OPEC Tries Leveraging Non-OPEC Oil Producing Countries!

The following was extracted from a Reuters News Service article dated November 15, 2008 -

"TEHRAN (Reuters) – Iran's OPEC governor said on Saturday talks were underway on cooperation between OPEC and producers outside the cartel to reduce oil output, following tumbling crude prices in recent months.

"Now there are negotiations that non-OPEC countries cooperate with OPEC to lower output to some extent because if they don't ... or if they increase output, they have neutralized OPEC's action," Mohammad Ali Khatibi said in an interview broadcast live on Iranian state television."

OPEC's obvious intention is to attempt to further damage a struggling world economy, while OPEC members continue to bathe in money. The question then becomes: How can the United States protect itself from energy banditry by OPEC? OPEC is made up of people who would have no petroleum industry had it not been for western exploration, organization and technology.

Here's a brief history of the development of the petroleum industry as it exists today:

1. Oil drilling began in the U.S.A. in 1859, and wasn't taken to the middle east until 1901 when the first oil concessions were contracted with Persia (now Iran).

2. 1917 - The U.S. produced two-thirds of the world's oil!

3. 1932 - The Kingdom of Saudi Arabia was created as a sovereign nation, and in 1933 the first oil concessions in Saudi Arabia were granted to Standard Oil of California.

4. 1937 - Oil was discovered in Saudi Arabia and, in 1945 U.S. President Franklin D. Roosevelt, and King Abdul Aziz of the Kingdom of Saudi Arabia, make an agreement whereby military protection of the Kingdom would be provided in exchange for oil supplies.

5. 1948 - Ghawar, the world's largest oil field, discovered in eastern Saudi Arabia.

6. 1950 - Completion of the 1,056 mile long Trans-Arabian Pipeline (TAPline). The Trans-Arabian Pipeline Company, a joint venture by Standard Oil of New Jersey (Esso), Standard Oil of California (Chevron), The Texas Company (Texaco) and Socony-Vacuum Oil Company (Mobil), was a major factor in economic development of Lebanon after independence and especially in the emergence of the south. TAPline was an important industrial adventure in global trade, the petroleum industry and American-Middle East politics.

7. 1953 - United States and Britain staged a coup d'etat against the democratically elected government of Iran's President Mohammed Mossadeq after he nationalized oil resources.

8. 1956 - Renowned Geophysicist, Dr. M. King Hubbert gave a speech outlining "the science of peak oil," in which he predicts US peak in 1970 and world peak in mid-1990s (the latter might have happened if the 1973 oil embargo had not reduced consumption).

9. 1960 - Organization of Petroleum Exporting Countries (OPEC) formed.

10. 1961 - Iraq makes effort to seize Kuwait, stopped by British military.

11. 1964 - World oil discovery peaks.

12. 1965 - Middle East oil production exceeds that of the United States.

13. 1968 - Oil is discovered on the Alaska North Slope by British Petroleum Corp (BP).

14. 1969 - Oil is discovered in the North Sea.

15. 1971 - US petroleum production peaks.

16. 1973 - The Saudi oil embargo results in gas lines in the United States. President Richard Nixon and Secretary of State Henry Kissinger secretly contemplate seizing oil fields. The Alaska Pipeline is approved by Congressional vote, thereby exempting it from Federal law.

17. 1974 - Arab oil embargo ends.

18. 1975 - Oil drilling begins in North Sea.

19. 1977 - The Alaska pipeline opens ... President Carter gives a televised speech declaring that the energy crisis is the "moral equivalent of war."

20. 1979 - Gas lines return. On July 15th, 1979 President Jimmy Carter gave the following impassioned speech to America (emphasis added) - "What I have to say to you now about energy is simple and vitally important.
Point one: I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 -- never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade -- a saving of over 4-1/2 million barrels of imported oil per day.
Point two: To ensure that we meet these targets, I will use my presidential authority to set import quotas. I'm announcing tonight that for 1979 and 1980, I will forbid the entry into this country of one drop of foreign oil more than these goals allow. These quotas will ensure a reduction in imports even below the ambitious levels we set at the recent Tokyo summit.
Point three: To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation's history to develop America's own alternative sources of fuel -- from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun.
...In closing, let me say this: I will do my best, but I will not do it alone. Let your voice be heard. Whenever you have a chance, say something good about our country. With God's help and for the sake of our nation, it is time for us to join hands in America. Let us commit ourselves together to a rebirth of the American spirit. Working together with our common faith we cannot fail. Thank you and good night." (Point one didn't exactly come to pass, and now we're paying the price for it - again.)

21. 1988 - Alaskan pipeline production peaks - hits maximum output at three quarter billion barrels a year

22. 1990 - Iraq invades Kuwait. The United States Central Command is engaged in a war game exercise called "Internal Look" at this time that simulated Iraq invading Kuwait. In mid-August the United States starts sending troops to Saudi Arabia, Operation "Desert Shield" beings.

23. 1991 - Operation Desert Storm - US drives Iraq out of Kuwait, decimates Iraqi infrastructure.

24. 1993 - NAFTA Treaty established, which gives the United States some powers over water and fossil energy resources in Canada and Mexico.

25. 1994 - In March of 1994 Dr. Paul Wolfowitz, Under Secretary of Defense for Policy, stated the following:
“The United States and the entire industrialized world have an enormous stake in the security of the Persian Gulf, not primarily in order to save a few dollars per gallon of gasoline but rather because a hostile regime in control of those resources could wreak untold damage on the world’s economy, and could apply that wealth to purposes that would endanger peace globally.” Wolfowitz concludes, “Given this permanent stake in the security of the Persian Gulf, the Gulf War provided an opportunity to base security on a foundation of credible commitment by the United States and its coalition partners.”

26. 2008 - The world sees oil prices top $140 per barrel, and watches as gas pump prices skyrocket.

Okay - I did say a brief history (covering 150 years in 26 points isn't excessive), and that pretty much brings us up to date. Prices have dropped significantly in October-November, but that will change if/when OPEC gets its way. What we need to do in order to protect our interests is to DRILL NOW! However, with the radical left taking control of our government in January of 2009, we undoubtedly will not do anything we need to do to insure our Nation's security - physical-, military-, economic -, or energy-security.

I could be wrong .............. and I HOPE I AM!

(but, I seriously doubt that I am ... )

Standard Liberal Voting Position

NObama in Wonderland

Barak NObama's latest cure for the USA's ever-increasing fuel cost problem is simple: ADD A 50 CENT PER GALLON TAX TO THE PRICE! This is a man who is obviously not in touch with the problems of working-class America. He believes that by making it even more costly, the American public will drive less, thereby reducing our demand for this OPEC commodity. What he FAILS to understand is that many of us who have to work for a living, unlike our elected officials, are already being crippled by the escalating cost of fuels. We must fuel our vehicles to get us to our work, that we may earn a living and support our families ... and our government! We're paying more at the pump daily, and so are those who transport goods to our retail outlets. Consequently, everything we need to live is costing us more.

Everything from the cost of groceries at the supermarket, to clothing, to the delivery of the evening newspaper to rural areas. In fact, home delivery to rural/unincorporated areas may become a thing of the past, since the delivery person is paying an exorbitant price for fuel, and may not even be making minimum wage. Other services will be forced to increase their prices as well, in order to make a reasonable profit and remain in business.

The challenge for our next elected leader will be to minimize the impact of the downward slide of the US dollar. Our government needs to tap into our own fuel reserves, and resurrect our refineries. Let the 'greenies" whine! The survival of this nation, and it's people, is far more important than a spotted owl becoming temporarily homeless. The owls can move ... and they won't burn a drop of fuel doing it!

NObama's solution sounds familiar though ... it reminds me of the French phrase "Qu'ils mangent de la brioche", or, "Let them eat cake." (For anybody who may not remember the consequences of that statement, it fueled the French Revolution, and the subsequent beheading of Marie Antoinette in 1793 for treason.) How far can the American people be pushed before we revolt? That has yet to be seen - and I hope not to see it in my lifetime, but ...

We deserve the leadership we elect ... and may God save us from our emotions! Use your intellect to vote, not your emotions.

I'm Gil, and I approve this Blog!

Where Is Kuwait?

We saved Kuwait when Iraq invaded and started burning their oil wells, where are they now that OPEC is burning our economy?

I'm Gil, and I approve this blog!

Shades of 1929!

The government won't make it official, because that would reflect poorly on the administration, but we are in a recession - bordering on another depression. It's been almost 80 years since the beginning of the "Great Depression" of 1929, which lasted until 1941, so we were about due for one. We had four lesser-known (except to economists and historians) depressions in the 1800's, each of which lasted between five and seven years. So, in a relative sense, the 20th century was a much smoother one, depression-wise. One biggie, but no roller coaster rides.

The root causes of the Great Depression are still uncertain, but a drop in the Gross Domestic Product (our ability to sell what we manufacture) initiated a high unemployment rate in the United States. The unemployment rate represents what is not produced that could be produced. The unemployment rate, these days, is a misleading statistic anyway. An individual is counted as unemployed if the individual is over the age of 16 and is actively looking for a job, but cannot find one. Students, those individuals who choose to not work, and retirees are therefore not counted in the unemployment rate. Nor are the under-employed (those who desire full-time employment but cannot find it), or those who are not drawing unemployment compensation from the government (those who have not filed for unemployment, or have exhausted their unemployment benefit). In 1929 the unemployment rate in the USA was 3.2%. In 1930 it had more than doubled at approximately 8.5%., and by 1933 our unemployment rate had hit 25%. (Source: www.sjsu.edu) That means that one person in four who was capable of working, and actively seeking employment was just S.O.L.! Keep in mind also, that at that time in our history, the labor force was over 90% male. Women may not have even been included in the statistics.


So, what's going on today? In August of 2001 our unemployment rate was 4.9%, based on:

		Description
Total civilian population	212,135,000	(excluding those under 16, members of the military, and persons in institutions)
- Not in Labor force	70,785,000	(retired, students, individuals choosing not to work)
= Labor force	141,350,000	(total population minus those not in labor force)
- Employed	134,393,000	(individuals with jobs)
= Unemployed	6,957,000	(individuals without a job and actively searching)

(Source: www.econedlink.org)

But, that was seven years ago. Today we have offshore outsourcing of American jobs, combined with in-sourcing of technical and professional people, added to the reported 12,000,000 (and constantly growing) illegal aliens. And we have an ever-increasing export deficit, and we are becoming more dependent on overseas sources - many of which are less-than-friendly to the United States - for goods and services. Where is our unemployment today? As of May 2008 our national unemployment stands at 5.5% - 2.3 percentage points above 1929, yet roughly 3 percentage points below 1930. We now have a "civilian population" of 154.5 million - that's slightly over 51% of our total population of 301 million - for a decline of 57,635,000. Where did those 57.6 million people go? Did they die? Surely mortality rates would be offset by those coming of age.

According to the U.S. Census Bureau, in 1990 there were 16.7 births per 1,000 population (those would be the people who will be 18 at some point in 1908). In 2007, the last year available from the U.S. Census Bureau, there were 8.1 deaths per thousand. That's less than ½ the number of people who had been in the employable age range for the previous 2 years. (I could find no figures giving specific numbers of either births or deaths, nor could I find statistics showing the number of people in the 16-30 age range who would have been excluded from the "civilian population" due to education, military or institutional status.) How do you have a birth rate twice that of the death rate, and lose 57.6 million people from the workforce? I am amazed at the number of things in this world that I just simply do not understand.
Our GDP has remained fairly stable since 2006 reflecting a growth of approximately $1 billion, which is a good sign. Although that amount is significantly larger than my monthly check, $1 billion is not a lot of money when your talking about a total GDP of $14,000,000,000,000 ($14 TRILLION). To review we have a 5.5% (official, if not totally accurate) unemployment rate, and a stagnant GDP. Then add over 5,000,000 welfare/Medicaid recipients (whose only skill seems to be spreading their legs and letting the taxpayers pick up the tab), and corporate offshore outsourcing of hundreds of thousands of American jobs. Now OPEC is actively engaged in driving our economy further and faster down the road to ruination, and transportation costs are killing us at the gas pump, retail stores, and others offering goods and services. Additionally, the U.S. dollar has been devalued by half around the world! Does the inevitable outcome escape our elected representatives in Washington D.C.? Let me spell it out for them - D.E.P.R.E.S.S.I.O.N.! And what gifts does the depression bring? Civil disturbances, increased crime rates, and perhaps rioting ... or possibly even another revolution. I do not wish to see any of these things happen, but I fear that unless the government changes the course our country has taken in the last 50 years, these will be the consequences of our inaction.

I hope that someday I can say, "That prediction I made back in 2008 was wrong! Our government finally grew a set, and re-directed our economic policies. Today our country is as prosperous as it was in the 1950s, our borders are secure, and we depend on nobody outside the United States for our fuel needs!"

I'm Gil, and I approve this blog!

OPEC Rip-Off

Here's a little math problem for you: Achmed has 42 US gallons of crude oil, which he sells to Exxon for $134. What is Exxon's cost per gallon? Just in case you suck at math, the answer is that Exxon is paying $3.92 per gallon for crude oil - that's the stuff that hasn't even been refined yet, much less delivered! Then, when you add in the utilities, payroll, taxes, and benefits for the pump jockeys, don't you have to wonder how the American Oil Cartel, made billions of dollars in profits last year. A cost of $4.25 per gallon at the pump starts to look like a pretty good deal! That's a markup of just slightly more than 10%.

Now let's look a little closer at those figures:

1. As of today, $134 is the cost of one barrel of crude oil.
2. One barrel of crude oil constitutes 42 gallons.
3. According to the California Energy Commission, one barrel of crude oil produces:
   

Product	Percent of Total
Finished Motor Gasoline	51.4%
Distillate Fuel Oil	15.3%
Jet Fuel	12.3%
Still Gas	5.4%
Marketable Coke	5.0%
Residual Fuel Oil	3.3%
Liquefied Refinery Gas	2.8%
Asphalt and Road Oil	1.7%
Other Refined Products	1.5%
Lubricants	0

"The total volume of products made from crude oil based origins is 48.43 gallons on average - 6.43 gallons greater than the original 42 gallons of crude oil. This represents a "processing gain" due to the additional other petroleum products such as alkylates that are added to the refining process to create the final products."

The Oregon legislature mandated that all gasoline sold in Oregon must contain 10% ethanol, a non-petroleum-based additive (look at this as if it were Petroleum Helper - the fuel industry's version of Hamburger Helper), which increases the volume of finished motor gasoline from 21.59 gallons to 23.75 (rounded to nearest 2 decimal places). What is the cost per gallon of this bio-fuel additive? According to the state of Oregon "Because a gallon of ethanol contains less energy than a gallon of gasoline, the production cost of ethanol must be multiplied by a factor of 1.5 to make an energy-cost comparison with gasoline. This means that if ethanol costs $1.10 per gallon to produce, then the effective cost per gallon to equal the energy contained in a gallon of gasoline is $1.65." So, that 21.59 gallons of gasoline just jumped from a cost of $2.01p/g to $3.66p/g as it leaves the refinery, but at the same time, increased in volume by 2.16 gallons to 23.75g. I know this math-dance can be a bit confusing - hell, I'm confused by it - but for me it means that the real price gouging is going on inside OPEC. I gave up trying to find the wellhead production cost per gallon, or even per barrel ... those figures appear to be extremely well hidden. This is just a guess, but I wouldn't expect that the OPEC production cost would be more than 10% of the per barrel price. Keep in mind that there are also hidden transportation costs for the American Oil Cartel. So, where do they make those billions in profit? Let me refer you back to the California Energy Commission chart - 48.6% of crude oil imports goes for the creation of other-than-automobile fuels, and that's where the remainder of those outrageous profits are created. It appears that OPECs goal is to ruin western economies ... the same economies that gave them their oil production capabilities in the first place.

I'm Gil, and I approve this blog!