American Elephants

Detroit in Ruins. by The Elephant's Child

Yves Marchand and Romain Meffre’s extraordinary photographs document the remains of the decline of Detroit.  The motor city is filled with abandoned buildings.  It is a sad exhibition of waste and abandonment featured in the Guardian, a left-leaning newspaper in the United Kingdom.

The Guardian, of course, chooses to suggest that this is symbolic of the decline of America.  It is certainly a picture of the decline of a once prosperous city, and a once thriving auto industry. And it is unbearably sad.

Gas Prices Up? Blame the Obama Administration. by The Elephant's Child

Did you notice that the price of gas is going up?  Oil companies are still waiting for approval to drill the first new oil well in the deep-water Gulf of Mexico.  The delay is hurting big oil companies such as Chevron and Royal Dutch Shell, which have billions of dollars in investment that are tied up in projects that are on hold and are paying hundreds of thousands of dollars a day for rigs that aren’t allowed to drill.   Small operators, which have less flexibility to focus on projects elsewhere, have been even harder hit.  Experts now expect the wait to continue until the second half of 2011 or even into 2012.

The Energy Information Administration — the research arm of the Dept. of Energy — has predicted that domestic offshore oil production will fall by 13% this year from 2010 due to Obama’s moratorium and the slow return to drilling.  A year ago that agency predicted that offshore production would rise by 5% in 2011.  The difference is about 220,000 barrels a day.

Environmentalists say the Deepwater Horizon disaster proved that regulations needed to be more thorough.  Why environmental organizations, groups of enthusiasts, have a special say is not clear.  The Obama administration’s own estimates put the job loss from the moratorium at 12.000.  Private sources’ estimates are even higher.

The administrations new offshore drilling regulator, the Bureau of Ocean Energy Management, Regulation and Enforcement, says it isn’t trying to stall new drilling, and won’t be rushed by pressure from the industry.

Agency spokeswoman Melissa Schwartz wrote “We will not cut corners in the permit review process.  Our priority remains, as it must, to ensure that oil and gas drilling is done in a safe and environmentally responsible manner.”  They learn to speak in bureaucratese very quickly.

ATP Oil and Gas is one of the smaller companies being frustrated by the glacial pace of the Obama administration.  The company buys proven, undeveloped reserves — wells that have been drilled but deemed uneconomic by larger companies.  These are often less risky than other wells, and the company’s equipment has more safeguards than many other operators.  They have the right business model and equipment for the post-disaster world, and should be at the front of the line.

The wait is costing ATP about $330,000 a day — at 7o days and more.  They cannot afford to keep their workers employed and playing cards.  Predictions are for $4 gasoline by this summer and $5 by the end of the year.

As with most of this recession, there is a better way.  It involves the free market, private property rights and the initiative of the private sector.

%d bloggers like this: