Executive Director, Citizens Alliance for Responsible Energy
Policy Advisor, The Heartland Institute
Archive for the ‘Oil Industry’ Category
Executive Director, Citizens Alliance for Responsible Energy
By Alan Caruba
More evidence that Obama doesn’t have a clue about basic economics: Impact of the Keystone XL pipeline on gas prices
After decades of paranoid hemming and hawing, last month the U.S. Bureau of Ocean Energy Management finally approved oil exploration in Federal waters along the Atlantic coast from Delaware to Florida.
‘The announcement is the first real step toward what could be a transformation in coastal states,” says the Associated Press report, “creating thousands of jobs to support a new energy infrastructure. But it dismayed environmentalists and people who owe their livelihoods to fisheries and tourism.”
Alas, this “dismay” afflicts only the greenies from Delaware to Florida. From New Jersey up through New England the greenie hysteria against offshore oil exploration prevailed. This superstition among the local worshippers of Earth Goddess Gaia proved as intractable as the one that once mandated burning witches by New Englanders no less “enlightened.”
“With today’s decision,” whined Claire Douglass, campaign director at the environmental group Oceana, “President Obama is bowing to pressure from Big Oil rather than listening to the thousands of voices calling on him to protect our natural resources and coastal economies.”
Well, allow me to present the call of “thousands of voices” and specifically from “people who owe their livelihoods to fisheries and tourism.” Their call, based on over half a century of experience with offshore oil production (including the ultimate test: the BP Oil Spill!) says: “Drill, Baby, Drill!”
With over 3000 of the 3,700 offshore oil and gas production platforms in the Gulf of Mexico off her coast, Louisiana provides almost a third of North America’s commercial fisheries. As a trivial sideline these oil production platforms also extract 80 percent of the oil and 72 percent of the natural gas produced in the Continental U.S. This “sideline” (as us fanatical fishermen see it) by itself would offset the hardships (in any rational calculation of national priorities) of the relatively few “people who owe their livelihoods to fisheries and tourism.”
But a study by LSU’s sea grant college found that majority of Louisiana’s offshore fishing trips (among the state’s top tourist attractions) target these structures. Recreational fishing and diving trips to these structures generate an estimated 5,560 full time jobs and $324 million annually for Louisiana.
“Oil platforms as artificial reefs support fish densities 10 to 100 times that of adjacent sand and mud bottom, and almost always exceed fish densities found at both adjacent artificial reefs of other types and natural hard bottom,” says a study by Dr Bob Shipp, professor at the Marine Sciences department of the University of South Alabama in Mobile, Alabama, and currently, the vice-chair of the Gulf of Mexico Fisheries Management Council.
In fact, the most prolific and diverse marine ecosystem ever recorded by marine scientists was created by offshore oil production. Acting as artificial reefs over the past half century, the teeming fish life, coral colonies, and “bio-diversity,” created by offshore oil platforms is amply documented in several studies commissioned by none other than the U.S. Dept. of the Interior.
One recent report by the Bureau of Ocean Energy Management Minerals (a division of the U.S. Dept.
The delay of the Keystone XL pipeline is a perfect example of the way President Obama and his administration has engaged in, not just a war on coal, but on all forms of energy the nation has and needs. Even his State Department admits there is no reason to refuse its construction and, as turmoil affects the Middle East, there is an increased need to tap our own oil and welcome Canada’s.
The latest news, however, is that Canada has just approved the Enbridge Northern Gateway Project, a major pipeline to ship Canadian oil—to Asia.
The pure evil of the delay is compounded by the loss of the many jobs the pipeline—that will not require taxpayer funding—represents to help reduce the nation’s obscene rate of unemployment and to generate new revenue for the nation. That’s what oil, coal, and natural gas does.
Less visible has been the out-of-control Environmental Protection Agency that has, since Obama took office on January 20, 2009, issued 2,827 new final regulations totally 24,915,000 words to fill 24,915 pages of the Federal Register. As a CNSnews article reported, “The Obama EPA regulations have 22 times as many words as the entire Harry Potter series which includes seven books with 1,084,170 words.” Every one of the EPA regulations affects some aspect of life in America, crushing economic development in every conceivable way.
The worst part of the EPA regulation orgy is the fact that virtually all of it is based on a hoax. As reported by James Delingpole, a British journalist, “19 million jobs lost plus $4,335 trillion spent equals a global mean temperature of 0.018 degrees Celsius. Yes, horrible but true. These are the costs to the U.S. economy, by 2100, of the Environmental Protection Agency’s regulatory war on carbon dioxide, whereby all states must reduce emissions from coal-fired electricity generating plants by 30% before 2005 levels.”
Citing a study by the U.S. Chamber of Commerce, Delingpole reported that the new regulations will cost the economy another $51 billion annually, result in the 224,000 more lost jobs every year, and cost every American household $3,400 per year in higher prices for energy, food, and other necessities.”
This is an all-out attack on industry, business, and the use of electricity by all Americans.
There is absolutely no reason, nor need to reduce “greenhouse gas” emissions, particularly carbon dioxide (CO2), a gas on which all life on Earth depends because it is to vegetation what oxygen is to all living creatures. It is the “food” on which every blade of grass depends. More CO2 means more crops and healthier forests.
Disastrously, even the Supreme Court—the same one that signed off on Obamacare as a tax—has not ruled against the EPA’s false assertions about CO2. In late June, however, it did place limits on the EPA’s effort to limit power plant and factory emissions blamed for a global warming that does not exist. The Earth has been cooling for seventeen years, but the Court ruled that the EPA lacked authority in some cases to force companies to evaluate ways to reduce CO2 emissions.
What is this incessant nonsense over Keystone XL?
It’s a pipeline, for crying out loud. The United States already has 185,000 miles of liquid petroleum pipelines, 320,000 miles of natural gas transmission pipelines, and more than 2,000,000 miles of gas distribution pipelines. Using the latest steel, valves and other technologies to build another 1,179 miles of pipe – to move 830,000 barrels of oil per day safely from Alberta, Canada oil sands country and North Dakota’s Bakken shale territory to Texas refineries – should not be an earth-shattering matter.
KXL would create jobs – in an economy that grew at a pathetic Depression-era clip of 0.1% during the first quarter, and where the true jobless rate (unemployed, underemployed and those no longer looking) is almost 13 percent, and much worse for minorities.
In fact, Keystone would create some 20,000 construction jobs; another 10,000 in factories that make the steel, pipelines, valves, cement and heavy equipment needed to build the pipeline; thousands more in hotel, restaurant and other support industries; and still more jobs in the oil fields whose output would be transported to refineries and petrochemical plants where still more workers would be employed.
States along the pipeline route would receive $5 billion in new property tax revenues, and still more in workers’ income tax payments. Depleted federal coffers would also realize hefty gains.
The pipeline would ease railroad congestion all over the central USA. The pipeline’s absence is forcing oil producers to move crude by railroad tanker car. That certainly improves the bottom line for RR companies and folks like Warren Buffet who have big-time investments in tankers.
But it causes train logjams and delays that are creating backlogs in getting fertilizer and other supplies to farmers, who have already been hard-hit by a long winter and now may not be able to plant on schedule. Come fall, their efforts to ship corn, wheat and other crops to market will also be stymied.
By reducing the need for RR tankers, KXL would also reduce oil spills and improve safety. A 2013 derailment in Quebec killed 47 people; 2014 rail accidents in Colorado and Virginia resulted in significant oil spills but fortunately no deaths. The Bakken Field’s light crude contains more dissolved gases and thus is more flammable than heavier crudes (like Canadian oil sands output), but both tanker cars and the Keystone pipeline would carry a variety of crude products.
Improved track maintenance, train scheduling and other safety practices would reduce rail accidents and spills. However, as US State Department studies point out, the Keystone pipeline is inherently safer than RR alternatives – and would likely result in fewer than 520 barrels of crude being spilled annually, compared to 32,000 barrels in the three rail spills just noted.
KXL will augment America’s national security, make North America more energy independent, further improve US balance of trade, reduce global supply and demand imbalances, and aid our European allies in their quest to counter Vladimir Putin’s energy blackmail.
The hydrocarbon wealth the pipeline would transport will help ensure improved human health, welfare, living standards and other many other benefits, in a more stable world that has more sources of jobs, wealth and income equality. Approval would improve relations with our ally and trading partner Canada.
Yemen’s Army and security forces entered the al-Qaida controlled town of Shabwa province on Thursday as part of the government’s retaliation against the Islamist group’s sabotage of the nation’s oil industry. According to the Yemeni news media, the Arab country lost more than $380 million during 2014’s first quarter as a result terrorist attacks aimed at sabotaging the oil pipeline, an official report said.
Yemen officials pointed out that the government’s share, as a result of sabotage, dropped to 3.1 million barrels during the period, while 6.8 million barrels were produced during the first quarter of 2013.
Revenues declined in Yemen from oil exports and with only $44 million in March 2014 alone, according to Yemeni media.
Yemeni banking industry claims that terrorist sabotage assaults by al-Qaida in the Arabian Peninsula (AQAP) resulted in a lower quantity of oil allocated for domestic consumption.
According to Saba news agency, security and stability gradually returned to the areas from which AQAP Islamists were removed, with the majority of the terrorists in Shabwa and Mahfad district retreating for this latest show of force.
According to counterterrorism and law enforcement expert Chuck Knowles, the Yemeni forces are continuing to hunt down the AQAP terrorists in all directions.
The capture of the AQAP stronghold in Azzan is considered one of the primary goals of the Yemen government’s major offensive in the last ten days.
In addition, Saba news agency reported on Thursday that two al-Qaida leaders were gunned down and killed in Shabwa.
The two men, Abu Mosab al-Kuwaiti and Abu-Walid al-Humaiqani, were killed in Shabwa as they were fleeing from the military and security forces.
On Wednesday, Yemen government officials said Wael Abdullah al-Waeli, a ring leader linked to al-Qaida who allegedly planned and executed a number of terrorist operations, was killed by police officers in Sanaa, Yemen’s capital. His attacks included the assassination of a French diplomat working for the European Union (EU) mission in Yemen.
“Al-Waeli has masterminded the abduction of a Dutch journalist and his wife, released earlier, in addition to his involvement in the terrorist attack on the central jail in Sanaa last February, in which 29 terrorists escaped,” the state-run Saba News Agency reported.
The Weasel in the White House once again plays his “sabotage America” games with the Keystone XL Oil Producing Program, making it even harder to reap the many bountiful benefits it could bring to this country. This forever dangerous liar will stop at nothing to keep that oil from being part of an out and out separation for us from the greedy and nefarious plans the OPEC oil (Islamic) nations will continue to press on us.
Over four months ago on January 23, 2014, I authored a column on this Canada Free Press website and asked the headline question, ‘Is There ONE American ANYWHERE Who Will Stand Up to Our DICTATOR, And Get the Keystone Pipeline Moving’? As what I suspected then, it may have taken more than 120 days to find out, but it seems as though not one person with any intestinal fortitude exists in America that will come to the forefront of the legislative arena and lead us to oil freedom.
I guess it’s easier to lead an armed division of militia or military into death-defying battle against an enemy of superior odds than it is to face down a punk metrosexual, street smart loafer who is adept at lying and confusing the welfare class into thinking that to follow him is victory. I thought we had a potential leader in Wyoming U. S. Senator John Barrasso but he must have been silenced by the many panty-waist environmental wimps throughout both Canada and the United States.
Forgive me for once thinking that Speaker John Boehner was going to back this oil freedom winner program and drive OPEC into poverty. I say forgive me, because I have never been more wrong in my life. He is an absolute wimp-RINO who now divests all traces of conservatism by closely embracing AMNESTY in all its inglorious dishabille and country-killing costs to decent taxpayers. Score another victory for Obama over Boehner who should by now be so shame-faced that he would fear facing his friends. If he has any left.
It has taken me a long string of verbosity to get to this point, but it is so painful I had hoped that it would just go away – but no, it’s still here. And that is the notice by Fox and Newsmax.com online on Easter Sunday, April 20, 2014 in “Obama Playing Politics With Keystone Pipeline” ‘President Obama is holding off approving construction of the vital Keystone XL pipeline not for environmental concerns but for political reasons – his fear of alienating one of his core constituencies, environmentalists, charges online magazine The American.’
I feel sure that many of you reading this article will remember and perhaps scratch your heads in wonderment at the reminder over the past 2 years of multiple news items on how this very sensible operation would assure us of over 800,000 barrels of oil a day from Canada to refineries mainly in the Southwest of U. S. Even Obama’s Cabinet member, the State Department, says that Keystone XL poses “no significant impacts” on the environment. And yet, as Newsmax.com states, “the administration insists that the pipeline will be approved only if “it does not significantly exacerbate” carbon pollution.
California loves to be seen as the trendsetter on energy and environmental policies. But can we really afford to adopt their laws and regulations in the rest of America? Heck, can the once Golden State afford them itself? The path to hell is paved with good intentions, counter-productive policies – and hypocrisy.
The official national unemployment rate is stuck at 6.7% – but with much higher rates for blacks and Hispanics and a labor participation rate that remains the lowest in 35 years. Measured by gross national product, our economy is growing at an abysmal 1.5% or even 1.0% annual rate.
Meanwhile, California’s jobless rate is higher than in all but three other states: 8.1% – and with far worse rates as high as 15% for blacks, Hispanics and inland communities. First the good news, then the insanity.
Citigroup’s Energy 2020: North America report estimates that the United States, Canada and Mexico could make North America almost energy independent in six years, simply by tapping their vast recoverable oil and gas reserves. Doing so would help lower energy and consumer prices, insulate the three nations from volatile or blackmailing foreign suppliers, and spur job creation based on reliable, affordable energy, says the U.S. Energy Information Administration.
Driving this revolution is horizontal drilling and hydraulic fracturing. According to Citigroup, IHS Global Insights, the EIA and other analysts, “fracking” technology contributed 2.1 million jobs and $285 billion to the US economy in 2013, while adding $62 billion to local, state and federal treasuries! Compare that to mandates and subsidies required for expensive, unreliable, job-killing wind, solar and biofuel energy.
Fracking also slashed America’s oil imports from 60% of its total petroleum needs in 2005 to just 28% in 2013. It slashed our import bill by some $100 billion annually.
By 2020 the government share of this boom is expected to rise to $111 billion. By 2035, U.S. oil and natural gas operations could inject over $5 trillion in cumulative capital expenditures into the economy, while contributing $300 billion a year to GDP and generating over $2.5 trillion in cumulative additional government revenues.
A Yale University study calculates that the drop in natural gas prices (from $8 per thousand cubic feet or million Btu in 2008, and much more on the spot market, to $4.00 or so now) is saving businesses and families over $125 billion a year in the cost of heating, electricity and raw material feed stocks.
The only thing standing in the way of a US employment boom and economic and industrial renaissance, says Citigroup, is politics: continued or even more oppressive anti-hydrocarbon policies and regulations.
Here’s the insanity. Fully 96% of this nation’s oil and gas production increase took place on state and private lands. Production fell significantly on federal lands under President Obama’s watch, with the Interior Department leasing only 2% of federal offshore lands and 6% of its onshore domain for petroleum, then slow-walking drilling permits, according to the Institute for Energy Research.