Tuesday Open Thread (updated w/ pre-SOTU info)
Posted by Heading Out on January 31, 2006 - 12:44pm
Topic: Miscellaneous
For your pleasure . . . .
Update [2006-1-31 18:15:26 by Super G]: NY Times reporting: "Bush to Say 'America Is Addicted to Oil' in Speech".
President Bush plans to tell Americans tonight that they must not retreat from challenges at home and abroad, that they make the economy of the United States the best in the world, but that they must break a national "addiction" to oil."In a complex and challenging time, the road of isolationism and protectionism may seem broad and invited, yet it ends in danger and decline," Mr. Bush says in his State of the Union address, according to excerpts issued in advance by the White House.
My guess, they will cut exports, no tanker attack (yet), gas prices at about 3.15 on Friday
-Stop the Iran war-
Here is a question for the Geo-politically minded people out there.
What is up with China and Russia?? What caused them to all of a sudden support the UN Security council recomendation for Iran to be dragged before the council.. I thought there would be NO WAY that either of them would support this measure. What do you think happened in the back rooms?? Promises of oil rights to Iranian oil fields in the future? Maybe we said, "we get Iraq and you get Iran, and we all go home hapy"....
What do you think?
Robert NW Ohio
http://tinyurl.com/d8zpr
The brains behind the new world geo-strategic map that is being drawn is Thomas Barnett. It is called The Pentagon's New Map. The globalization map can be seen below:
http://tinyurl.com/9ya2u
To begin to understand the current landscape you have to first understand we have all been conditioned to view the world in a bipolar way. There is a "good" and a "bad" and to us the US represented the good. The world is shifting to a unipolar landscape. There is no more "bad" and "good". All the major economic nations are working together to close the gap, containing all the energy and natural resources, and unite the globe. The US is basically a global police force, called by Barnett, the leviathan (why do you think we spend more on the military than the entire world combined?). As the strategy evolves they are beginning to form a Sysadmin force that will stabilize counties after the leviathan has toppled the noncompliant government.
China, Russia, and the US (Functioning Core) are using government sponsored "international terrorism" to seduce the global population under a blanket of fear. They are working as a team to close the "gap" and unite the world under a global federation...
Real Player presentation:
rtsp://cspanrm.fplive.net/cspan/project/ter/ter122004_barnett.rm
==AC
The OFFICIAL PARTY LINE, WAR IS PEACE;
"Security that American military strength provides is as important as any of those other flows. If you remove that security, you will feed the disruption of the flow of people, investment, and energy. Walls will go up and globalization can be killed. That is one thing that the American public does not understand. Our export of security is one thing -- it does not mean exporting arms. It means paying attention to mass violence around the world. The Department of Defense is the world's largest consulting force. It goes to where the "client," so to speak, lives. The American public only wants to hear about the exit strategy. But "the boys" are not coming home until we make globalization truly global. People don't want to hear about that long-term effort.
People might say a "happy ending" is naive, but there is enough in the book for me to show that I am not "a wooly-headed peacenik." I come from the world of national security -- I work at the Naval War College -- I can say that there is a happy ending if you have the courage to recognize the path that lies before us and the tremendous opportunity that lies beyond. The society is on the verge of eliminating war as we know it. That is what the book seeks to describe."
Tom Barnett
http://tinyurl.com/93w2o
http://en.wikipedia.org/wiki/Carter_Doctrine
Your point however is not weakened, rather it is strengthened because of the more recent G. W. Bush doctrine.
http://en.wikipedia.org/wiki/Bush_doctrine
There has been no president more supportive of Israel than GW Bush, Iran has threatened Israel with nukes. Israel has threatened to attack Iran before Iran can deploy nukes. There is no doubt in my mind that Bush will take action before Israel does. His Axis of Evil has three members: Iraq, Iran and North Korea. Iran is next. Its leadership apparently wants confrontation - their connection with reality is clouded by mystic beliefs. I suppose the Iranian liberals boycotted the last election in the hope that this would come about. AIPAC (American Israel Public Affairs Committee) is already beating the war drums:
http://aipac.org/iran/
And because of the Israeli lobby in DC, war opponents in the US are muted:
http://www.antiwar.com/justin/?articleid=8428
As has been pointed out on TOD, the West and other economic powers have Strategic Petroleum Reserves, which have been prepared for military emergency - the US has more oil in its SPR than at this time last year:
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/curren t/txt/table1.txt
It is indeed striking that Russia and China are going along with this. But that might be a result of America's conduct of the Iraq War and subsequent occupation. Their worst fears were not realized - an exclusive takeover of the oil fields. Russia benefits greatly from high petroleum prices. China puzzles me, but economic ties with the US may play a part.
How will our major media connect the dots? Will we get a legitimate story or will we be treated to news clips of Iranian mullahs? I don't expect to see vids of lumbering SUV's cruising for E80.
Light crude prices seem to be having a difficult time holding above $68/bbl, but like a moth to flame can't stay away from that level. The too easy story to my mind, is that this price premium is driven only by geopolitical anxieties focused on Iran and Nigeria. The price to problem corelation is not strong enough, to my mind. (I imagine that traders are catching on to the underlying geological supply problems and reading Staniford et al. late at night on TOD.) Anyway, the real surprise is that prices have held up to the extent they have. Why?
Incidentally, gas prices in Eastern Maine are drifting down and have no relation to crude prices, just yet.
So they will only try to threat, trying to influence as they can the price but I bet that there are other underlying causes to the raising prices than the geopolitical fears ...
1.) America impeach Bush while they comb the junkyards for used Volkswagen parts as Ford and GM disappear into thin air,
2.) US interest rates climb to 30% to finance purchases of sky-high SUV food supplies while American Airlines, Delta and Southwest... stop flying then go broke 6 months later.
3.) or what?.. France nukes Israel (or US) in response to <whoever's> use of tacticle nukes in Iran?
4.) OK! I don't know what, but one thing is a sure bet; Something ugly is going to move very far to the right on the probability curve.
Welcome to the "Real War on <Oil> Terrorism". Osama is just a neighbourhood gang player in this one. Iran got everybody by the short hairs with this nightmare "End of diplomacy" play.
To me it looks like Iran gets nuclear power... hands down, or you/we get 1 and/or 2 maybe 3 and certainly 4.
Hey, what the hell, maybe the State of the Union Address "When America leads, America wins" will cheer everybody up.
Iranians can't afford not to sell their oil. If they take their production out for a while, it wouldn't be long. They might sell it to China, but that would diminish the pressure for overall competition.
Bush impeached ? Which purpose would that serve ?
France nuking Israel or USA ? I've heard that before. But Chirac's speech really mean't : Dear George, I'm back with you. Don't forget his minister, Mr Sarkozy, went to school with the neocons.
If oil price rallies over a short period, dollar will fall back, and USA will export again like ever. Who would take profit ?
They won't take out any tankers, but they surely might not send any out either.
Buy futures before then! Ya the risk is priced in now, but its only the probability, NOT the certainty.
Heating Oil
Gasoline/Diesel
Jet Fuel
Plastics
Lubricants (let's stay serious here folks)
Fertilizer
Conversion to Electricity (Utilities)
I'm sure there are many others...
Please includes thoughts on substitutability with other methods/end products and how scaleable they are.
Since we hit Peak Oil for light sweet in 2000/2001, the supply & cost of bunker fuels has been better than for higher end product. The yield of bunker fuels from heavy oil is higher than for light crude oils.
Other uses for oil products for electricity and industrial heat can be rapidly substituted.
Limited subsitution for home heating can be made with natural gas and quite limited substitution with wood.
However, this winter has shown a good price elasticity of demand for heating and natural gas in general. In late December, we were actually STORING NG for one week.
An interesting crunch will come in demand for NG to extract tar from Canadian tar sands. 2,000 cu ft/2 million BTUs of NG per barrel of tar with current technology.
Is the barrel of tar equivalent to heavy sour crude in terms of refining costs?
Looks like an EROEI of about 2.5 before refining. Not very good. Even worse considering the value of NG.
Can superheated water from a nuclear plant hydrogenate the tar?
Better to build nuke (or wind) in Texas, California etc where high % of electricity comes from NG, substitute uranium or wind for NG, ship NG to Chicago to substitute for Canadian NG for tar sand use.
Strip mining is a mobile process, moving from site to site. Nuke reactors (except USN) are not mobile. Major issue to feed nuke plant site with enough tar sands for 40+ year life of reactor.
How important is kerosene in the U.S. or is that under jet fuel?
What is needed here is a breakdown by category or product in terms of its percentage "take" of oil produced. For example, gasoline consumes approximately 45% of oil produced.
Once the list is completed, then we can see what can be done in terms of each category.
Hmm...Buy some Gold?
Now you're talking :-)
But seriously. Exxon could start, as peakguy says, by investing in renewable energy, and a nice second attempt would be at cleaning up the environmental disasters that they've sometimes left behind.
As for the price controls that Leanan mentions from a CNN poll, please. We really need a better information campaign explaining why this is such a crappy idea.
They actually did pass price controls in Hawaii. (Yes, even with a Republican governor.) They are not '70s price controls, and don't seem to be hurting. Not sure they're helping, either.
Letting the price rise may be the easiest way of creating demand destruction, but politically, it's fraught with peril. I expect there will be a lot more people demanding price controls or windfall profits taxes in the years to come.
http://money.cnn.com/2006/02/01/news/economy/oil_specter.reut/index.htm