Showing posts with label Oil. Show all posts
Showing posts with label Oil. Show all posts

Saturday, February 01, 2014

The Keystone Report

The State Department has released its report on the Keystone Pipeline. There is no recommendation one or another on whether the pipeline should be built. It noted that even with some sort of governmental blockage on the line, it would accomplish very little to slow the expansion of Canada's vast oil sands. The report offered some solace to climate activists who want to stem the rise of oil sands output. It reaffirmed the idea that Canada's heavy crude reserves require more energy to produce and process - and therefore result in higher greenhouse gas emissions - than conventional oil fields.

So where does that leave us? In my view, still undecided. I don't see any convincing evidence that Keystone is going to do massive environmental harm, as activists claim. Yet I also don't see a negligible impact on the environment either. I guess I'm wondering why we are having this debate in the first place. Arguing about oil is like having a debate over the viability of the cassette tape versus Mp3s. We should be spending our time on bringing down the cost of renewable energy and making it as cheap as coal and oil. The entire debate over Keystone reminds of past arguments over the NEA (a loser for both sides who just want something stupid to club each other over the head with).

So, John Kerry is going spend the next three months consulting with government agencies when he should be doing other things like...oh, I don't actual peace deal between Israel and Palestine.


Wednesday, July 24, 2013

And About Keystone?

I'm not quite sure what to make of the Canadian oil train disaster that caused the deaths of 47 people. Certainly regulations were lax and Canada has stepped up and made moves to fix the problems in transporting hazardous goods. Of course, they don't have irrational adolescents in their country screaming about socialism so that makes it easier.

But what about Keystone? If the northern section of the pipeline is approved, what sort of guarantees do we have that the same thing won't happen here? Do we have regulations that are similar to the ones Canada is implementing? No more one man crews?

I really don't know. That's why I am asking.

Tuesday, July 16, 2013

An Illegal Foreign Land Grab?

There is a myth out there that basically states the Right is all for the Keystone Pipleline expansion and the left is all against it. It's simply not true. There are many people who feel that the approval of the pipeline will amount to government failure to protect eminent domain. Michael Bishop is one of them.

My name is Michael Bishop and I am a landowner in Douglass, TX in Nacogdoches County. I have been fighting TransCanada’s Keystone XL pipeline for almost five years now and, except for a handful of good Americans, was told there was no interest in eminent domain cases or that I “couldn’t win a case against TransCanada.”

There are many landowners like Bishop. No one is listening to them.

What I find further disturbing during my research in the cases I have filed against TransCanada, the Texas Railroad Commission and the U.S. Army Corps of Engineers, is the level of corruption I have uncovered and witnessed in our judiciary and legislative representatives. Sadly, this allegation goes all the way to the White House. During my fight against this illegal foreign land grab, I have seen many good people in Texas and other states destroyed by the actions of TransCanada Keystone XL Pipeline, and their dreams (along with mine) for the future of their children and grandchildren shattered by greed, lies, propaganda and bullying tactics of a private, foreign corporation that has the complete and overwhelming support of these corrupt local leaders, politicians and judges. It is time for change.

Wow. Doesn't exactly sound like your typical Texan portrayed in the media...except maybe the anti-government part. One would think they would be all pro oil on everything (at least, that's what the right wing blogsphere tells me) but clearly they aren't.  It's also sort of amusing, in a hypocritical way, that some on the Right are all for a foreign country taking American land for their own profit.

The rest of his letter raise many interesting points that haven't hit the mainstream media. I'd like to see his view get some more attention as we debate whether or not this project go forward.

Thursday, November 15, 2012

Great Economic News

The United States has exported 187 billion dollars worth of goods-an all time high and up 3.1 percent-for the month of September. This narrows the trade deficit to its lowest point in two years, at 41.5 billion.

Driving this uptick was the sale of the iPhone 5 as well as oil exports. A recent article in the New York Times (highlighting an IEA report) show the US is set to become the world's top oil producer in five years. In fact,

The United States will overtake Saudi Arabia as the world’s leading oil producer by about 2017 and will become a net oil exporter by 2030, the International Energy Agency said Monday.

Wow. Imagine how different a world that is going to be. It's going to give me an enormous amount of satisfaction to have the power shift in the way it is going to do so. So how has this happened?

That increased oil production, combined with new American policies to improve energy efficiency, means that the United States will become “all but self-sufficient” in meeting its energy needs in about two decades.


Wednesday, October 24, 2012

We Are Drilling, Baby, Drilling

From AP News yesterday...

US may soon become world's top oil producer.

Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951. 

Fourth straight year...wait a minute! I thought the president was blocking oil drilling. Well, there goes another lie. Speaking of BS...

The increase in production hasn't translated to cheaper gasoline at the pump, and prices are expected to stay high relatively high for the next few years because of growing demand for oil in developing nations and political instability in the Middle East and North Africa. Still, producing more oil domestically, and importing less, gives the economy a significant boost.

That's right. And how is it helping the economy again?

Businesses that serve the oil industry, such as steel companies that supply drilling pipe and railroads that transport oil, aren't the only ones benefiting. Homebuilders, auto dealers and retailers in energy-producing states are also getting a lift.

But I thought the president was destroying our economy. It's getting better?


Thursday, March 29, 2012

Friday, March 23, 2012

Somehow, In Their World...

A recent article in the New York Times offers an excellent summation of how truly exciting the future will be in regards to energy in this country.

Across the country, the oil and gas industry is vastly increasing production, reversing two decades of decline. Using new technology and spurred by rising oil prices since the mid-2000s, the industry is extracting millions of barrels more a week, from the deepest waters of the Gulf of Mexico to the prairies of North Dakota. 

That's right. And it's simple fact that has driven the right in this country to paranoid fits about the president and the Democrats. How dare they not act like a bunch of granola eating tree huggers?

Taken together, the increasing production and declining consumption have unexpectedly brought the United States markedly closer to a goal that has tantalized presidents since Richard Nixon: independence from foreign energy sources, a milestone that could reconfigure American foreign policy, the economy and more. In 2011, the country imported just 45 percent of the liquid fuels it used, down from a record high of 60 percent in 2005. 

But no, say it ain't so! Somehow they must be plotting and restricting access to energy reserves, right?


The domestic trends are unmistakable. Not only has the United States reduced oil imports from members of the Organization of the Petroleum Exporting Countries by more than 20 percent in the last three years, it has become a net exporter of refined petroleum products like gasoline for the first time since the Truman presidency. 

The natural gas industry, which less than a decade ago feared running out of domestic gas, is suddenly dealing with a glut so vast that import facilities are applying for licenses to export gas to Europe and Asia. 

National oil production, which declined steadily to 4.95 million barrels a day in 2008 from 9.6 million in 1970, has risen over the last four years to nearly 5.7 million barrels a day. The Energy Department projects that daily output could reach nearly seven million barrels by 2020. Some experts think it could eventually hit 10 million barrels — which would put the United States in the same league as Saudi Arabia. 

Alright, well, what does the energy sector think?

“We’re having a revolution,” said G. Steven Farris, chief executive of Apache Corporation, one of the basin’s most active producers. “And we’re just scratching the surface.”

Today, more than 475 rigs — roughly a quarter of all rigs operating in the United States — are smashing through tight rocks across the Permian in West Texas and southeastern New Mexico. Those areas are already producing nearly a million barrels a day, or 17 percent more than two years ago. By decade’s end, that daily total could easily double, oil executives say, roughly equaling the total output of Nigeria. 

So, why is the right continuing to insist that the president is trying to block energy output? Especially in light of this information?

Mr. Obama’s current policy has alarmed many environmental advocates who say he has failed to adequately address the environmental threats of expanded drilling and the use of fossil fuels.

Well, Paul Krugman has the answer. 

This claim isn’t just nuts; it’s a sort of craziness triple play — a lie wrapped in an absurdity swaddled in paranoia. It’s the sort of thing you used to hear only from people who also believed that fluoridated water was a Communist plot. 

Sadly, I have experienced this in comments with some folks who can't seem to understand this basic fact.

Simple economics suggests that if the nation is producing more energy, prices should be falling. But crude oil — and gasoline and diesel made from it — are global commodities whose prices are affected by factors around the world. Supply disruptions in Africa, the political standoff with Iran and rising demand from a recovering world economy all are contributing to the current spike in global oil prices, offsetting the impact of the increased domestic supply. 

Why it is so difficult to understand the concept of a world market perplexes me.

It must (as is usually the case) the fact that the paranoia about Barack X has taken over. Somehow, in their world, this...

The newfound wealth is spreading beyond the fields. In nearby towns, petroleum companies are buying so many pickup trucks that dealers are leasing parking lots the size of city blocks to stock their inventory. 

Housing is in such short supply that drillers are importing contractors from Houston and hotels are leased out before they are even built. Two new office buildings are going up in Midland, a city of just over 110,000 people, the first in 30 years, while the total value of downtown real estate has jumped 50 percent since 2008. With virtually no unemployment, restaurants cannot find enough servers. Local truck drivers are making six-figure salaries. 

“Anybody who comes in with a driver’s license and a Social Security card, I’ll give him a chance,” said Rusty Allred, owner of Rusty’s Oilfield Service Company. 

is not happening.


As Jon Stewart says, "The Republican Party...rooting for America to fail since 2008."

Wednesday, March 21, 2012

Still More Facts

In many ways, I'm very happy the energy issue is out front and center right now in public debate because we are starting to see more articles like this.

More US drilling didn't drop gas price

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump. Political rhetoric about the blame over gas prices and the power to change them — whether Republican claims now or Democrats' charges four years ago — is not supported by cold, hard figures.

Oh really? 36 years you say?

Seasonally adjusted U.S. oil production dropped steadily from February 1986 until three years ago. But starting in March 1986, inflation-adjusted gas prices fell below the $2-a-gallon mark and stayed there for most of the rest of the 1980s and 1990s. Production between 1986 and 1999 dropped by nearly one-third. If the drill-now theory were correct, prices should have soared. Instead they went down by nearly a dollar.



Sometimes prices increase as American drilling ramps up. That's what has happened in the past three years. Since February 2009, U.S. oil production has increased 15 percent when seasonally adjusted. Prices in those three years went from $2.07 per gallon to $3.58. It was a case of drilling more and paying much more. U.S. oil production is back to the same level it was in March 2003, when gas cost $2.10 per gallon when adjusted for inflation. But that's not what prices are now.

.But what about Keystone?

Supporters of the controversial Keystone XL pipeline say it would bring 25 million barrels of oil to the United States a month. That's the same increase in U.S. production that occurred between February and November last year. Monthly gas prices went up a dime a gallon in that time. 

Facts, folks. These are facts. Read the entire piece as it contains many more hard statistics.

And what is it again that affects prices?

That's because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline.

Why is that so difficult for people to understand? Oh yes, that's right...Barack X and his army of killer robots that are destroying free enterprise in this country.

Of course, the ultimate irony here is that I'm beginning to think that supporters of increased domestic drilling are under the impression that the United States government would own the oil. They wouldn't, of course, because that would be socialism, right? So, the companies that would own the oil would be able to sell it on the free market.

Where do you think they would go and sell it?

Monday, March 19, 2012

A Problem With Math (and fundamental principles of markets)

A recent discussion in comments has once again illustrated the problems with facts and math that tend to come up when the right are talking about their fictional character, Barack X.

Their latest line of fantasy is how the president is responsible for high gas prices and if he would just unshackle the energy industry, we could decrease our dependence on foreign oil.

One small problem with this narrative is (as always) reality.

(Source: Energy Information Administration) 

The other reality item to consider is the world market.

(Source: Energy Information Administration) 

We could drill everywhere the right wants us to drill and it wouldn't matter. We will still be shackled to the world market.

So, the next time that mouth foaming uncle who gets his facts from right wing blogs says that we need to reduce our dependence on foreign oil, politely inform them that President Obama has been doing that.

Tuesday, March 13, 2012

A Bookend

A nice bookend to my post below is this recent article.

The report by six federal agencies was released Monday on the first anniversary of a speech by President Obama in which he pledged to reduce U.S. dependence on oil imports by one-third in about a decade. According to the study, the United States reduced net imports of crude oil last year by 10 percent, or 1 million barrels a day. The United States now imports 45 percent of its petroleum, down from 57 percent in 2008, and is on track to meet Obama's long-term goal, the administration maintains.

How have we accomplished this?

Imports have fallen, in part, because domestic oil and gas production has increased in recent years. U.S. crude oil production increased by an estimated 120,000 barrels a day last year from 2010, the report says. Current production, about 5.6 million barrels a day, is the highest since 2003.

So, most of the caterwauling about "Drill Baby Drill" is (as always) patently false. We already are.

And prices have gone up...gee, what a shock...

The Usual Suspects

I've pretty much had it with people blaming the president for high gas prices. First of all, he can't really control what happens in the Middle East, a major factor in the price hike. Second, drilling more oil here simply means that more oil will get sold to China and India, not us. US imports of oil have declined from 11 billion barrels a day  in 2009 to 8 billion barrels a day at the end of 2011. Simply put, we aren't using as much. Remember that we are a net fuel exporter now for the first time in decades and that simple fact still hasn't changed the price of a gallon of gas.

Add in the fact that the number of rigs in U.S. oil fields has more than quad­rupled in the past three years to 1,272, according to the Baker Hughes rig count. Including those in natural gas fields, the United States now has more rigs at work than the entire rest of the world and guess what? Prices are still high.


As Dennis Kelleher points out below, a big reason is the always....


That graphic says it all...In 2002, 89 percent of crude oil training was commercial with 11 percent non-commercial. Now crude oil trading is 63 percent non-commercial and 37 percent commercial. What was the price of a barrel of oil in 2002?




Obviously, there are other factors to consider but this is the one that isn't talked about much because these are the same fucking people that got us into trouble in the collapse of 2008.

Thursday, February 23, 2012

Another Energy Milestone

For the first time in more than 60 years, The United States has become a net fuel exporter."It looks like a trend that could stay in place for the rest of the decade," Dave Ernsberger, global director of oil at Platts, told The Wall Street Journal. "The conventional wisdom is that U.S. is this giant black hole sucking in energy from around the world. This changes that dynamic." All of this is happening because of new sources of oil in North Dakota and Texas as well as new opportunities in Canada.

But......anyone notice a drop in gas prices?


That's because, as I have stated many times, world demand has been rapidly rising in emerging markets. Brazil used to export fuel to the United States but now they import over 100,000 barrels a day. Singapore has quadrupled its imports from the US.

So, while this is a wonderful opportunity for oil companies, we won't see any difference at the pump, as the Wall Street Journal notes.

But U.S. drivers aren't seeing much benefit in the form of lower prices because refineries on the Gulf Coast are shipping much of their output to places where demand is strong, keeping prices high.

So, we can "drill, baby, drill" all we want but with demand falling off here in the US and rising abroad, it won't matter one bit how much fuel we export.

Wednesday, May 04, 2011

Drill Baby Dr-hey, waitaminute!

Yeah, it's great that we got bin Laden but how about those gas prices? Not allowing any sort of victory for the Obama administration, the GOP and pundits are moving on to the soaring gas prices we see around our country. They are right about one thing: gas prices are high. After that, they are pretty much wrong about the rest of it.

Their solution is domestic drilling and they fault the Democrats for not allowing it to happen. If we drilled more here, they say, prices would go down and all would be well and good. As is often the case, they are completely full of shit. Here's why.

Take a look at this graph.

The blue line shows the average price of gas in the United States. The red line shows the average price of gas in Canada. The green line is the price of crude oil. Canada is a net exporter of oil meaning they export more oil than they consume. They export around 3.3 million barrels a day and consume 2.2 million barrels a day. So, even with their abundance of oil and smaller population, they still have higher prices than we do. In other words, drilling and keeping more of their own oil hasn't helped them at all. They still pay more for gas.

So why are gas prices so high and why can't drilling help us? To put it simply, that's the marketplace for oil. Whatever extra we would produce would be insignificant in comparison to what the world consumes. In addition, OPEC would likely cut production to match what we were producing.

"This drill drill drill thing is tired," said Tom Kloza, chief oil analyst at the Oil Price Information Service, which calculates gas prices for the motorist organization AAA. "It's a simplistic way of looking for a solution that doesn't exist."

Simplistic indeed...almost as if a child came up with it.

It's pretty clear to me what needs to happen. The first thing we need to do is unshackle ourselves from the global marketplace. This can be done with new forms of energy. Unfortunately, one party is stomping their feet and acting like a red faced bully on this one. The second thing we need to do is reveal that the oil industry is gauging prices. That's why I'm happy to report that President Obama is looking into this issue. In fact, I think this investigation should be on the same level as Harry Truman's quest to eliminate fraud and price gauging in the defense industry. Ending oil subsidies for oil companies should also be part of this.

Finally, we need to simply stop buying gas. Easier said than done, I know, but it is a way that the free market can fix this with less demand. I've made a conscious effort to not use as much gas. So has Last In Line. People need to adjust their behavior and maybe bike, walk or take a bus. Lord knows there are many Americans who could use the exercise.