60 Minutes Airs 24-Minute Infomercial for Saudi Aramco

Lesley Stahl gushed all over the Empty Quarter at the amazing feats of engineering occurring in Saudi Arabia in order to bring their production from about 10 million barrels per day to 12 million.  She visited Saudi Aramco’s nerve center in Dahran and gushed some more about the Saudi’s high tech mastery of horizontal drilling from hundreds of miles away.

Stahl’s piece centered on the Saudis bringing on line the Shaybah and Khurais fields.  Shaybah was discovered in the late 1960s but couldn’t be exploited until recently with the advent of horizontal drilling.  Khurais is reported by the Saudis as containing more oil than the entire U.S. but it will take 84 million gallons per day of seawater – being pumped from over 100 miles away – to supply the pressure to bring the oil to the surface.

The Saudis didn’t used to have drill horizontally or pump seawater into oil fields at the beginning of their production life.  Although Stahl didn’t deal directly with the subject of peak oil, the evidence is there that the Saudis are now engaged in producing the harder to find, harder to yield oil.

Much of the report was an interview with Saudi Oil Minister Ali Al-Naimi.  At the end of the piece she asked him about Saudi research into solar energy. From the story on the 60 Minutes website:

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.

If Saudi Arabia is now banking on fields that take $60 billion in investment before the first oil is produced and they have long-term plans to be the world’s supplier of solar power, is there any question that we’re in the era of peak oil?

Video: CBS 60 Minutes – The Oil Kingdom – December 7, 2008

Check out C2′s Commentary on This Piece Here

Demand Matters

As energy prices soared earlier this year, the snickers could be heard once again any time conservation was mentioned.  I got sick of hearing about Jimmy Carter’s sweater wearing during White House winters. The fact is, Carter did us all a favor by moving the country – for a short time – toward conservation awareness.

Our newly official recession is also serving as a form of forced conservation.  Conservation after all is about lessening demand.  Less economic activity is sharply lowering demand for oil worldwide.  The first chart below came from a late-November International Energy Agency publication.  I like this one because it shows oil demand forecasts against the shrinking GDP.  The next chart is one that I made with data from the U.S. Dept. of Energy.  It shows the weekly average oil price during roughly the time period of the first chart.

I look at exercises such as this as further proof – as if we need more – that there are a range of choices available to the U.S. in order to ease our consumption of foreign oil.  $40 per barrel oil gives the Irans of the world a lot less money to invest in Hezbollah and nuclear weapons research than $147 per barrel pricing did.  Additionally, the greatest long-term threat we face as a nation is the depletion of oil resources.  Our entire economy from farmer’s field to Silicon Valley is based on petroleum products.  We need to move toward an energy future not fueled by gasoline and diesel. 

One question for energy policy experts has been what is the bridge to this future?  After all, we are not anywhere near technologically or economically ready.  I think the bridge will be built of several spans and conservation will be one of them.  Another span will be a nationwide commitment to the Pickens Plan or something very similar.

$2 Gas Doesn’t Mean Problem Solved

America Loses if Pickens Takes a Powder

Just over a week ago, T. Boone Pickens acknowledged on Meet the Press that the sluggish economy and lower oil prices have conspired to thwart his plans to fully fund what’s become known as the Pickens Plan.

BROKAW: Well, let me talk about what you have been talking about on television and everywhere else these days, which is converting to wind-driven general — generation of electricity and transferring natural gas to big public transportation.

I am told that, given the perilous state of the economy, the decline in oil prices, which has not made it as urgent in the minds of a lot of consumers, that you find yourself now at a very difficult crossroads financially in your own situation, and you’ve had to call a halt to your development plans.

PICKENS: Well, the wind, you know, it — I’ve got a — I had planned on 30 percent equity, 70 percent debt, and I can’t get any, any, any money for that at this point. But it doesn’t mean that’s the end of it. It’s been postponed is all it is. …

This is a shame on many levels.  U.S. oil production peaked in December 1970, some say in 1971.  Today we import over 70% of our oil.  Much of that comes from the friendly environs of Canada and Mexico, but a good bit of it comes from Saudi Arabia and other Middle Eastern nations.  As our dependence on foreign oil has grown since the 1970s, so has the flight of dollars used to buy that oil.  According to Pickens’ numbers – which no one disputes – Americans spend $700 billion every year on foreign oil. 

What does $700 billion mean?  Well, we all know how bad the U.S. economy is at the present time and it’s expected to worsen.  Congress just approved $700 billion to bailout the U.S. financial sector and it’s had barely an effect on the credit markets.  $700 billion is about 10% of the entire annual economy in the U.S.  What if those dollars were being put to use here at home – especially now.

But it’s not just about energy security and getting away from foreign oil for the sake of not being dependent.  Oil is a diminishing resource.  It’s non-renewable.  There hasn’t been a major new discovery of oil since the late 1960s.  The Middle East contains over half of the world’s proven reserves.  The problem with reserves is that in countries like Saudi Arabia and other OPEC nations, their production quotas are based on their stated reserves.  In order to produce more, thereby increasing revenue, these countries have restated their reserves to be higher year after year.  There is no transparency as there is here in the U.S., so we only have an educated guess as to what those reserves really are.  To make a long story short, they can’t be what they say they are – the rest of the world is reaching or has reached “Peak Oil” and every indication save OPEC official pronouncements says that the Middle East is not far behind.  Unless there is transparency, we won’t know what the score is until it’s too late.

So, oil is a matter of security.  Too much American wealth is being transferred to foreign countries to fuel our addiction.  The world is approaching peak oil production which will lead to less supply even as economies like those of China and India add to demand.  Tighter supplies and stronger demand mean higher prices that will eventually have nowhere to go but up.

Pickens, an oil man, understands all of this.  His plan is relatively simple.  Replace the portion of U.S. electrical power generation accounted for by natural gas (it’s 20% of the total) with wind energy.  The wind energy will come from a 4,000 Mw wind farm he plans to build in Pampa, Texas.  The natural gas which is not being used for electrical generation will be repurposed for transportation use – cars and trucks.  This would replace 38% – or $300 billion worth – of imported oil.  If this all sounds confusing visit Pickens’s site and watch the video, Whiteboard Presentation.  (Or watch the embedded video at the end of this post)

As someone who has read about the peak oil debate, considered the national security implications of our dependence on foreign oil and who wants the U.S. to be ready for the next energy economy – and better yet – leading it – I’ve learned this about energy policy:  There is no post-oil solution anywhere near ready to go.

We need a bridge to the future.  This energy bridge will be built on coal, solar, wind, nuclear, biomass and oil.  While we build this bridge there will have to be concurrent investment in research to determine what will take the place for oil as an energy source.  There is not a politician or business person in the United States who has put together the business plan and put their own money for building the bridge.  That is, except for T. Boone Pickens.

Give this some thought and consider signing up at the Pickens Plan website.  Sure, T. Boone could make some money off of his wind farm, but aren’t we constantly pontificating in this country about private sector solutions?  Pickens will need the support of Congress and President Obama to get this thing done and pull other industries and constituencies onboard. 

Don’t be fooled by $2 per gallon gasoline.  The economy slowed way down fairly quickly and demand went with it.  Four dollar gas was a foretaste of what’s to come and it won’t end at four bucks.  It’s more important than ever to show support for the Pickens Plan so that the politicians in Washington know we aren’t lulled to sleep by the calm in the storm. 

As an Obama supporter, beginning this bridge to our energy future is change I can believe in.  I hope you’ll join me and others by signing up to show your support.

Transcript: T. Boone Pickens on ‘Meet the Press’ with Tom Brokaw | November 16

Editor’s Note: This is a portion of the program Meet the Press from November 16, 2008.

(Source: CQ Transcriptswire)

BROKAW: (…) It is “Green Is Universal” all week here at NBC, and the issue of energy dependence is certainly key in that discussion. And joining us now, a very familiar figure, the legendary Texas oil man, T. Boone Pickens.

Welcome, Mr. Pickens, from Dallas this morning.

PICKENS: Good morning, Tom.

BROKAW: You just heard that very spirited discussion. Do you think the Big Three automobile dealers should survive?

PICKENS: You know, I — it’s not my subject. But I wonder, you know, what you’re going to do about the next industry. Is it going to be the airlines?  Or what if Toyota and Honda want some help, too?  I — I don’t know. I don’t know where it stops.

BROKAW: Well, let me talk about what you have been talking about on television and everywhere else these days, which is converting to wind-driven general — generation of electricity and transferring natural gas to big public transportation.

I am told that, given the perilous state of the economy, the decline in oil prices, which has not made it as urgent in the minds of a lot of consumers, that you find yourself now at a very difficult crossroads financially in your own situation, and you’ve had to call a halt to your development plans. Read more

Why I’m Voting for Obama – Reason 1 of 3 – The Economy (and Energy)

Since the first presidential election in which I could vote, I’ve been hearing politicians promise tax relief for the middle class. They called it “tax relief” because very often there was nothing in it for the middle. President Clinton, to his credit, took care of the lower end of the scale with the Earned Income Tax Credit. Both Bushes gave us more of the Laffer Curve and Trickle Down Economics. The biggest breaks under every president I’ve had the privilege to vote for or against has benefited large corporations, usually of the multi-national type. Read more

Video: First Presidential Debate – Oxford, MS

Full Transcript: First Presidential Debate|Barack Obama-John McCain|Oxford, MS, September 26, 2008

(Source: CQ Transcriptswire)

Sept. 26, 2008

JIM LEHRER, MODERATOR

LEHRER: Good evening from the Ford Center for the Performing Arts at the University of Mississippi in Oxford. I’m Jim Lehrer of the NewsHour on PBS, and I welcome you to the first of the 2008 presidential debates between the Republican nominee, Senator John McCain of Arizona, and the Democratic nominee, Senator Barack Obama of Illinois. Read more

David Brooks Column Today Very Insightful on John McCain as Candidate

I’m someone who has more admiration for Americans of generations past or nearly past, than just about anyone in any sort of public or private leadership position I can think of today.   John McCain’s story of heroism in Viet Nam, the narrative of a grandfather, father and son all wrapped up in the tradition of the U.S. Navy and service to country – these threads in the fabric of the man that is McCain appeal to me.  As a former journalist, I admired the way he handled the media in 2000.  I admired the way he stood up to George W. Bush and the cynical machine that Rove built.

Frankly, I always thought that John McCain – because of all the genuine American qualities about him – could be the sort of leader who could help bridge the country from one century to the next.

Somewhere along the way, John McCain changed.  I no longer think that way anymore and it’s not just because I’m in the tank for Barack Obama.  McCain hasn’t been a maverick for around six years.  He’s operated on either a ‘go-along, get-along’ basis with the Bush Administration or stooped to the sort of political gimmickry he used to decry in others.

No, what disappoints me about the McCain campaign is it has no central argument. I had hoped that he would create a grand narrative explaining how the United States is fundamentally unprepared for the 21st century and how McCain’s worldview is different.

McCain has not made that sort of all-encompassing argument, so his proposals don’t add up to more than the sum of their parts. Without a groundbreaking argument about why he is different, he’s had to rely on tactical gimmicks to stay afloat. He has no frame to organize his response when financial and other crises pop up.

Brooks has it spot-on.  We are in a time made for big thinkers and grand strategists.  The United States is in decline in many ways while other nations are on the rise.  There’s not a better basic system of governing or preserving freedom than the American way, yet the system(s) aren’t working the way they used to.  From education to foreign policy we are backsliding.  The greatest threat – our dependence on fossil fuels – is just the sort of big problem groaning for the American innovation of old. 

America needs a central argument and it’s not a trumped up ‘War on Terror.’ America needs to return to a shared framework for prosperity, not our current backslide into a culture of greed.

You can read Brooks’ entire column here.  I believe he feels like so many Americans do: John McCain has changed and he’s not the leader to take us in to the next decade of the 21st Century.

Text: Ed Rendell Speech to DNC – Energy Policy

DENVER (AP) _ Remarks as prepared for delivery to the Democratic National Convention on Tuesday by Pennsylvania Gov. Ed Rendell:

It was eight years ago that George W. Bush and Dick Cheney came to Philadelphia to accept their party’s nomination. Onstage at that convention, we heard lots of talk about energy. The Republican platform itself called for expanding the renewable energy tax credit. But once elected, they broke their energy promises to the American people and let big oil determine our national energy policy. Read more

Tuesday a.m. Clips – Ohio Rs: No to Romney; Ohio Highway Patrol sexiness; Dimora & Russo; Ohio AG race; War of Russian Aggression; Dimora & Russo; Payday lending; Debunking offshore drilling

Ohio News

• Ohio activists reject Romney – Columbus Dispatch
• Troopers in trouble over romances – Columbus Dispatch

It’s time for Ohio Highway Patrol to resubmit to civilian authority – racism and sexiness too much – if the Army can take orders from W, OHP can bend to Strickland, Guzman

• McClendon wrongly held by state for 18 years – Columbus Dispatch

Original prosecutors and anyone else who stood in the way of justice in these cases should be disbarred.

• Dimora – Russo probe began long ago – Cleveland Plain Dealer
• Ohio AG race overview – Cleveland Plain Dealer
• Opposing sides in payday lending fight over ballot language – Dayton Daily News
• Wind may hold energy and Ohio jobs – Mansfield News Journal
• Strickland: Ohio education system stuck in past – Newark Advocate
• Diebold to close Hebron plants – Newark Advocate

National/International News

• Russia orders halt to war in Georgia – Reuters
• What does Georgia want from Russia – NPR
• Russia says it has halted aggression – New York Times
• Healing wounds, Putin calls shots – New York Times
• Bayh offers risks and rewards – New York Times
• Global trail of online crime ring – New York Times
• Editorial: Russia’s War of Ambition – New York Times
• Endangered Species Act eyed – Washington Post
• Bush questions Moscow’s motives – Washington Post
• Editorial: ‘Snake Oil’ – Washington Post

Oil Shock: Drilling for Answers on High Prices Part IV of V

As posted here (and why), I continue to post the Washington Post articles from the Oil Shock series.

from The Washington Post

Gas Prices Apply Brakes To Suburban Migration

By Eric M. Weiss
Washington Post Staff Writer
Tuesday, August 5, 2008; A01

That 1958 brick rambler inside the Beltway is suddenly looking a lot better to Dawn and Jeff Schaefer, who are buying their first house in Northern Virginia.

Not too long ago, they were looking farther out — for a newer house, a bigger yard and all the amenities. But no more. “You get less house and property for the same price, but we’re willing to make that sacrifice to save on gas prices and commuting costs,” Dawn Schaefer said.

Cheap oil, which helped push the American Dream away from the city center, isn’t so cheap anymore. As more and more families reconsider their dreams, land-use experts are beginning to ask whether $4-a-gallon gas is enough to change the way Americans have thought for half a century about where they live.

“We’ve passed that tipping point,” U.S. Transportation Secretary Mary Peters said. Read more

Full Text: Obama Energy Townhall in Youngstown, Opening Remarks

August 05, 2008

Obama Energy Townhall in Youngstown

Barack Obama, as prepared for delivery

Youngstown, Ohio

We meet at a moment when this country is facing a set of challenges unlike any we’ve ever known. Right now, our brave men and women in uniform are fighting two different wars while terrorists plot their next attack. Our changing climate is putting our planet in peril and our security at risk. And our economy is in turmoil, with more and more of our families struggling with rising costs, falling incomes and lost jobs. Read more

Media Coverage – Obama Energy Plan, Speech in Lansing MI

Obama’s ‘New Energy for America’ Plan

• McCain’s Oil Co. Donors – The Caucus Blog – New York Times
• Obama calls for tapping oil stockpiles – Associated Press (New York Times)
• Obama speech fueled by energy plan – Lansing State Journal
• Obama vows tax credits, aid to automakers for hybrid cars – Detroit News
• Barack Obama, on his birthday, has energy on his mind – Blog – LA Times

Full Text: Obama Speech on Energy Plan – Lansing, Michigan

August 04, 2008

New Energy for America

Remarks of Senator Barack Obama — as prepared for delivery
Lansing, Michigan

We meet at a moment when this country is facing a set of challenges greater than any we’ve seen in generations. Right now, our brave men and women in uniform are fighting two different wars while terrorists plot their next attack. Our changing climate is placing our planet in peril. Our economy is in turmoil and our families are struggling with rising costs and falling incomes; with lost jobs and lost homes and lost faith in the American Dream. And for too long, our leaders in Washington have been unwilling or unable to do anything about it.

That is why this election could be the most important of our lifetime. When it comes to our economy, our security, and the very future of our planet, the choices we make in November and over the next few years will shape the next decade, if not the century. And central to all of these major challenges is the question of what we will do about our addiction to foreign oil.

Read more

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