Journalists!!

So where do I get the idea that journalists are simply a bunch who know how to write and broadcast but know little about anything else?  And who infect each other with leftist politics?

Watching the Weather Channel this morning, I got an education of blowout preventers.  The bozo with the microphone told us that hardly anybody knew what a blowout preventer was until the BP oil disaster and that oil companies don’t like to talk about blowout preventers.  The gist of the article was about some guy who has invented an undersea cleaner to clean things dropped on the deep sea floor of mud and other contaminants.  Good invention.  But the author went on to say that the notion that things might be dropped under construction is hush-hush by the evil oil industry. 

Hunh?  Blowout preventers have been around since the 1920s.  They are the things that keep wells from spewing crude into the air.  Come to Oklahoma and talk to anybody who works on a drilling rig.  Or anybody in an oil company.  Or just about any casual citizen who lives around the oil industry.  Any lawyer, state regulator, or accountant who has ever seen an Income and Expense sheet for an oil and gas concern.  If you have a reservoir two miles deep and an overburden of rock that is at least twice as heavy as water, it’s like sitting on a water balloon and poking a hole with a needle through a bore hole straw.  Do you think the water will try to blow out the straw?  Same with an oil or gas well. So now as we approach the 100^th anniversary of blowout preventers with an entire competitive industry of well services, the journalists are clueless of their existence. 

Now it’s okay to be a layman and not know about the engineering, but to then to blame that your own stupidity on perniciousness of an industry is sort of telling about your own moral character.  Let me give another example.  The left has been fretting about how the Hobby Lobby decision will allow Big Companies to use religion to exonerate and extricate themselves from other things they dislike like taxes.  Indeed, I sit facing a cartoon that shows a tall building labeled as megareligion corporation and big headlines about how the company wants poor pay for women, no minimum wage, and no pensions, no taxes.  I have one little question.  Does the writer know anything about any religion out there?  Did Jesus say something about not liking minimum wage?  Did Buddha nix pensions?  Lao-tzu decry taxes? Maybe Moses wanted his sister Miriam to work for free.  Okay, so Islam might want unequal pay but that’s something for the Justice department to pursue.  The point is that the Godless Left knows so little about faith it’s laughable.  They spew airheaded manure and believe their own dung.

Finally came a supposedly serious article by AP, “Absolutely Pretentious” about how the US economy is just wondrously better than all the rest of the world, and immune to the problems that plague those other poor countries.  The author lists reasons why.  Employment is booming with 288,000 jobs created, entrepreneurship is just sky high, USA knows better than to cut spending much, and the stock market is glorious.  Hmm.  The jobs report for this month shows 800,000 part-time jobs created and 500,000 full-time jobs lost giving a net +288,000. But the loss of all those full-time jobs is troubling, by most any economist’s thinking.  USA has gradually stopped being a highly entrepreneurial country under the thumb of heavy regulation.  Before the 90’s, 13 to 14% of companies were less than a year old showing a lot of new enterprises starting—a statistic true for over a hundred years.  Today we are down to 6-8%, the statistic that reminds one of France and the PIIGS countries of the European Union.  Germany has more start-ups than USA.  Deficit spending has continued so long that debt service will become a devastating issue if the interest rate ever goes up—in other words, when the economy tries to improve.  So our national debt may be a drag on overall growth for years to come.  Finally stocks now trade at an average price-to-earnings ratio of 25.  Historically US stocks have traded at 10-16 P/E and whenever they have gone above 20, they won’t stay that way for long.  Either a crash or sea change of earnings increases has to take place. 

If anything, this AP article could be viewed as a strong indicator of a market crash, like Joe Kennedy, a week before Black Monday, listening to the shoe shine boy talk equities and concluding that things had come to a pretty pass and it was time to get out of the market.  Me?  I just think it is time to stop listening to the journalists.

Oil prices, Immigration crisis, Hobby Lobby

            Fuel’s going up in price and it will likely continue.  Oklahoma has seen oil production almost double since the low in 2003-05.  It is now .4M barrels a day.  USA uses 19M b/d.  So we are a drop in the bucket.  US production is up, but Iraq, which was 2.5M b/d a few years ago is now 2/3 of that.  It wasn’t so much the loss of that production as it was the fact that we expected Iraqi production to be 6M by 2020.  It’s unlikely to happen.  And around the world many major fields found in the 70’s-90’s are in serious decline. Saudis no longer can flood the market with 10M b/d like they used to.  And the world’s appetite is growing now that the 2007 recession is behind us.  Bottom line.  Higher oil prices are coming.

            I have perhaps mentioned this before as a laugh, but it is actually serious.  The way to do something serious about the border crisis with so many children is easy. (assuming we won’t be able to return many of them to parents down south) 100,000 kids.  Find that many Christian conservatives who would foster.  Turn the kids into fire-breathing conservatives with a paper route or a yard-moving business or a job doing what they can.  As soon as Obama finds out this horror, he will shut the border up so fast it will make your head swim.  And those kids would go on to be leaders and naturalized citizens with both an American Mom and Dad as well as a natural Mom and Dad they could bring up from Honduras.  Or, if the conservatives could not win the deportation battle, the kids go home with a “foreign exchange” burning in their hearts as future leaders back home. It would be a life-changer for every kid who experienced this.

            You think it won’t work?  Or not enough people who would make it work? Consider the early Christians who rescued unwanted children who had been “exposed”(infants left to die in a ditch or the woods) by Roman pagans. Thus began the world’s first orphanages and foster homes.  When 80-year-old Polycarp, the understudy of the apostle John, was martyred in the second century, the authorities found 80 children in his home, all rejected as children.  The kids ran every direction, escaped for the most part and became leaders in the early church.  This is one of the primary methods of growth the church had which went from about 5000 in 33AD to 36 million in 325 AD.

            Our libs would similarly try to destroy a dandelion by kicking the head and scattering the seed.  Liberal women have 1.6 births per person while conservative women average 2.8.  Demographically, libs have been running short of heirs for decades and that is why only about 20% of US population calls themselves liberal. 

            There’s been some recent research into genetics and success/poverty that suggests that some nations are too diverse, some too-little diverse to be greatly successful.  (other things like lack of corruption, free markets are larger considerations, however) If the mix is like Poland, many Muslim countries, or Japan which have extreme homogeneity, they are harmonious but not highly innovative societies.  On the other hand, countries with enormous diversity, like Congo have everybody from 4-foot pygmies to 7-foot Watusis and Hottentots, Bushmen, Benins, etc.,  are distrustful, polarized and often fall into civil wars.  USA is extremely diverse, but interestingly, highly assimilative.  So long as it assimilates successfully, it respects others, and continues to be an economic powerhouse.

            Okay, enough of this serious talk.  I am so saddened that Hobby Lobby won.  Had they lost, I was about to suggest that future Republican Presidents could turn the tables on Barack.  For spiritual healing under Obamacare, we could insist that atheists must be insured for the cost of Bible-of-the-month club.  Muslims could be forced to buy a policy that provides Pork servings for dietary plan.  There could be no end to the onery stuff. Harry Reid would surely repeal and Rangel would sue for impeachment.

Fixing the economy, part III

I can teach you how to calculate what the price of gasoline should be.  There are 42 gallons in a barrel of crude.  So if you take the open market price per barrel and divide by 42 you get the price of the raw materials.  Recently price per barrel was $105.  So here’s the calculation.

                        $105/barrel equals     $2..50 per gal.

                        Add refinery margin        .13

                        Add transportation           .10

                        Add retail margin             .05

                        Add state&fed tax(OK)    .35

                                                            ---------

                        Total                            $3.13 per gallon pump price

Do you buy your gas that cheap?  No, I don’t either.  Here’s why.  20 to 30 cents extra is added to refinery and transportation margins when the EPA demands that 20 different grades of gasoline be produced for environmental reasons.  But these fairly new regulations have had little benefit on the environment.  If we just removed the restrictions and went back to the 1990’s we’d have cheaper fuel. 

            Next question.  How much does it cost you when Oblamer won’t okay the Keystone pipeline?  We keep hearing about 20,000 jobs to build and maintain the pipeline.  But what is the price of your gas doing?  There is a bottleneck in the pipeline network that is slowly being fixed which Keystone would have instantly alleviated.  For the last 4 years we’ve had gasoline prices that have suffered.  The commonly quoted West Texas Intermediate price has been down as low as $80 while North Sea Brent has been $115 at times.  We just can't get WTI and other mid-continent crudes distributed. Because Keystone would help alleviate the bottleneck it would allow more distribution of crudes from the middle part of the country where the boom is on.  Thus a refinery in Lyndon, NJ  would get to use WTI rather than expensive Brent for most of its refining.  Recently, other pipelines have been built and this has partly alleviated the bottleneck, but for 4 years Oblamer and the environmentalists have cost most of the country about 30 cents per gallon at the pump.

            Third question.  How much has it cost you to keep the half-moratorium on drilling on federal lands and in federal waters?  Here the answer is not large, maybe a nickel since oil is a fungible commodity and increased production in USA doesn’t change total world production and hence world price that much.  And since 2006 US energy imports have fallen in percentage from almost 30% to 12% as private land production has boomed.  But had the trends in horizontal drilling been  extended to federal lands and waters, it is estimated that net imports would now be—are you ready for this?—zero.  No import reliance would make questions about whether we should be involved in the latest Middle East follies a lot easier to answer.

            And that also shows the imperative of keeping EPA and the radical environmentalists from destroying the fracking revolution.  US production of oil has risen from 6% of world production to 12% just behind Saudi Arabia (13%) since 2005.  It has also reduced the prices of natural gas from nearly the world average $12.40 to $4.03.  That gives us a significant advantage over China at $13.70 and Japan at $14.10 and Europe at $10.11.  The advantage will ultimately translate into manufacturing jobs as cheap energy brings those jobs home.  JP Morgan Asset Management, from whom I owe all these numbers, also estimates an economic drag on our economy of about 1.0% due to high fuel prices since 2010.  Yet US petroleum imports as a percentage of GDP is at 2.5% (2Q’13)—at almost record highs as per the early 80’s.

            Now consider.  If we add 1.0% to our lackluster 1.5% growth this year, it becomes a respectable 2.5%.  Had we had merely that kind of recovery growth for the last 4 years, we’d be near 5% unemployment, $3.00 gasoline and a consumer sentiment index that is well above this lousy 80% where we are today.

            How do we fix our economy? We shoulda listened to Sarah Palin.  Drill, baby, drill!         

Lydie's Broken Statue

A group of us went to see this new play.  The play ain’t bad.  If you are from Ponca City or associated with the town, go see it.  But it sure isn’t factual from what I know.  Just enjoy the story as fiction.

I spent a good deal of time researching Marland and Lydie to teach Elderhostel class in the 90’s, “Petroleum: From the Ground to the Glamour”.  As I watched the play, I kept thinking I had rocks in my head, because I didn’t remember things happened this way.  Then it dawned on me that the author had played fast and loose with characters, rather like Hollywood does routinely.  There is some guy named Craggins who is supposedly nemesis of Marland.  No such person.  He’s a composite of Lew Wentz and the wildcatters like Tom Slick who followed Marland around trying to hog down on leases around his acerages. (My attorney and friend Geraldine Miller told me how crooked Lew Wentz’s leasing was, much proof of his violations in abstracts, but he made amends by his charity)  Since Marland always seemed to strike oil, they knew he was onto something.  What Marland was doing was drilling surface expressions (hills) when there was an absence of outcrops on the hillsides.  Hence it was reasoned that the subsurface geologic layers were bent into a dome and not flat.  This was the beginning of geologic prospecting. In 1911 it was considered oddball.  By 1923 it was all the rage.  I do credit the author, Perry, with having several lines and a vignette in the play about Marland’s use of geology.  Good show!

It was advanced that Lydie had a big love affair with Walter Johnson.  If you read the biographies, Lydie is held by all to have been an extremely private and shy individual who was only rumored to have had a liking for a boy named Walter Johnson.  Never proven. Where’s Walter?  What we do know is that she and George were taken in by the Marlands, who could not have children.  But as was common in those days rich relatives took in the teenage children of poor relatives to provide an education and get them started at a better advantage.  Lydie and George Roberts lost parents and grew up dirt poor.  EW’s dad in Pittsburgh was wealthy as well.  Perhaps the easiest story to read about Marland and Lydie is in “Oil in Oklahoma”.  A chapter about them is just a few pages long and a good summary.  Was Lydie in love with EW?  She certainly was at the end of her life.  Jan Proh, former director of the Pioneer Woman Museum told about how she had a collection of old time clothes, many dresses of first ladies and governors from OK history.  Several times a year, Lydie would come down to the Museum and ask if she could see some of EW’s clothes.  Jan told about how she would hug his shirt tightly and weep.  Was the marriage just a marriage of convenience in the beginning?  Not according to Jack Baskin and Bob Fakin.  Jack related how Lydie was often the only person to be at the train station when Marland came home from his many business trips.  Bob’s dad was the gardener of the gardens of Marland’s grand home, which looked like Palace of Versailles going east down the hill to 14^th Street. He told me how his dad often noted, after Virginia’s death, the two of them sitting in the gardens together.  She was very athletic and rode with the fox hunts.  Marland loved athletics and was reputed to have hired many of the football and baseball players around the area.

Hence the play doesn’t do much to advance the idea that Lydie and EW were in love, but then history would be getting in the way of the love triangle between a protective and violent EW, naïve but ardent Walter Johnson, and Lydie the timorous.  Trouble with this is that EW was Mr. Smooth. Unlike Frank Phillips and Bill Skelly who were hard-driving and got into a fist fight in the Hotel Tulsa, or many other oil men of the era, Marland didn’t make his money by fighting for prime lease acerage or shooting at people spying on his wells. He didn’t run his brother off like Frank did Wade Phillips.  Marland scienced the game.  Likewise he was a visionary politician, two term governor (although he didn’t seem to have the common touch in the struggles of the 30’s).

But there are things in the play that are spot on.  The use of projection to set scenes from the photos of the era is splendid.  (Exception is the Ponca Cemetery --modern picture of headstones.  Was originally grave racks and bodies in trees which would have been pretty spooky to kids as one scene suggests.) The two fictional women who appear and gossip incessantly was great.  Indeed, Marland’s ventures, his marriage to Lydie were the constant talk of quiet gossip.  (But how does your pastor publically preach against Marland when his church receives a generous donation every year!)  Joe Miller’s business-like cowboy character was perfect. 

The play is narrated by a character named Charlie.  No Charlie exists, although I thought it might be CD Northcutt or Earl Krieg or some such composited friend.  Earl was sitting across from me in the theatre frowning at times. In the end, I don’t think this play does much to explain Lydie.  CD says she was just so shy and didn’t want the expectations of the gossipy public, that she was a free spirit who in that sense was like EW.  Beats me.  Ask Earl or CD.

Olin and Dusty

One week, two friends died, hard to take this in.

I owe Olin Branstetter a favor. Several years ago I was designing elderhostel classes and noticed that nowhere in the 20,000 classes offered nationwide was there one in petroleum. Now wasn't that interesting. We all have viewpoints on the price of gasoline and heating fuel and all the derivative products from plastics to lipstick, but there were no courses on the subject. (well not surprising that academia doesn't do business) What's more, Graydon Brown and I had researched Marland's fabulous first oil find in the South Ponca field. So here was a chance to offer folks a chance to learn about oil and gas from the ground to the glamour, history and all.

And so with help from Conoco friends, I began to bone up. Brad and Bill Bridwell taught me about refining and safety. I knew the exploration and production side. But I still didn't know the story about independent oil guys who drive around in pickup trucks in our area fixing stripper well lifts (pumps) and drilling stepout wells and re-stimulating (often using pressure fracturing, that much-maligned technique that has been around for about 50 years and no environmentalist worried about it for the first 45) One day I mentioned this to Olin as he and Dusty came in to eat at our restaurant. He practiced the most romantic thing. He would take Dusty out to eat and then read her poetry as she finished her desert. It's the only time I have ever seen waitresses retreat to the kitchen to shed tears of joy over an old couple who were just too precious. Next day Olin came to my front desk and announced, "I need you to come with me and I am going to teach you all about the oil bid-ness." He had a bottle of crude and a core sample he gave me as class props and took me on a whirlwind tour of local production, explaining not only his own projects but that of other guys in the business as well. I came away armed with examples galore of how independents are squeezing the earth for more oil than the majors are interested in.

So we became friends. And I asked Olin if he and Dusty could teach something on aviation. What they produced were three women who, along with Dusty have set records in flight. I was so staggered by their expertise we taught this class in conjunction with the state's Pioneer Woman Museum. It was the untold story since Amelia Earhart. Then one day, Olin, former state senator, gave me a business card of a colonel at Vance Air Force Base. York was her name. I visited with her about doing some sort of a update class on the Air Force and she got excited about it but first we did a dry run on some retirees who were having a reunion a few weeks away. And so WW II vets met a modern base. Amid stories of baracks they lived in during the war, were tours of modern base housing. Discussions of tactics, jet plane mechanicals, all that paled in comparison to the flight simulator. P-38 pilots met the F-22 in that simulator and came out of there with eyes wide and grins they couldn't get off their faces. Clearly, Olin had pointed me to possibly the best senior education class Elderhostel International would ever offer.

But then it never came about. Days later was 9-11. People stopped traveling. Elderhostel, under enormous money scandals and problems, cut back on classes. The Air Force had to institute new policies that will never make bases so accessible for retired civilians. Northern Oklahoma College, under which I organized classes was cut from Elderhostel International. Excuse: No one will travel to Oklahoma. Ho hum. Things always change.

Oh, did I mention, that the day we held the dry run on all those Army Air Corps guys, Olin and Dusty were along for the fun and were the last two to enjoy the F-22 flight simulator?