The Oil Wars

[Don M.]

We have all been pleasantly surprised at the falling prices at the gas pumps in recent weeks. However, this is a Very Complex issue, and has Global implications. The US and Canadian oil companies have nearly made North America "energy independent", and that has put a severe strain on some other nations economies....particularly places like Venezuela and Russia. OPEC has cooperated by Not reducing its output, and is letting the markets dictate the prices...for now. The first effects are already being seen, as some of the more expensive processes, like fracking, shale, and the oil sands are beginning to pull back, as they are not profitable at less than $60 a barrel. Almost 5% of the North American wells and operations have shut down in the past month, as these marginally profitable operations come under stress. I would imagine most of these operations are being Mothballed, and can be quickly brought back if prices rise a bit.

Meanwhile, Venezuela is in serious trouble, and the people of that nation are seeing inflation rise as high as 60%, as their oil dependent economy is quickly collapsing. Russia is going through real pain as their oil exports are being hit hard. The Ruble has nearly collapsed, and Putin is coming under a lot of pressure. The world needs to watch this closely, as Putin is just crazy enough to try to lash out with some military action to hold on to his position.

The next few months will be interesting as this global market tries to find its balance. Hopefully, we will see oil settle down at around $70 a barrel, which will allow some decent "wiggle room" for nearly all suppliers, and result in pump prices, here, to settle in the $2.50 a gallon range...which would be quite acceptable to most.

People have been switching to more fuel efficient cars in recent years, and driving less...which has helped tremendously, but there has been a recent uptick in large SUV sales, so some people seem to have a short memory.

EPA mandates for fuel mileage, in the future, will change the types of vehicles we drive. This, and a good long term outlook for oil supplies, should keep prices low for quite some time. Plus, rapidly accelerating technology advances in things like solar energy may finally put us on a path whereby we can begin to reduce some of the pollutants in our atmosphere that are creating so many Climate Change issues.

Overall, these events are, to me, one of the more optimistic things that have occurred recently.

 

[QuickSilver]

The only ones hurting from this are the Big Oil companies... they REALLY have my sympathy... yeah... right.. They have been gouging us for years.. so up theirs.

 

[Don M.]

I, too, haven't had many kind words for the Oil Industry. But, if their investments have helped pull us out from under the thumbs of the Arab oil Barons, they have done us all a favor.

 

[Debby]

And today, the Canadian news announces the pink slips being handed out in Fort McMurray, as oil hits $52.00 earlier in the day. A company named Civio(?) which sets up camps for oil workers is beginning to lay off their workers as the energy companies begin to pull back. And so it begins.


As for your comment Don, about Putin being crazy enough to do something militarily, first of all I disagree with your assessment of him. He became sort of a 'hobby' of mine and I've read numerous articles about him, read numerous speeches by him, and read numerous articles about the whole Ukrainian situation. This morning I was reading about the MH17 findings and various pieces of evidence as a matter of fact. He isn't crazy, he's very smart, he has not been any more inflammatory and actually less so than the US administration. In the face of a continuous stream of unsubstantiated accusations, his tone has for the most part been non-confrontational and conciliatory. And periodically he's stated that if America forces him too, at some point Russia would act to protect itself.

He is doing exactly what you would expect your government to do if some other larger 'power' was treating you the way Russia is being treated. This is a game of chicken and one of the aspects of the whole duel is about America being the holder of the world reserve currency' status. I believe that gold will ultimately be shown to be of significance in this whole struggle as well.

 

[Josiah]

My preoccupation is that as much carbon remain in the ground as possible and this glut of oil and falling prices isn't going to help that at all. Not to sound like the Grinch who stole Christmas I would favor a $4 per gallon tax on gasoline the entire proceeds to be used to develop and promote renewable energy.

 

[QuickSilver]

My preoccupation is that as much carbon remain in the ground as possible and this glut of oil and falling prices isn't going to help that at all. Not to sound like the Grinch who stole Christmas I would favor a $4 per gallon tax on gasoline the entire proceeds to be used to develop and promote renewable energy.

Amen

 

[Don M.]

And today, the Canadian news announces the pink slips being handed out in Fort McMurray, as oil hits $52.00 earlier in the day. A company named Civio(?) which sets up camps for oil workers is beginning to lay off their workers as the energy companies begin to pull back. And so it begins.


As for your comment Don, about Putin being crazy enough to do something militarily, first of all I disagree with your assessment of him. He became sort of a 'hobby' of mine and I've read numerous articles about him, read numerous speeches by him, and read numerous articles about the whole Ukrainian situation. This morning I was reading about the MH17 findings and various pieces of evidence as a matter of fact. He isn't crazy, he's very smart, he has not been any more inflammatory and actually less so than the US administration. In the face of a continuous stream of unsubstantiated accusations, his tone has for the most part been non-confrontational and conciliatory. And periodically he's stated that if America forces him too, at some point Russia would act to protect itself.

He is doing exactly what you would expect your government to do if some other larger 'power' was treating you the way Russia is being treated. This is a game of chicken and one of the aspects of the whole duel is about America being the holder of the world reserve currency' status. I believe that gold will ultimately be shown to be of significance in this whole struggle as well.

I would expect that the Canadian Tar Sands operations would be among the First to be impacted by these falling oil prices. The costs of that production far exceed those of more traditional means of production. However, when all this settles out to a more long term pricing picture, I fully expect the Canadian production to pick up, once again.

Yeah, I was wrong in calling Putin "crazy"...."Crazy, like a Fox" might be a better description. He is very Crafty, and has a far better Grasp of international politics than our President, IMO. He knows how to Push for a Russian advantage, then pull back at the last moment. However, the decline in the Ruble, and now these oil prices, which supply the bulk of the foreign capital to Russia, is certainly going to require some action, at some point. He and Obama, with all these sanctions, are indeed involved in a high stakes game of "Chicken". News video of those two, in close proximity to each other...by their "body language", strongly indicates that neither holds the other in high regard.

 

[Don M.]

My preoccupation is that as much carbon remain in the ground as possible and this glut of oil and falling prices isn't going to help that at all. Not to sound like the Grinch who stole Christmas I would favor a $4 per gallon tax on gasoline the entire proceeds to be used to develop and promote renewable energy.

I'm not too concerned about the price of gas. Now that I no longer have to drive thousands of work related miles each year, gas is a small part of our budget. However, millions of our people still clog the highways every day going to and from work. I, too, would like to see more money devoted to alternative energy, and even more importantly, in the shorter term, and increased expenditure in Mass Transit. 95% of the cars on the road during rush hour, wind up sitting in a parking lot/garage all day.

 

[Debby]

My preoccupation is that as much carbon remain in the ground as possible and this glut of oil and falling prices isn't going to help that at all. Not to sound like the Grinch who stole Christmas I would favor a $4 per gallon tax on gasoline the entire proceeds to be used to develop and promote renewable energy.

I agree with you pretty much Josiah. Silly thing for me is that this is a relatively recent adjustment in my philosophy, not that I was a 'carbon-pig' but I didn't give a great deal of thought to the whole thing. And in these years of adjusting philosophy, I find myself the guardian of two old horses, who required that we have a vehicle big enough to pull a horse trailer and who need to have hay cut for them which requires the use of more large equipment than would be used if it was just me and my husband. And we live far enough out in the country that it takes me 25 minutes to get to town (all that driving, all that gas....) and our closest daughter is a 5 hour drive away and I'm trying to stay in the grandchildren's lives as long as they are interested.....

But maybe in a couple years I'll be moving back to a small city where I can live in a condo that is within walking distance of a good supermarket and great coffee shops and restaurants. Fingers crossed.

 

[Debby]

Hey Don, in case you or anyone else for that matter are interested to hear what Putin's Christmas address was about, you can read it here: http://eng.kremlin.ru/transcripts/23406

and the speech is followed by a Q & A later with journalists and others from the area, Ukraine and I believe some from the EU. It's pretty interesting and he touches on most of the big issues of the moment.

 

[Josiah]

I can't agree with you Don regarding Putin's prowess in the field of international politics. Right now the international community seems to be of one mind and that is to punish Putin for his adventures in Ukraine. I don't call this holding a winning hand. I like the way Paul Krugman handled the subject in this recent column
http://www.nytimes.com/2014/12/19/opinion/paul-krugman-putins-bubble-bursts.html?ref=opinion&_r=0

 

[Debby]

I gather that you've read very little from the other side of the story Josiah. Putin is politically astute, but the US administration has rallied a force against Russia that any man would be hard pressed to deal with. While I fully intend to read your Krugman article, might I likewise suggest you read the above mentioned Christmas speech of Putins. And do go through the questions that follow and all his answers. They are also very enlightening. That might give you an idea about the man that western media works hard to hide.

 

[Josiah]

What I don't like about Putin's Russia is pretty much what I didn't like about Bush's America. Both countries with vast wealth concentrated in a powerful elite and both countries that have unwisely utilized their military power repeatedly. Ok so why didn't I say Obama's America? Because Obama has at least backed policies which benefit the middle and lower classes. He's been entirely too acquiescent with Wall Street for which I fault him. On the foreign scene he's extracted us inelegantly from two wars. I very much regret his military policy regarding the new Islamic State. I feel he was entirely justified in cooperating with Europe to put sanctions in place to punish the Russian military adventures. So all things considered I think the pros outweigh the cons.


I did follow some of Putin's Christmas speech and question answering session. I don't feel he justified his military involvement in Ukraine and calling his troops volunteers is just disingenuous. I also couldn't warm up to his lengthy bear metaphor which I'm sure went over big with the Russian public. Still I'm sure there are many accomplishments about which the Russian nation should be justifiably proud, but I don't feel that owning Crimean beach front property should be one of them.

 

[SeaBreeze]

I, too, haven't had many kind words for the Oil Industry. But, if their investments have helped pull us out from under the thumbs of the Arab oil Barons, they have done us all a favor.

I agree.

 

[Debby]

What I don't like about Putin's Russia is pretty much what I didn't like about Bush's America. Both countries with vast wealth concentrated in a powerful elite and both countries that have unwisely utilized their military power repeatedly...........

Russia has been much, much, much less involved in other countries since Putin took power, than America has. I would ask you, since you are so willing to 'punish' Putin for his military adventures, what are your thoughts on punishing America for yours? Afghanistan, Libya, Iraq, Haiti, Ukraine, not to mention previously, Vietnam, Cuba, Cambodia,.....Besides Ukraine which the mainstream media has been 'slanting' atrociously, what military escapades of Russia have you actually read about?

And ask yourself at the same time, how fair is it for America to once again, put another region (the EU) in the hot seat by insisting that those countries go along with American manipulations/sanctions. America doesn't suffer with sanctions, but the various countries of Europe are feeling the impact of the sanctions that Russia has implemented in response to American dictates.

As usual, you are ignoring the 60% turnout for the Crimean vote and the 90% decision to go with Russia. You are also forgetting or ignoring the fact that until 50 years ago, Ukraine was part of Russia and so the likelihood that there are family ties involved suggest a real possibility that those who are going from Russia to SE Ukraine to protect family is very real. Think of it like if Mexico decided to take back Texas. Would Americans go to the aid of their Texas family members if they decided to struggle against Mexico's incursion? And by the way, we aren't hearing anything about Crimea 'struggling against the annexation' are we? Not a mention. Is that indicative of their enthusiasm for their own vote?

And here's another question for you: perhaps you can tell me why this vote of Crimea's is different than Kosovo's vote to separate from Serbians which the USA supported.

What has happened in Ukraine is exactly what happened when Obama got elected the first time. Obama took the same people who 'engineered' the economic meltdown in 2008, back into his cabinet. Larry Summers, Tim Geithner, Volker and Corzine. And in the Ukraine, thanks now to America, the same thing happened when the coup originally occurred:

'...The Maidan street revolt and the subsequent coup just reshuffled the same marked deck of cards, forever rotating in power.The new acting President has been an acting prime minister, and a KGB (called ‘SBU’ in Ukrainian) supremo.The new acting prime minister has been a foreign minister. The oligarch most likely to be ‘elected’ President in a few days has been a foreign minister, the head of the state bank, and personal treasurer of two coups, in 2004 (installing Yushchenko) and in 2014 (installing himself).His main competitor, Mme Timoshenko, served as a prime minister for years, until electoral defeat in 2010....'http://www.globalresearch.ca/putin-like-hitler-how-did-prince-charles-get-it-so-wrong/5383160

In my opinion, abdicating ones ability to think and understand foreign relations means that you support continued violence and misappropriation of lands and rights and abuse of peoples in other nations. Personally, as a Canadian, I am appalled at the instances where my government has abused and in some cases continues to abuse citizens of other countries and our own. I am thinking of our First Nations people, the people of Ukraine (whose own government won't talk to them but will send their military and weapons after civilians) and the people of Haiti and Afghanistan.