The Oil Drum

There was an interesting juxtaposition today in that, when the President was asked about energy, the exchange went (from the transcript).

Q Thanks. Mr. President, what do you say to people who are losing patience with gas prices at $3 a gallon? And how much of a political price do you think you're paying for that right now?

THE PRESIDENT: I've been talking about gas prices ever since they got high, starting with this -- look, I understand gas prices are like a hidden tax. Not a hidden tax, it's a tax -- it's taking money out of people's pockets. I know that. All the more reason for us to diversify away from crude oil. That's not going to happen overnight. We passed law that encouraged consumption through different purchasing habits, like hybrid vehicles

-- you buy a hybrid, you get a tax credit. We've encouraged the spread of ethanol as an alternative to crude oil. We have asked for Congress to pass regulatory relief so we can build more refineries to increase the supply of gasoline, hopefully taking the pressure off of price.

And so the strategy is to recognize that dependency upon crude oil is -- in a global market affects us economically here at home, and therefore, we need to diversify away as quickly as possible.

The response seems to feed to the Saudi position that they have plenty of oil, if only we users would provide the refineries that could use it.

At the same time Darwinian and Totoneila draw attention to the strange case of the Shrinking Refinery. Apparently the BP Refinery at Texas City, which pre-hurricanes had a capacity of 460,000 bd, will no longer produce at more than 300,000 bd.

Well, let's see I have put on the helmet, the breast plate, the greaves and all that stuff, and so perhaps I might be armored enough to tip-toe into the debate about oil sands and oil shale. Tonight will be oil sand, if I survive and recover, then (after reading a few more scientific papers) I will tackle oil shale.

Just recently there has been increasing attention paid to the heavy oil sands of Alberta. Perhaps, as in the case of the Washington Post more negative than positive. And it is interesting to note, from the tone of those pieces, that it is now apparently more desirable to have your rivers flow over and through tarry sand, than to have the sand cleaned and replaced, along with the river. But it is not that argument that I would follow, but rather, OGJ having come out with a Supplement on Canadian Oil and Gas, to briefly comment on one or two of the features of that report. (Which apparently will take a while before it appears in the electronic version of the magazine).