California Gas Stations Shut as Oil Refiners Ration Supplies

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.

Read more here.

Rejecting Keystone is ‘insanity’

Washington Post columnist Robert Samuelson has some choice words for President Obama’s rejection of the Keytsone pipeline:

President Obama’s rejection of the Keystone XL pipeline from Canada to the Gulf of Mexico is an act of national insanity. It isn’t often that a president makes a decision that has no redeeming virtues and – beyond the symbolism – won’t even advance the goals of the groups that demanded it. All it tells us is that Obama is so obsessed with his reelection that, through some sort of political calculus, he believes that placating his environmental supporters will improve his chances.

[…]

Now consider how Obama’s decision hurts the United States. For starters, it insults and antagonizes a strong ally; getting future Canadian cooperation on other issues will be harder. Next, it threatens a large source of relatively secure oil that, combined with new discoveries in the United States, could reduce (though not eliminate) our dependence on insecure foreign oil.

Finally, Obama’s decision forgoes all the project’s jobs. There’s some dispute over the magnitude. Project sponsor TransCanada claims 20,000, split between construction (13,000) and manufacturing (7,000) of everything from pumps to control equipment. Apparently, this refers to “job years,” meaning one job for one year. If so, the actual number of jobs would be about half that spread over two years. Whatever the figure, it’s in the thousands and thus important in a country hungering for work. And Keystone XL is precisely the sort of infrastructure project that Obama claims to favor.

The big winners are the Chinese. They must be celebrating their good fortune and wondering how the crazy Americans could repudiate such a huge supply of nearby energy. There’s no guarantee that tar-sands oil will go to China; pipelines to the Pacific would have to be built. But it creates the possibility when the oil’s natural market is the United States.

This is the Obama we have come to know and love; piously proclaiming his priority being job creation while taking actions that directly contradict that priority. He says he wants business to thrive — and then throws up roadblock regulations to prevent it. He says he wants the economy to grow — and then advocates policies that stifle growth.

And then he blames his failures on others.

Energy independence, jobs, growth in the economy — all of these would have been affected positively by building the pipeline. Instead, the president decided to pander to his far left base of Luddites.

Huge increase in electric bills seen in the next few years

Via Ed Morrissey at Hot Air, this Chicago Tribune article pretty much confirms what President Obama promised; that our electric bills would “necessarily skyrocket” as a result of new environmental regulations that will make coal-fired electric plants virtually a thing of the past.

The increases are expected to begin to appear in 2014, and policymakers already are scrambling to find cheap and reliable alternative power sources. If they are unsuccessful, consumers can expect further increases as more expensive forms of generation take on a greater share of the electricity load.

“Each generator will have to decide for itself whether the investment required to meet environmental requirements can be justified based on its projection of market prices and the cost of its capital. In any case, those costs will be passed through to consumers,” said Mark Pruitt, director of the Illinois Power Agency, which procures electricity for Illinois.

American Electric Power, one of the country’s largest coal-burning electricity generators, said Thursday it will retire nearly a quarter of its coal-fueled generating capacity and that it will spend up to $8 billion to retrofit remaining units to meet regulations that start taking effect in 2014. Those moves will have an impact.

“The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling,” AEP Chairman and CEO Michael G. Morris said.

There is also a chance that actual shortages – you know, the kind that occur regularly in Third World countires – might hit the grid with rolling blackouts, brownouts, and perhaps even regulations that would outlaw HDTV’s, certain refridgerators, and other appliances that consume a lot ot electricity.

Yes, but at least we’ll stop global warming in its tracks…or not. For every atom of CO2 we stop emitting in the US, China and India will put two into the atmosphere. Their economies will boom. Ours will shrivel.

Has there ever been a great nation that committed economic suicide for no real reason?

Senate rejects GOP bill to expand, speed up offshore drilling

The Senate on Wednesday rejected Republican-backed legislation intended to speed up and expand offshore oil and gas drilling.

In a 42-57 vote, the Senate failed to move forward with the bill, which was opposed by the White House and most Senate Democrats. Republicans needed 60 votes for the measure to proceed.

Every Senate Democrat voted against the motion to proceed along with five Republicans: Sens. Jim DeMint (S.C.), Mike Lee (Utah), Richard Shelby (Ala.), Olympia Snowe (Maine) and David Vitter (La.).

The legislation – which is similar to bills the House approved in recent weeks – would set deadlines for several upcoming Gulf of Mexico lease sales.

It also would require lease sales off the coasts of Alaska and Virginia that the Interior Department had canceled following last year’s oil spill.

In addition, it would require the Interior Department to approve or deny offshore drilling permit applications within 60 days of filing, or the permits would be automatically approved.

Republicans characterized the bill as a step toward ending what they call undue White House limits on domestic energy development.

Senate Minority Leader Mitch McConnell (R-Ky.), speaking ahead of the vote, called it a modest “first step” in the GOP energy strategy.

The Big Oil Dog and Pony Show

Did you happen to catch the big oil bash-fest that occurred yesterday in Washington? It was really quite a day for the progs with all those evil oil executives summoned to the liberal throne room to testify about their “obscene profits” – must be as close to Christmas morning as it gets in Washington. Right now the Democrats are in a push to pass the “Close Big Oil Tax Loopholes Act,” which would raise their taxes by $2 billion a year by eliminating tax subsidies for the five major oil companies. So before we go any further, let me catalogue some of the quotes from our Democrat Senators just slobbering … I mean dripping! … in wealth envy rhetoric.

* Sen. Jay Rockefeller, D-W.Va.: “I think you’re out of touch, deeply profoundly out of touch and deeply and profoundly committed to sharing nothing,” Rockefeller said. “You never lose. You’ve never lost. You always prevail

* Sen. Bob Menendez, D- N.J .: “I find it hard to understand how you can come here before this committee and the American people and say, when you are projected to make $125 billion in profits this year … That somehow the loss of $2 billion a year, which means you only make $123 billion in profits, is somehow so punishing, somehow not part of shared sacrifice, somehow you need to go back at them at the pump to make up for it.”

* Sen. Bob Menendez, D- N.J .: “If the big five oil companies could just live with $123 billion in profits in 2011, they could pay their fair share in taxes, help lower the deficit and not raise the price of gasoline, and all of the savings here go directly to deficit reduction. This is not an argument about there’s other spending we’d like to do; this is about going directly to deficit reduction.

* Sen. Chuck Schumer, D- N.Y.: “Do you think that your subsidy is more important than the financial aid we give to students to go to college?”

* Sen. Claire McCaskill, D- M.O.: “There is more hot air around this building about deficit reduction than any other topic right now, and if we cannot end subsidies to the five biggest most profitable corporations in the history of the planet that come from the federal taxpayer, then I don’t think anyone should take us seriously about deficit reduction. The bottom line is this: If we can’t do this, if we can’t remove subsides from these profitable big oil companies, then I don’t know if we can ever get to the really difficult work that lies ahead.”

Now, I’m trying to noodle this one out. While I am not one for corporate welfare, I also do not believe that our government should be singling out specific industries, and particularly specific companies. By the way, let me take this moment to point out that if we had the FairTax, none of this tax subsides nonsense would even be an issue. But moving right along …. so exactly what subsidies are we talking about? Can you answer that question? What subsidies are the Democrats demanding that we get rid of? This excellent article in the American Thinker has the breakdown:

* Domestic manufacturing tax deduction — $1.7 B. This is a tax deduction given to every manufacturer in the US. Per CNN, it was “designed to keep factories in the United States.” If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other manufacturers.

* Percentage depletion allowance — $1 B. Any industry can write down a portion of the cost of its capital equipment as part of the cost of doing business. Right now, oil in the ground is treated as capital equipment. Again, this “subsidy” amounts to how the cost of doing business is defined. All companies get it, not just oil companies.

* Foreign tax credit — $850 million. Companies get credit for taxes they pay to other countries. All companies get this “subsidy,” not just oil companies. Should a company pay tax on tax? Should only oil companies pay tax on tax?

* Intangible drilling costs — $780 million. According to CNN, “[a]ll industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.” Among these four tax “breaks,” this smallest one was the only one that treated oil companies differently.

As Randall Hoven, the author of the American Thinker article, points out … the only subsidy that is specific for the oil industry is the last one for intangible drilling costs. So $3.55 billion that the Democrats want to claim are tax credits that are offered to all industries and manufacturers in the United States. But what if the Democrats get their way and raise taxes? Hoven has the figures …

* The amount of earnings not collected in taxes is about $4.3 billion per year — about 0.2% of this year’s deficit and enough to fund about 10 hours of current US government spending.

* The only tax in which the oil industry seems to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy? That would be $0.78 billion per year — enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign-owned and state-owned oil company for drilling offshore Brazil.

So what is really going on here? The Democrats know that people are screaming about the cost of gas. Now the fact of the matter here is that while the people are screaming, they’re also doing something about it. They’re consuming less. As they consume less – as the demand decreases – the supply increases. What happens with reduced demand and increased supply? Prices come down, that’s what, and that’s exactly what happened with the wholesale price of gas this week. Give the dealers the chance to replace the more expensive gas in their storage tanks with less expensive fuel and the price comes down at the pump. But before that happens the Democrats want to make sure that this price crisis doesn’t go to waste. So they haul the oil company executives to Capitol Hill and hammer them with their moronic class warfare rhetoric and lies about wanting that money to reduce our deficit.

The problem again is education. The American people are not well enough educated to see through this political rhetoric for a glimpse of the truth. But then that’s the very purpose of government control of the education process.

House Says No to Obama Dictatorship

The House of Representatives voted to open more of the nation’s oceans for oil and gas exploration on Thursday by a vote of 243 to 179.

The “Reversing President Obama’s Offshore Moratorium Act,” requires the Interior Department to set a production goal of three million barrels of oil per day for its 2012-2017 leasing plan.

In order to reach that target, the legislation requires the department to hold lease sales off the coast of Southern California, in the Arctic Ocean, off Alaska’s Bristol Bay, and in the Atlantic Ocean from Maine to North Carolina.

Republicans say that the bill, along with two other drilling measures passed earlier this month, would create 1.2 million jobs and lower the price of oil. The Congressional Budget Office says that the offshore lease sales would generate $800 million in revenue over ten years.

The Obama administration released a statement opposing the bill Wednesday. The White House argued that the proposal would undermine the current leasing process and mandate drilling leases without input from the affected states.

Obama promised higher energy costs. He wasn’t kidding

President Obama held a town hall meeting Wednesday at a wind turbine manufacturing plant in Fairless Hills, Pa., to promote his Big Green energy agenda. Not everyone in the audience was receptive to his message.

When one man failed to clap as Obama talked about government forcing higher fuel efficiency standards (which, contrary to the president, did not reduce U.S. oil imports a single drop), Obama teased him: “If you’re complaining about the price of gas and you’re only getting eight miles a gallon — (laughter) — you may have a big family, … How many you have? Ten kids, you say? (Laughter.) Well, you definitely need a hybrid van then.”

In fact, there are no family-sized hybrid minivans on sale now, and any that come online in the near future will likely cost somewhere north of $30,000. We doubt that a family of 12, or even an average family of four, has that much money just lying around to invest in Obama’s Big Green dreams. But we’ve seen this Obama many times before. Instead of understanding the challenges facing his fellow Americans, and working to lower their energy costs, Obama lectures them about the alleged errors of their ways and tells them how they should spend their hard-earned money. The Fairless Hills exchange was an illustration of the professional politician who thinks he’s the boss, when in fact he is supposed to be the elected servant.

“There is no magic formula to driving gas prices down,” the president also said Wednesday. Maybe so, but Obama has figured out a pretty good formula for driving gas prices up. Immediately after taking office in 2009, his interior secretary, Ken Salazar, canceled 77 previously approved leases for oil and gas development in Utah. In February 2010, the Environmental Protection Agency mandated that consumers buy 36 billion gallons of renewable fuels (like ethanol) by 2020. By July 2010, the White House banned drilling in the Gulf of Mexico in the wake of the Deepwater Horizon disaster. The ban has since been lifted, but only half a dozen permits have been issued despite hundreds of pending applications. Now the Energy Information Administration projects a 13 percent decline in off-shore oil production this year.

Read more here.

The Focus on Energy

I’ll give it to him … the Community Organizer deserves some props on this line. It’s funny because it is true. During a speech yesterday about energy, Obama dropped the line: “[Energy Secretary Steven] Chu’s the right guy to do this, he’s got a Nobel prize in physics — he actually deserved his Nobel prize.” That’s pretty good. But what’s not pretty good is Energy Secretary Steven Chu and his views on energy in America. Did you know that during an interview with the Wall Street Journal in September of 2008, Steven Chu said that gas taxes should slowly be increased over the next 15 years in order to force people to turn to alternative energy sources. He says, “Somehow, we have to figure out how to boost the price of gasoline to levels in Europe.”

Looking around at our current gas prices, one can’t help but wonder if Steven Chu is getting exactly what he hoped for. Don’t forget that “energy” is one of the last pillars of Obama’s plan as president, rounding out healthcare, education and financial reform.

Drill where? The Hollywood left blocks new oil field drilling

The sheer magnitude of the Tea Party tsunami that roared through Washington last week posits the existence of an active, motivated conservative electoral base. Without a doubt, this base will continue to engage itself in rolling back the entrenched positions of the liberals and progressives in government, business, and popular culture. The Tea Party re-generation seems unlikely to shrug its shoulders and suffer in silence while ideas and values that undermine traditional America are flaunted.

That said, the primary importance of a vigorous, healthy American oil industry is essential to achieving energy independence and maintaining American freedom. I would wager there are very few Tea Partiers driving electric cars home to solar-paneled houses. I believe it’s time, therefore, that Americans get behind the oil industry and petition our elected representatives to do something about the absurd level of red-tape and smoke thrown up by leftists every time an oil company wants to drill for more of the one natural resource Americans need most:

Texas Tea.

The anti-oil blockade over the last 20 years has metastasized from hippie protesters to federal bureaucrats to liberally appointed judges to the point that no potential oil producer can even begin to drill for new sources of oil without suffering through literally years of litigation and hundreds of thousands of dollars (if not milions) in legal fees. I say its time to free the oil industry, drill there, drill now!

It’s not like we’re facing an army of brain surgeons on the other side. We need to stop pretending that we are all chicken-little Al Gores out here, gone all touchy-feely with idiot compassion for the planet and address the continued liberal obstruction of our access to more abundant and cheaper oil.

In Anchorage today, a public hearing is taking place regarding oil leases purchased by Shell Oil (and others) from the U.S. Minerals Management Service for the right to drill in Alaska’s Chukchi Sea. Our desperate-for-cash government accepted 2.7 billion dollars from the oil companies, but drilling has been blocked by “legal and regulatory challenges including a lawsuit over the sale.”

I’m sure the oil companies have their best attorneys on the case. They will be facing a motley assortment of environmentalists, Alaskan native groups and, just to give their side some gravitas, Ted Danson.

That’s right, Whoopi Goldberg’s old boyfriend. I’m sure the enviros took Danson’s decision to appear in blackface at a Friar’s Club roast for Goldberg into consideration when evaluating his good judgment and mien. Ted sits on the board of Oceana, one of the enviro-pests driving the oil blockade. The other board members are either free-booting lawyers, women with too many hyphenated names, actors or other layabouts who are apparently incapable of holding a real job.

As for the Alaskan native groups, they comprise about 15% of the total Alaskan population of 698,473, for a total of 100,000 people. Why should 100,000 indigenous people dictate economic hardship for the other 300 million of us?

A recent article by the Indigenous Environmental Network quotes Jack Schaefer, President of the Native Village of Point Hope: “We’ve hunted and fished in the ocean since time immemorial. We’ve always believed that we own the ocean and that it is our garden. We can’t afford to stop our religious, cultural and subsistence activities that depend on the ocean.

So the environmental circus is in Anchorage today. We’re all waiting to see if Ted Danson shows up in Eskimo-face. As members in good standing of the American Tea Party, we need to run this circus permanently out of business and get back to the business of America doing business.

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