White House Chronicle

News Analysis With a Sense of Humor

  • Home
  • King’s Commentaries
  • Random Features
  • Photos
  • Public Speaker
  • WHC Episodes
  • About WHC
  • Carrying Stations
  • ME/CFS Alert
  • Contact Us

Obama and Energy: What He Can and Can’t Do

March 26, 2012 by White House Chronicle Leave a Comment

 

When the Obama administration seeks to explain its oil policy, it changes the subject mid-sentence.
 
The most frequent practitioner of this verbal contortion is the president's press secretary, Jay Carney. It is as though he's a magician who has promised to pull a live rabbit from his top hat. This conjurer stands before his audience, recites some incantations and, poof, retrieves not a live rabbit, but a dead chicken.
 
Carney, like others in the administration, starts talking about oil and switches to talking about "alternatives." The alternatives, with the exception of the nettlesome subject of biofuels (nettlesome because they produce little or no energy above what's invested in producing them), are ways of making electricity.
 
The administration is adept at confusing these almost unrelated subjects.
 
Oil is the stubborn problem. It affects every aspect of life and prosperity, from the balance of payments to war planning, from economic growth to our relationship with China. Worse, it may be in constrained supply for the rest of time, as the BRIC countries – Brazil, Russia, India, and China – continue to suck up the precious commodity.
 
New finds and technology relieve the gloom for a while, but as demand rises and supply struggles to adjust, the problem remains – even though conservative think tanks and trade groups fight the notion of structural shortage.
 
But the United States isn't short of electricity and has no need ever to be. The electricity problem, if there is one, is environmental. Do we continue to burn coal on a massive scale while we search for an environmental fix? Or do we go wholeheartedly for nuclear – even though the Obama administration has abandoned the Yucca Mountain nuclear-waste repository in Nevada?
 
Solar, wind, geothermal, wave, and even biomass energy come under the rubric of "alternatives" – and they're all electricity technologies.
Then there's natural gas, thought to be exhausted in the United States, but now in abundance as a result of sophisticated technologies. That's another electricity fuel.
 
It's enthusiasm for alternatives (a longtime love affair on the left) that has encouraged the confusing White House utterances about a policy of "all of the above." It's this that has spread the public perception that the president can do something about the price of gasoline. And it's this that makes him vulnerable to scorn over debacles like the loan guarantees to the solar-array manufacturer Solyndra.
 
If Obama's reelection hopes aren't to be extinguished at the gas pump this November, he needs to separate oil from electricity – and the future from the present. He can't affect world oil prices, and he can't drill enough holes in the United States to change the world oil market.
 
But he can change the debate, and push down the price somewhat, by taking up arms not against the oil producers, but rather against the oil traders, who are the market movers. They are concentrated in the New York Mercantile Exchange, where they daily bid up the price in a spiral that is unrelated to cost. The price of oil is set by traders, who use rumor, fear, and the knowledge that producers will be silent partners to jack it up.
 
They aren't phantoms. They are real, flesh-and-blood people who manipulate the markets daily. What's happening to oil in the New York Mercantile Exchange is what happened to electricity prices in California when Enron's traders were running wild.
 
There have even been shenanigans at the Cushing tank farm in Oklahoma, the installation that President Obama toured on Thursday. He might do well to read Leah McGrath Goodman's Fortune magazine article this month, on how ConocoPhillips warehoused oil at Cushing. That oil came in by the same pipeline that the new owners have now reversed, she writes, and it's now flowing to refineries by the very route it came in, but at higher prices.
 
Goodman knows what she's talking about. The former Wall Street Journal reporter wrote The Asylum, the definitive book about the New York Mercantile Exchange and the madness of oil trading.
 
Obama could jawbone the traders while providing more resources and moral support to the Commodity Futures Trading Commission – the poodle trying to do a pit bull's work.
Email, RSS Follow
Email

Filed Under: King's Commentaries Tagged With: alternative energy, ConocoPhillips, Cushing tank farm, electricity, energy, Leah McGrath Goodman, New York Mercantile Exchange, oil, President Obama

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

White House Chronicle on Social

  • Facebook
  • Twitter
  • Vimeo
  • YouTube
Go Green on the High-Tech Bandwagon

Go Green on the High-Tech Bandwagon

Llewellyn King

The newly seated Democrats in the House have lessons to learn, but none more than not to tell people what you’re going to take away from them. That was the great mistake Alexandria Ocasio-Cortez made when she laid out her Green New Deal. It sounds like big stick from big government. She said everything should […]

The Deadly Hurt of Loneliness — It Kills

The Deadly Hurt of Loneliness — It Kills

Llewellyn King

For some Valentine’s Day is a day not of love but of profound, despairing loneliness. The candies, cards and flowers from kind people can sometimes serve to open a void of despair, a black hole of unhappiness for them. They are people made lonely through disease. Some lonely for life. And loneliness kills. That is […]

New Tech Bonanza Will Be the Digital Takeover of Cities

New Tech Bonanza Will Be the Digital Takeover of Cities

Llewellyn King

Benjamin Franklin was the first to deploy street lighting. He put candles in a four-sided, glass case for his lights. The engineering took a giant leap forward in England, when William Murdoch lit his home with coal gas lights in 1792. Today street lighting is taken as a given, like waterborne sewage. But it’s also […]

Want to Be President? Then Learn the Politics Trade

Want to Be President? Then Learn the Politics Trade

Llewellyn King

Mark Twain once observed that no one would try to play a fiddle in public without some prior instruction in the instrument, but no one had such hesitation when it came to writing. Clearly, many candidates these days think you can run for president without any political experience or with precious little. The unqualified and […]

Copyright © 2019 · White House Chronicle Theme on Genesis Framework · WordPress · Log in