The answer can be found in Obama Chief of Staff Rahm Emanuel’s now-famous words, “You never want a serious crisis to go to waste — and what I mean by that is it’s an opportunity to do things that you think you could not do before.” That sure was true of global-warming policy, and especially the cap-and-trade bill. Many observers thought the measure, introduced last year in the House by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), was dead: The American people didn’t seem to think that the so-called global-warming crisis justified a price-hiking, job-killing, economy-crushing redesign of our energy supply amid a fragile recovery. Passing another major piece of legislation, one every bit as unpopular as ObamaCare, appeared unlikely in an election year.

 President Obama has a solution to the Gulf oil spill: $7-a-gallon gas.
That’s a Harvard University study’s estimate of the per-gallon price of the president’s global-warming agenda. And Obama made clear this week that this agenda is a part of his plan for addressing the Gulf mess.
So what does global-warming legislation have to do with the oil spill?
Good question, because such measures wouldn’t do a thing to clean up the oil or fix the problems that led to the leak.
The answer can be found in Obama Chief of Staff Rahm Emanuel’s now-famous words, “You never want a serious crisis to go to waste — and what I mean by that is it’s an opportunity to do things that you think you could not do before.”
That sure was true of global-warming policy, and especially the cap-and-trade bill. Many observers thought the measure, introduced last year in the House by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), was dead: The American people didn’t seem to think that the so-called global-warming crisis justified a price-hiking, job-killing, economy-crushing redesign of our energy supply amid a fragile recovery. Passing another major piece of legislation, one every bit as unpopular as ObamaCare, appeared unlikely in an election year.

Oil hits 18-month high on economic outlook

 U.S. crude futures hit an 18-month high on Monday, climbing toward $86 per barrel on expectations of faster-than-expected economic recovery and increasing demand for fuel.
Data on Friday showed U.S. employers created jobs in March at the fastest rate in three years. Non-farm payrolls rose 162,000, only the third increase since the U.S. economy fell into recession in late 2007 and the largest since March 2007.
U.S. manufacturing is also expanding at its fastest pace for more than five years, while Chinese manufacturing is picking up and Japanese business sentiment is also improving.
U.S. crude oil for May delivery rose $1.02 per barrel to a high of $85.89 in early Asian trade before slipping back to around $85.37, up 50 cents, by 1130 GMT (7:30 a.m. ET). The market was closed for a three-day weekend including the Good Friday holiday.
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Jeff Rubin: Oil To Triple Digits By The End Of This Year, And New All-Time Highs During Next Year

 Famed energy analyst Jeff Rubin is banging the drum again about an imminent oil spike.
Rather than state what to him is probably obvious -- that demand is surging and supply is not -- Rubin turns it around in his column at Canada's Globe & Mail:

Does anyone still believe the reassuring forecasts from discredited feel-good organizations like the International Energy Agency about new sources of cheap supply, like those that once flowed from places like Prudhoe Bay in Alaska or the North Sea? If so, where is that supply of new affordable oil coming from? Surely not from tar sands or from ultra-deep water fields six miles below the ocean’s floor.

And what will suddenly put the brakes on world demand over the next year that will pull oil prices back from the precipice of triple-digit range? Are car sales about to tank in China and India over the coming months, suddenly halting the otherwise insatiable demand from these countries for more oil? Will OPEC suddenly start charging its drivers and its utilities world oil prices and halt the explosive demand growth in their own economies for the very oil they are supposed to supply to the rest of the world?

Ultimately, he's calling for triple digits later this year and a new high -- beyond the $147, 2008 high-water mark -- next year.

$7-A-Gallon Gas Needed to Meet Government’s CO2 Cuts

 As the national average of gasoline creeps to three dollars a gallon, economists are warning that high gas prices [editor's note: artificially imposed by enviro-political mandates] in the United States could slow the economic recovery. Other countries’ economies are recovering more quickly and increased production and activity is putting upward pressure on oil prices. That coupled with a relatively weak US dollar spells trouble for American drivers. Throw in carbon dioxide cuts and gasoline prices could reach unprecedented levels:

To meet the Obama administration’s targets for cutting greenhouse gas emissions, some researchers say, Americans may have to experience a sobering reality: gas at $7 a gallon. To reduce carbon dioxide emissions in the transportation sector 14 percent from 2005 levels by 2020, the cost of driving must simply increase, according to a forthcoming report by researchers at Harvard’s Belfer Center for Science and International Affairs. The 14 percent target was set in the Environmental Protection Agency’s budget for fiscal 2010.”

If you think it’s out of the question, it’s not. Members of Congress are working with oil companies now to levy a carbon fee on the transportation sector: “Key senators are weighing a request from Big Oil to levy a carbon fee on the industry rather than wrap it into a sweeping cap-and-trade system that covers most of the U.S. economy. If accepted, the approach — supported by ConocoPhillips, BP America and Exxon Mobil Corp. — could rearrange the politics of the Senate climate debate and potentially open up votes that may not be there otherwise.”
Such an approach would do nothing but cause more economic pain for American households. Higher gas prices lower employment, income, and spending, and Americans will have to dip into their savings to pay for higher gas prices. Heritage economist Karen Campbell details these effects in her paper, “How Rising Gas Prices Hurt American Households.”

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Peak Oil: Richard Branson warns that oil crunch is coming by 2015…

Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years. The founder of the Virgin group, whose rail, airline and travel companies are sensitive to energy prices, will say that the ­coming crisis could be even more serious than the credit crunch.

“The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well,” Branson will say.

“Our message to government and businesses is clear: act,” he says in a foreword to a new report on the crisis. “Don’t let the oil crunch catch us out in the way that the credit crunch did.”

Other British executives who will support the warning include Ian Marchant, chief executive of Scottish and Southern Energy group, and Brian Souter, chief executive of transport operator Stagecoach.

Their call for urgent government action comes amid a wider debate on the issue and follows allegations by insiders at the International Energy Agency that the organisation had deliberately underplayed the threat of so-called “peak oil” to avoid panic on the stock markets.

Ministers have until now refused to take predictions of oil droughts seriously, preferring to side with oil companies such as BP and ExxonMobil and crude producers such as the Saudis, who insist there is nothing to worry about.

But there are signs this is about to change, according to Jeremy Leggett, founder of the Solarcentury renewable power company and a member of a peak oil taskforce within the business community. “[We are] in regular contact with government; we have reason to believe their risk thinking on peak oil may be evolving away from BP et al’s and we await the results of further consultations with keen interest.”

The issue came up at the recent World Economic Forum in Davos where Thierry Desmarest, chief executive of the Total oil company in France, also broke ranks. The world could struggle to produce more than 95m barrels of oil a day in future, he said – 10% above present levels. “The problem of peak oil remains.”

Chris Skrebowski, an independent oil consultant who prepared parts of the peak oil report for Branson and others, said that only recession is holding back a crisis: “The next major supply constraint, along with spiking oil prices, will not occur until recession-hit demand grows to the point that it removes the current excess oil stocks and the large spare capacity held by Opec. However, once these are removed, possibly as early as 2012-13 and no later than 2014-15, oil prices are likely to spike, imperilling economic growth and causing economic dislocation.”

Skrebowski believes that Britain is particularly vulnerable because it has gone from being a net exporter of oil, gas and coal to being an importer, and is becoming increasingly exposed to competition for supplies.

“This is likely to put pressure on the UK balance of payments and in a world of floating exchange rates is also likely to put downward pressure on the valuation of sterling. In other words, the positive benefits to the valuation of the pound as a petrocurrency are now eroding,” he said.

The question of peak oil came to centre stage last November when a whistleblower told the Guardian the figures provided by the IEA – and used by the UK and US governments for much of their planning scenarios – were inaccurate.

“The IEA in 2005 was predicting that oil supplies could rise as high as 120m barrels a day by 2030, although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source. “The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.”

But Saudi Arabia launched a counter-strike at Davos, insisting the issue was overblown. “The concern about peak oil is behind us,” said Khalid al-Falih, chief executive of Saudi Aramco.

Tony Hayward, the BP chief executive, downplayed fears about dwindling supplies in an interview with the Guardian last week. Full: http://www.guardian.co.uk/business/2010/feb/07/branson-warns-peak-oil-close

Triple Digit Oil and Economic Change: Jeff Rubin, the former Chief Economist of CIBC World Markets

It is not that we will be running out of oil. Rather, we will be running out of cheap oil, light sweet Arabian crude, to be replaced eventually by synthetic oil rendered from tar sands and shale. The implication is $200 per barrel oil and $7.00 per gallon gasoline. The oil shock may hit the economy within 12 to 15 months according to Jeff Rubin.

Jeff Rubin: Oil Will Blow Past $100 By Year's End

Former CIBC World Markets Inc. chief economist, Jeff Rubin -- who accurately predicted crude price increases over the last decade -- expects oil to reach $90 a barrel by the end of Q1 and $100 by the end of the year, Bloomberg reports.

Yesterday, the price of crude hit a 15-month high at $83.52 a barrel.

Rubin forecast in his book, “Why Your World is About to Get a Whole Lot Smaller” that oil will hit $200 a barrel by 2012

The strain of $200 oil on consuming nations may prompt a subsequent collapse toward $40, he added.

“When we get into 2011 or 2012 and we start to deal with prices of $120 a barrel, $147 a barrel, $160 a barrel, that’s where I think at least the global economy becomes very challenged,” he said.

Heads in the Sand? Or, Why Don’t Governments Talk about Peak Oil?

There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem… [G]overnments and multilateral agencies have failed to recognize the imminence and scale of the global oil supply crunch, and most of them remain completely unprepared for its consequences.

Anyone aware of peak oil has had to wonder (at least briefly) why the world's governments seem to be ignoring the issue. The official silence is difficult to fathom in light of the fact that the IEA has decidedly come down on the side of a likely peak by 2030, while Fatih Birol (the Agency's Chief Economist) suggests it's more likely a “plateau” from 2020, or even earlier – a claim recently published in the influential magazine, The Economist.² As the UK's Energy Research Council points out, “The growing popular debate on ‘peak oil’ has had relatively little influence on conventional policy discourse. For example, the UK government rarely mentions the issue in official publications and …..'does not feel the need to hold contingency plans specifically for the eventuality of crude oil supplies peaking between now and 2020'.”³ The report notes that “the UK is one of many countries that are failing to give serious consideration to this risk.”⁴ But are governments really ignoring peak oil? Are they unaware of it? Or are they aware and taking steps to deal with it – even while they keep silent on it in public? Indeed, is their silence a policy choice itself?
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Gulf petro-powers to launch currency in latest threat to dollar hegemony

The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate.

“The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait.

The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.

Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank.

Full article here

Ramping up Afghanistan war to control Caspian oil and gas transport routes

The 800-pound gorilla standing in the auditorium at West Point is still waiting for an answer to why Obama made his surge-speech for 30,000 more troops and $30 billion to pay for them. That gorilla wonders “why” Obama pitched so hard for the US to stay and surge through Afghanistan and Pakistan. The reasons given were that the Afghanistan Taliban and Al Qaeda led by Osama bin Laden were the people that attacked us on 9/11, which was an iteration of George W. Bush’s reasons for the War on Terror. They are as phony now as the day Bush promised to smoke out Bin Laden.But, here are Obama’s actual words, pointed out by Christopher Bollyn on page 2 of his article, Why Afghanistan?

“1. I am convinced that our security is at stake in Afghanistan and Pakistan. This is the epicenter of the violent extremism practiced by al-Qaeda. It is from here that we were attacked on 9/11, and it is from here that new attacks are being plotted as I speak.

“2. It is important to recall why America and our allies were compelled to fight a war in Afghanistan in the first place. We did not ask for this fight. On September 11, 2001, 19 men hijacked four airplanes and used them murder nearly 3,000 people.

“3: If I did not think that the security of the United States and the safety of the American people were at stake in Afghanistan, I would gladly order every single one of our troops home tomorrow.”

Also, as early as Oct. 14, 2001, a month and three days after 9/11, Bollyn wrote in The Great Game – The War For Caspian Oil And Gas: “President Bush’s ‘crusade’ against the Taliban of Afghanistan has more to do with control of the immense oil and gas resources of the Caspian Basin than it does with ‘rooting out terrorism.’

“Once again an American president from the Bush family is leading Americans down an oil-rich Middle Eastern warpath against ‘enemies of freedom and democracy.’

“President George W. Bush, whose family is well connected to oil and energy companies, has called for an international crusade against Islamic terrorists, who he says hate Americans simply because we are ‘the brightest beacon of freedom.’

“The focus on religion-based terrorism serves to conceal important aspects of the Central Asian conflict. President Bush’s noble rhetoric about fighting for justice and democracy is masking a less noble struggle for control of an estimated $5 trillion of oil and gas resources from the Caspian Basin.

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Wrestling a Vampire Squid in Oil

As I recently pointed out on my blog (“The Dollar and Oil”), oil and oil stocks in particular are underperforming the market rally. We have seen inventory builds in the U.S., including a big build this week, but there are many other forces that should be bullish for oil prices, even in the short-term. Here are just some recent examples …

• Iran Oil Minister Masoud Mir-Kazemi says OPEC won’t raise production when it meets in Luanda, Angola, on December 22 to review output targets and the impact of supply reductions announced last year. Ministers from Kuwait and Nigeria have also indicated they expect quotas to be left unchanged.
  
  
• The purchasing managers’ index for China, released today by HSBC Holdings, rose to a seasonally adjusted 55.7 from 55.4, the fastest pace in five years. Combined with other indicators, this points to Chinese oil demand increasing by 5% this year and at least 4% next year. A U.S.-bound supertanker was seized by pirates off Somalia. This potentially impacts U.S. supply.

This is just the news out recently. So why isn’t oil higher? I think someone with big pockets is selling every time the price of oil goes up. It could be a big trading house like Goldman Sachs — the “vampire squid” of the American economy, as Matt Taibbi called it in his now landmark Rolling Stone article.

I’d rather not be on the other side of their trades, for the simple reason that they have tools and access the rest of us don’t — like High Frequency Trading (which I believe should be illegal) that allows them to push markets around in rather shifty ways. But it’s not just Goldman Sachs — there are multiple vampire squids who can manipulate the markets; they have very deep pockets.

Full article here

Auto Execs Urge Government to Tax Fuel up to $8/Gallon to Increase Fuel Efficiency

CEO at leading parts supplier: “Energy independence…ultimately means that fuel has to be more expensive”

It’s no secret that when gas prices dropped early in the year and with the recession in full swing, hybrid sales saw their first drop in years. Faced with tough new fuel economy restrictions, auto executives had come up with all sorts of unusual suggestions — such as cutting crash testing — but now had to puzzle over a new dilemma; what if consumers don’t want the higher-priced electric vehicles that they plan to start flooding the market with in less that a year?

At a special Reuters summit in Detroit, numerous auto industry executives are cited as suggesting that the government raise taxes on gasoline substantially to spur the adoption of fuel efficient vehicles. States Tim Leuliette, chief executive of privately held parts supplier Dura Automotive, “In the United States, we’re afraid to touch the fuel price. We’ve got to continue to raise taxes in the United States so that, by the end of the next decade, gas is about $8 a gallon in today’s terms.”

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Pickens: Oil Could Go to $300 a Barrel

http://moneynews.newsmax.com/streettalk/boone_pickens_oil_price/2009/06/19/227028.html