Falling Revenues

The Iraqi government faces falling revenues as a result of the collapse of oil prices. This has hurt all countries that rely heavily on oil, but for Iraq it is especially critical. At this early stage of development of a civil society, one of the ways the central government maintains control is by providing money to various political actors to ensure their (for the most part) loyalty. Oil prices are likely to rise significantly in the future, but will it be soon enough?

Capitol Hill Update XIII

Congress passed legislation which would reverse U.S. Supreme Court rulings that created new barries to coverage under the 1990 Americans with Disabilities Act. The measure clarifies that Congress intends the Americans with Disabilities Act to be broadly interpreted in requiring employers to make accommodations for the disabled.The court ruled, for instance, that mitigating circumstances like medication or a prosthesis make a person ineligible for coverage. On a voice vote, the House of Representatives approved the measure that was unanimously passed by the Senate last week. The White House said President George W. Bush would sign it into law.

The U.S. House passed a bill intended to prevent excessive speculation in oil despite a veto threat from the White House. It also passed a bill to compel the District of Columbia to ease its gun control laws. However, a second economic stimulus package was defeated.

Meanwhile, the Senate voted on a defense bill that included a military pay raise. The Senate bill must now be reconciled with the House's version before the legislation is sent to the White House for President Bush's signature.

It Won't Help

It's said a picture is worth a thousand words, and that appears to be no less true when the picture is a graph of how little offshore drilling will do to reduce our frightening dependence on foreign oil. 

Capitol Hill Update XI

Both the House and the Senate approved an expanded global AIDS program and a massive housing market rescue bill. President Bush will sign both.

The House passed a $1 billion bill on Thursday mandating inspections and repairs of federal bridges but failed to pass legislation intended to cool off gasoline prices by requiring the government to sell 70 million barrels of light sweet crude oil from the Strategic Petroleum Reserve. Meanwhile, Senate Republicans block a bill that would nearly double federal aid to help the poor pay heating and air-conditioning bills and one to reign in excessive energy speculation.

Capitol Hill Update VIII

There was much in the way of GOP obstruction this week. Senate Republicans blocked a windfall profits tax on Big Oil that be used to fund alternative energy sources. Republican senators also blocked legislation that would trim payments to private health insurers serving people in Medicare and use the savings to raise reimbursement rates for doctors.

The House approved an extra three months of jobless benefits for all unemployed Americans. After failing to get a veto-proof two-thirds margin by three votes on Wednesday, Democrats got an exact two-thirds margin on Thursday with a 274-137 vote — the amount needed to overcome a threatened presidential veto. But chances are slim that the same can be achieved in the Senate. The House also passed Amtrack funding with a veto-proof margin, as has the Senate.

Capitol Hill Update VI

In the House, Speaker Pelosi split the next war supplemental into separate votes; funding for the war actually failed 141-149 and a new Dec. 31st, 2009 troop withdrawal deadline passed. the House also backed a 13-week extension in unemployment benefits, as well as a $52-billion expansion of veteran education benefits, paid for by a "patriot tax" on wealthy individuals. However, the Senate is expected to reject the withdrawal deadline and veteran-benefits tax, and restore the war funding... Also this week, the House voted for the long-awaited farm bill by a veto-proof margin (as did the Senate, though Bush will still veto in a symbolic move in all likelihood). Lastly, the House backed legislation directing Bush to temporarily stop filling the emergency oil reserve.

In the Senate, there was a near-unanimous vote to scrap FCC-proposed rules that permit one company to own both a newspaper and television station in the same market. By an overwhelming 97-1 margin, the Senate also backed legislation to temporarily halt the filling of the national oil reserve. Bush opposes the bill, but probably will sign it.

Yes, It Was Oil

This op-ed in the Washington Post by Steven Mufson explains that no, oil probably was not the primary factor in going to war in Iraq, but it certainly was an important one. Unfortunately for everyone involved, that's gone about as well as any of our other stated or unstated rationales for going to war.

Everything's bigger in Texas...including pollution

It's an awful thing to be known for, but there's no reason to be surprised when our governor wanted to build 11 more coal plants, despite the opposition from a majority of Texans.

The headquarters state of America's oil industry spewed 670 million metric tons of carbon dioxide into the atmosphere in 2003, enough that Texas would rank seventh in the world if it were its own country, according to the most recent figures from the U.S. Energy Information Administration. The amount is more than that of California and Pennsylvania — the second- and third-ranking states — combined.

Of course, it's not like it's even mostly Perry's fault, especially not when we've got people like this living here:

Debbie Howden, an Austin real estate agent, said her family of six has two pickup trucks, three SUVs, and no apologies. "I would definitely put size and safety over the emissions thing," said Howden, 55. She calls their high fuel bills a "necessary evil."

Yeah, our continued involvement in the Middle East because of oil can also be called a necessary evil, which is partially true. It is evil. But hey, we can't ask people to give up their god-given right to huge vehicles that take up too much space and burn too much gas, can we? We can't worry about that "emissions thing" too much, you know; that leads to us not being able to do whatever the hell we want no matter the cost to our economy and environment. We wouldn't want that, would we?

Iran Strike: "All Hell Will Break Loose"

The bad news: the price of oil is at a record high. The good news: the increasing volatility in the oil markets give us great incentive not to hit Iran:

"It will be chaos. . . . I can't really see it," said Abdulsamad al-Awadi, an oil trading consultant and former executive at Kuwait Petroleum. "Having been in the marketplace for almost 30 years, I can't see a scenario for it, or precautionary measures" that oil companies could take. "There are no precautionary measures."

"If war breaks out, anticipate that all hell will break loose in the oil markets," said Robin West, chairman of PFC Energy, a District oil consulting firm.

"If it's a clinical strike like the one that Israel carried out on the Syrian installations and no one admitted to doing it, you'd have a fierce reaction from Iran, but it would probably die down," said Leo Drollas, deputy executive director and chief economist of the Center for Global Energy Studies, a London think tank founded by former Saudi oil minister Ahmed Zaki Yamani. "If it were a botched job with lots of targets and civilians dying and Iranians retaliating . . . it could escalate and the price of oil could shoot up to God knows where."

This comes at the same time that we've launched new sanctions against Iran which, depending on your point of view, are either a precursor to war or an alternative to it. What comes next? Your guess is as good as mine.

UPDATE: Oops. According to Kevin Drum, the Heritage Foundation says we CAN bomb Iran...and profit! It sure is hard to know who to believe...industry insiders, or hacks at a conservative think tank? You make the call.

Australian defense minister admits oil is the reason they're staying in Iraq

From the AFP:

Australia admitted for the first time on Thursday that securing an oil supply is a key factor behind its involvement in the US-led war in Iraq.

Defence Minister Brendan Nelson said a review of Australia's defence strategy to be released Thursday concluded that maintaining "resource security" in the Middle East was a priority.

"The defence update we're releasing today sets out many priorities for Australia's defence and security, and resource security is one of them," Nelson told the Australian Broadcasting Corporation.

"Obviously the Middle East itself, not only Iraq, but the entire region is an important supplier of energy, oil in particular, to the rest of the world.

"Australians and all of us need to think what would happen if there were a premature withdrawal from Iraq," he said.

Well, you can at least admire the honesty, however belated:

The centre-left opposition Labor Party, which wants to withdraw Australia's troops from Iraq, said the government's admission that the conflict was linked to oil contradicted its statements before the 2003 invasion.

"When Mr Howard was asked back in 2003 whether this war had anything to do with oil, Mr Howard said in no way did it have anything to do with oil," Labor leader Kevin Rudd told reporters.

"This government simply makes it up as it goes along on Iraq."

Howard will release the biennial defence review, defining national defence policy, later Thursday.

Howard denied the war was linked to oil in an interview on February 2003, on the eve of the invasion.

"It's about the danger to Australia if countries like Iraq continue to have chemical and biological weapons, and those weapons get into the hands of international terrorists -- that fundamentally is what this is about," he said at the time.

No wonder Howard is such good friends with Bush. They think and act exactly alike!

Also not surprising, oil companies sued for price manipulation

Exxon Mobil Corp., the world's biggest publicly traded oil company, and four other U.S. gas retailers must face a lawsuit accusing them of conspiring to drive up the price of gasoline, a federal judge ruled.

Irving-based Exxon, Marathon Oil Company, Venezuela-owned Citgo Petroleum Corp. and U.S. affiliates of Royal Dutch Shell PLC and BP PLC are accused in the complaint of intentionally limiting the available gasoline supply, driving up prices and boosting profits, U.S. District Judge Amy St. Eve in Chicago said Wednesday.

Did they or did they not? We'll find out when this case goes to court!

Saudi Arabia's oil production in decline

Is it true? Read and find out. If so, this is one of the century's biggest stories. Scientists have been telling us for a long time that this was going to happen sooner or later. Conservatives (note, not scientists) have been telling us there's nothing to worry about and that it's all lies (sound familiar, i.e. global warming?) meant to scare us into following the liberal agenda of environmentalism and now corn-based ethanol.

If this is true, there won't be a choice for much longer. We'll either have to go around the world invading countries to secure oil or just wait until the end comes and hope it doesn't destroy us too much. Of course, we could always prepare by investing in energy-conserving measures and energy-efficient technology.

More Drilling Won't Solve Our Oil Woes

The L.A. Times reports "the Bush administration has moved aggressively to open up broad areas of largely unspoiled federal land to oil and gas exploration. The administration has pressed for approval of new drilling permits across the Rocky Mountains and lifted protections on hundreds of thousands of acres with gas and oil reserves in Utah and Colorado. In the process, it has targeted a number of places prized for their scenery, abundant wildlife and clean water, natural assets increasingly valuable to the region's changing economy."

We all know the Bush administration has the worst environmental record of any, but I'm not even going to get into that. The simple facts are the United States has only 3% of the world's oil, and we import 61% of the oil we use from other countries. There's no way we can drill ourselves out of this problem. The simple fact is the world is going to run out of oil someday, and we have to find other energy resources. To continue to ignore this problem or pretend it doesn't exist helps no one, and I can't understand why anyone believes that is an option anymore.