Let me be clear I don't like subsidies and I think the energy bill was a pork laden disaster that should have never been passed. You are correct, the energy companies are doing everything they can to repair the infrastructure because having production is shut in is costing them massive amounts of money. Subsidies are not needed nor would they be helpful.

Having said that I re read the article and the only thing I could find that even hinted of a subsidy was this sentence,

"Chemical companies have been particularly outspoken in calls for the Bush administration and Congress to focus on curbing consumption and repairing energy infrastructure in the Gulf of Mexico" the meat of the sentence appears to be this "to focus on curbing consumption and repairing energy infrastructure in the Gulf of Mexico"

One sentence out of a two page article does not seem to be a big push for subsidies. There could be a hint of subsidies in that sentence but I am not seeing an explicit call for them. In fact curbing consumption would seem to me to be the opposite of a subsidy. Furthermore, focusing on repairing infrastructure repair may mean something similar to the way the fuel blend standards were relaxed after the hurricanes to allow greater gasoline imports.

Again, I agree with you on subsidies lets just focus on stepping on that cockroach where we know it exists.

Thanks,
TJIT

I understand, and that fits with quite a bit of what I wrote, but I see the typical resposne being to subsidize the natural gas producing companies, not things like allowing for more drilling, importation, and so forth. Remember who is sitting in the White House, a President who hasn't been more happy to spend future tax revenues today on stupid policy.

TJIT,

Sure there subsidies, you just missed them. The part about the government helping more with rebuilding after Katrina? I can see that as nice juicey subsidies to help get rigs back online, pipelines back up and running, and so forth. It is at that point that we should recall that I also wrote,

And even if the U.S. prices are higher, then the idea of subsidizing an industry whose prices are increasing is just nonsense. Profits are usually an increasing function of price. Hence, it would be like subsidizing a fat person's potato chip consumption--i.e. stupid. However, getting the government out of the way to the extent of allowing for more drilling, more imports, and not building new import terminals on the coast of Louisiana and Texas for crying outloud would be a good place to start. Further, they'd be cheap in that we wouldn't have to spend billions subsidizing companies that are already posting record profits.

[...]

And with prices already high and profits rising very fast, there is no need for the government to step in and do more to repair the energy infrastructure damaged in the Gulf. Those companies want that infrastructure repaired as soon as possible to take advantage of the high prices. And given that their competitors are thinking precisely the same thing, getting the government involved is just a way for these companies to get consumers to subsidize the repairs.

I work in the oil business (drilling) so my comments are from someone who is in the industry for what its worth.

1. I read the article and did not see any subsidies mentioned. What I saw was an effort to open more areas to drilling and working on approval of new LNG terminals to increase US natural gas import capacity.

If I missed it would you please point out what subsidies are being proposed in the article.

2. This month congress had hearings and demanded that oil companies do more to increase domestic oil supplies. After this demand congress actively prevented the to oil business from increasing domestic energy supplies by voting against allowing drilling in ANWR.

I really don't care if drilling ever occurs in ANWR. However, the rank hypocrisy of these actions is disgusting. Congress and the public has to understand if drilling is not allowed in ANWR, offshore and the Rockies the ability of the oil companies to increase domestic energy production is limited.

I always thought that this was shortsighted. It is true that coal is dirtier than just about any other fuel but it can be cleaned up. It costs money, a fair amount of money, but it can be done.

Natural gas is used primarily for building heating and there are few alternatives. I think that fuel oil and propane are about it. We cannot realistically heat residential buildings with coal, at least not in its mineral form. I think that Propane is made from natural gas so that's no help. Fuel oil comes from petroleum and subject to the same supply issues as the other petroleum fuels.

Perhaps large commercial heating could be done with coal but it would be cost prohibitive to do it cleanly.

We've got lots of coal. Coal requires a large application to make the cleanup costs reasonable.why not use it where it makes the most sense?

Gas fields first developed close to population centers, so that they could be piped from field to gaslamp. Since then we've connected more and more fields on this continent to their users, but there are gaps, and the gaps matter. There is some question in Canada whether gas should be used to process tar sands or piped further to population centers.

The hardest thing is to get natural gas across oceans. Compressing and liquifying are very expensive, and there are contstraints in the number of suitable ships and docks.

Anyway, news out here in California is that our utilities are tapping their in-state reserves right now, to offset current prices. Which means of course they'll have less reserve next year ...