The UN Climate Treaty Is A Big Deal – Can it come soon enough

I have written letter to the local paper, The State Journal Register, arguing that if we don’t stop carbon emissions on this planet we will “burn ourselves off the planet”. I was called extreme. I have been lectured by my cousin about being to pessimistic. He says, Humans are inventive and we will solve the problem. Well OK, is this the beginning of that? I hope so.


Alongside 174 Nations And Holding His Granddaughter, John Kerry Signs Paris Climate Accord

A majority of the world’s nations gathered at the United Nations on Friday to officially sign the Paris climate agreement born out of the U.N. Conference on Climate Change in December. A record 175 nations officially signed the agreement, the most to have signed a U.N. agreement on an opening day.

“More countries have come here to sign this agreement today than any other time in human history, and that is cause for hope,” Leonardo DiCaprio, U.N. Messenger of Peace, said during the opening ceremony which marked the beginning of the signing. DiCaprio also called climate change the “defining crisis of our time,” and called for fossil fuels to remain in the ground in an effort to cut carbon emissions.

Despite the fact that over a hundred countries officially signed the agreement Friday, there is still work to be done to make the treaty effective in the eyes of international law. For the treaty to officially “enter into force” — which means that key provisions would become binding — at least 55 countries representing at least 55 percent of global emissions must both sign the treaty and approve it domestically. Domestic approval of the treaty means different things for different countries. In the United States, it most likely means entering as part of an executive agreement, which does not require the approval of Congress. For other countries, like Mexico, some sort of legislative approval is needed before the treaty can be ratified domestically.


Go there and read. More next week.


The Message To Elected Illinois Officials – Get on board with renewables

The budget impasse is hurting Illinois when it comes to investing in renewable energy. This is getting ridiculous. Rauner’s quest to destroy public sector unions has got to stop. This lady spells it out in no uncertain terms.

Michelle Knox: Illinois must act now to fix its clean energy policies

Posted Apr. 19, 2016 at 10:05 PM

In 1970, more than 20 million people worldwide took part in the first Earth Day. Millions more will take part in Earth Day 2016.

As someone who delivers both wind and solar energy to customers in Central Illinois, I can attest to the need to fix Illinois’ energy policy — and quickly. I plan to be among those participating in a rally at the state Capitol in Springfield this week, during which we will deliver a strong message to Illinois leaders: by the time Earth Day 2017 arrives, it is critical that Illinois will have taken steps to reform our state’s out-of-date energy policies or we will lose clean energy jobs to other states.

Any day that goes by — let alone another year — without such a fix puts our state at risk of losing out on jobs and investments in this competitive field.

Fortunately, lawmakers have the chance to bolster our clean energy economy at the time we need it most. The Illinois Clean Jobs Bill (SB1485/ HB2607) would create more than 32,000 jobs and deliver more than $1.6 billion in savings to electricity consumers, while making vast improvements in public health. This bipartisan legislation would double the current standards for energy efficiency while increasing the targets for electricity generated by renewable energy sources, such as wind and solar, to 35 percent by 2030, up from the current target of 25 percent by 2025.


Go there and read. More next week.


The Keystone XL Pipeline Is A Very Bad Idea – So why is the Springfield Chamber of Commerce backing it

I have no idea how much Keystone and the Koch brothers gave to the Springfield, IL Chamber but it must have been a bunch because they hired someone to coordinate their support for the project. The first I knew of it was an Editorial published in what is left of the State Journal Register. So this posting and the next are in part my preparation for writing a counter Editorial.

Rocky Kistner’s Blog

In Canada’s Tar Sands, a Dante’s Hell Threatens People Nearby and Across the Globe

In Canada’s western province of Alberta, Melina Laboucan-Massimo’s community—the Lubicon Lake Nation—has endured a withering toxic tar sands oil assault, an Armageddon against nature few Americans are fully aware of. Here in the once pristine sub-Arctic, tar sands mining operations level vast swaths of boreal forests near native lands, as pipelines burst and spew corrosive chemical-laced tar sands oil into rivers and lakes.

The Lubicon are used to living in harmony with nature. But tar sands mining has brought a deadly discordance to their environment. Melina has watched family and friends battle unheard of cancers and respiratory ailments; she’s listened to local fishermen and hunters complain about unusual lesions and tumors festering in their catches and prey. She’s reacted in disbelief as her government has sponsored airborne sharpshooters to gun down mighty Canadian wolf packs—a zero sum game that is killing one species to try to save another—as dwindling herds of caribou flee their disappearing forest homes and may be gone forever in the not so distant future.

For members of the Lubicon Lake Nation, it is a nightmare of Kafkaesque proportions. Their verdant land of abundant wildlife is metastasizing into pock-marketed battlefields of a thousand Verduns. Melina and other community leaders have not sat idly by as the environmental carnage unfolds around them. She has testified before Congress, spearheaded Greenpeace protest actions, and worked tirelessly to get the word out about the devastation in her community.


Go there and see the video. Go there and read. More tomorrow.


Mira-Cool is a fraud and a scam – Please see my letter to the SJ-R below

I was wrong in one respect. The Cool Surge which was last years ploy to rape this market was actually a little swamp cooler, which might have some basis in fact, if you live in death valley. However these new babies are straight up theft. As a friend of mine put it, why not just fill up a bucket with ice and let your fan blow over it. Or as my mom says, just stand at your kitchen sink and run cold water over your wrists. Either one is more effective than this stupid machine.



State Journal Register

One Copley Plaza

Springfield, IL 62701

Emailed – 8/2/10

Dear Editor:

The full page ad in the July 21st edition of the SJ-R is a scam if not a fraud. The title promises air conditioners but the devices are actually fans. These devices were called Cool Surge last year now they are called Mira-Cool. The first thing to note is they offer free devices. This is probably the largest part of the scam because everyone will call in to try to get the free ones, and I guarantee they will be “out of them”. This lets the operators create a nationwide “suckers list” which they can use to sell other scams.

The devices consist of nothing more than a fan and several “cold packs” that you freeze in your freezer. You insert the packs in the device and then the fans blow cool air back at you. They cost well over $200 a unit to purchase, yet for $140 you by an energy efficient air conditioning window unit that will cool a single room for pennies. For $40 dollars you can buy the fan and the cold packs yourself and achieve similar results. But it is a really bad idea from an economic standpoint. I mean you are using your freezer (expensive) to freeze the packs, and your electricity to power the fan.

The bigger issue is how effective would this “cooling effect” really be? If your room is say 80 or 90 degrees, it would take all the stored cold out of the freezer packs in a very short time. Then the temperature goes back up while you are refreezing the cold packs. They could never cool a room to anything like a comfortable temperature and this puts at risk any seniors or other people, susceptible to high heat, at risk of dieing. Be smart. Buy an efficient air conditioner. Cool a single room and save your health and a heck of a lot of money.

Doug Nicodemus

948 e. adams st.

riverton, IL  62561



More tomorrow



State Journal Register Refuses To Publish My Letter On Toxic Waste In Coal

I hardly ever use this blog as a personal soapbox but the State Journal Register has taken to publishing OP/ED pieces and long letters from one James Monk “President” of the Illinois Energy Association extolling the virtues of coal and opposing proposed Cap and Trade Policies. So here is a letter they did not run:


State Journal Register

One Copley Plaza

Springfield, IL 62701

Emailed – 12/31/09

Dear Editor:

How ironic it must be to work at the SJ-R these days. First, on a single day, you run an OP/Ed piece by Ann Coulter that claims global warming is “all made up”.  On the back page of that same section you run an AP article about the many changes we humans will have to make to “adjust” to global warming. Are the facts overwhelming the “opinions” yet?

But it got worse on December 29th. On that day you ran a long letter to the editors by the appropriately named James Monk, President of Illinois Energy Association arguing that regulation of coal fired powerplant byproducts as hazardous waste will harm the economy of the nation. While on page 6, on the back of page 5, is a long article with the headline: MERCURY POLLUTION UP IN ILLINOIS. This was blamed on coal fired powerplants. Constiuent components of the coal byproducts can contain arsenic, beryllium, boron, cadmium, chromium, chromium VI, cobalt, lead, manganese, mercury, molybdenum, selenium, strontium, thallium, and vanadium, along with dioxins and PAH compounds. This sounds very toxic to me.

After the 200 million gallon spill in Tennessee, this 130 million lb. yearly ticking time bomb needs to be declared toxic and cleaned up. I don’t think that coal is as cheap to burn as some people claim. You SJ-R guys are only a page away from getting the facts (or truth) on the same page as the OP/Ed page, congratulations.

Doug Nicodemus

948 e. adams st.

riverton, IL  62561



Cap And Trade – An industry insider opposes it when industry proposes it


Community Energy Systems is a nonprofit 501c3 organization chartered in Illinois in Sangamon County. As such we are dependent on public donations for our continued existence. We also use Adsense as a fundraiser. Please click on the ads that you see on this page, on our main page and on our Bulletin Board (Refrigerator Magnets) and you will be raising money for CES. We say a heartfelt THANK YOU to all who do.


This is an example of what we have to put up with in this community. Springfield has been raped by corporate media purchases. First a right wing conglomerate, the Sinclair Broadcast Group, bought channel 20 and gave us an ex-CIA agent as a far right social commenter. Then Gatehouse buys our local paper, the State Journal Register, and in one week they give us an editorial in which Union Pacific says that they can ram as many freight trains down our throats as they want and the opinion below that Cap and Trade will kill the USA’s economy. This by the guy who lead the deregulation train before it derailed our economy. Thanks a lot man.

In My View: CO2 curbs would be devastating


Posted Nov 07, 2009 @ 12:03 AM

 Regulations and mandates that force nationwide cuts in carbon dioxide emissions offer only speculative environmental benefits, if any, as a switch to wind and solar power will certainly cause more harm than good to the environment.

But command-and-control forces in Congress are headed in that direction, with the House narrowly passing a bill to cap CO2 emissions, and the Senate taking up a companion bill this month.
Engineers calculate that a stunning 600 square miles of wind turbines would be needed to produce the same 1,000 megawatts of electricity as a single medium-to-large coal power plant. That’s enough to provide electricity to about 10,000 homes.

Even in favorable locations, wind turbines can supply electrical power only about 20 percent of the time, meaning utilities still must have an alternative baseload source to compensate for wind fluctuations, and those alternatives are three: coal, natural gas or nuclear power plants. But by taking coal and natural gas out of production due to carbon dioxide restrictions, a massive and enormously expensive program will be needed to build more nuclear power plants to supply this baseload.

Further, wind turbine developments despoil nature’s beauty, and indiscriminately kill birds and bats, including many endangered species.

Writing last summer in the Boston Globe, Eleanor Tillinghast, director of the environmental advocacy group Green Berkshires, warned, “Cutting wide swaths of unspoiled forest for access roads, clear-cutting miles of ridgelines, erecting industrial structures with spinning blades that threaten migrating birds and the last remaining bats — these are irreversible actions with permanent consequences.”

Solar power likewise requires substantially more environmental destruction than coal. The Nevada Solar One array, the most efficient in the nation, requires 350 acres of land to produce less than 1/10th the power of a conventional coal-fueled power plant, and that’s at peak efficiency at noon on a cloudless day.

Both wind and solar power projects inevitably would require the construction of new transmission lines, often across otherwise-pristine lands, to reach energy-hungry consumers. The nation’s key wind corridor, from the Texas panhandle to the Dakotas, contains no major population center.

Further, wind and solar generators consume much more water than coal power plants, a serious problem in desert areas with the most sunlight.

All of that explains why so many environmentalists oppose further development of wind and solar power. By forcing construction of more of these projects, carbon dioxide restrictions will have a devastating impact on many of America’s most valuable natural treasures.

Dan Miller is publisher at The Heartland Institute and former chairman of the Illinois Commerce Commission, the public utility regulatory body in Illinois. He can be reached at


More on this guy Miller later.


High Speed Rail – Improved travel at reduced energy use or boon to Union Pacific


Community Energy Systems is a nonprofit 501c3 organization chartered in Illinois in Sangamon County. As such we are dependent on public donations for our continued existence. We also use Adsense as a fundraiser. Please click on the ads that you see on this page, on our main page and on our Bulletin Board (Refrigerator Magnets) and you will be raising money for CES. We say a heartfelt THANK YOU to all who do.


Will High Speed Rail become a fast way for the general public to get around at a reduced energy cost? Or will it become a fast way for the Wealthy to commute from city to city? Will Union Pacific and the other big railroads carve up small towns in the rural areas while doubling and tripling freight traffic? Only time will tell. BUT here is Union Pacific’s take on it from the The State Journal Register.


Joseph Bateman: Rail upgrade needed for passenger service, not freight


Posted Nov 04, 2009 @ 12:04 AM

Last update Nov 04, 2009 @ 06:58 AM

Contrary to the headline and opinions expressed in the Oct. 25 article “High-speed rail spending to be a boon to freight rail companies,” Union Pacific does not need for its freight operations the improvements contained in IDOT’s proposal for high-speed passenger service in the St. Louis-to-Chicago corridor. The public expenditure required for track capacity and other improvements needed on the UP line for high-speed passenger service is necessitated by the increased frequency in passenger service (10 to 18 daily trains) and the increase in maximum passenger train velocity (79 to 110 mph), not by the increased UP freight operationsPlans to build our new Joliet intermodal terminal, which could result in additional UP traffic in the corridor, were announced long before high-speed passenger rail or stimulus funding grabbed the national spotlight. Union Pacific currently has adequate capacity on our existing rail corridor infrastructure to support growth in freight train volumes. If the time comes when we might require additional capacity, we will build and finance it ourselves, just as we have done throughout our 23-state, 32,000-mile network for nearly 150 years.Nonetheless, we think it is important for Springfield residents to be aware of misconceptions and facts regarding this project that have not been widely reported:* Union Pacific did not ask for higher-speed passenger trains on our line. We are responding to requests from the state of Illinois and others to host this service on our line.* One high-speed passenger train consumes the equivalent track capacity of two to three freight trains. Even without freight train growth, a computer simulation of the corridor demonstrated that double track infrastructure is needed to meet required levels of service and reliability for IDOT’s four-hour express passenger schedule.

* UP always has been willing to review any mitigation alternatives the city of Springfield may propose for the Third Street corridor, including grade separations. To date, we have received no suggestions for mitigation from either the city or county.

* Congested urban areas such as between Sangamon and Iles avenues in Springfield require speed restrictions, most likely in the 40 to 50 mph range, not the 110 mph maximum speed envisioned elsewhere in this corridor. Passenger trains will operate even slower in the downtown area because of the station stop.

* The maximum number of trains running through the Third Street corridor would be 40 combined passenger and freight per day, assuming maximum growth of UP’s business over the next 10 years. In contrast, there would be 60-plus trains per day using the 10th Street corridor to accommodate Union Pacific, passenger and Norfolk Southern trains.

* At-grade road-rail crossings in Springfield would be blocked by 40 trains for a total of approximately 65 minutes per crossing per day, not five hours per day. Unnecessary speed restrictions or inadequate rail capacity provisions, however, would create bottlenecks that will add to blocked crossing time.

* Constructing a bypass for UP on the 10th Street corridor would require displacing many residences and businesses to accommodate the required double track and grade separations. In addition, a new connection track at North Grand Avenue would be required through or near an area now occupied by housing, the ballpark, Memorial Stadium and tennis courts.

High-speed passenger rail ultimately boils down to a public policy decision. If private freight rail infrastructure is to be used for passenger service, then federal grant policy requires that sufficient infrastructure capacity must be provided to efficiently and reliably handle both existing and future freight and passenger service on demand. That infrastructure must be paid for by the party precipitating that need, in this case, the sponsor of expanded passenger train operations.

Joseph Bateman is vice president for public affairs of Union Pacific.


I plan on writing a response, so if the SJ-R doesn’t publish it then I will put it up as a post.


Oil Speculators Are the Modern Robber Barons – State Journal Register letter to the editor hits the tap on the barrel head

I swore on my mother’s grave (sorry mom) that I would not put up a post about oil prices until they fell below 100$$ per barrel because I was tired of people pointing fingers at each other because the whole system is rigged. The Chinese were hoarding diesel for the Olympics (now over), the speculator’s contracts were lapsing (August 31 and September 15), the Senate is going to have hearings in the middle of September (hint: it will all be back to normal by then), and when the oil prices fall the gasoline refiners will lose their cover and half to ramp up aritificially low production levels to drop the price of gasoline. BUT not before 300 billion $$$ are vacuumed out of poor people’s pockets. Boy that took a long time to say! Then I saw this letter and was re-energized to put the facts out there one more time, so maybe people would wake up and just stop using those nasty stinky oil products.

Things could be done

to reduce price of gasoline

The recent letters regarding the why and wherefores of the price of oil and

 gasoline prompted me to join in the debate.

First, a few observations:

Since 2003, investments in commodity index funds have increased

 from $13 bil­lion to $$260 billion, a 20-fold increase.

The Commodity Exchange Commission has already set

limits on the holdings any one investor can have in a commodity

to prevent speculation. But the larger institu­tional investors

(known as “swap dealers”) such as Goldman Sachs have exploited an

exemption that allows them to bypass those limits if they make trades through

brokers or dealers.

The majority of these trades in the USA are made by a British company

 with head­quarters in Atlanta while all the trading takes place in

Chicago! They do have a rep in London, Robert Reid, who answers to Atlanta.

The intercontinental exchanges do not have to abide by the rules set up by

the New York Mercantile Exchange be­cause they are listed as a foreign company!

Last month Michael Masters, a portfolio manager, told Congress that index

speculators had bought the equivalent of 1.1 billion bar­rels of oil — eight times

 as much as the United States has added to the Strategic Petroleum Reserve

over the last five years!

Because of all this speculation the price of oil has reached $140 a barrel.

The speculators in oil futures obviously say it is sup­ply and demand that

is causing the rise in prices. Granted, there is a certain amount of this i

nvolved, but not in the USA. The demand or use of oil in the U.S. has

been stead for at least a decade.

The ex-president of NYMEX, appearing before a congressional committee

a few weeks ago stated that if margins, which are now 50 percent, were

increased, the price of oil would drop to approximately the marginal cost

of oil, which is between $60 and $70 per barrel. It was also stated that

these margins could be increased, accord­ing to NYMEX rules, during an

 emergency. I think this is an emergency! By the way, it was stated that this

could be done within a 30-day period.

P.S. Just recently, a bill that would put new limits on speculative trading

 in ener­gy commodities failed to get the two-thirds majority required.

Most Republi­cans objected to the bill — the vote was 276 to 151.

Eric Gregg Springfield


Think Eric is crazy? Want to hear more names of the AMERICANS picking your pocket? Well okie dokie then.


Tuesday, May 27. 2008

Stop the Oil Speculators

What factors are causing the zooming price of crude oil, gasoline and heating products? What is going to be done about it?

Don’t rely on the White House—with Bush and Cheney marinated in oil—or the Congress—which has hearings that grill oil executives who know that nothing is going to happen on Capitol Hill either.

Last week the price of crude oil reached about $130 a barrel after spiking to $140 briefly. The immediate cause? Guesses by oil man T. Boone Pickens and Goldman Sachs that the price could go to $150 and $200 a barrel respectivly in the near future. They were referring to what can be called the hoopla pricing party on the New York Mercantile Exchange. (NYMEX)

Meanwhile, consumers, workers and small businesses are suffering with the price of gasoline at $4 a gallon and diesel at $4.50 a gallon. Suffering but not protesting, except for a few demonstrations by independent truckers.

A consumer and small business revolt could be politically powerful. But what would they revolt to achieve? Their government is paralyzed and is unable to indicate any action if oil goes up to $200 or $400 a barrel. Washington, D.C. is leaving people defenseless and drawing no marker for when it will take action.

Oil was at $50 a barrel in January 2007, then $75 a barrel in August 2007. Now at $130 or so a barrel, it is clear that oil pricing is speculative activity, having very little to do with physical supply and demand. An essential product—petroleum—is set by speculators operating on rumor, greed, and fear of wild predictions.

Over the time since early 2007, U.S. demand for petroleum has fallen by 1 percent and world demand has risen by 1.3 percent. Supplies of crude are so plentiful, according to the Wall Street Journal, “traders of physical crude oil say their market is suffering from too much supply, not too little.”

Iran, for instance, is storing 25 million barrels of heavy, sour crude oil because, in the words of Hossein Kazempour Ardebili, Iran’s oil governor, “there are simply no buyers because the market has more than enough oil.”

Mike Wittner, head of oil research at Societe Generale in London agrees. “There’s various signals out there saying for right now, the markets are well supplied with crude.”

Historically, oil has been afflicted with the control of monopolists. From the late nineteenth century days of John D. Rockefeller, and his Standard Oil monopoly, to the emergence of the “Seven Sisters” oligopoly, made up of Standard Oil, Shell, BP, Texaco, Mobil, Gulf and Socal, to the rise of OPEC representing the major producing countries, the “free market” price of oil has been a mirage. Despite the breakup of the Standard Oil company by the government’s trustbusters about 100 years ago, selling cartels and buying oligopolies kept reasserting themselves.

In an ironic twist, the major price determinant has moved from OPEC (having only 40% of the world production) and the oil companies to the speculators in the commodities markets. What goes on in the essentially unregulated New York Mercantile Exchange (NYMEX)—without Commodity Futures Trading Commission (CFTC) enforced margin requirements, and, unlike your personal purchases, untaxed—is now the place that leads to your skyrocketing gasoline bills. OPEC and the Big Oil companies reap the benefits and say that it’s not their doing, but that of the speculators. Gives new meaning to “passing the buck.”

Deborah Fineman, president of Mitchell Supreme Fuel Co. in Orange, New Jersey, summed up the scene: “Energy markets have been dictated for too long by hedge funds and speculators, who artificially manipulate the numbers for their own benefit. The current market isn’t based on the sound principles of supply and demand but it is being rigged by companies and speculators who are jacking up prices for their own greed.”

Harry C. Johnson, former banker who worked for many years inside Big Oil and ran his own small oil company in Oklahoma, blames the CFTC, the Department of Energy, the Administration, and Congress, as “asleep at the switch on an issue that is probably costing U.S. consumers $1 billion per day.”

He cites “some industry experts, who profit greatly from the high price of crude, and have stated openly that the worldwide economic price of crude, absent speculators, would be around $50 to $60 per barrel.

Imagine, our government is letting your price for gasoline and home heating oil be determined by a gambling casino on Wall Street called NYMEX. The people need regulatory protection from speculators and an excess profits tax on Big Oil.

In addition, a sane government would see the present price crises as an opportunity to expand our passenger and freight railroad capacity and technology.

A sane government would drop all subsidies and tax loopholes for Big Oil’s huge profits and other fossil fuels and promote a national mission to solarize our economy to achieve major savings from energy conservation technology, retrofitting buildings, and upgrading efficiency standards for motor vehicles, home appliances, industrial engines and electric generating plants.

Those are the permanent ways to achieve energy independence, reduce our trade deficit, create good jobs that can’t be exported and protect the environmental health of people and nature.

Those are the reforms and advances that a muscular consumer, worker and small business revolt can focus on in the coming weeks.

What say you, America?

State Journal Register Supports Big Oil –

Last week the State Journal Register solicited a “Guest OP-ED” piece from the mouth piece for the Illinois Petroleum Council that in simple form says we must overcome our current energy crisis by,  Conservation and
fuel economy
  (which he instantly discounts), Stronger energy-trading alliances with neighbors, Expand domestic resources, and  Diversify supply.  By diversify he means Nukes. You can read the rest of the slop at:

I know for a fact that many people have written to respond against most of his ideas because many environmentalists including Will Reynolds and Diane Lopez always do. I posting my letter here because I sent one and they did not publish it:


State Journal Register

One Copley Plaza

Springfield, IL 62701

Emailed – 07/015/08

Dear Editor:


Dave Sykuta recent guest editorial “Get Over It” (the title of an Eagles song)  was nothing but one long environmental taunt. It had nothing to do with the irrationality we call the Oil Market.


Supply is not the overwhelming issue that he makes it out to be. The Iranians have 7 or 8 super tankers full of oil (depending on which report you listen to) parked in their main port because nobody is buying them. Why? Because the price is artificially elevated. Speculators beginning as far back as September of last year have bought up the cheap oil. We are now at a precipitous economic moment. An oil Mexican Standoff. The speculators can’t sell or the price will drop dramatically and hardly anyone is buying because they know the price is too high. Best guesstamates are that at least 40-50$$ of the current price of oil is due to speculators.


But the Drillers want to take advantage of this artificial shortage to get more Leases, because in their warped minds the leases that they hold are the leases the other guy don’t. The proof of this is the current 85 million acres that they lease that they won’t explore.


Really though nobody cares about the price of oil, what they car about is the prices of gasoline products. That price is being rigged as well. Refineries are at 85% of their capacity because if they ran the refineries at capacity they would lose money. In a perverse market flaw, the more they make the cheaper gas becomes and they lose money. Again the gasoline refiners are using the rigged higher oil prices to run up their profits by keeping refineries at the bare minimum it takes to run this country.


All the loud shouting at each other about the price we pay at the pump has obscured the realities on the ground. Oil production has been stuck on 85 million barrels a day now for sometime. Even though everybody has pledged to raise it. That may be the real limit on production and the world may have to learn live with it, discounting the fact that China is hording diesel in preparation for the Olympics.


Anyway, “if the drill here drill now” crowd had their way, what would they drill with? Brazil just bought or leased the 160 available rigs in the world to try to extract oil from their new alleged oil field off their southern coast.


When an oilman that I trust (there ain’t many – please see There Will Be Blood) T. Boone Pickens pledges to build a 1000 megawatt wind farm in Texas and then pays his own money for an TV advertisement to say why. (hint: we are running out of oil) Then I go with the wind farm guy every time.


I believe the Eagles said they would tour again when hell freezes over. Did I miss something?


Doug Nicodemus

948 e. adams st.

riverton, IL  62561




AND YET THEY RUN STORIES LIKE THIS IN THEIR Business Section in the newspaper and don’t even acknowledge that they did on their web site:

Big Oil steers record profits to investors

MONEY: Critics say too much is going into stock

buybacks and not enough into exploration.

The Associated Press
HOUSTON – As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going?The companies insist they’re trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.It’s good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel. The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University’s James A. Baker III Institute for Public Policy.

The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.

The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday.

Oil prices are set on the open market, not by the oil industry. But that hasn’t stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax.

In the first three months of this year, Exxon Mobil Corp., the world’s biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects.

ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion — nine times what it spent on exploration.

Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company.

But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price.

And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply.

“If you’re not spending your money finding and developing new oil, then there’s no new oil,” said Amy Myers Jaffe, an energy expert at Rice University who’s studied spending patterns of the major oil companies.

Investor-owned companies like Exxon Mobil and Chevron hold less than 10 percent of global oil and gas reserves, way down from past decades. And finding new oil has become harder and more expensive.

No one questions that Big Oil is rolling in cash. The cash the biggest oil companies bring in from running their businesses, or operating cash flow, is four times what it was in the early 1990s.

“It becomes a management decision,” said Howard Silverblatt, a senior index analyst at Standard & Poor’s. “It’s not like they’re going to the board and saying, ‘Well, I can do one or the other or the other.’ The balance sheets are flush with cash.”


The Oil Markets ARE Being Manipulated – The only question is by whom and by how much

Since gasoline prices world wide range from 12$$ in Oslo to .36$$ in Venezuala then obviously the oil markets are being manipulated. For one thing oil sales prices are never ever challenged. Producers get to charge what ever they want to. But so do shippers and refiners. In one of the weirdest markets on the planet, liquid fuel markets in general get to charge more than the market can actually bear or is that bare. Geniuses like Dave Sykuta at the Illinois Petroleum Council try to turn this into a negative.  April 17

** The third factor in gas prices is about making the fuel. Price-wise, Springfield is fortunate not to have to sell special low-polluting fuels as Chicago and St. Louis do. They’re the world’s cleanest fuels but much more expensive. We have too many special fuel requirements, a gridlocking 45 or so required nationwide in the summer.
Since the 1990s, the oil industry has increased refinery capacity about 15 percent. Numerous Illinois expansions are planned but move slowly through a rocky political process where the same politicians and others who demand infrastructure expansions on Monday and Tuesday, oppose them on Wednesday and Thursday. NIMBY and lately BANANA (build absolutely nothing anywhere near anything) are factors in higher prices and uncertain supply. They’re self-imposed problems that reasonable people should be able to solve.


And they have been shoveling this hoo haw for the past 20 years when in fact the Oil Companies have constrained capacity by at least 15% to increase profits. This naked price manipulation has never been challenged by regulators. Instead for the same 20 years politicians have consistently dragged Big Rich Oil Executives before a congressional committee as they did today and to DEMAND that prices come down. Heck they don’t even swear them in any more because they know they are lieing. This from 2001:

The Oil Industry, Gas Supply and Refinery Capacity: More Than Meets the Eye

An investigative report presented

by Senator Ron Wyden

June 14, 2001

“As observed over the last few years and as projected well into the future, the most critical factor facing the refining industry on the West Coast is the surplus refining capacity, and the surplus gasoline production capacity.  The same situation exists for the entire U.S. refining industry. Supply significantly exceeds demand year-round. This results in very poor refinery margins, and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline. “

Internal Texaco document, March 7, 1996

“A senior energy analyst at the recent API (American Petroleum Institute) convention warned that if the U.S. petroleum industry doesn ‘t reduce its refining capacity, it will never see any substantial increase in refining margins…However, refining utilization has been rising, sustaining high levels of operations, thereby keeping prices low. “

Internal Chevron document, November 30, 1995

America is indeed facing an energy crunch. For much of the year, gas prices have soared and supply has trailed demand.

During the course of my ongoing investigation into potential anti-competitive and anti-consumer practices by the oil industry, I have obtained documents that raise serious questions about the circumstances leading to limited gas supply and high prices.

The oil industry and its allies would have the public believe that insufficient refining capacity, restrictive environmental standards, growing gasoline demand and OPEC production cutbacks are the primary reasons for the current oil and gas supply problem.

However, the record shows – supported by documents I have obtained – that there is more to the story. Specifically, the documents suggest that major oil companies pursued efforts to curtail refinery capacity as a strategy for improving profit margins; that competing oil companies worked together to subvert supply; that refinery closures inhibited supply; and that oil companies are reaping record profits, yet may benefit from a proposed national energy policy that would offer financial incentives to expand refinery capacity.


If you think this is just liberal ideology blowing environmental smoke, read this from the National (frickin) Review:

High Pump-Price Fairy Tales
Blame global supply-and-demand realities — not the enviro-whackos.

By Jerry Taylor & Peter Van Doren

So what’s driving these high gasoline prices, which now average $2.22 across the country? Conservatives think it’s largely a function of the chickens coming home to roost. In short, bureaucratic red tape, anti-growth environmental extremists, and “not-in-my-back-yard” community activists have long prevented new oil refineries from coming online. This in turn has starved the market of the gasoline and — voila! — record prices are the logical result.

It’s a convenient story line for the Right. Unfortunately, the narrative is wrong.

How can that be, you might ask, when we’re constantly beaten around the head with the fact that no new oil-refining plants have been built in the U.S. since 1976? The reason that no new facilities have been built is partly because it costs far less to expand production capacity at existing plants than it does to expand capacity by building new plants. And because existing refineries are ideally situated near oil terminals and pipelines, it’s more convenient to increase capacity in those locations than to do so elsewhere.

But if that’s so, how do we explain the facility shutdowns that have characterized the industry? After all, there were 325 oil refineries in the U.S. in 1981, but only 149 remain today. The explanation resides in the fact that we had a lot of refineries back in 1981 not because of market forces or the lack of environmental regulations, but because the government subsidized the existence of small, inefficient refineries.

Here’s how it worked. Under the Mandatory Oil Import Quota Program (which was in effect from 1959 to 1973), low-cost crude oil imports were restricted to support the domestic crude price. Refineries got disproportionately more rights to import if they were small. The subsidies to small refineries continued under the price-control programs in place from 1973 through 1980. When the subsidies ended, a large number of inefficient small refineries bit the dust.

That helps explain why domestic refining capacity dropped from 18.6 million barrels of oil a day in 1976 to 16.8 million barrels of oil today. Dramatic improvements in the operational efficiency of oil refineries also contributed to that decline. Refineries now operate much closer to their capacity than 20 years ago. Accordingly, less “nameplate capacity” is necessary to meet demand.

The upshot is that even though domestic refineries have been shutting down and total refining capacity has been declining, domestic gasoline production has actually increased by 20 percent since the last oil refinery was built in 1976.

But even that figure only tells part of the story. Gasoline markets today are increasingly global rather than regional in nature. For example, European governments tax diesel fuels less than gasoline and European motorists have responded by using diesel. Accordingly, European refineries make more gasoline than they can use and it’s cheaper for us to import that gasoline than to produce it here at home.

The increase in gasoline imports since 1976 (from 2 percent of the market then, to 5.8 percent now) is often cited as evidence that “we have a problem.” Nonsense. International trade is a good thing. The more globalized the market, the more diversified our supply and the less vulnerable the U.S. market is to disruption. Moreover, the more global the market, the greater the competition. How much domestic refining capability we have is increasingly less important than the amount of international refining capacity we can access.

It is true that there is a little slack in production capacity at the moment. Why don’t we have more production capacity? Because profit margins in the refining business have traditionally been rather meager. The gasoline refining market is about as close to the model of “perfect competition” as you’re going to find outside of an economics textbook. Rents are competed away and little profit is left for producers, especially when compared to the profits available from investment in oil production.

Conservatives believe that environmental regulations have a lot to do with those low profits. They’re wrong. A large oil refinery costs $4 billion to $6 billion to build. The installation of “best available control technology” is a very small part of that figure.

Accordingly, President Bush’s proposals to provide low-cost real estate in the boonies and to somewhat reduce plant costs through regulatory improvements simply won’t result in any new refining capacity. We’d love to blame big government and enviro-whackos for today’s high gasoline prices (we do, after all, work for the Cato Institute). But telling fairy tales about the market does no one any favors. Prices are high because of global supply-and-demand factors, and Congress can do little about it.

Jerry Taylor is director of natural-resource studies at the Cato Institute in Washington, D.C. Peter Van Doren is editor of Cato’s Regulation magazine.


So why did the State Journal Register give this guy a Guest OP ED Piece. Lack of investigative reporting maybe?