Economics of oil and the American Dream

A new hurdle has been passed for the Keystone Pipeline, as expected it was ran through on a Friday Afternoon when DC and New York City was evacuating for an incoming hurricane.  Seems they save “bad” decisions for the environment for when news will not report it.  Typical to say the least:

http://www.marketwatch.com/story/transcanadas-keystone-pipeline-clears-hurdle-2011-08-26?reflink=MW_news_stmp

Picture courtesy of http://www.oilempire.us/tarsands.html

But let’s get out of the gutter and talk facts.  I like facts.  They are the bread and butter of reality and they paint a picture which will never be wrong.  For instance, in the above picture some people see evil.  I see jobs, taxes, and production.  Some people see hell.  I see human ingenuity, environmentalism, and above all else a work ethnic from Canada.  We can argue over the semantics all day long, but what you see in production is up to the person.  But the reality here is that these oil sands have produced a vibrant economy in a location in Canada that is exploding in population growth, and other jobs are making this the most prosperous of the Canadian provinces.   What is it that you see when you see that picture?  I will leave that for now and go on to explain how its irrelevant whether this pipeline is built, the oil will still be sold and someone will buy it.

We may be able to pick the reality we see from pictures such as this, but human ingenuity should never be questioned and the right of people to work should never be up to activists who spend their time just trying to take apart jobs and dismantling economies all in the name of the “Greater Good.”

First, It should be noted that if the US does not buy this oil, the Chinese who seem to be smarter than we are will.  Canada is not a member of OPEC and as such they sell the oil for what they wish to sell it for.  Read: This means cheaper oil.  So regardless of any argument of “the Earth is heating up like a fondue pot, and we can not burn oil” the oil will be sold.  The question that remains is, will we buy the oil from OPEC nations which thrive on price controls, artificial limits and as a rule are generally nations that are ruled by tyranny where the only people who benefit from the oil are the leaders who in their “Grace” allow some of the profits to trickle down to common man?  Finally, if we do that, the Chinese just buy the oil and leave us with the higher gas prices.

http://priceofoil.org/2009/09/04/chinese-in-2-billion-tar-sands-deal/

Oil is going to be in demand regardless, and unless we set limits to the amount people can use (which I might remind people is illegal in the country of the US at least for now…).  Well until then, the same amount of oil is going to be used regardless and this is based on the demand which of course is somewhat effected by the price.

So will the US buy the oil in large quantities and get cheaper gas prices?  Or does the current administration just want China to buy it and keep American’s in economic straits?

That is the question really and the one point the activists in the US who are actively working to stop this must answer.  They must answer reality, and the call to it I start now. Answer the question on why China should be allowed to burn oil but not your own country?  Answer it or go home and think about it until you can.

Picture from: http://c1.planetsave.com/files/2011/08/Tar_Sands_Pipeline_Protest.jpg

From here, we can see the activists are fully at work even today:

http://warisacrime.org/content/join-tar-sands-protest-dc-aug-20-sept-3-stop-keystone-pipeline

The people protesting and getting thrown into jail thrive on breaking the law up to a point, getting points for being arrested and otherwise being little annoyances to police officers who are only doing their jobs.  Why is it that these people think its OK to break laws for protests instead of protesting peacefully?  We are a free country.  Protest away, just don’t get arrested.  How difficult is that?  Is it a martyr syndrome where people feel like they must suffer for being born human?  Is it the fact as they believe that humans are evil through and through?  I don’t know, sometimes modern-day activists act like they lost their sanity over 10 years ago and everything they do just harms the environment and people in the end.

Don’t worry, that last point I will cover in a future blog post that is almost complete.

So to recap, sure, if you like high gas prices, lets buy oil from the Middle East.  Lets close down domestic production as much as possible, and rise prices as much as possible so that nations like Venezuela get more money from us.  But lets not mention that this oil is also extracted out of tar sands….no we can not face reality and the truth.  Environmentalists for years have been blinkered with oil production and seem to thrive on one doomsday story after another.  It is sad: here is one of many.

http://www.oilempire.us/tarsands.html

In this story, the Earth is discussed as if it’s a living entity.  The planet is “being raped” so to speak by evil industry in their words.  Well I have a fact here for this argument.  The Earth is NOT a living entity unless you believe it is a God, in which case you have other issues that you need help on.   But there is also Peak Oil and AGW to consider as other doomsday stories and how they are “saving the world.”  Well let me tell them one thing:  The world will CALL them when it needs them.  Since the planet Earth can not place calls as of yet: You have a long time to wait my activist buddies.

Yes, my rant here is focused on environmental activists who have as a group have cost the US and other nations jobs, security in the form of fuel, wealth, et al, and above all else have worked to cripple honest people from doing an honest day’s labor.  They are truly anti-American and its a miracle that today we still follow their cuckoo ideas.  CAGW, peak oil, it’s all stories to scare the children.  We still believe it.

But here is something you can choose to believe or not.  Will the US be able to survive with zero production and zero mining?  The closing of all coal plants and domestic oil production will cost the US over 500,000 jobs.  There is no replacement for that type of labor anywhere.  Closing GM as a reference point would have cost 1/10th of that, and yet our current administration chose to save GM, but when it comes to coal mining, in his own words “I will bankrupt coal.”

This escape from reality that exists in our current president can not be ignored.  While he is enjoying himself on vacation, countless millions of people work for a living and as such depend on coal, oil and especially gas to feed themselves and their families.  Be aware of reality.  Even though activists might tell you that anyone who works for an oil company is heartless, the opposite is more likely true.  They just want to enjoy the American Dream for not only themselves, but for the next generation.

So my call is this: face the truth in everything.  Learn what you can.  And then speak out against people who want to destroy the American Dream for the next generation.  Without the Canadian Pipeline, we get fewer jobs, higher gas prices and nothing changes for Canada.  Do not let jobs escape us in our especially fragile position!  Vote for the American Dream for the next generation as well.  That vote is also a vote for American ingenuity, wealth, and consequently power.

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2 responses to “Economics of oil and the American Dream

  1. Once you have a sane Federal government again, you will be able to focus resources on the enormous oil deposits in continental United States that have been discovered in the last few decades. The Bakken Formation, lying within the Williston Basin and covering parts of Montana, North Dakota and Saskatchewan, has in the USGS study linked recoverable reserves estimated upwards of 4 billion barrels. And that is small compared to the shale oil reserves in the Green River Formation underneath the Rocky Mountains in Utah, Wyoming and Colorado. Estimates of these fields range upwards of 1.8 trillion barrels, of which 750 billion barrels is recoverable by existing technology. Put another way, about 200 years at current U.S. consumption rates.

    You won’t read about any of this in the MSM (the USGS being regarded as a suspect scientific organisation, being overly interested in inconvenient entities like facts). But I foresee a day within my own lifetime when the United States will be the world’s largest producer and exporter of oil.

    • I tend to agree, but for different reasons. Someday if the US does not throw away its resources and actually uses what we were blessed with, we will become the oil capital of the world along with China. This is not due to conventional oil deposits (which we do still have plenty of) but shale.

      Someday, the oil extracted from that will become economical. Someday this will occur and since the US has the equivalent of over 10 Persian Gulf’s in this formation (China has roughly 11) we will have the dominant source of oil someday.

      The question is just when it will become economical to use these techniques? Like I tend to focus on, economic factors are the bread and butter for mining industries and oil industries. The higher the price, the more sources become economical, which increased supply, which lowers the price to equilibrium until demand increases (or perhaps decreases).

      The true strength of an economy is based on not only what it can produce and sell, but what it can mine and create. This is the true litmus test and where civilizations rise and where they fall.

      The US will be something to watch in this regard..

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