The Aspen Times has an OpEd piece today titled Energy Bill Bad for Colorado.¹ The OpEd writer falls towards a neoliberal slant in its belief that the new energy bill will cause great harm to the already burdened industry, as well as the environment. The author is wrong in many ways, but right in a few. The best solution for the new energy economy is to deregulate who can do what they want to do with their property as long as they don’t plunder or pollute anyone else’s property. This requires significantly less government intrusion than the current energy bill does — we don’t need government to license some companies to extract oil at the expense of others. We don’t need to give companies free access to rivers and waterways for the water they need to extract shale oil. We don’t need to give some companies tax exemptions but pay for their shortfalls by taxing others. Just let the free market dictate the rules — if the company can profit on its own land without subsidies, grants and restrictive licenses keeping competition away, they should be free to do what they please on the land that they own. If they pollute their neighbor’s land or steal their neighbor’s oil, basic property laws can govern the penalties for the trepass or the theft.

From the neoliberal view of the Aspen Times we see a switch to the neoconservative view of FrontPageMag in an article titled How Oil Lubricates our Enemies.² Here’s the normal right wing line of absurdities: Americans are freer and richer than any time in its history (the opposite is true), the stock market is at near record highs (not with inflation factored in), the unemployment rate is low (not if you use the old calculations), home ownership is at near record levels (not if you consider equity percentages), and oil prices are high only because of increased demand (having nothing to do with decreased supply due to Bush’ warmongering everywhere). Why don’t we see more free market analyses? Because people love war and they love battles between the right and the left. Both sides are lying, yet people would rather read lies than consider what the truths are — that government is the reason why oil is so expensive, and there is nothing government can do to make things better, except deregulate prices, licensing, and barriers to entry.

The LA Times does no better in understanding how strong property rights are the solution to another energy problem in their article titled Fort Worth’s New Noisy Neighbors: Gas Derricks.³ In the article we see that homeowners are unhappy that oil drillers are making noise in extracting oil from the ground in their neighborhoods. Over the decades we’ve seen preferential treatment see-saw between home owners and oil land developers, with both sides complaining about the other. Instead of worrying about creating more regulations and restrictions for either party, how about setting up strong property rights standards and better definitions of the most basic forms of pollutions? If an oil driller has an explosion, the home owner who is harmed should be compensated. That’s a basic property right. If the oil driller is there first and someone else moves into the neighborhood, they should accept the noise pollution that was there ahead of them. If the opposite is true, the oil driller should contract with the neighbors and set a legal limit to how much noise they’ll make. Nothing prevents both sides from coming to an acceptable agreement, but both sides would rather wrangle it out in the political forum rather than contract out both their desires and work out an amicable agreement. Property rights mean nothing, today, if you have the power of the local politician in your pocket.

Even worse, sometimes there is no private property in the oil game: some companies are frustrated by the paperwork mess required to drill on PUBLIC lands!⁴ Instead of selling the lands to private developers (for whatever reason they would want to use their now-private property) our governments are happier to license (their friends) in order to gain the tax power and regulatory power (over their non-friends). This is typical cronyism, and you usually only hear complaints from the restricted side and congratulations from the preferred side.

Goodbye Exxon, hello Energen. The new energy love on the stock market pages is a company that seems to be playing games with the numbers to make the investors happy.⁵ At the article’s end is the winning quote: While the corporation’s public utility, Alabama Gas Corp., continues to make a consistent - and consistently strong - contribution to the parent company’s financial performance… Ha! The public utility is what is making the numbers strong now, but the analysts are looking to their R&D wing for future profits. I’ve heard that before.

The Star-Telegram hits on the private property issue from a different and respectable angle in Drilling pumps dollars into old neighborhood⁶ Here we see Texas drilling companies paying leases to the private property owners that own minerals beneath their homes and businesses. While there are huge restrictions from government preventing and preferring different business agreements, we’re seeing that some businesses are more understanding of the need to protect the property rights of everyone if they are to be protected from the business. I’d love to see a breakdown of which companies want eminent domain takeovers (the preferred companies) and which are willing to pay leasing fees to the mineral owners (the non-preferred companies).

In another free market marvel, we see two different companies uniting together in cleaning the environment in the New York Times’ A Refinery Clears the Air to Grow Roses.⁷ I’ve always said that NO company wants to pollute if they can find a way to stop throwing away something that might be profitable. In this case, one company has a need for CO2 (to grow roses) and another company has too much CO2 they’re throwing away. Together they both profit without throwing away a valuable piece of property: CO2 emissions. Just wait until more companies find ways to utilize “pollutants” in a profitable and safe way: one man’s pollution is another man’s feed and fertilizer.

To wrap it up is a hilarious article regarding Premier Klein’s blasting of Al Gore.⁸ “The United States needs our oil. I don’t know what he proposes the world run on, maybe hot air?” Time to close up shop, Gore, when a Canadian trumps your moronic spouting of unfacts and myths.

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Today’s oil news is pretty thin with most of the newsrags reporting that investors are sitting and waiting for the Fed report to gauge where future commodity prices will be heading.

We are seeing new discoveries of oil all over the Ugandan area, with 4 new reports surfacing very recently.¹ The Albertine region is possibly rich in crude and shale oil varities, and has seen much more attention from international companies in the past few years.

EnergyBulletin has an article towards their own Peak Oil theorists (”peaksters”) on how they can better sell their story to the public.² For me, I just want to see real economic backing to prove if we’re running out. I’ve watched the Gold to Oil ratio for nearly 10 years, now, and I’m not seeing the fears that many are pointing to. Sure, oil is expensive, but the dollar has quickly become worthless in my lifetime, and I’m not sure that we’re looking at a supply problem. There is a high demand for oil and a low demand for dollars, of course the price of oil will go up.

A U.S. Congressional panel said yesterday that Canada can give OPEC a run for the money in the oil business.³ From the article: Production from Canada’s oil sands region will put the nation in the top five producers of crude oil in the next 10 years, according to a report from the Joint Economic Committee, which examines economic policies and their impact. Canada is currently the seventh-biggest global oil producer, the report said. We’re seeing Canada’s stock market, the TSX, boom with the growth of gold and oil’s value on the world market. As the dollar price of oil goes up, the opportunities to extract new oil varieties such as shale and tar sands increases. My concern is that the price of oil is not significantly higher versus income levels compared to decades past, so will these new oil varieties really be profitable? The dollar is worth less, and it should require many more to actually process these alternative oil structures. I’ll be surprised if this is the going to be the time that shale and tar sands become profitable. The experts are telling us that most are profitable at US$60 per barrel, but that price is considering the dollar’s value from 5 years ago. Since the fall of the dollar of almost 50% in that time versus other currencies and commodities, it is possible that tar sands and shale oil might only be profitable at US$120 per barrel!

The new U.S. emissions regulations are already costing oil producers money as they have to revamp refineries again to attain the new standards for lower-emissions fuel. Suncor just invested nearly half a billion dollars into revamping their refinery in the Alberta region in Canada.⁴

I’ve been reading RIA Novosti a lot lately, the Russian News and Information Agency. Today’s article is titled Prospects of the dollar as oil currency⁵ Russia has always had a huge amount of oil to process and sell, but decades of communism always made this oil unprofitable on the world market. Now that Russia is starting to provide more semi-free market options for businesses, their oil industry is ready to explode on the market, but the petrodollar connection is one that keeps many countries from being able to get into the market on their own terms. Russia already holds enough petrodollars and reserve dollars and may not want more, especially with the dollars fast decline in value due to Bernanke’s overprinting of supply, continuing Greenspan’s decades of madness. RIA Novosti’s article covers many of the thoughts I’ve been having in recent years, and I believe it is worth taking the time to read (and comment on).

Instead of blaming themselves for allowing the Fed to go print-crazy on new money, the US Senate now wants to investigate higher prices by seeking parties to blame in the energy trade industry.⁶ While I believe speculation does tend to raise prices, it also tends to lower prices as well. We have to look at the supply of resources versus the supply of money. As long as the supply of money keeps going up (Federal Reserve-created inflation, as we’ve seen for 100 years), prices will always tend to go up as the value of the dollar keeps going down. There is no energy market collusion here, just a lot of military intrusion, currency value destruction, and usual power-tyranny being manipulated by those who can. The Senate has no one to look at but themselves, the Congress, the Executive branch and the Judicial branch that allows it all to continue without heeding the Constitution.

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G.U.N. Summer Vacation Update