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coma
Saw this article this morning. Interesting. Something has to change at some point, doesn't it? Apparently it did in 1980.

http://www.cnn.com/2008/US/04/24/beck.oil.prices/index.html

QUOTE
NEW YORK (CNN) -- If you're a poor sap who needs to eat or drive in the near future, then you might want to consider taking out a second mortgage (assuming you could even get one) pretty soon.

Food and gas prices have been all over the news lately, and even a big dumb rodeo clown like me can see that it's all connected. Our policies, which try to cater to everyone from oil company executives to environmentalists, end up benefiting no one -- and now we're all paying the price.

I know that real economists probably will say that the causes of these skyrocketing prices are extremely complicated to understand, but the truth is that it's actually pretty simple: We've done this to ourselves.

I don't know if it's because of our arrogance, our stupidity or maybe both, but I believe that history may one day judge America as the most suicidal superpower of all time. After all, what country that cares about its future would do what America has done to its supply of food and fuel, two of the most critical things that any civilization needs to survive?

For example, look at the way we treat our food supply. We've spent decades giving billions of dollars in government subsidies with incentives for the wrong things, we've mandated that huge areas of farmland stay open for "conservation" and we're using grains that could feed tens of millions of people to make a crappy biofuel that you can't even buy anywhere.

That's not arrogance?

Our fuel policy has been even more absurd. We're completely dependent on foreign countries, many of whom hate us, to keep our trucks moving, our planes flying and our homes warm.

That's not arrogance and suicidal stupidity?

Take a look at the top five countries we currently rely on for oil imports. You tell me if these are the five you would choose if you were creating your own world superpower from scratch: Canada, Saudi Arabia, Mexico, Nigeria, Venezuela.

Aside from Canada, that's not exactly a "Who's Who" list of stable, America-loving countries.

And if you think I cut off the list at five because the next five are so friendly, think again. Here's the next five: Iraq, Angola, Kuwait, Colombia, Ecuador.

The point is that we don't control our own destiny, foreigners do. Despite bipartisan hatred for high oil prices, they've gone up 49 percent since 2006. If we could've done something, anything, to stop that, we would have. But the sad fact is that we can't.

That's why, instead of offering real solutions, most politicians offer something else: blame. Democrats blame Republicans, Republicans blame Democrats, and nothing ever gets solved. President Bush provided a good example of that last week when he was asked about high oil and gas prices.

"We've had an energy policy that neglected hydrocarbons in the United States for a long period of time, and now we're paying the price. We should have been exploring for oil and gas in ANWR, for example," he said. "But, no ... our Congress kept preventing us from opening up new areas to explore in environmentally friendly ways. And now we're becoming, as a result, more and more dependent on foreign sources of oil."

Personally, I think the president is right; we should be drilling in the Arctic National Wildlife Refuge. In fact, we should've been drilling there a decade ago, but that's not the point anymore. Opening ANWR now would be like stopping at the bathroom on your way to the electric chair; you're only delaying the inevitable.

Should we still do it? Yes. Frankly, we need all the time we can buy ourselves to find a long-term solution; our nation's very survival is at stake. But ANWR is not the answer, it's a Band-Aid, and I worry that our shortsighted politicians would use it as an excuse not to look for viable replacements for oil, which is what we really need.

Fortunately, there is some good news in all of this: Oil prices this high mean that a lot of formerly dismissed alternatives will finally make good economic sense.

For example, back in 1980, Congress passed the Energy Security Act, which led to the creation of something called the Synthetic Fuels Corp. (SFC). Lawmakers provided SFC with up to $88 billion in loans and incentives to get started (the equivalent of about $230 billion in today's dollars) with the goal of creating two million barrels a day of synthetic oil within seven years.

So why aren't you putting SFC oil into your SUV right now? Well, it turns out that members of the Organization of Petroleum Exporting Countries didn't appreciate the competition so they started bringing down the price of oil. From 1980, when SFC launched, to 1986, when it was shut down, oil went from more than $39 a barrel to less than $8 a barrel. Suddenly, synthetic oil didn't seem so important anymore.

In announcing the SFC's closure, then-Energy Secretary John Herrington said that oil prices had simply dropped too low to make it a viable business.

But the good news is that those economics don't work anymore. The state of Montana, which is leading the synthetic fuel charge, says we can now make it for somewhere around $55 a barrel. That's more than a 50 percent discount from what it costs to buy the real stuff.

It's the opportunity of a lifetime, a chance to use OPEC's price gouging and monopoly against it.

So let me be the big, dumb rodeo clown once again and ask the obvious question: Why aren't we doing it?
jelsey
"Glenn Beck for President".

I heard this guy for the 1st time during the Terry Schiavo debacle. Liked him then, like him now. The man speaks from the gut, and more often that not, he speaks for me, "Mrs. Middle America".

Bravo for Montana, I hadn't heard this before, I admit, I'm woefully un-informed regarding alternative fuels.

I heard or read something last week that really stuck with me, it had to do with health care however, not fuel, it was "America is the richest third-world country on Earth".

Damn, hadn't thought of it that way, but when I DID think, I had to agree. Sad. Just sad.
jburrs1715
QUOTE (coma @ Apr 28 2008, 11:28 AM) *
Saw this article this morning. Interesting. Something has to change at some point, doesn't it? Apparently it did in 1980.

Agreed Coma. Good article. I bet the mere discussion of starting this program again would bring down oil prices almost immediately.
Metzger
Nice post. You can't have ethanol without killing poor people and you can't have electric cars without nuclear reactors. Hope we come to our senses soon.
Snoopy
I doubt it, J.

Capitalism would have already ridden to the rescue if it were easy and profitable to convert coal to oil. I like Beck, but he is short of facts for this one. Show me.
BMIC
QUOTE (coma @ Apr 28 2008, 11:28 AM) *
Food and gas prices have been all over the news lately, and even a big dumb rodeo clown like me can see that it's all connected.

So a big dumb rodeo clown is the best CNN can do for an economic commentator? Wow they sure have gone downhill!
Yossarian
OPEC is nothing more than a bunch of economic terrorists. They've found a good way to shove it to the USA.

Are there any countries that we get our oil from, that are friendly to the U.S.?
Patton
Canada, as was stated above.
azurewinds94
Actually it is my understanding that the two leading sources of oil we import are Canada and Mexico. Funny how we are sandwiched between the two countries yet can't seem to drill our own oil. As for converting coal to oil, the Germans did it during WWII so it can't be that difficult. Don't know how clean it burns, could set off the environmentalists, but then what doesn't?
SMan
I had always read that synthetic oil wasn't economically worthwhile. The Nazis only used it because their fossil fuel supplies were being destroyed or retaken by the Allies.
jburrs1715
I think now that crude oil is $120 a barrel, synthetic oil is very much a possibility considering other countries are already moving in this direction...have been for years now. I imagine if we wait it out, once oil prices reach $150-$200 a barrel, synthetic oil will be a no-brainer.

On the other hand, maybe we will just let the Chinese beat us to the punch and take advantage of this future industry so we can become slaves to them as well as the Middle East.
SMan
We certainly have enough coal to give it a go.
Snoopy
QUOTE (jburrs1715 @ Apr 28 2008, 02:51 PM) *
On the other hand, maybe we will just let the Chinese beat us to the punch and take advantage of this future industry so we can become slaves to them as well as the Middle East.

Unless the Chinese take all of our coal rolleyes.gif how would we become slaves to them even if they start doing it first?

If it is so economically advantageous to do it now why isn't "big coal" building coal to oil plants now? Someone please splain that to me.
BMIC
I've heard that Canadian oil sands are now economically viable, and the associated deposits are immense. OPEC should be VERY nervous.
Snoopy
QUOTE (BMIC @ Apr 28 2008, 07:56 PM) *
I've heard that Canadian oil sands are now economically viable, and the associated deposits are immense. OPEC should be VERY nervous.

I'd love to see evidence of that, but I have not yet. Have you?
BMIC
QUOTE (Snoopy @ Apr 29 2008, 11:37 AM) *
I'd love to see evidence of that, but I have not yet. Have you?


http://www.energy.gov.ab.ca/OilSands/oilsands.asp

QUOTE
Second only to the Saudi Arabia reserves, Alberta's oil sands deposits were described by Time Magazine as "Canada's greatest buried energy treasure," and "could satisfy the world's demand for petroleum for the next century".
...
In 2006 Alberta's oil sands were the source of about 62 per cent of the province's total crude oil and equivalent production and about 47 per cent of all crude oil and equivalent produced in Canada. Over the last four fiscal years, from 2003/2004 to 2006/2007, oil sands development returned $4.276 billion to Albertans in the form of royalties paid to the provincial government.


If you want firmer evidence than that, I guess you need to grab yourself a shovel and head on up to Alberta!
SMan
Let me sneak in a book recommendation if the talk in this thread interests you.

The Prize : The Epic Quest for Oil, Money & Power

It covers from the first discovery of oil deposits, the forming of the major oil companies, the rise of the Middle East production, through to the turn of the century. Great insights on the business and science of oil.
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