auto industry, in the oil lobby and oil industrial complex. robert engler in his books outlined that in the early '60s, and that's part of the sustained history. presidents of the united states have largely accommodated these interests, and there's certainly military interest as you're pointing out ratherrer in a sophisticated fashion or part of the equation. so my question is, you know, how can we respond to this? because now obama at least rhetorically has talked about expanding mass transit, high-speed rail, alternative energy and it seems for different reasons that i think are largely ideological. we don't even have the resources to act proactively. so how, given these different structural forces, do you think the space for interventioning? i mean, what did gerald ford do about these structural forces? >> well, gerald ford was unelected, and he had a short time in the white house, and he was dealing with multiple crises. he turned to the saudis, and they flooded the market in 1977. and as i said, you know, the saudis right now are pumping,

where that wti oil, that curbing, oklahoma oil is now almost as valuable as all the other oil in the world. >> tom: you're talking about west texas enter media. i want to put on the screen the police differential you're refering to, between west texas crude and the north sea brent, the global benchmark at 112. what happens to this? does brent wind up going down or does u.s. benchmark oil go up to the $111 mark? >> today was both. today we saw wti crude soar, as you said to nearly 103 a barrel, over $3 price rise. but brent crude was down about dollar and a half. at one point this month brent crude was about dar 25 higher price than this wt crude. today the differential got down to $9. the historical difference was that the wti oil was about 1.50 to $2 higher the brent oil, which represented the transportation cost from the north sea to our texas and oklahoma refineries. >> tom: so does that mean u.s. oil at $115 a barrel then if you go back to historic norms? >> no. i think the price action you saw today is the bulk of it. i would look for those prices maybe to go a bit heyer to 205.

oil prices are creeping up toward $100 a barrel. this is the first time since summer, tom, that prices have spiked this high. >> tom: just a few weeks ago, susie, oil was in the $70 range. but with supplies declining, prices are going up. in new york trading, december crude futures jumped $1.21 today closing at $98.99. they climbed as high at $99 earlier in the session. >> susie: rising oil prices means rising prices at the gas pump. jeannie yurman looks at what's behind these price moves. >> reporter: forecasts for world oil demand are coming down and yet the price of oil remains relatively high near $100 a barrel. so where's the disconnect? analysts say it's a classic case of supply and demand. in this case, supply is tight. half a dozen countries have experienced supply disruptions in the past year and their output is still below normal, knocking a million barrels a day out of production. oil trader ray carbone says the mood in the trading pits is bullish. >> while global demand forecasts may be going down the oil market is funda

oil has contributed a lot to the development of our country.he focus we are planning now is on small and medium businesses, which is the number-one priority for local government. over 20 years, we have created about 30,000 jobs with new facilities. >> diversification is the name of the game, is it not? >> of course. this is the number one priority. we are implementing an innovation program. last year, we put into operation about seven new industries. by the end of this year, we'll come up with an additional 15 facilities. it is in the region. we have it in oil and gas, and in construction, vehicles, chemicals, and heavy-machine building. >> how do people field in kazakhstan about the changing of the country as the 20th anniversary is not here? >> first of all, for quality of life, kazakhstan is perfect. something that was not affordable 20 years ago became affordable and possible. we get used to good service and good things. this seems to be normal now. 20 years ago i entered the university system as a student, and 20 years ago because of the p

development of the oil shale. however, your department plans to issue hydrofracking regulations which would undoubtedly hinder this development, but also in the past, right after coming into office, the administration changed the terms of oil shale lisa's making them so limited that industry has little interest in these tracts of land. can you explain to this committee what economic analysis was used, if any, in making these decisions cracks and do you take job creation into effect when you issue regulations that had the effect of creating uncertainty and limiting business opportunities? >> congressman, i appreciate the question and the fact is oil shale and developer of the oil shale resources of colorado, utah and wyoming are different from the issue of tracking of tight gas is in other permissions around the country. with respect to the oil shale of western colorado, i think it's a portrait going to remember that there are some very significant questions, including the impact of water supplies of the colorado r

we won't see oil and the price of oil is set on the futures market. and they look at what the future about will be. so, the price of oil will go down and you talk to any futures trader, they'll tell you that. >> it's all about supply and demand and opec ultimately controls the supply. >> absolutely, they doesn't care. in the u.s. we don't put pressure on opec, just sit there and take itten you should use natural gas as a viable alternative to get off the junk if you were. >> adam, i know that somebody has spoken for you, but chime in with an opinion? >> waist going to say, probably not even necessary, charles. >> i got it, i nailed it, i knew i nailed it. >> since you asked. no, as it happens, charlie, you didn't nail it. all right, let's have a few facts here, first of all, as we all know, and we've been told many times, even when gas was at $4 plus a gallon in the united states. our gas is cheap compared to the rest of the world. europeans pay far more for their gas than we do because we subsidize our gas. the other thing is we're drilling for oil i

the development of the oil shell. however, your department plans to issue hydrofracturing regulations that undoubtedly hinder this development, but also in the past, after coming into office, the administration changed the terms of oil shell leases making them so limited that industry has limit interest in these tracks of land. can you explain to the committee what economic analysis was used, if any, in making these decisions, and do you take job creation into effect when you issue regulations that have the effect of creating uncertainty and limiting business opportunities? >> congressman lamborn, i appreciate the question, and the fact is that oil shell and development of the oil shell resources in utah and wyoming are different than cracking tight gases and other formations in the country. with respect to the oil shale of western colorado, i think it's important for everyone to remember there are some very significant questions that have not been answered including the impact of water supplies on the colorado river

you all right gregg or with the war our bank runs on political crazies in the many have missed that oil was back up over one hundred dollars how is all well and one hundred dollars a barrel when we are in the midst of a great global deflation in the near term i think that we may have just seen oil prices make their last iraq for the great reflection or period that started in two thousand and nine and clearly is probably finish you know you know in two thousand and eleven even though i think that won't prices will probably we can from here i do think that whatever level they go down to will probably be much higher than what we saw in the two thousand and nine financial crisis you know we've had no growth in crude oil supply for the sixty or now and really the way the world has has coped with that is fight taking more and more to me and out of the developed nations of europe and the united states so that asia with this growth in demand could actually have some oil so you know we were flat max for the last six years all right so a couple of points first of all i guess that is the definitio

of a great global deflation in the near term i think that we may have just seen oil prices make their last heroic for the great relationship area that started in two thousand and knowing and clearly is probably finishing up now in two thousand and eleven even though i think that won't prices will probably we can from here i do think that whatever level they go down to will probably be much higher than what we saw in the two thousand and nine financial crisis you know we've had no growth in crude oil supply for the sixth year now and really the way the world has has coped with that is by taking more and more to me and out of the developed nations of europe and the united states so that asia with its growth in demand could actually have some so you know we were flat max for the last six years all right so couple of points first of all i guess that is the definition of peak oil and number two what i mean it's moved over to asia it. and what in what capacity how does that work exactly all supplies no zero sum game. one hundred percent of the growth in asian to me has been composed of simp

one hundred percent of the growth in asian to me has been composed of simply frame no oil consumption from here in the west i mean for example if we look at petroleum consumption in the united states or around peaks of teeth out. thought of two thousand and six at the top of the housing bubble when we were building lots of houses and people were buying pickup trucks and light vehicles oil demand here in the united states is down almost thirteen percent in the period and we're not recovering our demand we've removed a lot of discretionary demand obviously we have a lot of police full discretionary manta to move out and of course those are economy fields to recover maybe we're about to remove another tranche of ten and here in the united states now gregor i see a lot of activity in the u.s. with this fracking you know this you know they go into the thread geological crust and they and their crack it open and they release natural gas and it is this a meaningful amount of supply to the energy mix overall it is a meaningful contribution to new supply and many of us have watched the growth

demand side their consumption of oil and continually move towards natural gas and solar and wind but as you saw post two thousand and eight even europe took another leg down in its petroleum consumption losing another million barrels per day and so one of the boner abilities that i see with europe is there isn't as much discretionary energy consumption to shed at this point and so any leg lower in energy consumption is going to be correlated basically one one with economic growth and of course this is the really tough spot but the developed world is in right now it needs to find some way to grow to service the debt and the barriers to growth are twofold one in the private sector remains way too high and two there just isn't an easy cheap energy resource coming along to rescue us and so you're in a very vulnerable type of threshold situation with what's occurred with debt in the developed world right now although europe has been cutting back on their consumption of oil the fact is that the oil industry over the past twenty five years has had a reciprocal all growth a raise been with t

what's taper the current fall foreign policy or develop the technological alternative sources of oil is a fairly easy question i mean just to put that in context america built out its highway system after world war two one fourteen dollar oil we're now trying to run that system and repair that system and maintain that system on a hundred dollar oil it's very an economical and from an energy standpoint it might even be an energy sink but other words the amount of resources first putting into that system may be more than the amount of pekin on a benefit they were actually getting back out of that and the problem is liquid energy max that's that's the real problem racing around the world trying to secure new liquid energy resources has become an economic loser for the united states we would be much better off investing in the power grid and plugging various sources not just solar and wind into that new power grid but also natural gas we do have a decent natural gas resources here and here in north america so you know your question's pretty easy to answer we're also considering the fact

that the world is paying the price for brant in the last year or so but i think you know yes the oil prices have just briefly come up above one hundred dollars a barrel but i just don't think given the levels at which we're operating that our economies are going to be able to sustain that so i think it's probably time to see a weakening face of oil prices all right greg mcdonald right of time thanks again for being on the kaiser report thank you max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacey harbor our thank my guests gregory macdonald if you want to send me an e-mail please do so at kaiser reported r t t v dot are you also follow me on twitter at kaiser report or on facebook kaiser report as well it's a nice time to snacks rather saying. that's become common names and mobile home is told me oh creation of the group of the system but no one food system is not created to feed the people of the world is created to maximize the profits. sure not trading the actual physical grain or trading promises for grain to be delivered a mont

finding out that they're just as exposed to the global credit oil cyc all regardless of whether they cut back that's correct we're sort of trapped below a scene when you know that the image of a ceiling is very very useful here every time these western economies try to get their head of the ceiling and try to walk into some sort of industrial growth to get the credit cycle we started again and to get that service going if you know or oil rises back up again because it's concurrent with any sort of growth whether it's production growth for consumption growth as i said next i think we've just seen the turning point and that cycle or west texas intermediate crude came up very quickly in the last four weeks because it finely he was released from its landlocked status in the interior of the united states and it's making its way down to the gulf of mexico and so west texas intermediate crude is rejoining with brant which is the global grade of oil that the world that's paying the price for brant in the last year so i think you know yes the oil prices have just briefly come up above one hun

well and and heating oil crude oil and gas and that would be gasoline and then as well as natural gas all these things are now allowed to freely be traded not be regulated at fixed prices so when that happened it freed up the market to to trade in a way it never had been able to before it was like letting the dollar float after the gold standard was lifted and that introduced these derivatives in my book i talk about the traders who first put these together and then of course the koch brothers further developed over the counter products as you mentioned and those derivatives were even more complex and exotic they were not standardized futures contracts which are also derivatives they were tailored bets between two parties so they call it bilateral you know parties would be you and i might enter a private agreement and it's therefore unregulated we're sophisticated players nobody's allowed in our business we're not trading on an exchange it's all over the counter which is off market to follow up on the gold brothers we know that they are involved in funding and creating some oil deriva

oil production going up rather than going down. u.s.mports going down up -- instead of going up. >> host: now, you discuss in chapter two of the book the idea of the petro state, and a lot of the book is on venezuela and the rise of chavez and his nationalization of the oil industry there, and you mentioned chavez and the connection to fidel castro in cuba, and that got me thinking because there's a lot of controversy now about planning with cuba drilling offshore, especially after the gulf oil spill that we had last year. how -- >> guest: that's an interesting chain of events. >> host: i'm trying to explain my logic here. how does cuba getting into the offshore oil game -- how does that affect the stability of energy, if at all, and is there a reason for us to be as concerned as we are post this event in the u.s. gulf? >> guest: i think the thing is cuba's very close to florida, and some of the cuban waters they drill in is close to florida, and so certainly concern about just basically environmental safety and security and how it's ma

just like this oil. the other losing would be the environment. this woman will not tell you but the pipeline movement of liquid fuels and oil is absolutely the safest way to move it. it is materially safer than ocean transport, a tanker cars, truck tankers, and that the like. the other loser of this pipeline is not built will be the environment. guest: thank you, joseph. when you talk about who loses and who wins in terms of this pipeline, one of the other pieces of this story is what would happen to oil prices in the midwest if the keystone xl pipeline is built. if this keystone xl pipeline is built, for the next 10 years it would mostly divert oil from the midwest to the gulf coast and cause i'll prices to go up in the midwest. that would hurt consumers there. this is something the pipeline company, trans canada, has said. host: we have the statement made by speaker boehner and it was put out on november 10 earlier this month this was after the obama administration called for consideration of a new rou

rig drilling oil.e can't drill there and it is going to cuba and venezuela and chine a. we get the emissionez and oil spills go on the beaches of florida it is the same in the arctic sea and key stone pipe line. we get the bad. but we don't get jobs and national security. it is a ridiculous policy. >> wayne do you agree? >> absolutely. it is ridiculous . that has to be reenforced to do that. you have 535 morons in washington who vote the other way. and until all of these people who are doing occupy wall street and go occupy occupy the washington mall, that will not change. >> you are going to have gas prices continue to prize especially for somebody like myself who is in the car more than the desk and office. it is going to hit election year. you will see them back at four dollars right in time for people to go to the polls. the president and administration, it is going to hurt his reelection . yet they fly by the seat of their pants. >>> and that is the greens goal tompt make energy more expensive and

>> and oil. >> so it comes out as oil too. >> 40 million barrels of oil in idaho alone. dakota, excuse me, north dakota alone. what they're finding is truly a stoppering, and transforming to are this country. >> to we're apparently richer -- >> we are. >> canada is -- >> shale. >> yes, but there are other places that haven't been successfully prospected yet. >> part of the trouble with our economy right now is the trade deficit. if we start ex for thing this oil, we could cut down the deficit by hundreds of billions of dollars that. would really help the economy. so i think this is a -- [everyone talking at once] >> game changer. >> maybe -- >> how much are we importing every day? >> something like 12 men barrels. >> where is that going? >> we've become depend only a lot of countries, venezuela, mexico, canada, and the middle east. >> i think 18% of our oil comes from venezuela. >> all right. call me the cynic. i see this as a public relations narrative advanced bithe coal and oil industry. >> ah-hah! >> that feels lying they're losing their -- >> so -- [everyone talking

the oil industry and oil companies will win from this.why we shouldn't be paying attention to their figures for jobs, 20,000 jobs. cornell did an independent study that said only -- fewer than 5,000 jobs created. who wins? people who invest in and make money off the oil industry. who loses, consumer? >> 401(k) invest in the oil industry. the oil industry wins either way. >> gas will go up and jobs temporary. >> speaker john boehner, put out a statement after this delay was announced by the president. here's what he said. quote more than 20,000 new american jobs have been sacrificed in the name of political expediency by punting on this project, the president made clear campaign politics are driving u.s. policy decisions at the expense of american jobs. will cain? >> pete just illustrated the reason being given for delaying this pipeline approval is a complete farce. the reason being given it's environmental damage to the aquifer, which we just saw on the map is massive. right. it's going to have horrible environmental impact on it. i'll u

canada oil sands is dirty, producing oil from the oil sands generates between 5 and 30% more greenhouseional production. but stopping the pipeline won't put a dent in global warming, canada will simply export its crude to energy hungry asian markets and will not have an effect on the oil markets in the united states. it may sound like a lot but a drop in the bucket of u.s. consumption. there's my argument. if that pipeline doesn't get built that oil will come out of the ground in canada and someone is going to buy it. that pooip pipeline should get built. >> it's good to know the coke brothers got to you. can we put this up to will cain and i can look at this. listen, here is the problem with this pipeline. okay? the pipeline is going right down there in the gulf of mexico to a port. why going to that port? so all of that oil, most of it, can go to the economic biggest competitor, china. why not build the pipeline that way right to china, because that's whose going to benefit from the oil. you know who is not going to benefit from the oil, maybe over, the north pole. consumers are not g

flow of oil. no other country in the world has the experience the united states has in that. >> you will go to nigeria and show them how to do this? >> we show them how we do it. we take the approach that you are smart. we will show you our practices and how we manage different functions. you can take the experiences and apply them to your circumstances. they will be different. they can take what works for them and take advantage of our experience. quick to set examples of good and bad. can you give us a bad -- >> you said examples of good and bad. can you give us a bad example? >> in the late 1990's, everybody was fascinated with california. we would insist that we would show the california model but also the other models in the united states as well. as time went on, the approach of showing different models was associated with the california energy crisis. >> do you think we will see a serious contribution in your lifetime? >> we are getting there on a niche basis. there are a couple of issues w