Just two days after President Obama’s re-election, the Obama Interior Department announced a plan to shut down 1.6 million acres of federal land to oil shale development. The land had originally been slated for drilling under President George W. Bush.
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Gasoline station owners in the Los Angeles area including Costco Wholesale Corp. (COST) are beginning to shut pumps as the state’s oil refiners started rationing supplies and spot prices surged to a record.
Valero Energy Corp. (VLO) stopped selling gasoline on the spot, or wholesale, market in Southern California and is allocating deliveries to customers. Exxon Mobil Corp. (XOM) is also rationing fuel to U.S. West Coast terminal customers. Costco’s outlet in Simi Valley, 40 miles (64 kilometers) northwest of Los Angeles, ran out of regular gasoline yesterday and was selling premium fuel at the price of regular.
The gasoline shortage “feels like a hurricane to me, but it’s the West Coast,” Jeff Cole, Costco’s vice president of gasoline, said by telephone yesterday. “We’re obviously extremely disheartened that we are unable to do this, and we’re pulling fuel from all corners of California to fix this.”
Spot gasoline in Los Angeles has surged $1 a gallon this week to a record $1.45 a gallon premium versus gasoline futures traded on the New York Mercantile Exchange, data compiled by Bloomberg show. That’s the highest level for the fuel since at least November 2007, when Bloomberg began publishing prices there. On an outright basis, the fuel has jumped to $4.3929 a gallon.
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Ed Henry, FOX News: Your critics will say on Capitol Hill that you want gas prices to go higher because you have said before that will wean the American people off fossil fuels onto renewable fuels. How do you respond to that?
President Obama: Ed, just from a political perspective, do you think the President of the United States going into re-election wants gas prices to go up higher? Is that — is there anybody here who thinks that makes a lot of sense? Look, here’s the bottom line with respect to gas prices: I want gas prices lower because they hurt families.
Gasoline prices have never been higher this time of the year.
At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.
“You’re going to see a lot more staycations this year,” says Michael Lynch, president of Strategic Energy & Economic Research. “When the price gets anywhere near $4, you really see people react.”
Already, W. Howard Coudle, a retired machinist from Crestwood, Mo., has seen his monthly gasoline bill rise to $80 from about $60 in December. The closest service station is selling regular for $3.39 per gallon, the highest he’s ever seen.
“I guess we’re going to have to drive less, consolidate all our errands into one trip,” Coudle says. “It’s just oppressive.”
The surge in gas prices follows an increase in the price of oil.
Oil around the world is priced differently. Brent crude from the North Sea is a proxy for the foreign oil that’s imported by U.S. refineries and turned into gasoline and other fuels. Its price has risen 11 percent so far this year, to around $119 a barrel, because of tensions with Iran, a cold snap in Europe and rising demand from developing nations. West Texas Intermediate, used to price oil produced in the U.S., is up 4 percent to around $103 a barrel. That’s 19 percent higher than a year earlier.
Higher gas prices could hurt consumer spending and curtail the recent improvement in the U.S. economy.
A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. That’s only 0.2 percent of the total U.S. economy, but economists say it’s a meaningful amount, especially at a time when growth is only so-so. The economy grew 2.8 percent in the fourth quarter, a rate considered modest following a recession.
Gas prices are already an issue in the presidential campaign. Republican candidate Newt Gingrich spoke several times this week about opening up more federal land to oil and gas drilling as a path toward U.S. energy independence – and lower pump prices.
“Our goals should be to get gasoline to $2.50 or less so that working families can actually get to work and retired families can travel,” Gingrich said at a campaign event in Los Angeles Thursday.
High oil and gas prices now set the stage for even sharper increases at the pump because gas typically rises in March and April.
Every spring, refiners suspend operations to switch the type of gasoline they make. Supplies of wintertime gas are sold off before March, when refineries need to start making a new formula of gasoline that’s required in the summer.
That can mean less supply for service stations, resulting in higher gas prices. And summertime gasoline is more expensive to make. The government mandates that it contain less butane and other cheap organic compounds because they contribute to the formation of ground-level ozone, a primary constituent in smog. That means more oil, a costlier component, is needed to produce each gallon.
The Oil Price Information Service predicts that gasoline could peak at $4.25 a gallon by the end of April. That would top the record of $4.11 in July 2008.
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Gasoline prices are headed for $5 a gallon in many locations in the United States this year, says John Hofmeister, founder of Citizens for Affordable Energy and the former CEO of Shell Oil’s U.S. operations.
Global demand will rise and pressure supply, while U.S. politicians aren’t doing anything to ease prices at home such as allowing for significantly more drilling.
“What’s really unprecedented is developing countries, particularly China and India, have this insatiable need for more oil and that has not been taken into account when we think of public policy in this country,” Hofmeister tells CNBC.
“So while we may be producing a bit more oil in this country, and while demand is down a bit, on a global basis, I’m afraid we face a continuing onslaught of prices creeping ever higher,” Hofmeister says. “I hope I’m wrong on this. I’d love to be wrong on this.”
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We hear a lot from the President, his environmental allies, and crony capitalists regarding the wonders of wind energy. Obama’s favorite crony capitalist, who is also a prominent supporter, heads up General Electric, a prime beneficiary of the wind power subsidies, grants, and mandates that have poured forth from the federal government ever since the president took power. These subsidies — giveaways — will be severely cut back at the end of this year unless Congress and the President extend them.
Now comes a documentary ” Windfall” that reports on the many downsides from wind power development that you will not hear about from its promoters: neighbors suffering from the effects of these towers and their spinning propellers, among them. But the problems go beyond the “whopping, whopping” and strobe effect of the blades rotation. The movie is a revelation about the dark underside of green energy. These schemes might enrich their promoters who donate to Democrats. They also might give a warm and fuzzy feeling for environmentalists in big cities whose exposure to them may be limited to seeing them along the road as they motor to their vacation homes. But they cause a lot of misery for the common folks left behind.
The Wall Street Journal reviewed the movie when it first started hitting the film festival circuit:
The film offers few experts on either side of the debate; rather, it allows local townspeople to discuss their own research, experiences and fears, such as the wind turbine’s “flicker effect,” as the machines pass across the sun and cast immense shadows, as well as the dangers of their low frequency hum.
Robert Bryce, author of “Power Hungry: The Myths of ‘Green’ Energy and the Real Fuels of the Future,” and a frequent critic of the wind industry (in the op-ed pages of the Wall Street Journal), says the “infrasound” issue is the most problematic for the wind industry. “They want to dismiss it out of hand, but the low frequency noise is very disturbing,” he explains. “I interviewed people all over, and they all complained with identical words and descriptions about the problems they were feeling from the noise.”
A more updated review by John Anderson for the Wall Street Journal was published on Friday;
They’re sustainable, they produce no emissions and they’ll reduce U.S. dependency on foreign oil. Right? Not quite. And living next to one seems like a nightmare.
Ms. Israel’s movie proves, once again, that the best nonfiction cinema possesses the same attributes as good fiction: Strong characters, conflict, story arc, visual style. The people of Meredith, be they pro or con the wind-turbine plan being fast-tracked by their town council, are articulate, passionate, likable. The issues are argued with appropriate gravity, and even though Ms. Israel, a Meredith homeowner herself, is clearly antiturbine, the other side gets a chance to speak its piece: Farmers, an endangered species, need income. Turbine leases are a way to it. But not only do the energy and ecological benefits fall short of what they’re cracked up to be, the turbines themselves are an environmental disaster: The monotonous whoosh of the propellers, the constant strobing effect caused by the 180-foot-long propellers, the threat of ice being hurled by the blades, the knowledge that it’s never going to end, all adds up to a recipe for madness. And that’s just during the movie.
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President Barack Obama will not be bringing up the Keystone XL Pipeline in his State of the Union address Tuesday night, but Texas Republican Congressman Ted Poe is intent on keeping the controversial oil pipeline project in the news and circumventing the administration’s denial of a permit to build it.
Tuesday, the Texas congressman introduced the “Keystone For A Secure Tomorrow Act” (K-FAST) to allow the 112th Congress to “directly and immediately” approve the Keystone XL Pipeline permit for TransCanada Corporation.
According to Poe, the approval of the pipeline is within Congress’ authority. In 1973, Poe noted, Congress passed the Trans-Alaska Pipeline Authorization Act to allow construction of the 800-mile-long north–south pipeline from frozen Prudhoe Bay to the ice-free port of Valdez.
The Keystone XL project, if authorized, would start in Canada and end up in Port Arthur, TX — part of Poe’s district. Poe estimates that he represents more refineries than any other representative in Congress.
“My bill would authorize the construction of the pipeline — except for the new route that has not been determined yet, that small route in Nebraska, that would still have to go through the normal channels. The rest of it would be authorized immediately,” Poe told The Daily Caller, adding that since Keystone is in “the national interest” Congress has the authority to pass the legislation.
Poe’s bill adds to proposals from other Republicans attempting to get around the Obama administration’s permit denial.
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U.S. Constitutional Free Press 