Sunday, February 20, 2011


Oil prices are going up and will keep going up. Estimates of global demand for this year and next have been ratcheted up as the global economy continues to gain momentum and developing countries continue to emerge toward developed country status. (Just wait until there's a car in 1.25 billion Chinese garages!) Supply on the other hand will be constrained. Brent and some other classes of crude are already trading over $100/barrel. Because of one-off anomalies and the pipeline configuration in the US, crude supplies are building up at the Cushing, OK terminals to such a degree that West Texas Intermediate (WTI, which is based on prices at Cushing, trades around eight dollars cheaper than Brent. But this aberration will not last forever and the price differential between Brent and WTI will collapse as, more than likely, WTI moves more in line with Brent, which will continue to climb.

Meanwhile, new supply is limited as reserves shrink. Exxon announced last week that it has only been able to develop enough new reserves to make up for about 80% of last year's production. In years past Exxon was able to increase reserves by more than enough to make up for production. New drilling in the Gulf and the Artic has been shut down by the Feds. More oil is under the control of governments around the world than ever before, and these governments are run by guys like Putin, Chavez, and that wacko in Iran who want to see prices move substantially higher. Global excess capacity continues to move towards the single digits, most of that being in Saudi Arabia. Some new reserves have been discovered,like the huge find offshore in Brazil, but on a global basis the Hubbert Oil Peak theory seems to be finding proof.

In other words, we're fucked. The only thing that might save us is if oil prices rise enough to justify greater oil sands development in Canada, where reserves almost match those of Saudi Arabia. Or maybe Boone Pickens' dream of a vehicle that runs on natural gas might become a reality. (One of the great, encouraging stories in this new century has been the new technology that enables drillers to get natural gas out of shale deposits, enough of which lies in the US to meet our nat gas needs for a century or longer.)

But getting oil out of oil sands is expensive and complex, and a natural gas auto can't seem to get off the drawing board. So expect gas prices to continue to rise along with oil prices over the next couple of years. Here in Connecticut, gas is going for around $3.50/gallon. It costs me almost $70 to fill my tank. What's the nation's mood going to be like if oil gets back to $140/barrel and gas to $4/gallon or even higher over the next year or two?

I had dinner the other night with a couple of my Democratic pals. They were still licking their wounds over the November mid-terms but expressed supreme confidence that Obama would get re-elected in 2012. No way he's going to lose, they said. Most pundits believe that if unemployment gets down to low 8% area, Obama will win. But I think the bigger joker wild for the 2012 elections will be the price of oil and gasoline. If gas gets up above $4 again, the populace will be in a foul mood, no matter how much lower the unemployment rate is. I think $4 is certainly in the cards and $5 or higher not out of the question.

And it's going to be so easy to point to Obamas's policies as being a major contributor to high gas prices. Ever since the BP explosion, his administration has not issued new leases for drilling in the Gulf. Although last Spring he was moving toward allowing drilling in the eastern Gulf of Mexico and on the outer shelf along the mid-Atlantic states, he flipped on that after the BP spill. Enormous prospects for oil exist in the Artic and off the Alaska coast, but Obama's militant EPA recently shocked the oil industry by taking back a permit that Shell had obtained from the EPA to begin drilling on a lease that it has spent over $3 billion developing. Such a remand of a previouly issued drilling permit has heretofore never happened. Can you imagine the field day Republicans are going to have painting Obama and his administration as out-of-touch environmental elitists who don't understand the hardship that four dollar gasoline inflicts on the average citizen? Repubs are going to take Rahm Emanuel up on his dictum to never let a crisis go to waste and play this one to the hilt.

Prepare yourself to be hearing a lot about the "Obama Energy Crisis" of 2012.

Sunday, February 13, 2011


The standard take on whatever happens to be the latest Lindsay Lohan debacle is as follows: Poor girl, she really needs help; we must do something for her before she ends up like Marilyn Monroe. No matter what outrageous antic she pulls off, the commentator shakes his/her head with a couple of sympathetic tsh-tsh's.

This way of thinking about Lindsay Lohan presupposes several things. First, that she is a "poor girl." Of course she's not poor in a monetary sense nor is she poor in any sense of the word that means "lack of resources." She is resource rich. Ever since she was a pre-teen, the little Hollywood princess has had people waiting on her hand and foot. I don't feel sorry for Lindsay. Why should I? Nor do I feel in anyway responsible for whatever crazy shit she does or if she doesn't get help that she needs. If she wants help, she all the means in the world to get it. If she wants to go out like some kind of meretricous Marilyn Monroe, then that's her choice. She has indeed tried to palm herself off as Marilyn in a couple of photo shoots, so mabye dying young and tragically is her ultimate aspiration.

And that's another assumption that we all accept as true, namely that she wants help. When I see her traipsing into the courtroom, she seems to be enjoying the attention, the hail storm of cameras clicking, the mob of paparazzi and reporters, the media examination of what she's wearing. I get the feeling that she spends an inordinate amount of time thinking about what to wear at her court/media appearances, down to how many buttons on her blouse she should leave open so that we can all ogle her breasts, which lately seem to be the only marketable assets she has left. Observe the way she mugs the cameras, devolves into hysterics when the judge throws the book at her (or at least raises the book in a threatening manner), plays the ingenue giving baffled looks to her attorney, pouting at the judge with her recently collagenized lips. Upon such observations, do you detect any real signs of genuine remorse? Allow me to introduce as evidence the words "Fuck You" painted on her fingernail and flagrantly displayed as she raised her middle finger to her chin at her July 2010 probation revocation hearing. Was this message directed at the judge? I'll let you be the judge of that. Some with hard hearts might say that gesture shows contempt of the court. With her acting career basically kaput as no producer in his right mind would hire such a walking disaster, her court appearances are the only star vehicle that she's got; and she seems determined to play the pitiable mean girl role up to the max. Lindsay is addicted all right, not just to narcotics but to narcissism. So no, I don't think that she really wants help.

Lindsay's real problem goes beyond an addictive personality, a mom who takes the stage mother syndrome to all time low, a dad who holds press conferences to announce how much he loves his daughter. The root of her problems is that she feels entitled. This curse has afflicted many a child star who was deluged with riches and mass media attention for doing something that was so effortless, such as acting or singing. Some argue that sense of entitlement is pandemic to Lindsay's entire generation. Instead of the "Me Generation" we have the "Mine Generation."

Lindsay feels entitled to blow off a probation hearing because she's partying in Europe and at the last minute can't find a friend with a private jet to fly her from Paris to LA. She feels entitled to abscond with a mink coat at some charity event (Lindsay must have thought she was the charity case) and was apparently so immune to any sense of guilt that she wore it at a photo shoot for a magazine. After seeing Lohan wearing her coat in the magazine, the coat's owner managed to retrieve her mink, "reeking of cigarettes, booze, and a tear in the lining," according to her. Lindsay evidently feels entitled to walk out of jewelry store wearing a $2,500 necklace that she didn't pay for even though she was carrying $3,000 in cash. She feels entitled to leave the scene of accidents, the latest happening last September when she hit a stroller while driving her Maserati in West Hollywood. On another occasion, she commandeered a luxury SUV and in the wee hours of the morning led the cops on a high speed chase in pursuit of a personal assistant who had the temerity to resign. When the cops finally caught up with her, she fingered one of her passengers, who happened to be a black guy, as the driver. After one court appearance for repeated probation violations, she invoked Article 5 of the UN Charter of Human Rights, tweeting, "It is clearly stated in Article 5 that no one shall be subjected to torture, inhuman or degrading treatment or punishment." Yet despite all the hit and runs, the trips to rehab, the violations of probation, the DUI's, the possession of narcotics, the charges of grand larceny, Princess Lindsay has spent barely a fortnight behind bars. And it's not just bleeding heart liberals who ask with outrage what would the jail time be for a person who wasn't rich, white, and famous?

So of course she feels entitled. She obviously thinks she can get away with anything short of a killing a person, and given her driving record it might not be long before that crime is added to lengthy rap sheet.

The best thing we can do for Lindsay Lohan and for our society as whole is to encourage the judge trying her for grand larceny theft of the aforementioned necklace to this time really throw the book at her, should she be found guilty, and sentence her like he would some Latina from East LA or some black guy from Compton.