Energy Facts And Fictions

The President and environmentalists are fond of the factually incorrect statement that the U.S. maintains only 2% of ‘proven or known’ oil reserves. ‘Proven reserves’ carries a very tight definition; ‘proven, confirmed and economically recoverable to a 90% certainty’. There are other categories of reserves that the President ignores. The actual fact is that estimated reserves are at least eight times higher than the President contends. It is also logically demonstrable that we have not even come close to identifying the full scope of potential energy reserves based on the rapid advance of technologies applied to production and identification of reserves.

The President further contends that the 2% reserve equals 2% of global production; also in error. The U.S. is responsible for 9% of global production. That differential is due to production efficiency and the relatively shorter time frame for getting it out of the ground and into usable forms. It also related to the immediately available markets in the U.S.

A favorite talking point is to connect the 2% reserves and the 2% production with yet another ‘hanging fact’. It is true that we consume 20% – 21% of global energy production. This representation is supposed to make us curl up in a guilty ball and self flagellate until we come to our consumption senses.

The appropriate comparison is what percentage of Global GDP does 20% consumption support? The answer is, based on the CIA World Fact Book, 24%. Economically speaking we’re relatively efficient when consumption is compared to GDP. China for instance represents 11% of global GDP and consumes 11% of available energy resources. Japan, historically, based on their reliance on nuclear power represents 10% of GDP but only 5% of energy consumption.

So put down the whips, chains and horse hair shirts. Connecting the factual dots is much more productive.

  • D.D.Mao

    But that is not all the President is “factually incorrect” about concerning the oil and gas industry. In it’s lead editorial yesterday the Wall Street Journal took a hard look at the Obama administrations campaign to end the so called “subsidies for Big Oil”.The hard truth is the oil industry is subsidizing the government.

    The other side of the coin is the oil and natural gas industry is an enormous source of revenue for the US government. In fact the industry PAYS THE FEDERAL GOVERNMENT APPROXIMATELY $86 MILLION A DAY OR ABOUT $31 BILLION A YEAR IN RENTS,ROYALIES,BONUSES AND CORPORATE TAXES.THIS DOESN’T INCLUDE THE PAYMENTS MADE AT THE LOCAL AND STATE LEVELS.

    Not paying their fair share? The Tax Foundation estimate that BETWEEN 1981 AND 2008 OIL AND GAS COMPANIES SENT MORE DOLLARS TO WASHINGTON AND THE STATE CAPITOLS THAN THEY EARNED IN PROFITS FOR SHAREHOLDERS.THE INDUSTRY AND IT’S ACTIVITIES ACCOUNTED FOR MORE THAN $1 TRILLION OF THE UNITED STATES ECONOMY IN 2009 OR ABOUT 7.7% OF THE UNITED STATES GROSS DOMESTIC PRODUCT.

    SO YOU ASK WHAT ABOUT THE SUBSIDIES THAT THE OIL AND GAS INDUSTRY GETS? They aren’t cash handouts like those that goes to the GREEN LOBBY.They’re deductions from taxes that cover the cost of doing business and earning income to tax in the first place. And MOST OF THEM ARE AVAILABLE TO OTHER MANUFACTURERS AS WELL.

    All this is only an attempt by the administration to misrepresent the industry and create winners and losers.After all an election is coming up and he can’t run on “Hope and Change” when he had a hand in scuttling the economy.

  • D.D.Mao

    Upon further review:

    All of those on the left who believe the oil and gas industry isn’t paying their “fair share” in taxes should think about where their pension plans are invested.Many pension plans today are heavily invested in the oil and gas industry and by taxing them more it has to affect your pension.But as we see with what is happening in healthcare the government doesn’t care if private industry cannot cover you any longer or not.They will gladly accept more recipients dependent on government “entitlements” due to something they caused in the first place with their higher taxes.The housing crisis is a similiar ponzi scheme the government created to further their ends. ONE VICIOUS CIRCLE!

    Perhaps if we CUT FEDERAL,STATE AND LOCAL TAXES gas just might go below $2.50 a gallon.For someone who DOESN’T DO A THING TO EARN IT the federal government receiving $31 billion dollars a year isn’t a subsidy IT’S EXTORTION!

  • Bill Hedges

    Warren Buffet owns some companies behind in their taxes. Some going back to 2002.

    As I have known for some time, Buffet has major interest in RAILROADS. That WE THE PEOPLE have been helping in repairs upon HIS RAILWAY. Brother sent me a interesting email. Contends if Canada’s pipeline was built Warren Buffet’s railroad would be financial harmed because oil tankers are source of income and run in area of pipeline.

    Is the bum doing everything in his powers to go well beyond a $$$ billion in campaign war chess ??? Perhaps future his economic outlook after leaving the White House ???

  • Bill Hedges

    Correction:

    Further not future…

  • D.D.Mao

    Bill:

    I wouldn’t doubt you hit the nail on the head concerning Mr.Buffet.Contributors to political parties have their own agenda. AARP for instance is estimated to BENIFIT BY $1 BILLION DOLLARS OVER TEN YEARS DUE TO AN INSURANCE BUSINESS THEY OFFER IF OBAMACARE WENT THROUGH. IT’S NO WONDER AARP WAS SHRILLING THE PRESIDENTS PLAN TO IT’S MEMBERS PRIOR TO IT’S PASSING.

  • D.D.Mao

    Bill:

    Could you possibly give us some insight on the Missouri caucuses? I understand they ended with no vote taken because a state party rule DOESN’T AWARD ANY DELEGATES TO CANDIDATES.Not even a straw poll was taken.These delegates would be free to pledge to any candidate at the convention then? What would be the point of holding the caucuses then?

  • Bill Hedges

    Is why I did not vote nor attend a caucus. W H Y !!! I FELT outraged THAT MY VOTE was WORTHLESS. I have next to no knowledge of this situation. My State messed up and caused this heresy. I am not pleased. In a non-binding vote awhile back we voted against buma. I expect my State to joins the others to vote out the bum and his class warfare friends.

    In my area when Sarah Palin shows up at Bass Pro we show up just to see & hear. obuma would be lucky to get homeless people looking for hand-outs.

    I will never join AARP unless a sweep is done and board is reborn with fresh clean blood. I have special needs insurance and availability of this type of insurance I need was but one this time around in my area. Use to be many. May be gone next year ? AARP does not have SNP. SNP, in my case, zeros in on my condition which is diabetes. All my fingers, toes, and health salute SNP for its support.

  • Who knows what the exact amount is. I think they are just telling those value for us not to expect anything.

    “Wesker” for barbecue en pierre