The Daily Graphic: Drill Baby, Drill is Over Baby, Over

Good story over at the New York Times on the slowdown in oil drilling and exploration as energy prices have fallen off the cliff over the past several months.

The Daily Graphic: February U.S. Oil Imports

Click Graphic to go the Pickens Plan oil imports page:

The Daily Graphic: January U.S. Oil Imports

Courtesy of the Pickens Plan is the following graphic about how much oil we imported into the U.S. during the month of January.  They get their numbers from the U.S. Dept. of Energy.

Transcript: Remarks by President Obama to Department of Energy Staff | February 5, 2005

REMARKS BY THE PRESIDENT TO DEPARTMENT OF ENERGY STAFF

U.S. Department of Energy
Washington, D.C.

12:12 P.M. EST

THE PRESIDENT:  Thank you so much.  Well, it is a thrill to be here.  Thank you, Secretary Chu, for bringing your experience and expertise to this new role.  And thanks to all of you who have done so much on behalf of the country each and every day here at the department.  You know, your mission is so important, and it’s only going to grow as we transform the ways we produce energy and use energy for the sake of our environment, for the sake of our security, and for the sake of our economy.

Read more

Obama Action Will Please Environmentalists, Peak Oil Advocates

Action that President Barack Obama will take Monday to allow California and other states to require stricter tailpipe emissions and automobile fuel efficiency standards shouldn’t just please environmentalists.

If you’re concerned about Peak Oil and the United States’ dependence on foreign oil, this is also a win for energy conservation. This could be a market force that Detroit cannot ignore, pushing fuel efficiency farther faster. Conservation isn’t everything, but for a society so totally unprepared, it’s one span in the bridge to the energy future.

The New York Times is reporting tonight that President Barack Obama will reverse Bush Administration environmental policy tomorrow and allow California and other states to mandate their stricter rules.

California Gov. Arnold Schwarzenegger had requested and been denied by the U.S. Environmental Protection Agency in 2007 a waiver to set California automobile emission standards higher than federal guidelines.  The Bush Administration told California and several other states that 2007 increases in federal fuel efficiency guidelines for cars and light trucks made their efforts moot and that a national patchwork of differing emissions laws would be untenable.

This is a win not only for environmentalists but also those concerned about the Peak Oil crisis and America’s continued over reliance on fossil fuels.  The stricter standards set by states will be a market force that the Big Three and other automakers will not be able to ignore.  According to the Times’ reporting, California’s action alone could have a great effect on fuel efficiency in the nation’s car and truck fleet:

The California law, which was originally meant to take effect in the 2009 model year, requires automakers to cut emissions by nearly a third by 2016, four years ahead of the federal timetable. The result would be an increase in fuel efficiency in the American car and light truck fleet to roughly 35 miles per gallon from the current average of 27.

In order to deal with the strategic, economic and societal changes which will brought on by a world where oil is harder to find and harder to extract, the U.S. and other nations will need to build bridges to the next energy economy.  Actions such as the one Obama will take on Monday will make it easier to build the “conservation” span of our nation’s bridge.

One question remains — will the Big Three automakers fight this in court? Probably, but they should be shamed out of the courthouse.  U.S. taxpayers are keeping two out of three of them afloat.  They should be discouraged from using our cash to fight our government …

Pemex Update: Production down nearly 10% in 2008

Final numbers came in today on the decline of Mexican oil production.  A good Bloomberg article can be found here and is briefly cited below.

Mexico may be a smaller example of what Saudi Arabia has in store when its super giant field Ghawar enters its final death throes.  Pemex, Mexico’s state oil company, gets 30% of its oil from the Cantarell field.  Pressure is declining fast at Cantarell.  According to Bloomberg’s reporting, daily production at Cantarell declined by around 500,000 barrels a day in 2008 to just over 1 million barrels per day.  In December, only 811,000 were extracted from Cantarell.

The beginning of the Bloomberg story linked above:

Petroleos Mexicanos, the state-owned oil company, said crude output fell 9.2 percent in 2008, the largest decline since World War II, as production fell at its largest field.

Production dropped to 2.799 million barrels a day, from 3.083 million barrels a year earlier, Pemex, as the Mexico City- based company is known, said today in a statement. Pemex extracted 31 percent less crude last year from Cantarell, the world’s third-largest deposit.

Pemex may have missed out on $20 billion of sales as plummeting production coincided with record crude oil prices last year, the Mexican Energy Ministry has said. Crude futures traded in New York have dropped more than $100 a barrel since touching a record $147.27 a barrel on July 11.

Pemex Declining Output On Heels of U.S. Report of Mexican Instability

Wednesday’s news about the Mexican oil industry won’t be good, and the implications are not merely to the Mexican economy.

According to reporting tonight from Bloomberg, Pemex, Mexico’s state-owned oil company will report on Wednesday historic declines in production.

This comes just days after a report by the U.S. Joint Operations Command which said that Pakistan and Mexico are in danger of sudden collapse.  In my mind, this note from the Bloomberg article ties Mexico’s oil production to Mexico’s stability:

Mexico relies on Pemex for 40 percent of its budget. Falling sales may cut into funding for a 570 billion-peso ($41 billion)-a-year infrastructure plan President Felipe Calderon is counting on to keep the country out of recession this year, Schtulmann said.

Pemex is among the ten largest oil companies in the world and outside of Canada and Saudi Arabia, Mexico is the largest importer of oil into the U.S.  It’s astounding that 40% of Mexican government revenue is dependent upon Pemex.  Mexico faces all of the structural economic problems it always has.  Recently, the government has been locked in what seems a death struggle with drug cartels who are buying out or killing anyone that gets in their way.  In 2008, 5,000 murders were attributed to Mexico’s struggle with the cartels.

Oil prices fell below $33 per bbl today.  U.S. and international inventories are high; world demand has lowered due to the recession – barring an insurrection in Saudi Arabia, prices aren’t going up soon.  Mexico is screwed.

And, so are we if our little slice of the Third World goes Pakistan Northwest Tribal Areas on us any time soon.

Aside from the scary scenarios one may conjure over the breakdown of central authority in Mexico, there is yet another strategic question for the U.S.  Where do we go to replace the lost Mexican barrels?  When our economy takes off again and demand for crude goes back on the upward slope, from which international bad actor will we be purchasing more oil?

My Ideas for the Obama ‘Citizens’ Briefing Book’

One Way to Deal With Torture Legacy:

If the country were not facing such an historic economic crisis, perhaps I would be one of those angered by signals that neither the incoming Congress, nor the Obama Administration, seem to have the will to investigate and potentially hold accountable those who broke the law in the areas of interrogation, detention and rendition during the past administration.

Here’s an idea – a truth commission.  What if the concept was based around answering the questions regarding the Constitution, the efficacy of torture, who was ultimately responsible, etc.  This could be done in such a way as to put off any public hearings or transparency until after a bipartisan panel of serious legal, policy experts and just plain citizens had a chance to pursue the issues with subpoena power under a media blackout.  Their product would be public.  In some manner, either through the office of the President or the Congress an acknowledgement would be made and a strong statement, law or EO would be enacted to guide the government through these issues in the future.  An acknowledgement could be made that any mistakes in judgement or action were the result of trying, out of the ordinary times (although this shouldn’t be an excuse).

Click this link to vote for this idea at change.gov

Initial Focus on the Bridge to Our Energy Future:

Our economy and society and is intertwined with petroleum – a single resource – that there is no single alternative on the horizon.  Many speak of a Manhattan or Apollo project for energy independence, but this economic is much to complex to be solved in a timeframe akin to either of those two great American achievements.

Think of the bridge with its major parts, the spans.  We can begin our Apollo-style project of basic research, advanced research, work on prototypes, testing, the development of economic models, etc.  But at the same time, we can also build the bridge, span by span.  One span may be the Pickens Plan, an effort that will attract private as well as government resources.  Another span could be an aggressive tax credit program for making existing American homes energy efficient.

This also has the benefit of being a communications or message construct which will help educate America as to the pervasiveness of petroleum and the strategic disadvantage we are in due to our dependence on this diminishing, primarily foreign supplied resource.

Click this link to vote for this idea at change.gov

December 2008 Oil Imports Into the U.S.

Courtesy of the Pickens Plan’s new Monthly Oil Imports page is the animated gif below.  In December 2008, the U.S. imported nearly 380 million barrels of oil.  For the month, 66.5% of the oil we consumed came from foreign countries.  We can’t let the temporarily low gasoline and home heating oil prices lull us to sleep on the need for a new energy economy.  I believe the Pickens Plan represents a span in the bridge we will need to build to a new, greener, economy built on American self-reliance.

More Evidence That Peak Oil Is A Reality Just Around the Corner

In the last month or so there have been two very public indications that not even the Middle East’s oil states are counting on endless supplies of the black gold which in the space of one or two generations moved their economies from the 18th century to modernity.

First came a puff piece on Saudi Aramco from CBS’ 60 Minutes.  Although there was a lot of information in Lesley Stahl’s report, it leaned a bit too heavy on the promise of technology to greatly impact the output of Saudi Arabia’s aging oil fields.  There is no doubt that the Kingdom is the promised land of oil – and will remain so – but their oil is getting harder to find and harder to extract than it once was.  The massive nature of Saudi fields such as Ghawar camoflage this, but the fact is there have been no major discoveries there since the 1960s and they jump through more hoops per barrel today to get it out of the ground than they once did.  Very telling was this from the end of the piece:

Rather than oil pushers, the Saudis see themselves as good global citizens who are trying to save the world from a catastrophic oil shortage. But, as Al-Naimi told 60 Minutes, the kingdom is hedging its bets.

He told Stahl the kingdom is doing research on solar energy, as sunshine is more than abundant in Saudi Arabia.

And he says it won’t hurt their oil industry, but supplement it. “Our vision is that we will be exporters of gigawatts of electricity. We will be exporting both: barrels of oil and gigawatts of power.”

And so, he says, the kingdom will still be in the energy business long after the sun sets on the age of oil.

Also hedging their bets are the Saudi’s neighbors in the United Arab Emirates.  Abu Dhabi, home of man-made islands and other ostentatious displays of oil wealth will host the Second World Future Energy Summit next week.  World business and political leaders will be in attendance for what the New York Times describes as the Davos of alternative energy.  The entire Times story is worth a read.  I found interesting some of the statements being made by Arab oil men other than Ali Al-Naimi, the above mentioned Saudi Oil Minister.

So even as President-elect Barack Obama talks about promoting green jobs as America’s route out of recession, gulf states, including the emirates, Qatar and Saudi Arabia, are making a concerted push to become the Silicon Valley of alternative energy.

They are aggressively pouring billions of dollars made in the oil fields into new green technologies. They are establishing billion-dollar clean-technology investment funds. And they are putting millions of dollars behind research projects at universities from California to Boston to London, and setting up green research parks at home.

“Abu Dhabi is an oil-exporting country, and we want to become an energy-exporting country, and to do that we need to excel at the newer forms of energy,” said Khaled Awad, a director of Masdar, a futuristic zero-carbon city and a research park that has an affiliation with the Massachusetts Institute of Technology, that is rising from the desert on the outskirts of Abu Dhabi.

Notice how the language is changing?  Yesterday they were oil exporters – now they are trying to remake themselves as “energy exporters.”  Even the Arabs are saying that the future is in alternative energy.  If oil supplies were endless these guys wouldn’t be wasting their billions on alternatives.

Ohio Newsbreak | January 2, 2009

• Weak economy means tough solutions says Strickland – Youngstown Vindicator
• Editorial: Tainted by Scandal – Toledo Blade
• Scenarios for gas prices in 2009 – The Plain Dealer
• State trims funding to municipalities – Columbus Dispatch
• Cleveland homicides down 25% in 2008 – The Plain Dealer
• Jackson pissed over Med Mart delays – The Plain Dealer
• Ohio Dems headed to Inauguration despite cost – The Plain Dealer
• Kaptur honored by The Nation – The Plain Dealer
• Editorial: Adieu, National City – The Plain Dealer
• Some officials forego all the pomp – Columbus Dispatch
• State anti-bias aide sent racist, sexist emails – Toledo Blade
• ODOT official golfed on the clock – Columbus Dispatch
• Gannon to leave Industrial Commission - Columbus Dispatch
• Editorial: Tighten laws on campaign funds - Columbus Dispatch
• Gasoline prices up 31¢ in Dayton over last week – Dayton Daily News
• Editorial: Ohio has made unemployment compensation problem worse - Dayton Daily News
• Op-Ed, Bertram DeSouza: What does Tony Gutierrez know? - Youngstown Vindicator
• PNC completes takeover of National City – Canton Repository

Will We Be More Dependent or Less on Middle Eastern Oil in 10 Years?

News Roundup: Obama’s Energy & Environment Team

• Obama names choices for key energy, environmental posts – Los Angeles Times
• Experts comment on Obama enviro/energy picks - Reuters
• Obama’s Green Team – Christian Science Monitor
• Obama promises renewed focus on energy, environment – Bloomberg
• Obama rolls out energy and climate team – Washington Post
• Obama announces energy team - Politico
• Obama makes strong picks - News Release, Sierra Club

Transcript: Obama News Conference Announcing Environment and Energy Team | December 15

(Source: CQ Transcriptswire)

• SPEAKER: PRESIDENT-ELECT BARACK OBAMA
• STEVEN CHU, ENERGY SECRETARY NOMINEE
• LISA JACKSON, EPA ADMINISTRATOR NOMINEE
• NANCY SUTLEY, HEAD, COUNCIL FOR ENVIRONMENTAL QUALITY-DESIGNATE CAROL BROWNER, ENERGY CZAR-DESIGNATE
• VICE PRESIDENT-ELECT JOSEPH R. BIDEN JR.

[*] OBAMA: Good afternoon, everybody.

Over the past few weeks, Vice President-elect Biden and I have announced key members of our economic and national security teams. In the 21st century, we know that the future of our economy and national security is inextricably linked with one challenge: energy.

So today we’re pleased to introduce the majority of the team that will lead our efforts on energy and the environment. I say the majority, because we are going to be doing separate announcements for the secretary of the interior, who’s going to have a lot to do on energy policy. And, obviously, interior or — transportation and agriculture will be important, as well. Read more

Text: Obama Speech Announcing Environment & Energy Key Personnel

Stephen Chu, Energy Secretary, Lisa Jackson, EPA Administrator, Carol Browner, Energy Policy Coordinator

Remarks as prepared for delivery (Source: Office of the President-Elect)

Good afternoon. Over the past few weeks, Vice President-Elect Biden and I have announced key members of our economic and national security teams. In the 21st century, we know that the future of our economy and national security is inextricably linked to one challenge: energy. So today, we’re pleased to introduce the team that will lead our efforts on energy and the environment. Read more

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