Obama’s Change of Heart on WPT

It seems that President-elect Obama has had a change of heart on enacting a windfall profits tax on oil companies. That, among other things, is angering the liberal wing of the Democratic Party:

Liberals voice concerns about Obama

Here are the excerpts from the article specific to this issue:

Liberals are growing increasingly nervous – and some just flat-out angry – that President-elect Barack Obama seems to be stiffing them on Cabinet jobs and policy choices.

Obama has reversed pledges to immediately repeal tax cuts for the wealthy and take on Big Oil. He’s hedged his call for a quick drawdown in Iraq. And he’s stocking his White House with anything but stalwarts of the left. Obama drew rousing applause at campaign events when he vowed to tax the windfall profits of oil companies. As president-elect, Obama says he won’t enact the tax.

One of the Campaign for America’s Future blogs commented on Obama’s decision not to tax oil companies’ windfall profits saying, “Between this move and the move to wait to repeal the Bush tax cuts for the wealthy, it seems like the Obama team is buying into the right-wing frame that raising any taxes – even those on the richest citizens and wealthiest corporations – is bad for the economy.”

“I’ve heard the most grousing about the windfall profits tax, but on the other hand, Obama has committed himself to a stimulus package that makes a down payment on energy efficiency and green jobs,” Hickey said. “The old argument was, here’s how we afford to make these investments – we tax the oil companies’ windfall profits. … The new argument is, in a bad economy that could get worse, we don’t.”

Obama is asking for patience – saying he’s only shifting his stance on some issues because circumstances are shifting. Aides say he backed off the windfall profits tax because oil prices have dropped below $80 a barrel. Obama also defended hedging on the Bush tax cuts.

One of my hopes was that some of his promises amounted to campaign rhetoric, perhaps necessary if he was to win the election. Since winning the election, it does appear that he has taken a pragmatic approach to a number of problems, including this one.

On the other hand, if you are ever going to enact a windfall profits tax, now would be the time to do it. Let me explain. If you had a tax that triggered off of $80 oil – as has been mentioned – at least the oil companies could build that into their economic evaluations of new projects.

Mind you, I am not arguing for this approach, but it makes more sense than the standard knee-jerk reactions every time gasoline prices go up and profits rise. Of course what we really need is a comprehensive, long-term energy policy. What we have had over the past few years is an energy policy that changes every year or so. This makes life difficult for all energy companies (and not just oil companies).

51 thoughts on “Obama’s Change of Heart on WPT”

  1. Obama seems to have selected the very best advisors on issues of the economy. And it looks like he will need them.
    This is a train wreck, what Bush left behind. I hope Volcker lives long enough to enact far-reaching reforms, through Obama.
    Now is not the time to impose any taxes, no matter how well-intentioned or fair-minded.
    Meanwhile, global signals indicate a recession of breathtaking speed and depth. inive

  2. Gee, is this sort of like Obama’s pledge with John McCain to only take public financing during the general election? And liberals are shocked?

    Hey Benny, can we agree on a date to stop the Bush bashing comments? How about 1/21/2009?

  3. So far I have been heartened by BHO’s actions. He is being much more pragmatic and middle-of-the road than I had hoped. I’ve always known he was intelligent ~ now it’s good to see he is also not a radical at heart. Who cares if he PO’s the left-wing whackos?

  4. King-
    I am deeply, deeply disappointed in the Bush Administration. As this is an energy forum, let’s limit it to that topic: Ethanol? Corn ethanol? That is the answer to our needs for a semblance of energy independnce?
    Don’t tell me about Bush’s 2001 energy plan. He enacted none of it, except corn ethanol.
    A subsidy, in other words. Socialism! Not a free market solution, or even one that uses the price mechanism. Socialism is the answer, in Bush’s world.
    Worse, it is likely a permanent subsidy. The ag business has never lost a subsidy in the 75 years since the Depression and the Dust Bowl. Permanent, insitutionalized socialism. That is our energy legacy from Bush. Corn ethanol forever.
    I suspect “Bush” is going to become a synonym for “lazy ineptitude.”
    The Bush Financial Farewell Fiesta is underway now. Your net assets are cut in half, and try to keep your job, or business afloat.
    King, I will bash Bush. But you are bashing BHO and he has not even done anything yet. Can you wait until he flops at something?

  5. I’m not bashing BHO other than to say that he doesn’t have a track record of keeping promises – unless they benefit BHO. So far hope and change turns out to look a lot like the same old politician.

    Personally I’m glad he isn’t going all radical. The WPT was never going to work anyway.

  6. Obama: Meet the new boss, same as the old boss.

    Definition of change: 2 Dimes, a Nickle, and 3 Quarters in exchange for a dollar bill.

  7. The good new on energy is BO does not have to change anything. The heavy lifting is done. Yes there are some who do not like Bush but the best I can tell their dislike is based on bias not facts. For example,

    “Of course what we really need is a comprehensive, long-term energy policy. What we have had over the past few years is an energy policy that changes every year or so.”


    “Don’t tell me about Bush’s 2001 energy plan. He enacted none of it, except corn ethanol.”

    Sorry but to set the record straight, US energy policy is very comprehensive. The cool thing about energy is that results can be measured. Some of the things I have tracked.

    So what is the record of the Bush Administration:

    -Anaerobic digestion of farm manure: exponential growth

    -Wind generation: exponential growth

    -Ethanol: exponential growth

    -Biodiesel: exponential growth
    -Geothermal: exponential growth
    -Nuke plants being closed: zero
    -Nuke plants being extended 20 years: 100%

    -Nuke plants being licensed: 30+
    -Nuke plants being sold to China: four

    -Biomass electricity generation: growing instead of declining

    -FERC regulations with teeth: passed

    -Rolling blackouts due to lack of capacity/fuel: zero

    -Operating drilling rigs: 1500 ip from 500

    -The price of natural gas for home heating: the same as 2000

    I would be interested in the list of things that you think BO will accomplish that Bush has failed to accomplish.

  8. Kit-
    I don’t expect much from BHO. Maybe the Fat Man said it best.
    But, a national gasoline tax rising to $4 a gallon would make sense. Balanced by income tax cuts. I don’t think BHO will do that.
    That said, I think you have conflated market reactions to higher oil prices with actions taken by Bush.
    If alternative fuels get crushed in the next two years (which I suspect), it is not the policy of BHO that will accomplish that. It is the market.
    And, after eight years of Bush, we are as vulnerable as ever to oil thug-states and crackpots.

  9. “That said, I think you have conflated market reactions to higher oil prices with actions taken by Bush.”

    Say what? Benny you are confusing your short term shallow thinking with how others evaluate energy. The uncertainty of high capital cost energy projects require policy long term policies that transcend short term market fluctuations. In fact the accomplishments I listed are independent of oil prices.

    As far as a regressive energy taxes neither Bush or BO are going to impose them because the do not work.

    Now Benny you should really read the National Energy Policy instead of RR. If you had then you would know about the oil and gas reserves available to the US. True Bush failed to get the dems to allow more drilling. If we see new oil rigs popping in the Santa Barbra Channel I will give credit to BO for furthering Bush policy.

  10. With all due respect to the handful of true JFK-style Democrats still around, the problem with modern Democrats is that they trend towards brain dead. Everything that went wrong anywhere antime was Bushitler’s fault. Anything the EvilShrub proposed, they were against it.

    At least now with the ever-so slippery Obama about to hold office, some Democrats may finally start to re-experience brain activity. With all branches of the Federal Government in Democrat hands, there are no more excuses for Democrats.

    We certainly haven’t seen any reason for hope-of-change from the Big O so far. The problem is he has a bunch of left-wing policy-wonk lawyers trying to come up with a regulatory solution to a technical challenge.

    The technical challenge is that fossil fuels are by far the cheapest, best, most practicable way to meet humanity’s legitimate energy needs. The only alternative that comes close (in at least some of those regards) is nuclear — which runs into problems with those same wonks.

    What we need is technological breakthroughs. But even Stalin himself could not mandate technological breakthroughs.

    If the Obamatron slides his way into cutting back on innovation-destroying excessive regulation and promoting major investments in research, he will have earned a place a history.

  11. reality meet pandering rhetoric!

    the man does not need those voters of such thought process for 3-1/2 yrs, prior to next election campaign. even if they notice the scars, would these souls use a vote for the other party[s] to salve the wounds? never!

    now for the next sleight of hand. INFRASTRUCTURE STIMULUS–

    what are the odds that a large part of $$ expenditure for the legislation goes to unintended sources[foreign and otherwise]. as legislation normally is not well thought thru to the point of execution[even though well intended]. it will not contain controls on detail expenditures, even if authors new how to do this. for “haste makes waste” and boy, we’re in a hurry to spend[ politics you know]. the money will be directed by money; a service economy does not produce things[those which hurt when dropped on foot]. things are made beyond our borders. and that “whoosh” you hear is the return of the housing workforce, returning from their vacations south of the Rio Grande. because, as i said, the money will be directed by the “MONEY”, and we must keep labor skills costs contained[max out profit so to speak].

    i sound skeptical/cynical on this, but too old to not know. i apologize to anyone i may offend in this view. there will be positives for many deserving persons and enterprises as should be so.

    for those of you liking the task–
    1-counter the argument
    2-for you accountants, track the actuals from legislation to expense.

    have fun!

    for all readers/writers of this site, enjoy a safe/happy season.


  12. @Kit

    “Yes there are some who do not like Bush but the best I can tell their dislike is based on bias not facts.”

    You are mistaken. Robert’s comments on energy policy are accurate. They don’t necessarily have much to do with Bush. They pertain to the congress passing a new energy bill every year. Will they extend tax credits? Will they impose a windfall profits tax?
    Which technology gets favorable treatment this time around? That poses problems for long term planners.

    I have heard executives from the oil industry, the wind and solar industries, and even the auto industry all bemoan the fact that we lack a comprehensive, long term energy plan.

    National Energy Policy or not, it is a fact that congress plays games with our energy policy.

  13. @Kit

    You are cherry picking data points. Natural gas prices exactly the same as in 2000? Um, OK. Do you think Bush did that? Was he then also responsible for the drastic rise in oil and gas prices?

    The drilling rig statistic comes about because the price of oil had gotten so high. Bush gets credit for that? You are demolishing any crumb of credibility you may have had.

    You criticize some for being Bush-bashers, but you are over the top with your Bush apologetics.

    And if you don’t think regressive energy taxes work, maybe you should look at energy usage around the world in places where they have been implemented, and places where they haven’t.

    You might also want to add an increased dependence on foreign oil to your list of Bush accomplishments.

    Oil imports in November 1999 – 8 million bpd
    Oil imports in November 2008 – 10 million bpd

    Yes, we are addicted to oil. Moreso now than when Bush took office.

  14. Kit: “So what is the record of the Bush Administration:

    -Ethanol: exponential growth”


    Exponential growth of (corn) ethanol is not a record to be proud of, nor of any great help. Robert has covered the points many times in this blog, but corn ethanol essentially does nothing more than inefficiently recycle natural gas.

    The latest negative against corn ethanol is that the heavy trucks needed to support the corn ethanol industry is tearing up the infrastructure of rural roads in the Corn Belt and those states and communities will soon be faced with a repair bill in the billions to repair the damage. (Don’t you think the least the ethanol industry could do is repair the damage to the rural transportation infrastructure they’ve caused?)

    Crumbling Infrastructure Hurting Rural Ethanol & Biodiesel Industries

  15. I guess some oil sellers are selling oil for even les than the NYMEX or Brent Spot prices. This is from FT:

    “While Mexican legislators were discussing legislation to increase oil exploration and production last July, Mexico’s crude oil mix hit a record $132.71 a barrel. The government’s coffers were filling at breakneck speed and, with a few exceptions, there were smiles all round.

    This month, with the reforms in place and following a presidential pat on the back to Congress for a job supposedly well done, prices have plummeted; the Mexico mix at the end of last week was down to $30.52 a barrel.”

    $30.52 a barrel and going down!

  16. Benny – about 2/3 of Mexico’s crude production is a heavy grade crude known as “Maya”. It has an API gravity of 22. This crude has always traded at a discount to WTI, Brent, and other reference crudes because of its properties. Maya requires substantial processing of its heaviest fractions to produce gasoline and diesel.

    With WTI in the low $40s Maya at $30 is no big surprise.

  17. The presidency is 90% circumstances and 10% agenda. That’s why you all but ignore campaign rhetoric.

  18. King-
    Thanks for the explanation. I surmised as much, but I like the fact that oil is selling somewhere for less than $30 a barrel. Gives me hope that we see $10 a barrel in 2009.
    I know, you are going to say that can’t happen. That’s what you said at $70, then $60, then $50, then $40, and now we are talking $30.
    I think we see $10 a barrel in 2009-10 — though I will “cheat” a little, and not say what grade. That way if some Mexican crap gets to $10 a barrel, I can say I was right.
    $1 gas here we come.
    Are there any Hummer dealerships for sale in Texas?

  19. @Dave

    No, I am not mistaken. You are confusing Bush’s policy with failure of congress to implement that policy as you stated. We do have a long term plan. Yes, there is lots of evidenced that you and other do not know what it is. In any case, BO does not have to create an energy policy. Will BO be able to get congress to grown and stop playing politics on energy issues?

    Furthermore, I am not cherry picking data. I clearly pointed out accomplishment. Dave you are cler confused between natural gas and oil. The run up on natural gas prices under Clinton because policies restricting natural gas drilling while increasing demand by building natural gas fires electricity capacity. Bush stopped obstructing drilling for natural gas.

    And Wendall please. Policy on ethanol is successful. The US has increase production of ethanol. If you and RR do not like it that is a different debate. Suggesting that road have deteriorated in just the lat two years because of ethanol is not very logical. It is like blaming wind turbines for aging transmission lines.

  20. Benny – you confuse likely with absolutely won’t. I said in another post I think $30 crude and $1 gasoline is a possibility. If unemployment hits 9% as some think it will, we could be down another 1 million barrels a day in the US. As economies in Asia slow down they will use less crude. Cash costs are somewhere around $25-30 for a substantial number of producers. Saudi Arabia is more like $10.

    Your dream of the PHEV or electric car may be hitting the rocks if GM goes bankrupt. It looks like Tesla has hit the skids as well. Maybe the US switches over to conventional vehicles that just get better mileage. We could see a repeat of the 1980s when it took 10 years for US demand to recover from the 1970s prices. (over that period just about all the oil fired power generation vanished as well).

  21. @Kit

    Your acrobatic apologetics are amazing, but inaccurate. You threw out a number of red herrings as well. May I presume, based on your contortions, that you are somehow involved with the Bush administration? After all, I have seen these sorts of contortions from Bush’s press secretary, but not in the real world.

    “You are confusing Bush’s policy with failure of congress to implement that policy as you stated.”

    I am not confusing anything. The claim was that we need a “comprehensive, long-term energy policy.” You took exception to this, suggesting that we have one. This is in contrast to what many executives at major energy firms have said. You now defend by claiming that I am confused about Bush’s policy, while admitting a failure of congress? It looks to me like you have just admitted that Robert was correct, and now you have moved the goal posts when you suggest that there is a policy, but congress just won’t get out of the way and enact it.

    “Furthermore, I am not cherry picking data.”

    If not, then the term has no meaning at all. You suggested that natural gas prices are the same as they were in 2000, which is a Bush accomplishment. You ignored the fact that the same natural gas prices, as well as oil, gasoline, and diesel all set records under the Bush administration. Shouldn’t we credit Bush for that as well? Of course, unless one wishes to cherry pick to exaggerate accomplishments. But the funny thing is that your claim isn’t even correct. Natural gas prices are substantially higher than they were when Bush took office. So much for that accomplishment.

    “Dave you are cler confused between natural gas and oil. The run up on natural gas prices under Clinton…”

    Bush apologetics are one thing, but let’s not try to rewrite history. Natural gas prices hovered around $2 to $3 when Clinton was in office. Under Bush they have exceeded $10. But impressive use of the red herring.

    I think based on your demonstrated tendency to simply fabricate data, we would all do well to check the rest of your claims carefully.

  22. Kit said: “Suggesting that road have deteriorated in just the last two years because of ethanol is not very logical.”


    I’m not the one who suggested it. The ethanol industry is complaining about the deteriorating rural infrastructure when their heavy use of rural roads is the prime culprit.

    My point is that if they cause most of it, they should fund the repairs instead of asking taxpayers to do it.

    First they needed subsidies to make ethanol a player, now they want more taxpayer money to fix the roads they break up. Please, give us a break.

  23. @Dave

    We have a National Energy Policy. I am looking right now. It is in a binder just before a draft of a plan to develop 250 MWe of biomass in the PNW. It is just before a practical guide for developing RPS.

    This is called physical evidence. Now Dave you can find all kind so folks that say all kinds of things.

    The point here is that I had an agenda when Clinton was president. I will be happy to list all the failures of Clinton. However, what I have listed are the energy indicators that I am interested and how Bush policy has had a very positive effect. This now cherry picking data. This is evaluating performance based on measurable criteria not gossip that Dave relies on.

    “ Bush apologetics are one thing, but let’s not try to rewrite history. Natural gas prices hovered around $2 to $3 when Clinton was in office. Under Bush they have exceeded $10. But impressive use of the red herring.”

    This is called cherry picking Dave. At the time, I could pick up the phone and get insider information from our traders in Houston. The value I put in a business plan was $1.50/MMBTU based on a 20 year contract. So Dave you may want to check natural gas prices for the last year of before Clinton left office. If you increase the amount of electricity produced with natural gas by 10% while supply from Canadian fields are declining and do not increase drilling for new gas, the price of natural gas is going to skyrocket. Cause and effect Dave, maybe you have heard of it.

    Dave I have children older than RR and was making electricity before they were born. I do not need to check my claims carefully. I was there. This is not my first business cycle. I have seen thing much worse than they are now.

    However, the topic here is what should BO do to build on the foundation that Bush has laid. We should continue to build coal plants. Reserve margins are dangerously low and depend on importing LNG. Our electricity supply should not subject to the whims of Putin. This a lesson that Carter failed to learn. Building coal plants was not an option when Clinton left office.

    BO should stay out of the nuke process allowing new plants to come on line and the geological repository in Nevada to get built. We should continue to help China and India build new nukes. Options not available when Clinton left office.

    BO should continue renewable energy and maybe expand it with consistent PTC. Options not available when Clinton left office.

    As far as transportation energy, BO should maintain ethanol at least at the present level and continue R&D on BEV. BO will be doing good if he can leave the next president an electricity system with an adequate reserve margin that allows us to consider shutting down old coal plants.

    Since hopefully I will be retired before BO leaves office and BO will do a better job than Carter. That That man deserves to be shipped up north and die in a house with out heat.

  24. “I’m not the one who suggested it.”

    Wendell you are passing along gossip. RR wants me to be nice so I will suggest that your argument is a little weak. If you would like to present a time line showing the growth of ethanol that corresponds to road repair, that would be interesting.

  25. Kit,

    Perhaps it is gossip, it comes from an ethanol lobbying blog: Crumbling infrastructure hurting ethanol

    “Gene Griffin of with the Upper Great Plains Transportation Institute at North Dakota State University says in his home state, where rural roads are seeing a huge amount of big trucks working the biodiesel and ethanol industries and North Dakota’s burgeoning petroleum industry is also taking a toll, that infrastructure needs the funding…”

  26. Hey-o King-
    Yes, the PHEV looks like it goes on the backburner for five to 10 years. Tesla always was a bad idea (lots of teeny-weeny batteries) and it doesn’t surprise me they flopped. Very few auto start-ups of any kind have ever worked.
    Manufacturing is a tough, tough busines (I was in furniture manufacturing for 15 years). The complexity of an auto compared to furniture…really, I don’t know how those companies produce millions of units. I admire them.
    A national gasoline tax is badly needed, balanced by tax cuts on the middle class. Yes, as Kip accurately points out, gas taxes areregressive, but people respond to price signals, not much else.
    I say we go to $4 a gallon gas tax, at 50 cents a year oiver eight years. Then Detroit will know it can sell PHEVs.

  27. “I say we go to $4 a gallon gas tax, at 50 cents a year oiver eight years. Then Detroit will know it can sell PHEVs.”

    Agree. And that is where the money for the Detroit bailout should come from.

    That would both incentivize (is that a word?) consumers to buy smaller cars and the auto industry to make them.

  28. Benny – I think that is a good suggestion. Nobody will want to buy the high MPG cars and crossovers that Detroit wants to make unless gasoline prices are higher.

    We can argue about whether $4 tax is the right amount or not. Let’s do the math:

    The US consumes about 10 million barrels of gasoline per day. At 42 gallons per barrel and 365 days per year, that works out to 153 billion gallons of gasoline per year. Your $0.50 tax would raise $76 billion the first year. That would be more than enough to bail out the US automakers.

    I would still let them go bankrupt to get out of their bad labor contracts. But in return for higher taxes I would drop CAFE standards (a stupid idea) and allow Ford and GM to import vehicles made overseas. CAFE punished automakers for US consumer preferences.

  29. @Kit

    “This is called cherry picking Dave. At the time, I could pick up the phone and get insider information from our traders in Houston.”

    Kit, I am sure that you have secret data that proves your point. I really, really believe you. But out in the open we have to rely on the data from the energy agencies. The EIA, for instance, shows natural gas prices going up substantially while Bush was in office, after being pretty flat during the Clinton administration. Those are the facts.

    If you like, you can take the average natural gas price during the Clinton, and then the Bush administration. The fact is that your claim of the “run up on natural gas prices under Clinton” is flatly refuted by the data. That run up happened during the Bush administration. That’s not a defense of the Clinton administration; it is just a refutation of a flatly false claim that you made. One, I might add, that you seem to have trouble owning up to.

    So before we go any further, are you prepared to admit that your claim is not supported by EIA data of natural gas prices? Not by the NYMEX prices, nor wellhead prices, import prices, residential prices, or natural gas purchased by electric utilities. All show that the price shot up under Bush. Can you own up to that?

    Further, can we agree that someone proposing an energy policy is not the same as having an energy policy? The energy policy has to be agreed upon, and if it is changed on a regular basis, it doesn’t meet the criteria of a stable, long-term policy.

  30. @Kit

    “I do not need to check my claims carefully.”

    I almost forgot. I don’t believe there are any sacred cows here. You have to check your claims, just like everyone else. Otherwise you end up making false claims such as natural gas prices shot up during the Clinton administration. Whether or not it is Bush’s fault, I think everyone here can agree that fossil fuel prices shot up sharply during the Bush adminstration.

  31. King-
    Great work on figuring out revenues. Sheesh, we could have massive income tax cuts, once the tax got up to $4 a gallon.
    BOH doesn’t have the guts to do this though.

  32. @ Kit P

    We should continue to help China and India build new nukes.

    Why ? How ?

    Show me the money … flow.


  33. From EIA, Monthly City Gate natural gas was $3.11/MMBTU in January 1993 when Clinton took office and $8.91/MMBTU in January 2001 when Clinton left office and January 2008 $8.34/MMBTU.

    Now Dave I did not say I had ‘secret’ information. I did have access to insider information. Professionals who analyzed data to make long and short term contacts based on publicly available information. My company also had a staff of meteorologist to predict short term demand for electricity. Personally I am very good at explaining cause and effect of price fluctuations. Well in hindsight anyway.

    Do be fair to Clinton, nobody warned him, Everybody got it wrong, including the folks at the company I worked for. Replacing old gas fired power plants with CCGT was so sweet and profitable. I was at a Greenpower conference where one presentation explained that the ceiling for natural gas was $4/MMBTU because of imported LNG.

    Cheap natural gas is a problem if you are building biomass renewable energy projects unless you happened to be in a state where George Bush. Let me quote from a reference previously discussed, “The success of of the RPS in some states, particularly Texas, is likely to spur interest in other states and congress.”

    So Dave, in the last years of the Clinton presidency, natural gas double and then tripled in price from when he took office. An interesting thing happens when you cross over from supply exceeding demand to competing on the world market for limited resource. The price for natural gas becomes volatile.

    As long as we are all agreeing on things Dave, the Clinton admin was anti-nuke and anti-coal. Increased demand for electricity primary met with natural gas. When China stopped exporting first oil, then natural gas, and then coal; the US was left subject to volatile energy prices.

    We now have had 8 years of good energy policy opposed by Bush hatred syndrome. The world has changed and BO has the same challenges that Bush faced. We will see how he does.

  34. @RBM

    Maybe you missed the announcement. China ordered 4 reactors from Westinghouse. This is employing engineers in Pittsburgh and at Shaw in North Carolina.

  35. Dave,

    “I think everyone here can agree that fossil fuel prices shot up sharply during the Bush adminstration.”

    And I think everyone here can also agree that they had their steepest fall ever under the Bush administration. Prices were flat under Bush Sr. They rose steeply under Carter. They rose and then fell steeply under Reagan. Natural gas rose sharply in the last year of Clinton’s term, but oil fell sharply in the late 1990’s. What does it all prove? It proves nothing.

    I don’t think this attempt to finger a US president for fossil fuel prices has much merit, except at the margins. If someone is going to make this charge, then they need to offer a reasonable case. For example, in the case of Bush, could you tell us 1) what mechanisms Bush used to implement the price increases, 2) why he waited until the fourth year of his presidency to take action, and 3) why he then reniged in the last few months and sent prices crashing.

  36. “A national gasoline tax is badly needed, balanced by tax cuts on the middle class.”

    A CNBC anchor was suggesting a variable gas tax yesterday that would keep gasoline around $4 per gallon. I like the idea,with a few modifications. Gas with 10% ethanol could be taxed 10% less. E85 could be taxed 85% less. Same thing with biodiesel. Liquid fuels made by LS9 and others from modified yeast wouldn’t be taxed at all. Consumers would be subsidizing alternative fuels,instead of taxpayers.

  37. @Kit

    Monthly City Gate? LOL! I think you may be regretting ever bringing this up.

    Mr. “I don’t have to check the data because I was there” has been caught in an awkward position. How about the charges of cherry-picked data? Do they stick?

    You might think it odd that Kit used something like “Monthly City Gate” to support his argument. You are probably thinking “What on earth is that?” Let me explain why he used it.

    Go to the EIA’s site and look through their natural gas prices:

    Natural Gas Prices

    If you look through the categories, you see such seemingly relevant headings as ‘Wellhead Price’, ‘Residential Price’, ‘Commercial Price’, and ‘Industrial Price.’ So why did Kit pick ‘Monthly City Gate?’ Because he is a cherry-picker.

    Residential price would seem to be a very relevant data point. If you look at the dates that Kit examined, January 2001 and September 2008, you find that the price is $10.12 under Clinton and $17.94 under Bush. The average annual price in Clinton’s last year was $6.69 and in Bush’s last year were $13.01. Whoops!

    Best not use that one. Try Wellhead Price. $6.82 under Clinton and $7.27 under Bush. Better, but then someone might point out that the price spiked up to over $10 under Bush. What’s a cherry picker to do?

    Try another one. Commercial Price. $9.50 under Clinton, $13.04 under Bush.

    Sheesh. I will be damned if I am going to admit that I made something up. Moving on. What’s this? Monthly City Gate? $8.91 under Clinton, $8.96 under Bush. I think I will use that one. Maybe nobody will notice that the price spiked up to over $12 under Bush. After all, I did claim that prices spiked under Clinton, and that might make me look like a doofus. Maybe nobody will look at the average yearly price under Clinton and Bush. {$3.10 for 1999, and always above that during the Bush years. During the most recent Bush year it was $8.11.} Maybe nobody will question my use of January for Clinton and September for Bush.

    My fellow posters, there is the anatomy of a cherry-picker. Kit claimed that there was a “run up on natural gas prices under Clinton” but he can’t bring himself to admit that he was in error. He goes and cherry-picks obscure pieces of data, and ignores the fact that the highest average annual price under the Clinton administration {per the category he selected} is lower than even the lowest annual price under the Bush administration.

    It seems that armchair, and possibly others, may be under the impression that I am a Clinton supporter. I am not. Never voted for the man. My point is not to show that Clinton’s energy policy was superior to Bush’s. I am just showing that Kit made something up, and he can’t own up to it. Instead of owning up to his mistake, he resorted to cherry picking data points, and ignoring the vast majority of the data that shows him to be in error.

    This is why one should ask Kit for reference when he makes claims. He has shown everyone here that he is perfectly willing to fabricate data and cherry-pick in order to advance an agenda. So the next time he writes of Bush’s accomplishments, you might want to ask “Got a reference for that?”

    Now Kit can hope that this scrolls off the page quickly, so people won’t notice how far he is willing to bend data to suit his preconceived ideas. Maybe he can run back over to The Energy Blog where he can’t seem to go two posts without insulting other posters. I did enjoy this one {link}, where he seems to be confused about enthalpy differences between water and steam. But I still don’t know what to make of his claim to be an environmental engineer, but also a mechanical engineer who specializes in energy.

  38. Since Dave seems to be more interested in attacking peoples maybe you would share with the group your qualification. How long have you been following natural gas prices looking for cause and effect?

    Generally I was interested west coast hubs because that was market for producing electricity that I was working in which is why I picked ‘Monthly City Gate’ from a EIA historical data.

    Another point of fact, Clinton did not have an energy policy. You could infer things from various documents published by DOE/EPA. Did you read any of those Dave?

    Dave seems surprised that someone could get a mechanical engineering degree and 20 years later go back to college become a environmental engineer. I liked being a machinist mate in the navy so becoming a ME was a natural. During my career I often had responsible for environmental protection and was always interested protecting the environment, so having NAFTA pay for a masters program in environmental engineering because of cheap imported natural gas was very cool.

    So Dave, if you want to discuss source, pathway, receptor (SPR) analysis of heavy metals from burning coal, bring it on. While cleaning up DOE super fund sights pays well, renewable energy is more fun.

    Now this is when I developed profound dislike for Clinton talking about renewable energy and AGW but not doing anything about it. Later I developed a profound like for Bush policies and actions not talk.

    It is ironic that the increase in natural gas and electricity prices put some many out of work.

  39. @Kit

    Re: personal attacks. You are correct; I have allowed the way you behave on another board to influence my attitude toward you here. That was wrong. Since our host has indicated his disdain for the personal, I will refrain.

    Re: dual degrees. I have them as well. But if I have a degree in economics, and work as a plumber, I don’t use my credentials in an effort to enhance my argument. I don’t write “As an economist…” Nor do I spend my time asking others about their credentials if I have difficulty with their argument. You have claimed, depending on the argument, to be both mechanical and environmental engineer.

    Re: Clinton. I think I made it clear that I am not defending Clinton’s energy policy. Red herring. I am going after a false claim you made about gas prices spiking under Clinton. They spiked under Bush.

    “It is ironic that the increase in natural gas and electricity prices put some many out of work.”

    Yet you blame Clinton for that? This is a lot to swallow, considering prices under Clinton were much lower than they were under Bush. No matter how you try to spin it, that’s true. I don’t think anyone is fooled by the cherry picking you did on Monthly City Gate prices.

    But let’s look at this in more detail. You showed the price when Bush took office, but you don’t know the price when Bush left office. What we know is in September before Bush left office, the price was $8.96. In the September before Clinton left office, the price was $5.21. But the number that really tells the tale is the average price during both administrations, not some snapshot in time. What was paid during Clinton’s term, versus Bush’s? The average tells that story. The average price during Clinton’s term was $3.42 {using Monthly City Gate}. The average price during the Bush years was $6.99, more than twice the price under Clinton. This indicates how people were impacted in contrast to a snapshot price of a single month.

    The fact that you consider natural gas price behavior under Bush to be an accomplishment while claiming they spiked under Clinton says much about your agenda and your willingness to stretch the truth. That’s not a personal attack; I don’t think anyone would deny that your claims around natural gas amount to truth stretching. This also means that as far as I am concerned you have blown any credibility I might have afforded you.

    I am still waiting for you to admit that you botched this one.

  40. @Kit

    One final entry on your usage of City Gate. Here are the EIA’s definitions:

    City Gate: A point or measuring station at which a distributing gas utility receives gas from a natural gas pipeline company or transmission system.

    Electric Power Price: The price of gas used by electricity generators (regulated utilities and non-regulated power producers) whose line of business is the generation of power.

    If you are involved in production of electricity, then it seems that you would have been more interested in Electric Power Price. If you are a gas utility, you are interested in City Gate. Consumers are interested in Residential Price, and you know what those numbers look like. I suspect if they had favored Bush, this is the data set you would have used.

  41. @Dave

    I am trying to make an important point about the energy and environmental policies that BO will be able choice from and that BO choices have been expanded by the good policies that Bush has promoted.

    Dave’s point is that I am wrong about something because he thinks he has caught me in an inconsistence on a topic that he refuses to understand. Dave’s tactic is to discredit me by finding another place that I am wrong or inconsistent.

    Dave, I standby statements on natural gas in this discussion, they are accurate. Furthermore Dave, the links you brought up are both accurate and consistent. Dave you brought up the topic of credentials and have used the word ‘claimed’ to infer that I am a dishonest person. For the record, I am have worked professionally in my areas of education but I also do my own plumbing, soldering, and electrical work.

    Dave, now pay attention. I will only explain it one more time.

    “Yet you blame Clinton for that?”

    When Bill Clinton was president he promoted natural gas to make electricity because it was ‘clean’. At the same time he made it harder to explore for natural gas by restricting areas that had reserves. His administration worked against nuke and coal generation. As a net result the demand for natural gas increased while supply decreased. This resulted in increased LNG imports. Then because events in the world market, the US became subject to subject world price spikes outside of the control of anyone in the US.

    When Bush became president, he established consistent policies for new coal plants and adding pollution controls to older plants. Bush provided incentives to renewable energy project built. Bush promoted new nukes. If a new nuke comes on line in 2015, give credit to Bush, if BO interferes with the process blame him.

    The other significant factor is shale gas. This cost more to produce but we have now seen the decrease in domestic production start to increase. I read a article about the increase in bunker fuel oil in New England power plants that have dual fuel capability. At least one 1000 MWe base load plant is down until next fall.

    As for my agenda, it is simple; ensure that there is an adequate supply of electricity. After that I will worry about the environment. Since 21% of our electricity is now produced with natural gas, then the price of natural gas significantly the price of electricity.

    If Bill Clinton had provided the incentives to build my renewable energy projects, I would have a picture of him on my wall. I recall one RFP for renewable energy. I had the perfect project. Reading the fine print, Clinton wanted my company to build a renewable energy project and sell it below market. How can you do that? Well ask ENRON, they won.

  42. This google search gave me one link with both search terms:

    60 billion yuan (8.7 billion dollar) Pengze nuclear plant in eastern China’s Jiangxi province

    Earlier, the official Jiangxi Daily said construction of the plant, which will consist of the AP-1000 nuclear reactor produced by the US-based Westinghouse, would start in October.

    Sounds insignificant, to be polite.

    I’m certainly not convinced that you’ve provided much of an argument – unless you have more …facts ?


  43. @DM

    Let me suggest that you ask for CO monitor for Christmas.

    Kit, I am glad to see you have a sense of humor. That was a good one.

    Dave Mathews goes way back here. He posted his hate-filled diatribes for a long time before I warned him multiple times, and then banished him. You can search the archives and see that he has old entries – in exactly the same vein as the one you responded to – that have not been deleted.

    But after multiple warnings about personal attacks, I told him that he would never be allowed to post here again. To this day, he is the only person I have ever had to do that with. But his personal attacks were so over the top (as he once again demonstrated), and his lies so repugnant, I had no choice unless I was willing to let the comments section go right into the gutter.

    I don’t think there is a need to comment on the specifics of what he wrote. As you alluded to, these are the writings of an unbalanced mind. No worries, though, as I am e-mailed each time he makes a post. They are never up for very long, so he can’t fulfill his life’s ambition to disrupt the conversation here.

    Cheers, RR

  44. “Sounds insignificant, to be polite.”

    Is corn significant in Nebraska RBM? One of the problems the human mind has trouble with is very large and small numbers. I have no problem with ppt of DDT or PCB because the risk is less than one in a million because I have been train to evaluate the significance.

    Recently their was press release about 4 MWe solar thermal project in California, the governor came. There was another press release about a 2 MWe PV system in a northern state to charge PHEV. If you evaluate the energy needed for all the limos and TV vans, the EROI is negative.

    Significance lies in your goal. Are you trying to baffle folks with BS or make electricity and reduce ghg?

    I read a press release this week about a contract for a 100+ MWe steam turbine solar thermal project in California to be delivered in 2011. This is significant because to the economy of scale and the efficiency of turbine. The root cause of failure of renewable energy projects is failure to make enough electricity to pay for maintenance.

    Westinghouse getting a contract for 4 AP1000 (1100 ?) MWe reactors is significant in the sheer magnitude of the order. In the context of American engineers designing a nuke power plants for the Chinese communists who happen to have nuclear weapons aimed at us, this is very significant.

    Going back to a 1996 DOE/EPA report on reducing ghg, improvements at US nuke plants was 1/3 of the planned reductions to the 1990 bases. This fact was let out of the executive summary. You could not even use the word ‘nuclear’ in AGW policy.

    France, Canada, Russia have all built nukes in China. China is taking the old French design (based on the old Westinghouse design) and building smaller reactors but China also wants the newer designs.

    Westinghouse, France and Russia submitted bids. The US has its foot in the door in the world largest market for new electricity generation. What about the second largest market and world’s largest democracy, India? The Bush administration has eliminated nuke trade restrictions and US trade delegation will be in India during the first of the year.

    So selling 4 nukes is very significant in Pittsburgh. Wind and Ethanol are more significant in Nebraska. Each are creating jobs by expanding existing under utilized industrial and agricultural capacity.

  45. @Kit P

    “Dave, I standby statements on natural gas in this discussion, they are accurate. Furthermore Dave, the links you brought up are both accurate and consistent.”

    What more really needs to be said? You claimed that prices spiked under Clinton, and bemoaned lost jobs. But the truth is that consumers, utilities, etc. all paid about twice as much for natural gas during Bush’s term as they did during Clintons. That you won’t acknowledge that tells me that I need to be very distrustful of the claims you make. Plus, I need to make sure I check all of those claims. But then if I find that one is incorrect, you can’t be counted upon to admit an error. This whole episode on your part has been nothing but spin, spin, spin.

  46. RBM, I tried adding a "4" to the search terms
    and found this instead
    "China wants to have 100 of Westinghouse Electric Co.’s nuclear reactors in operation or under construction by 2020 — more than double what was anticipated, according to the company’s incoming CEO….

    Last year the company beat out French rival Areva to win a $5.3 billion contract to build four AP1000s in China.

    Though of course wanting is different from actually building, and not directly attributable to any US president.

  47. @ Clee

    Thanks for the update regarding the addition of the ‘4’ to search term.

    Though of course wanting is different from actually building, and not directly attributable to any US president.

    Yup, that’s the truth !

    My fuse gets shorter and shorter with all the spin and political partisanship that goes on. The signal to noise ratio is continually decreasing 🙁


  48. @RBM

    This is a discussion about presidential policy that the future president might follow. I have explained the existing policy.

    My fuse is getting a little short too. RR would like the discussion to be civil discussion. I have made an effort to contribute and be civil.

    I made an honest effort to answer RBM’s question but if RBM would like to respond in demeaning terms such as ‘spin’ maybe he could make an effort to be identify what you think is spin.

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