Articles by Michael Moynihan

Increasing oil production will not substitute as energy solution

Originally posted on the NDN Blog.

Yesterday, Saudi Arabia did what everyone -- including George W. Bush on bended knee -- has been asking it to do for months: agree to increase production. Prices closed up a dollar. The Saudi move and its non-impact on the market shows just how tight supplies remain. While it was designed in large part to offset declines in Nigerian production due to rebel violence in the oil-rich, poverty-stricken Niger Delta, it might have sent a psychological signal of easing supplies but it did not.

Meanwhile, back in Washington, another panel of oil traders told Chair Dingell's House Energy and Commerce Oversight subcommittee that speculation is driving up oil prices and tighter oversight of commodities futures markets could lower prices. Staffers released data to the effect that 70 percent of trades are now speculative, up from 30 percent not long ago.

S&P cites automakers’ cashflow concerns

Originally posted at the NDN Blog.

While news about high fuel prices this past week centered on disingenuous calls by President Bush and others to drill our way out of the crisis, perhaps the most significant -- and ominous event -- was the barely publicized action by S&P Friday to place the Big Three U.S. automakers on a credit watch. In taking the action, S&P cited "renewed concerns about the three car makers' future cash flows."

Given Ford's preexisting troubles -- accentuated by its announcement last week as well that it is postponing relaunch of its star vehicle, the F150 truck -- Chrysler's uncertain future under private equity management, and GM's plummeting market share, the announcement raises real questions about the survival of the U.S. auto industry.

Domestic car sales were already down about two million vehicles this year from their high in 2006 before the current fuel crisis. Plummeting sales and oceans of red ink -- as customers struggling under the weight of sky-high consumer debt payments and declining wages eschew the gas guzzling stars of only two years ago -- threaten the U.S. auto industry's very existence. The potential collapse of the Big Three -- still the second largest employer in the country after the government -- calls into question the very essence of the American way of life.

Conservative arguments to the contrary are intellectually bankrupt

Originally posted at the NDN blog.

Of the various false solutions being proposed to the current oil shock perhaps none is more disingenous than the idea that it can be solved by drilling in the Alaskan wilderness and along the Outer Continental Shelf. This is the idea that the right wing media, recently John McCain, and now President Bush have been pushing as a cure-all for soaring oil prices. Since many Democrats oppose this drilling, the next false logical step is to say Democrats are to blame. This was the thrust of President Bush's energy proposal yesterday, one that only highlights the intellectual dishonesty and partisanship of this failed administration.

Is more drilling the answer? No, for three reasons.

Notes from a plug-in hybrid conference

Silicon Valley came to Washington this week to talk about plug-in hybrids at a great conference organized by Google.org with Brookings. The combination of tech visionaries, electric cars on display, Washington heavy hitters such as John Dingell, Chairman of the House Energy and Commerce Committee and even a couple of film stars, Peter Horton and Anne Sexton of Who Killed the Electric Car?, made for a great meeting.

Here are my notes from the standing room only event ...