Markets Solve Energy Crisis, Natch

Don't listen to the Luddites and Malthusians. They're wrong, again.

Even if demand were still at pre-recession levels, advances in technology brought on by high prices would have sated world energy demands for generations.

America is not going to bleed its wealth importing fuel. Russia's grip on Europe's gas will weaken. Improvident Britain may avoid paralysing blackouts by mid-decade after all.

The World Gas Conference in Buenos Aires last week was one of those events that shatter assumptions. Advances in technology for extracting gas from shale and methane beds have quickened dramatically, altering the global balance of energy faster than almost anybody expected.

Tony Hayward, BP's chief executive, said proven natural gas reserves around the world have risen to 1.2 trillion barrels of oil equivalent, enough for 60 years' supply – and rising fast.

"There has been a revolution in the gas fields of North America. Reserve estimates are rising sharply as technology unlocks unconventional resources," he said.

This is almost unknown to the public, despite the efforts of Nick Grealy at "No Hot Air" who has been arguing for some time that Britain's shale reserves could replace declining North Sea output.

Rune Bjornson from Norway's StatoilHydro said exploitable reserves are much greater than supposed just three years ago and may meet global gas needs for generations.

"The common wisdom was that unconventional gas was too difficult, too expensive and too demanding," he said, according to Petroleum Economist. "This has changed. If we ever doubted that gas was the fuel of the future – in many ways there's the answer."

The breakthrough has been to combine 3-D seismic imaging with new technologies to free "tight gas" by smashing rocks, known as hydro-fracturing or "fracking" in the trade.

The US is leading the charge. Operations in Pennsylvania and Texas have already been sufficient to cut US imports of liquefied natural gas (LGN) from Trinidad and Qatar to almost nil, with knock-on effects for the global gas market – and crude oil. It is one reason why spot prices for some LNG deliveries have dropped to 50pc of pipeline contracts.

[...]

The US Energy Department expects shale to meet half of US gas demand within 20 years, if not earlier. Projects are cranking up in eastern France and Poland. Exploration is under way in Australia, India and China.

Texas A&M University said US methods could increase global gas reserves by nine times to 16,000 TCF (trillion cubic feet). Almost a quarter is in China but it may lack the water resources to harness the technology given the depletion of the North China water basin.

Needless to say, the Kremlin is irked. "There's a lot of myths about shale production," said Gazprom's Alexander Medvedev.

If the new forecasts are accurate, Gazprom is not going to be the perennial cash cow funding Russia's great power resurgence. Russia's budget may be in structural deficit.

As for the US, we may soon be looking at an era when gas, wind and solar power, combined with a smarter grid and a switch to electric cars returns the country to near energy self-sufficiency.

This has currency implications. If you strip out the energy deficit, America's vaulting savings rate may soon bring the current account back into surplus – and that is going to come at somebody else's expense, chiefly Japan, Germany and, up to a point, China.

Please, when listening to 'Prophets of Doom,' take their alarmist warnings with a healthy dose of skepticism. This applies specifically and perhaps most importantly to the High Priests of the Holy Church of Climate Change (long live Mother Gaia).

If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Bjorn Lomborg's 'Climate-Industrial Complex'

From last week's journal, a great article by this blog's favorite purveyor of global warmism common sense, Bjorn Lomborg. As the article title indicates--The Climate-Industrial Complex--Lomborg warns against the many special interests that stand to gain from adoption of the radical green plans President Obama has proposed.

The cozy corporate-climate relationship was pioneered by Enron, which bought up renewable energy companies and credit-trading outfits while boasting of its relationship with green interest groups. When the Kyoto Protocol was signed, an internal memo was sent within Enron that stated, "If implemented, [the Kyoto Protocol] will do more to promote Enron's business than almost any other regulatory business."

[Aside: As James Taranto frequently reminds his readers, Paul Krugman is a "former Enron adviser." That shouldn't surprise anyone.]

I'm always surprised by liberal friends of mine who are sure that the only nefarious business interests at work in the world today are "Big Oil" companies which obviously hate the planet and just want money. They, in turn, are always surprised to learn that Al Gore, in addition to being a Nobel and Academy Award winner, is also, as Lomborg describes him,

a politician, a campaigner and the chair of a green private-equity firm invested in products that a climate-scared world would buy.

Yeah, folks, green technology is a money maker--just not for most Americans.

This is what happens when the government intervenes in the market and picks the winners--you pay more taxes and Al Gore laughs all the way to the bank.

If you have tips, questions, comments, suggestions, or requests for subscription only articles, email us at lybberty@gmail.com.

'Alternative Energy': Oil, Coal, & Natural Gas

I love this topic & I love posting things like this--a bit I found in the Notable & Quotable section of the Wall Street Journal, Jon Basil Utley writing in at Reason.com:

It's only a matter of time before President Barack Obama's vast popularity runs aground on his energy policies. In the name of saving the planet from global warming, he has delayed new oil drilling, an action that will have major political repercussions once the world economy recovers. Instead of using some [of] the stimulus billions to produce more gas and oil, Obama's wild-eyed supporters dream of "renewable" energy derived from corn, wind, sunshine, and even grass.

With the appointment of extremists like climate czar Carol Browner and science adviser John Holdren, Obama has placed his administration's environmental policy in the hands of radicals. Interior Secretary Ken Salazar proposes replacing oil and coal with windmills. Yet Barron's recently reported that America would need to build 500,000 giant offshore windmills and transmission lines to produce Salazar's specified 1,900 gigawatts of electricity. In contrast, oil and gas drilling could provide hundreds of thousands of solid, well-paying blue-collar jobs. . . .

All of these things are happening at a time when natural gas is abundant and cheap. The new technology of horizontal fraccing has made it economically feasible to drill into vast shale deposits in many states, even famously difficult ones like Michigan and New York. Many cars could run on natural gas, much like many buses do already. On a recent trip to Peru, I learned that most taxicabs have been converted to natural gas for a cost of about $1,000 each. New technologies continually revive old oil and gas fields and make new ones economically viable. So it's little more than socialist Malthusianism to argue that the world is running out of cheap energy. Science will always find and harness new sources.

History suggests that markets will always find a cheap source of energy.

As for me and my blog, I'll stick with the historically overwhelming power of the market, over the liberty-taking, economy-destroying, command & control social engineers in the Obama administration.

Cap & trade, in addition to being pointless from an "environmental" perspective and incredibly costly (effectively a huge tax on American families), is at its core an opportunity for your intellectual betters in the Obama administration to take control of a huge section of the American economy and your lives.

You see, they're smarter and more enlightened than you & me are and thus, should be controlling an ever-increasing portion of our lives.

It's about power & control: They own/run/influence a huge section of the financial industry as a result of TARP, etc., and now effectively control Chrysler. Next up? This is no secret. Government healthcare, cap & trade and other stuff I'm forgetting at the moment.

If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

The Day The Earth Stood Still: Craptastic Film Of The Year

I don't even know where to begin. Last night I attended an early premier of Keanu Reeves' latest at the BFI Imax here in London.

I guess the best way to sum up this movie is to say this: Imagine if Al Gore, Obama speechwriter Jon Favreau, and those idiots who posted the anti-Christmas atheist sign in Olympia had an unholy trinity/wrote a screenplay--the result of this union, of all that environmental moralizing would be the The Day The Earth Stood Still.

Don't see it. It's worse, even, than The Day After Tomorrow--another couple of hours of my life I wish I could have back.

A little background. Aliens have been monitoring our planet and finally decided that we don't deserve it, that we are about to deserve one of the few planets in the universe capable of sustaining life. So, we are to be terminated. Reeves is the chief executioner. He brings mini ark/globes that collect samples of every other species for preservation. Meanwhile, humanity is wiped away by an alien plague of locusts. Really.

Briefly, in bullet points:

- I didn't stick around long enough to see, but did the writers give credit to Favreau for half of their lines? Every other sentence between Jennifer Connelly Keanu Reeves' alien creature/character (yes, another one) has Connelly pleading with Reeves insisting that humanity can change, "we can change! We can do it!"

- At one point, Connelly's mentor, her "leader of the world," a professor of bioethics, no less, tells her that she has to appeal to Reeves not with reason, but with herself. One envisions the emotional, angry Obamaniac advocating for change with airy rhetoric that means nothing. Change. Hope. Whatever.

- The alien (Reeves) likes Bach--Bach, the soundtrack of the Enlightenment. Of course he does.

- The destroyer of humans and all things created by humankind? Alien locusts. No kidding. Instead of the God of the Old Testament bringing locusts to cow the Egyptions into submission, Reeves brings alien locusts to consume humans and everything they have created--including, and specifically, Giants stadium, the oil fields (which figured prominently), and half of downtown Manhattan.

- At one point, when Connelly has persuaded Reeves to give humankind another chance, he says something to the effect of, "it's going to require a serious change in your way of life." Seriously? Did they get an advance look at Obama's innaugural speech?

- Did I mention the prominence of images oil derricks? Every version imaginable plus refinerys plus car manufacturing plants--hey, hey, the warming gangs' all here.

- Connely drove a hybrid Honda Civic. I suppose I should just be glad it wasn't the totally cliche Prius. Toyota probably didn't want to pay the product placement fee.

- The President and Vice President have been hustled off to separate bunkers where they are completely out of touch with the outside world and have left the female SecDef to monitor and manage things. Hurricane Katrina, anyone? Give me a break.

- At one point, Reeves-alien was cornered by a scared police officer who wants to detain him. Reeves starts a car with his hand and sends it hurtling forward, killing the man. His reasoning, as told to Connelly, "He was an obstacle." Sure, he brought the man back to life with the alien goo in his pocket, but still, this is environmental morality. Obstacles must be removed.

- I can't remember if this was a discussion between Reeves and Connelly or Reeves and Bates, but one of the latter two asks Reeves why he's saving samples of every other creature except humans. Reeves response, 'humans are just one species.' This is how the enviro-nuts view humanity--just one species of a gazillion, all of which have equal claim on the earth, none more important than the other.

- Scanning the reviews at Rotten Tomatoes, I noted that one critic complained that at no point in the film is the phrase "global warming" uttered. Really, Katey Rich of cinemablend.com, they needed to say the words "global warming" for you to know that's what the movie was all about? The multitudinous pictures of oil, oil derricks, drills, refineries, gas guzzling cars, car factories, etc., I'msureI'mforgettingsomeoilisbadcliche, weren't enough?

- Lots of typical Hollywood diatribe about American intervention abroad, torture, violence, etc.

I'm sure there's more, but this is all that occurs to me at the moment.

Let me take this moment to say how glad I am that 650 scientists are now standing up to the whole "global warming consensus." My suspicion is that we will look back at this fad and say that it hit its peak in 2006-07 and that 2008 was the beginning of the end (for the Church of the Holy Environment, not the planet).


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Oil: It's Not Black & White (UPDATED)

As a general rule, I look to the efficiency and amorality of the market to solve economic issues. I guess that makes me libertarian. However, my libertarian-ness has limits. I won't get into those here.

From that general rule, I find myself hesitant of any plan that seeks to manipulate the market to attain some desired, utopian end. One example of this would be "an end to oil dependency." You see, I used to just accept, like everyone else, that dependence on oil for our energy use was an unmitigated bad--the blackest of black.

(nor should this be interpreted as a call for laissez faire, whatever)

My opinion is shifting. Like any other traded good, and especially one so vital to the operation of a country, I think oil forces the United States to make compromises and care about parts of the world which would otherwise receive no attention. And I don't buy the "blood for oil" arguments of the most ardent anti-Bush people. Sorry, folks, President Bush doesn't/didn't just take his marching orders from Exxon & Haliburton.

And I'm worried about the unintended consequences of "going green" or even of imposing some sort of pigovian tax. Sure, I'm sympathetic to a plan that trades cuts in income taxes for a carbon tax, but I'm worried that under such a scenario, the poor will pay--and not just the poor of this country. I'm reminded of the failure of the massive ethanol subsidy which contributed to worldwide food shortages and famine.

I bring all of this up because of an article in the Wall Street Journal which argues, essentially, that oil dependency and the moderation in foreign policy it forces is good. It's a persuasive essay written by someone, Roger Howard, who has done his homework.

While there are, of course, circumstances in which oil can exacerbate tensions and be a source of conflict, it can also act as a peacemaker and source of stability. So to identify America's "foreign oil dependency" as a source of vulnerability and weakness is just too neat and easy.

It's at least worth considering because, like so many other things, the question of oil is not black & white.

12 December 12:50am BST: RD at Pendulum Politics responds.


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Oil Prices Fall & Other Good News

This is the good news, the silver lining, coming out of yesterday's precipitous market drop. Oil prices fell by over $10. And, the dollar had its biggest gain against the British pound in something like 15 years (so Drudge tells me).

Considering that Americans consume roughly 20.73 bbl/day, a $10/bbl savings means [open "Calculator," punch in a bunch of numbers, 20 mins. later ...] that Americans will save $207 million per day. A few more days like yesterday will go a long way towards covering the cost of the Paulson Plan!

American Thinker has an article about the current state of the oil game here in the United States. Janet Levy's section on "current supply estimates" is particularly instructive.

Although Congress has not authorized a thorough inventory of offshore resources for over 30 years, the American Petroleum Institute estimates recoverable U.S. oil resources at about 86 billion barrels offshore and 32 billion barrels onshore.[7] This estimate doesn't take into consideration technological advancements, unconventional sources and recent discoveries.

Currently, the United States is the only industrialized country in the world not actively seeking to explore new offshore resources. In fact, offshore drilling is allowed in most of the Gulf of Mexico but prohibited on the East Coast, West Coast and Alaska. Only 17% of non-park, non-wilderness federal land is open to energy development and 85% of coastal waters are off limits. Further, since 1983, the amount of federal land available for development has decreased by more than 60%.

Recent assessments of the extent of economically recoverable, conventional oil in two important locations -- the Bakken Formation and the Arctic National Wildlife Refuge (ANWR) -- could increase these estimates considerably.

First discovered in 1953, the Bakken Formation covers part of Montana, North Dakota and Saskatchewan. In April of 2008, the U.S. Geological Survey (USGS) estimated that Bakken contains 3 to 4 billion barrels of technically recoverable oil, a 25-fold increase from the agency's 1995 estimate. Market conditions and drilling and production advances could transform Bakken, the largest continuous oil accumulation in the lower 48 states, into one of the largest producing oil fields in the world.

Meanwhile, petroleum experts have estimated that ANWR contains anywhere from 9 to 16 billion barrels of technically recoverable oil and could prove to be one of the largest oil fields yet in North America. Since current USGS estimates are based on the petroleum geology of adjacent lands, the true potential for oil recovery is uncertain.

Environmental arguments about risks to wildlife and pristine forests have kept ANWR off limits to energy development, even though such risks are unfounded. Drilling in the region would cover a mere tenth of one percent of its 19 million acres. Plus, ANWR is a flat, treeless plain with temperatures inhospitable for most animal species. The area is already home to a village of Native Americans, who support its development. It currently contains an airstrip, power lines, an oil well and a military radar site. Two decades of drilling in the North Slope area has had no negative effects on the ecology of the area and, during that time, the caribou population actually increased sevenfold.

If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Drill, Baby, Drill: Dems To Quietly Let Offshore Drilling Ban End

It's a catchy slogan, isn't it?

The AP reports that Democrats are finally going to give up the ghost on their offshore drilling ban.

Since I don't buy the 'environment argument' against drilling (any of them) and think there are mitigating factors to the 'energy independence argument,' I find this to be incredibly great news.

More from Ace. Guitar Hero fans (of the game, not Barack Obama*) be sure to watch the video Ace links. It's a classic.

Adult observations courtesy of The Corner.

UPDATE 10:43pm MDT: I almost forgot: *Over-the-top performance, no real skill or experience.


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Eugene Gholz: On Energy Independence

For awhile now I've bought into the argument that we should reduce our usage of oil and move to other energy sources in order for us to attain "energy independence." All along, I've had concerns about the practicality of such a goal and the unintended consequences--call it my ethanol starvation concern--that might result.

Though I'm not entirely prepared to back off of that broad goal, I'm beginning to rethink my position--not least of all because most of our oil--2/3 by some estimates--comes from Canada and other "friendly" nations.

A recent article by Eugene Gholz, associate professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas Austin, adds weight to my intuited concerns. An excerpt from that article:

Our exaggerated fears over energy security have some benefits – for example, they may reduce the United States' inclination to attack Iran. But they also have big costs. Politicians could be induced to try costly solutions for problems that don't exist, such as President Bush's commitment to double the size of the Strategic Petroleum Reserve. Western leaders may also pay too much heed to an oil producer's saber-rattling. (ed. note: Russia) And, finally, exaggerated fear may encourage oil-market traders to panic at the first sign of even a small disturbance. When it comes to energy security, let's not let fear get the best of common sense.

(emphasis, ed. note, added)

The overarching question I have about all of this is: In an increasingly globalized world, is it possible to be truly independent in anything? Let alone energy independence?

(h/t Dartblog)


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Neil Cavuto Is Awesome

Not only is he awesome, he may be the most thoughtful pundit with his own show. I like Brit Hume, but he's a straight news guy. Hannity does the necessary rallying of the base, but gets bogged down in talking points. O'Reilly is a populist. I like him when he pounds people hard with his common sense and pragmatism, but I hate him when he demonizes "big oil." The night before last, Neil Cavuto took him to task for doing just that.

(h/t Allah-Hot Air)


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Quote of the Day

Douglas Holtz-Eakin, a McCain economist, was recently quoted in the National Journal, responding to former Enron Adviser*, Paul Krugman's criticism of McCain's pro-drilling policy:

If we could get a firm commitment to expanded supply of oil on the market three and a half years from now, that would change spot market prices three and half years from now, that would change futures prices today and that would translate into pressure on prices instantaneously. You know, Mr. Krugman's a good economist; he can go back and read his finance text

*Thank you James Taranto.

h/t: John Fund, Political Diary


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Shale Oil & Energy Independence

This is what we've been talking about.

We have "more [oil shale reserves] than the entire world has consumed since oil was discovered in Pennsylvania in the 19th century."

(h/t Power Line)


If you have tips, questions, comments, suggestions, or requests for subscription only articles, email us at lybberty@gmail.com.

More Superficial Drivel

[ed. note: we originally titled this "Answers To Your Questions." That was before we wrote the post. Once finished, we decided on this, more appropriate title.]

First off (though we don't know why we even have to clarify this), we have never pretended to be a moderate/centrist/non-partisan/post-partisan/bi-partisan blog. We're conservative first. This often leads us to support Republican candidates. How is this a surprise to anyone? We try to be fair and reasonable, but we know enough about bias to understand that objectivity is a pipe dream. Plus, this is an opinion blog, not a reporting blog. We've got no reason to even make a failing attempt at 'just the facts, please ma'am' reporting a la The New York Times. So, please, quit faulting us for not being something we never claimed to be in the first place.

When we bash what seems to our readers to be a far-left opinion. Don't take it personally. We very rarely pick on those precious few of you who choose to read and respond to our posts. We get that none of you advocate the ridiculous things we pan here at OL&L. Most of our readers are conservatives. Most of you who reply are moderate to liberal. To our knowledge, none of you fall into the extreme left camp we frequently lampoon. So, when we go after whacked out leftist/environmentalist ideas or whatever, don't take it personally. We're usually responding to something we read over at the Seattle PI or maybe our bi-weekly scan of the Daily Kos or Huffington Post--not your comments.

We like the idea of drilling independent of its political ramifications. The fact that it could be used politically to help get people we like elected is simply a happy coincidence. Our support of drilling is not so myopic or narrow as some of you seem to believe. We have repeated here (every time we talk about energy issues. check our archive.) that we support drilling along with a carbon tax, nuclear power, and increased R&D funding. What more do you want? We are wary of the economic cost to Americans and American businesses if we attempt large scale transition from fossil fuels to renewable energy. It will hinder us competitively in relation to other countries and is an environmental burden we should not bear alone.

When it comes to policy recommendations, we are political realists. We like the idea of a carbon tax, but the likelihood of enacting one by itself is very slim. Coupling it with a reduction in income and corporate taxes improves its chances, but still makes it tough politically. This is why we half-heartedly endorsed McCain's $300 million initiative to award individuals or corporations who developed better battery technology. It's not the broad, market based solution we hoped for and RD mocked, but if McCain is elected President, it has a far better chance of passing Congress than his and our preferred carbon tax.

And all of these things have a better chance of passing if they are lumped together with increased drilling--a policy supported by a significant majority of Americans.

Part of the reason we disagree with some of you about drilling is that we do not entirely agree with the assumptions on which you base your conclusions.

We get the idea of "peak oil." We understand the price distorting effect of a cartel like OPEC. But we think some of these things are overblown. OPEC's influence has been overstated since the trade embargoes of 1979. Since then, their influence has diminished and with the increased supply coming from Canada's oil sands (our largest single supplier), they have been diminished even further. This isn't to say they have no or little effect, simply that their influence is less than you think because it's easy to demonize and hate the terrorist/oil producing countries.

Regarding peak oil and how that plays into this conversation, RD and some of the rest of you don't like the idea of drilling because it prolongs the influence and control OPEC has on the price of oil and therefore the American economy, national security, and our international interest. We don't like the idea of funding Saudi Wahabbists anymore than the rest of you. However, we believe that between the outer continental shelf, ANWR, and non-traditional supplies of oil found in shale-oil and Canada's oil sands, the increased supply will both decrease the price of oil in the long run and the price influence (what is the technical term? control of marginal supply?) of the OPEC cartel. Some estimate that shale-oil and other non-traditional oil reserves are actually several times greater than the oil reserves of OPEC nations. Again, accessing these resources would significantly diminish OPEC's cartel influence.

We are optimistic about oil because we believe that higher prices will drive the market to find more sources of oil like thermal depolymerization which could potentially manufacture oil indefinitely from things like garbage, sewage, and agricultural waste. We also believe that improvements in technology will make more oil more accessible. Higher prices and technology led to large oil field finds in the Gulf of Mexico, off the coast of Brazil and of course drove the development of Canada's oil sands. We do not foresee a peak oil collapse in the near or even mid-term because of these factors. Heck, our faith in the markets is such that we think prices will eventually drive a near-seamless transition from fossil fuel to some other, perhaps yet-to-be discovered energy source. This is what our study of history has shown us.

Within the general framework we outlined the other day, we are of course open to new and different ideas. Hopefully our drilling fetish makes sense to you when considered in light of our assumptions about supply, demand, OPEC, peak oil and the other things we've written about in this post. Or, you could do as Krauthammer suggested Congress was doing (h/t: S. Lybbert) with some of their recent legislative posturing--repealing first the law of supply and then the law of demand because, of course, they're laws so they must have been put in place by some other idiot Congress--probably a Republican one.

The truth is, we blame most of the rising cost of gasoline on the weak dollar. Greenspan, the guy who seems like he wishes we was still in the game, is largely responsible for cutting rates to far and leaving them their too long. If Bernanke follows through on his commitment to raise interest rates and strengthen the dollar, we expect gas prices to fall accordingly.
/superficialdrivel

[cue Raisin's predictable mocking impersonation]

If you have tips, questions, comments, suggestions, or requests for subscription only articles, email us at lybberty@gmail.com.

Re: Drilling, A Few Points of Clarification

After reading a few of your comments, we figured the discussion on this blog would benefit from a little issue elucidation.

- First off, though we endorse a carbon tax, we do not believe that it is realistic to expect one in our lifetime. Americans would probably throw the president and party who enacted such legislation out on their posteriors. The only way this works is if it is coupled with a cut in income taxes and corporate taxes as we suggested in our last post. Even then, passage of of a carbon tax remains an extremely long shot.

- Let drilling be part of a comprehensive plan. The global warming fetishists also happen to be the same people who have been anti-nuclear and in our neck of the woods (Washington State) anti-hydropower. Of the alternatives to fossil fuels in providing electricity to Americans, nuclear power is the only one even close to having proven capacity to produce. All the other "alternative" energy options combined produce something like 0.5% of all the energy consumed in this country. And this, even after the huge subsidy to their production and the high price of oil.

- All of which brings us to our point about R&D (research & development, to the uninitiated). Spend money on R&D, but do so in a cost effective fashion. We'd like to see a competition with a $100 million prize to the team or corporation or university or whoever was able to come up with the cleanest most viable alternative energy source. It does no good to simply throw money at wind or solar or whatever when the "solution" (though we doubt there will ever be just one OR that we'll ever truly go away from fossil fuels) may be something that has not ever been discovered yet.

A command and control solution to our energy problem will not solve the problem. We guarantee that the cure will be worse than the disease. For those of you who doubt this guarantee, we point, once again, to the ethanol debacle. Mandate ethanol, starve the already poor and starving in lesser developed countries.

- We agree with Lomborg and the consensus conference of earlier this year. The money being expended trying to cool the earth could be better spent in other areas. And, efforts to curb global warming, which studies show will have little to no impact, will hinder economic development that would, in the future, enable us to develop the technology necessary to actually do something.

Want to do some good in this world? Good that would actually save lives and make them better--make the world a better place?

Per the consensus, the most cost-effective ways to help the world's poor:

1. Vitamin A & zinc supplements
2. Doha trade round
3. Iron supplements and salt iodization
4. Expanded youth immunization
5. Biofortification of seed stocks

Those of you who click through to the article will find global warming-related initiatives at the bottom of the list. Even global warming R&D is near the bottom of the list. But then, we don't really care about developing new energy sources because of the environment. We don't think it's as serious a problem as the GW fetishists.

- Re: the millions less miles Americans drive today versus a few years ago: this is due far more to the price of gasoline than to any efforts of the GWF's.

- Drilling off the coasts is only part of the solution. And admittedly, not a short term one. We hope only to derive short term political gain from the issue, but we believe, and there is reason to do so, that drilling could help America's long term issues with energy dependence. Banning development of domestic oil and shale-oil is a stupid policy and stupid Democrat Party "article of faith." If they want to hold to it, they should be punished at the polls. But in addition to drilling off-shore and in ANWR, we think Congress should open up America's shale-oil supply to development and production. The numbers we've read--1.5-2.6 trillion barrels--that could potentially come from those sources are huge. They could be and would be developed and produce oil the same way as the Canadian tar sands. Coal liquefaction is another fossil fuel alternative.

There is energy to be had on American soil. And it can be extracted cost effectively. We should free American corporations to get at it. Fossil fuels will always be part of the American energy picture because they are there and they are cheap--far cheaper than the "alternatives." And, as they dwindle, market forces will drive innovation that will bring other energy alternatives online--the same way we went from whale oil to light sweet crude.

- For those of you religiously opposed to fossil fuels, your next alternative should be nuclear power. It is proven and it is clean. Call on your local representatives to do what is necessary to free the American nuclear industry from onerous regulations and frivolous lawsuits. In the nuclear sense, we should follow the example of the French, whose energy needs are satisfied in large measure by their extensive nuclear power program.

Our comprehensive energy/environment policy recommendations:
- open American coastlines, ANWR to traditional oil drilling.
- permit development of shale-oil extraction.
- enact a carbon tax combined with a cut in income and corporate tax.
- expand nuclear power plant construction.
- introduce cost effective, competitive R&D legislation
- start worldwide campaign to divert money now being spent on ineffective global warming policy towards the Top 5 cost-effective ways to help the world's poor.


If you have tips, questions, comments, suggestions, or requests for subscription only articles, email us at lybberty@gmail.com.

Drill! Drill! Drill!

We return from our 2 week (or so) blogging sabbatical to advocate for drilling anywhere and everywhere--including ANWR. We also endorse enactment of some sort of carbon tax. However, we would only embrace said tax if it were matched by a concurrent cut in corporate and individual income taxes such that there be no net increase in taxes.

A few notes:

- Technology has improved in the last 20 years (since the coasts were placed off-limits) to the point at which drilling can be done safely and with minimal environmental impact. This is a non-issue.

- We understand that drilling will have no short-run impact on prices. We don't care. We only hope that the current furor over prices drives policy in a direction we like: towards expanded drilling.

- Though it won't eliminate the need for importing oil from the middle east, expanded use of domestic oil supplies (including the estimated 1.5-2.6 trillion barrels to be derived from shale-oil) will lessen our dependence on middle eastern oil.

- This issue could be a winner for John McCain. The Rasmussen poll we saw tonight said that 62% of Americans agree that we should drill domestically. Obama may be leaving behind Bill Clinton's centrist ideals, but he should not forget that Presidential politics are almost always all about the economy. We almost feel sorry for poor global warming fetishists whose green utopia has run headlong into economic reality.

This is one of those few, happy instances when the popular policy is also the right one.

All that remains is for high gas prices to hold long enough to bully Democrats in Congress into passing domestic drilling legislation OR give McCain and congressional Republicans an election-breaking issue come November.


If you have tips, questions, comments, suggestions, or requests for subscription only articles, email us at lybberty@gmail.com.

World Oil Prices

From Drudge:

• Bush wants OPEC to Up Oil Output...
• *Saudia Arabia: Market Dictates Production...
• **BYU Econ Major to Saudi Arabia: Markets? Don't give me that. Saudis part of "largest cartel in the world."

If you have tips, questions, comments, suggestions, or requests for subscription only articles, email us at lybberty@gmail.com.

Daily Primer: Oil Companies are Awesome

- Today marks the 10 year anniversary of the Information Technology Agreement. This agreement enabled the technology led expansion of the last decade. Don't believe us? Check out this bit of information from a great article on the impacts of this free trade agreement:

What impact did all this have on the U.S.? The best way to answer is in terms of productivity, which is the single most important metric to gauge the standard of living for any country. From 1973 to 1995, output per worker hour in the nonfarm business sector grew at just 1.35% per year. Then in 1995, productivity growth began to accelerate. From 1996 through 2006 it doubled, to an average annual rate of 2.7%.

The importance of this productivity acceleration is difficult to overstate. At the previous generation's growth rate, average living standards required 52 years to double. At the current growth rate, average living standards need just 26 years to double. This carries profound implications for the well-being of all Americans.

It's this type of growth that makes America the richest nation in the world. This is why our definition of poverty includes households that own multiple tv's and have air conditioning. And free trade doesn't only enrich America, it raises the standard of living of every country that engages with America in these sorts of free trade pacts. It's why Hong Kong is richer than mainland China and why Taiwan, Japan, and South Korea exploded economically over the last 20-30 years.

We should all be free traders and sometimes we wonder that we're not. And then we walk past that pesky "Fairtrade" cafe at school. To see what else we've posted about free trade & business click here, here, here, here, and here.

- Check out this great defense of the oil industry. These guys are politicians' favorite punching bag and it's a shame they even need a public defense. From the article:

There are two American oil industries. One exists only in the minds of its critics, many of whom are politicians. When prices and profits rise, as happens in a cyclical business, the critics demand new antitrust and other legislation. When prices and profits inevitably fall? Silence.

The other American oil industry exists in the real world. It's intensely competitive, innovative and subject to more scrutiny and tougher antitrust enforcement than any other segment of the economy. And it's adept at meeting the diverse and dynamic needs of American consumers.

They endured 15 years of below average profits, finally have a few good years, and now Congress wants to nail them for "price gouging." Does anyone even know what that is? Then, rather than easing regulations that would speed up exploration for new oil supplies (and alleviate our dependence on Middle East oil) or build new refineries, Congress adds more hoops (ethanol, anyone?). All of this combines to make gas more expensive. It's a testament to the market and oil companies themselves that the price of gas has remained relatively low. In fact, when taking inflation into account, the price of gasoline has experienced only mild increases since Americans first started putting it into their Model T's.


If you have tips, questions, comments, suggestions, or requests for subscription only articles, email us at lybberty@gmail.com.