There are two separate issues with regard to the supply of petroleum and refined products: Price, and Security of Supply. When the President said, “We can’t just drill our way to lower gas prices”, the political pressure of $4.00 per gallon for gasoline was his primary concern. But in an international emergency (say, a protracted shutdown of the Straits of Hormuz), our Strategic Petroleum Reserve might be quickly exhausted. Gasoline at $4.00 per gallon might seem cheap. Security of supply should be our nation’s #1 strategic concern with respect to energy.

A recent article in the New York Times considers our current supply situation and its causes:

U.S. Reliance on Oil From Saudi Arabia Is Growing Again

The increase in Saudi oil exports to the United States began slowly last summer and has picked up pace this year. Until then, the United States had decreased its dependence on foreign oil and from the [Persian] Gulf in particular.

This reversal is driven in part by the battle over Iran’s nuclear program. The United States tightened sanctions that hampered Iran’s ability to sell crude, the lifeline of its troubled economy, and Saudi Arabia agreed to increase production to help guarantee that the price did not skyrocket. While prices have remained relatively stable, and Tehran’s treasury has been squeezed, the United States is left increasingly vulnerable to a region in turmoil. …

“At a time when there is a rising chance of either a nuclear Iran or an Israeli strike on Iran’s nuclear facilities, we should be trying to reduce our reliance on oil going through the Strait of Hormuz and not increasing it,” said Michael Makovsky, a former Defense Department official who worked on Middle East issues in the George W. Bush administration.

The accompanying graphic helps make sense of the figures:

U.S. oil consumption is flat to declining for two reasons: 1) the economic recession, and 2) a long-term trend of decreased energy intensity in our economy.

The production declines in Mexico are alarming. Mexico has been a reliable partner, and as a North American source, a boon to U.S. energy security. If current trends continue, Mexico will become a net importer of oil by 2020. This is taken seriously in the country, which is seriously considering allowing access to international firms to explore and develop Mexican fields for the first time in nearly a century.

By citing “increasing domestic oil production” as a policy goal, the Administration calls attention to the fact that it has done little or nothing to enable it. In fact, early in the Obama Administration, increased oil production was actually seen as a negative, in that it worked counter to the Administration’s ambitious Green Energy plans. Credit the private sector with 100% of the supply growth we’ve experienced since 2009.

Two other decisions by this Administration have worked counter to Security of Supply. Because of the drilling moratorium and general regulatory overreaction to the BP Spill in the Gulf of Mexico,

… production is about 700,000 barrels a day lower than forecast. Much of that oil is heavy and is being replaced by Saudi imports, experts said.

Then there’s the Keystone XL pipeline, which was designed to enhance access and availability to Canadian heavy oil to those same Gulf Coast refineries that are running short of Mexican and Venezuelan heavy oil supply that they are designed to process. Again, Saudi oil can make up the shortfall.

Some issues transcend November’s election and voters angry over $4.00 per gallon gasoline. Our interests are heavily dependent on having a secure source of North American oil. If we continue to be oblivious to supply security concerns, we might wake up one day to find that the Chinese have shut us out of the game while we were asleep.

How do we achieve North American energy security? Mexico and Canada can be only part of the picture. The rest depends on a commitment to do as much as possible to help ourselves, and we can drill our way to that, Mr. President. You start by recognizing that our domestic oil and gas companies are part of the solution, not part of the problem. You honor the commitment of American explorers and risk takers who have “built that”, in the Bakken and in the Eagle Ford and in the Deepwater Gulf of Mexico, and elsewhere. And you take a rational, apolitical look at cutting red tape and opening access to areas that for whatever reason we currently deem off-limits to drilling.

Cross-posted at Maley’s Energy Blog.

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The company is now counting on operations beginning in early August, which gives them two months to work before they have to vacate this fall for the whaling season guaranteed to the native Alaskan Inupiats.

As a former employee (1978-1981), I hold Shell’s technical capabilities in the highest regard. Shell pioneered deepwater drilling and development; if they think they can safely carry out exploration in the hostile and remote (but shallow) waters of the Chukchi and Beaufort Seas, they probably can. I can offer no informed opinions of their specific plan, but it would be a mistake to assume that drilling and producing offshore northern Alaska is a risk-free undertaking.

Perhaps the question we should be asking ourselves is the one posed in a post at the Sustainable Alaska blog, sponsored by Rice University’s Baker Institute of Public Policy:

Does Drilling in ANWR Make More Sense than the Alaskan Offshore?

(Map source: www.northern.org, the Northern Alaska Environmental Center)

Permitting oil production only in the Chukchi and Beaufort Seas suggests that offshore is a superior alternative to drilling in ANWR. Yet this seems to be a questionable conclusion.

And then they tick off the reasons why:

…[P]erhaps most importantly – an oil spill offshore would be far more devastating than one in ANWR.

Arctic researcher for the Pew Environment Group, Dr. Henry Huntington, in a video interview at the Sustainable Alaska site, compares an oil spill in Russia’s Komi Republic (1995) with the Exxon Valdez disaster (1990): ”My conclusion is, if you’re going to spill oil, do it on land. I’m not advocating spilling oil anywhere, but for crying out loud, it’s containable and it’s sort of limited; the land doesn’t move. And so, in that sense, the risks associated with problems onshore in ANWR to me seem quite a bit smaller than the risks associated with offshore.” 

The 1002 Area [the coastal portion ANWR] may produce as much oil per day as drilling offshore.

The risk-weighted reserve estimates for both the Chukchi and Beaufort areas offshore exceed the estimated ANWR reserves, but ANWR is more geographically compact and could come on production sooner. ANWR might produce 958,000 barrels per day, compared to the combined estimate for both offshore areas combined of just over 1,000,000. Given an operating window of only a few months per year, it will take many decades to realize the full reserve potential offshore. (For perspective, current total U.S. crude oil production including Alaska is 5.5 million barrels per day.)

As it stands right now, the Alaska [treasury] would receive more revenue from ANWR than from onshore oil.

That’s because the Chukchi and Beaufort Seas are in Federal waters, where the Feds own the minerals and thus would enjoy the lion’s share of royalties. ANWR is on land where the State of Alaska owns the minerals.

 A pipeline from ANWR might be easier to get approved than one from the Chukchi Sea.

The 300 mile-long Chukchi route would traverse the Teshepuk Lake, an environmentally-sensitive habitat for birds and caribou. Permitting the offshore/onshore line will give environmentalists ample opportunities to object; the pipeline permitting process alone could drag out for years. By comparison, ANWR is only 30 miles from an existing connection to the Trans-Alaska Pipeline System (TAPS), with 100% of that route lying onshore, using proven technology.

The environmental and subsistence concerns regarding the porcupine caribou [for ANWR] are not much different from those surrounding bowhead whale [offshore].

In this video (one of several informative interviews), John Payne of the North Slope Science Initiative describes the incredible shrinking footprint of onshore Arctic development, from the 1970s until today:

The post concludes:

Existing evidence suggests something that politicians and environmentalists do not want to admit: if there has to be Arctic drilling – and that is a big “if,” given the substantial risks involved – ANWR may actually make more sense. That should be food for thought for both politicians who advocate drilling in Alaska and activists who fight against it: Have battlegrounds been drawn in the right place?

That’s an excellent question. Environmentalists ascribe an irrational level of symbolic importance to ANWR. In straining at ANWR’s gnat, we have swallowed a moose.

Anyone with an interest in energy policy or Alaskan development should spend some time at the Sustainable Alaska site. As you can tell from its conclusions, it is hardly a site filled exclusively with industry cheerleaders and apologists. Instead, they take a rational, balanced look at the issues and consider input from both sides.

Cross-posted at Maley’s Energy Blog.

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It works like this: carbon credits can be traded for cash. You earn one credit for destroying or sequestering a ton of carbon dioxide (CO₂). Some other gases have stronger greenhouse effect than CO₂, and so are worth more in carbon credits. A ton of methane counts for 21 tons of CO₂, nitrous oxide 310. It’s a huge market.

Buyers of the credits include power plants that need to offset emissions that exceed European limits, countries buying offsets to comply with the Kyoto Protocol — an international environmental treaty — and some environmentally conscious companies that voluntarily offset their carbon footprint.

A gas called HFC-23 is worth 11,700 credits. It is a waste byproduct of the manufacture of HCFC-22, the world’s most common refrigerant. Manufacturers get lots of credits for making HCFC-22 and destroying the HFC-23 rather than venting it directly to the atmosphere.

HCFC-22 is considered ozone-depleting; its use is being phased out in developed countries but it is still manufactured in 19 plants worldwide, 16 of those in India and China. It didn’t take a Harvard MBA for plant managers to figure out that the more HCFC-22 they make, the more money they make from HFC-23 credits. Some of them make 50% of their profit from selling HFC-23 credits. Furthermore, according to a graphic accompanying a recent article in the New York Times, 40% of the U.N.’s total carbon abatement credits are attributable to HFC-23. (Link requires registration.)

The plants in India and China in particular have cranked up the production of HCFC-22, which is a concern for the environmentalists in itself:

The high output keeps the prices of the coolant gas irresistibly low, discouraging air-conditioning companies from switching to less-damaging alternative gases. That means, critics say, that United Nations subsidies intended to improve the environment are instead creating their own damage. …

The plants also used inefficient manufacturing processes to generate as much waste gas as possible, said Samuel LaBudde of the Environmental Investigation Agency, an organization based in Washington that has long spearheaded a campaign against what he called “an incredibly perverse subsidy.”

A-hem.

Further,

Disgusted with the payments, the European Union has announced that as of next year it will no longer accept the so-called waste gas credits from companies in its carbon trading system — by far the largest in the world — essentially declaring them counterfeit currency. That is expected to erode their value, but no one is sure by how much.

But the manufacturers hold the upper hand. Now that they’re geared up to produce HCFC-22 in large quantities, if they can’t sell the HFC-23 credits, they’ll just vent the offending gas into the atmosphere.

“I was a climate negotiator, and no one had this in mind,” said David Doniger of the Natural Resources Defense Council. “It turns out you get nearly 100 times more from credits than it costs to do it. It turned the economics of the business on its head.”

It should come as no surprise that people do exactly what you give them an incentive to do. The moral is, be careful in how you structure your incentives. Bureaucrats will never be able to design a system that can’t be gamed by a clever, profit-motivated individual. Or, as Moe Lane eloquently put it, “…if you attempt to set up a market without having the first [expletive deleted] clue about how capitalism works on a practical level, that market will be manipulated by people who do have a [expletive deleted] clue about how capitalism works on a practical level.”

One last observation: This half-baked attempt to fool the markets is largely an outgrowth of the Kyoto Protocols. Green activists and Democrat politicians have been bemoaning the U.S. Senate’s refusal to ratify Kyoto since 1997. The protocol’s provisions took effect in 2005:

[Wikipedia]: As of September 2011, 191 states have signed and ratified the protocol. The only remaining signatory not to have ratified the protocol is the United States. Other United Nations member states which did not ratify the protocol are Afghanistan, Andorra and South Sudan. In December 2011, Canada renounced the Protocol.

Can you imagine how much worse the problem would be if the U.S. were a signatory?

[Updated to correctly identify the refrigerant gas as HCFC-22, per commenter wlcjr, below. - Ed.]

Cross-posted at Maley’s Energy Blog.

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A parody video that answers the question “How’s all that hopey-changey stuff workin’ out for ya?”

A CO-PRODUCTION OF:
http://www.republicanpartyanimals.org and http://houseofsunny.tv

Nice work. Open thread.

In Markey’s mind, several deepwater Gulf of Mexico operators have gotten over on the government to the tune of several billion dollars in oil and gas royalties. The operators counter that they’re honoring to the letter of certain leases that were granted in 1997 and 1998 to encourage exploration during a period of low oil prices.

The courts have blocked Interior from unwinding DWRRA. Congress has tried and failed to take away its benefits. A new tax to penalize the recalcitrant companies has been a centerpiece of President Obama’s budget proposals since he took office. Markey can’t let it go.

Now he has a new angle. In a letter to Treasury Secretary Tim Geithner, Markey suggests blocking the $15.1 billion acquisition of Canada’s Nexen Inc. by the state-owned China National Offshore Oil Corporation (CNOOC) until Nexen pays back royalties on DWRRA tracts. Treasury gets involved becasue 10% of Nexen’s assets are in the Gulf of Mexico.

Here’s the part where Markey channels his internal Doctor Evil:

In response to this potential merger and the loss of taxpayer money to the Chinese government’s benefit, Rep. Markey today sent a letter to Secretary Tim Geithner highlighting the fact that Nexen has already drilled (sic) 32 million barrels of oil and 34 million cubic feet of gas for free without paying a dime to American taxpayers in royalties and that this giveaway could transfer directly to the Chinese government-owned company if the merger goes forward as planned.

Thirty-four million cubic feet of natural gas?! Why, at today’s prices, the government’s share of that would be worth almost $15,000.00!! (Actually, of course, the correct figure is 34 billion cubic feet. What’s a factor of 1,000 among friends?)

[Note to Rep. Markey: I am available to consult with you or your staff on proofreading or other technical matters. My consulting rates are quite steep, however; they have recently increased due to the expectation of tax increases. - SM]

The DWRRA authorized the Department of the Interior to create incentives for the development of deepwater oil and gas leases in the Gulf of Mexico during times of low prices (oil was generally in the $10 to $30 per barrel range in the late 1990s). By waiving the normal 12.5% royalty due to the Federal government on production, Interior created an economic incentive for exploration. The astronomical cost of deepwater drilling and developemnt may not have been justifiable without the relief.

Most of the leases called for an end to royalty relief if the price of oil exceeded $35/bbl. Not the 1997-98 vintages of leases, though. For those leases, relief ended only when a predetermined number of barrels had been produced.

In retrospect, it looks like a screwup. Oil has been consistently above $35/bbl since 2004, and the government has left a lot of money on the table. Some of the lessees (notably Shell, BP and ConocoPhillips) have voluntarily honored the economic provision at Interior’s request. A long list of smaller companies have not.

But if it was a screwup, it was a screwup under the watch of a Democratic president and a Democratic Secretary of the Interior (Bill Richardson).

In a similar case between private parties, the plain language of the lease contract would prevail. In a case where there were a contractual error that accrued to the government’s benefit — good luck suing the government. But in the case of the DWRRA, Interior sued the reluctant oil companies.

The case was Department of the Interior et al v. The Kerr-McGee Oil and Gas Corp. In 2009, the Supreme Court declined to hear an appellate court decision blocking Interior from collecting the royalties.

Cross-posted at Maley’s Energy Blog.

Imagine for a moment an alternate universe where the President talked smack to the Giants …

“..Look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own.”

Or, “I’m always struck by people who think, well, it must be because I was just so [talented]. There are a lot of [talented] people out there.”

Or, “It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there.”

Or, “If you were successful, somebody along the line gave you some help. There was a great teacher [or coach] somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges [and stadiums]. If you’ve got a [championship] — you didn’t build that. Somebody else made that happen.”

No, he didn’t tell the Giants that because it would have been rude and ungracious. He didn’t tell them that because they are heroes.

On June 8, President Obama welcomed the New York Giants, champions of Super Bowl XLVI in a Rose Garden ceremony. Here are some excerpts of his remarks:

THE PRESIDENT: Hello, everybody! (Applause.) Everybody, please have a seat. Welcome to the White House, and congratulations to the Super Bowl Champion New York Giants. (Applause.)

We’ve got some members of Congress and members of my administration who are here today and rabid Giants fans. I want to also recognize the Maras and the Tischs, as well as, of course, head coach Tom Coughlin and general manager Jerry Reese. They have built this team into one of the NFL’s most outstanding franchises. So we are very proud of them. (Applause.) …

Now, [Coach Tom Coughlin]’s a tough guy. And you can see that toughness reflected in everybody else on this team. The Giants took a whole bunch of hits this season, but they never went down. From day one, they followed a simple motto: Finish. Finish the play. Finish the game. Finish the season.

And after week 15, sitting at 7-7, they knew that every game was a playoff game. But the players, the coaches, the staff, the owners — they didn’t quit. They believed in each other. And they kept winning, all the way to Indianapolis.

… Eli Manning led the way, earned his second Super Bowl MVP. (Applause.) So I would just advise the sportswriters out there the next time Eli says he thinks he’s an elite quarterback, you might just want to be quiet. (Applause.)

Eli wasn’t alone, of course. Justin Tuck got to the QB. Victor Cruz scored and salsaed. (Applause.) Mario Manningham kept his feet inbounds for the biggest catch of his life. Nobody was perfect, but everybody did their job. And when the Patriots’ Hail Mary hit the ground, the Giants were Super Bowl champions. Of course, the fans back home went crazy.

The President went on to say that the Giants give back to the community by fighting childhood obesity (“Michelle likes that”), sending food to homeless shelters, and working with Make-a-Wish. Bully for them, and congrats to the Giants organization and the NFL for encouraging those worthy activities. He also noted Wellington Mara’s service and the long tradition of the Giants supporting the military. I am sincerely glad that they do.

Entrepreneurs and successful business people can be heroes. Several of them are my personal heroes, having touched my life through their mentorship, a gift of kindness with no expectation of a return, a reward, or even thanks. I daresay their commitment to the military (including military service) and their commitment to charitable and community causes matches the Giants’.

Several times a year, President Obama congratulates popular sports millionaires as heroes, lauding the success they have earned by virtue of their natural gifts, their hard work, their toughness and their commitment. That’s entirely appropriate.

Small businessmen, risk takers and entrepreneurs are the primary engine of job growth in our economy. Few if any are looking for public adulation. They just want a fair and predictable return on their investment. By demonizing them and asking them to carry an ever-greater share of the load, politicians like Obama discourage their participation.

It’s easy to see why creating jobs is so frustrating a task for Obama: he doesn’t know the first thing about job creation.

Cross-posted at Maley’s Energy Blog.

Now, we don’t need more top-down economics.  I’ve got a different view.  I believe that the way you grow the economy is from the middle out.  (Applause.)  I believe that you grow the economy from the bottom up.  I believe that when working people are doing well, the country does well.  (Applause.) …

So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together.  That’s how we funded the GI Bill.  That’s how we created the middle class.  That’s how we built the Golden Gate Bridge or the Hoover Dam.  That’s how we invented the Internet.  That’s how we sent a man to the moon.  We rise or fall together as one nation and as one people, and that’s the reason I’m running for President — because I still believe in that idea.  You’re not on your own, we’re in this together.  (Applause.)

So, contrary to what you may have learned in your reactionary history class in high school, the middle class was not an organic outgrowth of the Industrial Revolution, or the coming-of-age of the mighty American Economy. No, the middle class is a policy construct of government, at least in Obama’s perception.

One thing about this President, he telegraphs his blows. He tells us precisely what he’s about, then he sets about doing it.

The President’s concept of “middle class” diverges radically from the traditional one, the middle class I grew up in. That middle class bought into a concept of the American Dream that included class mobility. Good grades, hard work, passion and a willingness to take some risk were a ticket to a better life.

The President’s vision is of a permanent, entitled Democratic voting majority of comprised of the lower- and working classes, more of a “meso-class” than a true middle class. In this vision, government “safety nets”-cum-hammocks have the necessities (food, shelter, health care) covered. Government even provides some of the trappings of the middle class, like cell phones. Class mobility is punished: anyone who tries to escape the meso-class climbs a steep slope of taxation. Many will judge it not worth the effort, quite a rational decision given the cost of entitlements foregone vs. the risk of failure. Tax collections will fall as the truly rich sit on their assets, absent a motivation to risk capital on new investment. It won’t matter so much, since job creation will be a central function of government, not the private sector. Tax rates will necessarily increase, and the cycle repeats.

The President’s understanding of history is flawed. It’s not that trickle-down economics has been tried and found wanting, it’s never really been tried. The most dramatic period of economic growth and rebirth, at least in my experience, was 1980 to 2000. The foundation of the renaissance was President Reagan’s tax reform, which shifted the economy’s focus away from the avoidance of ridiculously burdensome 70+% marginal tax rates (characterized by abusive tax shelters and intentionally unprofitable investments) toward real, productive economic growth. A Democratic Congress refused to reign in spending, so Reagan got half a measure of what might have been possible, but it undeniably worked.

Today’s Democrats, meanwhile, cling to the notion that we can tax our way to prosperity. This week, Steny Hoyer declared that unemployment benefits and food stamps are the two most effective means at our disposal of stimulating the economy. Left to their own devices, one can be sure that the Democrats would create two new Cabinet-level departments: the Department of Digging Holes and the Department of Filling Them Up.

Cross-posted at Maley’s Energy Blog.

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The EPA runs a program that is supposed to ensure 36 billion gallons of biofuels are blended into the gasoline supply by 2022. Every gallon produced earns something called a renewable identification number, or RINs, which are then sold to and traded among refiners and other “obligated parties” to help meet their annual biofuel quotas.

[Source. WSJ link requires subscription.]

Rodney Hailey owned a company called Clean Green Fuels, based in Baltimore. Clean Green Fuels earned EPA registration as a biofuel producer, despite the fact that it owned no biofuel manufacturing capacity. Clean Green Fuels could sell the RINs, to the tune of $9 million, but there was no biofuel to back them up. Hailey used the illicit proceeds on such necessities as private jets, expensive jewelry and a Rolls-Royce.

Nor was it alone. In the biodiesel market—whose size is second only to corn ethanol—the EPA itself estimates that some 140 million RINs are fraudulent or otherwise invalid, and the true number may amount to as much as 12% of the biodiesel “supply.”

Hailey has been convicted on 42 counts of fraud, but here’s where the story takes an odd turn.

The EPA is punishing the companies Hailey scammed.

The EPA, however, maintains a “buyer beware” policy that says refiners are responsible for ensuring they buy good RINs, even if they are purchased in good faith from companies certified by the EPA. After the EPA’s enforcement gumshoes raided Clean Green Fuels and deduced that it was a fraud, they did not notify the companies buying these credits for 15 months.

Then the agency said the companies would have only 14 days to replace the bad RINs. And then it fined 24 businesses for not conducting due diligence. The total cost came to $40 million.

That’s pretty typical of regulation in my business, too. Time is only of the essence when it’s demanding action of the regulated community. When the ball is in government’s court, it takes its sweet time.

Two reports on the EPA in one day. On one hand, you conduct business with a duly licensed private party, and do so in good faith, and you end up getting fined when it turns out that you’ve been scammed. On the other hand, the government passes a law mandating a product that doesn’t exist, and then fines you for failing to buy it.

Is this a great country or what?

Cross-posted at Maley’s Energy Blog.

But when it comes to the economy, the presumptive Republican nominee is the Man of Steel compared to the Democratic incumbent.  So far, the Obama Administration has been a 3-1/2 year experiment to reconfirm that Keynesian Economics is deserving of history’s dustbin.

To the weavers of a narrative, invulnerability is a real problem. Ask the creators of Superman. They needed a plot device to trump the advantage of an infinitely powerful character. The plot device need not be explained by the laws of physics or the natural world; rather it is the MacGuffin by which the reader actively suspends disbelief for the sake of the narrative.  The exchange goes something like this:

Reader: I’m willing to believe that Superman threw the moon past Pluto, dove to the center of the Sun and then flew backwards around the Earth faster than the speed of light to turn back time. How am I to believe he is captive in Lex Luthor’s laboratory?

DC Comics writer: Kryptonite!

Reader: That makes sense.

In much the same way, Obama’s storytellers, fabulists and propagandists would engage the electorate.

Undecided voter: Obama told me he could turn around the economy with massive government borrowing and spending. But a lot of the Jobs Created and Saved have already been Lost again. He’s wasted money on a cockamamie Green Jobs program, and a lot of those jobs are overseas. Unemployment is higher than the worst projections of the “do nothing” case, and they’re that low only because people are leaving the workforce in droves. He seems to have no faith in market-based solutions, and seems more focused on regulating and punishing job creators than in turning the economy loose.

While he’s busy criticizing investment bankers, half of his Administration are Goldman-Sachs alumni, and the Treasury Secretary can’t run TurboTax.

What about Mitt Romney?

Obama campaign/News media: Bain Capital!

In the interest of full disclosure, I stopped reading DC Comics when they raised the price from 12¢ to 20¢.

Cross-posted at Maley’s Energy Blog.

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Many conservatives favor an explanation focusing on lifestyle differences, such as marriage and faith. They note that most conservatives are married; most liberals are not. (The percentages are 53 percent to 33 percent, according to my calculations using data from the 2004 General Social YNSurvey, and almost none of the gap is due to the fact that liberals tend to be younger than conservatives.) Marriage and happiness go together. If two people are demographically the same but one is married and the other is not, the married person will be 18 percentage points more likely to say he or she is very happy than the unmarried person.

The story on religion is much the same. According to the Social Capital Community Benchmark Survey, conservatives who practice a faith outnumber religious liberals in America nearly four to one. And the link to happiness? You guessed it. Religious participants are nearly twice as likely to say they are very happy about their lives as are secularists (43 percent to 23 percent). The differences don’t depend on education, race, sex or age; the happiness difference exists even when you account for income.

Whether religion and marriage should make people happy is a question you have to answer for yourself. But consider this: Fifty-two percent of married, religious, politically conservative people (with kids) are very happy — versus only 14 percent of single, secular, liberal people without kids. [Emphasis added.]

Note that many married, religious, politically conservative people (with kids) were once single, secular, liberal people without kids.

Liberals, Brooks says, observe that “…there is an entire academic literature in the social sciences dedicated to showing conservatives as naturally authoritarian, dogmatic, intolerant of ambiguity, fearful of threat and loss, low in self-esteem and uncomfortable with complex modes of thinking.” So much for social “science”, which seems in this one sentence to be more about confirmation of left wing dogma than a scientific examination of the belief systems.

In reality, the difference seems to lie in conservatives’ worldview of personal responsibility and individual control over outcomes, versus a typical liberal worldview of a the individual as helpless and subject to the whims of various power structures, whether it be “management”, “the government”, “the rich”, “fascists”, etc.

And the characterization of conservatives as selfish, unfeeling misers is further punctured by Brooks’ research. From his Wikipedia page:

Brooks argues that there are three cultural values that best predict charitable giving: religious participation, political views, and family structure. Ninety-one percent of people who identify themselves as religious are likely to give to charity, writes Brooks, as opposed to 66 percent of people who do not. The religious giving sector is just as likely to give to secular programs as it is to religious causes. Those who think government should do more to redistribute income are less likely to give to charitable causes, and those who believe the government has less of a role to play in income redistribution tend to give more. Finally, people who couple and raise children are more likely to give philanthropically than those who do not. The more children there are in a family, the more likely that a family will donate to charity. One of Brooks’s most controversial findings was that political conservatives give more, despite having incomes that are on average 6 percent lower than liberals. [Emphasis added.]

My wife and I have found that the first step to feeling happy is often to act happy. Are you an unhappy single, secular, liberal person? Do you want to feel happy? You could try the following recipe; it worked for me, and I didn’t even get all of the steps in the recommended order:

1. Find religion.
2. Become generous.
3. Commit to a spouse.
4. Be fruitful and multiply.
5. Become conservative. (Last, because most people become more conservative after having kids, even if conservatism is not in their nature.)

There are no guarantees, but Brooks’ research would indicate that success increases your chance of being happy by almost 300%. All of these steps may not be achievable by all people, but what is a more noble way to spend ones life than the pursuit of happiness?

Cross-posted at Maley’s Energy Blog.

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This week’s installment is a look at production decline curves from selected shale gas plays. The extreme rates of decline experienced in these wells has interesting and far-reaching policy implications, although this angle is rarely described in the mainstream press. For the energy operator, the performance of his wells in aggregate determine the success or failure of his enterprise. For the nation, shale well performance has become a key factor in energy policy and planning.

Reserves and price projections are the key to everything. I promise to keep this understandable at a general business level.

The curves in Figure 54 at left represent averages for five different shale plays; each well is an individual. But what this curve fails to make explicit is the fact that there are very few wells in these shale gas plays with more than four years of history; the rest is projection.

Engineers commonly use decline curves (pdf) as a primary tool for analyzing historical performance of producing wells and forecasting their future performance. The total accumulated past and future production of a well is termed its Estimated (or Economic) Ultimate Recovery (EUR). The EUR of gas wells is measured in billions of cubic feet (BCF). The estimate of future production is termed “remaining reserves”.

Since a resource company’s primary asset is its reserves, these squiggly lines have a lot to do with a company’s financial performance. Truth be told, decline curve analysis can be subjective instead of scientific, particularly early on in a well’s life.  Tight rocks like shales typically exhibit this characteristic “hyperbolic” shape, declining precipitously in the early years; EUR depends on how quickly the rate “breaks over” to a lower, more sustainable rate.

EIA’s Table 17 (click any image to enlarge) shows how reserve estimates have changed in the last three AEOs. In particular, the estimate for average recovery of a well in Louisiana’s Haynesville Shale was 4.59 billion cubic feet (BCF) per well in AEO2010, 3.58 BCF in AEO2011, and only 2.67 BCF per well in this most recent AEO2012. Just as surprising is the inset graph in Figure 54 above, which suggests that a typical Haynesville well produces >95% of its reserves in the first 5 years. The wells produce at phenomenal rates to begin with, but decline rapidly due to the constrained flow properties of ultra-tight shale rocks.

I don’t have any insight on the EIA’s methodology or statistics, but it would appear that as data accumulates with time, the Haynesville per-well reserves have decreased. Back in 2008, Chesapeake Energy made a big splash as the Haynesville pioneer; their estimate at the time was that Haynesville wells would average 6.5 BCF each. (At the time, gas prices were north of $8.00 per mcf at the wellhead.)

All that “flush gas” coming on the market created a temporary glut and drove natural gas prices into the basement. As recently as 2004, energy in the form of gas cost more than the equivalent amount of energy as oil (see Figure 34, left). The horizontal drilling and fracking concepts were first proved in the Barnett Shale of Texas; the phenomenal early success in the Haynesville in turn ignited shale plays in across the country, and now those ideas are spreading internationally, too.

How big a difference does all this make? For an energy company, it is all about reserves x price; when one or both goes south, it is bad news. When you produce disappointing reserves into declining price, it can be disastrous.

The table at right is a grossly simplified look at the economics of developing the EIA’s typical well from the 2011 and 2012 studies. Gross revenue is reserves times price; in this example the gross revenue for a 3.58 BCF well, given $4.50/mcf gas prices (early 2011 prices) over the well’s life would generate  $16.1 million in gross revenue (far right column). After deducting landowner royalties, state severance taxes and lease operating expenses, the owner’s net is almost $10.8 million, enough to repay the assumed $7.5 million cost to drill and equip the well and leave a $3.3 million profit. (This analysis ignores overhead, income taxes and the time value of money. It also ignores the up-front cost of the lease, the rights that allow the driller to drill, which can be very significant.)

But if the well’s performance disappoints and the reserves turn out to be 2.7 BCF (per AEO2012) instead of 3.6 BCF, drilling becomes a breakeven proposition, even if the price hangs in at $4.50. With the price falling to $2.50, it’s a disaster. The operator takes home only 50¢ on $1.00 of his initial drilling investment. That’s called “destroying value”, and it doesn’t matter if you’re an oil man, a shoe salesman or a chicken farmer, you understand that that’s bad for business. (Politicians may not get it, and there’s not a lot we can do about that.)

Operators have mostly responded rationally to the current oil/gas price situation. The Haynesville produces “dry gas”, i.e. without associated liquid hydrocarbons. A modest amount of oil or condensate produced along with the gas can radically alter drilling economics. Consequently, most operators have refocused their attention away from the Haynesville and other dry gas plays to gas/condensate plays like the Eagle Ford of south Texas or to pure oil plays like the Bakken of North Dakota. In the Eagle Ford, the gas price matters little because the economics are totally driven by the condensate.

Historically, 60-70% 0f domestic rigs targeted gas. Now, only 25% of the rig fleet drills for gas.

Long term trends? I look for the historically wide price spread of gas vs oil to close somewhat. Few operators will be able to deliver gas to the market profitably under the current price regime.  We have already seen the total production curve for the Haynesville peak and begin to decline.

Is this the end of the “shale bubble”? Hardly. The shales are everywhere. Each one has different characteristics and a different breakeven price.

I suspect that price stability in the $4-$5 range would support an active gas drilling industry. Even at that level, gas would still provide a huge price advantage compared to gasoline as a transportation fuel.

Natural gas is clean, abundant and American; it makes up nearly 25% of our nation’s total energy consumption. Of the fuels in our energy mix, gas is the most versatile, useful for electrical generation or for transportation. Domestic drilling is a true, private sector “shovel ready” jobs program that could be kicked into high gear overnight without tax credits and DoE loan guarantees.

Cross-posted at Maley’s Energy Blog.

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35th anniversary of TAPS, June 20, 2012

Since oil first flowed down the 800-mile pipeline on June 20, 1977, TAPS has delivered more than 16.6 billion barrels of oil. For Alaskans, that translates into more than $171 billion in revenues to the state treasury. …
TAPS once carried nearly 2 million barrels of oil a day from the North Slope to the port of Valdez, but is now down to almost a quarter of that. Today, Alaska is no longer America’s second-largest producer of oil, having been surpassed by North Dakota. And North Slope production continues to decline by 7 percent annually.

Without new oil production, throughput in the pipeline could fall enough to threaten its future viability. Shutting down the pipeline would mean closing up shop on the North Slope. Alaska’s oil — like its massive natural gas reserves today — would be stranded with no way to market, leaving the state scrambling to replace the 85 percent of its annual revenue that today comes from oil.

We should all wish TAPS a Happy Birthday and thank a (mostly) bygone generation of decision makers who had the foresight and conviction to make it happen.

But in the story of the passage of the TAPS enabling legislation through Congress there is an object lesson:

Energy policy is way too serious to be entrusted to Democrats.

In 1973, the Senate was deadlocked on a vote to set aside legal and environmental challenges to the pipeline’s construction. Even with the country in the grips of OPEC’s first oil embargo, even with pro-energy Democratic stalwarts like Lloyd Bentsen (D-TX) and Russell Long (D-LA) in the Senate, the deciding vote was cast by Vice President Spiro T. Agnew. It passed 50-49. One of the dissenting votes was cast by young Sen. Joe Biden (D-DE). (A similar vote on the Keystone XL Pipeline, you may have noticed, is currently going nowhere.)

At the time, the pipeline was expected to cost $3.5 billion and to provide access to 10 billion barrels of oil. The line was built in just over 2 years at a cost of $8 billion, all private dollars. It crossed three major mountain ranges in some of the world’s most challenging conditions.

In its 35 years of service, the pipeline provided up to 2 million barrels per day of domestic oil at a time when it was most needed. Predictions of dire consequences for the caribou and musk ox populations proved unfounded.

These days, Louisiana Senator Mary Landrieu is the only semi-reliable Dem when it comes to energy issues. There are a few Democratic Congressmen from the energy states, but they are an endangered species.

As the November election approaches, some find it easy to be disenchanted with certain policies of certain Republican politicians. It may be immigration reform, budget control, health care, fiat currency, etc., etc. When those voters give voice to their frustration, it sounds something like this:

There’s no difference between the Republicans and the Democrats. I don’t agree with Candidate XYZ’s position on my pet issue, so I may not even vote.

Well, pardon my French, but that’s just stupid.

Even if we were to accept the "no difference" premise on every other issue (which I don’t, BTW), there is such a huge gulf between the GOP and the Dems on all things energy, that issue alone justifies full and enthusiastic support of Mitt Romney and Republican candidates for the Senate and Congress.

Cross-posted at Maley’s Energy Blog.

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To wit, this screenshot of a cute little animated .gif at Fox’s website gaslandthemovie.com.

It clearly depicts fractures from a horizontal gas well invading a freshwater aquifer. Scary! Now, consider the detail of that portion of the cartoon which depicts the fractures extending vertically up into the shallow water-bearing zone:

“Research is underway”, indeed. How about we look at some of that research?

I came across an excellent presentation (.pdf link) on the subject of Marcellus drilling and its potential to affect groundwater sources. The author is John H. Williams, a groundwater specialist with the U.S. Geological Survey who runs the New York Water Science Center in Troy, NY. I will steal a few of Mr. Williams’ images and refer to a few of his slides.

The image at left is a fair (not to scale!) depiction of a horizontal well, at left, versus a conventional vertical well on the right (click for a larger image). The subsurface is composed of a multitude of rock layers, only a few of which have potential for oil or gas development. Pressure increases with depth, and pressure is an important factor in exploiting gas, so most gas drilling in the Marcellus is at least 5,000 feet below the surface. (Williams’ slides 5 and 38 show the actual Marcellus shale at the surface, where it outcrops 100 miles or so north of the PA state line.)

Oil and gas operators are interested in understanding the mechanisms by which hydraulic fracturing works. To that end, they have employed microseismic imaging to map the propagation of an induced fracture while the frack job is in progress. The cracks and ruptures induced in the rock at depth can be recorded by arrays of surface microphones and mapped in three dimensions (Williams, slide 39).

Now, the science.

The graph below depicts the results from over 350 frac jobs. The fracs were sorted from deepest to shallowest, and for each one, the vertical depth of the wellbore was plotted, along with the shallowest and deepest detected rupture detected by microseismic.

Vertical scale represents depth. The red line portrays the depth of the well, and the yellow highlight depicts the zone above and below the well affected by the frack. Blue is the depth of freshwater sands.

What does that tell us?

• Fractures tend to grow up, not down. The Tully Limestone is widely regarded as a zone overlying the Marcellus Shale which tends to stop further propagation of the frack job (Williams slides 5 & 37).
• Of 350+ observations, the maximum vertical fracture extended about 1,000 feet above the well.
• For all 350+ wells, a cushion of at least 3,000 feet separates the fracture zone from groundwater supplies.

From all practical standpoints, it is physically and geomechanically impossible to induce a fracture in a well below 5,000 feet that extends into shallow freshwater sands above 1,000 feet. Fox’s cute little cartoon may be effective propaganda but it is not rooted in science or in any real world observation.

Does this mean that groundwater contamination is not a concern? No, it just means that we shouldn’t waste time on fracking as a bogeyman.

The slide (Williams 55) at right shows the construction of a typical Marcellus horizontal well. Groundwater is protected by two strings of steel casing, each secured in place with several hundred feet of cement. Groundwater protection depends on the integrity of these casing/cement systems. Note that these slides were originally generated by Southwestern Energy, a Marcellus operator.

As the detail (slide 56) shows, failure is possible. It is much more likely that the source of pressure that would compromise the surface casing would be shallower sands with cement jobs that break down over time.

Note that surface casing integrity issues have nothing to do with horizontal drilling or fracking. You have the same concerns with a vertical well. As Williams reminds us, the first well drilled for gas was in Pennsylvania nearly 200 years ago (slide 9). Fracking is new, and is a convenient scapegoat.

For groundwater protection, I’d rather be near a new Marcellus well than an old vertical well drilled in the 1930s or ’40s. The new wells are more tightly inspected and have to conform to modern regulations. The operator of an $8-10 million well is unlikely to take a stupid shortcut that might compromise his entire investment. He is much more likely to conform his operation to the “best practices” suggested by Williams in slide 60 (at right).

For those unfamiliar with my background, I am a Petroleum Engineer (and a registered Professional Engineer) with 34 years of industry experience. My employer has no interest in the Marcellus shale or in any of the other “resource” plays which rely on horizontal drilling and fracking. For that matter, it would probably be beneficial to my employer, and to me personally, if fracking as a practice were outlawed. So I’m writing this, not out of personal interest, but out of respect for the truth.

Cross-posted at Maley’s Energy Blog.

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• A. Cold Fusion
• B. Pixie Dust
• C. Unicorn Farts
• D. Cellulosic Biofuel
• E. All of the Above

Careful. It’s kind of a trick question. Answer below the fold.

Most of you probably answered “E”, correctly noting that the one energy attribute most prized by Progressives is nonexistence. In fact, the more fanciful, the better.

But the correct answer to our little quiz is “D”, Cellulosic Biofuel. For not only is commercial-scale Cellulosic Biofuel every bit as nonexistent as Cold Fusion, Pixie Dust and Unicorn Farts, the Wizards of Washington have figured out how to tax its very nonexistence!

How is that for 100% pure awesome??

Behold, please, a video from our friends at the American Energy Alliance:

In 2011, Congressional mandates for Cellulosic Biofuel cost refiners $6.8 million (New York Times story). In 2012, the mandated use of Cellulosic Biofuel is 8.6 million gallons.

The projected commercial availability of Cellulosic Biofuel for 2012 is 0.0 gallons.

Blenders must use their mandated quantity of Cellulosic Biofuel, or pay “offsets”, essentially a tax the EPA charges for failure to use the nonexistent product. Of course, refiners are not going to absorb this cost, they’ll merely pass it on to the consumer. (Two industry groups have joined in a lawsuit against the EPA and its absurd penalties.)

Imagine the possibilites. Nonexistent commodities can be mandated in limitless quantity. Congress could mandate the consumption of, say, Pixie Dust or Unicorn Farts, knowing full well that not only will said consumption have zero impact on the environment, but it will be an unparalleled revenue opportunity. There will be burgeoning markets in Pixie Dust Credits or Unicorn Fart Offsets. Unleashed from the constraints of reality, we could even balance the budget.

Repeat after me: Yes We Can!

Cross-posted at Maley’s Energy Blog.

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As an article in yesterday’s New York Times points out, in many cases platform removal is more damaging to marine life than simply leaving in place. They look in particular at a platform designated High Island 389-A, operated by W&T Offshore. What makes it unusual is that it is located near the Flower Garden Banks, our northernmost living coral reefs. They lie 115 miles southeast of Galveston, surrounded by water nearly 500 feet deep near the edge of the continental shelf. The reefs extend up into the light zone, in less than 50 feet of water at the shallowest point.

After all the wells are plugged, W&T proposes to remove the deck and cut the standing “jacket” structure of the platform at a depth of 85 feet, thereby minimizing impact on the fish, corals and other organisms.

The alternative?

The federal government estimates that the blasts needed to remove one platform kill 800 fish, although others who have observed the process put the number in the thousands. Much of the marine life on or around the structure dies, either from the explosions to separate the platform from its supports or when it is toppled or towed to shore and recycled as scrap metal.

Here is an interesting video that shows the diversity of marine life hosted by a typical platform. Without a structure to support growth, this patch of the Gulf would be relatively barren, over a relatively featureless flat ocean bottom.

In the interest of full disclosure, my employer is considering a “Rigs to Reefs” abandonment of a platform. If approved, the jacket portion of the structure will be toppled on bottom in a specified location.

Remember, the Gulf of Mexico habitat needs all the help it can get. Every summer brings a “Dead Zone“, starved of oxygen due to an excess of phosphates and nitrates in the Mississippi River. So the corn ethanol mandates lead to juiced up ag practices in the Midwest, which kill fish in the Gulf, which thrive under the oil platforms. Who’d'a thunk it?

Cross-posted at Maley’s Energy Blog.

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“A significant portion of western and central Pennsylvania Democrats declined to vote for Barack Obama in the April primary, an analysis by PoliticsPA has found. The results there resemble those of Arkansas, Kentucky and West Virginia, where the President lost around 40 percent of the primary vote to no-name opponents or “undecided”. … Over 30 percent of voters left the presidential ballot blank rather than select Obama’s name in 27 counties.” (Source.)

Now, the distribution map of the Marcellus Shale:

Geologic map showing the distribution of the gas-bearing Marcellus Shale in Pennsylvania. (Source.)

While we’re at it, a third map shows the locations of active drilling wells in the Keystone State:

Active drilling wells in PA, June 2012. Each symbol represents a new drilling well in progress. A typical Marcellus Shale well costs $8 million to $10 million prior to production. (Source.)

In discussions of energy and politics, the focus is often on the bogeyman, “Big Oil”. But in the energy states, energy policy intersects with electoral politics at a very local grassroots level.

When an oil and gas operator decides to drill, they need a lease; in other words, the company pays cash directly to the landowner, up to thousands of dollars per acre, in return for the right to drill.

In addition to this “lease bonus”, the landowner receives a royalty on production. This is a non-cost-bearing interest in production, maybe 20% or more. “Non-cost-bearing” means the landowner does not pay one cent of the cost to drill or operate the well.

So drilling benefits only the landed gentry? Hardly.

Oil and gas money usually doesn’t end up under a mattress. It gets deposited in local banks. The money ends up with local car dealers, building contractors and furniture stores.

And then there are the oilfield jobs, generally better paying jobs, with better benefits, than previously existed in the community.

Consequently, local folks generally come to like oil and gas. Especially the Chambers of Commerce. Even local pols, local Democratic pols, like oil and gas activity because the increased valuations mean more property tax dollars filling the public coffers and enriching local school boards.

As the maps show, even Democratic voters vote their pocketbooks.

Cross-posted at Maley’s Energy Blog.

In an interview with the Guardian, Lovelock embraces fracking for natural gas, scorns renewables and castigates the Germans for shutting down their nukes in favor of lignite, a low-grade coal, for electricity generation. (H/T wattsupwiththat.com.)

First, fracking:

Gas is almost a give-away in the US at the moment. They’ve gone for fracking in a big way. This is what makes me very cross with the greens for trying to knock it: the amount of CO2 produced by burning gas in a good turbine gives you 60% efficiency. In a coal-fired power station, it is 30% per unit of fuel. So you get a two-to-one gain there straight away. The next two-to-one gain you get is that methane has only got half its energy in the carbon, the other half is in the hydrogen, so there’s a four-to-one gain in CO2 output from the same amount of electricity by burning methane. Let’s be pragmatic and sensible and get Britain to switch everything to methane.

On renewables:

We rushed into renewable energy without any thought. The schemes are largely hopelessly inefficient and unpleasant. I personally can’t stand windmills at any price. Hydro, biomass, solar, etc, have all got great promise, but they’re not available tomorrow, or even in 10 years.

Germany:

Germany is a great country and has always been a natural leader of Europe, and so many great ideas, music, art, etc, come out of it, but they have this fatal flaw that they always fall for an ideologue and Europe has suffered intensely from the last two episodes of that. And it looks to me as if the green ideas they have picked up now could be just as damaging. They are burning lignite now to try and make up for switching off nuclear. They call themselves green, but to me this is utter madness.

The Intergovernmental Panel on Climate Change (IPCC):

I think the most outrageous example of climate scientists getting it wrong and not admitting it was the 2007 IPPC report. They happily accepted the Nobel prize, but their sea-level rise estimates … were 100% wrong. They didn’t really answer this other than say it’s a very complicated business and we’ve only just started. The IPCC is too politicised and too internalised. Whenever the UN puts its finger in it seems to become a mess.

Cross-posted at Maley’s Energy Blog.

A new documentary, “TruthLand“, is an attempt to counter Josh Fox’s distortions. It is the tale of Shelly, a teacher, dairy farmer and mom from Susquehanna County, right in the heart of the Marcellus Shale gas play in northeastern PA. Shelly sets out to find the truth about fracking and gas development, speaking with landowners, environmentalists, engineers, scientists and regulators to learn the impact that fracking might have on her family farm.

Along the way, Shelly finds a “burning faucet” just like in “GasLand”, but unlike Josh Fox she discovers the truth behind it.

The trailer:

You can watch the entire 35-minute movie here.

This is an important issue. Natural gas provides nearly 25% of the energy that America consumes. No energy source including renewables is without risk, but natural gas is the closest thing to an ideal fuel that we have. It is clean, abundant, cheap and American. If you’re not a fan of natural gas, you’re a fan of mud huts.

We have never had any instance of groundwater contamination from hydraulic fracturing — ever. For any fluid, frac fluid, to migrate up a mile, two miles to the water table is impossible. You are more likely to hit the moon with a Roman candle.

– Elizabeth Ames Jones, Texas Railroad Commission [oil and gas regulatory body] (June 3, 2011)

The “GasLand” movie is misleading. It has a mission. That mission is to shut down the gas industry. It’s very effective at stirring fears. The truth about gas drilling is much more complicated and complex than was presented in “GasLand”.

– John Hanger, Former Secretary of the Pennsylvania Department of Environmental Protection

“TruthLand” is a production of Energy in Depth, a project of the Independent Petroleum Association of America.

Cross-posted at Maley’s Energy Blog.

They don’t dare accept the notion that it was their ideas, their ideology and their tactics that were rejected at the polls. They chose the battlefield, the weapons and the timing. They chose poorly.

Dollar bills don’t vote. People vote.

For too long, “Democracy as We Know It” meant secret ballots. If a little friendly arm-twisting dislocated your elbow, brother, maybe you’ll learn to be a smarter voter before the next election. Oh, by the way, pay your dues.

“Democracy as We Know It” meant that you didn’t have join a union, unless you wanted to work. “Right to Work”? Where in the First Amendment does it say that you have a right not to assemble? Oh, by the way, pay your dues.

“Democracy as We Know It” tolerated a back-scratching arrangement between public sector union bosses and the Democratic elected officials who “negotiated” their collective bargaining agreements. And vote the donkey, brother. We will be watching. Oh, by the way, pay your dues.

“Democracy as We Know It” meant legislators would slink out of state to deny a quorum to the people’s duly elected representatives.

“Democracy as We Know It” meant no ballot box integrity. What an affront that a Citizen! of these United States! be asked to identify Him- or Herself! Or only vote once!

“Democracy as We Know It” meant physical occupation of the halls of government and public places by a Leninist/anarchist mob who knew they couldn’t muster the votes. This crowd is too stupid to grok the irony of their Che Guevara designer tees.

Yes, if Tuesday’s vote marks the end of “Democracy as We Know It”, then I feel fine.

Cross-posted at Maley’s Energy Blog.

Here’s how the two loans panned out:

You’ve gotta wonder about someone who can draw any kind of equivalence between these two programs. Maybe that’s the difference between a community organizer and a businessman. [Update: Note also that there have been several other failures in Obama's DoE LAN guarantee program, notably Beacon Power Corp., a failure of similar scale to Solyndra. - Ed.]

TobyToon cartoon idea: Driver A is driving 125 mph in a School Zone. While drunk. In a stolen car. Painted like a cop car. Driver B is driving with interstate traffic at 67 mph in a 65 zone. Driver A to arresting trooper: “See? He’s speeding too!”

The analogy is pretty good, except that there’s absolutely nothing to criticize in Romney’s role in the Konarka loan, while everything about Solyndra smells bad.

TheHill: Solar firm that received state loans under Romney files for bankruptcy

“Every day we see a new example of Mitt Romney’s hypocrisy. Just one day after he pulled a political stunt outside Solyndra, we learned even more about his record of picking winners and losers in Massachusetts when one of the companies he gave a loan to went bankrupt,” said Obama spokeswoman Lis Smith in a statement. “Mitt Romney may think he can play by a different set of rules, but he can’t hide his history of giving millions of dollars in government loans to campaign donors.” …

The [Romney] campaign also noted that unlike Solyndra’s ties to the president, nobody from Konarka had given to the Romney campaign and the company had paid back the loan distributed during Romney’s tenure. Williams also noted that the decision to loan Konarka money was made before Romney became governor…

Also, Boston Globe: Mitt Romney accused of hypocrisy after Lowell solar company goes bankrupt

Cross-posted at Maley’s Energy Blog.

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