All you ever wanted to know about the Oil “Crisis”

Every once in a while, Reason Online has great in-depth articles on the big topics of the day.

In the article below, they unpack the entire oil debate for you.

Peak Oil Panic

The good news is that the peak oil doomsters are probably wrong that world oil production is about to decline forever. Most analysts believe that world petroleum supplies will meet projected demand at reasonable prices for at least another generation. The bad news is that much of the world’s oil reserves are in the custody of unstable and sometimes hostile regimes. But the oil producing nations would be the ultimate losers if they provoked an “oil crisis,” since that would spur industrialized countries to cut back on imports and develop alternative energy technologies.

Probably the most respected private oil consultancy in the world is Cambridge Energy Research Associates (CERA) in Boston. On December 7, 2005, CERA senior consultant Robert W. Esser testified at a House Energy and Air Quality Subcommittee hearing on the peak oil theory. “CERA’s belief is that the world is not running out of oil imminently or in the near to medium term,” Esser said. “Indeed, CERA projects that world oil production capacity has the potential to rise from 87 million barrels per day [mbd] in 2005 to as much as 108 mbd by 2015. “We see no evidence to suggest a peak before 2020, nor do we see a transparent and technically sound analysis from another source that justifies belief in an imminent peak.” Instead of a sharp peak followed by a production decline, CERA’s analysts foresee an “undulating plateau” in which global oil production remains more or less steady. “It will be a number of decades into this century before we get to an inflection point that will herald the arrival of the undulating plateau,” said Esser.

Instead of preparing for an energy war, the best policy is to let markets have free rein. Even if, say, the Iranians make the political decision to disrupt the flow of oil to world markets, those markets left to themselves will eventually discipline them. The temporarily higher prices will encourage more exploration and technological advances, which will bring energy prices back down. On the day of his inauguration in 1981, President Ronald Reagan lifted oil price controls. Five years later oil prices fell below $10 a barrel.


Like this would surprise any economically literate person.

You really do need to read the whole thing.

When will some one attack “Big Corn?”

Two stories on the gas “crisis” (“Run for the hills!!! Off with their heads!!! Gas is at 3/4 of it’s all time high!!!”) show that we have just as much to worry about from “Big Corn” than we do “Big Oil.”

Illinois congressman unveils gas price plan

And provide more incentives to install fuel pumps dispensing E85, a fuel blend of 85 percent ethanol and 15 percent gasoline.

Some of the proposals already have passed the U.S. House and others are pending in both houses of Congress, said Kirk, who pressed for similar changes last year.

The E85 on sale at the Mt. Prospect station costs 34 cents less a gallon than regular gasoline—$2.64 for E85 compared with $2.98 for regular unleaded gas—Kirk said.

But some critics have accused Midwest legislators of advocating the use of ethanol because of the agricultural lobby.


Ya think?

Denny Pelosi
Gas prices rise, and Republicans panic.

There’s been unconscionable behavior all right, most of it on Capitol Hill. A decent portion of the latest run-up in gas prices–and the entire cause of recent spot shortages–is the direct result of the energy bill Congress passed last summer. That self-serving legislation handed Congress’s friends in the ethanol lobby a mandate that forces drivers to use 7.5 billion gallons annually of that oxygenate by 2012.

At the same time, Congress refused to provide liability protection to the makers of MTBE, a rival oxygenate getting hit with lawsuits. So MTBE makers are leaving the market in a rush, while overstretched ethanol producers (despite their promises) are in no way equipped to compensate for the loss of MTBE in the fuel supply. Ethanol is also difficult to ship and store outside of the Midwest, which is causing supply headaches and spot gas shortages along the East Coast and Texas.

These columns warned Republicans this would happen. As recently as last year, ethanol was selling for $1.45 a gallon. By December it had reached $2 and is now going for $2.77. So refiners are now having to buy both oil and ethanol at sky-high prices. In short, the only market manipulation has been by politicians.

Some Fun


American’s “Best” Corporations – on the Frontline of Chinese Fascism



Is that symbol above going to become the trademark of America’s “best” technology companies? It appears that things are heading in that direction.

PBS’ Frontline did a full program on the phenomenon of “The Tank Man.”


It is excellent journalism, and I recommend it highly. The sixth segment highlights America’s Corporate Quislings, who gladly take cash to censor the truth and turn dissidents over to the Chinese authorities.

Back When Republicans Enacted Their Ideas…

Remember “Welfare Reform?” Want to know how well it worked?

How Welfare Reform Worked

What about concern number two-that welfare mothers would sink deeper into poverty? Shortly before TANF (Welfare Reform) passed, the Urban Institute released a report, solicited by a wavering Clinton administration, warning that welfare reform could impoverish an additional 2 million people. Reform Jeremiahs waved the report around as scientific proof of their worst fears. Even if some welfare mothers did find jobs, they argued, they would merely be stocking shelves at Duane Reade or making hotel beds, the proverbial “dead-end jobs” that would leave them worse off than on the dole.

Though a lot of women did take low-paying service jobs, the unreformed got this one wrong, too. For one thing, they failed to consider the Earned Income Tax Credit, whose expansion in 1993 meant a 40 percent boost in annual earnings for a minimum-wage worker with two kids. Most leavers, though, were doing better than minimum wage. In 2002, the same Urban Institute that had predicted TANF disaster found that the median hourly wage for working former recipients was around $8 an hour. Moreover, O’Neill and Hill discovered that, just as with most other people, the longer recipients were in the job market, the more they earned; four years off welfare, only 4 percent of working single mothers—and only 8 percent of high school dropouts who were single mothers—were earning minimum wage or less.

As a result, most welfare leavers had more money than when they were on welfare. The poverty rate for single women with children fell from 42 percent in 1996 to 34 percent in 2002; before 1996, it had never in recorded history been below 40 percent. This was the first boom ever where poverty declined faster for that group than for married-couple families. Nor did leavers disdain their “dead-end jobs.” Studies consistently found that ex-recipients who went on to become waitresses, grill cooks, and security guards took pride in being salarywomen.

The Upside of High Gas Prices

As some one who has been critical of overspending on Mass Transit Systems that no one uses, the fact is that if gas prices go high enough, people will use public transit.

Having just experienced the generally decent Bay Area system (BART), one has to ask why so many conservatives sneer at decent public transit.

Sure, massive payroll and pension piggery are problems that need to be solved, but what is wrong with excellent mass transit.

We haven’t even started to calculate the upside to $3.00+ gas. A better US auto industry and better mass transit are two big vats of lemonade we can make out of this lemon.


Drivers switch to public transit

Among mass transit systems:

•Washington, D.C. Thursday was the sixth-busiest day in history on Metrorail, the area’s train system, while Tuesday was the ninth busiest. There were no special events in the area to explain the higher ridership. “We think gas prices had something to do with it,” Washington Metropolitan Area Transit Authority spokeswoman Candace Smith says.

•Salt Lake City. Ridership is up 50% on the 19-mile, light-rail system in Salt Lake City from a year ago. The Utah Transit Authority has added 10 used rail cars it bought from San Jose, Calif., to meet demand. But in some cases, cars are becoming so packed that the doors are dragging on the platforms at stops because of the increased weight, spokesman Justin Jones says.

Riders responding to onboard polling increasingly are saying they are motivated to take public transportation because of higher gas prices, Jones says.

•Tulsa. Tulsa Transit’s March ridership was the highest since August 2003. For the fiscal year, which began in July, trips on the bus system are up 28% from the prior year.

•San Francisco. After taking a “nosedive” in recent years, ridership on Bay Area Rapid Transit is up 4.1% this fiscal year, which began July 1, spokesman Linton Johnson says. He attributes the gain to heavier traffic and higher gas prices.

The increase in ridership, or number of trips, is similar to last year when gasoline prices hit record levels, William Millar, of the American Public Transportation Association, says. The number of trips nationwide was up 5% in August and September compared with the same months in 2004. “It looks like history is repeating itself,” he says. “The spike in gas prices is causing many people to look for ways to beat the high cost, and trying transit is one of the things they are doing.”

The Utter and Complete Failure of Public Education

The numbers tell all.


Of every 100 freshmen entering a Chicago public high school, only about six will earn a bachelor’s degree by the time they’re in their mid-20s, according to a first-of-its-kind study released Thursday by the Consortium on Chicago School Research.

The prospects are even worse for African-American and Latino male freshmen, who only have about a 3 percent chance of obtaining a bachelor’s degree by the time they’re 25.

The study, which tracked Chicago high school students who graduated in 1998 and 1999, also found that making it to college doesn’t ensure success: Of the city public school students who went to a four-year college, only about 35 percent earned a bachelor’s degree within six years, compared with 64 percent nationally.

Researchers say they’re not exactly sure why Chicago schools alumni graduate from college in such low numbers, but that poor preparation during high school and too few resources at the college level contribute to the problem.


At some point, somebody should be held criminally responsible for this massive destruction of human potential caused by public education. Just how bad does it have to get?

Gas Prices, Selfish Americans, and Bush’s Approval Ratings

I spend quite a bit of time arguing with my listeners on gas prices. Americans appear to believe they have a God-given right to cheap gas.

This is a load of poop.

I could make a case that the condition of our decrepit and uncompetitive auto industry is a direct result of our addiction to cheap gas. Call it the “Escalade Epitath.” Big, fat, cheap crap that can’t hold a candle to cars that have acceleration, luxury, and better milage.

What does all this have to do with Bush Approval ratings? Everything. Check out the graph below. It pretty much sums it up. Soldiers dying? Not it. Rumsfeld? Not it. Katrina? Maybe, but it tracks with gas very closely.

No. Wars, inflation, deficits, and disasters don’t matter to Americans. Only the price of their addiction. Junkies, that’s what we are. The guy could be diddling 20-somethings in the closet, as long as we get our fix.


All the President has to do is tell the oil companies, Arabs, and a few billion Chinese and Indians to drop consumption from Sept 1st to Nov. 5th, and his party will benefit greatly.

That pretty much sums up the argument against the idiots who think Bush controls the oil industry (or vice versa).

Extreme Wisdom on the Bird Flu

Sorry for the light blogging, but I’ve been exceptionally busy. Doing 2 hours of radio a day is a lot more work than 2 hours a week.

When I can integrate blogging with show prep, things go well, but when I can’t, blogging gets light.

Regardless, I recently interviewed a Dr. Arnold Monto of University of Michigan regarding the H5N1 Bird Flu issue. The podcast is about 28 minutes. Though a little dry compared to the immigration and tax issues, it is pretty informative.

Listen while you work. Click the podcasting link. You may have to crank up the volume.

Added link to a great Education Website

The Education Intelligence Agency has been around a long time. I finally got around to linking them on the left side of my page. The site is full of great stuff like the item below…


1) New EIA Spending Analysis Reveals Enrollment “Lag.” Three years ago, EIA posted statistics for every public school district in America – focusing on enrollment and labor costs. With the release of the latest data from the U.S. Census Bureau upon which those tables were based, it is time to update those statistics, add new ones, and examine the three-year trend.

The new tables contain statistics from the 2003-04 school year: enrollment, per-pupil spending, and amount per-pupil spent on employee compensation, along with the percentage change in those categories from 2000-01. And, because it has become such a newsworthy item, EIA added a column that notes each district’s “65% solution” status – that is, whether that district or state spends 65 percent of its funding on instruction, as defined by the National Center for Education Statistics.

This work requires some rather tedious and time-consuming exercises, so it will take awhile to update all 14,000+ school districts. However, EIA has completed the state ranking table as well as district statistics for Alabama, Alaska, Arizona and Arkansas. The early results are intriguing.

There are two statistics which, although interesting when examined alone, when taken together illustrate a phenomenon that should be intuitively obvious, but is rarely discussed in the school finance debate:

1) Per-pupil spending in the U.S. increased by 13.77% in the three-year period.

2) Twenty-six states had fewer students in 2003-04 than they had in 2000-01.

In those 26 states, per-pupil spending increased an average of 17.6% over those three years, well beyond the national average. All the states with spending increases of more than 20% (Hawaii, Louisiana, Mississippi, New Hampshire, North Dakota, Pennsylvania and Vermont) lost students in the last three years.

The reverse is mostly true, with some notable exceptions. Large enrollment increases in Nevada, Texas and Florida led to lower-than-average per-pupil spending increases, but Arizona and New Jersey managed to raise per-pupil spending substantially even with burgeoning enrollments.

What this suggests is that there is a lag in the time it takes money to follow the pupil. States with booming enrollment increase spending quickly to accommodate the new students, but not rapidly enough to keep up with the national average. Meanwhile, states with falling enrollment at the very least continue to spend the same total amount among fewer students, thereby increasing per-pupil spending substantially.

It also fits political reality. The public education establishment has a tough time raising new revenues, even when increasing enrollment demands it. On the other hand, school officials and advocates are very good at keeping the money already built into the formula, even when falling enrollment calls for cuts to be made.

There is a lot more to be gleaned from these statistics. Still think there are economies of scale in public education? I don’t yet know if it will hold true for all 50 states, but so far there are a lot more small school districts meeting the “65% solution” threshold than large school districts.

As I update each state’s statistics, I will mark them with an asterisk on EIA’s school district spending web page. Your comments and questions, as always, are welcome.