Here is the text of a program that aired on Marketplace last night:
Bush speaks, we read between the lines
President Bush was firmly on message today in a Rose Garden press
conference: It's a slowdown, not a recession... He'd love to lower gas
prices, but Congress is standing in the way. Bob Moon and Kai Ryssdal
examine what the president said and didn't say.
President Bush speaks at a press conference today in the White House
Rose Garden. (Saul Loeb/AFP/Getty Images)
TEXT OF INTERVIEW
*Kai Ryssdal: *I don't know the last time the President pumped his own
gas, but he's probably got staffers who filled him in on how much it's
costing because he wasted no time this morning telling Americans he
feels our pain.
Gas is up $1.40 a gallon over the past year, he said, and he knows why:
*President Bush: *One of the main reasons for high gas prices is
that global oil production is not keeping up with growing demand.
Our senior business correspondent Bob Moon's been spending some time
today going over the president's remarks.
Hi Bob.
*Bob Moon: *Hello Kai.
*Ryssdal: *Alright, so let's get to the fundamentals, as the economists
like to say: supply and demand. Is that really what's going on here?
*Moon: *Well, we got a leading industry analyst on the phone, Kai:
Barbara Shook at the Houston research firm Energy Intelligence and she
begs to differ with the president:
*Barbara Shook: *The U.S. market is well supplied. Do you see
anybody waiting in line at the filling station?
*Moon: *In fact, analysts have been reporting that gasoline reserves in
this country have been on the rise since October and in recent months,
we've got more stored up than we have since the early 1990's, so as
Shook points out, we've got enough on the supply side. Then you've got
demand and that's actually been falling since last July. None other than
the Bush administration's own Energy Department now says the demand for
gasoline here is on track to see the first annual drop in consumption in
17 years. And I might point out that analysts aren't the only ones who
are questioning this supply and demand explanation. Let me give you a
quote from the head of Exxon Mobil recently: "In terms of fundamentals,
fear of supply reliability is overblown."
*Ryssdal: *Hmm. The president mentioned Alaska -- ANWR: The Alaskan
National Wildlife Refuge -- a couple of times today. He said he hopes
Congress will start worrying as much about gas prices when they think
about ANWR as they do about environmentalism.
*Moon: *Well, Barbara Shook says more supply certainly couldn't hurt
here, but this comes down to a very long and complicated political fight
that's not directly connected to the price turn-up we're seeing today,
so even if we do open up that exploration, it's not going to bring
prices down right now.
*Ryssdal: *Let me ask you about refineries, Bob. The president also
talked about those a couple of times today. Here's what he said:
*President Bush: *Another reason for the high gas prices is the lack
of refining capacity. It's been more than 30 years since America
built it's last new refinery.
*Ryssdal: *Mr. Moon, over to you. Is that the problem?
*Moon: *Well, Barbara Shook was a little confused by that one. She says
we're already doing that:
*Barbara Shook: *We're expanding refining capacity in this country.
We have probably more than half a million barrels of new refining
capacity per day under construction right now and I wouldn't be
surprised to see another 100,000 barrels per day of new capacity
announced in the next six months to a year.
*Moon: *And Kai, remember what I just said about demand going down.
We're actually using less gasoline lately. Well that means refineries
here in the U.S. have actually been cutting back on production because
their margins are tightening up.
*Ryssdal: *Alright, so to review, if it's not supply and demand, it's
not refineries, it's not gas on the market, what is it?
*Moon: *Well, most analysts say it's a combination of a couple of
things. They say as long as the value of the dollar keeps sinking -- and
oil does get priced in dollars you know -- the price of oil has to go up
then, so that the sellers can make up the difference in their purchasing
power. That doesn't entirely explain this, though. Last year, for
example, the dollar dropped a little over 10 percent, but at the same
time, oil prices were up around 50 percent, so the major factor here
seems to be the wave of investment dollars that are flowing into the oil
market, the speculators driving prices higher. Here's a number for you:
about $9 billion was invested in oil futures back in 2000. Well, that's
now up to $250 billion and even the head of Exxon Mobil blames wild
speculation for all this.
*Ryssdal: *Marketplace's Bob Moon and the president this morning. Thank
you, Bob.
Doyle Saylor wrote:
Greetings Economists,
On Apr 30, 2008, at 7:54 AM, troy cochrane wrote:
Has investment in unconventional oil sources - oilsands and shale oil
- increased over this period?
Doyle;
This is an example of research in this area
- http://www.physorg.com/news128692150.html
quoting -
"Profero Energy has financial backing from Newcastle-based venture
capital company Novotech Investments Ltd and is being watched with
great interest by the oil and gas exploration industry. With the price
of natural gas soaring in recent months, companies are becoming
increasingly interested in new technologies. "
...
"The discovery of how this process works could have major implications
for the oil and gas industry because we think we will be able to
extend the 20-30 year operating lifespan of a typical oil reservoir.
In North East England, similar processes may occur in abandoned coal
mines, opening the door to a possible means for recovery of the
region's extensive abandoned energy resources as clean-burning
methane, said Professor Head. "
thanks,
Doyle Saylor
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