Saturday, June 21, 2008

US and Canadian oil, possibly much more plentiful at today's prices, is much "dirtier" than Mideast oil; problem for "conservatives"?

Already, there is confusion on how to balance two critical needs in our energy and oil price mess: how to produce more oil and gas and get the price to something “reasonable” (maybe less than $100 a barrel) and how to implement the maze of cap and trade standards being proposed for carbon emissions, especially in California and the Midwest.

Oil companies are practically “blackmailing” us into allowing a lot more offshore drilling, which they now say can yield a lot of oil at today’s prices, using new sonar and detection technology, and which they say can be done cleanly. And they want to use huge oil sands deposits in the Canadian prairies, especially quite far north. All of this seems to yield oil which may burn less cleanly and be harder to refine.

This has put John McCain “between a rock and a hard place.” The Washington Times Fri-Sat June 20-21 issue has the headline “McCain oil plan fosters reliance on the Middle East” because Middle Eastern oil is usually “cleaner” and can be more easily fit into new carbon emission standards. US and Canadian oil is said to be relatively “dirty.” The link is here.

The notion of a boon for off-shore drilling and Canadian tar sands digs (or American oil shale) does also call into question the idea of oil production "tapping out" as in the film "A Crude Awakening."

The oil price volatility at the end of this past week was excited by news that China would increase the price of oil to its own consumers, but also bad news about a Nigerian pipeline attack and about Israeli threats against nuclear facilities in Iran.

NBC Today (June 22) reports that now is the first time in history that US demand for oil has dropped but oil prices have not. Despite the growth of China, US demand outstrips Chinese demand by a ratio of 25 to 2.

No comments: