Free Markets, Free People

Daily Archives: March 13, 2012

The real oil production numbers Obama doesn’t want you to see

President Obama is fond of claiming that oil production is up at record highs for the past 8 years under his administration.

Well, yes, but here’s the clinker for him – they’re at record highs despite his administration not because of it.  In fact, he could have been a hero and had oil production at epic highs had he not instead done all he could to slow down oil production on federal lands.

“Yeah, yeah, we know McQ, you’ve been harping on this for weeks, but all you can do is throw out a counter-claim that he’s full of it.”

Well, let’s go to the numbers, shall we?

oil production

 

Here are the production figures for the last 4 years.   Note the “Total Federal”.  Note the decline.   I’m not the one trying to hide the decline, the White House is.  Note too the difference between 2009 and 2011. 

On the privates side of things, note total NonFederal.  Alaska has declined but others have boomed.  In fact so much that the NonFederal (i.e. state and private) have been able to offset the large drop in Federal land oil production and show a net increase.  That’s the number for which Obama has been trying to take credit.

And if you think oil is bad, check out natural gas:

 

Gas production

 

Again total Federal shows a huge decline.  Once more look at 2009 vs. 2011.  Then look at the huge boom in NonFederal production. 

The claim made by Obama, while technically true, is true despite the Federal government.  One way to better state that is while oil and gas production as a whole is higher than it has been in 8 years, oil and gas production on Federal lands is off significantly because of the Obama administration (and not forecast to increase).

A few more facts.  You’ll note that production is down in Alaska for both oil and gas?    In 2008, the oil and gas industry spent $2.6 billion to obtain 487 leases in the Chukchi Sea. To this date, the administration has not allowed a single well to be drilled on any of these leases.  But they’ll gladly whine about Big Oil holding all these leases, won’t they?

Current estimates show production on Federal leases in the Gulf of Mexico are down 22%.  Of course that’s the most significant portion of potential oil production the government controls.  It doesn’t get any better.  The forecast for production this year is it will be down 30%.   But, of course, that couldn’t possibly effect price, could it?

Finally, while onshore Federal oil production (not gas) has shown a modest gain, it could be much higher if the Federal government would cooperate in the Western Colorado area.  There, leasing is down by 68 percent since President Obama took office, and the number of wells drilled is also down. 68%.  But, you know, “drill, baby, drill” won’t work, will it?

See the freakin’ numbers.

~McQ

Twitter: @McQandO

Are the recent employment gains real?

Over the last several months, we’ve seen moderate gains in non-farm payroll jobs, with the rate of job creation running at about 200,000 jobs a month. That’s seems good, as does the continuing drop in initial claims for unemployment to around the 350,000 level weekly.

The thing is, how real is this job creation, in an environment where the past year showed a rate of GDP growth of 1.8%, and the most optimistic forecasts for this year indicate a 2.5% rate of GDP growth? Those rates of growth are significantly below the long-term trend rate of growth for the US economy, which is between 3% and 3,5% per year. How is employment increasing when GDP growth is so slow?

Well, the answer is, it may not be.  Take a look at the charts below, They are taken from the historical A tables of the Bureau of Labor Statistics’ (BLS) household survey. This is the survey where households provide employment data.

The first chart shows the number of people in the Household survey who’ve declared themselves to be employed since January of 2002.

AChart1

That does indeed indicate a moderate rate of employment growth since January of 2010. So far, so good.

The next chart, however, shows those who are employed as a percentage of the civilian, non-institutional, adult population.

AChart2

This provides a far more negative picture of employment. Essentially, the percentage of the population that is employed has crashed, and the percentage of employed was lower in 2011 than it was in 2010. As a percentage of the adult population, peak employment has declined every year since 2007.

Essentially, a additional 4% of the adult population is now jobless, compared to 2007, and that jobless percentage has been increasing, not decreasing, over the last two years, despite mild declines in the official unemployment rate.

~
Dale Franks
Google+ Profile
Twitter Feed

Regulations and Obama: Judge him by what he does, not what he says

Remember the hot air Obama has given regulatory reform?

In January 2010, he announced a government-wide review of federal regulations to restore "balance" by eliminating those "that stifle job creation and make our economy less competitive." He emphasized that concept again in his 2011 State of the Union speech, referring to "rules that put an unnecessary burden on businesses."

Of course that was all said to deflect a growing belief that his administration was anti-business.  Politically, that was unacceptable.  So, as usual, he said the appropriate things, things that would help sooth the business community and others who believed that about his administration.

Meanwhile, other than a few fairly insignificant regulations that may have been removed, his administration was piling on new regulations at an unprecedented rate.  The Heritage Foundation has put it in a chart for simplicity’s sake:

 

2012 MASTER GFX TEMPLATE

 

Heritage issues this disclaimer:

Excessive regulation, of course, cannot be blamed on the White House alone. A great many of the rules and regulations imposed each year are mandated by Congress, and many others are made possible by intentionally ambiguous statutory language. Others are promulgated by so-called independent agencies not subject to White House control (although they are run by presidential appointees). Regardless of responsibility, the result is the same: more burdens for Americans and the U.S. economy.

A reminder for all that for the first two years when most of these regulations were passed into law, Obama enjoyed a Democratic majority in both houses of Congress.

And, huge surprise here, even more regulation is in the pipeline:

The most recent Unified Agenda (also known as the Semiannual Regulatory Agenda)—a bi-annual compendium of planned regulatory actions as reported by agencies lists 2,576 rules (proposed and final) in the pipeline. The largest proportion—505 rulemakings—is from the Treasury Department, the SEC, and the Commodity Futures Trading Commission—all tasked with issuing hundreds of rules under the massive Dodd–Frank statute. The Environmental Protection Agency is responsible for 174 others, while 133 are from the Department of Health and Human Services, reflecting, in part, the regulatory requirements of Obamacare.

Of the 2,576 pending rulemakings in the fall 2011 agenda, 133 are classified as “economically significant.” With each of these expected to cost at least $100 million annually, they represent a total additional burden of at least $13.3 billion every year.

So pardon me for giving whatever this President says a health eye roll of skepticism.  He’s not serious about what he says when it comes to regulation and the actions that have taken place under this administration, strictly on the executive side of things, says he’s actually quite fine with increased regulation, regardless of the impact on business.

Bottom line: he remains as most have perceived him to be – anti-business.  He continues to be at the head of an administration that does indeed “stifle job creation and make our economy less competitive” through over-regulation.

His deeds belie his words.

~McQ

Twitter: @McQandO

Economic Statistics for 13 Mar 12

The following statistics were released today on the state of the US economy:

The NFIB Small Business Optimism Index rose to 94.3, the sixth straight month of increases for the index.

Retail sales rose 1.1% in February. Less autos, sales were up 0.9%, and ex-autos and gas, sales rose 0.6%.

Business inventories rose 0.7% in January, keeping the stock-to-sales ratio unchanged at 1.27.

The Ceridian-UCLA Pulse of Commerce Index rose 0.7% in February, following a drop of -1.7% in January. Even with the February increase, the PCI is indicating that the economy is still weaker than other indicators seem to show.

In weekly retail sales, Redbook reports same store sales were up by 3.3% over last year. Meanwhile, ICSC-Goldman reports weekly sales rose 0.7% for the week, and were up 2.3% over last year.

~
Dale Franks
Google+ Profile
Twitter Feed

Rising gas prices can be directly attributed to Obama’s failed energy policy

The stated plan of the Obama administration, or at least their stated goal, was to see gas prices rise “to the level of Europe” so alternative energy sources would be more feasible, affordable and attractive.  Or that’s how I remember it.  

So here we are, headed that way.  But while the administration may find that to be a good thing, most Americans watching gas prices rise … don’t.

And who do they blame?  Well they blame the same person they always blame – the president.  Right or wrong, the reason is irrelevant.  That’s politics in America.  So the best thing to do is implement policies that will ensure this potential political landmine is kept disarmed.  Of course, this administration, despite its strident claims and outright falsehoods to the contrary, has done anything but that.

The so-called “experts” are trying to rise to the defense of Obama on this:

“This notion that a politician can wave a magic wand and impact the 90-million-barrel-a-day global oil market is preposterous,” said Paul Bledsoe, strategic adviser to the Bipartisan Policy Center and a former Clinton administration official.

Well a straw-man statement like that really does make one wonder about his expertise, doesn’t it? And one wonders if this expert from the “Bipartisan Policy Center” remembers the last time politicians laid blame for gas prices on a president.

Of course no one is talking about a magic wand (although it could be argued that George W. Bush used one by announcing his intent to lift the offshore moratorium that saw the price of oil plunge in its wake) except Democrats (“tap the Strategic Petroleum Reserve!”).

This isn’t about “magic wands” or immediate actions to stem adverse political results.   This is about the sum of a policy of 3 plus years that has seen us end up moving toward the administration’s stated goals.  The only thing that has kept it from being worse is the rather large increase in production of oil and gas on state and private land which has offset the overall decline in production on federal lands.

As political calculations go, though, this administration forgot one important thing about their goal of making gasoline more expensive in order to make alternative fuels more attractive.  The one thing they forgot was to get the people’s buy in (same problem with ObamaCare).  And, as you might imagine, the people aren’t buying in.  Add in the tsunami of negative stories about “green energy” companies and the cost of alternative fuels and you have a situation that is entirely predictable – Obama continues to try to sell his goals and the American people continue to refuse to buy into his pitch:

Monday’s efforts were just the latest in an aggressive messaging blitz that has included three recent swing-state speeches touting Obama’s backing for oil drilling, federal investments in green energy and his administration’s tougher fuel economy rules.

But a Washington Post/ABC News poll released Monday suggested the effort is falling flat with voters upset about prices at the pump, which according to AAA are now averaging $3.80 per gallon — a 30-cent increase in the last month alone.

The poll found that 65 percent of U.S. adults surveyed disapproved of Obama’s performance on gas prices, while 26 percent approved and 9 percent had no opinion.

As mentioned, this isn’t just about gas prices alone.  This is also about Obama’s energy policy goals, well documented, that want to see fossil fuels eliminated as the predominant fuel for our economy. 

Naturally, because of the obvious negative political results, the Obama administration has embarked on a campaign to shift the blame about gas prices elsewhere – leopard/spots. 

In this President’s view, only the good things that happen during his watch are his responsibility, the bad things belong to someone or something else.  Bush was the blame for high gas prices (and just about everything else) when Obama was running for President – speculators, however, are the bad guys in this particular gas price crisis.  Never mind the “permatorium” and reduced drilling on federal lands during his 3 plus years have also had a detrimental effect.  Forget the promise of the Keystone XL pipeline and the immediate effect its approval might have had on gas prices.  Oh, and approval to expand Gulf Coast refineries?  Who needs that?   Nothing to see here citizen, move along.  Its those damn speculators.

Politics is about perception, and the perception is that Obama is an enemy of the oil business (and he’s done nothing to dissuade that perception) and those chickens are coming home to roost, to quote his favorite pastor:

“Anything that is perceived by people as a problem in the immediate advance of the election has a chance to impact the election,” said Paul Beck, a political science professor at Ohio State University.

The threat to Obama from rising fuel prices is likely to become more grave if the economic recovery stalls.

“It depends in part on what happens with gas prices, and it depends to some degree on the state of the economy as well,” Beck said.

Among other things.  Bottom line, as much as the Obama spin-meisters try to lay this off on others, it just isn’t working.  Its that record of statements damning the oil industry and those statistics that show that this administration has done everything in its power to slow the production of oil in this country where it could that counts.

Much to Obama’s chagrin he’s being judged on his actions, not his words.

~McQ

Twitter: @McQandO

Deficit watch: The trillion dollar beat goes on

In case all this contraception talk has distracted you (as it surely was intended to do), you need to know that the deficit continues to grow and is on pace to go over a trillion dollars for the 4th year in a row:

The federal government set a new monthly record deficit of $232 billion in February and has notched a total of $581 billion in the first five months of the fiscal year, according to the Treasury Department’s official count released Monday.

February’s record is $8 billion more than the previous monthly record, set in February 2011, and came chiefly because of a drop in individual income tax receipts.

The overall deficit remains on pace to top $1 trillion this year for the fourth year in a row — but is down slightly from its pace last year …

Sorry to intrude with such boring reality.

Now back to “slutgate”.

~McQ

Twitter: @McQandO