who was buying this paper oil? >> california pension fund, harvard endowment, lots of large institutional investors. and, by the way, other investors, hedge funds, wall street trading desks were following right behind them, putting money--sovereign wealth funds were putting money in the futures markets as well. so you had all these investors putting money in the futures markets, and that was driving the price up. >> in a five-year period, masters said the amount of money institutional investors, hedge funds, and the big wall street banks had placed in the commodities markets went from $13 billion to $300 billion. in 2008, 27 barrels of crude were being traded every day on the new york mercantile exchange for every one barrel of oil that was actually being consumed in the united states. >> we talked to the largest physical trader of crude oil, and they told us that compared to the size of the investment inflows--and, remember, this is the largest physical crude oil trader in the united states-- they say that we are

diversion barriers that don't divert the oil, not really. >> the bp oil spill proved that the oil industryad not made any progress at all in 30 years. and that sort of shocked the country. it was a shock to our collective psyche as a nation. >> our culture is threatened. our coastal economy is threatened, and everything that i know and love is at risk. even though this marsh lies -- along coastal louisiana, these are america's wetlands. excuse me. i just wish to submit that for the record. thank you. >> the bp disaster was devastating. it turned us around as a country on this issue. how could it be that after 30 years of progress in drilling, there had been zero progress in cleaning up the disasters created by drilling. how could it be the only tools to clean upç the oil spill wer the same old ineffective 30-year-old technology, boom and skimmers and chemical dispersants dropped by air. now in 2012, now that it's been two years since that big wake up call, two years since the bp disaster, the oil industry today wants to assure the nation they are now fully prepared for any future oil spil

fracking today you do have oil fracking now there's a lot of things wrong with oil fracking but you do have it and it is incremental supply and you do have tar sands producing oil again lots of things wrong with paris and lots of things wrong with fracking they're not going to solve our problem but if oil had been let's say eighty or ninety dollars a barrel there would be no fracking i mean and so this is showing you how these markets work they're working very well and for obama to sit here and say that we want to discourage high prices is the same thing as saying we want to discourage alternative energies we want to discourage more drilling and exploration for that hard to get hydrocarbons it just makes no sense whatsoever except in the political context in which you speak when dr levy if you want to talk about speculation just to hammer the white house a little more don't they play a role in it whenever they spurt grammars that obama will release search egypt oil supplies every time that oil prices climb. of course and there's an ongoing rumor echo if you will i mean obama suppose

there is an oil and gasoline footprint on everything we do. oil and gasoline matter to us a lot. president obama took office, gasoline is up over $2 per gallon, that translates to nearly half a trillion dollars stripped from mainstream americans and deposited into bank accounts of middle eastern sheiks and people like mahmoud ahmadinejad and putin in russia. why would the obama administration ignore a massive and unprecedented increase in gasoline prices? there is only one answer. it's because they have no answer. listen to the man in charge of our energy policy. energy secretary steven chu. >> so do you drive one? >> no. i don't own a car at the moment. >> and following the cost of gasoline at the pump? >> i would say i would give myself a little higher. >> they would give themselves an "a"? prices are up and everything is skyrocketing yet they give themselves an "a". denial, delusional or both? it's an election year. you think they would be more concern. they would have study, some reach or some research. >> here is what they come up. >> there are things you can do individually

there is an oil and gasoline footprint on everything we do. oil and gasoline matter to us a lot.soline is up over $2 per gallon, that translates to nearly half a trillion dollars stripped from mainstream americans and deposited into bank accounts of middle eastern sheiks and people like mahmoud ahmadinejad and putin in russia. why would the obama administration ignore a massive and unprecedented increase in gasoline prices? there is only one answer. it's because they have no answer. listen to the man in charge of our energy policy. energy secretary steven chu. >> so do you drive one? >> no. i don't own a car at the moment. >> and following the cost of gasoline at the pump? >> i would say i would give myself a little higher. >> they would give themselves an "a"? prices are up and everything is skyrocketing yet they give themselves an "a". denial, delusional or both? it's an election year. you think they would be more concern. they would have study, some reach or some research. >> here is what they come up. >> there are things you can do individually to save energy. making sure you

supplies every time that oil prices climb. of course and there's an ongoing rumor echo with you will i mean obama supposedly has said sat down with the french and the europeans and they've agreed that a particular point in time they will release strategic petroleum reserves this is i can't tell you how silly this kind of thing is i mean those reserves are to protect us against the real rainy day i mean a stormy hurricane like day and anyone looking at the middle east in the past couple of years the arab spring how much money the saudis are paying for security and incidentally the saudis probably need or look around ninety or one hundred dollars in order to maintain all those security provisions anyone looking at the chaos in the middle east and saying that well we really don't have to worry we'll just release the oil now because we think it's a little bit high this is the kind of nonsensical policy that is led to the sort of problems that we're in right now and we are in very very deep problems with respect to energy and other

the third is oil spill response. if you have an oil spill, we want to make sure we have the ability to be able to respond effectively to an oil spill, so working with industry, with companies that have now been formed like the well incorporation in helix, we have made a huge progress on preparedness and oil spill response and containment and led largely by our agencies and the ocean energy advisory committee, which i have put into place. we're moving forward to make sure we have good laws which can be followed, and we'll keep people accountable for them. now, with respect to the question on bp, our expectation is bp will be held accountable for what it has done in the past. in the future bp will be held accountable to meeting standards that we promulgate through the rules and the mer mitting processes through the department of interior. >> what would you do differently if there was another oil spill? >> you know what? we would move with the same sense urgency. production in our oceans that -- depth of 5,000 feet, 10,

speculating on oil. i will hang up and listen to your answer. guest: i appreciate all of those very good questions. you pointed out that there are more oil rigs in the united states this year than last year. as i said earlier, when we listened to the president's clip from yesterday, yes, there are more. there is more domestic production this year than last year. but his reasoning in going after oil and natural gas in this company on private land, like the shale and -- shale in pennsylvania, or no dakota, not on the outer continental shelf, there is still essentially a moratorium put in place by the president. it exists today. the other question that you brought up about china buying a controlling interest of oil in alberta, indeed, the prime minister of canada come only after president obama made that decision, and i think a very political decision, as a tribute, if you will, to the environmentalists that support him, to not approve keystone and bring 700 million barrels of oil per day down to the refine

and our con sumgts of oil. by the way, president eisenhower, when he was in office and he knew a thing or two about national security, said it would be a national security emergency if we imr ported over 15% of our oil needs. just a few years ago, we were up to 60%. but here's the issue in a nutshell. oil is basically transportation. of the slightly now under $19 million barrel a day that we burn per day, about 20% of world demand, 70% of it's transportation and of the 70% of oil used in transportation, you have to recognize that somewhere around 97% is powered by oil. the light duhty sector is by far the biggest single user of petroleum. it represents somewhere around 10 million of our daily con sumts. the heavy, over the road vehicles represent around 3 million barrels a day. let me give you some gee whiz numbers here. we have 250 million light duty vehicles in the united states. that's personal automobiles and small trucks, coca-cola, verizon, at&t might use. if you could wave a magic wand and convert all to

: iran's oil minister this week claimed the discovery of a new oil field, but exports are falling. >> we've also heard from our shipping sources that they may be actually storing crude oil offshore because they can't sell it. >> reporter: kate durian monitors the economy from dubai for platz, the energy news service. >> one of the major problems is insurance cover. >> reporter: european sanctions prohibit the insurance of iranian oil. >> people buying iranian oil, even if they're willing to buy it, can't find tankers that are willing to carry it. >> reporter: that's forced iran back to the bargaining table. iran has agreed to appear at the u.n.'s nuclear talks in baghdad next month. >> pelley: maybe progress. anthony, thanks very much. birds hit the vice president's plane. the vatican reprimands american nuns. and two years after the b.p. oil spill we'll check on the long-term impact. when the "cbs evening news" continues. >> pelley: it was two years ago tonight that the deepwater horizon oil rig blew up in the gulf of mexico off louisiana. 11 workers were killed and it caused the lar

of 620 of oil.um of 100 years of natural gas. this is your industry. is that about right? >> there is a tremendous amount of supply in the u.s. we have seen that over the last three years as we have -- in 1973 we produced 9.6 million-barrels and it had fallen down to 5 million-barrels by 2008 but now we produce closer to 6 million-barrels and this was a trend that i would have never thought could have changed but a it is because we have capital willing to invest in the united states in the last just within the last three years. >> sean: and the obstacles and obstructions, steve, this is your business. you follow this every day. they have been great in making it almost impossible for any company in wanting to invest in resources here. >> shows the entrepreneurial spirit of the american people. the whelm thing on fracing. >> sean: explain for most people. >> it takes an intense amount of water and a few chemicals going thousands of feet underground and breaking rock and releasing natural gas and that

of 620 of oil. gas. this is your industry. is that about right? >> there is a tremendous amount of supply in the u.s. we have seen that over the last three years as we have -- in 1973 we produced 9.6 million-barrels and it had fallen down to 5 million-barrels by 2008 but now we produce closer to 6 million-barrels and this was a trend that i would have never thought could have changed but a it is because we have capital willing to invest in the united states in the last just within the last three years. >> sean: and the obstacles and obstructions, steve, this is your business. you follow this every day. they have been great in making it almost impossible for any company in wanting to invest in resources here. >> shows the entrepreneurial spirit of the american people. the whelm thing on fracing. >> sean: explain for most people. >> it takes an intense amount of water and a few chemicals going thousands of feet underground and breaking rock and releasing natural gas and that has doubled gas production

the prop with the oil market is that it's not a free market. the oil market is controlled by opec. opec is a cartel which owns some place close to 90% of the proven oil reserves in the world. it meets a couple of times a year to set the price of oil. oec even though they own this tremendous amount of the world's resources, although we're starting to find additional significant reserves because of this new technology being developed here, but the opec nations produce about 42% of the oil used by the world each year. so think about that. they own 80 to 90% of the reserves and produce 42%. that's not classical economics. they're not maximizing their economic return. in fact, if there's an intell t intellectual fight, but maximizes their income, they need about 94, $95 a barrel in sars to make their social payments these days. that's not my figures. that's the saudi government's figures. the iranian wod like to run the price up as high as possible in order to hurt the west. particularly during this period of time when the west is is put sanctions on the iranian regime. and in 2001, the

any oil from any need to import oil from middle east or places like nigeria going to sway the canadian as they put it and we want to buy conflict oil that is oil from the middle east and we want to buy it is oil from canada and i think the answer is we should have people from canada now the rest of the world would be buying it now canada they are moving ahead with their very ambitious plans to expand. the u.s. can't really pull it off. so why is it that we see such this vast difference in terms of. you know being able to get these big projects lumped. again a part of that part of it is what's wonderful is that you go if you can and i've been to canada and i've been to the oil sands are very and i reported from there and seen what's going on it's an amazingly. complicated yet clean environment and we sound operation canadian can think of it this way canadians would produce oil in a much cleaner better way than places like saudi arabia or going to sway or niger angola or any other you need the other places we might get oil so if you're really worried about the state of the environment wh

gas and oil production. then i also mentioned electrification for light duty, personal and commercial vehicle. the use of natural gas for heavy over the road and centrally fuel vehicles renewed standards. and continued research on biofuels. so you need to do all five of those. in the case of natural gas and electrification, they both get at the fundamental problem about our oil use. and our consumption of oil. by the way, president eisenhower, when he was in office and he knew a thing or two about national security, said it would be a national security emergency if we imported over 15% of our oil needs. and at one point as i mentioned we were up to 60%. but here's the issue in a nutshell. oil is basically transportation. of the slightly now under $19 until barrels a day that we burn per day, about 20% of world demand, 70% of it's transportation and of the 70% of oil used in transportation, you have to recognize that somewhere around 97% is powered by oil. the light duty sector is by far the biggest single us

the majority of the oil is in south sudan but not all of the oil and by stopping pumping their own oil and transferring it through the pipeline because they had no more revenue by taking the higley coil field they were basic cutting the government in khartoum from forty percent of its oil production increasing their economic difficulties so it's not so much about gaining anything at least not in the short run it's about denying the other side the oil ok is it. already had. the south of the government of the south their rhetoric on it was that they invaded their area because that was where the north was launching planes which were bombing southern territory so they felt that it was then in their rights to try to prevent the north from from bombing their own civilians they were not hitting military targets that has been proven they were hitting civilian targets in the south and they. went into heglig to stop that happening and then withdraw again but i think some of the kids playing a very dangerous diplomatic strategy here i think is trying to appease to the international community sure

to buy conflict oil oil from the middle east we want to buy i think a little oil that is oil from canada and i think the answer is we should have all the oil from canada now the rest of it now canada they are moving ahead with their very ambitious plan to expand. but the u.s. can't really pull it off. so why is it that we see but there's a vast difference in terms of. you know being able to get these big projects launched. well again and part of that part of it is what's wonderful is if you go if you can and i've been to canada and i've been to the oil sands reported from there and seen what's going on it's an amazingly. complicated yet clean and environmentally sound operation and canadian can think of it this way canadians with it is oil in a much cleaner better way than spaces like saudi arabia or even a slave or niger wrangler or any i knew the other places we might get oil so if you're really worried about the state of the environment where it was being produced you would really differentially want to be produced in candidate. secondly i think that our regulatory regime here is bein

the oil wealth of the sudan. could have insisted that all these issues were resolved it didn't as we speak correctly the chinese are in a very difficult position trying to form a relationship with the south to get their oil at the same time trying to maintain an all relationship with the north who don't have oil but who they can actually sell arms true so when you find out that key stakeholders do not need top and actually apply pressure on the two governments to comply and keep away from war there then you can have the problems which are the ones we're facing currently in libya if i go back to you what kind of leverage do the chinese have we know that the south sudanese president was visiting china you know the chinese are a huge stakeholder in these two countries right now we know that they don't want to take a very public view which is probably unfortunate but what can they do privately they have a lot of interests in the country they have a lot of interest in both countries and therefore it goes without sayin

you are not buying oil. for not selling oil. finally with regard to the physical markets, and to decimate eight the largest oil was morgan stanley. if you can drive the price up after futures markets, you would want to buy physical and you're not going to want to sell the physical because it is like an appreciating asset. why let the american consumer habit? let's keep it until we hit the bubble peak. >> thank you both. that is correct. the largest supplier is morgan stanley. an oil company appears that even some of you which talk about big oil, it's actually wall street that is controlling most of our oil. >> revelation after revelation. but that, the question of my colleagues from massachusetts, the ranking member mr. markey. >> thank you, madam chair. climate change, new england is now four degrees warmer than in the 1970s. we still have philadelphia's weather in 1970. people for opening day and of insects are planning on white short sleeve shirt giveaway or, rather than which combination of sweaters and flannel shirts they a

my secret plan to fix our oil problem. coming up after the governor breaks down the natural [ male announcer ] this is lois. the day starts with arthritis pain... a load of new listings... and two pills. after a morning of walk-ups, it's back to more pain, back to more pills. the evening showings bring more pain and more pills. sealing the deal... when, hang on... her doctor recommended aleve. it can relieve pain all day with fewer pills than tylenol. this is lois... who chose two aleve and fewer pills for a day free of pain. [ female announcer ] try aleve d for strong all day sinus and headache relief. [ female announcer ] try aleve d fore! no matter what small business you are in, managing expenses seems to... get in the way. not anymore. ink, the small business card from chase introduces jot an on-the-go expense app made exclusively for ink customers. custom categorize your expenses anywhere. save time and get back to what you love. the latest innovation. only for ink customers. learn more at chase.com/ink i can get a s

the rocky mountains are seeing and i'm crested boom in oil and gas drilling. montana wyoming colorado new mexico utah the boom is happening all over the country there's oil and gas operations in thirty two states right now but the rocky mountain states are really seeing the vast majority of the expansion. and it's overflowing into communities where she will are seeing this right in their backyards. oh sure you were they wanted to put this location one of the first places that they wanted to put it to surprise you and say we have three well out there you don't have in the city. it's split state situation it is when somebody who the surface of their land does not own their resources their underneath their land for example oil and gas or other minerals a private person could own a house with land and the federal government or another private individual might on the resources under it the person who owns the oil and gas has rights to access that oil and gas which means that whoever owns the surface probably can't control what happens on their own property just in

there was little oil. in desperation chris and steve moved to grand junction colorado abandoning their home and a place that had been their dream. just. you know. four hundred forty thousand dollars and we just walked away from it. there are no official statistics tracking people who have moved away because of the effects of gas and oil development but in the two colorado communities profiled in this film the impact has been profound. there is a record of at least nine dry hollow families who formally complained about the drilling and they have moved away. some were afraid some were sick all were exhausted by their fight with the industry. chris and steve had seen the same thing in their neighborhood in rifle i think almost all of our neighbors have . people that occupy their houses now or people that work for the world. there's a growing resistance on the part of people who live in the past to. say that living with this development has affected our lives in nearly every way imaginable with other recourse

, oil is in the ground. what is this new technology? >> well, i think there's two things. one, the seismic work which benefits from all the enormous gains we've made in the i.t. world. other major -- >> this is the information technology finding the oil? >> exactly. >> mapping the ground. >> mapping the ground. and secondly, the other latest dappings of technology that has been around a long time is drilling techniques going from vertical to much more use of horizonal which mes more of the -- >> down like that and up like that. >> exactly. >> how many directions? one well? >> i've seen them in one place. and then there's the frakking. what is that? >> that's ability to increase the channels for oil to flow into a production. >> so it's cracking the lock? >> exactly. >> pushing something in to push something out of the rock. >> the push in a rock that m. hubbard saw. >> we focus on how do we get the right policies both in the united states and around the world, and maximize invasion. >> is invasion a matter o

a large part of that is oil sands. this resource has the ability to create hundreds of thousands of jobs. at our kearl project in canada, we'll be able to produce these oil sands with the same emissions as many other oils and that's a huge breakthrough. that's good for our country's energy security and our economy. and i thought "i can't do this, it's just too hard." then there was a moment. when i decided to find a way to keep going. go for olympic gold and go to college too. [ male announcer ] every day we help students earn their bachelor's or master's degree for tomorrow's careers. this is your moment. let nothing stand in your way. devry university, proud to support the education of our u.s. olympic team. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz. >>> the obama administration said today it will cut the time it takes to ge

i'm curious to hear from a real oil company, not oil and gas.pumps, and sells crude into these markets, as to where oil can go and how much money can be made with oil, even if the price breaks further. tonight we have on a real oil company. one you may have never heard of, energy xxi, the third largest oil producer in the gulf of mexico shelf. they purchase fields from exxon, huge drivers of growth and cash flow. it's not levered to the crashing price of that glutted fuel. we have to find out what's going on in the patch now. so many have given up on oil and selling all the stocks and convinced they all go lower. we have to find out if there is still money to be made despite these declines. i would like to welcome john schiller, founder, chairman and ceo of energy xxi. which is exxi for you home gamers. welcome to "mad money." >> glad to be here, how you doing, jim? >> real good. thank you. i went through the 40th annual howard wheeler energy conference. you have to explain how we got great technology here. i found fields discovered in 1948, 195

they are putting it into place and trying to contain the oil slick in the gulf of mexico. >> oil skimmingvessels are put into service to catch any patches of oil which may get through. about five miles offshore another team of private oil containment workers is prepared to intercept drifting oil but it gets to hand. >> those were the pitiful means by which we had to respond to a giant oil spill in the gulf of mexico more than 30 years ago. that was it. that's all we had. we had boom. we had skimmers and chemical disper sant dropped by air. 31 years after that oil spill and those pitiful means of responding to it, 31 years after that big spill and we had a new spill. it was like time had not passed. >> at this time crews are in the air and on boats looking for oil at the mouth of the mississippi river. >> u.s. military officials tell nbc news a list of options are being put together that could include sending additional plane, boats, skimmers and booms. >> planes, boat, skimmers and booms. boom and skimmers and chemicals dropped by air. same in 2010 as it was in 1979. the bp oil spill star