Questions about oil, OPEC and fracking

People tend to think about the price they spend per gallon on gas as a given far out of the control of mere mortals. Oil suppliers rule the day as does the futures market;  despite political rhetoric from all sides, government rarely if ever tackles the issue. The policy is ad hoc, and renewal sources (wind and solar) suffer when petroleum prices are low.1280px-West_Texas_Pumpjack

Here are some questions and answers [Aided by a primer written by the Economist in December.]. Oil price was $70 per barrel then, and may be forced down close to $10 per barrel.

Q: Why is the price of oil and gasoline plummeting?

OPEC is leading the way, especially Saudi Arabia. “…the Saudis and their Gulf allies have decided not to sacrifice their own market share to restore the price. They could curb production sharply, but the main benefits would go to countries they detest such as Iran and Russia.”

Q: Why would they do that?

In part, to reassert OPEC dominance in the oil market. Petroleum is power. “Saudi Arabia can tolerate lower oil prices quite easily. It has $900 billion in reserves. Its own oil costs very little (around $5-6 per barrel) to get out of the ground.” The United States and other oil consumers tend to tread lightly on negotiating oil price with Saudi Arabia and OPEC.

Q: Who loses?

Countries such as Russia, Iran, Venezuela and other troubled economies highly dependent on oil revenue. But the U.S. fracking industry also suffers, which can’t expand and grow when extraction prices dip below $60-$70 per barrel. Fracking involves pulverizing the earth with high pressure water to release the natural gas held in abundant oil shale supplies. It is a booming industry, the 21st century equivalent of a Gold Rush.

Q: What’s good about fracking?

Theoretically, it is a step toward U.S. energy independence. It produces major economic changes in the areas where oil shale supplies are plentiful.

Q: What’s bad about fracking. Environmental issues

Two interesting headlines from the news recently:

FROM TEXAS:
“After 11 quakes in the last two days – with one registering at a 3.6 – Irving, Texas’ sudden onset tremor problem might be the fracking industry’s nightmare.
There’s a monster lurking under Texas, beneath the sand and oil and cowboy bones, and it’s getting a little restless after a 15 million year nap.”

FROM OHIO:

“Not long after two mild earthquakes jolted the normally steady terrain outside Youngstown, Ohio, last March, geologists quickly decided that hydraulic fracturing operations at new oil-and-gas wells in the area had set off the tremors.” Now a detailed study has concluded that the earthquakes were not isolated events, but merely the largest of scores of quakes that rattled the area around the wells for more than a week.”

Q: Name the world’s largest oil producer.

The United States outstripped Saudi Arabia in 2014 as the world’s largest oil producer. The United States has been the world’s largest natural gas producer since 2010.

Q: What are the components of gasoline price:

About two thirds of the price is based on crude oil prices. As of November, according to government statistics:

in percentages:  (rounding slightly less than 100 percent)

crude oil:        62.4

taxes                  14.6

refining              5.5

retailing          17.4

 

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Alan Gross’s Mission in Cuba: How Much Did the White House Know?: Newsweek

Alan Gross
Jailed USAID contractor Alan Gross, right, poses for a picture during a visit with Cuban Jewish Community leader Adela Dworin, center, and David Prinstein, vice president, at Havana’s Carlos J Finlay Military Hospital September 28, 2012. REUTERS

[READ MORE]

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The Pope and The U.S. Cuban Breakthrough: Gracias pero….

It’s fine to thank Pope Francis, but let’s not overplay the idea that the Vatican took a significant role in the historic change of U.S.-Cuban relations after more than half a century.

Officials in Washington and Havana have been in contact all along, albeit at lower levels through their periodic and sometimes secret meetings in Havana and Washington.  They didn’t need an intermediary–they needed a political moment, and the timing is perfect.

It is great that the pope could provide a meeting room, write some letters to presidents Obama and Castro and express his concern on humanitarian grounds for Alan Gross and the other prisoners on both sides. But the Vatican involvement is probably little more than diplomatic cover. Cuba is a Catholic country, the pope is seen as a progressive peacemaker; perhaps the idea of his participation soothes the animus of a few Cuban exiles in Miami with the inference that President Obama listened to a higher power.pope and obama

Neither did the countries need to meet in Canada, other than for the sake of following through on diplomatic protocol.

Rarely have two countries known one another as well as do the United States and Cuba. The change in relations has its own moment. First, President Obama can do it now without expending much political capital. He need not face elections again and taking this step right after the midterm elections can cushion the eventual Democratic presidential candidate from what he has done. Meanwhile, the profile of Senator Robert Menendez, one of the key opponents to a modern rethinking of Cuban policy, is on the wane. He will move aside as chairman of the Senate Foreign Relations Committee when Republicans take over in January.

In addition, a persistent domestic political problem for Democrats is wasting away with time.  Florida International University’s most recent survey about Cuban-American views of the embargo is emblematic of change. This year for the first time the tri-yearly survey shows that a majority of Miami Cubans support an end to the Cuban embargo. Florida was once a more troublesome problem. Democrats thought they could not win Florida’s 29 electoral votes without taking a strident anti-Castro position. President Obama, however, took Florida both in 2008 and 2012 with the support of Cuban-Americans.

Times are changing. The pope is Latin American and his support cannot hurt. But the eventual resumption of Cuban-American relations has everything to do with two presidents of two countries, one term-limited out and the other dealing with actuarial tables.

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“Waterboarding” is Torture — Torturers have been imprisoned and executed

Dick Cheney claims that “waterboarding” “stops short” of torture, but victims knew the reality. Torturers have been executed for submitting prisoners to simulated drowning, now tagged with  that indistinct, even innocuous-sounding term.

Go no further than John McCain, who is unequivocal on the subject. He says waterboarding is not “enhanced interrogation” — it is torture.

In World War II, German and Japanese interrogators — and their commanders — were punished, imprisoned and executed for such crimes:

“The torture of the bathtub consisted in plunging the patient into a bath of icy water, his hands handcuffed behind the back, and keeping his head underwater until he was on the point of drowning. He was dragged to the surface by the hair and, if he still refused to speak, was immediately plunged underwater again.”Jacques Delarue, an anti-Nazi French intelligence officer during World War II.

The quote is from The Freedom Line, my book about the rescue of Allied pilots rescued by underground fighters in occupied Europe during World War Two. One key practitioner of simulated drowning at Gestapo headquarters in Paris was Jacques Desoubrie — aka Jean Masson. Desoubrie, a double agent who had infiltrated the underground, was captured by the United States after the war and executed in France.

 

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“Isn’t it Rich, Aren’t we a Pair?” The Koch Brothers and Pope Francis

What do we find in our Sunday newspaper this morning? An opinion piece that conflates the Koch brothers and Pope Francis as being on the same page.

The Washington Post

The Washington Post

It is clear, we are told, that the Koch Brothers and the pope (who by golly the writers have met) are fighting the same fight–the “preferential option for the poor.”

The authors are John and Carol Saeman, fawning friends and moneyed allies of the Koch brothers, the benevolent pair who oppose climate change legislation and Affordable Health Care, using their billions to support the Tea Party and other ultra right-wing causes, and to control American politics and election outcomes. This ‘umble opinion piece is topped off by photographs of the brothers, David and Charles, flanking Pope Francis.

Yea, as we walk through the valley of American fear, the Koch brothers are our saviors. Progressive social programs, welfare and anything else created since the New Deal are the enemy. No mention of Democrats, or the name of the president, just code–“centralization” and “bureaucrats…collude to protect politically favored companies and crowd out competitors.”

“This phenomenon isn’t found only in Third World Dictatorships. It’s increasingly evident in Washington….”

Not to worry, the Koch brothers are here. “We believe the Kochs are doing more to help the poor than the “social justice” campaigners who so often attack them.”

It is a strange argument and, at the least, difficult to believe.

More about the Koch Brothers?

Daily Show

Rolling Stone

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History Reminder: Emancipation Proclamation Was an Executive Order

In wake of President Obama’s order on immigration, some historical perspective is in order
emancipation proclamation

 The Emancipation Proclamation was an Executive Order by President Abraham Lincoln.

Abraham Lincoln’s Emancipation Proclamation provides the foundational precedent for President Obama’s executive order on immigrants in the country illegally. Bruce Ackerman, a professor of law and political science at Yale

The proclamation was criticized by the so-called Copperhead Democrats who opposed the Civil War and wanted a negotiated settlement with the Confederacy. The Copperheads were northern members of Congress who wanted to oust Lincoln from office along with the Republicans who supported him. They saw him as an imperial president destroying American values.

The titles have reversed, but how much has changed?

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Marion Barry, The Perennial DC Mayor and Political Leader, Dies at 78

Marion_Barry_2010I only met Marion Barry once, a lunch meeting at a downtown Washington, DC eatery in 2006. He had just finished lunch with an attractive woman, showed her to the door and then turned heels without missing a beat for lunch number two. He displayed all the charm and political savvy one had heard of and imagined. His goal, in dealing with one of what have been an endless progression of Washington Post reporters and editors he had met–was to show me that he was nobody’s fool. He understood politics, he understood nuance and human nature. I knew and had read all of the backstory of his life — but I was impressed.

The Washington Post obituary by Bart Barnes:

Marion Barry Jr., the Mississippi sharecropper’s son and civil rights activist who served three terms as mayor of the District of Columbia, survived a drug arrest and jail sentence, and then came back to win a fourth term as the city’s chief executive, died around midnight Saturday at United Medical Center in Washington. He was 78. [read more]

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