Tag Archives: government

June 6th And Liberal Blinders

June 6th should always remain a day of remembrance and gratitude for the sacrifice of thousands of young men who faced terror in its rawest form and an uncertain outcome for that day’s efforts.  There were many significant engagements during the War but that date was truly the opening of the final act in that grand and fateful play.  The day and the War were a victory for freedom, for some of the world but not all.   The Left in the US and much of western Europe had had a romance with the Communists and the Socialists regimes for decades and before the War and continued that devotion in many quarters to the present day.  They ignored then and continue now to avoid any discussion of the villainy of the Communist and Socialists movements.  Today many especially in western Europe prefer the use of Socialist rather than Communist.  Of course that completely overlooks the fact that the Stalinist empire was promoting Socialism.  Indeed its very name–“Union of Socialist Soviet Republics” says it all.  The Commies love Socialism.  Stalin never held a formal government office.  He was Secretary General of the Communist Party and sat of the Politburo but he ran everything.  For decades the Left had a romance with the Commies and for decades after the War continued that romance.   Many of the “journalists” from the ’20’s all the way beyond the Reagan era touted their goodness or at least their good intentions.  They were for the regular guy as long as he obeyed the dictates of the elite who knew best.

The first warning the Left had regarding Communism were the publicly flaunted purge trials of the ’30’s shortly before the War.  Their public nature was the whole point.   Yet, the Left sympathizers in the West made feeble at best comment and mostly ignored those events or made tortured efforts to justify them.  Then came a real bang on the head for the Left in the West–the Treaty of Friendship between Hitler and Stalin literally a couple of weeks before the invasion of Poland.  Some on the Left did finally abandon the socialist ship at that point but not in buckets.   They filled the newspapers, magazines and radio waves with justifications, explanations and apologias for the action.   That venal act of the Commies was quickly followed within a month by the conquest and annexation  of eastern Poland by Stalin during September of 1939.  Even then most on the Left remained loyal to that ideology.  Two months later Stalin invaded Finland without any provocation whatsoever.   Finland was tiny but fought hard and contrary to the French a few months later hung on into early 1940 before the weight of the Soviet assault overwhelmed their limited resources and men.   Finally some on the Left woke up.  You have to know your history or do some real research because it is never mentioned these days.  But the West was so outraged by the naked aggression that for a couple of months Britain and France seriously considered declaring was against the Soviets;  they say not a wit’s difference between what Stalin was doing and Hitler.  They were right but hesitated and events passed them by.  No sooner had Stalin taken a huge chunk of Finland than he immediately marched right into Latvia, Lithuania and Estonia.  Raw evil on display.  As always the Soviets maintained that the local socialists and commies wanted them there and that Stalin was only doing a good thing for the ideology of the Left.   This additional conquest occurred only weeks before Hitler finally launched his invasion into Western Europe.   Still the Left around the world for the most part stood by their ideology and their man.

The Commies after the taking  of their share of Poland rounded up about 25 to 30 thousand leading members of Polish society.  These were military men, lawyers, professors, politicians, preachers and anyone consider influential in the bourgeois world.  They were taken out and slaughtered, shot in the back of the head.  Recently the death of the military people at Katyn forest was remembered as part of the current Russian charm offensive.  You may recall that was when the jet crashed killing the then Polish President and all on board.   But that was only about 5 thousand or so of  the total executed by the Left.   The Germans found some of these mass graves during the War and made them known  to the world but in the midst of the War and Hitler being hated the disclosure was discounted for decades as Nazi propaganda.   As with the concentration camps word leaked out of the executions but the Left of the West ignored the truth.

Tend years before Joe McCarthy became infamous there was another purge of Communists in a Western Nation.  The Communist Party was very strong in France during the ’30’s and totally devoted to the cause and the Comintern.  Several dozen communists were in the French legislature at the outbreak of the War.  France was a very left leaning nation at that time.  But Stalin’s invasion of Finland was too much for the majority of the French.  Within weeks of the Finnish war start, 24 communist deputies were arrested and several were tried and convicted on various charges against the State.  Over three thousand more were rounded up and imprisoned for their membership in the Communist Party and their activities.  Most of those were eventually released.   Of those arrested in the legislature otherwise many were in fact funneling information to the Commies and following orders of the Comintern which of course meant Stalin.  Old Joe wasn’t the first one to go after Commies because he believed them a danger to society and often outright spies for Stalin.

Unless you really know your history pretty well you’ve never heard about any of the above.  Certainly the typical World History text book won’t mention any of this of the multitude of other atrocities committed by the Commies before during and after the War.   The Left never discusses the shortc0ming or outright evil of Socialism.  After the War there was still the romance and all was forgiven.  At the Nuremberg trials the Soviets did not allow any of the German defendants to raise these or similar issues as mitigating circumstances.  Like an Orwellian world the invasion of Finland the rape of Poland was eliminated from history and sadly the Left in the West and their media friends were co-conspirators in this grand cover up that continues to this day.   These events mentioned are only a sliver of the evil cared out in the name of the “Revolution” by the Left.  We might list a few more down the road.

“Education is a weapon, whose effect depends on who holds it in his hands and at whom it is aimed.” Joseph Stalin.   http://www.olcranky.wordpress.com


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Physician Heal Thyself

We have a new nominee for Surgeon General.  Her photos have now been flashed across the screens of cable TV and elsewhere.   The job of Surgeon General isn’t to actually be out there treating patients on a daily basis but to serve as an advisory for the general health policies of the nation.   Their role is to lead those efforts against diseases and conditions that affect the general health of the nation.  They also project an “image” of our nation to the world as the spokesperson for all of us on those issues.   They should serve as a role model in some form.  Those role models are not the be all and end all but they have a significant place in a modern society founded on communications.  Words and pictures communicate all kinds of messges.

Be honest, when you saw those pictures of the new nominee what was your immediate reaction?  Mine sure wasn’t of someone who is the picture of health.  That lady must be at least 75 pounds overweight.  Merely standing there without saying a word she sends the wrong message to everyone.  She is a professional and knows more than I do about the dangers of being overweight yet she carries around lots of extra heft.  Her mere presence says to the young people it is ok to be way overweight, you can still become an important person.  She is the poster child for saying that weight doesn’t matter and that it is ok to be like that and have a much higher chance of developing those debilitating diseases and conditions and others will pay all your expenses.  I think she is a terrible choice.  She is a living negative about everything wrong with modern health issues and self control and taking responsibility for your own life and well-being.  The Surgeon General doesn’t need to look like an Olympic champion but they sure shouldn’t look like that lady that sings at the end of the opera.

We have been advised in recent years repeatedly that obesity is the major cause of at least four of our deadliest and costliest medical issues: heart disease, high blood pressure, diabetes and cancer.  Those by far consume the bulk of our national health care cost.  If you reduce obesity you dramatically would reduce the incidences of those four medical conditions and the attendant treatments, medicines and hospitalizations associated with them.  We know and our common sense tells us that obesity is self imposed.   I realize that they are few medical conditions that can cause obesity but those are quite rare.  The overwhelming majority of obesity is caused by over eating.  In spite of those hundreds or thousands of diet books on the shelves at the book store and promoted on TV or radio, the issue of weight is really very simple.  It is chemistry and physics.  It is gross calories in and gross calories out.  If you consume more calories than your body uses each day then for sure you will gain weight.  That isn’t opinion but science, facts, physics and the laws of chemistry at work.  If you are taking in on average 2900 calories a day and your body’s metabolic rates and the additional exertions you make on your body are burning up on average 2000 calories a day then, yes, you will become obese at some point.   The simple solution is to stop eating so much and/or ramp up your burning of calories.   When you burn more than you consume the weight will drop.  There is nothing magic about any of that.

Why are so many of us having to pay for the self indulgence of so many others?   I know you can make the argument that if you don’t even have a car why should your tax money be spent on the highways.  But I think this issue is very different because it is a problem that is self induced and then the problem has to be paid for by others.  I think that is a quite a different kettle of fish.  My behavoir shouldn’t cost you money and likewise I don’t want to pay for your bad mistakes and choices.  When folks choose to indulge in harmful behavoir that is their right and freedom but I shouldn’t have to bear the risk attendant to that behavoir.   As those politicians ramble about health care costs I hope they will consider both incentives and downsides for those who wish to lead risky life styles.  I have enough government on my back already to carry and I don’t need a bunch of overweight folks with high blood pressure expecting me to pay for their medication.  Lose weight.  That doesn’t require any medicine or diet pills or frankly any expense.  Just eat less.

I guess before they appoint a health czar they might want to check into how that is working for Rattner.  The car czar is gone.  He came in to do Goverjnment, Inc’s dirty work and did fire lots of people at GM, hand picked new board members, ignored all shareholder rights, and strong armed the creditors into submission.  Submission is the right word. Those weren’t bargaining sessions, they were platforms to deliver threats.  After all Mr. Rattner represented the creditor,  new shareholder, regulator, labor negotiator, banker and car designer extraordinaire.   It seems he forgot some of that “luggage” from his past in his hurry to feel the rush of pure power.  I predict he will lay really low.  Let’s see if the investigation goes anywhere into his company’s dealings.  It won’t unless it is so obvious that it can’t be swept under a really big rug.

Bulgaria is the latest European nation to join the list of those that are leaning to the “right” as the US runs downhill to the left.  Those progressive folks across the P0nd are trying to send us a message but Reid, Pelosi and that guy don’t  read their mail from over there.  www.olcranky.wordpress.com

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Filed under Economics, Environment, government, Mother Nature, Politics, Socialized Medicine

Divided We Unite

During any tense election season it it always tempting to think the worse and lose some hope for the future of the country.   I have endured for about half my life Administrations that I either didn’t trust or outright despised.  Even when the Administration was one that I geneally approved of there were always policies and actions that irritated me or disappointed me.   Have you ever worked on a committee at the school, Church or any other civic organization and noticed how a seemingly simple proposition will get so many varied and disparate responses.  We are an argumentative people by nature in the West.   It has been our hallmark from recorded time.   In the East where great deference is paid to age and authority you don’t have that same outlook.   It is considered bad form to disagree publicly with your “betters”.   We in the West don’t like that idea that we have betters.   From Greek times, to Roman to the Middle Ages to Napoleon to this day, our history is filled with contentious disputes about religion and politics, power and money and the shape of society  and the determination of power granted to government and who gets to wield it.

From our birth as a Nation we have broken into factions and blocs for various reasons and causes.   The early country was split most vehemently between the merchant class (generally the New England states) and the rural and agricultral classes (mostly in the South and western portions of the country).   It was not geography so much as economic interests and outlook toward the world that mattered.   The New England states were the driviing force behind the increasing tensions with England that lead to the War of 1812, the South mostly followed along but once committed joined whole heartedly.  Remember A. Jackson and the last battle at New Orleans to finish the war.   The respective sides said really vile things about each other.   We endured the War Between the States and the ongoing struggle between the “East” and the Western expanding portions of the country.   Teddy Roosevelt had vitrolic enemies during his terms as President and so did his later cousin.   One way or another we managed to survive our disagreements and disputes.   Those strong differences are both our glory and our curse.  I try to remember that in trying times.  

Now with our economy  very shaky our differences of opinion become more pronounced and strident.  Surely you have noticed that not even all those in the same party are in agreement on the correct course of action and that applies to both parties.   We as a nation will make some mistakes, our leaders will make mistakes, and there will be the usual inefficiencies of democracy but I have confidence the ship of state will right itself in time.   As long as we keep our freedom we will be alright.   As long as the Government remains our servant and not our boss we will be fine.   Our danger is not fear or tumoil or a weak economy, it is any eroision in our rights and privileges or the ceding of individual responsibility to the collective wisdom of Government.   We must have a Government that allows for the rewarding of industry and integrity, not one that rewards simply based on existence or status.   If our freedoms remain intact we will survive our disagreements and our different points of view will merge into a consensus that will keep us well.   Compromise is the evil we hate when we are losing the argument, but it is the bedrock of a large and rambunctious society.  Both donkeys and elephants are beast of burden to aid man but remember that they each need a firm hand and guidance by man.   Left to their own devices each can be very destructive and tear up the field and crops.   Let’s remember who needs to be the leader here and now.

The Federal Reserve Bank in New York was the repository for the gold stores of many different nations for years.  It may still be for all I know, I have not read that it ever has changed.   In those vaults there was gold bullion stored in the name of each country with reserves.  When one nation owed another for debts they would literally measure out the right amount of gold ingots and move them from one storage vault to another.  Interesting that all the nations in the civilized world trusted us with that duty.   Churchill during the early days of WWII commented privately often about the drop in the reserves of England as she had to pay her debts for war materiel from the US before Lend Lease and then our entry into the war.

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Texas and the Senate count

Ok, guys  we are going to explore a little bit of history that most of you don’t know anything about but which some day could have a real impact on the makeup of the US Senate.  Knowing a little history comes in handy now and again and can have real practical effects on the world of today.

When Texas came into the Union in the 1840’s, its admission as a state was completely different than all the states before it or after.   Originally there was the 13 colonies which formed the first states of the US after the adoption of the Constitution in 1787.  After that all the new states were part of the territories of the US and then were admitted per the Contstitutional provisions for territories.   That practice was followed for all the states down to Hawaii and Alaska in the late ’50’s with the notable exception of Texas.   The territories would apply to Congress and then be approved there and a local vote for admission would usually follow. 

Texas was never a territory of the US so it did not follow that procedure at all.   When Mexico broke away from Spain it was more or less simultaneous with Stephen Austin bringing the first settlers to Texas in 1821.  Mexico was a newbie as an independent nation.  After several years of turmoil between the new settlers and Mexico Texas won its independence in 1836–Remember the Alamo! and all that.   For the next 10 years Texas was a nation, a republic with its own government, navy and army, coinage and ambassodors  around the world.  Texas had ambassadors in all the major European countries and that promoted and encouraged the migration of many from old Europe from Germany, Czechaslovakia and elswhere to migrate to Texas.   When Texas and the US both thought it would be mutually beneficial to have Texas join the US negotiations were begun.  It is true that many including Sam Houston believed from the beginning that Texas should join the US, but that belief was not universal in Texas or in the US. 

After negotiations between envoys there was a treaty and compact entered into between the two independent nations that resulted in Texas joining the Union.  Some in the US were opposed to it and there was even a saying that Texas was really “Taxes” and that the admission would only be a burden on the US.  But obviously that sentiment did not prevail.   So Texas became a state in the union by treaty and not under the normal Constitutional provisions.  That treat provided that Texas resserved the right to partition itself into 5 states any time it wanted.  Each of those five states would automatically be states of the US.  There was no admission process.  The partition is totally under the control of Texas.   Texas gets to make the decision to divide itself and the geographical configuration of the five states.   Those matters are not under the purview or control or subject to the approval of the US government or Congress.  The belief at the time of admission was that Texas was so large that it might make more sense some day to subdivide if you will.

Texas has 2 senators at the moment.   If Texas became 5 states they would have 10 senators, a net gain of 8.  It wouldn’t take much gerrymandering to assure that 7 or 8 of those new states of the union would have Republican senators.   Over 40 years ago when there was one of those perrennial pushes to have D.C. made into a state with it own senators there was a bit of talk about the partition right of Texas.   Neither effort every got off the launching pad.   But the right of Texas to subdivide itself still exist and will always be there.    In politics you better learn to never say never about what will or will not happen.   And remember the old military adage when assessing an enemy–what they are capable of doing you should plan that they will do some day.  There are some who maintain that Texas lost its right when it joined the Confederacy and then was readmitted to the Union.  But that argument makes no legal sense since the position of the US all during the War was that secession itself was illegal and that there never was a legitimate government in Texas during the War.  The argument of the US was that Texas was a state all along but under domination of renegade groups–the Johnny Rebs.   In fact a solid legal argument could be made that the US Supreme court would not even have jurisdiction  over any dispute in this matter because it is a matter of treaty, not US law.  The Court could decide only the matters pertaining to the US side of the equation but not the other.   I assume the US would not want the treaty revoked and then have Texas revert to an independent nation status again.   Hmm,,,,,interesting thought.   Texas and California are probably the only two states that actually could make it as completely independent nations.   So, ponder these thoughts and check your history if you think this is a fairy tale.   You’ll find the facts are there.

Vaya con dios.

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Authoritarian Governments

I have noticed so many times that people bandy about the words Nazi and Communists or Socialist as though they were interchangeable.   There were differences between the two.  Usually some politician, “activist” or “spokesman” when really upset about a particular policy of our government or that of another nation will throw around those words.  They seem to like using the word Nazi more than Communist.  Sometimes they would use the phrase Stalinst, like it carried a different conotation than Communist.  Make no mistake they were both reprehensible systems and abused human rights and dignity with brutish force.

An entire book or thesis could be written on this subject and probably has somewhere.   We’ll explore a few distinctions.  Under the Commies there was only one party as a matter of law.  Only those who were members of the Communist Party could even run for any office.  Originally, the idea was that there could be some diversity of opionion about how to achieve the Communist ideal and comrades could compete against each other.  That quickly went by the boards.  The Communist learned that a true democratic process can be rather messy and unpredictable.  The Politboro put the kabosh on that idea.   The Government was monolithic by law and design.   To participate in Government you were a Commie or you were out–period.  You could rise based on merit, intelligence and education.  But that was for the few and if you and your family weren’t part of the Party your chances of advancement were virtually nil.  And your rise was controlled by the State.   What you became, where you lived, where you worked were all under the dominance of the State.  Remember only a tiny percent of the population was allowed to go to college.   Assume you were bright and got a college degree, then you were assigned where you would work and the type of work you would do.  You were expected to fill the needs of the State and to do so happily.   To request different work was considered disloyal and suspect.  To travel you needed a permit.  I mean travel inside the USSR.  Travel beyond the borders was restricted to diplomats and very few others.   If you were assigned to a job in Kiev and were leaving the University in Moscow you better take that direct route.  If you were caught going off on a little lark of the heart you could wind up in the Gulag.    Your job, your housing, your education, your travel and even free time were controlled by the State.   There was no freedom of religion.  It was banned and the churches were turned into museums or other public buildings.  Privacy was non existent.  If you wanted privacy that in and of itself was suspect.   Read Solzhenitzyn, read the biography of Stalin’s daughter,  read anything by people who actually lived there.   If you or your group were deemed adverse to the Government’s agenda you would be killed.  Read what happened in the Ukraine in the early ’30’s–the starving of the farmers who didn’t like having to obey central government control.  Everything was controlled from Moscow.  Stalin killed more people than Hitler.  Stalin slaughtered more Poles than Hitler, check  the Katyn forect massacre as an example. (That was where thousands of Polish officers were executed because it was believed by the Commies that must have belonged to the wrong class or they wouldn’t have been officers in the first place)   You belonged to the State.  Your loyalty was only for it or else.   Family was not first, the State.   Read the early John Le Carre novels, like The Spy Who Came In From The Cold. 

There was a structure to the Government.  But please read some good histories of that era and analyses of the USSR government structure.  There was an Assembly but it was eye wash.  The real power was with the Politboro which was a governing committee if you will.  Over it was Stalin or Lenin or the leader of the day all the way down to Gorbachev.   The local offices were filled from Moscow or at the direction of Moscow.   Different viewpoints were not tolerated and thus the central control mechanism.   Unions of course were prohibited.  After all it was a workers’ paradise.  The Govenment took care of everything and  everyone was treated fairly and equally they maintained.   “Activists” and such were not allowed anymore than a preacher.  Yes, everyone had a roof over their head, they had free medical care, a free education and food on the table. 

The Arts–only as approved by the State.  An arthor could get in trouble merely submitting a book for publication that was found suspect by the authorities as not adhering to the Party line.   Movies, plays and any other entertainment likewise had to be given the seal of approval by the Government.  Merely possessing books, movies, paintings or poems from non USSR sources was a crime against the people.  Communism didn’t exactly engender creativity but fostered conformity to the level of a religious tenet.

Of course there was caviar and Bering Sea lobster but who do you think was entitled to have those luxuries?  Likewise who got the other good food stuffs and the dachas in the countryside or on the shores of the Black Sea–yes, the Party big wigs and no one else.   The conformity and the lack of respect for the common man and lack of trust in the people lead to the eventual downfall of the Commies as much as anything else in one man’s opinion.

Tomorrow we’ll explore the ruffians of the Nazi elite.

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Bailouts–what’s the dog and what’s the tail?

Well, dear friend, Mother Government has come to the rescue again with the recent legislation for just about everyone to “save” the mortgage business and home ownership.   At least so they assure us.   No one loses we are told by the Kings of Capitol Hill.   I submit to you that there are millions  of losers and that the problem has been mis-stated and the solution shaped to benefit the political fortunes of those seeking votes.   Was it done to help you?   There are millions of people who own their homes outright and millions more who are current on their mortgages and will remain so until it is paid in full as per the terms of the original agreement between the owner and the mortage lender.   Other than higher taxes what are all these millions of people getting  out of this deal except to aid politicians in winning  reelection.

Remember our heritgage.  People came here and built their home with their own hands.  We were individuals and that stalwart attitude toward life with all its joys and trials is what has made us a great nation.   If we lose that “soul” of America then we will diminish as a people.

No one is forced to buy a home. No one is forced to go into the mortgage lending business.   The negative consequences of greed should always be punished the same as punishment should apply for those who broke any laws.   This legislation helps homebuilders, the mortgage lenders, those who buy and sell mortgages, mortgage brokers and the irresponsible homebuyer who bought more than they could afford and no doubt knew they were buying more than they could afford.  

Mortgages are a safe long term investment.  They are not spectacular like Google or Microsoft but you can make a good return on your money if you loan to repsonsible people and loan an amount appropriate to the value of the house.  They pay off like a slot machine for years.   Why else do you think there was such a market for them in the first place.   We have plenty of money in the private sector to fund mortgage lending.  We Americans have over 3 trillion dollars in ready cash in Money Markets and savings accounts right now.   That doesn’t count the trillions additional held by pension funds, unions and private investment houses.  businesses and assets.  Our economy is still the world leader.    Would you rather own assets in Indonesia or the US?   Well, those folks around the world feel exactly the same way.  There are millions more worldwide who love investing in US. Exactly what has a 25 year old done to deserve a $7500.00 tax CREDIT to buy a new house that I didn’t do 35 years ago?  I would have liked a tax credit when I bought my house.   I had to pay 15% down in cash, real money.  It wasn’t easy and there were years when it was a struggle to make the payments.   But I felt like I was in the same boat with everyone else and it seemed fair enough to me.  What is going to be fair about doling out money to people who won’t work long enough and save enough to own their home?   Those people with sub prime loans moved in with no money down.   They had no investment in their home.  Talk about believing in the free lunch concept.

I am afraid this is just another example of how we are becoming a nation of victims and one where no one will accept blame for their own actions.   There are those who even take the position that they don’t want to pay for anything personally but they will let the Government pay for it!   They somehow can’t seem to get the picture that the Government only takes from us.   We blow so many things out of proportion to the delight of the media and the politicians because that sells newspapers and makes people think they need to rely on Government for everything.  Losing to the Nazis or losing the Cold War would have been the end of the world as we know it.  Having our American culture Balkanized would be the end of the world.   Letting Fannie/Freddie fail would not be the end of the world.   Do you want the Government to be in control of mortgage lending with all its rules and regulations and bureaucrats running that vital part of our economy?   I much prefer private entreprise with all its diversity and competition and the choices  it provides to us as consumers.   Think  about your dealings with any branch of the Government.   How flexible have you found it to be?  Did they people at the SSA or the IRS even use common sense when dealing with your problem?   I don’t want people like that making those future loans to my grandchildren.

The politicians have grabbed the tail and sure won’t let go.  It makes for too many wonderful sound bites during a campaign season.   Let’s show them though that the dog still has a bark and a bite when necessary.

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Trust the people with the oil facts, not the politicians

By popular demand I will augment the discussion about offshore drilling  and the the oil business generally so everyone can reach their own conclusion and not rely upon the spoon fed information of some of our more verbose politicians.  We need to examine a bit about exactly how the oil leasing  and production business operates in the real world as opposed to the implications offered on news shows and the steps of Congress during interviews with politicians who wouldn’t  know a toolpusher from a toothbrush.  A toolpusher by the way is usually the lead boss on a drilling rig operation.   There are many good “hornbooks” on the  oil business and I strongly recommend you read one.  You should be knowledgeable about this vital American industry and not rely on the opinions of others, including me.   Get some facts and make up your own mind.

Off shore drilling leases are obtained by the oil companies in competitive bidding with the US govt.  They pay for them.  The Gulf of Mexico is segmented into “blocks” and they are auctioned off to the highest bidder on a regular basis.  The oil companies are constantly updating their research on the areas and evaluating the data to determine the likelihood of produtive results.  It isn’t really that hard to find oil under the ground but it is damn difficult to find it in commercially produceable quantities that can be extracted at reasonable costs.   Many of the “dry holes” actually did have a “show” as they say in the industry but the prospects of getting enough to recover the costs of completing the well are too problematic to continue with development.   An oil well is drilled to a specified depth and then testing is done to determine if is  commercially viable.   This all cost money–lots of money.

At these auctions the oil companies bid against one another and it is quite a gamble.  They have all done their research but there is no sure thing in the business.  Even though science is used, I.e. geology, physics and engineering, the fact is that there is a lot of art still involved in finding the oil in quantities that you can extract at a cost to make a profit.   The companies bid regularly on these blocks for future development.  Most of themare not envisioned for immediate use until more research and evaluation is done.   As a side note you should be aware that these auctions are by the US govt. although there was serious litigation over who had jurisdiction of the Gulf waters a half century ago.  It was called the Tidelands case during the Eisenhower Administration.   It was between all the States that bordered the Gulf and the US.  Naturally the suit was over money.   The States wanted control and jurisdiction over the leases so they could get the tax and royalty revenue from them and likewise so did the US.  The Supreme Court ruled for the US and thus it controls the leases in the Gulf to this day.

An oil company has to pay several different ways and times to obtain and operate a lease.  Most production companies have what are called “landmen”.  It is their job to locate possible oil or gas production sites and then to negotiate with the landowner to acquire the mineral rights to the land.  This is usually done by a lease.   In almost all the States where there is any significant production at all it is not uncommon for the mineral rights to have been sold seperately from the suface rights.   I live in Texas and I haven’t looked at my deed in years but I wouldn’t be surprised to see that the mineral rights have been reserved to some earlier owner years ago.   You can have fee simple ownership of the surface rights to the land in one person and the mineral rights in another; it is quite common in many States.

The landman negotiates with the mineral righs owner which may or may not be the owner of the surface rights (the person occupying the land with a house, etc.) and if they reach an agreement then a lease to the mineral rights will be signed.  Normally the oil producer will have to pay a signing bonus.  It is a matter of negotiation and how “hot” both sides think the area is for future production.   Sometimes there is no bonus.   In a normal situation the lease will provide that drilling and development must commence by a certain date.  Again that is a matter of negotiation.   A typical deal would provide for a few years time but at the anniversary of the lease the oil producer will usually have to pay what is called a “delay rental”.  That is a payment due because the oil or gas producer has not started drilling yet and to keep the lease alive he has to pay additional sums to the mineral rights owner.  

The mineral rights owner also will get a royalty payment for each barrel of oil produced or MCF of gas produced.  (MCF, is a thousand cubic feet of gas).  A barrel is 44 gallons for those who snored through their high school classes.  Historically, the royalty has been 1/8 but it has been higher and lower depending again on how good or medicore the area is deemed to be for commercially  producible petroleum products.   An oil or gas well is developed in two stages.  First you drill to a specified depth–that is the modern way.    In the old days the leases usually didn’t designate a particular depth but many do today.   So the well is drilled to a specific depth with testing all along the way.  Then if the various tests look good and the odds appear favorable for substantial production you “complete” the well.  The completion costs are often about as much these days as the drilling costs. 
That is the stage where all the pipe is set and the fracturing or other treatment is utilized to enhance production.   Then if everything has worked out right and your guesstimates are good you get production.  Of course you have to install the infrastucture to deliver the oil or gas to the refinery or processing plant.   I haven’t even talked about the “red tape” part of the process but it is substantial in all the States and with the Feds.    You have to report everything essentially that occurs on the site and the well and get the appropriate permits to take each step along the way.    

Many wells can also cause real heartache to the oilman with a “flush” and fade.  That is a situation where the well after completion looks very good and might be producing a 100 barrels a day–great well.  But then after a few days or weeks it drops off to maybe 10 barrels a day or even less.  Then you are faced with the choice of more treatment, at a big cost, or abandoning the well as not commercially feasible.   Oilmen for decades have tried to figure out why that occurs sometimes.  Obviously, they have not solved the puzzle yet or they wouldn’t complete those wells.  It just happens, a hazard of the business.

I offer all this info only to rebut the implication that the oil and gas companies are taking advantage of the Government or the people.  They have paid for those leases and made gambles on whether production is even viable.  They continue to do so through the delay rentals.

Like our aircraft industry the  oil and gas industry is something we as Americans should take pride in and recognize as an essential ingredient to our national security.   

Driving home tonight remember an old song with your first love or chasing fireflies when you were six.

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Oil Facts, not fiction

I am getting really irritated by the comments of politicians about our energy situation and those who oppose trying to drill now for more oil.   Their arguments are disingenuous at best and outright spin lies at worst.   Just this weekend I heard more than one say that it would take 30 years to develop offshore fields.  They have also touted the more modern technologies and the envoirnmental concerns to the point of hysteria.   I did notice that an international group of physicists ( real scientist by the way)  have raised questions about the whole idea that global warming is caused by man made activity.   Perhaps we should pay them some heed.

I have written before that I am for all the methods for improving our energy needs, except ethanol.  I oppose that because it is a boondoggle and a political sop for special interests groups which I always oppose.   Let’s do it all, try it all and that includes drilling for more oil and saving our money and spending it at home.   Let free market competition loose to find our best solution.  It is true that we borrow from the Chinese now to buy mid east oil.   Any significant savings we can make there helps all Americans.   We will need the oil for the mid term.  We can’t get around that and we should have as much of it home grown as we can; it helps strenthen the dollar and our national security.   By way of example I would point out that I have a gas operated vehicle that is a few years old but paid for and I intend to drive it as long as I can, say 10 more years.  If Mr. Genius invented the perfect solar battery for cars tomorrow would I go out and buy a new car?  No.   There are millions of folks just like me and we shouldn’t be punished and forced to pay for something we don’t need yet.   Ten years from now I might well be in the market for something different if it is available.  But remember the market and Americans’ right to choose their means of transport and how they wish to spend their money or save it.  

Now with that said let’s  turn to drilling offshore and the arguments some are making against it.  It will not take 30 years.   This is not rocket engineering.  (There is no science of rockets).  We know how to drill oil wells; it fact we have done it better than anyone for decades.  One interesting point also to consider is  the seepage from the ocean floor for the envoirnmentalist out there.   Off Santa Barbara  there is a substantial natural seepage that flows into the offshores waters every day, every year.  I have heard it asserted that it amounts to another Valdez every year.  That would be eliminated by drilling and properly  pumping out the oil in the formations below the seas.   The seepage is substantial and real.   Check it  out for yourself.   It will  take a few years to get everything online but only a few and the price of oil will reflect that effort.   All markets are based on the future.  Prices for comodities are a result of the collective belief of what is going to be, not what has been.  Anytime you buy a stock you are projecting the future.   A real drilling program will have an effect on the price of oil and it certainly won’t make the price higher to have a greater supply.   The technology today for drilling is vastly different that what it was a generation ago.   Most people still picture in their minds those ugly drilling derricks dotting  the horizon but that is not the reality of today.   Drilliing today is cleaner and neater than every before.   We will not all die in 10 years from carbon.   Besides what if we have another methane eruption like the earth has had many times in its past or we are hit with a gamma ray burst from an exploding star or the magnetic field reverses on us again which it is more or less due to do?   The average Joe wants the gas at a lower price and it is definitely in his personal interest that the Dollar have greater worth against all foreign currencies.   It will work.   Green geeks don’t want to discuss the truth or the facts though, their are on a misguided mission and insist we all be baptised into their faith regardless of costs.

Lastly, I keep hearing the blather about how there are 68 million acres under lease already and the oil companies could simply drill on them.   They imply that they are sitting there just ready to be plucked and the public is being suckered.   Well, we will write more tomorrow about that in detail but for now please observe that yes there are lots  of acres under lease.   Oil complanies have to plan ahead for decades.  They have leased up lots of areas that just might, maybe have some oil production potential.   Those are the least productive of the “plays” available or they would be drilling them already.   Those extra leases are their inventory if you will.  They have leased up millions of acres of oil shale land in the Rockies even though the technology is not developed to tap that petroleum resource.  Maybe someday it will be and they can extract the petroleum and that would be good for us all.   But to assert the way the politicians do now that the companies are just sitting on their hands on top of all this oil product is assuming we are all idiots.  Oil companies have leases in Ohio, Pennslyvania and just about every state in the Union where seismology indicates there could be petroleum but those are not  viable options yet and may well never be.   I would  point out that those leases costs the companies money when they get them.   They have to pay a signing bounus and then delay rentals. We’ll explain those tomorrow because I imagine there are some very bright folks out there who simply  have never had any exposure to the oil and gas business and don’t understand how it works.   In case someone thinks I am in the oil business, think again.  I am not and never have been.  This is not about me but I what I believe is best for my country and the millions of decent folks who deserve oil at the most competitive price until we do have those solar panels that work.   That would be marvelous.   I am all for that when the day comes.

I have always wondered why we could not build better turbines to harness the energy of the moon as it is reflected in our tides.  Those billions of gallons of water move every day.  Motion and the electromagnet field is all you need to produce electricity.  Those turbines could create it.  Guess it is too expensive an engineering job.  But I like the idea.  There is lots of ocean and the tides will be here longer than we will.

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Magic of the Market

The recent intervention of the Fed in banking and turmoil over the subprime market downturn should cause one to ponder the benefits or negative effects of Government actions in reaction to those events. If you don’t believe in Capitalism, there is only one answer–let the Government run everything and make every decision. It could determine who can buy what, when and how. That could eliminate any chance of a “mistake” or being duped into a bad loan for that luxury house that was truly beyond your means in the first place.

If, however, you buy into the efficacy of the free market place, then you must accept that mistakes will happen and the failures will occur. When they do, is it the place of Government to bail out the investors and consumers from those mistakes? Many speak out now for various Government programs or one sort or another to remedy the current market upheaval caused by an over optimistic assessment of the the housing market and the value of loans made to people who couldn’t repay them. Is Government or either political party the best judge of how to deal with this problem or the collective wisdom of the market place?

I trust the collective, consensus wisdom of the people more than any politician or Government program. The market responds more quickly than any election cycle and with more prudent judgment that any politician. We, the people, by making our individual choices by the millions per day express our thoughts, our wisdom and projections for the future more directly and effectively than any Government bureaucracy. That is the free market at work. It reflects the thought and counsel of each of us and gives direction to the market and our economy. Any Government program is biased by politics and diminished by lag time and inevitably skewed by special interests. We, with all our faults and even those bad ideas by some, still come to a consensus on what is best. Let us control the economy with our choices, our mistakes, our victories. Remember the bread and circuses offered by the Government always come with a condition–loyalty to those who bestow them.

Ol Cranky

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