Of course blogs are about opinion. I am spouting mine here. But you have to base your opinion on SOMETHING. You have to have something to believe in. Do people believe what they believe because someone they trust or admire or like said it? Do they believe it because it was written in a magazine or a journal or they saw it on the news? Why do people believe what they believe and what can make them change their minds?
I think that people believe the things that fit their world view and no amount of fact will change their minds. Ever. They will find a way to alter the facts instead. You can easily see this by the number of people who believe George W. Bush was anything but an unmitigated disaster for the US. Some still believe he was "the best President ever" despite overwhelming evidence to the contrary. And I mean overwhelming.
This brings me to my post for the day. I want to post facts about Oil. Facts are used in understanding the world and in decision making. For example, here is a study that shows pumping more oil does not lead to lower gas prices -- there's no correlation.
http://minnesota.publicradio.org/display/web/2012/03/22/ap-gas-prices-analysis/
And yet all the red meat morons that listen to "Drill, Baby, Drill" would never believe it. It doesn't matter if it's right. To them it's just left-wing opinion. 2 + 2 does NOT necessarily equal 4, just as George Orwell said in "1984". It can equal whatever someone says it mean, if he is saying what his followers want to hear. We are awash in oil. The US has so much oil that North American Oil, classified as "WTI" has separated in price from European oil, called "Brent Crude". WTI is about 10 - 15 dollars LESS per barrel than Brent. The issue is not oil. The issue is "refining capacity". The US has not built a new gasoline refinery since 1972. They are expensive, dirty, big and very dangerous with lots and lots of regulatory issues but that doesn't stop companies from building nuke plants. (There's three new permits for nukes for the first time since the 70s also) We don't build them because there is no incentive to build them. By using what we have, the oil companies can simply jack up prices and make record profits. And when they want to make even more money, oil companies can just shut down one or two for "maintenance". If you want a real laugh, go to the "Exxon-Mobil Perspectives" site sometime where they spew unbelievable propaganda that would make Joseph Goebbels proud. But I digress....
Facts about Oil
"If you have a milkshake and I have a milkshake and I have a straw and my straw reaches across the room and starts to drink your milkshake. I drink your milkshake! I drink it up!"
- Plainview (Daniel Day Lewis), "There Will Be Blood"
Gallons of oil in a barrel: 42
Number of gallons of gasoline rendered from a barrel of oil: 20 - 21
Amount of oil used each day worldwide: 94 million barrels
Amount of oil used each day in the US: 24 million
Amount of oil imported into the US each day: 10 million barrels
Amount of gasoline used each day in the US: 400 million gallons
Number of gas stations in the US: 104,000
Number of cars in the US: 254 million
Number of trucks in the US: 15.5 million
Average fuel use on average: 1.6 gallons per car per day
Amount of aviation fuel used in the US each day: 70 million gallons
Number of oil wells in the entire world: 950,000
Number of oil wells in the US: 530,000 (56%)
How gasoline is priced:
Crude oil: 76%
Taxes: 12%
Refining: 6%
Distribution/Marketing: 6%
Taxes raised from fuel: $110 million per day
Top oil producers, exporters, consumers, importers in millions of barrels per day:
Producer Exporter Consumer Importer
1. Saudi Arabia 10.72 1. S. Arabia 8.65 1. United States 20.59 1. United States 12.22
2. Russia 9.67 2. Russia 6.57 2. China 7.27 2. Japan 5.10
3. United States 8.37 3. Norway 2.54 3. Japan 5.22 3. China 3.44
4. Iran 4.12 4. Iran 2.52 4. Russia 3.10 4. Germany 2.48
5. Mexico 3.71 5. UAE 2.52 5. Germany 2.63 5. South Korea 2.15
6. China 3.84 6. Venezuela 2.20 6. India 2.53 6. France 1.89
7. Canada 3.23 7. Kuwait 2.15 7. Canada 2.22 7. India 1.69
8. United Arab Emirates 2.94 8. Nigeria 2.15 8. Brazil 2.12 8. Italy 1.56
9. Venezuela 2.81 9. Algeria 1.85 9. South Korea 2.12 9. Spain 1.56
10. Norway 2.79 10. Mexico 1.68 10. Saudi Arabia 2.07 10. Taiwan 0.94
11. Kuwait 2.67 11. Libya 1.52 11. Mexico 2.03
12. Nigeria 2.44 12. Iraq 1.43 12. France 1.97
13. Brazil 2.16 13. Angola 1.36 13. United Kingdom 1.82
14. Iraq 2.01 14. Kazakhstan 1.11 14. Italy 1.71
Source: http://www.infoplease.com/ipa/A0922041.htmlI apologize about the column justification, I can't seem to figure out how to make the cells work in this blogger and I'm far too lazy to struggle with it.
Top exporters to the US
| CANADA | |||||
|---|---|---|---|---|---|
| SAUDI ARABIA | |||||
| MEXICO | |||||
| VENEZUELA | |||||
| NIGERIA | |||||
| COLOMBIA | |||||
| IRAQ | |||||
| ECUADOR | |||||
| ANGOLA | |||||
| RUSSIA | |||||
| BRAZIL | |||||
| KUWAIT | |||||
| ALGERIA | |||||
| CHAD | |||||
| OMAN |
Gasoline and the Destruction of Money
In the 1930s George Maynary Keynes talked about the power of government to create or destroy money as a way of flattening business cycles and easing the pain of depression. In his theory he said that in times of recession/depression the government could create money by cutting taxes and spending like crazy. This would put people to work and so on. In fact, this is exactly what the US government did during the second world war and that ended the depression with a vengeance. He also said that in times of prosperity, the government should destroy money, raise taxes and lower spending. This would slow the economy but would make for a more regular cycle. This worked until Johnson came around and decided to just blow the whole thing up and we've been screwed up ever since. During the bad times we overspend and during the good times we overspend. Now we'll never balance the budget. Keynes saw the government as the prime mover of the economy because it controlled the money. He never envisaged a Congress that would work AGAINST the President to actually HURT the economy as the Republicans do now. Plus, government policy is slow to enact and takes time to have an impact.
Not so with gasoline!
From the stats above we see that the average gas use is about 2 gallons a day. We also see that the average family has 2 cars in America. That means that the average family is using about 28 gallons of gasoline per week. Every penny gasoline goes up means a quarter less per week to spend. And gas has gone up more than 2 dollars over the past year and a half or so. That's 56 dollars per week! That represents the destruction of 56 dollars of spending for every family in America! Fifty six dollars is a night out at a restaurant; or a movie and popcorn for a couple; it's a pair of jeans; it's a new hammer, saw and set of screwdrivers; it's any number of real things people can't buy. It's the destruction of purchasing power and money in just the way Keynes described.
What happens when money is destroyed? The economy slows down. It MUST slow down -- people aren't buying things because they don't have the money do buy them.
Gasoline prices are going up. The economy will slow down. No amount of drilling will change that.
| Country | Reserves (bbl) | |
|---|---|---|
| 1 |  Venezuela (more information) (2010) [1] | 296,500,000,000 |
| 2 |  Saudi Arabia (more information) (2011)[2] | 264,600,000,000 |
| 3 |  Canada [3] (more information) (2008) | 175,200,000,000 |
| 4 |  Iran (more information) [1] | 150,600,000,000 |
| 5 |  Iraq (more information) (2010) | 143,500,000,000 |
| 6 |  Mexico (more information)[4] | 139,020,000,000 |
| 7 |  Kuwait (more information) (2010) | 104,000,000,000 |
| 8 |  United Arab Emirates (more information) (2008) | 97,800,000,000 |
| 9 |  Russia (more information) (2009) | 74,200,000,000 |
| 10 |  Libya (more information) (2010) | 47,000,000,000 |
| 11 |  Nigeria (more information) (2011) | 37,200,000,000 |
| 12 |  Kazakhstan (2009) | 30,000,000,000 |
| 13 |  Qatar (2009) | 25,410,000,000 |
| 14 |  China | 20,350,000,000 |
| 15 |  United States (more information) | 19,120,000,000 |
| 16 |  Brazil (ANP 2/10/11 revised est.) | 14,240,000,000 |
| 17 |  Azerbaijan | 14,000,000,000[5] |
| 18 |  Angola | 13,500,000,000 |
| 19 |  Algeria | 12,200,000,000 |
| 20 |  India | 9,000,000,000 [6] |
| 21 |  Sudan | 6,800,000,000 |
| 22 |  Norway | 6,680,000,000 |
| 23 |  Ecuador | 6,542,000,000 |
| 24 |  Oman | 5,500,000,000 |
| — |  European Union | 5,453,000,000 |
| 25 |  Ghana (more information) (2010) | 5,000,000,000 |
| 26 |  Vietnam | 4,700,000,000 |
| 27 |  Egypt | 4,300,000,000 |
| 28 |  Indonesia | 4,050,000,000 |
| 29 |  Gabon | 3,700,000,000 |
| 30 |  Australia | 3,100,000,000 |
| 31 |  United Kingdom | 3,000,000,000 |
| 32 |  Yemen | 3,000,000,000 |
| 33 |  Malaysia | 2,900,000,000 |
| 34 |  Syria | 2,500,000,000 |
| 35 |  Argentina | 2,386,000,000 |
| 36 |  Colombia | 1,900,000,000 |
| 37 |  Congo, Republic of the | 1,600,000,000 |
| 38 |  Chad | 1,500,000,000 |
| 39 |  Brunei | 1,100,000,000 |
| 40 |  Equatorial Guinea | 1,100,000,000 |
| 41 |  Denmark | 1,060,000,000 |
| 42 |  Trinidad and Tobago | 728,300,000 |
| 43 |  Romania | 600,000,000 |
| 44 |  Turkmenistan | 600,000,000 |
| 45 |  Uzbekistan | 594,000,000 |
| 46 |  Timor-Leste | 553,800,000 |
| 47 |  Peru | 470,800,000 |
| 48 |  Bolivia | 465,000,000 |
| 49 |  Pakistan | 436,200,000 |
| 50 |  Thailand | 430,000,000 |
| 51 |  Tunisia | 425,000,000 |
| 52 |  Italy | 423,700,000 |
| 53 |  Ukraine | 395,000,000 |
| 54 |  Germany | 276,000,000 |
| 55 |  Turkey | 262,200,000 |
| 56 |  Cote d'Ivoire | 250,000,000 |
| 57 |  Cameroon | 200,000,000 |
| 58 |  Albania | 199,100,000 |
| 59 |  Belarus | 198,000,000 |
| 60 |  Congo, Democratic Republic of the | 180,000,000 |
| 61 |  Cuba (more information) | 178,900,000 |
| 62 |  Papua New Guinea | 170,000,000 |
| 63 |  Philippines | 168,000,000 |
| 64 |  Chile | 150,000,000 |
| 65 |  Spain | 150,000,000 |
| 66 |  Bahrain | 124,600,000 |
| 67 |  France | 101,200,000 |
| 68 |  Mauritania | 100,000,000 |
| 69 |  Netherlands | 100,000,000 |
| 70 |  Morocco | 100,000,000 |
| 71 |  Poland | 96,380,000 |
| 72 |  Austria | 89,000,000 |
| 73 |  Guatemala | 83,070,000 |
| 74 |  Suriname | 79,600,000 |
| 75 |  Serbia | 77,500,000 |
| 76 |  Croatia | 73,350,000 |
| 77 |  New Zealand | 60,000,000 |
| 78 |  Myanmar | 50,000,000 |
| 79 |  Japan | 44,120,000 |
| 80 |  Kyrgyzstan | 40,000,000 |
| 81 |  Georgia | 35,000,000 |
| 82 |  Bangladesh | 28,000,000 |
| 83 |  Hungary | 26,570,000 |
| 84 |  Bulgaria | 15,000,000 |
| 85 |  South Africa | 15,000,000 |
| 86 |  Czech Republic | 15,000,000 |
| 87 |  Lithuania | 12,000,000 |
| 88 |  Tajikistan | 12,000,000 |
| 89 |  Greece | 10,000,000 |
| 90 |  Slovakia | 9,000,000 |
| 91 |  Benin | 8,000,000 |
| 92 |  Belize | 6,700,000 |
| 93 |  Taiwan | 2,800,000 |
| 94 |  Israel | 1,940,000 |
| 95 |  Barbados | 1,790,000 |
| 96 |  Jordan | 1,000,000 |
| 97 |  Ethiopia | 430,000 |
| - | Total | 1,392,461,050,000 |
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