U.S. addicted to oil, like cocaine

House Majority Leader Steny Hoyer (D-Md.) spoke at his weekly pen and pad today about the failures of the Bush Administration and the need to regulate the speculation in the oil market. The House is holding four hearings this week on the impact of speculation on the oil market.

Recently President Bush said that the United States was addicted to oil, and his solution was to get more oil, Hoyer said you don’t give a cocaine addict more drugs and that the United States should be looking for alternative solutions to our energy needs. The United States should be looking to reduce, explore, extract, refine, sell and bring prices down in the oil market in the near future, he said. The House Democrats were recently blocked by the Republicans to get the oil industry to drill on the 68 million acres of federal land they have permits for or lose the permits. Hoyer said that Republicans have blocked many pieces of legislation on the House and Senate side and are not seriously working to solve the energy crisis.

Hoyer said that the Bush Administration has had the worst job performance of any administration, they have lost jobs and increase the national debt of the U.S. Americans are correctly concerned about the energy crisis, and that only recently did the Bush Administration recognize the fact that global warming was an issue.

The House will be getting its message out to voter in the month of July, and Hoyer said they will be working with the Obama campaign to get a change of direction from the Bush economic, energy and fiscal policies.

Senate urges pressure on Saudi Arabia to increase oil production

Five senators held a press conference today immediately following a vote on a Democratic proposal to “suspend filling the nearly full Strategic Petroleum Reserve (SPR) in order to increase supply and lower energy prices,” the official release said. Sen. Charles Schumer (D-NY) said that Saudi Arabia currently produces nearly two million barrels of oil per day below capacity, and said that prices would likely lower by 50 cents per gallon in the next month or two if they increased production by just one million barrels per day. Schumer said that himself and the other senators wanted to present President Bush with a “motion of disapproval” of the Saudi arms deal, and urge him to put pressure on the Saudis to increase productivity and lower prices as he leaves for his trip to the Middle East today. “We are saying to the Saudis that ‘if you don’t help us, why should we be helping you?’” Schumer said. “You need our arms, but we need you to cooperate and not strangle American consumers.”

Sen. Bernard Sanders (D-VT) said that OPEC functions as a cartel, and that it is time for Pres. Bush to say to OPEC that “we are going to challenge their very existence,” so they can no longer “limit production and artificially raise prices.” Sen. Bob Casey (D-PA) said that Bush “needs to demonstrate leadership,” and while he is “talking to the Saudis about oil production as he should, he should have done it long ago.”

Sen. Amy Klobuchar (D-MN) said that she is “pleased” that the Senate was able to pass the amendment today, but she “would rather see a comprehensive package.” She added, “but if we’re going to have to do it one scrap at a time, that’s how we’ll do it.”

The oil industry should be regulated more

The House Judiciary Committee met today to discuss ‘Retail Gas Prices’ and the effects it has on consumers. The Competition Policy and Antitrust Laws Task Force Subcommittee led the hearing, which discussed the future of diesel fuel and it’s effects on small businesses as well as consumers. Many of the witnesses suggested drilling for oil in ANWR, the Arctic National Wildlife Refuge, and turning the oil market from an oligarchy to a competitive market.

We regulate onions more than we do oil, said Dr. Mark Cooper, director of research of the Consumer Federation of American today. The oil industry is not a competitive market and thus is under the jurisdiction of the antitrust task force. Cooper stressed the necessity to not ignore the traditional problem of the market structure. Since the market is working like a “cartel”, drilling in the United States whether in ANWR or creating more refineries will not influence the world price of oil. Cooper said it is necessary to change the market and make it more competitive, which will in turn lower gas prices.

Small business petrol and convenience stores are also suffering with the high costs of gasoline. Convenience stories earn profit not from gas, but from the food inside, however with gas prices so high, many consumers are driving farther to get cheaper gas. This is putting thousands of hard working American families at risk, said Bill Douglas, chief executive officer of Douglass distributing company.

David Owen, president of the National Association of small trucking companies, described the hardships smaller trucking companies are going through with the high diesel fuel costs. Small business truckers, which started more as grassroots organizations or family run businesses, cannot stop running or go on strike. If they do either of these things, then they will go out of business, Owen said.

America's Oil: Good to the last drop

By Ellen Ratner

As I sit here writing this column from the oil rich Middle East, I am reflecting on the political oil wars that we are hearing so much about from President Bush, Congress and the presidential candidates. Yet, no matter our favorite party, branch of government or candidate, the whole story is not being told.

During the last week in April, there were press briefings galore in Congress with words and accusations flying everywhere. The price of oil is killing our economy, small airlines are folding and larger ones are laying off employees or trying to merge. Trucks and their drivers are parading around the Capitol on a daily basis, honking horns and making it clear that it is difficult to survive with the gas prices so high.

The Democrats want the president to stop adding to the strategic oil reserve, which is 97 percent full. So far the president has not budged. The Democrats figure that it could save Americans 5 to 24 cents per gallon. Their plan put forward in four congressional bills includes holding OPEC accountable for price fixing (HR 2264), cracking down on gas price gouging (HR 1252), repealing subsidies to oil companies, investing in renewables (HR 5351) and developing new mileage standards (HR 6).



During several of the pressers, the Democrats rattled their swords. They pointed out that the Saudis had reduced their oil output by 800,000 barrels a day since 2005. Then came the threat, saying that Congress would "block their, (Saudi Arabia, Kuwait and UAE), lucrative arms deals." Of course Americans would be on the Democrats' side on this one. Why should we sell arms to countries that are making record profits? The answer is two words: Russia and China. Having just returned from Sudan, it is clear that as soon as the United States opts out of oil production, then China is going to opt in. If that means the price of entry is arms sales, then China and Russia are going to "pay that price" and sell arms. The threat of no arms sales sounds great to the Americans watching the evening news, but it is short sighted indeed.

All of this saber rattling took place against the backdrop of Exxon Mobil releasing its quarterly profits, which are a whopping $10.25 billion for the quarter. The numbers look great for oil investors now, but there are clouds over the horizon, and the large investors are well aware of the darkening cloud cover.

That cloud is called Hubbert's peak. M. King Hubbert predicated in the mid '50s that the world was reaching peak oil production and that the United States would reach it by 1970. He was laughed at and disregarded. Hubbert was right, and one member of Congress has been the lone voice for Hubbert's Peak and the implications that it brings. That member is Republican scientist Roscoe Bartlett from Maryland. As the lone wolf he has said, "You can't pump what is not there." This might explain why there is less oil being pumped from Saudi Arabia. They might be close to peak oil production. There was a stated increase in Saudi "oil reserves" about 10 years ago, but there is no data real data to back up this alleged "find." Saudi Arabia going dry is a very scary situation for the economy and Middle Eastern stability, and cutting off arms sales isn't going to change that fact.

Ordering GAO studies, Rep. Bartlett has continually been on the floor of the House showing graphs and pushing for renewables and alternative energy sources. He was also first out of the box to discuss what he terms as the "investment risk" of doing business with countries that have the largest proven reserves and carry the most political risk. Those just happen to be Iran, Iraq, Nigeria and Venezuela. He has many ideas, including plans for the U.S. to achieve energy independence. One is a bill for "net metering" which encourages Americans to sell back any energy they produce using solar, wind and other alternative energy sources.

There are numerous ways to mitigate the effects of peak oil in the U.S. or anywhere else, but these require long-term planning, investment and action. Idle threats such as cutting off arms sales or stopping CEOs from taking home more bacon are not going to address the problem. Rep. Bartlett has been saying what no one wants to hear. It is time we paid attention.

White House Gaggle

Briefer: Dana Perino

President had his normal briefings this morning. At 10:25 am, he will receive the Annual Report to the Nation by the Boy Scouts of America. At 10:50 am, President Bush meets with the King of Jordan. At noon, President and Mrs. Bush will host a private social lunch with the King and Queen of Jordan in the Family Dining Room of the White House. At 1.15 pm, the President makes remarks to Political Appointees and Federal Government Employees in DAR- Constitution Hall in Washington, DC.
White House Press Secretary Dana Perino will brief the press at noon today.


Middle East

Perino said that, “there is a lot of tension between the Israelis and the Palestinians, “and Secretary Rice is in region to bridge the gaps and bring them back together. One of the things Secretary Rice said, and the President agrees with is that, “Hamas has made themselves an enemy of the Palestinian state.” Perino said that the Palestinians could have a Palestinian state given the leader they have now--Hamas is what is holding them back. Secretary Rice will also be meeting with Prime Minister Olmert as they are also concerned about the situation.

When asked if it is really possible to negotiate peace with a divided Palestine, Perino said that they believe Hamas is a terrorist organization and Israel has the same feeling. She continued to say that, “President Abbas has said that he wants to be the Palestinian President for everybody, including the people living in Gaza, who are living under terrible conditions right now… The strategy is to try to allow the Palestinians to see that is a choice to make. There is a path that can get you to a Palestinian state and possible more security and prosperity… The purpose of Secretary Rice’s trip is to try to establish again this clear strategy and division between the choices there is to make for the Palestinians. “ A reporter questioned Perino when it comes to the Palestinians in Gaza, saying that she assumes that they actually have a choice or wish to make a choice, which that does not seem to be the case. Perino said that she thinks they do have a choice. She also said that the government that US is working with, lead by President Abbas, is the one that has chosen peace. Perino said the “issue is that it is extremely complicated, and we never said that this was going to be easy.” But we do believe that people have a choice, Perino continued, “and the President believes that when people have a choice they will chose freedom.”


OPEC

When asked about a response to OPEC’s decision to not increase production to ease prices, Perino said that she hasn’t heard anything about yet. She will wait until they make an official announcement. Perino did say that she oil producing countries should work to keep the markets well supplied.


Iran

Perino was asked about a comment on Iran who has rejected the sanctions resolution that was imposed by the United Nations. Perino said that they were not expecting anything else from the regime of Iran. We have provided several incentives for the Iranians if they would halt the enrichment of uranium and come to the negotiation table. Perino also said that she was pleased to see that the UN went forward with the 3rd rounds of sanctions. “A lot of people did not think that it was not going to be possible after our National Intelligence Estimate came out in December…”


Ahmadinejad in Iraq

When asked if the President talked to the Iraqi Prime Minister Malaki after the visit of the Iranian President Ahmadinejad, Perino said that they haven’t talked since. Though there have been reports by Ambassador Crocker and General Petreus.


Boy Scouts

When asked if the President has any concerns about discriminatory practices by the Boy Scouts against gays and atheists, Perino said that she had not asked about it, but “the President has always said that everybody should be treated with dignity and respect. “