Analysts: US's Chances To Head Off Current Oil Crisis Were Ignored, Blocked

Just three years ago, with oil trading at a seemingly frothy $66 a barrel, David J. O'Reilly made what many experts considered a risky bet. Outmaneuvering Chinese bidders and ignoring critics who said he overpaid, Mr. O'Reilly, the chief executive of Chevron, forked over $18 billion to buy Unocal, a giant whose riches date back to oil fields made famous in the film "There Will Be Blood."

For Chevron, the deal proved to be a movie-worthy gusher, helping its profits to soar. And while he has warned about tightening energy supplies for years and looks prescient for buying Unocal, even Mr. O'Reilly says that he still can't get his head around current oil prices, which closed above $145 a barrel on Thursday, a record.

Read the whole story here.

Comments

[Bettysdad]

The article states that the European gas average is now 44 mpg, soon to go to 48.

Guess what? Those numbers are achieved with a huge number of engines produced by GM and Ford. Both have wholly owned subsidiaries around the world producing much higher efficiency engines.

American car companies are making cars that people want with 50% higher mpg. They're making them in Europe and Australia. They have the technology. They only question is will they spend the money to build the engines America needs

[KillTheMessenger]

Pssst... I don't want to disturb your sweet dreams, but the cars they make in Europe are not the cars people want. They are the cars that fall within government specifications. If you brought any of those cars over to the US, they would rust on the lot. People would perceive them as small, under powered toys.

That these cars sell in Europe, anyway, is simply for one reason: you can buy a small car or no car at all. There is slim pickings for the average European at $8+/gallon.

[jdfast]

Does this tell you anything about the auto companies and their lobbying in congress. They could have done this years ago, but they didn't and whined to congress not to increase the mileage requirements. Congress "bought and paid for" sat on their thumbs and you see what we got now.

[separatingwheatfromchaff]

Reading this story and hearing politicians say they made a mistake and now they're all for raising CAFE numbers is depressing.Either they are dumb as a rock or they've been getting huge amounts of cash or influence from the automobile industry,the oil industry or their various related business cohorts.I don't believe they're dumb,I fully understand where all that cash comes from when election season starts and so do most Americans.If anyone thinks corporations distribute all that cash to both sides of the aisle because of their benevolent nature and their interest in being patriotic and helping our country, here is the truth.They are only benevolent if by some strange cosmic force their motives for pushing for certain legislation happens to intersect with the needs of the country(which is extremely rare),or they're looking at another run for office or personal financial gain for themselves or their cronies.This isn't true of all politicians,but a majority is all that's needed to turn our government into a cesspool of corruption.

[jdfast]

"Deep Throat" wasn't wrong when he told Woodward and Bernstien to follow the money was he. Its great to get elected to a job that pays 125K a year and leave 6 or 8 years later as a multi millionaire. Only in America do we have the best congress that money can buy.

[almoguy]

From the article:

"The American auto industry has sold the cars people wanted," he says. "You"re going to blame the auto industry for that or the American consumer? He likes it sitting in his driveway, he likes it big, he likes it safe."

The auto industry certainly IS to blame for what the consumer "wants." The marketing of the "huge vehicle" was the very successful campaign by the auto industry playing on the fact that Americans lives are boring as hell. You were not buying a car; you were buying the promise of adventure! Hummer dealers have fake mountains on their lots; suburban guys were shown in commercials walking out their front doors and skydiving to their SUV to go to work (cubicle anyone?) The auto industry punched the collective buttons of "rugged individualism" and sold us a lie.

Responsible action means lower profits. Ah capitalism!!!!

[joebaggadonuts]

They are little different from the Tobacco guys.

[watchingthings]

Tobacco "exhaust kills" and car "exhaust kills". They are both killers.......

[arvay]

Sorry, not to forgive the car companies for their part in this, but there's no way to absolve consumers for their bad choices. A democracy depends on an educated electorate, and than encompasses self-education.

Part of that education is the budget thumping consumers are experiencing now that oil and gasoline prices have rocketed. If they have any sense, they'll rase their voice against the Iran war-talk, which is helping to drive up prices. If the US and Israel ARE stupid enough to attack, the current situation will look like a bargain. People need to pry themselves away from their TVs and write to their representatives, who need to be told not only to squelch the idiotic war talk but to have the government finance alternate, renewable energy sources.

[almoguy]

I fully agree with you arvay. But it is the age old : "there is a sucker born every minute" mentality of tweaking the stupidity of the populous by the marketing industry is their stock and trade. If the general population think that they can laid by buying a certain product they will buy it... and industry knows this. The concept of ethics is sorely lacking in corporate America. Avarice always trumps altruism in business.

[biwee]

I remember the Carter presidency. If the USA had taken Carter's warnings about energy seriously, we would not be in this disaster now. Instead we elect a President Bush who has an IQ of less than 75, and is a lying coward to boot. The weird thing about a democracy is that you get what you vote for (Ohio massive voter fraud in 2004 excepted).

[DallasMike]

How do you go from Carter to GW Bush?
You are just like all the other lefties, you make a comment about a subject and then you can't end it without blaming Bush.
What about the 1st Bush and "slick Willie Clinton" they could have done something also.

[ccpostman]

Your 100% right.

Don't forget that a**hole Ronald Reagan who tore down the solar panels that Carter put up on the White House. Why? Because he hated Carter. What a good reason!

He was a real winner, and set the bar for all the re-pucks that came down the greasy corporate oil pipe!

[HumeSkeptic]

http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html

The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day. For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher"2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case (Figure 20). Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.
------------------

Look at the charts in that link. If we drill everywhere, we'll have 7% more oil in 2030, and none before 2017. And, as indicated above, no impact on price.

With Califiornia saying no, and East Coast reluctant, we are talking mainly the Gulf Coast. So, cut that 7% number down in half or less, to less than 3.5%.

Combine that with the risks of oil spills in a hurricane-prone region.

That's all that drilling will do.

[KillTheMessenger]

"That's all that drilling will do."

Not at all. The drilling will make a few dozen people richer by billions. It will make a few hundred people richer by millions.

Your technical analysis is completely correct. But your insight in why they want to drill completely ignores the political and economic facts. While there is absolutely no money in drilling for the little guy, it will make some of the people behind the spin rich beyond imagination.

[joebaggadonuts]

Iran is pretending to deal. Maybe the oil price will come down for awhile to "prove" that we don't have to worry any more. Heh.

[sleeperd]

The real travesty is that both the worldwide crises we face - food prices and oil prices - are a direct result of liberal democrats and their enviro-whacko buddies.

The food crises is a direct result of the ethanol mandates championed by guess who??? We are burning up our food supply thanks to these green weenie nitwits and their slack-jawed puppets in the democratic party.

These same idiots have prevented every attempt to drill in this country for the past 30 years and in the process have turned trillions of our dollars over to Islamo sheiks in the middle east. They have stopped every effort to build refineries while they propose to SUE OPEC for not producing enough oil.

Every idiot in this country that is pushing for Obama should have their head examined. They will push this country - and the world - into a catastrophe worse than the great depression.

[KillTheMessenger]

Good trolling. Based on lies all around, but good trolling nevertheless. Gets you all the attention you crave. Doesn't it?

[DallasMike]

This is from the CATO institute July 10 1997
In June 1994 Clinton imposed new ethanol mandates on gasoline, relying on fatuous arguments that the corn-based fuel "would create thousands of new jobs for the future" and protect "our environment, our public health and our farmers." The New York Times immediately exposed the political payoff, noting that the mandate would "take money from consumers and taxpayers and hand it over to Archer Daniels Midland." Why would the administration want to do that? Investigative reporter James Bovard found that ADM and related interests gave $50,000 to the Democrats days before the 1992 election and some $300,000 in soft-money contributions to the Democratic Party in the first 18 months of the Clinton administration.

After reading this it would appear that sleeperd was telling the truth

[Redrover666]

You know damned well he's right. You folks have been singing the same tune for three decades. "Won't do us any good!.... Won't do us any good!....." Picketed nuclear power stations blocked construction of oil refineries and oil wells.

You fools put us right where we are, most Americans know it and guess what tune you are singing.........................Won't do us any good!

A troll to you is ANYONE who disagrees with you. You're an intellectual coward too.

[leduck]

you're a 'tard
the enviromental crowed was also against urban sprawl
and now, even if you can drive your SUV an extra 6 months with oil off the coast
you'll still have to abandon your exurban house and move back to the city
or become a farmer

you can't be serious

[HumeSkeptic]

Drilling in the U.S. would have no effect on oil price. High food price is largely due to high gasoline and diesel price.

Certain amount of drilling is fine, as long as it doesn't further damage the environment. Already, we must pay a huge price for past mistakes.

Put down some numbers and examine the facts, rather than mindlessly reciting what Hannity and Limbaugh pumped into your empty skull.

BTW, here is Bush logic on oil for you:

1. "We are addicted to oil"
2. "We need to drill more for oil"

Is this not like Limbaugh buying a lot more OxyContin to overcome his addiction? Funny. Isn't it?

[Redrover666]

paragraph:

1. Tough to say when liberals have blocked it for 30 years. You're right about food prices.

2. You haven't been around long enough to have any real clue how far we've come.

3. Americans are examining the facts, every time they pump fuel or buy groceries. Then ask themselves how Democrats figure we oughtn't to drill for more oil with the lesson of the last thirty years starring us in the face.

Must be nice to be urban and middle class, sport. Drop by a food pantry and tell the folks there your little theories on energy and see if you don't get thrown out on your ass.

[OneVoiceInACrowd]

Check your facts man.

[research]

LOL 7 years of complete fascistic totalitarian control by the BushCo GOP and this isthe best you can do?

Boy, those liberal democrats are SO POWERFUL they dominate even in a BushCo Republican congress, supreme court and congress! I guess the rethugs are wimps.

[aurora57]

It's interesting that the focus is just on gas prices and the impact on transportation. At least I can use some discretion in my driving habits to lessen the impact of gasoline prices.

My bigger concern is how to handle heating my home. I have fewer options when it comes to reducing the amount of heating oil I use to heat my mid-Atlantic home.

The heating season is only 90 days away and I am not hearing anything about what plans are in place to ensure homeowners can keep their families warm this winter. I think this could be disasterous for families that are living on the margins. And it will have a huge negative impact on the non-energy economy when the vast majority of homeowners are forced cut discretional spending to pay for heat in addition to gasoline for transportation.

I am more interested in what the presidential candidates have to say about home heating this winter than a cut in the gas tax this summer.

[mouselion]

If you have south-facing walls to your domicile, believe it not, passive will either completely heat your dwelling -- or do much of it. It requires chambers which trap heat and which can be vented into your home. Might be in conjunction to your original heat source. Make friends with some engineers, or a tleast some carpenters, it really works! Don't listen to nay-sayers! May take some time and right location to get it going, but it's what you should do.

[KillTheMessenger]

Passive solar heating is overrated and can not be successfully applied exclusively to the majority of residential buildings. But a combination of insulation, passive and active measures can bring the heating and cooling cost for most buildings in the US down by a factor of three or more. Co-generation can supply heat to residential buildings while it optimizes the efficiency of power plants and we can use wind and solar electricity to supply heat to homes across the country with geothermal heat pumps.

[aurora57]

Thanks. Maybe I just haven't been sensitive to passive as an option; or maybe that it is not promoted.

[mouselion]

Maybe, just maybe, some a ya' people might just realize:

There's been some of us trying to convince the rest o' ya' for a long time.

You didn't listen. Now that it's too late (because of intentional actions by Cheney & Co. intentionally driving in the economic nails..., and you choosing to be asleep) -- do you begin to see why we're so pissed, whilst you drive around and act so self-righteous and still pretend we're not saying what we said all along?!!

Guess what? No lifeline is there! Sorry. We tried for you. You didn't listen. It's too late.

[RTIII]

I have a 50 year old Karmann ghia that gets 42 mpg on a good day and 27 around town and does 90 MPH. I've got a younger one that also has disk brakes and gets 34 mpg and great acceleration - plenty enough for the traffic here in the San Francisco Bay Area. (The Karmann Ghia is also a lot safer than others of its era due to its unibody, all crumple-zone construction. It's on par with 1980s vehicles, or even early '90s with regard to crash safety.)

If my FIFTY year old car beats the FUTURE CAFE standards, what the hell is wrong with this picture?

The recent change to the CAFE standard is to be welcomed but it's nothing to BRAG about.

Give us EUROPEAN technology TODAY!

RIGHT people?!

[KillTheMessenger]

"If my FIFTY year old car beats the FUTURE CAFE standards, what the hell is wrong with this picture?"

Absolutely nothing. The car weighs 2000lbs (907kg) and has a 57hp engine. It's a more aerodynamic version of a Beetle. Since it is