Canada is enjoying a Booming Oil Industry because they don’t have a President Obama

Posted by PITHOCRATES - January 19th, 2014

Week in Review

The latest jobs report from the Bureau of Labor Statistics showed that for every person that entered the workforce in December seven people left the workforce (see The BLS Employment Situation Summary for December 2013 posted 1/13/2014 on PITHOCRATES).  In fact, since President Obama assumed the presidency 11,301,000 people have left the labor force.  Despite his policies to create greener and higher-paying jobs to replace the jobs in the coal and oil industries he destroyed.

For America was going green.  Whether we wanted to or not.  Pity, because we’d have a lot more high-paying jobs in the coal and oil industry had it not been for President Obama.  North Dakota is doing really well thanks to natural gas production on private land. Not much he can do to shut that down.  And just to the north things are going very well in the oil business (see Oil patch salaries rise 5 times as fast as rest of Canada posted 1/13/2014 on CBC News).

The average salary of young men working in Canada’s oil patch increased by 21 per cent between 2001 and 2008, more than five times the pace of gain seen by those workers in other parts of the country.

According to a report published by Statistics Canada Monday, men aged 17 to 24 living in the oil-producing provinces of Alberta, Saskatchewan and Newfoundland and Labrador were more likely to have a job than their counterparts in other areas, less likely to still be in school, and more likely to earn more.

Kids graduating college with worthless social science and humanity degrees have a boatload of student loan debt.  And little prospect of a job in a high-tech economy.  Had some of these kids had a chance to get a high-paying job in the oil industry instead of getting those worthless degrees they probably wouldn’t be living in their parent’s basement.  With that huge student loan debt hanging over them like the Sword of Damocles.

It’s a pity that the Americans can’t learn a lesson from the smarter Canadians when it comes to energy.  If we had pursued Canadian energy policies instead of Obama policies 11,301,000 people wouldn’t have left the labor force during his presidency.  For a good number of these people would now be in the oil business.  In the oil pipeline business.  In the oil refining business.  In the refined oil distribution system.  And all of the Mom and Pop stores catering to this influx of economic activity all along the way.  That’s what we could have had if we didn’t have President Obama.


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President Obama increases Joblessness and Poverty with his Policies

Posted by PITHOCRATES - August 3rd, 2013

Week in Review

The political left is ruining the country.  Every time they get into power they leave a swath of destruction in their wake.  And we hear the same things over and over again.  The plans these people have to fix the things they’ve destroyed.  We heard Jimmy Carter.  And now we’re hearing the same things from President Obama.  But they’re just empty words.  For if things get worse while you’re in office it’s you.  Not everything else (see Exclusive: 4 in 5 in US face near-poverty, no work by Hope Yen, Associated Press, posted 7/28/2013 on Yahoo! Finance).

Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

The findings come as President Barack Obama tries to renew his administration’s emphasis on the economy, saying in recent speeches that his highest priority is to “rebuild ladders of opportunity” and reverse income inequality.

Renew his emphasis on the economy?  To renew something you had to have done something first.  The president is in his 5th year in office.  And all he’s done is implement policies that has discouraged job creation.  Obamacare is causing employers to freeze hiring and push some employees to part time.  Obamacare, then, has increased joblessness.  And forcing people into lower-paying part-time jobs has increased poverty.

Shutting down the oil business in the Gulf of Mexico destroyed good-paying jobs in the oil business.  Refusing to approve the Keystone XL pipeline has prevented the creating of good-paying construction jobs.  And the additional good-paying jobs in the oil business that would have processed this new oil coming to American refineries and out into the distribution network.

The president’s war on coal is shuttering coal mines.  And destroying good-paying jobs in the mining industry.  And moving away from cost-efficient coal-fired power plants has increased the cost of electric power for businesses and households.  Something else to put pressure on hiring.  Leading to more joblessness.  And poverty.

Things have gotten worse during the Obama presidency because of his anti-business policies.  When you have anti-business policies you don’t create an environment for job creation.  Which is the source of all of our problems.  People can’t get a good-paying full-time job because President Obama is destroying them.  And if that wasn’t bad enough, liberal Democrat policies make a bad situation worse.

Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones.

“It’s time that America comes to understand that many of the nation’s biggest disparities, from education and life expectancy to poverty, are increasingly due to economic class position,” said William Julius Wilson, a Harvard professor who specializes in race and poverty. He noted that despite continuing economic difficulties, minorities have more optimism about the future after Obama’s election, while struggling whites do not…

For the first time since 1975, the number of white single-mother households living in poverty with children surpassed or equaled black ones in the past decade, spurred by job losses and faster rates of out-of-wedlock births among whites. White single-mother families in poverty stood at nearly 1.5 million in 2011, comparable to the number for blacks. Hispanic single-mother families in poverty trailed at 1.2 million.

The political left won’t tell kids to stop having so much sex.  In fact, they’re facilitating it.  By giving free condoms to high school kids.   Making abortion available on demand.  And even providing the morning-after pill to any girl regardless of age without a prescription or parental notification.  Because kids are going to have sex no matter what we say.  A message heard loud and clear by our kids.  Who are having a lot of sex.  Hooking up to satisfy their needs.  Then going on their way.  Seeing no need to get married.  Especially the guys.  Who never had it better.

The enlightened attitude of the political left has made it a veritable smorgasbord out there.  Objectifying women like never before.  Where men look at women as sexual flavors.  And wonder what they feel like tonight.  This is the hookup.  And it isn’t conducive to making long-lasting relationships.  These guys don’t even want to talk to these women.  They want to take care of their business.  And leave.  Returning to their male friends.  Where they can enjoy the things they really like once their sexual needs are satisfied.

This is why marriage rates are declining.  Because with the left’s objectification of women what’s the point of marrying them?  This is the world a girl finds herself in after getting pregnant.  And doesn’t want to get an abortion.  She is on her own.  And there is no faster way to poverty than being a young, single mother.  If she doesn’t graduate from high school or can’t go on to college because she has to raise a baby what chance does she have?  While others are getting an education she is working a job that doesn’t require an education.  When her high school classmates are graduating from college she is still working that same job.  Because she missed out on getting the college education that could have given her a career with a high-paying job.  Instead working a job that requires no advanced education.  The kind that doesn’t pay well.  Because they’re often entry-level.  The kind high school kids work.  And those in college.  Who then quit these jobs to begin the career they went to college for.  But what a single mother can’t do.  Because without that education she doesn’t have that option.

The obvious solution to this problem is for these girls to wait for marriage before having a baby.  When a parent can stay at home with the baby while the other is building a career that lifts them out of the poverty level.  If the left would stop objectifying women people will stop hooking up and get married instead.  To build a career.  And a family.  Instead of just giving in to their base impulses and enjoying the moment.  And living a life of abject poverty.  For like the old saying goes, good things come to those who wait.  And if you wait until marriage before having children life will be so much better than life as a single mother.  As the data shows.


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Gas Prices continue to Rise as the Number of Working Oil Rigs in the U.S. Fall

Posted by PITHOCRATES - September 15th, 2012

Week in Review

The law of supply and demand tells us when prices rise demand rises.  Causing supply to rise to meet that demand.  And it typically works when the free market is left to market forces.  Apparently that isn’t happening in the U.S. oil business.  So if you ever wonder why gasoline prices are so high this is the reason (see U.S. rig count unchanged at 1,864 by The Associated Press posted 9/14/2012 on USA Today).

The number of rigs actively exploring for oil and natural gas in the U.S. remained unchanged this week at 1,864.

Houston-based oilfield services company Baker Hughes reported Friday that 1,413 rigs were exploring for oil and 448 were searching for gas. Three were listed as miscellaneous. A year ago, Baker Hughes listed 1,985 rigs…

The rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

The president may say we are drilling for more oil than ever before but the number of active rigs fell this year to 1,864 from last year’s 1,985.  A drop of 121 rigs.  At a time of increasing gasoline prices.  The rig trend appears to be trending in the wrong direction.  Rising prices mean demand is greater than supply.  So the number of rigs should increase not decrease.  To meet that rising demand.

The last time gasoline prices were soaring like this was during the Carter years.  Because gas prices were so high oil companies rushed in to meet that demand.  So that by 1981 (the first year of the Reagan administration) the number of rigs peaked at 4,530.  Which gave us the steepest fall in gas prices in U.S. history.  Falling from a high of $3.31 to about $1.75 a gallon (prices are in 2007 dollars).  All of those rigs (as well as others throughout the world) created a glut of oil in the market.  And that glut of oil brought gas prices down.

Gas prices are about as high as they were in 1981.  And yet we have fewer rigs drilling for oil.  Far fewer.  President Carter may have asked us to turn down our thermostats and wear a sweater to help in the energy crisis.  But he at least allowed the oil companies to drill for oil.  And they would drill today like they did under Carter for gas prices are as high as they were under Carter.  And the only reason that they are not can be that it is not as economically beneficial for them today as it was under Carter.  Or that the Obama administration is just not letting them drill.  And with prices and demand being as high as ever it suggests the latter.


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High Gasoline Prices blamed on Wall Street instead of Where it Belongs – Environmentalism

Posted by PITHOCRATES - April 15th, 2012

Week in Review

Is Wall Street to blame for high gasoline prices?  Or are governmental environmental policies.  Most like to blame Wall Street.  Because they have no understanding of the oil business.  Even though it’s pretty straight forward.  And follows all the rules of supply and demand.  Where most of the current price pressures are coming on the supply side of the equation.  But Wall Street isn’t to blame for that.  We are.  For our collective attacks on the oil industry.  And our acquiescence of the environmental movement (see If the U.S. is now an oil exporter, why $4 gas? by Leah McGrath Goodman posted 4/11/2012 CNNMoney).

The U.S. is now selling more petroleum products than it is buying for the first time in more than six decades. Yet Americans are paying around $4 or more for a gallon of gas, even as demand slumps to historic lows. What gives..?

Americans have been told for years that if only we drilled more oil, we would see a drop in gasoline prices. (Speaking to voters last month, Newt Gingrich made the curious assurance that more oil drilling could drive down gasoline prices to $2.50 a gallon, prompting the White House to accuse him of “lying.”)

But more drilling is happening now, and prices are still going up. That’s because Wall Street has changed the formula for pricing gasoline.

Until this time last year, gas prices hinged on the price of U.S. crude oil, set daily in a small town in Cushing, Oklahoma – the largest oil-storage hub in the country. Today, gasoline prices instead track the price of a type of oil found in the North Sea called Brent crude. And Brent crude, it so happens, trades at a premium to U.S. oil by around $20 a barrel.

So, even as we drill for more oil in the U.S., the price benchmark has dodged the markdown bullet by taking cues from the more expensive oil. As always, we must compete with the rest of the world for petroleum – including our own…

To put it more literally, if a Wall Street trader or a major oil company can get a higher price for oil from an overseas buyer, rather than an American one, the overseas buyer wins. Just because an oil company drills inside U.S. borders doesn’t mean it has to sell to a U.S. buyer. There is patriotism and then there is profit motive. This is why Americans should carefully consider the sacrifice of wildlife preservation areas before designating them for oil drilling. The harsh reality is that we may never see a drop of oil that comes from some of our most precious lands.

It’s not Wall Street.  It’s the crude oil.  The refineries.  And the fact some refineries can only refine the Brent sweet crude oil.

The stuff we import, Brent sweet crude, is a higher quality crude.  It’s cleaner.  And easier to refine.  But it’s more expensive.  Which is a problem for the refineries on the east coast.  And on the Gulf Coast.  Because that’s the crude they can refine.  Because their crude costs are higher their refined gasoline costs are higher.  Therefore, these refineries lose money when selling at the prevailing market price.  So they export their gasoline where they can sell it at a higher price that covers their costs.  Or they shut down refineries.  Which they have done.  Shutting done some 5% of refinery capacity within the last 6 months.  Bringing total online capacity to about 60%.

The stuff we get from Canada, North Dakota and the Gulf of Mexico is West Texas Intermediate.  Which is a heavier, dirtier crude oil.  The refineries that can refine this oil are located in Oklahoma, Kansas and outside Chicago.  And because the gasoline they sell starts with a crude oil priced about $20 less a barrel than their east and Gulf Coast rivals they can sell at prevailing market prices and make a profit that recovers all of their costs.  Which is why these refineries are operating at about 95% of capacity.  Which explains why gasoline is cheaper in Midwest than on the coasts.  Well that, and California’s own emission standards that require an even more costly blend of gasoline than your typical summer blend (to reduce the polluting affects of gasoline at higher temperatures).

(You can read more about refining costs in a February Bloomberg article.  And more about gasoline blends in an Energy Policy Research Foundation article.)

So, no, it’s not Wall Street causing the high gas prices.  It’s environmental policy.  Which requires costly blends of gasoline to reduce emissions.  And makes any expansion of the refinery infrastructure cost prohibitive.  Environmental impact studies alone can take years to complete.  And cost hundreds of millions of dollars.  So the aging infrastructure strains at the seams.  Whereas if those policies weren’t so cost prohibitive we could build new refineries along the east and Gulf Coast to replace those underutilized and shuttered facilities.  And flood them with domestically produced West Texas Intermediate.  Which would make gas prices fall.  At least it would lower the east and Gulf Coast prices to that enjoyed in the Midwest.  But not in California.  Who will forever have the highest gasoline prices thanks to their emission standards


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