Biden Administration Misdirection on US Oil Production

 The Biden administration is making a habit of misdirecting Americans on the causes of the increases in the cost of oil in several respects.  They have repeatedly made the claim that U.S. crude oil production is at an all-time high, for instance.  Here is the actual data on U.S. Crude Oil production per week according to the U.S. Energy Information Administration:

The peak in average daily crude oil production was in the weeks of 28 February and 13 March 2020 when the average daily oil production was 13,100 thousand or 13.1 million barrels of oil.  Oil production was reduced after that due to the Covid-19 pandemic and expected lowering of demand for oil as people stayed home or at least stayed closer to home.  The week of 29 January 2021, Biden's first full week in office, the daily average oil production was 10.9 million barrels of oil per day.  The week of 25 February 2022 the daily average crude oil production was 11.6 million barrels.  This was due to some recovery in oil demand and the price of oil due to the easing of the Covid-19 pandemic.  This is still 1.5 million barrels per day below the U.S. peak oil production.

Another Biden administration misdirection is the claim that 9,000 oil leases for oil production means that any shortfall in oil production is the fault of oil production companies.  The Biden administration has made it abundantly clear that they want the prices of oil and natural gas to skyrocket, which means they want their production to lag the demand for them.  They want this to encourage the massive mistake of a false belief in an existential catastrophe due to man-made global warming.  Oil and gas production has no long-term future according to their belief system.  Twice the Keystone XL pipeline was put on track for construction and twice its construction was halted by the Democrats and the Russian-funded environmentalist special interest groups with whom they collaborate.  This has caused the loss of massive sums of capital to its investors.  Other pipeline projects have also suffered as the Democrats ruined the investment climate.

One cannot make use of a lease to drill oil if one is not allowed to produce on that lease under reasonable environmental rules.  One cannot make use of an oil lease if one cannot build a pipeline to deliver the oil to a refinery.  One commonly cannot drill or build a pipeline if one cannot borrow money from banks and other lending institutions.  The Biden administration has been strongly discouraging banks and other lenders from making loans for purposes tied to oil production, oil transport, and oil product production.  They have discouraged liquification facilities and liquified gas transport capability.  They have also placed a moratorium on further leases on federal land and on offshore oil drilling. 

If the Biden administration were to give you the go ahead to invest a billion dollars into an oil and gas production effort, would you feel comfortable that they would not halt you in the midst of your investment or at a late stage in that investment?  If you were not very cognizant of that risk, you would certainly not be someone who should have any control over the investment of a billion dollars.

The Biden administration is definitely responsible for an unfavorable climate for oil and gas production.  It is extremely dishonest of them to claim that any shortfall in oil and gas production is due to the failure of the oil and gas industries.

  

Tides Foundation Screed Against Capitalism in Schools

The Tides Foundation is closely associated with Obama and many of his close advisers. It has put out an incredibly distorted DVD called The Story of Stuff on Capitalism, the actions and purposes of the American government, and on the environment. A friend, Paul Cohen, directed my attention to it on 22 September and this afternoon I watched a Glen Beck show in which he discussed it. That such a viewpoint is supported by the Tides Foundation, with its close connections to Obama and friends, should be most frightening. It is still more frightening because the government-run schools are using this widely to indoctrinate our children, just as Hugo Chavez is now indoctrinating the children of Venezuela in its public schools!

Basically, it says that the purpose of government is supposed to be to take care of the people, but instead government is the shoeshine boy for big corporations, which are so big that of the 50 largest economies of the world, 48 are corporations and only two are countries! The purpose of the corporations is to destroy the planet, using up all of America's resources and those of the rest of the world. Then the corporations poison us all with toxins, but many people have to work amid the toxins for them for almost nothing and without health care because they are desperate due to the destruction of the planet! Goods are designed to break quickly so they have to be replaced. Advertising indoctrinates us all into becoming consumers by telling us we suck if we have not purchased the most recently produced stuff with all its arbitrary, useless changes. We are then inundated with trash, about 4.5 pounds each per day. Getting rid of it, further exposes us to toxins and damages the earth with landfills.

It tells our children they must join the environmentalists in ending the use of resources, fight for stronger labor unions and labor protection laws, fight for health care, to end the use of all toxic materials, to end advertising, to close landfills and shutdown incinerators, and join in other socialist goals.

Glen Beck pointed out that its claim that the U.S. only has 4% of its original forests was likely to mislead children. Many of them would conclude that rapacious corporations cut down 96% of all forests and they were never to return. In fact, more forest since colonial times has been lost due to lightening than to lumbering operations. And in both cases, the land usually is replanted. Actually, we have as much forest land now as we did in 1900, and since the 1960s the forests have been improving in terms of health and tree size.

Annie Leonard, the narrator, also claimed that after 9/11 when George Bush might have asked us to grieve and pray, he asked us to shop. Actually, he did ask everyone to remember the dead and to pray for them, those who loved them, and for the United States. He also asked us to not give victory to the terrorists by disrupting our way of life. There was a sharp fall-off in the economy and he did want us to return to business. It was a serious problem, since many businesses did fail at that time. Beck also objected to this statement.

Let us revisit the claim that only two countries have economies larger than 48 corporations. The two biggest countries in GDP are the U.S. and Japan as of 2008. The next largest is China with a GDP of $4.4 trillion. According to Annie Leonard, 48 corporations have revenues in excess of $4.4 trillion! Incredible!!!! It turns out that Walmart is the world's biggest company with revenues of $379 billion. That is big, but China is more than $4 trillion bigger! Maybe she means there are only two countries with tax revenues that put them in the top 50 organizations with respect to revenues. Then Walmart and ExxonMobil have more revenue than does the Japanese government, but not nearly as much as Germany, France, Italy, or the U.K. Spain and Russia have government revenues exceeded by only a few of the largest companies in the world also. Again, the statement is false. Telling lies to our children in government schools should not be tolerated.

The presentation to the children also claimed that one-third of the world's natural resources had been consumed in the last 3 decades. We long ago finished consuming all of the world's oil according to many of the predictions of the past, so such assessments are rarely worth anything. Unless, of course, you simply wish to scare our children.

40% of U.S. waterways are undrinkable. I would be surprised if the percentage of undrinkable waterways was not pretty high in colonial times. Plenty of waterways have parasites and harmful bacteria in them naturally. The children are supposed to assume that all the undrinkable waterways cannot be drunk due to toxins put there by corporations. There are toxins put in the rivers by corporations, but the scale of their responsibility for this statistic is being exaggerated.

The U.S. has 5% of the world population, but consumes 30% of the world's resources and creates 30% of its waste. It also creates most of its medical advances, which should be cut back to 5% of all medical advances allowed by this logic. Apparently, the U.S. is supposed to use or contribute no more than 5% in any category of production, use, and creation. Hogwash. Besides, we have greatly extended the lifespan of people throughout the world, helped to end slavery around the world, and served as the example to many countries to get them to protect property rights and to allow their people some individual rights and more economic rights. I suppose we were only supposed to make a 5% contribution there also.

If everybody consumed at U.S. rates, we would need 3 to 5 planets. Five planets were shown. If everyone consumed at U.S. rates, then we could assume that everyone was as inventive and productive and we would develop many more resources. The size of the resource pie is not fixed, as is usually assumed by socialists.

There are over 100,000 synthetic chemicals in commerce today. This is presented as though it is a bad thing. Is it not marvelous how inventive we humans are?

U.S. industry admits to releasing over 4 billion pounds of toxic chemicals a year. Wow, U.S. industry is dumping more than 4 billion pounds of toxic chemicals a year into our air, land, and water! Well no. The EPA so-called "release report" is really only asking industry what they are making or using, not what they are disposing or allowing to escape. So, copper, silver, nickel, cobalt, chromium, fumed aluminum, and other metals are included even though the copper becomes copper wire, silver becomes jewelry, the nickel, chromium, and cobalt go into metal alloys, and the fumed aluminum is captured in a matrix of other materials. Urethane and styrene are counted as toxic, which they are when in short chain lengths, but after manufacture into a product, they are in a long chain form and pretty inert in most cases. They go into packaging, cushions, car dashboards, sealants, rubbers, etc., and are not much of a safety threat! Ethylene glycol is listed and is used in anti-freeze, but do not drink it, please. Lithium carbonate is listed. Eat a wee bit and it will make you a bit mellow, but do not use more. It is used to treat depression. Also it is used as a fluxing agent for ceramics and a ceramic enamel ingredient to coat aluminum. The products are not dangerous, but the amount used is counted by the EPA. Isopropyl alcohol is also listed. Yes, you should not drink your rubbing alcohol. Ammonia, used in cleaners, is also counted. Again, do not drink your cleaners. Of course, many of the chemicals listed are truly nasty, but they are handled as such and recycled in processes and less and less is released with time. But, it is all counted in this EPA "release" report whether it is released or not or is released in a harmless form.

Our children are told that it is bad that: The average U.S. person consumes twice as much now as 50 years ago. National happiness peaked in the 1950s. We spend 3 - 4 times as much time shopping as Europeans do. The U.S. house size has doubled since the 1970s. Happiness peaked in the 1950s because they were so obviously better than the war years or the Great Depression years before that. Everything most people think is good, is clearly bad in the eyes of these Tides Foundation-supported socialist environmentalists. Clearly, people must not be left free to determine for themselves what is good for them. We need strong leaders to force us to do what is right.

Every garbage can we put out on the curb is filled with stuff that it took 70 other garbage cans worth of stuff to make. Among this garbage waste is, no doubt, the earth that was moved to get to the nickel, silver and copper we use. Given the track record above, I have little confidence in this statistic as stated and implied.

So, this is the view of Capitalism and America that Obama and his allies want our children to have. I believe this is most revealing and very, very threatening. But, this is just the kind of shenanigans one should expect that government-run schools operated by members of one of the most socialist unions in America would lend themselves to. This is very blatantly socialist propaganda worthy of a Hugo Chavez or a Joe Stalin, with a thin, thin veneer of polish. It also fits in nicely with the Cult of the Personality many schools are developing for Obama.

Obama Wants 600,000 More Bureaucrats

Daniel J. Mitchell of the Cato Institute listened to President-Elect Obama give his weekly radio address and discovered that Obama wants 600,000 more government bureaucrats to harass the American people. Obama claims these people will help the economy get moving.

Only a fool believes that government workers create anything positive on a scale comparable to what private sector workers produce. Government, when strictly limited to its proper scope, creates an environment as free of the use of force as possible, provides rational and knowable laws, and protects property and enforces contracts. Beyond that, and we are way, way beyond that, it only creates mischief, injustice, time-sinks, high taxes and waste, and barriers to trade and production.

Inefficient Nationalized Oil Companies

This last week Congress once again called the big American oil companies before committee to ask them why they were making profits when Americans were paying so much at the gas pump for gasoline. The oil companies ran weak ads on TV defending themselves and blaming the cost of oil on OPEC, high demand in developing countries, and the political uncertainties in many oil-producing nations. They did not complain about the government adding to the cost of oil with ethanol mandates and high gasoline taxes. They also did not point out that Congress will not allow them to drill for oil in much of the United States and its territorial waters. They did not point out that oil production is falling in some countries due to the inefficient operation of their nationalized oil companies.

Of the top ten companies in the world in terms of petroleum reserves in 2006, nine are state-owned national oil companies. The largest by far is Saudi Aramco and the 2nd, 3rd, and 4th largest are NIOC (Iran), INOC (Iraq), and KPC (Kuwait). These all have reserves of over 100,000 million barrels of oil. Fifth place is PDV (Venezuela), 6th is Adnoc (United Arab Emirates), 7th is Libya NOC, 8th is NNPC (Nigeria), 9th is Lukoil, and tenth is Qatar Petroleum. Of these, only Lukoil is private and it is controlled by ex-KGB thugs. Exxon-Mobil, the largest US oil company in terms of reserves, is number 14! BP is 17, Chevron is 19, ConocoPhillips is 23, and Shell is 25 in 2006. Because the international oil companies have so few reserves, they have a greatly diminished ability to determine the cost of oil and that ability is diminishing with time.

It is true that the international oil companies carry their weight better when it comes to the actual production of oil. Three of them are actually in the top ten in that respect. In 6th place is BP, in 7th is Exxon-Mobil, and in 9th is Shell. Production is dominated by Saudi Aramco, followed by NIOC (Iran), Pemex (Mexico), PDV (Venezuela), and Kuwait Petroleum Company. PetroChina is 8th and Sonotrach (Algeria) is 10th. Exxon-Mobil and BP each produce about 23% as much oil as Saudi Aramco does. NOIC (Iran) produces about 37% as much and Pemex (Mexico) produces 34% as much. PDV (Venezuela) produces 24% as much as Saudi Arabia. Iran and Venezuela are self-declared enemies of the United States and Saudi Arabia heads the OPEC cartel and Kuwait in position 5 is active in OPEC. Of the top 5 producing oil companies, only Mexico's Pemex is not in OPEC and is not in a country participating in terrorist activities, outside of some bloody drug traffic anyway.

These statistics are known to our grandstanding Congress. They were taken from a report prepared by the Congressional Research Service for Congress. The report is called The Role of National Oil Companies in the International Oil Market. It was written by Robert Pirog and dated 21 August 2007.

Many of these national oil companies are inefficient producers of oil. This goes with having government monopolies in general and the oil business is no exception. Articles appeared in the Economist about the increasing inefficiency of the once relatively efficient PDV, the number 4 producer, under Hugo Chavez in the last couple of years. Pemex, the number 3 producer, is similarly plagued with inefficiencies. NIOC (Iran), ONGC (India), Rosneft (Russia, 75.16%), and PetroChina are very inefficient oil producers. This inefficiency raises the cost of oil.

On Friday, 7 April, the Washington Times had an article on the problems with Pemex. Production at the Cantarell oil field, Mexico's largest, fell 18% last year. Overall, Pemex's production has fallen in 2005, 2006, and again in 2007. Since the price of oil went up 57% last year, company revenues are not decreasing despite the reduced production.

Pemex has virtually no control over the 110,000 union workers among its employees. A fertilizer plant closed in 2002 is still manned with union workers who cannot be fired or transferred. They show up each day and clean the plant a bit and then sit. Meanwhile, despite estimates that there are 30 billion barrels of oil and gas in the deep water areas of Mexican territory in the Gulf of Mexico, Pemex is doing nothing to expand its oil reserves. They do not have the money, the knowledge, and the technology to do so. They suffer also from high taxes, corruption, deteriorating equipment, lack of investment, and lack of competition. Pemex exported 1.67 million barrels of oil last year, but without new oil fields, exports are expected to fall to 290,000 barrels in 2016.

Pemex paid the government $62.5 billion in taxes last year. This is 60% of Pemex revenues! Pemex provided the Mexican government with 40% of federal spending. With continuing production decreases, it is unlikely that Pemex will be able to support so much of the weight of the government. Mexican legislators are themselves becoming a bit worried and have allowed Pemex to retain $18 billion for exploration this year. But, Pemex is limited in its ability to pursue market approaches to solving its problems since the Mexican constitution gives the state the exclusive right to process and distribute oil and natural gas. It appears unlikely that Pemex production will soon stop decreasing.

In general, the national oil companies have little incentive to expand production and they have even less to operate efficiently. They are commonly operated to employ as many people as possible and keep them beholdened to the governments. This is clearly the case in Iran, Venezuela, and Mexico. Taken together these 3 nationalized oil companies produce 94% as much oil as Saudi Arabia does. The other nationalized oil companies are not very efficient either.

There is little we can do about this as Americans, except to open new oil fields of our own in the Gulf, off the Pacific and Atlantic coasts, and in Alaska. We can also open the huge tracts of land in the west languishing in the hands of the Federal government for the development of oil sands and oil shales for oil production. We should build new clean and safe nuclear power plants and use our very plentiful coal for power stations with improved scrubbers to remove pollutants. We will still use foreign oil suppliers, but it is foolish not to increase our options and suppliers, so long as we rely on our most effective weapon, the free market. Unfortunately, our Congress will not allow the free market to do its wonders.