Europe Puts Hurdles In Obama's Climate Path

Spiegel International (Germany) ^ | December 10, 2008 | Gregor Peter Schmitz

[flattorney]

ABSTRACT: Just as the U.S. gets a new President who promises to reverse years of climate change neglect, with Nobel Peace Prize winner Al Gore at his side, American environmental experts worry that Europe's resolve on climate change is substantially weakening. German Chancellor Angela Merkel has gone out of her way to show herself as a climate saviour. But those times are over. Now, with heads of state and government from the European Union gathering in Brussels at the end of the week to approve the bloc's climate goals, Merkel has begun singing a different tune. She said that she would not approve any EU climate rules "that endanger jobs or investments in Germany." The world was listening. Indeed, given the changing message, it's no wonder that the negotiations in Poznan, Poland -- aimed at hammering out a successor treaty to the Kyoto Protocol, which expires in 2013 -- already appear to be deadlocked after just one week. Germany campaigned massively last year for climate protection; now they're claiming more opt outs than other countries. Many American environmentalists are also rubbing their eyes in amazement. Just as a new US administration looks ready after eight years of Bush stagnation to make real efforts on climate change, the Europeans seem to be getting cold feet. French President Nicolas Sarkozy, current holder of the European Union's rotating presidency, is trying to push through an agreement in Poznan. But the European optimism felt in 2007 has disappeared. The U.S. is fixated on its serious economic crisis. Republican Senator James Inhofe warns that any kind of limit on pollutants would be a deathblow for the crippled US industries. Democrat John Dingell in the House of Representatives thunders: "In times of economic downturns, members (of Congress) are extremely reluctant to add burdens to the economy."

[flattorney]

With a very serious and long-term global recession in the making, Obama, Gore, IPCC, and their fraudulent environmental “green religion” movement are becoming unwelcomed international guests. ~ SFARI

12.10.08: In Gore's presentation on Oprah (pointing to his Florida map shown in the photo) he said if Greenland and Antarctica continue to melt, due to man-made global warming, all of South Florida will be under water (affecting 3.8 million people ~ FlA) and the maps of the world will need to be redrawn. In short, Gore is a worthless fear mongering fraud. This is the same prick that said man-made global warming caused Hurricane Katrina - and its massive loss of lives and damages. Gore can go straight to hell. He will say anything to line his, and the Soros Shadow Party, financial pockets. - FlA

[steelyourfaith]

 

Beam me to Planet Gore !

[bmwcyle]

650+ Prominent Scientists Call Global Warming, poopie-doodie

Have you been speaking for all those Scientists? poopie-doodie?

[Jabba the Nutt]

Heh.

"Many American environmentalists are also rubbing their eyes in amazement. Just as a new US administration looks ready after eight years of Bush stagnation to make real efforts on climate change, the Europeans seem to be getting cold feet."

American enviromentalists are either gullible or evil. The gullible are what is known in poker as "suckers". Now the fact that gullible environmentalists are surprised that with Obamessiah actually going to take action on "climate change", ie the weather, and the Euroweenies suddenly change course by 180 degrees is just proof of their gullibility, naivete and stupidity.

The whole purpose of "Kyoto" was to beat up upon the US, pound America. "Kyoto" had exactly zero to do with "climate change". So, if the Euros see that their scam will actually have an effect in the real world, when Obambi takes actual actions, the Euros are going to run for the hills to protect their own economies.

"Kyoto's" use as a club to beat up on the Ami's just lost its value. This ought not be a surprise to any sentient beings, which is why the Enviros are surprised. They're suckers.

[reasonisfaith]

Europe coming to its senses. Changes the dynamic.

[oblomov]

The European heads of state are to the right of the next US head of state. It’s a strange, inverted world.

[gridlock]

Remember how 8 Million Homeless disappeared on January 20, 1993?

The same thing will happen to Global Warming on January 21, 2009.

[gridlock]

I think you are right on the money, Jabba. However, I would note that Europe would be only too happy to watch Obama gut the US economy like a fish, as long as they don’t have to do the same to themselves.

BTW, and the Yankees going to move you to the bullpen this year, or what?

[A CA Guy]

But I thought I was your favorite cracker after Bill Clinton (the first black President was elected).
How come you never politically supported a white liberal like me and now only this black guy Oprah?

Were you getting your racism on Oprah?

[nathanbedford]

If Republicans make up a party which never misses a chance to miss a chance, we can sleep serenely in the knowledge that they will make nothing of the global warming debacle which is looming.

The intellectual and scientific ground under the feet of Al Gore is melting faster than any ice pack if one can believe the recent release from the Senate offices of ranking member Jim Inhofe who has long been a stalwart advocate for scientific sanity. He maintains that scientists are breaking free of the constraints placed on them by leftists in the academic and governmental institutions which had compelled them to bend over for global warming and now 650 eminent and respectable scientists have recently spoken out against climate change.

In this article says we have Angela Merkel backing away from the received dogma of global chief warming which means that nothing can be achieved in Europe so long as Germany balks. No one can believe that China will risk civil wars (note the plural) by crippling its economy in order to pay homage to the secular religion of global change-after all the Chinese Communists have long had their own secular religion and do not need Al Gore's. Moreover, the Chinese are far more preoccupied with the disintegration of their own society which is an immediate problem rather than the end -of -the -world theatrics which are neither realistic nor immediate. So the world, overwhelmed in the midst of financial chaos is not about to back the play of Barak Obama on an international stage. If Barak Obama is to impose cap-and-trade on America he will do so without political cover from Europe and the rest of the world. He will be out there alone to some degree leaving him vulnerable to charges that he is mindlessly bankrupting the economy for a chimera.

If Republicans cannot make a case against taxing every building, every industry, every means of transportation, and every job well people are out of work and in foreclosure, they are in the wrong business.

Although financial considerations are far away the most compelling, the fact of petrodollars being sent out of the country in their hundreds of billions to subsidize the terrorist spawn of Saudi Arabia and Iran is an issue of national defense which even a Republican should be able to exploit. More, the Communist regimes of Russia, Venezuela, and a half dozen nations in South America are tottering on the brink of disintegration so long as the price of a barrel of oil remains low. Allow the price of a barrel of oil to climb and look for Russia to resume muscling Ukraine and the Baltic states. Look for more Russian warships docking in Venezuela, making flights over our Caribbean lake, and installing threatening missiles. Look for Hugo Chavez to regain his popularity and extend his revolutionary cancer into other lands. Look for a pact between Iran and many of the same countries which may or may not involve nuclear weapons, especially if Russia is drawn in.

The paradigm is simple: price of oil low, good things happen; price of oil high, bad things happen just about everywhere one can think of.

Or Republicans can somehow come out of their sleepwalk and advocate drilling everywhere there is a possibility of finding oily fluids. Republicans can remind the folks how many jobs this would create an American, how many dollars this would keep in America, how this would keep the price of a tank of gas down at the pump, how that in turn would revive the entire American economy.

Which side of this argument would you like to argue? Barak Obama's who says that he can keep the price of oil down and gas down at the pump by putting a solar box on your roof or a windmill in your backyard? Or would you prefer to argue the Republican side which says that competent multibillion dollar oil companies that have been doing this successfully for generations can bring in oil on American shores and thereby keep the price of oil to a manageable level while they pay American payrolls and fund American retirement plans? Would you rather have Obama's argument, if he is stupid enough to make it, that the way to encourage solar and wind power is to let the price of gasoline float up, or even tax it up to $4? Republicans can argue that solar and wind cannot be economic as long as we can keep the price of gasoline down and we can do that best buy drilling at home.

So Obama must rest his case for climate change on dubious science. He must rest his case for solar and wind on equally dubious technology. He must risk the nation's economy at a time of financial chaos for windmills! Dare one say Don Quixote? He will risk the nation's security for a pipe dream as he ships our money the very unsavory dictators abroad.

Can you imagine what a spokesman with the talents of Newt Gingrich could do with this scenario? Can Sarah Palin do it? We need someone armed with a flamethrower who knows how to use it and will not shrink from throwing bombs.

What do you suppose the chances are the Republican ranks can produce such a man?

[BufordP]

Is there any doubt that global warming alarmists are poopyheads! Algore is the Grand Poop.

Poopie doodie indeed!

[nathanbedford]

codicil: I am not unaware of Gingrich's flirtation with the global warming movement, I am making reference only to his forensic abilities by way of an example.

[tbpiper]

The Florida map looks pretty good to me. Makes my drive to the beach shorter.

[Dixie Yooper]

the maps of the world will need to be redrawn

Hey Al, it's all digital computerized graphics now. All we need to do is key in a new sea level and the coastlines redraw themselves automatically. Where have you been for the last 25 years?

[Dixie Yooper]

This is the same prick that said man-made global warming caused Hurricane Katrina - and its massive loss of lives and damages

This is the same prick that called George Bush and conceded the 2000 Presidential Election, then 1 hour latter called back to renege on his offer, dividing our country apart to divisions not seen since the Civil War. (dramatic similarities used for effect only:)

[bmwcyle]

I knew it.

[Matchett-PI]

When you get time, would you give me your take on what I posted here?:

http://www.freerepublic.com/focus/news/2144094/posts?page=11#11

Thanks, Nate!

[nathanbedford]

A very grim and very plausible reprise of the economic prospects. I agree with the thrust of the article and it was these thoughts that prompted my post. I have no doubt that the yo-yo effect notorious in the oil patch as well as in Florida real estate will have its effect. To keep our thinking clear, we must identify whether we are thinking as an investor or as a political observer.

The government must regard the oil situation from a political as well as from an economic point of view. We're not talking about importing bananas here we are talking about something that is absolutely indispensable for human life, national defense, economic growth, and the future of the country. At a time when the government has abandoned even lip service to the principle of free markets-as I write this the big three bail out has surprisingly failed in the Senate-the government must conclude whether our energy needs are as important as our banking system. My view is simple, without energy tens of millions of Americans will die.

Therefore, viewing this as a political matter, the government should be taking steps to lubricate the drilling and refinery business with liquidity so that as the inevitable spring back occurs its effects will be moderated and its benefits will be realized in America instead of the normal pattern in which the negatives are realized in America and the benefits realized abroad. If the government will permit drillers to select the best and most lucrative domestic fields and domestic offshore fields in which to drill, and if drillers can confidently rely on funding sources, drilling will occur, jobs will be created, petrodollars will stay in America, homes will be heated.

Let us think for a moment not as political observers but as investors. I once tried manfully to read through a book written by George Soros which was tedious beyond endurance. The thrust of the book could have been expressed in a sentence: markets overreact and the pendulum over swings. His ego required an entire book to say what was perfectly obvious. I think we are in such a situation now. I believe the the oil price has probably fallen a bit too far judging supply relative to demand. That is not to say it will not go down farther. The authors you cite are analyzing a sector, oil patch, where the pendulum swing is more exaggerated than even in Florida real estate. The actual reduction in demand has not been so profound yet the reaction in price has been catastrophic. Eventually the price must catch back up to demand. I think the price disintegration is more in anticipation of a lack of demand than in the fact.

Caveats: we are not the only geniuses alive. The street and the oil patch both have some pretty smart fellas thinking about this and they no doubt have come to the same conclusions as have you and I and the author of your piece. Therefore, I believe the market will move to moderate some of the effects of the spring back by investing in new wells in anticipation of the recovery in price.

Second caveat: we do not have any idea how bad the downturn will be and how long it will delay the spring back. Like the old adage, "in the long run there is no farm problem," it is always easier to predict direction than timing. Lots of people have gone broke waiting to be right.

Third caveat: last night (German time) as I started to dictate this I went over to the Yahoo finance thread and saw headline that said oil prices have spiked 12%. This morning, another headline said the price had receded. The third headline said that the president of Russia had committed to cooperate with OPEC in reducing oil production. And this is the caveat, I'm very skeptical that Russia or Venezuela can do anything other than pump full blast for their own survival. It may be possible for Saudi Arabia and other Gulf states to cut back but it is the margins that direct traffic. So it is very possible that the spring back might be delayed by OPEC's inability to reduce production. Finally, during the spring back a lot of wells will be uncapped and put quickly back onto the market, another factor mitigating the spring back in price.

I would also anticipate that the pendulum swings will be less dramatic because the economy has less spring so I anticipate lower highs and higher lows beyond the normal cycle of pendulum swings which tend toward the happy mean anyway even in a normal economy.

Was it Marshall McLuhan or some other New Age cultural observer or maybe it was a fella who came along a bit earlier called Plato who said in effect that merely examining a phenomenon changes it. So whatever happens in the rebound of the petroleum industry will be shaped by our perception of it and that is a very difficult variable to factor into the equation from an investor's point of view.

As an investor, I would keep my powder dry -if I had any left. Believing that the pendulum always over swings, I am not satisfied that the hysteria has subsided. My caution, as I indicated, has to do with timing not direction. I think your analysis is correct.

To return to thinking about this as a politician. We are at a crossroads in which we can buy into some very dubious science and dubious technology claims or we can reject these fairy tales and put the nation in the forefront of the energy business. We have the natural resources. It seems to me that Barak Obama, if he is to fulfill his promise most menacingly expressed by his wife to change our way of life for ever- past recognition, has by his appointments deliberately permitted the dwindling down of his options to exploiting the financial crisis to socialize and nationalize the economy and to do that mostly through the energy gambit. That is why he is made centerleft appointments to the Department of Defense and State because his move will not be there. His dangerous appointment is Rahm Emmanuel who did not take the job of chief of staff because of small ambition. He has echoed Obama's remarks to the effect that a financial crisis presents an opportunity to change society. Both men fully intend to do so. It is not clear yet how they intend to do so. My money is on the energy/economy play.

As a father of six and a conservative I say we must find a way to stop them.

[Matchett-PI]

Thanks, NB! I just now got home and found your reply. I’ll get back with you as soon as I get a chance to read and distill it.

[nathanbedford]

http://www.reuters.com/article/newsOne/idUSTRE4BA5CO20081211

note last paragraph

[Matchett-PI]

Hi NB,

I copied Glenn Morton on what you had to say about what he wrote.

Here is his reply:

From: “Glenn Morton” glennmorton@entouch.net
Subject: RE: $4 gas is here to stay
Date: Sat, 13 Dec 2008 18:39:39 -0600

Tell Nathan that the only thing I disagree with his post on was the thought that oil companies would drill in anticipation of the price rise. He is right on everything else.

This wont happen because of the way we do economic analysis in the business. Projects have to pass the hurdle of making money at half price du jour economically speaking. Most projects that were being undertaken over the past year or so were judged at $70/bbl. We do that because we know we are in a business with lots of price volatility.

Today projects are going to have to pass muster at about $20/bbl, and almost nothing will. Drilling activity is stopping, rigs are being stacked and people being let go. At the start of December there were 80 rigs in the Gulf of Mexico. 15 were stacked (meaning in port waiting business), 2 were in shipyards, but the demand is expected to be only for 55 of them very shortly. Most of the rig stacking onshore will take place next year after the contracts run out.

bttt

[Matchett-PI]

You wrote:
“http://www.reuters.com/article/newsOne/idUSTRE4BA5CO20081211 note last paragraph” ~ NB

At your link:
Jim Rogers calls most big US banks, “bankrupt”.
http://www.reuters.com/article/newsOne/idUSTRE4BA5CO20081211

Last paragraph: “He’s investing in growth areas in China and Taiwan, in such areas as water treatment and agriculture, and recently bought positions in energy and agriculture indexes.”

Yep! Here’s more:

Jim Rogers: “The Dollar is Doomed and the Fed’s Days are Numbered” (He moved his whole family to Singapore and says that people need to learn Manderin. He plans to sell all his dollars at the next rally) http://www.youtube.com/watch?v=KY5cy7w6seY&feature=related

Peter Schiff:
Obama administration will be a disaster and will be the reason why we won’t be able to dig ourselves out of this economic collapse.
http://www.youtube.com/results?search=related&search_query=%20commentary%20analysis&v=h6kQddulxlM&page=2

10/28/08 Peter Schiff predicts doomed economy under Obama
Get ready for change........ ... peter schiff obama thestreet bailout economy election ... 1 month ago 83,858 views
http://www.youtube.com/watch?v=sMdF1CiQAkA

Gerald Celente of CEO Trends Predicts Revolution, Food Riots, Tax Rebellions By 2012
http://www.youtube.com/watch?v=7QCyhi-6EFc&feature=related

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=118211&t=01008118765082075349

If you read the speeches made by Ben Bernanke a few years ago, you will find that he pledged to eliminate a lack of aggregate demand in the economy by dumping tons of freshly printed dollar bills on the economy. Well, folks, he is now doing just that and he will keep it up until it looks like people are spending again. The markets have caught on to this. Stocks have been rallying on bad news. Today commodities rallied on terrible news in oil inventories and China exports. What this means is that the markets are anticipating all that money falling from the sky and finding it’s way into the economy.

Unfortunately for Mr. Bernanke, he can bombard us with dollars but he can’t ultimately determine where those dollars will end up going. He wants them to go into house prices, car buying, and job creating investments, and some of the money will no doubt go into these areas. He doesn’t want the money to work it’s way into metals prices, gas and energy prices, or food prices, but these areas are likely to be the prime beneficiaries of his money deluge. Another prime winner in the money game will be Asia as all those consumers rush to Wal-Mart to spend their loot. I would just guess off the top of my head that about $5 will go into “undesirable to Ben” places for every dollar that goes into “Ben’s favorites”. Ultimately, this means that the stuff people really need is going to skyrocket in price, while the economy remains in “circle the drain” shape. This won’t happen overnight, but it is inevitable that it will happen sooner or later. Remember that printing money doesn’t create prosperity or jobs that last. It just wipes out the middle class and the retirees who are invested in fixed income and who can’t figure out what is going on until its too late. I like silver, gold, farmland, agricultural commodities, gasoline, and Asian stocks.

1 Comment:

#1) On December 10, 2008 at 6:11 PM, FAHayek (98.54) wrote:

All to true, the government is the cause of the problem and they are making it worse. Come visit my blog to read my perspective. Governmental Undulations In the Market.

Governmental Undulations In the Market
December 10, 2008
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=118142&t=01000103058597130673

[Matchett-PI]

Here are a couple of items you may find of interest when you get time to read them (I threw in an opinion piece I like at the end):

Supertankers store 50m barrels of oil
By Carola Hoyos in Oran and Javier Blas in London
Published: December 15 2008 23:17 | Last updated: December 15 2008 23:17
http://www.ft.com/cms/s/0/d638d9fc-caf7-11dd-87d7-000077b07658.html?nclick_check=1

Oil companies and traders are storing at least 50m barrels of oil in supertankers in a clear sign of supply outstripping demand as the global economy slows.

The surge in floating storage, – enough to meet France’s oil imports for a month and the biggest since late 2001–, is likely to push the Opec oil cartel, which is due to meet on Wednesday in Oran, Algeria, to make a deeper production cut to reduce stocks. Storing oil in tankers is unusual as it is significantly more expensive than inland.

Abdullah al-Badri, Opec’s secretary general, said on Monday: “Stocks are very high. We have to act. We see a very sizeable reduction [in production].”

Chakib Khelil, Opec president, said: “Everybody is supporting a cut.”

Oil prices rose briefly above $50 a barrel, recovering from a four-year low of $40.50 earlier this month. Oil later traded $1.30 down at $44.95 barrel on concerns that Opec’s cuts would not be enough to prevent further stock building.

Several Opec officials have suggested a 2m barrels-a-day cut, the biggest in recent history, and were also hoping to persuade Russia – the world’s largest oil producer outside the cartel – to make a reduction.

But with Russia’s oil output already declining because of a lack of investment, any commitment is likely to be seen as a political gesture rather than an actual reduction.

Whatever the size of Opec’s cut, the floating storage surge is a clear sign the cartel is losing its battle to cut supplies more quickly than demand falls.

Jens Martin Jensens, managing director at Bermuda-based Frontline, the world’s largest operator of supertankers, said that as many as 25 supertankers – each holding about 2m barrels – were being used as floating storage worldwide. Other traders suggested a similar number, pointing to companies such as BP and Royal Dutch Shell and traders such as Vitol and Koch as the holders of the oil.

Opec ministers said in November they intended to reduce developed countries’ oil stocks from the equivalent of 56 days of demand to 52. But the surge in floating storage indicates that tanks are brimming, in spite of Opec’s having announced 2m b/d in cuts. Indeed, inventories have risen to almost 57 days’ demand.

The International Energy Agency, the western countries’ oil watchdog, said the surge was the “result of abundant prompt supplies having a hard time finding customers”.

2 Comments:

1. In the worst year ever for oil, investors can lock in the biggest profits in a decade by storing crude.

Traders who bought oil at the $40.81 a barrel on Dec. 5 could sell futures contracts for delivery next December at $54.65, a 34 percent gain. After taking into account storage and financing costs investors would earn about 11 percent, according to Andy Lipow, president of Houston consultant Lipow Oil Associates LLC. The premium, known as contango, is the biggest for a 12-month span of futures since 1998, when a glut drove crude down to $10.

Stockpiling crude may provide higher returns than commodities, stocks and Treasuries as the U.S., Japan and Europe endure simultaneous recessions for the first time since World War II. Crude sank 70 percent in New York since peaking at $147.27 in July. The Standard & Poor’s 500 Index fell 38 percent this year and two-year government notes yield 0.9 percent.

“The bottom line is that you buy crude at a low price and lock in a profit by selling it forward,” said Mike Wittner, head of oil market research at Societe Generale SA in London. “It’s low risk. The contango can definitely pay for storage and the cost of capital and leave plenty left over.”

Royal Dutch Shell Plc sees so much potential in the strategy that it anchored a supertanker holding as much as $80 million of oil off the U.K. to take advantage of higher prices for future delivery. The ship is one of as many as 16 booked for potential storage instead of transporting crude, said Johnny Plumbe, chief executive officer of London shipbroker ACM Shipping Group Plc. 5

2. [This] means that investors are confident enough to pay storage costs believing the rise in prices will result in more profit later even after paying the additional expenses. Look at the futures market and you can see how quickly they believe it is going to rise. Up $9 in five months.

Crude Light Oil Comp. - nymex
http://online.wsj.com/mdc/public/page/2_3028.html?category=Energy&subcategory=Petroleum&contract=Crude%252520Light%252520Oil%252520Comp.%252520-%252520nymex&catandsubcat=Energy%257CPetroleum&contractset=Crude%252520Light%252520Oil%252520Comp.%252520-%252520nymex 10

<>

A related item:

ExxonMobil to invest in refinery expansion
By Ed Crooks
Published: December 16 2008 02:00 | Last updated: December 16 2008 02:00
http://www.ft.com/cms/s/0/27f2a81c-cb12-11dd-87d7-000077b07658.html

ExxonMobil, the world’s biggest oil company, is to invest $1bn in expanding the capacity of three of its refineries. This comes in spite of the global downturn in demand for oil products and the squeeze on margins that has led many other companies to delay or cancel projects. The refineries, two in the US and one in Belgium, will be expanded to add a total of 143,000 barrels per day of extra capacity to produce diesel fuel, increasing Exxon’s diesel production capacity by 10 per cent. ..... [snip]

<>

Related (opinion):

‘We have suddenly been plunged into a new age of superstition, where scientific evidence no longer counts’
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/11/30/do3010.xml

[nathanbedford]

Nathan Bedford is out of commision for the next week. He had knee surgery today but I will print this and brighton his day tomorrow. He can not believe the hospital doesn’t have wlan, no hot spots. N.B. Wife

[Matchett-PI]

Thanks so much for the heads up. Please give him my best for a quick full recovery. I know how I would feel (bored) if I had to be without my internet access, so I can empathize.