Sunday, November 09, 2008

I Thought Democrats Didn't Like The Concept of the "Unitary Executive"

Perhaps they've changed their minds now that one of their own will soon be in the White House:

President-elect Obama plans to use his executive powers to make an immediate impact when he takes office, perhaps reversing Bush administration policies on stem cell research and domestic drilling for oil and natural gas.

John Podesta, Obama's transition chief, said Sunday Obama is reviewing President Bush's executive orders on those issues and others as he works to undo policies enacted during eight years of Republican rule. He said the president can use such orders to move quickly on his own.


Anonymous said...

About time.

Ellen K said...

We will see how that goes down when the price of gas goes back up. This time with an economy that isn't making headway. Leave it to the liberals to think that by removing key energy resources in appeasement to their green supporters that they will make things better for folks in the middle class. It's easy to be green if you can afford new cars, new houses, new stuff. But for those of us in the real world all it means is higher energy costs. Watch the prices of anything that has to be transported including food and medicine go through the roof. And if it's a cold winter, watch as his former Chicago supporters curse him under their frozen breaths.

mazenko said...

Power of the presidency - can be used for good or nought. The stem cell move is long overdue. The drilling restrictions might cost him, but it's nice to see a move away from "drill, baby, drill" when America has a whopping 3% of the world's oil reserves, and drilling in America doesn't mean the oil stays here. It goes on the world market and is bought up by China, India, Europe, and the U.S., just like any other oil.

Quincy said...

Politicians never remember that the power they grant themselves will always end up in the hands of the opposition.

Way to go, George!

Anonymous said...

Where does this 3% come from? I've read or heard it for decades now. Is it just a made up figure?
Why is it that I read that oil is there, it just is too costly to drill?
We do not, I repeat do not have an energy crisis, we have an energy policy crisis. Drill baby, drill! Do so as good stewards, reward risk takers of new technology-develop other sources and help not hinder the development of energy.

Ellen K said...

I heard yesterday that we are the third largest reserve of oil, but much of it is barred from production. The Greenies base this on old school technology when the current oil industry has moved lightyears beyond that. There are capped wells in the Permian Basin that oil companies can't open due to these ludicrous standards. And the idea that the folks in the rural areas can simply suck it up and do without is narrow and elitist. But then, so is the DNC.

mazenko said...


Believe me if it were feasible to make money drilling in America, industry would be doing it. Government is no so powerful. Currently, oil and gas companies are not even drilling on the leases they've already obtained. This is true in the gulf as well. The government can open up new leases, but without new rigs which are incredibly costly, no drilling will happen. There are only a few manufacturers of these platforms and they are already backlogged with orders from Russia, China, Mexico, and others. Thus, it's simply not so simple.

caheidelberger said...

"reversing Bush Administration policies" -- undoing the abuses of executive power they were protesting... sounds perfectly consistent to me!

allen (in Michigan) said...

> Where does this 3% come from? I've read or heard it for decades now. Is it just a made up figure?

Pretty much. If there were some way to determine how much oil there was then, by inference, you'd know where it was as well. That would obviate the need to go prospecting which is still a pretty important part of petroleum production. Ergo, it's a made-up figure.

> Believe me if it were feasible to make money drilling in America, industry would be doing it.

A good reason not to believe you then.

For all the endless blather about Bush being in the pocket of the oil industry why did it take until the last few months of his administration to even take a substantive step toward drilling on the outer continental shelf? Sorry, the power is in the hands of those who get their agenda enacted into law and that hasn't been the petroleum industry for a long time.

> Currently, oil and gas companies are not even drilling on the leases they've already obtained. This is true in the gulf as well.

Of course they are. They're just not drilling where there isn't any oil.

Do you think the petroleum companies would refuse to drill where they might find the stuff that fuels their bottom line to establish some political pretext to open up other areas? If that were the case it would have turned out to be a particularly stupid policy since the petroleum industry isn't particularly profitable - check out the sector's P/E ratio.

That widely-quoted misrepresentation is based on the difference between where oil can be looked for and where it's found. No oil company's going to spend the substantial sums required to prospect for oil if they know they can't drill for it so large areas are still unexplored that might, in fact, contain commercially-exploitable reserves.

mazenko said...

The 3% is not a made-up number. 3% refers to the "known" oil reserves.

The oil companies are, as you note, drilling in places where there are known reserves. However, many have reached capacity, and they aren't pursuing drilling on much land for which they have leases. That doesn't mean they know there's no oil there. They haven't even begun for a variety of industry-related issues. Many are the same concerning refineries. Critics lament that we haven't built new refineries in thirty years. Yet, the current ones aren't even used at capacity, and many sit dormant.

To argue that the industry isn't "particularly profitable" makes no sense. Even understanding the P/E, which I do, the industry is still producing enormous profits by volume alone. Wal-mart operates on the same principle. The oil industry is incredibly profitable, perhaps one of the most profitable in the history of industry. Are you complaining about your dividends from your Exxon stock? I know I'm not.

allen (in Michigan) said...

And known reserves are only known once they're discovered.

If you can't drill for the oil why look for it? That 3% figure is a made up number because there's no way of knowing how much oil is economically recoverable, i.e. will be known reserves, until it's discovered which won't happen until the oil companies have some reason to think it's worth investing the money in prospecting.

As to the profitability of oil companies, if you understand what P/E is and means then how can you credit the nonsense about the enormous profitability of the oil companies? They're big companies but their profits are below average for publicly-traded companies which means they're not "incredibly profitable". It means they're not particularly profitable.

As to "the industry is still producing enormous profits by volume alone", that's a meaningless formula that justifies further meaningless formulas like "obscene profits" and the like.

A dollar invested in the oil industry will earn poorer returns then a dollar invested in quite a few other sectors. That's the measure of profitability but it's not much use when trying to whip up greed in the electorate.

mazenko said...

A dollar invested in the oil industry will return well above average dividends and growth to match. There is no one who is running, working for, or investing in the oil companies who are not tremendously pleased with the profitability of the industry. Just ask T. Boone Pickens. I'm not one to justify "meaningless" statements about "obscene profits." I simply look at the data and judge it rationally.

Currently, the oil industry is doing quite well, and they are, in many ways, at their (and the entire related industry's) capacity in terms of drilling and refining. There are numerous other market forces at work, the least of which is environmentalists limiting their ability to explore for oil.

allen (in Michigan) said...

Then why is the P/E ratio for the sector so low? Shouldn't investment be driving up the price, and P/E, of the sector due to it's attractiveness as an investment?

While the petroleum sector has its attractions unusual profitability isn't one of them. That's why no petroleum company sports the P/E ratio of, say, a Google.

As to the environmentalists limiting the ability of the petroleum companies to explore for oil, of course they have. That's what all the recent controversy was about in the House and Senate. If the obstructions didn't exist there wouldn't be any need to remove them.