Thursday, April 24, 2008

How to screw Hugo Chavez and make the US more energy independent at the same time

Sounds like a tall order doesn't it? After all, we get about 1200k barrels of petroleum per day from Venezuela. But it is possible, it merely takes the will to do it. If the US acts now, we can squeeze that pimple on the ass of society until it spurts bloody pus. After all, the first step in healing is getting rid of the infection. Only the US is capable of refining the sulfurous tar that passes for Venezuelan crude oil in large amounts. So we merely need to stop buying his oil. within 6 months or less, Venezuela will have a new government. We merely need to be able to bring 1200k barrels of additional crude per day onto the market to replace that which we are embargoing from Venezuela. We have a number of possible sources for this, but it will require some lead time and planning to get it done, and unfortunately time is relatively short. We of course have the option of opening Florida, California, and ANWAR up for drilling. But that will probably be a minimum of five to ten years from large scale production. We could negotiate with Mexico or Brazil for them to send additional oil our way in return for technology assistance in bringing that oil to market, and possibly paying a premium for social programs and assistance.
Brazil is especially attractive because they do not have the technical capability to bring their oil to market. They also have recently found a number of very large oil and gas reservoirs in deep water off the Brazilian coast.

If we can further pacify and stabilize Iraq, we could also increase our oil purchases from them. Iraq is sitting on reserves that approach those of Saudi Arabia. The limitation has been the pacification of the country.

So as you can see there are a number of short and longer term solutions that could be implemented to accomplish this task. And we do not have to completely embargo his oil, merely buy as much as we can obtain from other sources, thereby reducing the amount we buy from Chavez. This will of course severely impact the amount of money flowing into his country. Without money flowing in, he cannot pay for the social programs that up until now, have endeared him to the low income populace of that country. If that money were to dry up, Chavez will find himself still standing when the music stops, and that will not end well for him.

I said earlier that time was short. The reason is that as of now, we are the only country that can utilize a large amount of his oil. That will be changing in the next decade or so. Both France and China currently can refine only a small fraction of his available output, but in the next decade or so, that heavy sour crude refining capacity will increase, making our ability to exercise our options that much harder. We should be working now to increase our ability to influence Venezuela's politics, because if we do not deal with Hugo now, we will have to deal with him later. it is better to deal with a problem when you have the ability to do so, instead of waiting until the problem is much bigger and less amenable to being dealt with.


Wednesday, April 23, 2008

A word to those who think that Big Oil is Evil Incarnate

If you live and/or work in and around Houston, your livelihood is directly proportional to the health and profits of EvilBushCo Big Oil. But even if you do not live and work in Houston, if you have money invested anywhere, odds are, you indirectly own quite a bit of energy company stock. Just like all the investment houses that figured they were fine because they didn't invest in sub-prime mortgages themselves, only to discover that the people THEY invested in DID, or they had invested in someone ELSE that did. THAT is how less than 10% of the mortgage market affected over 90% of the investment markets and caused the meltdown of Bear Stearns and others.

And even if you kept ALL of your money in a mattress somewhere, you still benefit from the O&G biz indirectly because every single one of your customers here in town (and you!) work for oil and gas companies either directly or indirectly. Even the clerk at the local Wally World works for big oil because her CUSTOMERS either work for big oil directly, or THEIR customers do, or THEIR customers do. Well over 75% of ALL REVENUE GENERATED in Houston comes from the oil and gas business. Imagine what Houston would look like if 75% of the people in this town were out of work. Would YOU have any customers that could afford your services if that happened? Could YOU keep your lights on? Could your employer? Think LONG and HARD about that.

I don't have to work real hard to imagine that, I lived through it in 1982, and only about 1/3 to 1/2 of the O&G biz shut it's doors then, because as bad as it was (and it was BAD!) people STILL needed gasoline and petrochemicals, so the biz didn't completely dry up, but on the flip side, back then even MORE of Houston's economy was based on O&G, closer to 90%. I try hard to block those memories out to be honest.

Put yourself in the shoes of "big oil" for a moment.

You have just spent close to a billion dollars bidding on a O&G lease offshore of Nigeria with little more to go on than a very low quality 2D preliminary seismic survey supplied by the Nigerian Government that if you hold your head just so, and squint just right, hints that there MIGHT, JUST MIGHT, be oil and gas there. You spend another billion on a more detailed and accurate survey that confirms the previous findings, in fact you got really lucky! There is a lot more oil and gas there than you thought, it could easily have been a lot less, or even none. And again, this is all based on a seismic survey that could still be wrong. Along the way you've had to grease damned near every palm in the Nigerian government at least once. This lease is in deep water on the edge of the continental shelf. There are no pipelines anywhere near there. You are going to have to spend close to another 15 billion to design and build pipeline infrastructure, and design and build the subsea equipment, drill the wells and complete them, and connect everything up and make sure everything works as planned (it rarely does work exactly as planned, shit happens.). You have to constantly inject methanol and glycol into the pipeline to keep it from freezing up with methane hydrates (natural gas in pores of water ice) and paraffin (wax) due to the temperature and pressure at that depth, and you can never let the pipeline ever shut down without purging it or it will freeze up solid. You've got to constantly contend with pirates boarding your vessels and holding your people hostage. You've got to constantly contend with rebels trying to tap into your onshore pipelines and causing massive fires and damage. You've constantly got to grease the palms of every minor government official to keep things going. You've got to constantly worry that a coup will happen and all of your investment will be nationalized by some pissant Marxist thug with delusions of adequacy and you will lose the TENS of BILLIONS of dollars you've invested over the last 10-15 years in one fell swoop.

Now multiply that by hundreds of similar long term investments in garden spots all over the third (and in some cases, even FOURTH) world in various stages of development.

Then on top of that the US government takes 26 cents out of every dollar of your product sold while you make about 15-18 cents, and the government complains that you are making too much money on the product and calls you to testify in front of congress. But of course since this is really so that they can show they are “doing something” so instead of allowing you to try to state your case and explain why they are wrong, they castigate you and make you sit there and take it.

Were you in that position, I think your answer to Nancy Pelosi would be a lot less printable than Exxon-Mobil's has been. I know mine would have involved her performing physiological and scatological impossibilities upon herself on the floor of the House in front of God and everybody. And that would have been after I cooled down and chose my words carefully. My initial reaction would probably have involved rushing the podium and pummeling her to a pulp on national TV with a bushel of corn, a gallon jug of ethanol, and a carbon offset.

Monday, April 21, 2008

A reminder to La Raza

Wednesday, April 16, 2008

$112 Billion

That is a really big big number. That is almost as much as the combined fortunes of Bill Gates and Warren Buffett. That would pay for nearly half the cost of the return to the moon through 2025 at current funding levels. That number is the conservative estimate of how much divorce and unwed parenting costs taxpayers PER YEAR according to the Institute for American Values. This study does not include the costs of abortion, which in 2006, the US government paid out over $305 million dollars to Planned Parenthood alone. Nor does it include the costs of cervical cancer treatment, STD treatment, condoms, birth control pills, and IUD giveaways, and all the other hidden costs of the sexual revolution. Our society has forgotten what society exists to do. Society exists, in all it's forms, to promote the one common thread of human existence. The family. The family is the one common feature of every human society from time immemorial. It took three and a half million years to get to where we are and to build up human society, it has taken less than 50 years to damned near destroy it. How did we manage to do that? Liberalism in it's many guises. Birth control freed people to have sex without consequence (usually). But since birth control was imperfect, accidents happened. Some of those women having sex without consequence did so outside of their marriage, or with men who were married to others. Men and women felt more comfortable exploring "alternative lifestyles" and "non-traditional families". People started thinking that "if it felt good, DO IT!" was the order of the day. They no longer felt any need to think about the consequences of their actions, either on a personal level or on a societal level. And then LBJ's "great society" programs took away all of the personal economic consequences and put them onto the back of the taxpayer.

As a result we have an entire generation of kids that grew up in single parent households, or worse, in the households of their grandparents. In many instances those grandparents raising grandkids are second or third generation single parent households. We have entire generations of black men in prison because they grew up without a parent in the home. We have entire generations of women who had their babies out of wedlock, before they finished high school, and in some cases, junior high school, and whose children will never know their father, and whose ability to support their kids is destroyed by their choice to have sex at such an early age and the resulting inability to finish school or get a decent paying job.

It all boils down to the liberal sexual revolution and the "great society" welfare state that took away all reason to think about the long term costs and consequences of bad choices. Those were the one-two punches that left society reeling for 50 years. Will we ever be able to get back up off the mat?

Tuesday, April 08, 2008

"If you love our nation, stop illegal immigration." UPDATE

So wrote 13 year old Melanie Bowers in Athens Texas on the protest sign project for history class. Apparently some hispanic students did not take kindly to the sentiment, and proceeded to bash her face into a brick wall, and then they threatened to rape and kill her. She finally managed to escape and went to the principal's office for help, only to be sent back to class.

Feel free to give the principal a call or an email and let him know you care.

It would appear that Ms. Bowers cried wolf, which is unfortunate. It damaged her cause in making such a false accusation instead of promoting it.

Friday, April 04, 2008


On May 10th, the residents of Klein ISD will be asked to approve nearly ONE BILLION DOLLARS worth of bonds between Klein ISD ($647 million) and the Lone Star College System ($420 million). Although I do not know this for certain, I suspect the two bond proposals will be voted on at different polling places, meaning in order to have a say in both bond elections, a resident must drive to two different polling places. This is of course intentionally geared towards holding the already low expected turnout even lower. Low turnout bond elections almost always pass.

While I will readily admit that both systems need an infusion of funds, I question whether they need as much as they are asking for, I also question if the funds they are asking for are going to be spent wisely. Klein ISD plans to spend $130 million to bulldoze a large section of Klein HS and rebuild it, uprooting the current students for two years crowded into a school yet to be built that will be overcrowded on day one, only to remain so for the rest of it's life. Surely there is another way that does not force students to try to live like sardines. The district needs TWO new high schools, not one, and Klein HS is not overcrowded the way the rest of the district is. The school needs to be remodeled, not torn down.

Both Klein Collins and Shindewolf, which are only 4-5 years old, already have temporary buildings, and have had them from almost day one. That tells me that the schools were not built large enough to give the district any growing space. That tells me that the district planned for overcrowding and planned obsolescence. I do not appreciate my tax dollars taken so lightly. Nor my desire or ability to pay yet more taken for granted. Is it too much to ask that a dozen or so classrooms be added to any planned building over and above the immediate need for expansion space? Use them as storerooms or language arts labs or tutor labs or something, or just close and lock the door, turn out the light and close the AC vent. It has got to be better than installing temporary buildings practically from day one.

Another $38 million is earmarked for laptop computers for high school kids, and parents will be held responsible for any loss, damages, or the cost of clearing virus infections. Most of the kids in this school district have computer/internet access at home already. Ours is not a poor district. Why do we need to give them an expensive computer for them to break or lose?

The college district is growing too. That is without a doubt and indisputable, but some of the buildings they plan on replacing are defective and the costs of replacement should be borne by the builders, not the taxpayers. One (at the North Harris Campus on W.W. Thorne Dr.) reportedly has severe water seepage problems with it's foundation, so much so that keeping tile on the floor is reportedly impossible and keeping mold in check is a constant battle. And this campus that they plan on spending a bunch of money on is at the end of two major runways at IAH with a third planned in a couple years. When planes take off and land, you can hardly hear yourself think and you can clearly see the worn tire treads on the landing gear. One of these days, one of those planes is going to have an abort on takeoff and plow into that place dumping an entire plane load of burning jet fuel on everyone there. This campus is in the very northernmost reaches of the Aldine School district, one of the original member school districts. It is not convenient to Aldine HS, Eisenhower HS, or McAurthur HS, where 3/4 of the Aldine students go. A more southerly location would be more central to that district, perhaps a new campus located on Beltway 8 just west of I-45 would be cheaper in the long run and better for the system at large than overhauling so much infrastructure at the existing campus.

In Cy-Fair, the same thing is true, one of the buildings is sinking and is in need of major foundation work I am told, but the district plans to pay for it themselves instead of seeking redress from the builder, architect and/or general contractor. They also plan on several new buildings at the Cy-Fair campus but the old TI facility, with brand new AC chillers installed, is standing empty and could be ready for students in under 4 months. But instead they plan on building all new buildings themselves. Apparently they never learned that it is usually cheaper to buy what you need than it is to build it yourself, and it is usually even cheaper when you lease it because you don't have depreciation to worry about.

There is also the fact that the debt payback schedule for both of these bonds is projected based on a real estate market that no longer exists. The market is tanking, which means the projected rate of growth of the tax base is going to be much lower than they planned. That means that to service that debt, they WILL have to increase the tax rate to keep up with the repayment schedule. Higher taxes will reduce home sales even more, leading to a downward spiral. Like the home buyers that bought more house than they could afford and then financed it with a mortgage they could not afford either, the college district and the Klein school district are biting off more than it's taxpayers will be able to chew.

Red Ink: Texas recommends that both bond proposals be rejected and force the boards to go back to the drawing board and come back with a more reasonable proposal.

Other Voices: BlogHouston here, here, and here.
Chronicle here.