What is going on?
The truth is that the answer is not simple nor black-and-white. Despite the political yammerings of the "Drill, Baby Drill" crowd, this little news report will only cause energy troglodytes to scratch their heads for a second before resuming their chant: More US drilling didn't drop gas prices, data show (Associated Press).
The reality underlying the geopolitics (Iran-Israel), increasing petroleum demand by China, India, etc., and the Wall Street energy speculators that probably accounts for more than half of the jump in the cost of gasoline recently, is the inconvenient truth of Peak Oil.
Here it is: the cheap, easy to churn-out oil has already been found; the expensive, hard to produce oil is what is making our gasoline now. Most of that 'Texas tea' that could be extracted by figuratively poking a pipe in the ground is gone ... now it costs tens and tens of millions of dollars to suck oil out of the seabed miles under the waters of the Gulf of Mexico. And there is this that most folks just don't understand -- Canadian tar sands petroleum is low quality and difficult to refine, it is expensive oil: "The heavy crude oil or crude bitumen extracted from oil sands is a viscous, solid or semisolid form that does not easily flow at normal oil pipeline temperatures, making it difficult to transport to market and expensive to process into gasoline, diesel fuel, and other products. It must be either mixed with lighter petroleum (either liquid or gas) or chemically split before it can be transported by pipeline for upgrading into synthetic crude oil." (Wikipedia)
What we are experiencing is the consequences of Peak Oil ... and the roller coaster of price swings that are the result of descending from the peak plateau of petroleum production.
Unfortunately, the politicians would rather squabble and point fingers than tell the American people the truth about our energy predicament. Pres. Obama doesn't have the courage or vision to tell us the truth and the dysfunctional, angry and desperate Republicans just don't want to face the ramifications any scientific reality these days.
We are a long way from building an energy future that will spare us the pain and suffering that will be our fate because of the end of the hydrocarbon era. In fact, all we have thus far accomplished are baby steps in creating alternative energy sources. While a dramatic conservation and efficiency regimen might spare us some of the worst trauma, there are too many Americans that even consider this practical approach as 'socialism', 'fascism' or some other intrusion into their current comfort zone.
My only advice is to prepare yourselves for a different world ahead ... get rid of that SUV you use for grocery shopping before it cannot even be given away. I wish there were candidates I could recommend supporting who would tell the truth and propose bold plans ... but there aren't any.
First here is a link to a series of charts that clearly display the reality of our present condition. Second, is a link and excerpt from a very good article that explores the unsettling truths about the most popular 'new' energy source that is supposed to save us from altering our lifestyles: 'fracked' natural gas.
It’s not only toxic – it’s driven by a right-wing billionaire who profits more from flipping land than drilling for gas.
... In January, the Energy Department cut its estimate of the amount of gas available in the Marcellus Shale by nearly 70 percent, and a group affiliated with the Colorado School of Mines warns that there may be only 23 years' worth of economically recoverable gas left nationwide. Even worse, new studies suggest that because of fugitive emissions of methane from wellheads and pipelines, natural gas may actually be no better than coal when it comes to global warming. "I was an early optimist about natural gas," says Robert Kennedy Jr., who sits on a panel that's advising Gov. Andrew Cuomo on whether to allow drillers like McClendon to expand into New York. "But after looking into it, I now believe that, without tighter regulations and stricter oversight, the shale-gas boom could turn out to be an economic and environmental disaster." ...
Aubrey McClendon, America's second-largest producer of natural gas, has never been afraid of a fight. He has become a billionaire by directing his company, Chesapeake Energy, to blast apart gas-soaked rocks a mile underground and pump the fuel to the surface. "We're the biggest frackers in the world," he declares proudly over a $400 bottle of French Bordeaux at a restaurant he co-owns in his hometown of Oklahoma City. "We frack all the time. What's the big deal?" ...
By McClendon's estimate, the industry has drilled more than 1.2 million wells nationwide, yet so far there have been only a few confirmed cases where things have gone wrong – despite dire warnings from scientists and environmentalists that fracking pollutes rivers and streams, contaminates drinking water and turns large swaths of farmland into industrial moonscapes. "Where is the mushroom cloud?" McClendon asks. "Where are the dogs with one leg? Where are the people that have been maimed or hurt?" ...
But what McClendon leaves out is the real nature of the business he's in. Fracking, it turns out, is about producing cheap energy the same way the mortgage crisis was about helping realize the dreams of middle-class homeowners. For Chesapeake, the primary profit in fracking comes not from selling the gas itself, but from buying and flipping the land that contains the gas. The company is now the largest leaseholder in the United States, owning the drilling rights to some 15 million acres – an area more than twice the size of Maryland. McClendon has financed this land grab with junk bonds and complex partnerships and future production deals, creating a highly leveraged, deeply indebted company that has more in common with Enron than ExxonMobil. As McClendon put it in a conference call with Wall Street analysts a few years ago, "I can assure you that buying leases for x and selling them for 5x or 10x is a lot more profitable than trying to produce gas at $5 or $6 per million cubic feet."
According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling. When the wells don't pay off, the firms wind up scrambling to mask their financial troubles with convoluted off-book accounting methods. "This is an industry that is caught in the grip of magical thinking," Berman says. "In fact, when you look at the level of debt some of these companies are carrying, and the questionable value of their gas reserves, there is a lot in common with the subprime mortgage market just before it melted down." Like generations of energy kingpins before him, it would seem, McClendon's primary goal is not to solve America's energy problems, but to build a pipeline directly from your wallet into his. ...