Guest Post: Obama's Empty Gasoline Tank

Tyler Durden's picture

Submitted by Llewellyn King from

Obama's Empty Gasoline Tank

There is a piece of doggerel which goes:

They said it couldn’t be done.
So I went right to it -- that thing they said
Couldn’t be done.
And I couldn’t do it.

And that is the way it has been with presidents since the 1973 oil
crisis. All of them -- from Richard Nixon to Barack Obama, who has just
joined the club -- have wrung their hands and exhorted Americans to use
less oil in general and less foreign oil in particular.

Nixon had his commerce secretary, Peter G. Peterson (he of enormous
wealth these days), promise far reaching and revolutionary “initiatives”
to tame our thirst for oil. But Nixon was out of office before these
palliatives were revealed.

Gerald Ford, caught up in vicious inflation, partly linked to the
cost of oil, launched the Energy Research and Development Administration
(ERDA), combining the Atomic Energy Commission, the Office of Coal
Research and other energy entities in the federal government. ERDA
initiated many programs, while politicians invoked the Manhattan Project
and the Apollo 11 moon landing.  But the search for the Fountain of
Eternal Energy failed.

Jimmy Carter wanted not only to solve the energy challenge, but to be
seen to be solving it. Ergo, he expanded ERDA into the Department of
Energy (DOE) and created a separate Synthetic Fuels Corporation. The
latter failed after a short and unhappy life. No oil reached the pumps.

When the price of oil collapsed in the 1980s, so did hopes for many
of the alternative energy sources, including ocean thermal gradients and
flywheel energy storage.

To its credit, though at great cost, DOE, through its chain of
national laboratories, kept searching. The result has been evolutionary
improvements in many fields, and some really revolutionary ones in how
we find oil and drill for it; these include seismic mapping, new drill
bits and horizontal drilling.

These evolutionary developments brought more oil to market and have
contributed to the recent improvement in domestic production that Obama
likes to point out. It has enabled us to cut our imports slightly, so
they now stand at 11 million barrels per day out of consumption of
20million barrels per day.

Obama wants us to cut those imports by a third. To do this, he has no magic bullet.

In fact, he has no ammunition: solid numbers and research. His speech
at Georgetown University was founded more on hearsay than science or

Because he criticized them for taking out leases they have not
drilled, the oil industry disliked the oil component of the speech, but
thrilled at the emphasis on natural gas. When it comes to leases, the
industry hankers not for those it holds, but for the plums that have not
been leased for political reasons:  the eastern Gulf of Mexico and

Sadly, Obama seemed to have learned the wrong lesson on his recent
trip to Brazil because he is brimming with enthusiasm for ethanol. In
Brazil, this is made from sugar cane, of which the Brazilians have a lot
and cheap labor to farm it. Here, it is made from corn with devastating
results on all the food products that come from corn. George W. Bush
shoved the country down that slippery slope, and Obama wants to add more

Another Obama tool is mandated fuel-economy standards. Problem is the
market will start circumventing the regulations. It works like this: If
you mandate 40-miles-per-gallon fleet average instead of floods of new
small hybrids of the Toyota Prius type, the market will supply small,
regular cars and large, luxury hybrids. Better, but not everything the
president might want.

Real oil savings come with high prices dictated either by taxes or
shortage. Presidents, however, have to placate voters by holding down
the price of oil, signaling that it is all right to consume.

That leaves presidents -- and Obama has just proved it -- with that last resort of the  impotent in office: exhortation.

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avonaltendorf's picture

Sorry, it's absurd to credit DOE or any of the national laboratories for seismic mapping, drill bits, or anything else of practical use in the oil patch.

Landrew's picture

Hi Alan,

Being from one of those national labs, sadly I have to agree. However, that being said, some of the tech that went into the production of those products was developed by our national labs.

avonaltendorf's picture

Mr. King, I hasten to add that I read and hope you will continue to post thought-provoking articles here.

Bananamerican's picture

"Obama seemed to have learned the wrong lesson on his recent trip to Brazil because he is brimming with enthusiasm for ethanol"

The only thing O is brimming with is corporate spooge...Ethanol is a proven boondoggle at this point. The ONLY reason to continue it's use is its utility as corpoRat Subsidy....

Obummer's picture

Ladies and gentlemen, fellow Americans, good people of the world. I would like to discuss a subject that all of us think about but rarely talk about. I would like to talk about our interests overseas. For we must protect our interests, and we must understand what protecting our interests means for us.

Ever since World War II, when the tragedy of Pearl Harbor pulled us into the greatest war mankind has ever known, America has had to protect her interests overseas. As the sole remaining power for freedom and democracy, America was in a unique position. And I am happy to say that with characteristic vigor Americans stepped up the plate once again. Folks, being policeman to the world is not easy. It is not a task that we relish.  It is thrust on us, but with typical American ingenuity we have made it our own.

In the modern era we have found our interests and the interests of our allies threatened time and time again by those who would seek to harm Americans, and to harm the American way of life. We have at times had to take extreme measures to secure our interests on foreign shores. We have done this reluctantly, but with goodwill in our hearts. At times the going has been rough, but we always manage to find our way. It may be that the tunnel is dark, but there is always a light at the end.

Some would call our recent project in Libya empire-building, but every real American knows this is not the case. After all, I am a Nobel Peace prize winner. Heh heh. (Pause for laughter.)

Folks, the fact is that we must protect our interests and the interests of our allies in Libya. Gaddafi has lost the right to govern his people. But that should not be our decision alone. This is why my administration gained the approval of the international community before moving against Libya. I believed that it was critical that we turn a new leaf, that we have the support of our friends and allies in the world so we could all protect our interests together in an orderly way. We had to protect the rebels so that their fight for democracy could find its way out of the tunnel.

Time was of the essense, and to protect democracy we had to move fast.  There are some who would say that we should have consulted or warned our colleagues in the American government of our intentions before we acted. Such suggestions start out innocently enough, but given oxygen to breathe the idea will blossom and threaten our standards of democracy, human values, and American decency.  Even now these words have been co-opted by the very terrorists we have been fighting against for so long.  And now we begin to find that these terrorist organizations have infiltrated the very heart of America, and are in our living rooms and bedrooms even as I speak.  Rest assured that I will do everything in my power as President of this great nation to repel this threat to our freedoms.  Know that I will not rest until I have protected American interests overseas.  And in the coming months we shall take decisive action against this new menace to our financial stability and to our Constitution.  Thank you, good night, and God bless America.

GBruenetti's picture

What has America (though I suspect you want to restrict that to that small part called the U.S. of A.) done recently to deserve Gods blessing?

BigJim's picture

The truly funny (and worrying) thing about these pieces is that they're virtually indistinguishable from the sanctimonious tripe Obama (or any other president) really would spout.

ElvisDog's picture

Funny, I thought it was a text from Obama's speech.

Stuck on Zero's picture

Los Alamos was far along in getting geothermal energy on a reasonable financial basis when George Bush II met with a bunch of oil company executives to formulate U.S. energy policy.  He eliminated the program.  It was too big a threat to the big oil guys.  Geothermal is a very clean way of generating power and in unlimited quantities.  There are some new startups that are advancing GTE quite rapidly and you can expect to see lots of it in the future.  I've visited many sites and it's amazing to watch steam turbines spinning out megawatts of power with no fuel as input.  Japan, in particular, could pursue this resource because of their geology. 

CrazyCooter's picture

Reliable/quality links for geothermal tech?



Concentrated power has always been the enemy of liberty.'s picture

yeah, that part is total shit.  Makes the whole article suspect.

Ident 7777 economy's picture

Tune-ups and - "check the pressure in your tires ..."

That was his plan ... wasn't that it ?




CPL's picture

+1 Ha!

Three phase approach...first what you mentioned and then take out the back seat and passenger seat.  Then everyone draft behind one another on the highway.

Zero Govt's picture


"Obama wants us to cut those imports by a third. To do this, he has no magic bullet. In fact, he has no ammunition"

Er yes he does actually. His Govt has been sitting on the largest (un-tapped) reserves of oil in the world. The US Govt, in collusion with the big fat Oil monopolists of America, has restricted oil exploration, exploitation and new refinaries on US soil for decades leaving only deep sea drilling.

Namely the US Govt is acting as party to monopolists (ie. fascists) to destroy smaller faster smarter competitors for decades, sending oil jobs overseas and causing Americas imports to increase.

If Obumma really, really, really wants to reduce oil imports he should get his fat Govt arse off all the restrictions on American oil reserves and allow competition (the free market, remember that?) to work its wonders.

Obumma is a 'victim' of his own corruption


Landrew's picture

People keep saying vast untapped oil reserves and never say where these non-existent reserves are. Where are these reserves and I will drill them myself! Unless of course it's FL. they will never allow drilling off coast ever after BP screwed the pooch!

Wait I know where they are! The Bakken Shale? The vast reserves of almost oil that requires vast amounts of fresh water and one well per thousand barrels of oil! So if your telling me your happy paying 300$ a barrel for almost oil that only India will refine. NO THANKS!

CrazyCooter's picture

Alaska has "lots" of fields which are held up by the federal government (permitting, etc, etc). I am not saying it is enough to change the long term trend, but there is a lot of development that doesn't go forward because of the various agencies involved.

Also, the race is on for artic development, for which Alaska is also the gateway.



avonaltendorf's picture

This is not going well at all, and I would prefer to keep a low profile. "Largest untapped reserves of oil in the world" - you mean the Beaufort Sea? - which is an unexplored frontier and for which there is no practical or cheap method of exploiting? The bit about monopolists is a joke. Onshore US there are 300+ independent oil & gas producers (like EOG, Continental, Noble) and countless small operators, pipeline companies, drillers, 'Mom and Pop' wildcat explorers, and service companies. Deepwater Gulf of Mexico makes sense because 70% of the total US offshore oil resource is there. GoM operators are all five US majors, US independents like Marathon and Anadarko, plus UK, Norwegian, Australian, Brazilian, Canadian, Japanese high rollers and a dozen pipsqueak "minnows" like ATP and Cobalt. Competition is fierce.

That Peak Oil Guy's picture

Your conspiracy theory seems to be in conflict with my conspiracy theory.  ;-)

Seriously, show us where the oil is and how much it costs to extract and get to the market.


Bananamerican's picture

"The US Govt, in collusion with the big fat Oil monopolists of America, has restricted oil exploration,"

This is my favorite conspiracy theory of the Right in that it posits how

George Bush & Cheney, 2 constitutionally untrammeled OIL-igarchs, were beaten into submission by leftist environazis. (and so were forced to move military muscle, man & ma$hine 1/2 way round the world to Iraq to secure THEIR oil)

For fuck's sake, american oil production peaked 40 YEARS AGO!


Shameful's picture

It's easy.  Just let the production plateau meet with the power of Zimbabwe Ben!  I daresay that $30 a gallon will put a big enough dent in America's consumption to hit those numbers.  Problem solved!  Hell put Ben at it long enough and you'll really be able to see those oil imports drop like a stone.

johnQpublic's picture

...and if that wont do it, the reduction in imports will easily be accomplished by peak oil


we certainly wont use what aint there




mark mchugh's picture

So what you're saying is he's tried nothing and is all out of options.

What about Rossi and Focardi?

Nat gas?


Brazil's model seems to work there, why can't it work here?


augie's picture

I think it would not work here because our entire way of life is pegged to Oil. Suburbs, foot ball games, Nascar ect. Forgetting the fact that the oil companies own congress, The infostructure change would affect way to many who have become slaves to their lifesytle.

Why would anyone who is making millions of dollars give all that up for the sake of humanity? The same question can be asked to a regular Joe why he would give up taking his kid fishing with a gas powered motor for the sake of humanity?


Bicycle Repairman's picture

As WWII ended, there were virtually no suburbs in the USA.  Time to revert to the cities.  No exurbs, no long commutes.

TimmyM's picture

Yes, we subsidize oil consumption in many ways. The home mortgage interest deduction, Fannie and Freddie and sprawling suburbia. The aircraft carriers in the Middle East. All of it misallocating capital and disturbing the optimal system.

MSimon's picture

You know what they call cities where I come from? Disease concentrators.

They also have another name. Targets.

disabledvet's picture

GM owns Congress.  And now you know that since "they got our money."  i always forget the part about "what's bad for GM is bad for the country."  to be honest, i never knew.

ElvisDog's picture

You know why none of these grand plans to wean us off oil ever work? Because people like driving around in our cars. Most of us don't want to live packed in high-rise urban apartment buildings taking the bus to get to work.

Tunga's picture

" won't have Dick Nixon to kick around anymore!" RMN

Bicycle Repairman's picture

The technology for electric, hybrid and natural gas vehicles is ancient.  Let's just get on with it already.  The problems are not technological.  They are political.

MSimon's picture

The problems are economic and technical. In 1900 battery cars had short ranges and used lead acid batteries. In 2011 battery cars have short range (relative to reqmts) and use lithium batteries. Oh. Yeah. If your battery car sits out in the cold it will lose range. You will need a garage. So battery cars are for suburbanites.  And the batteries wear out.

Natural gas? Limited range due to not many fueling stations and the tanks are heavy. And if the tanks are light? Well you want to be riding in a bomb when you have an accident?

Hybrids? Good choice for now. If they didn't cost so much. Unsubsidized.

All this tech works for people who can't multiply amp-hours times volts. Every one else wants an oil fueled vehicle.

Bicycle Repairman's picture

"Natural gas? Limited range due to not many fueling stations and the tanks are heavy. And if the tanks are light? Well you want to be riding in a bomb when you have an accident?"

A Honda Civic that runs on natural gas:

You can find natural gas filling stations here:

There are conversion kits to convert any car or truck to natural gas.

MSimon's picture

Given that you need a 4X larger gas tank for equivalent range I'd say there were a few problems. Buses make sense - you can refuel them overnight in garages. And the added weight of the tanks is a lower % of vehicle weight.


And the lower cost? If you don't count in gasoline taxes for road maintenance. Which account for about half the price of gasoline. Right now the numbers are small so the loss is not too big. When there are lots of CNG cars on the road woe unto you if you haven't paid your taxes. To make sure it is fair the government will be checking your car to see how far you have traveled. And probably where.

ElvisDog's picture

I believe Denninger stated that if we converted a sizable portion of the U.S. car fleet of over 200 million vehicles to natural gas that we would run out of natural gas pretty quickly. CNG cars may be another one of the many energy schemes that works well at a small level but can't be scaled up beyond a certain level.

CrazyCooter's picture

CNG cars are very widespread, but not in the US except for fleets.

Converting an EFI car is not cheap. I think it was 10k-ish when I looked at converting my 300c to bifuel. Also, the EPA regulates that, so the design has to be "approved" which is 100k investment. This has been done in some cases, but to be fully legal there are limitations to conversation. Do your homework.

Converting a carbureted car/truck is much more simple.

I would never own a CNG car unless I had a system at home to charge it. I looked very close at doing this but just couldn't justify the cost, and that was with half the fuel cost.



CrazyCooter's picture

You can start your CNG research here for an EFI vehicle. I was going to go with these guys product line, but like I said ... cost wasn't there.



Bicycle Repairman's picture

For electric cars I recommend the film "Who killed the electric car?"  That film will tell you a lot about how things work in the USA.

MSimon's picture

It is not who. It is what. The what is the cost of batteries.

CrazyCooter's picture

Screw hybrids. Why waste all that weight for an ICE? Just get on with battery cars.

You know why manufacturers hate electric cars? Think about this for a sec ... how many moving parts? Think of all the on board systems, sensors, etc required for fuel, exhaust, engine, transmission, and so on. All electric cars are just simple by comparison.

Planned obsolencense, with the exception of the battery, is out the window. And batterys recycle very well. The maintenance side of the equation has a revenue of damn near zero.

Just my two cents.



CrashisOptimistic's picture

Silliness, all.

1) No, the US is not sitting on the largest untapped reserves in the world.  Why would that be so?  Why would US geography of 150 million years ago do anything special that other areas did not do?  And what we DID have, we pumped the hell out of for 100 years.  Just what did you think purchased global dominance?

2) The available exports from oil producing countries worldwide is cratering.  Saudi's populace is consuming oil at an explosively growing rate.  Russia's populace the same.  If you are producing oil, you subsidize it for your own citizens.  That drives the domestic price down, and that explodes domestic consumption growth.  Consequently, THERE WON'T BE ANY EXPORTS FOR THE US TO IMPORT.  Obama's goal is not his goal.  It's silly.  It happens by doing nothing.

3) Geology wins.  There is nothing anyone can do about this.

dnarby's picture

OK, here's your reserves:

Mine coal and rare earths.  This gives you abundant thorium.

Build new, and convert existing and decommissioned nukes to thorium (far cleaner, and far far safer than uranium nukes).

Use abundance of electric power to convert coal reserves into synthetic fuel.

Power the USA for 1000 years.

Easy peasy!

CrazyCooter's picture

Thorium can't be used in uranium based reactors, at least that is my understanding.

You are refering to MSR designs, which are fluid, not solid. That is a key design distinction as fluids don't suffer structural damage from heat. Think of a fuel rod as a cigarette, you can handle it as long as its not "burned up". Once its ash it falls apart. Rods are only burned abourt 30% I think, then they are too structurally damaged to be handled safely beyond that. If you burned up 60% of the fuel, the rod would just fall apart. That is why reprocessing is required; to get the rod back in shape for burning.

And yes, thorium is the way to go, but its a whole new generation of reactors that need to be built. Here are my obligator links for those who haven't seen them:

Lastly, because it is fluid, you can disolve other fissile material in the fluid and burn it, including old fuel rods. See the links.



falak pema's picture

Thats what the DOE wanted to do in 1979-1980. Reagan shot it down in 1981. Then asked/ORDRED  Saudi regime to open the tap wide. (King Fahd, new on job, pro-US surrogate, obeyed as Iraq/Saud were politically stretched, waging war on Iran based on US 'back-room' technological support). Oil prices never recovered as energy cutbacks and deflation had changed the oil demand momentum in west since 1983 onwards. 

We lost 30 years since then to do R&D in renewables as the OIL lobby just loves 'drill baby drill'; even when world conventional oil peaks and the returns are now so minimal or in a shit type oil shale/Orenoco goo that no one wants/knows how to refine.

Go long bikes! But the real kicker is civilisation change : moving to a new consumer model based on sustainable growth not wasteful, junk consumerism.

Until USA resuscitates syn fuels and goes renewables with conventional oil at 150+ LT!

johnQpublic's picture

wood gas until the whole planet looks like easter island

Caviar Emptor's picture

Guess we have to repeat the same bonehead mistake again for the millionth time: the more energy becomes available through drilling, the more get used. Instantly. If we drill drill drill we'll burn burn burn. That's been considered axiomatic since the 19th century when the same was found true for coal. England already lived through what happens when you max out domestic energy production (coal). Sooner or later the well runs dry and you're much worse off, totally dependent. 

One of the worst mistakes of the "cheap" oil era between the oil shocks (1985-2002) was that we undid EVERY energy conservation measure that was instituted in the 1970s: the national speed limit, voluntary heating/cooling restrictions, smaller cars to name a few But then we went one step further: allowing SUVs to qualify legally for horrible gas mileage by exploiting a loophole which designated them as trucks instead of cars. And it was done to keep the domestic auto manufacturers alive. 

There will be no solution until we address what nobody wants to address: reducing oil demand, not increasing production.

US oil production peaked when?? Yesterday?? No! IN 1970!!! We're so far beyond peak that there is absolutely no hope of raising it because as fast as new production comes on line, it's burned by SUVs, yachts, private jets and McMansions with floor to ceiling windows. Despite every attempt to increase oil production (and you can't get more oil-friendly than Bush-Cheney aka Lord Halliburton ) we only become MORE dependent on foreign supply never less. 45% of gasoline is imported. 

I wish somebody would finally expose this BS for what it is: more drilling without less consumption is a giveaway to oil interests, not favorable for the US economy. 

CrashisOptimistic's picture

It's far past that.  Conservation won't do it.  Conservation is acquiescing to dominance by China and Russia.

The only way to reduce global consumption is a near term nuclear war that depopulates China.  Period.  You could get the same result depopulating the US via nuclear war, too, but I sort of want to be on the winning side, so I choose China to die.

Caviar Emptor's picture

Instead of focusing exclusively on production technology, we need to focus more on conservation technology. The rumor from the 1970s was true: cars already had the tech capability to quintuple average gas mileage, but that was kept off line because of the quick profit motive and the powerful oil lobby. Conservative members of Congress are opposed to mass transportation projects. Can you guess why??

Bicycle Repairman's picture

The cities of the USA had a burgeoning mass transportation system after WWI.  It was scrapped at the behest of big oil and the car companies.  It could easily be rebuilt.