Why Isn't Obama Celebrating High Oil Prices?

Understanding the president's environmental inconsistency

It's about time the administration began taking on the ogres of the left's imagination seriously. Attorney General Eric Holder has formed the "Oil and Gas Price Fraud Working Group to Focus on Energy Markets" to expose the speculators, the gougers, and those fat cat millionaires. And if we can't confront make-believe distractions with "working groups," well, we are surely a nation in decline.

But of course, Holder will find the biggest frauds right in his administration, which—as a matter of policy, as a matter of faith—believes the price of fossil fuels ought to be extortionate and has done all it can to ensure it.

The left's "energy" initiatives of the past decade—the entire purpose of energy policy, in fact—have been aimed at artificially driving fossil fuel prices up to incentivize the bitter clingers to embrace the government's Utopian energy schemes. No secret has been made of it. In 2008, candidate Barack Obama was asked by CNBC's John Harwood, "So could the (high) oil prices help us?" Obama: "I think that I would have preferred a gradual adjustment." Sudden spikes are bad (politically speaking), but gradual price spikes? Helpful. That same year, current U.S. "Energy" Secretary (then just a zany professor) Steven Chu clarified that "somehow we have to figure out how to boost the price of gasoline to the levels in Europe."

Who says this administration doesn't get things done?

What we need are clean energy investments, properly inflated tires, Chinese-style rail systems—all free of the distraction of capitalism. Also, we must rid the nation of oil subsidies. This I completely support, as long as the funds are reinvested into projects beneficial for the struggling American worker, say, bike paths or public service announcements.

We all, you see, have to make adjustments. As President Obama explained, "if you're complaining about the price of gas and you're only getting 8 miles a gallon ... you might want to think about a trade-in." What kind of trade-in, sir? Let me guess. A $41,000 economy-class government-made Chevy vehicle (a real cost of 100K-plus without taxpayer support) that plugs into expensive government-subsidized energy produced by the sweet howling wind? Yes, these are the serious people.

Then, of course, there is all the profit-mongering we keep hearing about. The Congressional Budget Office reported that in January, federal and state fuel taxes sucked in about 48 cents per gallon for gasoline and 53 cents per gallon for diesel fuel. Government typically sees more profit per gallon of gas than the oil companies. At least the fossil fuel oligarchs—smart enough to control the entire world market but too dumb to do it more often—have the decency to provide a product before taking carnal advantage of us at the pumps.

Let's not forget the Environmental Protection Agency, which, as we speak, is in the process of rolling out the "the most far-reaching environmental regulatory scheme in American history," according to Time magazine. Using the Clean Air Act to regulate greenhouse gases—so, all useful energy—the EPA is trying to initiate cap and trade by fiat. It has to because even a Democratic monopoly in Washington was unable to muster the courage to launch this kind of assault on prosperity.

Complaints about our "dependency on foreign oil"—considering the fungibility of the commodity, where we get it from and how long it takes to increase production—seem to be nothing more than crowd-pleasing bipartisan talking points. Surely, there could be a useful debate on the topic, if this administration cared one whit about increasing production at home. The de facto moratorium on offshore oil drilling and the regulatory burdens placed on new production prove that any "dependency" on oil, not just the Middle East variety, is the real problem.

The administration, of course, isn't at fault when oil prices spike; it just seems to make matters worse. Or better, if you happen to be an environmentalist. So why isn't it celebrating? Though the left may be wary of the political consequences, it has been pining for high fuel costs for decades. So here they are. Let's see how the economy responds.

David Harsanyi is a columnist at The Blaze. Follow him on Twitter at davidharsanyi.

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  • Paul||

    "Oil and Gas Price Fraud Working Group to Focus on Energy Markets"

    Obama should have called it the "Oil Market Group for Winning The Future"

  • Paul||

    I'm still at a loss as to how anyone is for all this tax credit and deduction welfare. It's O.K. when the Republicans to dish out welfare to special interests, but god forbid we go along with it when the Democrats call them on it?

  • Paul||

    It's not OK when the GOP doles out corporate welfare. Welcome to the board... and libertarianism. Reason has some excellent coverage of this very subject.

  • Bingo||

    Sideboob!

  • Bingo||

    Oh wow, my sense of perception is off today, that's just regular ol' cleavage.

  • The Fringe Economist||

    I had no idea the government made so much per gallon of gas. This makes BP look like a saint in comparison.

  • Tony||

    Why do you ask questions to which you know the answer?

    Obviously higher fuel costs will harm the economy in the short term. Equally obviously, we can't continue burning fossil fuels forever. The solution would seem to be some kind of direct government action to see that investments are shifted from protecting the energy status quo to developing sustainable alternatives without doing too much harm to the pocketbooks of the middle and working classes.

    Or I suppose we could blather on like a lunatic and pretend that fossil fuels are infinite in supply, defining "useful idiot" for the industry status quo, while sniping at the people trying to find a workable solution for not doing so fast enough in the face of your total opposition.

    What's pretty clear is that there is no free market fantasy solution required or offered. It's just, keep dumping money into fossil fuels because the alternative might mean big government! And better the big government we know... even if it is killing the planet and is obviously economically unsustainable.

  • ||

    If fossil fuels run out, people will switch to something else. Not to complex there, Tony.

  • Tony||

    Thus proving that the market isn't very good at long-term planning. We know it will run out (meaning become economically infeasible). Hello, China and India. The least we could do is stop supporting the status quo with subsidies and free pollution allowances. The "free market" solution seems to be to inflict the most amount of pain possible for no good reason.

  • ||

    Tony, the problem is that to an ideologue doing things the "right" way is more important than doing things the way that gets the best result.

  • ||

    NEEDS MOAR STRAWMAN

  • Arcaster||

    Funny you should say that. Don't you advocate for the government taking care of the poor? Private charity gets the best results, but you want things done the right (government) way.

    http://www.cato.org/pubs/polic.....8n6-1.html

  • OO||

    tony - i would argue that cheap gas damages our national security. in fact, i would assess a variable tax to ensure the retail price never drops below a min

  • Paul||

    The "free market" solution seems to be to inflict the most amount of pain possible for no good reason.

    Like Apple's iPhone?

  • ||

    Thus proving that the market isn't very good at long-term planning.

    Oh no, there'll be no warnings at all. It will come as a complete surprise to everyone. We'll be shocked, I tell you!

    Seriously? Isn't it a bit early in the thread to be flying the moron flag?

  • prolefeed||

    It's almost like there's no futures markets in TonyWorld -- or no people making long term investments based on what they think will happen long term -- or no fossil fuels beyond the proven reserves found so far, because of course people will keep on searching for more reserves even when it isn't yet economically feasible to do so, until every last carbon atom has been found.

  • Fiscal Meth||

    In Tony world, which is not much different than Trumpworld on this issue, there wouldn't be much of a futures market because they would ban or punish prospecting and/or "gouging" which is precisely what gives people the message that something is running out and rewards competitors for finding alternative products. But no, Tony, markets don't "work" when politicians fuck with the signals.

  • ||

    Also in Tony world, there is no shale oil and no coal gasification. We have enough fossil fuel for a thousand years at BELOW what we are paying now, if only we were free to exploit it.

  • Jason||

    You're only demonstrating why government interference is a problem.

  • ||

    Shhh, he doesn't call it " interference". It's just government "problem solving".

  • ||

    Thus proving that the market isn't very good at long-term planning.

    Huh? United States agriculture and transportation mechanized itself without direct government input just fine. Matter of fact, Americans invented the concept for a nation on this scale.

    Can you imagine a central planner in 1890 seeing a network of roads connecting Americans everywhere using their personally owned, mass-produced automated horseless carriages powered by yet-to-be-invented overhead valve 4-stroke heat-cycle engines? C'mon man.

  • George||

    But the government did plan, build, and pay for the national network of highways.

  • KDN||

    They only did that well after personal transportation was already mechanized without government intervention. The point is that government is an inherently reactive force.

  • some guy||

    I believe we payed for the highway network. The government only planned and built them. And I'm sure private industry could not have done a better job. I mean, there's no way private industry would put a 4-lane, limited access highway through North Dakota...

  • LarryA||

    Thus proving that the market isn't very good at long-term planning.

    The market outperforms government at long-term, intermediate-term, and short-term planning every day of the week. Right up until the government interferes.

  • ||

    Precisely! The market is good at predicting everything except government intervention, therefore we need the government to intervene in those occasions when government intervention has made an unpredictable future.

    You have a bright future ahead of you in politics.

  • some guy||

    Thus proving that the market isn't very good at long-term planning.

    How so? It's not like fossil fuels are going to run out overnight. Gradually, fossil fuels will become harder to obtain. The price of fossil fuel energy will gradually rise. The price of other sources of energy will gradually fall. Eventually they will meet and the transition will gradually occur.

    The least we could do is stop supporting the status quo with subsidies and free pollution allowances.

    Agreed. But we should also end subsidies for all other forms of energy.

    The "free market" solution seems to be to inflict the most amount of pain possible for no good reason.


    The "free market" solution, if it were allowed to occur, would see energy prices at an optimal level because everyone would know exactly how much each form of energy costs.

  • Randle||

    Fossil fuels have accumulated over millions of years. They are a massive amount of solar energy stored up for us by nature in concentrated forms - oil and gas in particular. We have mostly spent this inheritance within a couple hundred years.

    What are the alternatives for these wonderfully convenient energy sources? Is human ingenity up to the challenge? I hate to think of humanity as the equivalent of a trust fund baby squandering his fortune and winding up broke (i.e. stuck back in the 19th century).

  • Paul||

    Even though it's big government that could be blamed for our reliance on fossil fuels.

    Check.

    I know, I know... WIND!

  • Jason||

    Now, now, we all know the Age of Sail ended because we ran out of wind.

  • ||

    Similarly, if it weren't for direct government action to see that investments were shifted from protecting the typewriter status quo to developing sustainable alternatives without doing too much harm to the pocketbooks of the middle and working classes, today we would have exhausted our typewriters and typists with all the new paperwork we generate and have neither word processors nor printers to pick up the slack!

  • Haydukelives||

    Fossils fuels are definitely not infinite however there will never be a day in which all of a sudden the world spout of them just all of a sudden runs dry. There will be a gradual decline resulting in energy prices from fossil fuels gradually rising. As fossil fuel prices rise the costs of other energy technologies will be good financial decisions for companies to take and they will invest. That time has not yet come as the only way these technologies come is from the government throwing huge subsidies to anything with the word green in the name.

  • Arcaster||

    Whoa there. You can't use basic economics when you're talking to Tony. His head could short circuit, and we'd have to endure more ignorant BS than normal.

  • Tony||

    I understand that--but fossil fuel energy is artificially cheap at present.

  • Arcaster||

    Can you demonstrate how they are artificially cheap? I would say that any measures taken to keep them artificially cheap are more than outweighed by policies that inflate their price.

  • ||

    fossil fuel non-carbon energy is artificially cheap not as expensive as it should be at present.

    Fixed.

  • Paul||

    I understand that--but fossil fuel energy is artificially cheap at present.

    Game, set and match.

    So why is the Oil Market Group for Winning The Future even investigating this?

  • Gilbert Martin||

    "Or I suppose we could blather on like a lunatic"

    That's certainly the ONLY thing your qualified for.

  • Jason||

    The free market solution is to let the free market take care of things. As oil becomes rarer, the price goes up. As the price goes up, the economic feasibility of previously prohibitive deposits increases and those deposits are put into production. In addition, people begin to change their oil use habits and some scientists and engineers develop more efficient uses of oil while others develop previously cost prohibitive alternatives.

    Alternatively, someone has a brilliant idea and develops an economically feasible alternative, destroying the market for oil, like the computer did to the typewriter and word processor.

    When are you going to stop being an economic creationist, Tony?

  • Tony||

    I'm all for the market working it out (if it can). But things have to be priced correctly and we can't a have huge leg-up for the status quo if you want the market pressures to act correctly.

    Yes, that entails coming to grips with the fact that dumping harmful pollutants into the atmosphere has its costs.

  • ||

    Yes, that entails coming to grips with the fact that dumping harmful pollutants into the atmosphere has its costs positive externalities that vastly outweigh the negative externalities.

    Fixed again.

  • ||

    More at, positive intrinsics that vastly outweigh the arbitrary and nonsensical "negative externalities", the latter being the intellectual equivalent of counting angels on the head of a pin.

  • ||

    The pollution from transportation and power generation is real, but all nitwits like Tony is scream and wail about pollution and completely take for granted the benefits they derive from such a system, to the point of pretending they don't exist.

    They want all of the good, but yet expect to bear none of the bad and in fact, stomp their feet, insisting that our leaders "do something" about the icky pollution by changing the laws of economics and thermodynamics.

    Were this family that was so ungrateful to your hospitality, eating all your food, laying about all over and using up all the hot water while complaining about the thread-count of the sheets, you'd kick them to the curb.

  • Tony||

    The only people being brave on this issue who are taking the political risk of advocating for big change. Because it's necessary, as anyone who understands anything about the real world appreciates.

    I think it can be done fairly painlessly. It just takes good policy. I.e., not policy bent on protecting the moneyed interests with their hands up Republican asses. But it doesn't matter if it can't be done painlessly, since the most pain comes with the consequences of the status quo.

  • ||

    I.e., not policy bent on protecting the moneyed interests with their hands up Republican asses.

    You are such a waste of perfectly good oxygen.

  • DLM||

    It just takes good policy.

    And from where does this 'good policy' magically materialize? You have way too much faith in altruistic impulses and competence of those who ultimately end up calling the shots. Human nature is a bitch.

  • ||

    Tony. Nearly, you have made a breakthrough! Good for you man!

    You're beginning to see for the first time the true beauty of free markets.

    Now, come into the light. It's only through collusive action between oligopolist industrialists, politicians and bureaucrats that unwarranted subsidies arise and regulation arise.

    The oil lobby works with politicians and bureaucrats to impede and squelch non-oil competitors.

    As always, the great source of evil that lets such happen is GOVERNMENT (politicians and unionized public employee bureaucrats.

    Welcome to the Desert of the Real, Tony.

  • Tony||

    Oh shut up with this "source of evil" crap. Government will always be there, for reasons other than handing out loot to corporate friends with benefits. The solution is accountable government and good policy, not no government, since that's crazy talk. Take away government and all you do is leave the power of the corporate interests in place, without the bother of the middle man.

  • ||

    First of all, solutions belong in the domain of chemistry.

    Not getting your thoughts right by misusing words reflects mind disorder -- in short, crazy talk.

    In truth, it's right design that dissipates any chance of accumulating power is what is needed.

    All extant government suffers from failure as failure means faulty design destined to generate failed results.

    In the U.S.A., that Congress could freeze the head count to the House and thus render impotent popular representation while at the same time stripping states' legislators from picking senators, and hence rendering senators as ambassadors of the states rather than tools of corporate interest; are the two heavy reasons why the expressed U.S. government design is failure and thus generates failed results.

    Is there anything else you need to know to open your mind?

    You're doing quite well to come around to seeing that free markets generate the best results.

    Why not come around to right design in government?

  • Tony||

    I am no defender of the US system as-is, though I think popular election of senators was a step in the right direction (I find it bizarre that libertarians would be upset over this). I think the constitution is perhaps fatally flawed and could use an overhaul.

  • Jason||

    The Stone Age didn't end because of Peak Rock.

  • Otto||

    ...fossil fuels are infinite in supply...

    Once we find a way to efficiently mine gas hydrates, they essentially are.

    A pair of relatively small areas, each about the size of the State of Rhode Island, shows intense concentrations of gas hydrates. USGS scientists estimate that these areas contain more than 1,300 trillion cubic feet of methane gas, an amount representing more than 70 times the 1989 gas consumption of the United States.
  • prolefeed||

    Equally obviously, we can't continue burning fossil fuels forever.

    Equally obviously, in five billion years or so, the sun will exhaust its hydrogen fuel and then expand to the orbit of earth and incinerate all life there, so we better quit relying on the sun to provide energy. Hell, no point in living any more, for that matter.

  • ||

    Oh shit, I was planning to go to the beach.

  • DLM||

    Kind of puts global warming into perspective.

  • Barely Suppressed Rage||

    Is that Paris Hilton? Because if so, ick. If not - I'd hit that! I'd like give her a good price gouging, if ya know what I mean, eh, what? Nudge, nudge, wink, wink, knowing smile.

  • Colin||

    Speaking of her, her boyfriend just got attacked at a LA courthouse as the two were entering.

    Must see video. I'm still laughing.

  • Jason||

    What no link to the clip?

  • ||

    Why isn't Obama celebrating high oil prices?

    Because he is not a fucking oil whore like Joe Barton and Dickless Cheney?

    Remember - he put a "shakedown" on BP - you Reason flakes.

  • ||

    Why isn't Obama celebrating high oil prices?

    Because he is not a fucking oil whore like Joe Barton and Dickless Cheney?

    Is Obama being a coal-whore better somehow here?

  • Joe M||

    Perhaps you missed the part where Obama's policies increased the price of oil, which was his admitted agenda.

  • ||

    What? He drug us out of the goddamn Bush Depression so oil prices rebounded?

    That fucker!

  • Paul||

    What? He drug us out of the goddamn Bush Depression so oil prices rebounded?

    Shrike, perhaps you could fax this info to the "Oil Market Group for Winning The Future"

    I'm sure that with this simple, easy to read info in extra-big type, they could shut their whole investigation down, and Obama could get back to the important business of faxing his birth certificate to Fox News.

    Or could it be that even Obama doesn't beleive that oil prices are rising merely because the economy is soaring to new, dizzying heights?

  • Gilbert Martin||

    "He drug us out of the goddamn Bush Depression"

    I knew shrike lived in his mom's basement but I didn't know her house was on fantasy island until now.

  • ||

    Shrike doesn't live in his mom's basement. He just lives in his mom.

  • Joe M||

    Nope; Obama is just working on a little gem called stagflation. See his spiritual predecessor, Jimmy Carter, for more details.

  • Cyto||

    But, but.... Halliburton!!

  • ||

    Hey shriek, can you fit your entire head up Obama's ass? I know you've tried; did you manage it?

  • Restoras||

    Maybe those filthy fingernails on O-Bomb-a's BirthCert were shriek's.

  • ||

    Just imagine what his keyboard and monitor look like.

  • Teenage Girl||

    Eeewww!!

  • Restoras||

    He isn't celebrating because he is a whore for power like all politicians and desperately wants to be re-elected. Clown.

  • Resto Druid FTW||

    Is this dude one of those persistent "we inherited this mess from Bush" types? Yet oddly, I have yet to see (supposing this premise is true) him indicating any worsening of the situation under the current ruler/regime/empty suit. Weird.

  • ||

    In ~4.134 x 10^9 years from now, when the Sun is in its engorged red giant phase ready to consume this earth, there will be someone of shrikian persuasion blaming Exxon for the CO2 that did this...

  • ||

    Most "global warming" is already caused by the sun's natural cycles. Solar wind redirects cosmic particles, which usually seed clouds away from the planet. The net effect is less clouds, just when solar output is peaking. This solar forcing effect can be traced back through time by correlating sunspot data with temperature data.

    Sunspots occur as the sun's massive belts of energy loop around. These solar conveyor belts of energy are what cause the solar cycles and the sunspots.

    But it is more expedient to blame human carbon emissions, especially if it supports your political agenda.

  • DLM||

    Most "global warming" is already caused by the sun's natural cycles.

    The natural temperature of the Earth is -459 degrees Fahrenheit.

  • Anonymous Coward||

    Now, now shrike.

    Obama is a GE whore.

    This means he gets DPed by wind and solar.

  • ||

    GE makes turbines for nuclear plants as well. GE is big into nuclear infrastructure.

  • Barely Suppressed Rage||

    But I thought he wanted to make fossil fuels more expensive so people used them less. He expressly said so, with regard to coal-fired power plants. He stated that they would make it so expensive, they would have to go out of business.

  • ||

    Obama's loved him coal ever since his smackdown with the HillBilly in West Virginia during their primary. But its 'clean' coal!

  • ||

    To answer the question in the title:

    Well, duh, we are, but we need to get re-elected too. It's win-win. We celebrate the drag on capitalism, plus we get to demagogue oil fat cats and Wall St. speculators.

  • ||

    Capitalism is in love with the guy - S&P 500 up 510 points for him - a record for any president.

    I know - fuck the facts - he is a SO-CIAL-ISST!

  • ||

    It must be love/hate relationship. Same S&P threatened to downgrade the debt he peddles. Again, a record for any president as you say.

    And this of course is based on the same myopic perception that the S&P does things - whether go up in points...do you even know what the S&P 500 is? - or downgrades debt, all 'for him.'

  • ||

    shriek's especially hyper today! Did you score some meth from your redneck trailer trash pals, shriek? The ones who you tell that you're a financial genius?

    HAHAHAHAHAHAHAHAHA

  • Arcaster||

    Shrike would do well to learn from F.A. Hayek.

    "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

    F.A. Hayek, The Fatal Conceit

  • Arcaster||

    More like a corporatist.

  • ||

    Aha! You may be right!

    The far left calls him that for his corporate friendly leanings.

    I just know when I hear "socialist" a dumbass is speaking.

  • ||

    That's funny, shriek; we know a dumbass is speaking as soon as you post.

  • Arcaster||

    I wouldn't say a dumbass, but you do have a point. Due to its overuse, the word socialist is suffering the same fate as the word racist.

  • MJ||

    You do know that "corporatism" is a flavor of socialism?

  • Arcaster||

    Definitely. Just like communism and fascism. All of them are some form of collectivism. I just think corporatism is more appropriate for describing Obama's policies. I'm not sticking up for Obama or Tony, but I think the repeated use of the word socialism is going to relegate the word to the same status as racism. I might be alone, but I automatically tune out when someone screams racist. I think we should try to keep everyone's interest when pointing out the flaws in progressive policies.

  • Arcaster||

    Sorry, confused Tony and shrike.

  • ||

    The markets go up because of bad fed policy. Low interest and quantitative easing devalue our currency, thus the price of shit goes up, including stocks. It's called inflation. Also note that as the velocity of this new money increases, the markets will treat it as an unlimited supply of loanable funds and your pal Obama will have further inflated the market. It's a bubble and it is going to pop.

  • DLM||

    , thus the price of shit goes up, including stocks. It's called inflation.

    Which is why I've got my savings (such has it is) in stocks. Too bad poor people don't have any. Too poor to be able to borrow much money and too poor to save any. They get hit hardest by inflation. Too bad so many are conned into thinking gubmint will take care of them.

  • Alternative Energy Activist||

    I don't understand why the government doesn't build wind-powered trains. It's policy win-win. Put a series of windmills on top of the trains, and the faster the train goes, the faster the windmills spin, providing more power for the train.

    We could do this with everything... cars, planes...

    We just lack the political will.

  • ||

    Put a series of windmills on top of the trains, and the faster the train goes, the faster the windmills spin

    I smell a Nobel Prize in here somewhere.

  • Mr. Methane||

    It's probably just shrike.

  • CatoTheElder||

    Congress must first repeal the those pesky laws of thermodynamics.

  • CatoTheElder||

    Congress must first repeal the those pesky laws of thermodynamics.

  • ||

    Wind energy is limited.

    Energy = mass * velocity squared.

    Wind has very little mass and it's velocity is variable, but on average not very high.

    Chemical energy (gas & coal) converts more mass into energy by breaking chemical bonds. This is a far more efficient release of energy because it does not have to convert a kinetic force. Of course chemical reactions only release energy from electron bonds. Electrons are .01% of an atoms mass.

    The other 99.99% of an atoms mass is in the nucleus. Nuclear reactions convert this mass into energy. But god go I'd we should use nuclear energy in the US, a once in a thousand years freak earthquake/tsunami might cause a meltdown that to date has not killed anyone.

    The sun is a nuclear reaction as well, so you would think solar power was a good alternative, but the energy has to travel 93 million miles to get here and by the time it gets here it is mostly gone. If it were not we would all burn to death. At about 400 watts per sq foot, the sun can provide significant energy, but the tech cannot capture the energy with 100% efficiency (more like 25 - 30%).

    Wind and solar share another drawback, availability. Solar is only available when the sun is out and wind only when it is windy. There are no commercial batteries that can store large volumes of energy, but even if they could, the demand for the energy would mean that it gets used as soon as it is captured so there wouldn't be anything to store.

  • MJ||

    "The other 99.99% of an atoms mass is in the nucleus. Nuclear reactions convert this mass into energy."

    Nuclear reactions only convert a small amount of that mass into energy. The only thing that I am aware of to convert the entire mass to energy is a matter/antimatter reaction. Unless you have a source of antimatter, that is not useful as a primary energy source.

  • ||

    That's true. Antimatter may not be that far away, it's difficult to produce now, but we are making gains and the fact that we can produce it artificially at all is encouraging.

  • DLM||

    wind-powered trains

    The problem is they could only go in one direction.

  • Gilbert Martin||

    A much better question to ask than why Obama isn't celebrating high oil prices is why the Republicans aren't running daily ad spots on TV, radio and print using Obama's own words and the statements of his assorted lackeys like Chu against him to make it abundently clear what a hpyocrital, lying, two-faced bastard he is on gas prices.

  • ||

    That goddamn socialist Bush 41 put in a real cap-and-trade system for sulfur dioxide and oil prices fell while acid rain nearly disappeared.

    Bush 41 - you fucking statist asshole!!

  • ||

    How many days have you been up on the meth, shriek? Two? Three? Are your teeth rotting yet?

  • ||

    Please try to stay on topic for once - you Ritalin-deprived juvenile.

  • ||

    I am on topic, shriek. The topic is how fucking stupid you are. Also, how hyper, manic, trashy, and did I say fucking stupid?

    Fellate Obama some more, shrieky! It never gets old.

  • ||

    I don't think it's the real shriek. He hasn't called anyone a bushchristfagrushcunt yet.

  • ||

    That was the name of a horse I once owned sir.

  • Paul||

    Quite possibly the only accurate thing you've uttered today. See guys? He's shrike's not all bad.

  • Otto||

    today?

  • Paul||

    I'm being nice.

  • ||

    There's no silver bullet to solve gas (oil) prices. To the extent that Obama doesn't think drilling will solve the problem, it's not because of the environment, but because speculation and hedging ignores the law of supply and demand...or manipulates it.

    Hedging and speculation means that some people are betting against a given market and will benefit when it crashes. That tiny amount of people have a hugely disproportionate effect on markets. It's somewhat analogous to OPEC (or even Enron and California electricity)...but at least OPEC and Enron actually owned the capital in the market which they exert control over. Speculators own nothing physical.

    Is this really what we mean when we say that a free market is the most efficient way to distribute resources? By conspiring to drive up prices outside supply and demand?

    You could open 200 new taps off our shores, but it still wouldn't solve the arbitrary inflation of prices through speculation.

  • ||

    Uh-oh, you won't be popular here.

    Paultards blame the Fed for everything from Saddam Hussein to high Tickle-Me-Elmo prices.

    Episiarch will not be amused.

  • ||

    Tell us how obama got us out of the Bush depression again, as inflation skyrockets and real unemployment is over 16%. You really are the dumbest motherfucker on here Shrike.

  • ||

    I dunno, Minge was making a pretty good run for it on the Walmart thread.

  • ||

    Are you posting from teh traktor pull?

  • Joe M||

    Haha, I think we'll get a lot of mileage out of that one.

  • Tony||

    You don't give a fuck about the employment rate except when you can wield it to bash Obama. And cite for the "skyrocketing inflation" claim?

  • Red Rocks Rockin||

    You don't give a fuck about the employment rate except when you can wield it to bash Obama.

    Let us know when the employment to population ratio gets back up the troughs of the dotbomb recession, Tony. Until then, we'll club that jug-eared jerkoff with it all we want.

  • ||

    I'm very amused, shriek; you've once again been as imbecilic as I expected you to be, by ascribing positions to me that having nothing to do with anything I've ever said. You do understand that only the dumbest partisans assume that if you disagree with them, you have to hold the exact opposite position, right?

    Of course you don't, because you are one of those dumbest partisans. You're a chimp, shriek. Play your organ grinder for us.

  • ||

    Can you blame me for not reading your puerile posts?

    They all have to do something with sucking cock.

  • ||

    You don't read anything, you moronic fuck. That's obvious to everyone. Except you, it seems. You're a true genius, shriek.

  • Tony||

    To be fair, you never write anything worth reading.

  • ||

    If you opened up off shore drilling and showed that the administration didn't hate oil and was willing to do what it took to increase the supply, that would change the psychology of the market and stop people from bidding up the price. Oil peaked in 2008 the day before Bush ended the moritorium on off shore drilling. Ending that caused people to stop speculating that the price would go higher in the future.

    It is a simple process really. Don't make war on the supply of something and speculators won't speculate that said supply will go down in the future.

  • Tony||

    Domestic oil production is at its highest level in decades. You don't know what you're talking about, as usual, since the only things occupying your head are Republican talking points, which are usually flat-out lies these days.

  • Edwin||

    But it isn't nearly as high as it could be given current technology and investment money available

    though indeed I don't know if I believe the right/conservative claims. It could just be entirely a matter of rising demand from China/India

  • Paul||

    You could open 200 new taps off our shores, but it still wouldn't solve the arbitrary inflation of prices through speculation.

    Like how housing prices remain artificially high?

  • Paul||

    Is this really what we mean when we say that a free market is the most efficient way to distribute resources? By conspiring to drive up prices outside supply and demand?

    To which Shrike Replies:

    Uh-oh, you won't be popular here.

    Paultards blame the Fed for everything from Saddam Hussein to high Tickle-Me-Elmo prices.

    Contrast with Shrike's comment above:

    What? He drug us out of the goddamn Bush Depression so oil prices rebounded?

    So let's break this down. There is NO real change in the supply/demand balance in the world oil markets, prices have been driven merely by speculation.

    Shrike seems to agree with jcalton's assessment above-- supply/demand is just a chimera, the real price increase is speculators!

    Yet previously the economic 'rebound' is responsible for the price increase, ostensibly due to increased demand.

    If you two kids could take a huddle, get your story straight, and come back with a more unified theory, the board would appreciate it.

  • ||

    Having a coherent story would require Shrike taking his meds. And shrike never takes his meds.

  • ||

    Is meth a med?

  • Otto||

    Shire Pharma thinks so.

  • ||

    No, supply/demand is everything - my theme - the Fed is irrelevant.

    I know - Paultards love their fucking gold-plated Polish doubloons!

  • Paul||

    Oh, and to add more confusion to the mix, I've got a fistful of environmentalist-funded studies which say that even at $4.00 a gallon, the price of gas (oil) is way, way WAY artificially low.

    I can't wait to see what the Oil Market Group for Winning The Future comes up with.

  • ||

    I for one hope they come up with a shorter name.

  • ||

    OMGWTF!

  • ||

    OMFG

  • ||

    Hedging and speculation means that some people are betting against a given market and will benefit when it crashes. That tiny amount of people have a hugely disproportionate effect on markets.

    Speculators have to get the money they speculate with from somewhere jcarlton. And everytime a speculator says they bet on something going down, that doesn't mean shit unless someone's willing to bet that it goes up. So to take your statement I quoted, you're literally missing half of whats going on there.

  • ||

    Speculators own nothing physical.

    Is this really what we mean when we say that a free market is the most efficient way to distribute resources? By conspiring to drive up prices outside supply and demand?

    You could open 200 new taps off our shores, but it still wouldn't solve the arbitrary inflation of prices through speculation.

    Wow. The way you just described the non-existent financial system above, there's no physical way for the speculators to impact real prices...no more than a line at the Vegas sportsbook on Cowboys/Redskins affects the actual outcome of the game. Damn baby you should brush up on derivatives. And futures markets, which is where speculators really dwell and impact prices.

  • CatoTheElder||

    If kcalton knows all about "speculation and hedging", why isn't he rich? If he has moral qualms about making money for his own account, then why isn't kcalton a top Obama contributor with the profits from his "speculation and hedging"? Big contributors get face time with the President. I'm sure jcalton would love himself some face time.

    Of course, there's a simple answer: jcalton doesn't have a clue about speculation and hedging.

  • ||

    Speculation means contemplation, consideration.

    Hedging is buying futures contracts to take delivery in case the price of capital (intermediate good used in production, often commodities like oil or wheat) rises, which would challenge profit potential and perhaps put to ruin a producer.

    Perhaps you meant to blame those SHORTING a market for a thing.

    Shorting benefits all as it gets two results:

    [1] better price discovery

    [2] better allocation of resources because of [1]

    If the price of capital (intermediary good used in production of a final product) of a particular kind, say oil goes up significantly, many producers that need oil in their production might get put to ruin because they waste resources and cannot bring to market products efficiently.

    This forces a shift of resources away from such incompetence and into the hands of those with competence.

    Likewise, in the absence of those SHORTING, all those who could outbid competitors for resources by whatever means, from cash to lobbying, would do so. Once secure, no incentive would exist for such resources winners to bring to market the most efficiently made products.

    Thus, all of us would be made worse off as less resources would be available for other products. We would become poorer as a people.

  • ponchy||

    jcalton, you can't "drive up prices outside supply and demand". More pointedly, you can't drive up prices *without* supply and demand. I think what you're thinking (wrongly) is that speculators kind of corner (or partially corner, or corner in combination) the market in oil, then they can sell it back to the market for whatever the hell price they want to. that's not actually what happens, but if it were, what they'd be doing is creating an artificial lack of supply, which would drive up the price *according to the law of supply and demand*. An artificial lack of supply works just like a real lack of supply -- it drives up the price in complete agreeance with what the law of supply and demand says will happen (it's a predictive law, after all, not a prescriptive law). In either case, the way you try to bring prices back down, if you so desire, is to try to increase the supply. You can draw your own conclusions about how one might go about doing that.

    Second point, speculation is far from arbitrary. Most of the movement in the oil market comes about as a result of refiners and other types of distributors trying to lay-in supplies for next month and the month after that today, while the price is lower than they think it will be then. If they think the price will be lower next month, or more or less the same, they'll buy their inventory differently. It's not much different than buying a few extra groceries while they're on sale and sticking them in the freezer. When you do that you're not acting arbitrarily, you're making a smart decision that will eventually save you money. If you weren't buying for yourself but operating a restaurant, say, then buying supplies at low prices while you can could be good for your customers too, as it could keep your prices a bit lower and make you more competitive when the cost of supplies goes up. (that's efficient allocation)

    It's fun to imagine speculators as coniving moustache twisters in a vacuum, but they don't exist that way. Most of them are placed somewhere in the pipeline between the wellhead and the gas pump. They're part of the oil business and they DO buy physical stock (even if they don't take delivery of it at POS). Even the pure speculators do what they do because they know they can sell their contracts almost immediately to people who have a use for the physical oil. There is no such thing as an oil collector. People aren't filling museums with oil just to look at and enjoy it and cherish it's value. There aren't people who have a psychological problem that causes them to hoard oil. The price of oil is all about supply going into a pipe and demand pulling it out the other end to be used. It's simple supply and demand no matter what you may fancifully imagine.

    Obama doesn't give a flying fuck about the price of oil except inasmuch as it impacts his polling. If he did care, he'd be opening up drilling opportunities rather than opening up a sham panel to sucker the rubes.

    Joke's on me. wasted 30 minutes of my time, and I'm sure you won't ever read this. But at least there's one less unchallenged ugly pile of trash lying out there polluting the internet for all eternity.

  • reason readin female||

    Since you posted this yesterday, there's a very good chance you won't read this, but on the off chance that you do.....
    You did not waste 30 minutes of your time.
    Your post was understandable and informative. My eyes tend to glaze over when technical or industry terms are used, and you explained this perfectly. Thanks!

  • ||

    Ponchy, great post!

  • DLM||

    That' OK. The goverment will bail out speculators. They can't be allowed to fail, you know.

  • ||

    Well the Administration already got one "speculator" good. Shell spent $4 billion dollars leasing rights and exploring offshore Alaska for oil. They made a massive find (27 billion barrels), but are not allowed to drill by the EPA. Gotcha!

    http://www.foxnews.com/us/2011.....z1KdRLtOHG

  • Gilbert Martin||

    I expect those Shell leases were also included in the regime's phony statistics about "inactive" leases that they cooked up to try and deflect the blame back onto the oil companies by making it look like they are sitting on huge pools of oil and twiddling their thumbs.

  • ||

    Shell agreed with the EPA there.

    "The administration has responded cautiously but favorably to Shell's offshore Alaska plans," Slaiby said. "Last month the presidential oil spill commission made comments that reflect positively on our plans."

    http://www.adn.com/2011/02/03/.....ation.html

    Fox News sucks in another asshole.

  • ||

    Jesus Christ you fucking retard, read the dates on the two stories. Yours is from February and the Fox one is from this week. Clearly the EPA changed its mind. Seriously, what the fuck is wrong with you?

  • ||

    shriek can't read, John; he just looks at the pictures. Dates are far beyond his ken.

  • ||

    Newsflash! Pulling millions of barrels of crude out of the crust is a multi-year process!

    Write it up and go geo!

  • ||

    shriek makes another idiodic post that makes no sense! Go mongoloid!

  • ||

    So you believe a few months for Shell's approval will change oil price dynamics?

    Hold on - a Paul-maniac may believe that - or maybe because it rips apart the gold space-time continuum you read about in a comic book!

  • ||

    shriek makes another idiodic post that assumes what I believe not based on anything I said, but on the voices in his head! Go mongoloid!

  • ||

    The evil Speculators respond to predicted supply increases too.

  • ||

    Can I catch retardation from reading a retarded post?

  • Otto||

    alt-text: "In, out. In, out. That's hot."

  • ||

    Isn't she a billionare? Why she pumps her own gas?

  • Otto||

    I thought I just explained that.

  • ||

    Oh. That is hot.

  • Im no professor||

    Minor correction: Steven Chu was not a zany professor in 2008. He was the Director of Lawrence Berkeley National Lab.

  • ||

    Yeah, he was making sure the National Illumination Facility was three times over budget and late...you know, working some Chu magic.

    You could almost see his reasoning:

    If only we could make our zany fusion EoS simulator so goddamned expensive nuclear weapons will just go away because we shit-canned actual testing! World peace achieved!

  • ||

    Why Isn't Obama Celebrating High Oil Prices?

    Because we didn't all drive our cars off a cliff and run for the nearest high speed rail like he thought we would. That's why.

  • ||

    Where's Old Mexican? He's usually on these energy threads like rather on an all you can eat buffet.

  • ||

    This article reminds me of the doublethink I witnessed in a city council meeting in which the oh-so-sensitive head central planner with Mr. Bluebird on her shoulder said something like, "Sure the Prius is a great advance for the environment, but we need to increase gas prices with more taxes."

    Do you want it to be cheaper to drive or more expensive? In one breath, this Orwellian goofball understood that making it more expensive to drive a mile would reduce consumption, while simultaneously thinking that making it less expensive to drive a mile was a good idea.

    The Prius MAKES IT CHEAPER TO DRIVE! This means people will drive MORE. The demand curve slopes downward and is convex. If you want people to drive fewer miles, you should want them to drive Hummers.

    Central planning is a disaster. But at least these militant dweebs should be consistent.

  • The Derider||

    "The left's "energy" initiatives of the past decade—the entire purpose of energy policy, in fact—have been aimed at artificially driving fossil fuel prices up to incentivize the bitter clingers to embrace the government's Utopian energy schemes"

    Liar.

    Also, since when do Glenn Beck and Reason share writers?

  • oil paintings||

    Bluebird on her shoulder said something like, "Sure the Prius is a great advance for the environment,

  • Edwin||

    Am I the only one who suspects that the abiogenic theory of fossil fuels might eventually turn out to be correct?

    There seems to be fossi fuels of some sort damn near everywhere. And the idea that coal would be UNDER rock seems screwy. If it's old dead swamps, wouldn't it be the upper layer of rock? Usually the crusts make more earth by upwelling from the ocean, not one smushing over the other (which is the only way coal could end up buried if it's old swamps). And oil fields eventually fill back up after a while. Could be an issue of it filling up from more oil somewhere else and slow flow, but still... Mainly though, it's the kind of stupid story that tends to dominate human history. "Hey, did you know way back then they thought oil would eventually run out because they thought it was made of dead algae?" "No way" "Yeah, they actually wanted to implement massive government policies to conserve it" "HA! Man people were dumb back then"

  • JinDenver||

    Depending on the type of rock it is under, and since you did not site any sources I will assume the type(s) of rock in question are sedimentary and metamorphic rock.

    http://www.historyforkids.org/.....tamorphic/

  • Edwin||

    OK, but if they were above-ground swamps, how did land go over them? Are we saying that said swamps later became seas, and sediment piled on top of them, and then even later the seas drained but left the sedimentary rock on top?

    Or maybe glaciation left debris over the swamps?

    is coal actually found only under sedimentary or metamorphic rock? It's never found under igneous rock>?

  • Ricky||

    Thanks ForSharing

  • ||

    Obama LOVES $5 gas.

    Except he wants $4 of that to be taxes...
    and a prime source of redistribution wealth.

  • nike shox||

    is good

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