ENERGY DEPARTMENT: GET USED TO IT

WASHINGTON — Motorists can expect gasoline prices around $4 gallon through next year, the Energy Department said Wednesday, with oil prices staying well above $100 a barrel.

Crude oil prices are likely to average $126 a barrel in 2009, $4 higher than this year, as oil supplies and demand are expected to remain tight, Guy Caruso, head of the department's Energy Information Administration, told a House hearing.

Gasoline prices are likely to peak at $4.15 a gallon in August and won't go down much after that, the agency projected in a report. Gasoline was forecast to average $3.92 a gallon through 2009.

The agency said that the high price of gasoline has reduced expected demand for this summer, but not enough to dampen prices.

Caruso told House members that new auto fuel economy requirements and the increased use of ethanol and other alternative fuels are expected to produce "a substantial reduction" in oil use and oil imports over the next two decades.

Predicting future oil and gasoline prices is highly uncertain with the volatile global oil markets, Caruso acknowledged. The agency projects oil prices declining to $86 a barrel in 2010 and then increasing to $107 by 2015.

Overall U.S. oil consumption is expected decline over the next two decades because of the production of more fuel-efficient cars and the growing use of ethanol as a motor fuel, Caruso said. Both were required by Congress last December.

Crude prices, meanwhile, soared Wednesday well above Caruso's projections as his agency announced that U.S. oil inventories fell more than expected last week. Light, sweet crude for July delivery jumped $4.50 to nearly $136 a barrel on the New York Mercantile Exchange.

Oil inventories fell by 4.6 million barrels last week, a much larger amount than had been predicted by analysts.

Comments

[research]

BushCo, the most Oil industry heavy administration in history,

presides over the Iraq Middle east destabilization war crime, admittedly for OIL.

Bush appeases, kisses, holds hands with, give Nukes to, gives weapons to...

The country and family most involved in the 9/11 attacks:

The Bin Ladens and the Saudis.

Following the money...Who benefited most from 9/11 and the Iraq War crime?

The Bin Ladens, the Saudis and BushChenyOil cronies inc..

And some of you people want to believe that there is no intent, but just supply and demand or peak oil, or some other fantasy.

BushCo robbed the world, right in front of your face!

[MemphisBuffalo]

Buy a bike. So now more in China are driving cars and we are ridding bikes.

[macintoshsauce]

Get used to it? I will do one better...

"Go to hell, Energy Department!"

[guajiro]

And still, about half of America will vote for the policies of the Republican administrations that have finally put the nail in the coffin of the once great middle class of America. There is no going back. The corporate billionaires like Paris Hilton and her family, along with the Railroad owning Vanderbilts, etc., know full well that humans can survive on much less and on worse human conditions as seen in third world countries. They know full well that America can be squeezed even further.

[hypnus]

Thanks for the update.

[SCG]

President Bush Requests $25 Billion for U.S. Department of Energy"s FY 2009 Budget February 4, 2008

Link: http://www.doe.gov/news/5920.htm

Department of Energy Formed August 4, 1977

Link: http://en.wikipedia.org/wiki/United_States_Department_of_Energy

$ 2 Billion a month, and what do we have to show for it? After 30 years? No policy just tough luck your on your own, couldn't we accomplish the same results without this dept?

[KillTheMessenger]

Did you actually read the budget document? It will spell out what they do with the money. Item by item. And a lot of it has nothing to do with energy because the DOE has the role of the Ministry of Science in the US. In other countries you have a Ministry of Science and Education and a separate entity which is all about energy and no science. So what you are really looking at is mostly the science budget of the US (minus geophysical, oceanic, atmospheric, space and life sciences). If you expect to find a line item in there that regulates energy prices, you are looking at the wrong place. That's not how the US works.

[ramal]

Duh!!!!!!!!!!!!! If they are telling you this, can you imagine how really bad it is going to be?

[BPCentrisAmerican]

I heard the lease issue also. Maybe it's time to take the leases back, if they are not being explored, maybe it's time to nationalize oil exploration on public land since private interest do not want to make the capital investment. I saw a report last night in a congressional hearing by a university researcher who specializes in energy, that the big five oil companies are investing less than 10% of their profits in energy exploration and not seeking permits to build refiners, by comparison the research and development budget of the auto industry is 50%, and they are getting killed by high oil prices. Maybe it"s time for some good old-fashioned Teddy Roosevelt Trust Busting, since the energy companies have become far to powerful though non-enforcement of anti-trust laws. During the height of the Great Depression a very frustrated Herbert Hoover said, and I quote the "problem with capitalism are the capitalist".

[KillTheMessenger]

This might interest you:

http://gailtheactuary.files.wordpress.com/2007/03/oil-discoveries.jpeg

http://www.theoildrum.com/uploads/44/oil_investment.jpg

Investments are rising... yet there is less and less new oil being found year over year. Why? Simply because once we have found the majority of large oil reserves on this planet, there aren't any more large ones to find. Return on investment for future exploration sharply decreases to the point where it simply does not make any more sense to invest in it. Of course, oil companies know all of this too well, and there is absolutely no incentive for them to invest in new refineries for oil that will never be found.

I would dare to say that lack of investment in refineries is the tell tale sign of oil companies admitting that we hit peak oil.

[WIpatriot]

"I would dare to say that lack of investment in refineries is the tell tale sign of oil companies admitting that we hit peak oil."

Follow the MONEY, KTM.

[Caliphane]

Why do they even bother making predictions? They never thought oil would go above $100 a couple of years ago. Unless they were to open ANWAR and start drilling other areas prices are going to only go up I'm sure. I love how they say ethanol is going to replace gas what a joke I can't believe they even advocate this stuff. It's subsidized which is making is cheap and it actually uses more oil to produce then it saves though fuel efficiency is increased so really there is a net loss. They need to figure out how to fix it or were screwed ethanol is most definitely not going to save us.

[almoguy]

I was out on a bike ride this morning and I was half heartedly chased by a mangy old dog with a hand full of enormously engorged ticks on its head...I thought to myself: "now there is a metaphor for America!"

[PeterM]

Hey feds "Get used to seeing less TAX REVENUE!"
And get used to being out of a job next year.

[k6007]

Promises, promises. Until someone gives suburban voters a 'good talking to'....we're in the stew.

[Darthwave]

Well the political hacks in the energy department should just get used to start looking for a new assignment next Jan.

[obamanation31]

this says it all:
http://www.youtube.com/watch?v=9fbxpMw4mco

[Dredd]

This morning It was watching some discussion about the oil drilling issue. I was on Sqawk on CNBC (the wall street bs crew).

Stenny Hoyer was being interviewed, and he brought up some hard facts:

*80% of existing approved oil drilling leases in the US have not been used (no drilling) by big oil

*1 refinery permit has been applied for in the past 30 years by the oil robber barons; the permit was granted, but no refinery was built

*existing refineries are running at about 88% of capacity, when they usually,at this time of year, are running at 95-98% of capacity

Thus I conclude that the liars who got lied us into the national insecurity crisis of addiction to their crude drug are still lying about how much they want to drill in the US and free us from foreign oil. I also conclude that they are in effect enemies of America to have done this to us.

And finally, they are the same crowd (cheney's gang) who helped lie us into the Iraqi war, then moved to Dubai (Haliburton) to count the booty.

It seems as if enemies of America have infiltrated and are running a propaganda campaign thru the MSM.
.
.

[KillTheMessenger]

Two remarks:

Just because there is a drilling lease does not mean there is oil. Why drill an expensive dry hole of one that spouts no more than a few barrels a day?

Refinery utilization is 85% and falling. We already have too much capacity. Why build more? The refinery issue has been a sham years ago when it was clear that there was very little industry interest to build refineries with 20 year amortization that wouldn't be needed five or then years later.

The situation is dire, but the solution is on the demand, not on the supply side.

[FreeThinkn1]

It's another one of those wonderful free market things. About 25 years ago Big Oil figured out that if they artificially reduce the supply it will increase the demand; therefore, they can charge more and their profits will increase. They are not only not building new refineries or prospecting for oil, they are purposely not maintaining the existing refineries and oil pipelines.

[loudspeaker]

Obama also says the oil prices are here to stay because of Chinese and Indian consumption as opposed to speculation and other tricks to jack up the prices. Why? There's a glut of oil in the world. The prices are due to pure speculation.

[Abhaha]

Fade to black: Is this the end of oil?
http://www.independent.co.uk/environment/green-living/fade-to-black-is-this-the-end-of-oil-845092.html

".......Worryingly, for a world reliant on the dirt-cheap energy that oil provided throughout the last century, the idea that oil production in all nations may soon start to decline just as in the North Sea has been seeping into the mainstream. The "peak oil" theory " that oil production has reached its maximum and will soon begin its decline, bringing potentially catastrophic consequences to the modern world " no longer just comes from internet crackpots and conspiracy theorists; now geologists, market analysts and oil prospectors believe that this scenario is becoming reality. And within the past year, there have been signs that the major oil companies are admitting this themselves. If they are right, high petrol prices could be the least of the world's problems......."

[KillTheMessenger]

There is a glut of oil in the world???? I admire your optimism.

[mightymouse]

say it often enough, it must be true.

no?

In reality, production hasn't increased since 2005, while demand has. China subsidizes gasoline. India is building a highway system. North Sea fields have peaked. Mexico has peaked. Russia may be at peak.

blaming "speculators" is convenient, I guess, but ignores the underlying reality

[izzat7]

All involved in this could care less about the Americans , they are all moving towards selling oil to the Chinese and Asian markets which are bigger then ours now.Even if they drill here , they will still sell it there.

[mergina]

Everyone, and I mean EVERYONE who is in Congress and the Senate who are allowing this to happen ALL NEED TO LOSE THEIR JOBS IMMEDIATELY! We so desperately need more than 2 parties in this disintegrating country previously known as the u.s.a. We are the Uncaring States of Abuse. All politicians are %$*%*%^%%##!

[scottyboi84]

I agree. They really don't care about us. What do they care? We pay for their gas too, and can barely afford our own, sweet, isn't it? And, really where does this guy get his facts? $4.15 for gas where I live was last week's price, now we're paying $4.25. And, it's not peaking, it's just continuing to rise. Screw them all.

[KillTheMessenger]

Oil production is peaking, but nothing keeps prices from ever rising. No contradiction there, it's actually quite logical. I wouldn't get too upset about these price "forecasts". They were wrong in the past, they are wrong now. If someone could predict the price, the markets would not be efficient and futures traders could make money without risk.