Category Archives: Government Revenues

What Makes Up The Price Of Gasoline?


Given the interest in the “whys and wherefores” of US gasoline price,  this site welcomes the work done by the Institute For Energy Research (IER).    Their full analysis can be found by clicking here,   but the following is a summary of that analysis:

IER’s analysis provides the following facts about gas prices:

  • 76 percent of the price of gasoline is determined by the price of crude oil.
  • 12 percent of the price of gasoline is determined by federal, state, and local taxes.
  • The federal tax on gasoline accounts for 18.4 cents per gallon, while the volume-weighted average state and local tax is 30.4 cents per gallon.
  • Refining costs account for 6 percent of the price of gasoline.
  • Retail dealer’s costs and profits account for a combined 6 percent of the price of gasoline.
  • Less than 5 percent of gas stations are owned by major oil companies.
  • 60 percent of U.S. oil demand is imported from foreign countries.
  • The world consumed 87.9 million barrels of crude and liquid fuels every day in 2011, the highest consumption rate in history.
  • China is now the world’s second-largest consumer of oil behind the United States.  In 2011, Chinese crude imports were up 8.2 percent over 2010 levels.
  • The U.S. produced an average of 5.67 million barrels of crude oil every day in 2011.
  • Production in the Gulf of Mexico is expected to fall by 90,000 barrels per day due to production declines in existing fields, permitting delays, and the Obama moratorium.
  • Crude oil production in Alaska is projected to fall by 20,000 barrels per day both in 2012 and 2013.
  • When President George W. Bush lifted the executive moratorium on offshore drilling, there was an immediate price decrease in the cost of oil.
  • About 25 percent of U.S. supply of oil comes from OPEC countries, which have agreed to a production ceiling of 30 million barrels per day including Iraq’s production and some overproduction by member countries.

U.S. monetary policy — particularly increases in the money supply through quantitative easing — have coincided with a surge in oil prices.  Recent signals from the Federal Reserve that interest rates would remain at near-zero through 2014 have created a ripe environment for hedge funds that bet on commodity plays.

Obama Administration Is Not Helping The Gasoline User


The Obama administration current 5-year offshore drilling proposal will further block access to drilling on Federal lands.  Lets look available and blocked offshore drilling sites under Bush and under Obama.

OFFSHORE UNDER BUSH

OFFSHORE UNDER OBAMA

Maps and history of the Bush and Obama Administrations regarding offshore oil and gas can be read in more detail here.

Raising Onshore Oil Production Costs

In addition to restrictions, Bureau of Land Management Director Bob Abbey said last week at a Senate Appropriations Committee on Interior hearing that federal regulations applied to oil and gas development simply make it more expensive than producing on state or private land according to a posting on Institute for Energy Research website. Then he remarked that the Administration is currently considering raising onshore production royalty rates from 12.5% to the 18.75% that  is charged for offshore oil; in fact, he said that the Department of Interior’s upcoming budget depends on an assumed 50 percent increase in royalty rates.

More blocking of access and higher rates.  How is this helping the US consumer?

Dr Evans:”Climate Models Are Violently At Odds With Reality”


Dr. David Evans has posted “Four Fatal Pieces of Evidence” demonstrating that using computer climate models as the basis for man-made global warming (AGW)  theory is,  in Dr. Evans’ view,  “violently at odds with reality”. He maintains there is “no empirical evidence that global warming is mainly man-made.  If there was, we would have heard about it.  Tens of billions of dollars have been spent looking for it.”Dr Evans uses four pieces of evidence to illustrate his position.

First: Evans examines the Climate Model predictions made by James Hansen (the so-called godfather of AGW) during his testimony to the US Congress in 1988.(click on chart to enlarge)

Evans says:”… the actual temperature rises are about a third of what he predicted. Remember, they have been saying the “science is settled” since the early 80’s, and the models now are essentially the same as they were then.

Furthermore, Hansen’s models predicted the temperature rise if human carbon dioxide emissions were cut back drastically starting in 1988, such that by year 2000 the atmospheric carbon dioxide level was not rising at all. But in reality, the temperature did not even rise that much. Which proves that the climate models don’t have a clue about the effect of carbon dioxide on world temperature.”

Second: Evans looks at ocean warming.  This is a better gauge of global warming than is measuring atmospheric temperature fluctuations.  The Argo Buoys were put into service in 2003.  The measurements of ocean temperatures prior to the Argo program are suspect in my view.  Nothing before 2003 remotely resembles the scope of Argo measurements.(click on chart to enlarge)

Evans says: the climate models predict the oceans should be warming. We’ve only been measuring ocean temperature properly since 2003, using the ARGO system. In ARGO, a buoy duck dives down to 2000m, slowly ascends and reads the temperatures on the way, then radios the result back by satellite to HQ. Three thousand ARGO buoys patrol the oceans constantly. They say that the ocean temperature since 2003 has been basically flat. Again, reality is very different to the climate models.

Thirdly: Evans looks at the “hotspot” which was  a climate computer prediction  which is the  Warmers’ proof of the positive feedback.  Feedback that is able to take a weak CO2 forcing signal and double or triple it.   Unfortunately for the advocates of this hypothesis, the hotspot does not exist.(click on chart to enlarge)

Evans says: “the climate models predict a particular pattern of atmospheric warming during periods of global warming. In particular, the most prominent change they predict is a warming in the tropics about 10 km up, the so-called “hotspot”. But we have been measuring atmospheric temperatures by weather balloons since the 1960s, and millions of weather balloons say there was no such hotspot during the last warming from 1975 to 2001. The hotspot is integral to their theory, because it would be evidence of the extra evaporation and thickening of the water vapor blanket that produces two thirds of the warming in the climate models…”

Fourthly:  Evans hits on one of the most discussed topic in recent times—that of outgoing radiation into space.    Note in the chart below that the top row left is the actual measurements of outgoing radiation by the stat elite ERBE program (Earth Radiation Budget Experiment-click here for more information.)   The other boxes are climate model predictions. (Chart source=Lindzen and Choi 2009)

Evans says: “satellites have measured the outgoing radiation from the earth and found that the earth gives off more heat when the surface is warmer, and less heat in months when the earth’s surface is cooler. Who could have guessed? But the climate models say the opposite, that the Earth gives off less heat when the surface is warmer, because they trap heat too aggressively (positive feedback). Again, the climate models are violently at odds with reality.”

Evans sums up saying:” Those are four independent pieces of evidence that the climate models are fundamentally flawed. Anyone one of them, by itself, disproves the theory of man-made global warming. There are also other, more complex, pieces of evidence. Remember, there is no direct evidence that man causes global warming, so if the climate models are wrong then so is the theory.”

Read all of Evan’s posting here.

cbdakota

U.S.Chamber of Commerce to Pres. Obama–How to Create Jobs


The U.S. Chamber of Commerce sent a letter to President Obama and Congress on creating jobs.The letter’s purpose is stated as follows:

OPEN LETTER TO CONGRESS AND THE PRESIDENT OF THE UNITED STATES

The most immediate priority facing our nation is to create jobs for the 25 million Americans who are unemployed, underemployed, or have simply given up looking for work.

To create jobs, we must enact policies that promote and sustain stronger economic growth. We must also address extraordinary fiscal and competitive challenges that are smothering growth and driving away jobs. At the same time, there are specific steps Congress and the administration can take right now to spur faster job growth in America’s private sector without adding to the deficit.

The letter has a number of sections. I have picked out one of them that relates to the Climate Change Sanity blogs theme:

2. PRODUCE MORE AMERICAN ENERGY

Let American energy workers and businesses responsibly develop all sources of domestic energy immediately. This will not only create jobs but will generate new government revenues, protect our energy security, and release us from the grip of some unfriendly governments.

                              Open offshore resources. Almost 190,000 new jobs could be created by 2013 if permitting in the Gulf of Mexico for offshore development returned to pre-moratorium levels. In Alaska, opening up energy production off the coast would create 54,700 jobs.

                              Expand access on federal lands. By expanding oil and gas exploration on federal lands, we could create 530,000 jobs, reduce imports by 44% by 2025, and increase government revenues by $206 billion.

                              Promote development of natural gas. Expanding the development of the nation’s massive shale gas deposits would create hundreds of thousands of jobs and help bring manufacturing back to the United States, especially in the chemicals and steel industries.

By 2020, natural gas production in Western Pennsylvania alone could create 116,000 new jobs, generate more than $2 billion in government revenues, and add $20 billion to the region’s economy.

                        Approve the Keystone XL pipeline. Construction of the Keystone XL oil pipeline connecting Canada to U.S. refineries in Texas would support 250,000 jobs, boost investment in the United States by $20 billion, and generate government revenues totaling $585 million.

Well said, and certainly in line with yesterday’s posting see here.

The other letter sections are as follows and worth reading:

  • Expand Trade and Global Commerce
  • Speed Up Infrastructure Projects
  • Welcome Tourists and Business Visitors to the U.S.
  • Speed Up Permits and Provide Regulatory Certainty and Relief
  • Pass Tax Incentives That Create Jobs While Increasing Revenues

cbdakota