E-Mail Address: Password:
Forgot password? [login]
Home Articles Stocks Faq About Us Contact Us RSS Feeds February 9, 2010
SEARCH:
Energy Tribune Jobs
(click here)
Featured Stories
Guest Opinions
Americas
Europe
Russia
Middle East
China
Australasia
India
Africa
Nuclear
Commentary
Print Issues
China And The “Denier...
China’s Oil Imports C...
White House Needs New...
India and China Face ...
The Botched Airline B...
Corn and Coal: The Co...
Obama’s “Clean Energy...
Married to Mendacity:...
Bryce v. Pickens Toni...
Robert Bryce Talks Wi...
China And The “Denier...
Obama’s “Clean Energy...
Corn and Coal: The Co...
US Biodiesel: The Nev...
12 Facts about Global...
Posted on Jun. 29, 2009

Barack Obama: Incompetency’s Gift to Big Oil?

President Barack Obama, accompanied by Energy Secretary, Steven Chu, delivers remarks on the energy bill, Monday, June 29, 2009, in the Grand Foyer of the White House in Washington. Photo by Pablo Martinez Monsivais: AP

President Barack Obama, accompanied by Energy Secretary, Steven Chu, delivers remarks on the energy bill, Monday, June 29, 2009, in the Grand Foyer of the White House in Washington. Photo by Pablo Martinez Monsivais: AP

During the 2008 election, Barak Obama constantly quipped about “Big Oil” (i.e. successful American energy providers.) They allegedly ran the Bush administration; they had filled John McCain’s pockets with dirty money; they were profiting from the high oil prices that they had somehow magically caused; and they were gleefully killing the Earth (which, of course, oilmen won’t need anymore after they take their ill-gotten gains back to their sunless home world deep in the Crab Nebula.)

If you believe the Obamabot propaganda machine, now that he is president, the days of big profit by Big Oil are numbered. There’s just one problem: while Obama’s policies may devastate the wider economy, they could leave Big Oil, that well-worn faceless bogeyman for leftist gobbledygook the world over, sitting pretty. Obama is no friend of the oil industry (or the six billion consumers it benefits), but his policies sometimes seem designed to enrich established energy producers – by creating a wholly manmade energy crisis several years down the road.

Imagine for a moment that you actually were part of a plot to jack up oil prices to obscene levels – what would you do? Much like OPEC tries to do, you would simply restrict the supply of oil. This would, of course, harm consumers and blunt economic growth, but it would leave you in command of a chokepoint in the world economy. Yet restricting supply is a cornerstone of Obama’s energy policy – which should really be called a “lack-of-energy-policy”, since the only energy in which Obama is interested is subsidized novelty technologies like biofuel and solar.

So while Obama’s green warriors tilt at windmills and E85, supplies of oil, gas, coal and the other energy technologies that the economy is actually fueled by will be intentionally allowed to wither.

Combine this politically driven lack of access for exploration and development with the fact that the financial crisis (through a collapse of oil prices and a freeze in credit markets) has essentially halted new infrastructure investment in the oil industry, and it becomes very easy to argue that a looming imbalance in supply is building. While the Obama administration fiddles, the inexorable atrophy of mature oil field production imperceptibly tightens supplies daily.

Then there is the demand side to consider. Unless one believes that we have reached the end of civilization with the current recession (and who could blame you for thinking this if you listened to the hyperbole and fear mongering that was used to pass various bailouts and stimuli), then you have to believe that demand for energy will increase in the future. China and India are not going away and they are not going to go without.

On top of any natural return to demand equilibrium are the artificial measures that have been universally taken by governments to stimulate the economy with fiscal and monetary sugar rushes. The scale of these endeavors is truly staggering, and most of the money set in motion by them has yet to be spent. Being unspent, these measures did little to stabilize the economy, but they are likely to have an unintended consequence when they do enter circulation: sustained inflation.

Inflation will have two major effects on the oil industry (as well as natural gas and coal). The first will be a surge in prices driven not just by inflation itself, but by fear of inflation. As dollars and other currencies lose value, investors will seek out safe havens, such as commodities. The up-swing in prices will then attract the much-dreaded “speculators” (i.e. strange people who like money and want to buy things that will be worth more of it) and a positive feedback loop could arise in prices: they will go up because people expect them to go up even more. This is also known as a bubble.

The second effect that inflation will have is to erode fixed-rate debt. This will be bad for banks and other creditors, but it will benefit those industries that tend to rely on large amounts of long-term debt to finance huge physical infrastructures – such as oil fields, pipelines, offshore rigs and the like.

And the cherry on top of this sundae? Since the Obama administration is set on micromanaging the technology of the future – actually picking (with all the wisdom of government) which ideas are best and how we will power our homes, cars, businesses, and hobbies – the chances that a new energy technology capable of competing on price with fossil fuels has probably decreased. Politics, subsidy, waste, and incompetence are very likely to crowd out true innovation for years to come. Innovative people will concentrate on gaming the system, rather than changing the game.

Supply restrictions, demand pressure, flight to safety buying, debt relief, and crowding out of real competition – that’s the possible future for oil in the US. Functionally, Obama’s Energy Incompetence is like Big Oil having a friend in the White House.

There are threats, though. One is that Obama and his allies might use the oil price spikes they are engineering as a populist excuse for confiscatory taxation, and the other is that in the long term, the health of the oil industry will be compromised by worldwide economic decay.

Ultimately, energy supplies and economic activity must exist in equilibrium. One can raise the other up, or one can tear the other down, but they cannot go their separate ways for long. In the intermediate term, however, there might be a lot of money to be made from the vandalism of that equilibrium by Barack Obama.

Stumble It!
Back Home   Back to Top
Related Articles
Add a Comment:
You must be a member to post comments. Please click here to sign up  
 
Article Comments:
thank you
Posted: 02/03/2010 02:41 PM by osmoz lade

Thanks for your useful info, I think it's a good topic

tatil otelleri

18 oyunlar

bodrum tatil

bayramören  
 

fendi handbag
Posted: 01/07/2010 12:31 AM by Emily Jane

tennis racket manufacturers

tennis racket suppliers

fendi handbag

AF1 Plus Jordan Shoes Men

Nike ACG Shoes Men

 
 

thanks
Posted: 01/04/2010 05:15 AM by osmoz lade

Thanks for your useful info, I think it's a good topic

çizgi film

kayu çizgi filmini izle

çizgi film izle  
 

Tiffany
Posted: 12/21/2009 06:40 PM by mxcm 428

your article is excellent,i really love it. hoping to read your following post

------------------------------------------------------------------------------------

Ed Hardy Clothing

Ed Hardy Clothing Clothing

Cheap Ed Hardy

Ed Hardy Sale  
 

  
 
Corn and Coal: The Cornerstones of Obama...
By Robert Bryce 
Feb. 5 2010, 5:47 EST
US Biodiesel: The Never-ending Subsidy S...
By Russ Finley  
Feb. 3 2010, 4:17 EST
China And The “Deniers”: Why Climate Cha...
By Michael Economides, ET editor in chief, and Xina Xie, ET China correspondent 
Feb. 2 2010, 11:41 EST
Obama’s “Clean Energy” Pandering: His St...
By Robert Bryce 
Jan. 29 2010, 4:10 EST
Married to Mendacity: Growth Energy Cont...
By Robert Bryce 
Jan. 27 2010, 4:27 EST
Chinese Coal Prices Soar, Power Producer...
By Xina Xie 
Jan. 25 2010, 11:43 EST
White House Needs New Look At Energy
By Michael J. Economides, Editor-in-Chief 
Jan. 22 2010, 12:49 EST
Bryce v. Pickens Tonight on Fox Business...
By Robert Bryce 
Jan. 21 2010, 2:36 EST
America’s Future Auto Fleet: Electric Ca...
By G. Allen Brooks 
Jan. 20 2010, 12:30 EST
2009 US Petroleum Trends
By Geoffrey Styles  
Jan. 19 2010, 12:50 EST
Robert Bryce Talks With Author Mark West...
By Robert Bryce 
Jan. 15 2010, 10:38 EST
China Pushes for Coal Gasification
By Xina Xie  
Jan. 14 2010, 12:01 EST
CLOSE
MORE
US Coal Industry Balks at Proposal for H...
By Steel Guru 
Feb. 8 2010, 12:59 EST
BP Shareholders Protest Canadian Oil San...
By Fred Pals 
Feb. 8 2010, 12:51 EST
US Seeks Access to Nuclear Program of Pa...
By The News 
Feb. 8 2010, 12:49 EST
Ukraine Says No Gas War with Russia
By RIA Novosti 
Feb. 8 2010, 12:45 EST
Iran Discovers New Oil, Gas Fields
By Tehran Times 
Feb. 8 2010, 12:25 EST
Arctic Sea Ice Vanishing Faster Than Mod...
By Bruce Owen 
Feb. 8 2010, 12:16 EST
Fear and Farce of Climate Change Science
By Eric Reguly  
Feb. 8 2010, 12:07 EST
Beyond the Black Stuff: Big Oil is Being...
The Economist 
Feb. 5 2010, 11:37 EST
Energy Flow, Emergent Complexity, and Co...
By George Mobus 
Feb. 5 2010, 11:27 EST
High Hopes for Clean Energy Jobs
By Rebecca Smith 
Feb. 5 2010, 11:22 EST
Improved Lithium Ion Batteries
By Adam Frucci 
Feb. 5 2010, 11:09 EST
Shell to Sell Oil Leases in Nigeria
By Elisha Bala Gbogbo 
Feb. 5 2010, 11:02 EST
CLOSE
MORE
Home Owners in Barnett Shale Lease Dilem...
By Jack Smith 
Feb. 8 2010, 12:19 EST
5 Dead in Gas Plant Explosion
By Michelle McLaughlin 
Feb. 8 2010, 12:10 EST
Gas Sites Spur Air Worries
By Ben Casselman 
Feb. 5 2010, 11:39 EST
Oil, Gas Output Rise in Colorado
By KRDO 
Feb. 5 2010, 11:20 EST
Comparison of US Plans to Cap Carbon
By Timothy Gardner 
Feb. 5 2010, 11:12 EST
Fed Doubts Energy States will Recover Fi...
By Stephen C. Fehr 
Feb. 5 2010, 10:50 EST
Congress Ups Debt Limit, Then Votes to C...
By David Lightman 
Feb. 5 2010, 10:41 EST
EPA’s New Biofuel Rules
By Geoffrey Styles 
Feb. 4 2010, 4:40 EST
Obama Touts His Alternative Fuels Plan
By John Broder 
Feb. 4 2010, 10:49 EST
Argentina Protests Over Oil Prospecting
By Sunday Morning Herald 
Feb. 3 2010, 11:25 EST
Oil and Trucking Industries Challenge Ca...
By Dale Kasler 
Feb. 3 2010, 11:12 EST
We Can’t Fight Two Wars at Once
By Alex Spillius 
Feb. 3 2010, 10:50 EST
CLOSE
MORE
Italy’s Nuclear Plans At Risk
By Israel Rafalovich, ET Roving European Correspondent 
Feb. 4 2010, 5:48 EST
U.K. Eyes Energy Reforms
By Selina Williams 
Feb. 3 2010, 11:19 EST
BP Profits Slide on US Refineries
By Robin Pagnamenta 
Feb. 3 2010, 11:03 EST
Jordan Wants Nuclear Power, Signs Agreem...
By Israel Rafalovich, ET Roving European Correspondent 
Feb. 2 2010, 1:15 EST
Demand for Natural Gas to Rise
By The Peninsula 
Feb. 2 2010, 11:27 EST
Gazprom to Extend Polish Contract on Eur...
By Tehran Times 
Feb. 1 2010, 11:56 EST
BP Chief Hails American Breakthrough in ...
By Terry Macalister  
Jan. 29 2010, 11:29 EST
Karzai: UK Troops Needed for 15 Years
By Ben Farmer 
Jan. 28 2010, 10:56 EST
Science Chief Calls for Honesty on Clima...
By Ben Webster 
Jan. 27 2010, 10:55 EST
European Offshore Wind Capacity up to 57...
By New Energy Focus 
Jan. 19 2010, 10:41 EST
Preserve Coal Plants to Keep Lights On
By Tim Webb 
Jan. 19 2010, 10:35 EST
France Cuts, Germany Debates Solar
By UPI 
Jan. 15 2010, 11:14 EST
CLOSE
MORE
Russia, Venezuela Step Up Oil Cooperatio...
By Mu Xuequan 
Feb. 1 2010, 11:28 EST
Belarus, Russia End Oil Supply Row
By Jacob Gronholt Pedersen 
Jan. 28 2010, 11:12 EST
Gazprom to Increase Gas Supplies to Euro...
By RIA Novosti 
Jan. 27 2010, 11:08 EST
BP Offers Technology, Expertise to Devel...
By RIA Novosti 
Jan. 22 2010, 2:06 EST
Poland to Deploy U.S. Missiles Near Russ...
By Judy Dempsey 
Jan. 22 2010, 12:46 EST
Ukraine Should Join Nord Stream Gas Proj...
By RIA Novosti 
Jan. 19 2010, 10:50 EST
U.S. Dethroning Russia as Gas King
By Anatoly Medetsky 
Jan. 14 2010, 10:57 EST
Turkey Approves Russian Gas Pipeline
By CCTV 
Jan. 14 2010, 10:53 EST
Turkmenistan Resumes Gas Supplies to Ru...
By China View 
Jan. 11 2010, 2:15 EST
Russia, Belarus End Oil Supply Talks Wit...
By China View 
Jan. 11 2010, 2:11 EST
Venezuela, Russia May Develop More Orino...
By Jose Orozco 
Jan. 4 2010, 10:46 EST
Russian Seaborne Crude Oil Exports Sched...
By Alexander Kwiatkowski 
Dec. 30 2009, 10:59 EST
CLOSE
MORE
Gas Transfer to Europe Key in Turkey, Ir...
By Today’s Zaman 
Feb. 8 2010, 12:55 EST
Iran, Pakistan to Ink Gas Deal in Turkey
By Tehran Times 
Feb. 8 2010, 12:42 EST
Iraqi Officials Lament Failure To Refine...
By Radio Free Europe 
Feb. 4 2010, 11:50 EST
Gas Transfer to Europe Key in Turkey, Ir...
By Today’s Zaman 
Feb. 4 2010, 11:44 EST
Afghan Fight is Coming
By Rod Nordland 
Feb. 4 2010, 11:18 EST
Oil Majors Move in on Iraq
By Oil Voice 
Feb. 4 2010, 11:12 EST
Dubai Discovers New Oil Field
By Adam Schreck 
Feb. 4 2010, 10:53 EST
Oil Demand Recovery Underway
By Trading Room 
Feb. 2 2010, 11:25 EST
Saudis Want Taliban to Expel Bin Laden
By Abdullah Al Shihri 
Feb. 2 2010, 11:01 EST
Iran Plans To End Energy Subsidies
By Andres Cala, European correspondent 
Feb. 1 2010, 12:36 EST
Bulgaria and Turkey Agree on Natural Gas...
By Reuters 
Feb. 1 2010, 11:54 EST
Lukoil to Develop Iraq Supergiant Oil Fi...
By Peoples Daily 
Feb. 1 2010, 11:44 EST
CLOSE
MORE
China may Renew Record for Crude Oil Imp...
By China Post 
Feb. 5 2010, 10:57 EST
China’s Oil Giants to Develop Iraq Oil F...
By People’s Daily 
Jan. 28 2010, 11:21 EST
As China Rises, Conflict With West Rises...
By Katrin Benhold 
Jan. 27 2010, 10:31 EST
China’s Oil Imports Continued Upward Cli...
Michael J. Economides, editor-in-chief, and Xina Xie, China editor 
Jan. 26 2010, 10:41 EST
Sino-Kazak Pipeline Transports 20 mln to...
By Istock Analyst 
Jan. 25 2010, 11:14 EST
China’s Economy is Soaring
By Zhou Xin and Chris Buckley 
Jan. 21 2010, 10:53 EST
China’s US Purchases Up 300% in 2009
By Vincent Fernando 
Jan. 19 2010, 10:16 EST
China Completes 1st Phase of Oil Reserve...
By China Daily 
Jan. 18 2010, 10:57 EST
China Will Drive Future Car Demand
By NPR 
Jan. 12 2010, 10:21 EST
Cold Snap Triggers Power Shortage in Chi...
By AFP 
Jan. 11 2010, 2:36 EST
Oil Falls on Concern Investment May Slow...
By Ann Koh 
Jan. 8 2010, 11:33 EST
Cold Snap Spurs Power Rationing in China
By Chris Buckley 
Jan. 6 2010, 3:47 EST
CLOSE
MORE
Chevron Finds Natural Gas Off Australia
By Anna Driver 
Jan. 27 2010, 11:11 EST
Another Gorgon Deal to Supply LNG
By ABC News 
Jan. 8 2010, 11:42 EST
Australian $90 Billion Gas Megadeal with...
By Felicity Williams 
Jan. 7 2010, 2:22 EST
Chevron Finds More Gas Off Western Austr...
By The Sunday Morning Herald 
Dec. 15 2009, 10:32 EST
New Zealand on Verge of Oil Boom
By Oil Voice 
Nov. 24 2009, 4:01 EST
Apache, Kuwait Join Chevron In Wheatston...
By Angel Gonzalez 
Oct. 23 2009, 11:45 EST
Chevron Pushes Forward On Gorgon
By Geoffrey Styles  
Sep. 21 2009, 10:08 EST
The Ghost Fleet of the Recession
By Simon Parry 
Sep. 14 2009, 11:52 EST
Australian Parliament Rejects Carbon Tra...
By Reuters Staff 
Aug. 13 2009, 10:43 EST
North Korea ''Test Fires Missiles''
By BBC Staff 
Jul. 2 2009, 11:14 EST
North Koreans Condemn U.S. and Sanctions...
By CHOE SANG-HUN 
Jun. 26 2009, 12:36 EST
Wind Turbines Killing Sleep Deprived Goa...
By Telegraph Staff 
May. 22 2009, 11:08 EST
CLOSE
MORE
India Suggests Deregulating Gasoline, Di...
By Sunil Raghu 
Feb. 3 2010, 11:23 EST
African Oil Fields on India Radar
By The Financial Express 
Dec. 9 2009, 4:35 EST
Bangladesh to Revive Debate Over Myanmar...
By Pipelines International 
Nov. 13 2009, 11:46 EST
RIL Discovers Oil in Cambay Basin
By Business Standard 
Nov. 10 2009, 2:38 EST
India, Scotland Join Hands On Renewable ...
By EE Times India 
Oct. 16 2009, 11:48 EST
Indian Subcontinent Weighs Nuclear
By Priyanka Bhardwaj and Michael J. Economides 
Oct. 8 2009, 11:59 EST
Cameco Upbeat on Canada-India Nuclear De...
By Cameron French 
Oct. 2 2009, 12:13 EST
Reliance Natural Seeks Dismissal of Gove...
By P.S. Patnaik and Gaurav Singh 
Sep. 18 2009, 11:05 EST
Tangguh Plant To Ship Less LNG
By The Jarkata Post 
Sep. 4 2009, 12:05 EST
Repsol Natural Gas Lot Production To Sta...
By Reuters 
Aug. 28 2009, 11:52 EST
India’s Coal Needs Fuel Overseas Push
By Priyanka Bhardwaj 
May. 28 2009, 4:25 EST
India Chooses Coal, Not Kyoto
By Priyanka Bhardwaj and Robert Bryce 
May. 11 2009, 12:39 EST
CLOSE
MORE
India Draws Strategy in African Oil Asse...
By The Hindu 
Feb. 8 2010, 12:40 EST
Nigerian Militants Claim Attack on Pipel...
By Seattle Times 
Feb. 8 2010, 12:13 EST
Angola Oil Pipeline Attacked, by Swordfi...
By Matthew Clark 
Feb. 4 2010, 12:29 EST
Nigeria’s Oil Pipeline Sabotaged
By BBC 
Feb. 1 2010, 11:05 EST
Nigerian Militants Call off Oil Truce
By Scott Baldauf 
Feb. 1 2010, 11:02 EST
Nigeria, UAE Supplies put OPEC Crude Pro...
By Iheanyi Nwachukwu  
Jan. 27 2010, 11:05 EST
Nigeria Hopes to Fulfill Oil Contracts S...
By Reuters 
Jan. 26 2010, 12:05 EST
Uganda to Block British Oil Bid
By AFP 
Jan. 22 2010, 2:00 EST
Two Million Nigerian Vehicles to Run on ...
By Guardian Newspapers 
Jan. 20 2010, 11:36 EST
Pirates Free Oil Tanker After Record Ran...
By Abdi Guled and Abdi Sheikh 
Jan. 19 2010, 10:14 EST
Dana Gas Finds Oil in Egypt
By Ed Attwood 
Jan. 12 2010, 10:45 EST
Sudan Seeks to Buy Natural Gas from Egyp...
By Sudan Tribune 
Jan. 11 2010, 2:27 EST
CLOSE
MORE
Iran Plans 10 New Enrichment Plants
By Washington Post 
Feb. 8 2010, 12:02 EST
Obama’s Nuclear Power Policy
By Mark Clayton 
Feb. 5 2010, 11:16 EST
Iran Accepts West’s Nuclear Deal
By BBC 
Feb. 3 2010, 11:09 EST
Iran Urges Islamic States to Possess Nuc...
By People’s Daily 
Feb. 2 2010, 11:44 EST
US, Russia Near Deal on Nuclear Weapons
By Jonathan S. Landay 
Feb. 2 2010, 11:06 EST
Italy Seeks Arab Role on Nuclear Row
By The International News 
Jan. 26 2010, 12:21 EST
Russia Warns Against Rushing to Iran San...
By Reuters 
Jan. 22 2010, 12:27 EST
U.S., Russia Never so Close on Iran Nucl...
By Mu Xuequan 
Jan. 21 2010, 11:20 EST
India, Hungary Hold Talks on Civil Nucle...
By Sachin Parashar 
Jan. 20 2010, 11:44 EST
Iran Rejects Nuclear Fuel Deal
By BBC 
Jan. 20 2010, 11:09 EST
German Minister Tough in Nuclear Talks
By Reuters 
Jan. 18 2010, 11:26 EST
Ahmadinejad Hails Iran’s Nuclear Progres...
By RIA Novosti 
Jan. 15 2010, 11:24 EST
CLOSE
MORE
Dow Jones -103.84 -1.04 9,908.39
S&P 500 -9.45 -0.89 1,056.74
NASDAQ -14.85 -0.69 2,126.27
As of 02/08/2010 04:00 PM  
Energy Tribune -0.23 -0.24 98.75
Integrated -2.31 -1.63 139.32
Operations -0.26 -0.22 117.95
Services & Equipment -1.93 -1.08 177.01
Coal -9.67 -2.87 327.57
As of 02/08/2010 04:00 PM  
WH Clean Energy -0.68 -1.61 41.22
WH Progressive Energy -0.38 -0.55 69.13
As of 02/08/2010 04:00 PM  
Bid to Develop Oil Sector in Libya G...
Feb. 8 2010, 1:05 EST
[Read More]
Japanese firm to delay start of Egyp...
Feb. 8 2010, 1:04 EST
[Read More]
Wintry Weather Drives Energy Prices ...
Feb. 8 2010, 1:04 EST
[Read More]
Arab states may become solar energy ...
Feb. 8 2010, 1:02 EST
[Read More]
US average gasoline price in four we...
Feb. 8 2010, 1:01 EST
[Read More]
Indonesia considering slowdown in co...
Feb. 8 2010, 1:00 EST
[Read More]
China to increase LNG import
Feb. 8 2010, 12:43 EST
[Read More]
Cnooc Falls After Report of Possible...
Feb. 8 2010, 12:22 EST
[Read More]
Climategate Scientist Considered Sui...
Feb. 8 2010, 12:14 EST
[Read More]
[ click here ]
Home | Subscribe | Articles | Commentary | Stocks | Faq | About Us | Contact Us | Subscribers Only | RSS | All News
Advertise With Us