Oil dips below $50 a barrel.

Good for the Washington Post's editorial board for injecting some sense into the energy debate in the United States by calling for higher gas taxes to shore up falling prices and encourage smarter consumer choices.

Unfortunately, this falls into the category of "stuff that won't happen, but should." Note that in President-elect Barack Obama's interview Sunday on 60 Minutes, he gave no hint that he is going to risk his political future by calling for a tax:

Kroft: When the price of oil was at $147 a barrel, there were a lot of spirited and profitable discussions that were held on energy independence. Now you've got the price of oil under $60.

Mr. Obama: Right.

Kroft: Does doing something about energy is it less important now than…

Mr. Obama: It's more important. It may be a little harder politically, but it's more important.

Kroft: Why?

Mr. Obama: Well, because this has been our pattern. We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it's not important, and we start, you know filling up our SUVs again.

And, as a consequence, we never make any progress. It’s part of the addiction, all right. That has to be broken. Now is the time to break it. 

And yesterday, TNR's Brad Plumer reports, Jeff Bingaman, chair of the Senate's Energy and Natural Resources Committee, said "flat out... that a gas tax or 'floor' on oil prices was never going to happen, because 'the politics are problematic.'"

So, instead of the one tool that we know for a fact spurs innovation and encourages people to change their oil-consumption habits -- higher prices -- we're probably going to get massive, complicated subsidies and tax credits for powerful, well-connected constituencies (e.g. the corn lobby). The U.S. government, rather than the market, is going to decide which technologies to support.

Somehow, I don't think the House of Saud is too worried about that pledge to wean the United States off of oil from the Middle East in 10 years.

Impressive. Somali pirates have now succesfully hijacked a Saudi oil tanker -- their biggest, though apparently not their first, such vessel. A crew of 25 is on board. This is just one of several pirate incidents this week.

Even more impressive? All this goes on under the watch of U.S., Russian, NATO, Indian, and now South Korean and EU ships. 

The world's largest shipping line, Odfjell SE, owns the ransomed tanker and now says that its shipping route will change -- steering around Africa's cape rather than across the perilous Gulf of Aden. Since 4 percent of the world's oil supply passes through the pirate-infested route, a change of direction would be no small shift. Two million barrels of oil were lost to pirates today, and now shipping costs -- and probably oil prices, to some extent -- will go up.

Under normal circumstances, the world would be pressuring the Somali government to reign in the renegade ship-lifters. But that government is no shape to do so. It's falling apart as Islamic insurgent groups gain terrority.

I can think of a few pirates who are smiling right now.

There's a lot of talk, in Thomas Freidman's columns and elsewhere, about how the U.S. auto industry deserves its current plight. I have some sympathy for this view, since I do believe GM and Ford have largely failed to innovate, fought hard against gas taxes or mileage standards, and generally managed their brands into the ground.

However, a couple points to consider:

• The industry was in trouble before, but it's the drying up of consumer demand due to the financial crisis that is threatening to destroy it at present. Even the innovative Toyota is feeling the pain right now.
• Who bought all those "gas-guzzling S.U.V.s and trucks" Friedman is ranting about? Martians?
• I must have missed the groundswell of grassroots activism in favor of the higher taxes that would have put a floor under the price of gasoline and made for a stable environment that could make technologies like plug-in hybrids viable even when market prices for crude oil collapse.

As oilman T. Boone Pickens put it this morning on Meet the Press, "If you want to blame somebody for it... all of us in America used the oil. The reason we did? The gasoline was cheap." Watch him here:

It's not just Brazilian politicians and gun dealers who are riding the Obama wave to success. Rebel groups are getting down on the action. The Movement for the Emancipation of the Niger Delta (MEND) a rebel group in Nigeria, writes this today to its e-mail list of correspodents:

We are being informed that the JTF [an army taskforce], still reeling from the humiliating defeat of the first oil war and the recent embarrassment in the hands of trainee militants in Bayelsa and Rivers [two states in Nigeria] are planning to launch an attack on two major MEND camps in Delta and Bayelsa with all they have got.

This will be a big mistake as it will lead to another oil war (Hurricane Obama) where we are sure of a "landslide" victory.

Hurricane Obama will target the oil industry in a way never done before which will in turn make the Nigerian governments 2009 budget projections based on oil revenue an economic disaster."

Clever. The rebels even noticed that it was the financial disaster that kicked "Hurricane Obama" into electoral overdrive in the United States, and now believe the same collapse can work in their favor. I'm not quite sure if that was the "righteous wind" that Obama was talking about.

The International Energy Agency's upcoming World Energy Outlook predicts that oil prices, which have sunk to nearly $60 per barrel, will likely rise once again to above $100 a barrel when the world economy rebounds. By 2030, the report estimates that the prices could exceed $200.

This price increase will be driven primarily by a decline in the supply of oil, as production from the world's older oil fields begins to slow. In order to counter this decline in production and provide for the growing demand in developing countries, the IEA estimates that oil companies will have to invest $350 billion each year until 2030 to develop new fields and improve their equipment. Naturally, that cost will be passed on to the consumer.

I'm reminded of Tony Soprano's famous advice to buy real estate: "Because God's not making any more of it." That maxim may not be working out so well these days when it comes to real estate in particular, but investors should certainly keep it in mind when it comes to oil.

Photo: YASSER AL-ZAYYAT/AFP/Getty Images

Wow:

Oil prices are spiking more than $25 a barrel as rising anxiety over the government’s proposed bailout of the financial system batters the dollar and sends investors scrambling for safe-haven assets.

UPDATE: The dollar is really going to get hammered, Bloomberg reports.

Dmitry Medvedev stepped up the brewing territorial conflict in the Arctic today by announcing that Russia would formalize its northern border. The competition for energy resources in the Arctic region has been heating up as global warming has made them more accessible.

University ofTexas Library

Under international law, the five countries with Arctic claims -- Russia, Canada, the United States, Norway, and Denmark (Greenland) -- can exploit resources up to 200 miles off their coastlines. The Russians say their continental shelf extends under the North Pole, where they used a miniature submarine to plant the Russian flag last year in a widely reported publicity stunt.

There could be as many as 10 billion tons of oil at stake in the Arctic seabed and today, Medvedev linked the region to Russia's energy future:

Our first and fundamental task is to turn the Arctic into a resource base for Russia in the 21st century. Using these resources will entirely guarantee Russia's energy security. [...] We must finalize and draft a law on setting the southern border of the Arctic region.... This is our responsibility to future generations."

The folks in Canada, which has a massive Arctic claim as well, aren't taking this very well. Canada was already looking north uneasily after the invasion of Georgia and has been conducting military excercises in the region. Some commentators are now calling for Canada to increase its activity in the Arctic in order to bolster its territorial claim. There is apparently no ban on weapons in the area so it's not hard to imagine things getting out of hand.

As for the United States' own Arctic rights, I can't help thinking that this is an international topic that the governor of Alaska might actually be expected to know about. Maybe Sean Hannity could ask her for us tonight?

FILE; DAVE CLARK/AFP/Getty Images

Why are oil prices bouncing back? A hurricane. Kind of.

Beginning this weekend, rebels in Nigeria's oil-rich Niger Delta region launched "Hurricane Barbarossa," an operation they claim has left 29 Nigerian soldiers dead. Violence has spread to 10 villages in and around the city of Port Harcourt. Reuters says there have been 100 casualties in all. Rebels claim to have taken 27 oil workers hostages. Oil pipelines, flow stations, and facilities have been destroyed. The country's oil output is down by 115,000 barrels per day.

The rebels' message to the world? Ships should not dock, foreign workers should be evacuated, and journalists should come see the destruction. As their spokesman e-mailed journalists on September 15, 

If the Nigerian military is confident of its capabilities, let them be bold to take journalists and photographers to Orubiri to assess by themselves the aftermath of Barbarossa. We will henceforth begin documenting our raids by providing digital cameras and camcorders for each fighting unit."

So what the hurricane is going on over there??

Since coming to power 16 months ago, Nigerian President Omaru Yar'Adua has promised peace talks to end the years of feuding. The rebels claim that their region has been neglected -- underdeveloped and decimated by environmental destruction. So, Yar'Adua promised a Niger Delta summit, a high-power moderator, and a lot more economic development. But fickle fights, waffling, and a lot of animosity from all sides have prevented plans from going forward. The government is charging one of the legendary founders of the rebel movement with treason. And it doesn't help that the Nigerian president is battling off rumors that he is sick and resigning.

With talks a nonstarter, the Nigerian government -- desperate to keep oil revenues flowing -- saw just one option: the military. State forces attacked rebel territory on Sept. 13, and the rebels quickly mobilized for what has become the heaviest fighting in two years. 

For months, rebel groups in the Niger Delta had grown fragmented and corrupt, kept wealthy by selling black market oil and accepting government handouts. Too many personalities had emerged for one cohesive fight.

All that might be changing. The Movement for the Emancipation of the Niger Delta, an umbrella group whose colorful threats rarely used to pan out, seems to be able to deliver now that the various rebel factions are united against the government.

FILE; Chip Somodevilla/Getty Images

Liberia is in a bad neighborhood to be finding oil. West of troubled Nigeria and with a history of resource-funded civil war, the country might do well to worry about local press reports that the small West African nation might soon strike it rich. 

Just five years ago, Liberia ended a long-running civil war fueled by timber, diamond, and rubber exports. Those funds bought weapons and power in Liberia -- and neighbors Sierra Leone and Guinea -- throughout a decade of embroiled conflict. Charles Taylor, rebel leader turned president, is now on trial in The Hague for his crimes.

Following Taylor's ouster (and his ominous promise to return), some 15,000 U.N. peacekeepers flooded the country and democratic elections brought to power one of the region's most respected leaders in 2005. President Ellen Johnson-Sirleaf (pictured above) has worked tirelessly to bring the years of corruption to a close, her first act annulling all timber contracts. The United Nations took note, repealing long-held sanctions on diamond and timber exports.

Liberia, in short, got a fresh start, and it would be a shame to throw oil into the picture. Just look at Nigeria, where management of the oil sector has been famously poor. There, pollution and poverty have stoked a rebellion in which combatants use black-market oil to fund their violence. Corruption is massive. There is good reason to worry that some in Liberia (including the son-in-law of Charles Taylor, now speaker of the house) might see the Nigeria model as "change we can believe in."

Alas, there probably are oil reserves off the Liberian coast. Northwestern neighbor Sierra Leone has them, and Ghana discovered the stuff in June of 2007. Handled with care, oil revenues could rejuvenate a bankrupt Liberia, funding infrastructure and services that are desperately needed. Yet most successful oil countries (think: Norway) have had transparent, democratic institutions long before the oil gets flowing. Liberia's young democracy is on that road, but years off from arriving.

Start planning for the black gold rush now, Ellen!

The Arctic oil rush is going to be messy. Need proof? Look no further than this new map from researchers at Durham University -- the first of its kind to delineate countries' current territorial claims and predict where disputes may arise in the future.

The U.S. Geological Survey last month revealed that as much as a fifth of the world's undiscovered oil and gas reserves may be in the Arctic, with perhaps as many as 90 billion barrels of oil, enough to meet current global demand for nearly three years at current rates. Heads-up to the six countries with territorial rights: Iceland, U.S., Canada, Russia, Norway and Denmark. Get ready for the scramble.

(Hat tip: Popular Science)

MARTIN BERNETTI/AFP/Getty Images

This should be easy fodder for the anti-globalization crowd. A lobbyist for oil giant Chevron, which is embroiled in a potentially costly lawsuit with Ecuador over the dumping of toxic oil waste in the Ecuadorian Amazon, is complaining of mistreatment at the hands of the big bad South American nation:

"The ultimate issue here is Ecuador has mistreated a U.S. company," said one Chevron lobbyist who asked not to be identified talking about the firm's arguments to U.S. officials. "We can't let little countries screw around with big companies like this—companies that have made big investments around the world."

Chevron is playing hardball, asking the Bush administration to revoke special trade preferences with Ecuador if the case isn't dismissed. But the plaintiffs have the backing of Ecuadorian president Rafael Correa, a Hugo Chávez ally, and two years ago secured the support of one Barack Obama, who wrote a letter arguing that the Ecuadorian peasants pressing the case should have "their day in court."

If the Bush administration doesn't act, and Obama wins in November, I wouldn't bet on Chevron in this rumble in the jungle.

Washington Post

Some good stuff in this graphic from Monday's Washington Post:

First, despite repeated calls to wean America off Middle Eastern oil, the United States actually imports most of its foreign oil from our friendly neighbors to the north and south. Also, while we hear countless warnings of China's impending rise and the impact growing Chinese demand will have on oil markets, the U.S. still imported nearly four times more oil than China in 2007.

Finally, it's interesting to note that even if the Iraq war really was all about oil, it's still failed its objective. Iraqi oil exports to the United States in 2007 were barely more than pre-war numbers in 2002, and less than those in 2000 and 2001. Iraq actually exports most of its oil to Asia.

Two countries that have fallen off the top-10 since 2002? The UK and Norway.

Some folks have all the luck:

The Harrods owner Mohamed Fayed has tapped a new source of wealth after winning a stake in a tiny oilfield under his Surrey estate despite not knowing it was there for several years.

Apparently Russia isn't the only country ready to play politics with its resource exports, BBC reports:

Libya's state shipping company says it has halted oil shipments to Switzerland in protest at the brief arrest of leader Muammar Gaddafi's youngest son.

Yes, the son's name is Hannibal. He was charged with assault. It's not the first time he's been in trouble, either.

ISSOUF SANOGO/AFP/Getty Images

As dreams of a gas-tax holiday died in Congress amid concerns of lost jobs for transport and construction, lawmakers in the Ivory Coast are paying for a reduction in fuel costs out of their own pockets. Both government ministers and managers of state-owned companies will see their paychecks halved to pay for a 10-percent cut in fuel prices, Prime Minister Guillaume Soro says:

Having heard the people's cry from the heart, the government has decided to cut the price of fuel," Mr Soro said.

A noble effort on its face, yes, this political stunt could actually be double trouble for the people of Ivory Coast. We've expressed our skepticism toward "gas-tax holidays" before, but lowering government officials' pay can also prove problematic, making ministers more susceptible to the ubiquitous temptation of corruption.

Koichi Kamoshida/Getty Images

The Japanese fishing industry is in dire straits, the LA Times reports:

If we lose our fishing industry, we Japanese will face a food crisis," said Masahiko Ariji, a fishery specialist at the Amita Institute for Sustainable Economics in Kyoto. About two-thirds of the nation's fishing groups were in the red last year, he said. With fuel prices higher this year, some "are about to collapse." [...]

If fuel prices keep rising, as many as 20% of Japan's fishing companies will close and 85,000 fishermen could leave the industry, the National Federation of Fisheries Cooperative Assns said. The fish catch, it says, could fall by almost half.

On balance, the fact that the Japanese fishing industry is suffering isn't necessarily a bad thing. If the trend keeps up, high gas prices might end up saving Pacific fisheries from imminent doom where regulation and conservation have failed. Add this one to the list.

Here's some fodder for the offshore drilling debate:

Photo by David McNew/Getty Images

A rare and endangered blue whale, one of at least four feeding 11 miles off Long Beach Harbor in the Catalina Channel, spouts near offshore oil rigs after a long dive July 16, 2008, near Long Beach, California. In decades past, blue whales were rarely seen along California's coastline, but their migration and feeding patterns are changing. In the past four years sightings in southern California have increased dramatically and blue whales have been reported almost daily this summer. Scientists suspect that climate change is having an effect on the food of the blues but other factors have not been ruled out. Before whalers stepped up their kill rate in the 1800s, there were at least 220,000 to 300,000 around the world. Today less than 11,000 survive worldwide with 1,200 to 2,000 in the Pacific waters off California. Blue whales are the largest animals on the planet, growing up to 110 feet long and reaching a weight of 200 tons. The U.S. Navy uses loud sonar blasts in submarine detection training exercises off Southern California that can harm or kill whales at great distances, a controversial issue that has reached the U.S. Supreme Court, and the high price of gas has increased political pressure to increase oil drilling in the waters where the whales live.

Sometimes, those dreaded straight-line projections actually do give you the right answer. Exhibit A: This chart from International Energy Outlook 2007, published by the U.S. Energy Information Administration.

iStockphoto.com

The summer gas-tax holiday is back, and John McCain thinks he may have a winning issue:

Along with Barack Obama, many economists largely dismissed the notion of a gas tax holiday as a political ruse that would do little to lower prices, but McCain has repeatedly said he does not believe the proposal would be a panacea for America's energy woes. [...] Instead, McCain argued, low-income families could save some extra cash to pay for their children's school supplies this fall, or perhaps treat themselves to a nice dinner.

I'm no mathematician, but let's do some quick number-crunching here. Suppose you buy a tank of gas each week and your car holds 15 gallons. The 18.4-cent a gallon gas tax will cost you $2.76 each week. There are 12 weeks left until Labor Day, the end of summer. That means a typical person would save $33. If you're a childless couple living in Falls Church, VA, that might buy you dinner at the Olive Garden -- where the Chicken Alfredo will run you a cool $13.50 -- but no wine.