The first round of the US Supreme Court’s attempts to settle the problem that is Obamacare takes place today, and from the Obama administration’s purely partisan (and particularly puerile) perspective, there’s no winning scenario available. Essentially, what’s happening today is the courts are hearing arguments about whether or not Obamacare’s individual mandate qualifies as a tax. If it does qualify as a tax, then under the provisions of the Tax Anti-Injunction Act (TAIA) the mandate cannot actually be challenged in courts until it’s actually been collected; more plainly, you can’t sue for relief from an onerous tax before they take it from you.

The merits of the case are one thing – the above link from Heritage goes into the whole issue, in some detail – but the partisan implications are another. There’s no good result for the Obama administration: if the Supreme Court decides that the individual mandate is not a tax then a large portion of the administration’s existing arguments goes away, thus increasing the likelihood of a humiliating disposal (at least in part) of the one thing that Obama has managed to do domestically in four years. But if the mandate is a tax, then Obama gets to face a plethora of attack ads in the fall which will (accurately) portraying him as a shameless serial liar who used the looming Obamacare legislation to sneak in a stealth tax on the American middle class.

:shrug: I can work with either scenario.

Moe Lane (crosspost)

PS: There is nothing deeply, deeply ironic about the fact that the President opposed the mandate as a candidate. Or, as American Majority put it:

Contrary to popular belief, a fundamental inability to live up to the job is neither particularly ironic nor particularly not ironic. It simply is.

PPS: If you’re wondering why either side got involved in this argument in the first place, well… neither one brought it up in the first place (the states don’t want to wait to destroy Obamacare, obviously). The court had to assign somebody to argue that TAIA applied in this case.

I rather badly want to have been the person who first came up with that phrase, in fact. I feel that I need to get this on the record.

Anyway, if you were looking for a recap on the entire didn’t-turn-out-as-intended climate alarmist attack on the Heartland Institute by – well, I suppose that it has not been proven in a court of law that Peter Gleick was responsible for the forged memo, so we’ll go with “person or persons unknown who could conceivably have the initials ‘P.G.’” and be done with it. Anyway, this is a pretty good recap: it describes the initial ‘data’ dump, identifies the central trouble with it (essentially, the central document is a farrago of nonsense and lies, and absent it the ‘supporting’ documents are thoroughly innocuous), notes the ghoulish zeal with which alarmist blogs treated the original ‘revelation’… and ruthlessly spotlights the petulant refusal of most of said alarmists to admit that the whole thing exploded in their face.

Relatively speaking, of course: the media was happy to memory-hole this one. Which, by the way, is one reason why support for this particular branch of for radical green theology has declined over the years: contrary to progressives’ fond hopes and dreams, rigid control over message dissemination only works up to a point. And after that point has been passed, said control only acts as a data point in the opposition’s favor.

Yeah, I know that it’s considered bad form to write out things like that; after all, the situation is ultimately rebounding in my side’s favor, so why risk spoiling things? …Which is an argument with some heft to it, but if I thought that my readers truly deserved the mushroom treatment then I would have stayed in the Democratic party.

(Via Via Meadia)

Moe Lane (crosspost)

“A budget is values,” says Douglas Holtz-Eakin, former head of the Congressional Budget Office and an adviser to John McCain’s 2008 presidential campaign. “When you put together a budget, you display where you’re going to put the nation’s resources and what you care about.”

(HT:Washingtonexaminer)

Something went wrong with the universe after the Puerto Rican GOP Primary. Mitt Romney not only made an accidental relevant statement, he made an intelligent and acutely cutting statement. He pointed out that nobody with a time horizon much beyond November 2012 could cast an intelligent vote for the Democrats. His actual quote was “I don’t see how anyone who is a young person could vote for a Democrat, I’m going to be honest with you.”

I’m no fan of Mitt Romney, but when he said that, he explained what we need to be shouting from the rooftops about the American Left. They have no values, they have no vision, and they offer no future. Well, they do offer a future; it’s just not a particularly bright or promising one. The chart below gives you the details. Maintaining Barack Obama’s current budgetary practices will spend our great nation into its grave and they know it.

The Current Path Is A Highway To Hell

Why do I believe they will spend us into perdition? Well as Newt Gingrich and Rick Santorum have told us recently; past performance is a powerful indicator of future results. CBS News explains how things have gone under the first 3 and 1/3 years of Barack Obama’s Presidency.

The National Debt has now increased more during President Obama’s three years and two months in office than it did during 8 years of the George W. Bush presidency. The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.

Barack Obama Wastes More in 3 Years Than GWB Did In 8. Yells "It's All Bush's Fault!!"

It would be grossly unfair to blame just Barack Obama for this deficit. It would be meaner than going on Fox News calling the poor man a Moslem! Barack Obama had plenty of help with the deficit. Despite the unequivocal language of the Congressional Budget Act of 1974, the Congressional leadership of the Democratic Party had the following things to say about the impending 2012 budget process.

“We do not need to bring a budget to the floor this year,” Reid told reporters last month, arguing that legislation setting limits on spending is sufficient. “The fact is, you don’t need a budget,” agreed fellow Democrat and House Minority Whip Steny Hoyer a few weeks ago. “We can adopt appropriations bills. We can adopt authorization policies without a budget. We already have an agreed-upon cap on spending.”

The more accurate statement of fact would be that Barack Obama, Steny Hoyer and Harry Reid do not want there to be a budget. A budget restricts your choices to something less than “all of the above”, “more than I can possibly afford” or “whatever the [barnyard epithet] gets me elected next time.” It’s always saying the magical word “No” that requires a set of nuts and a set of values.

This explains why no budget has made it to Barack Obama’s desk for 1,056 days. It explains why the US Senate has not passed one since 2009. It explains why House Minority Whip Hoyer does not want one to go up for a vote this year either.

Yet like Sisyphus, Republican Paul Ryan will try to bring Congress back into compliance with its own Federal Law. He will yet again attempt to pass his budget and cut $5.3 Tr from future domestic spending. The Democrats will predictably rerun their infamous advertisement showing him pushing Grandma Wheelchair off of a cliff. But Ryan has looked into the Abyss that is Southern Europe, and he’s seen Illinois, Rhode Island, California…(and quite possibly the other 54 states as well).

For his efforts to at least mitigate the problems of our profligacy Ryan will be castigated, stone-walled and ultimately defeated in 2012. This is when whomever we nominate needs to do more of what Mitt Romney did in his Chicago speech. When the Democrats hide from the future they arrogantly and self-righteously bluster that they represent, the Republicans need to call them on it. Those deficit charts need to be stapled to every Democratic Congressional Candidate’s forehead. This is the only way we can force our Congress to actual pass a budget. This budget is the only way to make our government actually make a choice.

With Steve Jobs now safely on permanent TDY to Heaven, Apple Corporation is now the target for years of pent up frustrations. The charming paragon of journalistic integrity, Mike Daisy, has accused the corporation of outsourcing manufacturing jobs to a Chinese Gulag/Sweatshop called Foxconn. Foxconn workers presumably worked 12-hour shifts on the line with nothing in their stomachs beyond a biscuit and some tea.

This sparked great outrage because Mr. Jobs, prior to his sad demise, had attended one President Obama’s interminable fund-raising junkets cum shakedown meetings that he regularly holds with the Satanic 1%™ At this meeting, Mr. Obama inquired of Mr. Jobs what it would take to make iPhones in America. Mr. Jobs was egregiously frank with our Fearless Commander-In-Chief.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

Somewhere along the Higher Path of Jihad against Capitalistic America, Mike Daisy’s claims were proven to be “enhanced;” or perhaps more accurately “fertilized.” The radio station WBEZ broadcast some of Daisy’s reportage on Foxconn and quickly found itself issuing a comprehensive retraction.

This should have left Apple Corporation free and clear to do properly non-altruistic things like coin money for its shareholders. But no, it seems like AppleCo now has, of all things, an Al Gore problem. It’s nice to see the rich and well-connected have more in common with Middle America. Apple recently dropped out of The Chamber of Commerce to protest that organization’s opposition to “Cap-and-Trade” as a governmental policy.

It just so turns out that Al Gore joined the Apple Corporate Board. Mr. Gore has been rumored to have strong opinions on the subject of Anthropogenic Global Warming. The fact that Al Gore’s other business interests, completely unaligned with his work at Apple, would have coined a stupendous fortune from Cap=and-Trade is yet another inconvenient truth. This has lead the National Center For Public Policy Research to claim that Gore abused his seat on The Apple Board for personal gain.

On the surface of this, I actually find myself sympathizing just a tad w/ Gore. I really don’t poop, shower and drive to work in the morning to not better my own personal fortunes. Mr. Gore didn’t bully and buy his way on to corporate boards to help other people or to save the plan…

Oh, wait! This is EnviroGore we’re talking about. He really claims that he does do these things to save Occidental Pet…., oops, I mean the planet.

Perhaps this shows us the oblique impact of Eastern Philosophy on Western thought. A man like Gore is supposed to be more altruistic. He is supposed to have evolved past this piggish grubbing for money. According to the Braham-like Transcendalism of 19th Century American Academe, we should think this for two reasons.

1) He’s already farting through silk.
2) He doesn’t have long left on Blessed Gaia to make a positive impact on the commonweal. (And Al’s generosity chakra is rumored to be glued shut like an impacted colon.)

We never will know whether Gore made Apple quit the Chamber to make the passage of Cap-and-Trade more likely. We *do* know that any corporation that personally affronts Barack Obama at a Black-Tie fundraiser is going to get floated a raft of something that doesn’t smell very nice. It’s also interesting to note that having Mr. Gore on the Corporate Board doesn’t make that corporation immune….

In May 2009, four months into the Obama presidency, retail gasoline prices averaged $2.32 per gallon. Rep. Charles Boustany (R-LA) wrote Treasury Secretary Tim Geithner to express concern about the impact that the Administration’s budgeted changes in tax policy would have on the oil and gas industry. Secretary Geithner clearly laid out the Administration position in his letter of response (pdf link).

That was then, this is now.

In just three years’ time, retail gasoline prices are up 68%. $4.00+ gasoline prices loom as a key reelection vulnerability for the President; in response, the Administration’s rhetoric has shifted to “energy friendly”, but its original energy-hostile policies have not changed a whit.

From Secretary Geithner’s May 2009 letter:

The Administration believes that oil and gas preferences distort markets by encouraging more investment in the oil and gas industry than would occur under a neutral system. To the extent the credit (sic) encourages overproduction of oil, it is detrimental to long-term energy security and is also inconsistent with the Administration’s policy of reducing carbon emissions and encouraging the use of renewable energy sources through a cap-and-trade program. Moreover, the credit (sic) must ultimately be financed with taxes that result in underinvestment in other, potentially more productive, areas of the economy.

The President campaigned on the idea that, if we are to finally reduce our dependence on foreign oil, we need to set aside old political battles and instead make the investments in new clean energy technology that will create good jobs here at home.

So, to recap:

• Encouraging more investment (drilling) is a bad thing, because
• More drilling leads to too much production (!), which is
• … detrimental to the nation’s long-term energy security (!!)
• Cheaper hydrocarbon fuel would work against the Administration’s goal of reducing carbon emissions.
• Carbon-based fuels were destined cost more (via taxation) under a cap-and-trade system anyway.
• We can raise the taxes on industry by taking away the deductions (not “credits”) which have historically, and successfully, encouraged drilling, and
• Redirect that money, and then some, to our political friends who are invested in “green” technologies (read: Solyndra, Fisker, et al).
• As was pointed out in my blog at the time, we have a Treasury Secretary who doesn’t know the difference between a tax deduction and a tax credit. Given his difficulties with TurboTax, perhaps this should not be surprising.

Ladies and gentlemen, this remains the Obama Administration’s policy; only the rhetoric has shifted.

Nowadays, instead of worrying about “overproduction”, the Adminstration crows about success in the oil patch. Success that owes little to government initiatives.

Interior Secretary Salazar bragged this week about bringing “ ‘the sweet spot of America, and that’s the Gulf of Mexico,’ safely back to ‘robust’ production”, despite the fact that production levels in the Gulf are about 30% less than the government’s pre-Macondo forecasts.

On the White House blog, Energy Czar Deputy Assistant to the President for Energy and Climate Change Heather Zichal says: “When it comes to domestic production, the President has made clear he wants us to continue to produce more oil and natural gas. ”

Ms. Zichal cites figures from a recent report by the U.S. Energy Information Agency: crude oil production on Federal lands was up 13% for the first three years of the Obama Administration, as compared with the last three years of the Bush Administration . Drilling down (pun intended), we find that nearly all of the increase was in the deepwater offshore, and thus was a result of pre-Obama decisions. Beyond that, the peak year of production was 2010, the year of the BP spill. Offshore production actually declined an alarming 20% from 2010 to 2011; can you say moratorium?

Citing this set of facts as evidence of the success of Obama’s policies is really kind of pathetic. It shows just how sensitive the Administration is to criticism of its energy policies.

Administration rhetoric has changed in other ways. “Cap-and-trade” has been deep-sixed; “all of the above” has been co-opted from the Republicans. Out: “green energy” and “green jobs”. In: “clean energy” (i.e., renewables plus natural gas; “clean energy” was invoked ten times during the 2012 State of the Union address, green energy not at all.) Out: cellulosic ethanol. In: algae!

Along the way, the rationale for implementing punitive tax policies that single out oil and gas have changed. In May 2009, it’s clear that the intent was to curtail oil drilling. Now, in 2012 with the identical tax changes on the table: “Have you seen those oil company profits?”

The electoral heat is on because of gasoline prices. Increased oil production is now perceived (publicly) to be a good thing, but the Administration’s line has morphed into “More oil production will not bring gasoline prices down.” That logic makes sense only to people who slept through Econ 101. Imagine how high prices would be without the production surge led by the private sector. Oil prices are set in a global market, but relatively small changes in supply can have a disproportionate impact on price. As the world’s #3 crude oil producer, U.S. energy policy can certainly affect supply in increments that could move price.

In the real world, a call for higher taxes is a call for less drilling. Even discounting the impact on price, more domestic drilling would mean more American jobs. More domestic drilling also means more domestic supply, which will enhance the nation’s energy security.

Cross-posted at stevemaley.com.

Follow @VladimirRS

(H/T: Instapundit) So, Politico publishes this story called “Four hard truths of health care reform“ – which is Politico’s way of saying ‘Obamacare has been an unmitigated disaster, but we’re going to try to spin it as well as we can anyway’ – and there’s two reasons why the tone of said story is amazing in its effrontery. The first reason is the way that it presents the aforementioned ‘hard truths’ as if they had just only now been revealed unto the populace, instead of being pretty much known all along. Don’t believe me? Take a look: below is each ‘hard truth’ Politico documents.

• “Some people won’t get to keep the coverage they like.”

NO! Really?

• “Costs aren’t going to go down.”

NO! Really? NO! Really?

• “It’s just a guess that the law can pay for itself.”

NO! Really? NO! Really? NO! Really?

• ““The more they know, the more they’ll like it” isn’t happening.”

No! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really? NO! Really?

…and that’s just me. I’m hardly unique.

Then there’s the second reason why this story is amazing in its effrontery; if Politico wants to take this disingenuous a tone over Obamacare (particularly on how much it was, and would still be, hated) then it possibly should read its own freaking archives. After all, they wrote an article about the controversy (called “Democrats guess wrong on health care“) in September.

That would be September of 2010.

Moe Lane (crosspost)

PS: Am I being fair to Politico? Depends on how you define the word. What I’m doing is treating Politico as an unofficial, but very real, partisan ally of the Democrats over Obamacare. Which is perhaps mean of me, but as I grow older I grow ever more impatient with the idea of letting people pretend to objectivity when they have no real intent in actually being objective.

Phillip Klein of The Washington Examiner is shocked. Phillip Klein is appalled. He’s shocked and appalled. It seems that he was the last individual in Washington, DC to get the message that The Affordable Care Act of 2009 (AKA ObamaCare) was going to take a wee tad more out of the national wallet than we were previously led to believe after the CBO estimated it’s ten year impact in March of 2010. Klein hyperventilated below.

President Obama’s national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law. Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.”

(The Washington Examiner)

Yep, that’s right Mr. Klein, the law was foisted off four years into the future in order to game the CBO ground rules for budgetary impact. A simple examination of the original CBO ACA budgetary impact estimate in Mar 2010 versus the mandatory annual update in Mar 2012 tells us just how badly the system just got yinced. All numbers below are in $Bn.

The First CBO Estimate of The ACA

The March 2010 estimate covers the impact window of 2010 to 2019 and gets us to a figure that is solidly under the $900 Bn per decade that our President flashed around town as an argument in favor of how frugal and cheap this new entitlement would be. It purports to show a law that only adds $79Bn/year to the Federal Budget.

It performs this feat of financial prestidigitation by counting four years of set-up costs as if they were actual full-on coverage. The law essentially doesn’t go full-metal Khrushchev until 2014. Thus, the time period 2010 to 2013 imposes only $31Bn or less than 5% of the 2010 to 2019 budgetary impacts.

The next chart shows the time period of 2012 to 2022. It shows a net budgetary impact of $1,252 Bn over 11 years. This gives us an annual cost of slightly more than $113Bn. This occurs because the time-phasing of the new 11 year estimate includes 9 operational years of ACA expenses and only 2 set-up years. The set-up years in the new estimate are set to cost $8bn total or less than 1% of the total budgetary impacts.

The Updated Cost of The ACA (11 Year Phasing Vs 10 in Original)

The final chart combines the two estimates over the entire time-phase 2010 to 2022 to demonstrate what costs were sunk, what costs were common to both estimates and what costs were concealed in the initial CBO estimate. The sunk costs column shows that an estimates $11Bn worth of set-up fees have been expended in 2010 and 2011. The common cost window of the two estimates (2010-2019) shows that the original estimate called for $783Bn ($794Bn – $11Bn sunk) to be expended in the original estimate. This compares to an estimated $772Bn to be expended in the new estimate.

...And Here's Where They Hid $481Bn

We perceive the true mendacity of passing a law in 2010 and phasing its actual operation to start in 2014 when we compare the costs for each estimate from 2020 to 2022. The original estimate has no such costs; the new estimate has $481Bn. Yep, that’s almost ½ Trillion that got laundered via the ground rules and assumptions relevant to how the CBO estimates costs. It kind of makes me wonder how Congress got the high approval rating of 11%.

In conclusion, the CBO didn’t lie to Phillip Klein or to Ma and Pa Middleton. They played a game by a circumscribed set of rules. The legislators that designed the Affordable Care Act knew these rules and gamed them in a disingenuous fashion to make the CBO estimate appear to say something that was obviously not the actual truth. Figures don’t lie, but liars can and do figure. Therefore, the CBO can, is and will be turned into a tool of disinformation by the dishonest leeches America keeps sending to Congress with depressing regularity.

Via Hot Air comes this rather-embarrassing 2008 Obama campaign video that’s simply too good – and by ‘good’ I mean ‘humiliating to the Obama administration’ – not to share. Here you go:

Hear that? When elected, Barack Obama promised to do something about those awful THREE DOLLAR AND FIFTY CENT A GALLON gas prices! Because of all those awful OIL COMPANIES! Wasn’t that nice of him?

Well, maybe. Because I don’t think that it quite worked out that way:

That $3.80/gallon is today’s (03/12/2012) number. And how does the long-term trend look, since… oh, 2006 or so (otherwise known as When we let the Democrats run Congress)? Look, and see:

That rather alarming drop, by the way, is an artifact of the 2008 financial meltdown that is the actual reason why Barack Obama is President of the United States. Or at least a President who got a popular vote majority. And I’m being told by our resident energy expert that while the 2008 price spike was a spike, the 2011 prices represent structurally higher prices. That means that 2011 is the new baseline, and if there is an economic recovery and production does not increase to match supply then said recovery will result in even higher prices. Which will impose entirely avoidable limits on that recovery.

So. Back in 2007, Barack Obama promised to do something about these $3.50/gallon gas prices, and apparently he did: we’re now at $3.80/gallon gas prices. And notice how the trend lines are going? The price goes up a bit, goes down a bit, but generally ratchets up over time. It takes a full-fledged fiscal crisis to knock down demand to the point where prices significantly drop… and even that didn’t take. All of which means that the price is probably going to go up in the near future, too. Call it… a Democrat tax. No, better: an Obamatax. We seem to have spawned a lot of these unnecessary brakes on the economy, lately.

Mind you, I do have a recommendation for the President on how to get out of this mess. Unfortunately, it’s probably unprintable, given that it involves… ah, drastically repositioning the spacial coordinates of his thumb? That’s probably a safe enough way of putting it…

Moe Lane (crosspost)

*Matthew 7:16. NIV version, if anybody’s interested.

Voters in the November election will be acutely aware of two key economic variables above all others: the national unemployment rate, and the price they pay for a gallon of gasoline. President Obama senses his vulnerability on gasoline prices, and is busy erecting a defense against charges that his actions (or inactions) have contributed to high prices.

His weekly radio address focused on the problem of rising gasoline prices and energy policy in general:

Ending this cycle of rising gas prices won’t be easy, and it won’t happen overnight. But that’s why you sent us to Washington – to solve tough problems like this one. So I’m going to keep doing everything I can to help you save money on gas, both right now and in the future.

Earlier this week, Obama said that gasoline prices are rising in part because of international bottlenecks and supply disruptions that affect the crude oil market.

Obama cites bottlenecks, speculation as possible gasoline price factors

US President Barack Obama said his administration is looking at whether it would be possible to ease both international and US supply bottlenecks as an immediate response to rising gasoline prices. … “We’re concerned about what’s happening in terms of production around the world. It’s not just what’s happening in the [Persian] Gulf. You’ve had, for example, in Sudan, some oil that’s been taken offline that’s helping to restrict supply.”

In its Mar. 6 Short-Term Energy Outlook (STEO), the US Energy Information Administration said several notable production disruptions outside the Organization of Petroleum Exporting Countries began or intensified during the last 2 months, leaving an average 1 million b/d [barrels per day] offline in February. [Emphasis added.]

Those production disruptions include a year-on-year loss of 230,000 b/d in the Sudan, 80,000 b/d in Yemen, and 140,000 b/d in Syria. That’s 470,000 b/d total shortfall from just those three hotspots.

I agree with this analysis, which acknowledges the supply/demand dynamics of the crude oil market. I have often maintained that crude oil is a world market that is balanced on a thin margin of “overhang”: global markets operate best if production capability exceeds demand by 1 to 2 million barrels per day. Anything that erodes that overhang (supply disruptions, increasing demand) can send crude oil rapidly higher.

Bottom line: gasoline prices are closely correlated to the crude oil price, and crude oil disruptions in half-million barrel per day “chunks” are significant to the crude oil price on a global scale. President Obama’s Sudan/Yemen/Syria excuse acknowledges as much.

But the President seems to forget supply and demand when it comes to domestic energy policy.From the weekly radio address:

As usual, politicians have been rolling out their three-point plans for two-dollar gas: drill, drill, and drill some more. Well, my response is, we have been drilling. Under my Administration, oil production in America is at an eight-year high. We’ve quadrupled the number of operating oil rigs, and opened up millions of acres for drilling. But you and I both know that with only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices – not when consume 20 percent of the world’s oil.

“We’ve” been successful finding new sources of oil on private lands, under state jurisdiction (primarily North Dakota, Texas and Oklahoma), driven by market incentives. Federal action deserves little or none of the credit.

But oddly, Obama’s position is “Drilling is up, production is up, but gas prices are still high!”, implicitly contradicting the supply/demand dynamic. One can only imagine how high gasoline prices would be without the recent supply surge.

There’s a reason President Obama must discount the positive effect of increased domestic supply: his policies have been hostile to it as a strategy.

The graph below depicts crude oil production from the U.S. Gulf of Mexico during President Obama’s term in office. Daily production of oil has dropped from a third of domestic supply to less than a quarter since the BP spill.

Gulf of Mexico crude oil production during President Obama's term in office. The dashed black curve is the forecast from the EIA's Short Term Energy Outlook for May 2010; actual data from the most recent STEO is in red. The May 2010 STEO was the last projection that did not take into account the impact of the BP spill.

As for 2012, the EIA’s Annual Energy Outlook for 2010 (AEO2010), published in December 2009, forecast GoM crude oil production to average 1.76 million b/d. The latest estimate is 1.26 million b/d. (For those keeping score, that’s a loss of 500,000 b/d, using the government’s numbers, not mine.) The Department of the Interior’s reaction to the Macondo blowout was a drilling moratorium and permitting slowdown which led to the exodus of 11 deepwater drilling rigs from the Gulf.

In my humble opinion, the Federal reaction to the BP spill was mostly overreaction. The most significant step in insuring industry’s capability to contain and control a future deepwater blowout event was a private initiative.

As for bottlenecks, none is perhaps more significant than the bottleneck that is currently keeping midcontinent oil, pegged to the West Texas Intermediate crude oil benchmark, trading at a discount to the world price. That bottleneck could be alleviated by the Keystone XL pipeline, among other projects. Keystone XL could deliver 700,000 b/d to Gulf Coast (and hence, international) markets.

With respect to domestic supply, Keystone XL is especially important to North Dakota operators. An improved oil marketing outlook for the region could spur an even greater pace of drilling in North Dakota’s Bakken formation, which is largely responsible for the current domestic supply surge.

An enhanced domestic supply of petroleum, along with efficient, modern infrastructure, are key elements of our nation’s energy security. The President is correct in his assertion that tight crude oil supplies lead to escalating gasoline prices. But domestically, his policy initiatives seem designed to discourage drilling and to erect stumbling blocks for producers.

I’m going to keep doing everything I can to help you save money on gas, both right now and in the future.

I just don’t buy it. His lips keep moving, but there’s a big disconnect between President Obama’s campaign rhetoric and his policies.

Cross-posted at stevemaley.com.

Follow @VladimirRS

“It is a little disconcerting that you pay that amount of money for a car ($100,000) and it lasts basically 180 miles before going wrong,” David Champion, senior director for the magazine’s automotive test center, told Reuters.

(HT: Autonews.com)

The Fisker Karma has found yet another way to conserve our nation’s precious energy. According to Consumer Reports, it goes 180 miles and then fails. Once it fails, it no longer consumes resources. The planet is saved!

Consumer Reports went to a dealership in Connecticut and acquired a Karma to test it out and give it a write-up in an upcoming issue of the magazine. The testers were attempting to calibrate the car at a speed of 65MPG when a warning light came on. They completed their test event, parked the vehicle and could not successfully operate it again.

This wasn’t the original plan that Fisker corporate founders Henrik Fisker and Bernhard Kohler had in mind. At their corporate website they describe their vision.

Henrik Fisker and Bernhard Koehler, who share over 51 years of combined experience in the automotive world, decided to forge a new and radical perspective on what is possible in the automotive world….In 2007, they founded Fisker Automotive, a true automobile manufacturer which introduced the world’s first premium hybrid electric vehicle, the Fisker Karma.

They prattle on about how many American jobs they are creating. They fail to mention once that the actual car is manufactured by The Valmet Corporation in Finland. Valmet began as a jobs project for The Finnish Governmentin 1968. It has since adapted, taken on private industry partners and is about as successful as you could hope a state-run industry would become. However well it does, it isn’t creating American jobs.

Of course, the US Government had hopes getting an electrical car plant up and running here. With that in mind the US DoE loaned Fisker $M529 to build a new, more economical model called Project Nina. This was to coincidentally take place in Delaware, home state of Vice President Joe Biden.

In a fitting tribute to Huey “The Kingfish” Biden the project quickly fell furlongs behind its Gantt Chart and the DoE ordered the Wilmington, DE project terminated. The corporation is currently negotiating with the USG to get the low –interest credit spigot turned back on. The State of Delaware is on the hook for an additional $M21, and private investors have possibly been yinced for the sum of $M850.

The Karma has experienced several unpleasant turns of fate prior to their recent Consumer Reports debacle. Greencarreports.com has criticized the car on several levels.

The Karma has had significant teething troubles, with several delays in the announced launch dates and two recalls, one to prevent a battery-pack leak and the other to update software. It was also rated at a mere 20 mpg by the EPA in range-extending mode, when the 2.0-liter gasoline engine switches on to power a generator that sends electricity to the pair of electric motors that turn the rear wheels. A further indignity: The low, sleek Karma sedan was rated a subcompact by the EPA, based on its limited interior volume. As we learned during our brief test drive in New York last month, the car is somewhat tight inside–although not necessarily cramped.

It would seem we have yet another Green Energy project that upholds the proud tradition of Solyndra. The basic idea seems good but pressure is immediately applied to achieve results. The underlying technology works well on a chalk board or a lab, but the hyper-aggressive programmatic risks lead to the fielding of unreliable, poor-value products. The government funding is therefore burned up for nothing. As fellow-Contributor Francis Cianfrocca points out, Obama, Chu, and everyone else in the govt are simply nuts to think electric cars make any economic sense at all. There just isn’t enough subsidy money in the world to buy an electric car for everyone given the current state of battery technology. A Tesla Model S gets as much as $30K in taxpayer subsidy, ditto the Volt. There are more than 200 million vehicles in the United States…Would take something $6 trillion to buy a Volt/Model S/etc for everyone.

Thus, even if the Karma worked, fate would not be kind to the utopian vision of green cars tooling on down the highway. It is just another road to Hell paved with taxpayer monies and politicaly correct intentions.
Pictured below is the one logical use I can find for The Fisker Karma at its current level of reliability growth. Enjoy…

The One Thing A Fisker Karma Is Good For