Thursday, May 04, 2006
Edgy Adji Of Iran And US Folly
Over the past four weeks, average daily gasoline demand in the U.S. was 9.127 million barrels per day, barely higher than year-ago demand of 9.125 million barrels a day, according to the Energy Department. And since the start of the year, average daily gasoline demand has been just a hair over 9 million barrels per day, slightly below last year.Part of the gas supply problems are explained by the suspension of the Congressional additive requirements that were cutting net refinery output. Over the last few years plenty of people have changed their driving habits and/or traded in at least one family car in favor of a more fuel-efficient model, and we are seeing the effect of that in the reduction of demand for gasoline.
The Energy Department's weekly petroleum report also showed:
• Domestic inventories of gasoline climbed 2.1 million barrels, reversing eight straight weeks of declines. U.S. gasoline supplies stand at 202.7 million barrels, or 5% below year-ago levels. (202.7/9.1 = 22.3 days of supply).
• Refineries ran their plants at 88.8% of capacity, compared with 88.2% a week earlier.
• Crude-oil inventories climbed 1.7 million barrels to 346.7 million barrels, or roughly 5% above year-ago levels; the supply of distillate fuel, which includes heating oil and diesel, fell 1.1 million barrels to 114.5 million barrels, but is almost 10% above last year.
"Political tensions in Iran, a refinery outage in Italy and supply disruptions in Africa (are) keeping the bulls running towards record values," said Vienna's PVM Oil Associates, predicting near-term price increases. PVM also said investments by hedge funds, pension funds and other investors seeking to cash in on rising energy prices were also creating a self-fulfilling prophecy. PVM noted reports that America's biggest pension fund, the California Public Employees' Retirement System, planned to allocate as much as $1 billion into oil and other commodities by August.
How much benefit are we really getting from the clean-air blends, anyway? When I read articles like this I don't know whether to laugh or to cry. Farmers are among the biggest welfare queens in America - that's the truth. Playing politics with gas and corn is ridiculous.
To me all of this is a great argument for investing heavily in domestic conventional energy sources (oil, gas, coal and nuclear power, using alternative energy sources where we can, and making sure that the market is not closed to workable alternative technologies. Oil is being used as a political football, and I don't want to see our nation's future and security compromised by an excessive dependence on foreign imports. See GreenGOP.
SC&A has written extensively about the dysfunction of some societies. We are allowing Iran, for example, to whipsaw us by letting our economy become so dependent upon energy imports. It's time to change direction. I am not in favor of some big government project on energy. Instead, our government's role should be removing unreasonable roadblocks to building new power generation facilities and refineries.
It is reasonable to assume that if the US starts to cut imports oil-producing nations would attempt to flood the market with oil in order to forestall a major shift away from it. Therefore David's (of Photon Courier) suggestion of bottom-floor pricing guarantees from the government is a good one. As David writes, there is madness loose in the world. It's historical folly not to recognize the madness, regroup, restrategize and get serious.
The alliance between the wacked-out ideologues on the right and left and violent Islamicists is real. David Duke has been trotting over to Iran to have nice chats with Edgy Adji. The communists of Europe and the Americas have been cozying up to Edgy Adji, including one Chavez of Venezuela. Galloway did say that the left's natural allies were the Islamic "revolutionaries". Edgy Adji is seeking to bolster up a failing regime by massive government giveaways:
Ahmadinejad's first piece of legislation to emerge from his newly formed government was a 12 trillion rial (1.3 billion USD) fund called "Reza Love Fund"  which was named after one of Shi'a Islam's Imams, Ali al-Rida. By tapping into Iran's huge oil revenues, Ahmadinejad's government claims that this fund will be used to help young people to get jobs and to afford marriage, as well to assist in purchasing their own homes.In order to do that he needs to massively boost Iran's income from oil. The seemingly lunatic strategy he is following by threatening the world is designed to do precisely that. Every time oil starts to drop he or another Iranian government official comes out with another provocative statement designed to keep the anxiety in the markets high and push up the price of oil. We are unable to counter Edgy Adji's strategy (ominously reminiscent of Hitler's economic plans for Germany, which in the end drove him into a war that Germany could not win) by boycotting the regime because we are dependent on the oil itself, as a result of decades of ignoring the basics of our own national security.
The fund also sought charitable donations, and includes a boards of trustees in each of Iran's 30 provinces. The new plan is subject to the approval of the conservative-held Majlis, but is seen as unlikely to encounter strong opposition given deputies in the Majles have also shown an eagerness to focus on resolving economic problems.
This piece of legislation was in response to the costly housing in urban centres which is pushing up the national average marital age, which currently is around 25 for women and 28 for men. This was the first example of Ahmadinejad's attempting to fulfill his promise of "bringing oil money to the Iranian people's plates."
I don't want to see the American military deployed unnecessarily in what will probably become a world war because we are drifting as a society. If we don't suck it up and get real that will happen. Congress needs to get its collective head out of its collective DC colon very quickly indeed.
Ethanol is not the answer. The corn us Georgians grow on our land is an excellent food for animals, birds and humans, but it has low energy density and cannot be grown and transported in sufficient quantities to make a real difference. Environmentalists (of which I am one) need to recognize a few basic facts, starting with the reality that it requires huge amounts of energy and capital investment to allow human populations to live so as to have a minimal impact on the environment. In order to protect the environment we require more energy, not less. The alternative is to kill off about eight-tenths of the human race.
There is a real and promising future for the US if we can drop our nonsense and deal with reality. Our future is very grim if we cannot summon the will power to change with a changing world.
Thanks for the links.
If the public forms its positions based on what it reads in the press, and if the press is incapable of understanding what is going on, then isn't this a massive societal vulnerability?
For example, it turns out that ethanol cannot be transported via today's pipelines; it has to go by rail or barge. This isn't a killer issue, but it is a cost and timing factor, which one would think would have been pointed out by those looking at this fuel. It's only now--after the rail bottlenecks have already started happening--that this point has gotten any attention.
Which is one problem with journalism: if there's no current-news peg, a topic tends not to be covered.
This ought to be intuitively obvious to most people, because every time we have a spike in transportation costs we see it almost immediately at the grocery store.
I need to look up gasoline consumption figures.
Not sure how long the green image will last, though, when the fuel for ethanol plants shifts from natural gas to coal, which is already starting to happen given the price disparity. A siding with 50 coal cars on it is probably not every environmentalist's dream...
I am pretty sure that the American consumer will shift to buying more economical vehicles, and I think there is a real interest in exploring other technologies among homeowners and auto owners.
It might well be that the most efficient governmental policy would be to ensure that a fair and information-rich alternative energy market exists.
I think Congress has made a huge mistake in mandating solutions. There are times when market forces are vastly more efficient, and this is probably one of them.
I think those yawping about the Dominion need to recognize that one does not require the Biblical God in order to develop one's own theology.
The thing is, their God is such vengeful God!
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