Sex, Drugs and Oil – ‘Drill baby Drill’ takes on a whole new meaning

This post has it all – A scam, a Democrat who grows a set, a sex scandal and the truth about the price of oil FINALLY comes out.

The Republicans have been screaming that if we want to lower to cost of oil, we must drill more.  They have used this to criticize Democrats and for a while it worked.  Many Democrats changed their position or softened their opposition to expanding the areas for offshore drilling (including Democratic Presidential nominee Barack Obama).  Even prominent Republicans have changed their position, like Republican Presidential nominee John McCain, Florida Governor Charlie Crist and Florida Senator Mel Martinez.

When Congress went on vacation recently, Republicans tried to pull a power play to get the Democrats to return to Congress to vote for removing the moratorium on leases expanding offshore drilling along the U.S. coast beyond what already exists.

When talk of drilling off the coast of Florida became bigger news, I began to research.  That led to 2 posts explaining the scam:

The Offshore Oil Drilling Scam – posted June 25, 2008 and

Offshore Oil Drilling – The Scam Continues – posted August 5, 2008

Bill Nelson Grows a Pair

A number of days ago, I heard rumblings from my other senator – Democrat Bill Nelson.  The only way I’ve been able to identify Nelson as a Democrat is by the ‘D’ after his name.  (though he is more of a Democrat than fellow Nelson, Ben Nelson (D-Nebraska))

Earlier this week, it was reported that Senate Majority Leader Harry Reid will offer a compromise bill that will allow limited offshore oil drilling 50 miles off the coasts of Virginia, South Carolina, North Carolina and Georgia and off the Gulf coast of Florida.

We are offering Republicans multiple opportunities to vote for increased drilling,” said Reid.

Then it happened!  Bill Nelson started showing a spine.  I’m not sure what caused it, but I like it.  He has begun advocating for a bipartisan approach to develop alternative energy sources.

Our national debt and our reliance on foreign oil are very heavy burdens for our economy.  It is my belief that one of our major threats to our national security is our dependence on oil — not just foreign oil, but oil.”

Bill Nelson has hinted at filibuster and said that Florida will not be ‘a sacrificial lamb.’  He also said the ‘drill baby drill’ pleas were misguided rhetoric and hollow chants.”

More leasing, if that’s just the answer, will only delay our freedom from oil,” he said. “Then we also have the potential consequence that we will dirty and destroy our state’s economy. We have a $65 million-a-year tourism industry in this state that depends on pristine beaches.”

“We need to bring the gas prices down by not wasting so much oil and by banning the greed speculation on the part of the oil traders and profiteers,” he said.

“Our future is breaking our addiction to oil. That is what the next president is going to have to do,” Nelson told reporters before his speech. “You can’t drill your way out of the problem.”

A Scandal is a-brewin’ or a-drillin’

As Reported by the AP:  {emphasis is mine}

A scandal involving sex, drugs and — uh, offshore oil drilling. It’s a strange mix, and it couldn’t have come at a worse time for those in Congress pressing to expand oil and gas development off America’s beaches while trying to stave off an election-year rush by Democrats to impose new taxes and royalties on the oil industry.

Between 2002 and 2006, 19 oil marketers — nearly a third of the Denver office staff — received gifts and gratuities from oil and gas companies, including Chevron Corp., Shell, Hess Corp. and Denver-based Gary-Williams Energy Corp., the investigators found.

Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representativeswho referred to some of the government workers as the “MMS Chicks.”

“This is why we must not allow Big Oil’s agenda to be jammed through Congress,” said Sen. Bill Nelson, D-Fla., who strongly opposes any expansion of offshore drilling, especially closer to Florida. He said the report “shows the oil industry holds shocking sway over the administration and even key federal employees.”

“This IG report has it all — sex, drugs and the Bush administration officials once again in cahoots with Big Oil,” said Sen. Charles Schumer, D-N.Y., whose Joint Economic Committee released a report last year claiming the Minerals Management Service has failed to collect millions of dollars in oil royalties.

Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, planned a hearing on the investigation next week.

But House Republican leader John Boehner, R-Ohio, accused the Democrats of “trying to pull a hoax on the American people.” He said the plan would result “in little or no new American energy production” because states would share no royalties and have little financial incentives to allow drilling.

It was oil market speculation after all

The title and first paragraph in the AP story told me all I needed to know.

Report: Oil-price surge was speculation

WASHINGTON — Speculation by large investors — and not supply and demand for oil — were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded today.

The report was completed by Masters Capital Management released by the U.S. House and Senate.  Here are some of their findings.

$60 billion was invested into oil futures markets during the first five months of 2008. As a result oil prices increased from $95 a barrel in January to $145 a barrel by July.

Since July, these investors have withdrawn $39 billion from those markets.  Prices subsequently decreased as a result.   Current price (close of September 10, 2008 – $102 per barrel.)

“We have clear evidence the fund flow pushed prices up and the fund flow pushed prices down,” said Michael Masters of Masters Capital Management.  The price decline “began a massive stampede for the exits” by investors on July 15th.

“This analysis illustrates that when oil speculators poured large amounts of speculative money into oil markets, prices skyrocketed just as they were hoping,” said Senator Maria Cantwell (D-Washington).  “And when the speculative money got pulled out, prices tumbled.” 

“These large financial players have become the primary source of the dramatic and damaging volatility seen in oil prices,” concluded the report.

The Commodities Futures Trading Commission is expected to release a report as early as this week on oil speculation.  Last July, the CFTC released a report indicating that “fundamental supply and demand factors” influenced the oil markets and that the data “does not support the proposition that speculative activity has systematically driven changes in oil prices.”

Excuse me?  Their report showed supply and demand were the indicative factors in the high price of oil? 

Who is this commission, you ask? 

From the ww.cftc.gov:

The Commission consists of five Commissioners appointed by the President, with the advice and consent of the Senate, to serve staggered five-year terms. The President designates one of the Commissioners to serve as Chairman. No more than three Commissioners at any one time may be from the same political party.

Currently there are 4 members on this commission.  Acting CFTC Chairman Walter Lukken 

Acting Chairman Walter Lukken (pictured at right) who was first appointed in 2002 becoming acting chairman on June 17, 2007.     

Commissioner Michael Dunn was sworn in December 6, 2004 and reconfirmed in 2006.

Commissioner Jill E. Sommers was sworn in August 8, 2007

Commissioner Bart Chilton was also sworn in on August 8, 2007

And in their infamous wisdom, the Senate will present legislation that will place “limits on the amount of oil certain traders, interested only in speculation, would be allowed to purchase in futures markets.”  They would also expand the authority given to the CFTC to regulate the oil markets. 

And there you have it.  A team of commissioners nominated by President Bush, release a report that incorrectly place the cause of the extremely high cost of oil on supply and demand.  This triggered the demand for increased offshore drilling.  So when evidence is presented that support that the report was incorrect, the US Senate expands the authority of that failed commission.  Brilliant.

 

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One response to “Sex, Drugs and Oil – ‘Drill baby Drill’ takes on a whole new meaning

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