the goals of a nuclear-intentioned Iran when we are so dependent and while they control the waterway through which 20% of world’s oil passes daily.
4) Economic strength demands that we reduce our dependence.
a. We are exporting millions of jobs that could otherwise be producing our fuel domestically.
b. We could be “recycling” these domestically spend dollars-at a time in which we need it so badly.
c. We could be developing the technologies that will fuel the future of the energy marketplace globally.
5) Many solutions.
a. We also need solar, nuclear, wind, and drilling.
b. But we need Flex-Fuel biofuels NOW as the surest short-term path to addressing our dependecies and to create security and economic strength.
c. The best time to get the auto-makers to cooperate is while they need a “bailout”.
6) Please, contact your Senator today–not tomorrow.
a. Call (202) 224-3121 and ask to be transferred to your Senator’s office.
b. You can make a difference with just a phone call.
c. Call both of your Senators.
Reprinted w/ Permission from MoveBeyondOil.org
E-mail: info@movebeyondoil.org
Phone: 516-717-0000
Why Conserve When Gas is Cheap?
I’ve been fielding some questions lately from friends and relatives about the importance (and sensibility) of fuel conservation at a time when the price of oil is dipping below $50/bbl and a gallon of gasoline costs less than $2/gal.
It was just 4 short months ago that the gasoline seemed destined for $5+/gal, and the cost of a barrel of oil was sure to climb to over $200/bbl. American consumers are enjoying “cheap gas” again, and some are already questioning the painful lessons of the summer. (For the record, gas prices are still twice as high as ten years ago when a gallon of gas cost you right around $1/gal)
Here are my thoughts:
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This too shall pass. Oil prices will not remain low for very long unless there is a major shift in the way our transportation sector is powered. Our dependency on oil is still nearly absolute, and there are major forces already acting to raise the price of oil.
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OPEC is cutting production by millions of barrels per day. In the past these kinds of cuts were successfully used to raise the price of oil world-wide. (I say “in the past”, read below…)
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Focusing too closely on the cost of fuel at the pumps today or in recent weeks ignores the inherent weaknesses in the capacity of our existing production, pipeline, refining and distribution systems. If consumers return to unbridled consumption, there is stil not enough capacity to meet that demand.
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Security experts have warned that one successful attack on major oil infrastructure can still have catastrophic effects on supply, which will immediately drive the costs to record highs.
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Improving fuel-efficiency appeals to a diverse group of people; including the penny-pinchers, environmentalists, and the national security hawks. The low cost of oil actually worries two out of the three, and the third is still feeling compelled to save.
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Environmentalists fear that cheap gas acts as a green-light to consumers to continue to buy gas-guzzling and CO2 belching SUV’s they don’t really need, and to slip back and continue wasteful consumption.
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National security hawks understand that the market is fragile and is still run by countries and organizations that openly wish to do us harm. Low-oil prices do hurt the war-chests of some state sponsors of terrorism and radicalized Islam, but these same players have enjoyed several years of record profits and have amassed enough fortune that they can wait-out any temporary drop in oil prices. We only reach security goals by replacing oil-based fuels with alternative sources of fuel and energy.
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And still the penny-pinchers need to save money. The economic trouble that exists alongside the cheap oil prices means that money is still tight, in spite of cheaper fuel.
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- The real damage to our economy is not yet realized, and we’ll need to continue to conserve and produce alternative sources of energy just to survive.
Personally, I think that the oil cartel has overplayed their hand. I think world-wide consumer confidence is shattered, and there will be a period of suffering for oil producers as the rest of the world works to replace them.
I think more than anything, last summers outrageous jump in fuel costs was an education for Americans, that our system truly is out of control, and that it’s not sustainable. It was an expensive education, to be sure, but one that may pay dividends as we continue to conserve as we develop and implement replacement technologies and fuels to ween ourselves off the oil tit.
US Govt gives automakers $25B in loans; drops fuel-efficiency mandate
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By Peter Forman |
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The United States continues to “perpetuate” a broken auto industry. Because of pressure from Detroit, unions, and Michigan lawmakers, the “Big Three” auto makers have been insulated from the real market-place of competition for the past 30 years. The Japanese and Germans have figured out how to build cars in the American South profitably–but not the Big Three. That’s fine and good except now we have a completely broken auto industry that is unable to compete. Now exposed to declining demand and lacking access to “cheap” capital, they are likely to disappear in their current forms–even after we spend untold billions in short-term assistance. The move, aimed at ending what the White House called partisan “gridlock,” represents a significant escalation in the political battle over aid to the Big Three auto makers. This is ahead of an expected showdown next week in Congress between Democrats and Republicans. While we are unlikely to ever see a return of these funds, the car companies could at least agree to manufacture all cars beginning in 2012 with flex-fuel compatibility and continues progress towards EVs (electric vehicles). Without at least those commitments, what will we have to show for this “investment”? Demand that your Congressperson and Senator act–call today! |
Used w/ Permission: MoveBeyondOil.org
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Citizens for Energy Freedom Founding Conference, January 2009 at Florida Atlantic University
Join me at the The Citizens for Energy Freedom Founding Conference this January at Florida Atlantic University for the founding meeting of this new grassroots energy-independence campaign.
The Citizens for Energy Freedom Founding Conference
January 17th & 18th, 2009
at Florida Atlantic University, Jupiter, Florida
Announced last month at the Energy Freedom Summit in Chicago, this two day convention will feature a series of talks and panels by leading experts on energy, economics, technology, national security, and politics.
Invited guests include:
- Sen. Mel Martinez
- Sen. Bill Nelson
- Sen. Hillary Clinton
- and Former Speaker Newt Gingrich
If tailored after the Energy Freedom Summit, this will be an intense two day collection of industry and government experts at panels, presentations, discussions, and workshops focused tightly on educating and motivating attendees to help organize to support a workable energy independence plan. Bring a notebook!
Sign up today at the bottom of this page to reserve your seat at this conference.
I’ve already reserved mine. :)
What Should Obama’s Energy Policy Include/Exclude?
Senator Obama ran a brilliant campaign and yesterday a majority of Americans voted him in to the Office of the President of the United States. While there is certainly reason to celebrate today, in a few short months he will inherit a failed energy policy, one in desperate need of change – but exactly what kind of change?
The Obama-Biden comprehensive New Energy for America plan will:
+ Provide short-term relief to American families facing pain at the pump
+ Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future.
+ Within 10 years save more oil than we currently import from the Middle East and Venezuela combined.
+ Put 1 million Plug-In Hybrid cars — cars that can get up to 150 miles per gallon — on the road by 2015, cars that we will work to make sure are built here in America.
+ Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025.
+ Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050.
In the past Obama has been a friend of the ethanol industry, supporting the subsidies that enabled the young industry to flourish in his home state (and surrounding states) early by encouraging private investment and innovation. He recently said corn ethanol is not “optimal” when compared with sugar cane ethanol, a comparison that is not entirely fair, since corn ethanol production produces feed for livestock as a byproduct.
Will he continue to support the ethanol subsidies, and work to raise the “blend wall” on E10 from 10% to a higher figure? (Ethanol production is about to “cap” out due to the lack of market for it’s excess product.) There is no mention of the Flex-Fuel Vehicle in the bullet points above, although it would be the cheapest fastest method for reducing (in a meaningful way) America’s transportation reliance on oil.
So, besides encouraging fuel conservation and mandating FFV’s w/ the Open Fuels Standard Act, what else should President Obama’s energy policy include and exclude?
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