Tag Archives: Oil and Gas

Incoming Kentucky Governor to EPA: we will not comply with your regulations

This is why I think that the real conservatism is always with the governors. When Republicans go to Washington, they often get so squishy that they are no use. If you’re looking for real conservative actions that produce real results, look to the governors. They get things done.

Video:

Here’s the article from The Blaze. (H/T ECM, who was suitably impressed)

Excerpt:

Kentucky Gov.-elect Matt Bevin said in an appearance on The Glenn Beck Radio Program Friday that he will push back against the Environmental Protection Agency’s efforts to regulate the coal industry, telling the EPA to “pound sand.”

Bevin’s comments came after Glenn Beck asked, “Now that you’re in, President Obama has said that he’s going to destroy the coal industry. Kentucky is a coal state. What are you going to be doing specifically to push back on that?”

In August, President Barack Obama unveiled his coal policy in partnership with the EPA, granting the agency authority over what is traditionally a state responsibility.

According to Sam Batkins, director of regulatory policy at American Action Forum, the policy will cost $2.5 trillion and 125,800 jobs, along with shuttering 66 power plants.

Bevin, a Tea Party favorite who became only the second Republican in four decades to win Kentucky’s governorship Tuesday, vowed to stand against the EPA when it comes to protecting his state’s large coal industry.

“Why it is that we in Kentucky — that sit on two extraordinary basins, the Illinois basin and the Central basin, an abundance of this — how are we not participating in something that the world wants more of than they ever have?” Bevin asked. “And so, from my way of thinking, we will tell the EPA and other unelected officials who have no legal authority over us as a state, to pound sand.”

Bevin, a self-described “staunch conservative,” told Beck he believes the 10th Amendment is “one of the most powerful tools” and that power not expressly given to the federal government is the responsibility of the states.

The incoming Kentucky governor said the EPA has “no authority” and that its only recourse would be to “take us to court.” Bevin said that, in the past, the agency has “bribed us with our own money,” but he insisted that will not happen anymore under his leadership.

“The EPA, for example, they don’t have an enforcement arm,” Bevin said. “They use federal dollars. They use our own money. They bribe us with our own money to stick it to ourselves. And we will not do that anymore in the state of Kentucky.”

Recall that coal is cheap to produce compared to more politically correct energy sources like wind and solar:

Cost of renewable wind and solar energy
Cost of renewable wind and solar energy

Now, if the people of America really want to do something to draw America off of coal, then we should focus on nuclear power, instead of wasting money on solar and wind. But of course, the Democrats oppose nuclear power, too – despite the facts that scientists are in favor of it.

The left-leaning Pew Research reports:

About half (51%) of Americans favor building more nuclear power plants to generate electricity, while 42% oppose this. Among the general public, a greater percentage of men (60%) than of women (43%) favor building additional nuclear power plants. More college graduates (59%) favor building nuclear power plants than do those with a high school education or less (46%). And larger shares of Republicans (62%) than independents (52%) or Democrats (45%) support expanding the use of nuclear power to generate electricity.

When it comes to nuclear power, the views of scientists are closer to those of Republicans than Democrats nationwide. Seven-in-ten scientists favor building more nuclear power plants to generate electricity, while 27% are opposed. Among scientists, majorities in every specialty favor building more nuclear power plants, but support is particularly widespread among physicists and astronomers (88% favor). As with the public, far more men (76%) than women (55%) support the expansion of nuclear power.

We are bankrupting the country wasting money on green energy production that is not cost effective, and Democrats are opposed to clean energy production that is cost effective: fracking and nuclear. Then they complain about coal and try to regulate it out of existence. Unless and until Democrats come around on fracking and nuclear power, then they should not be regulating coal out of existence. All that will do is raise energy prices for all of us, which is exactly what we see happening in Germany. They are further along the green energy road, and we must learn from their mistake.

Socialist party wins majority in Canada’s most conservative province

Orange = NDP, Green = Wildrose, Blue = Conservative
Orange = NDP, Green = Wildrose, Blue = Conservative

This article from Reuters explains what happened.

It says:

The left-wing New Democrats won election in the Canadian province of Alberta on Tuesday, ending the 44-year run by the Progressive Conservatives amid promises to review oversight of the oil and gas sector in the home of Canada’s oil sands.

At the end of a month-long campaign, the New Democratic Party (NDP), which has never held more than 16 seats in the 87-seat provincial legislature, will lead a majority government. It held a commanding lead in early results, leading or elected in 54 seats at 9 p.m. local time while the Conservatives were ahead in just 13, according to CBC TV.

The NDP is expected to be far less accommodative to the Western Canadian province’s powerful energy industry.

NDP Premier-elect Rachel Notley has proposed reduced support for pipeline export projects and a review of oil and gas royalties in the resource-rich province, and energy shares on Canadian stock markets are expected to react negatively to her party’s victory.

The NDP had promised to hike corporate tax rates by two percentage points to 12 percent if elected, but its promise to review the amount of royalty payments due the province from oil and gas production made some investors nervous.

Alberta’s oil sands are the largest source of U.S. oil imports.

The Conservatives had won 12 straight elections, but support for rookie Premier Jim Prentice plunged during the campaign and right-wing voters split support between the Conservatives and the younger, more conservative Wildrose Party, which appeared on track to be the official opposition.

The Alberta “Progressive Conservatives” are almost as leftist as the NDP. The only real conservatives in Alberta are the Wildrose.

This Canadian Press looks at specific NDP policies:

The NDP have won a majority in Alberta. What could Alberta look like moving forward? Leader Rachel Notley campaigned on having the wealthy pay more to fund better health care and education. Here’s a look at some of the party’s key platform planks:

— A Resource Owners’ Rights Commission to review the royalties oil companies pay to the province with any amount earned above the current rates going into savings.

— A boost in the corporate tax rate to 12 per cent from 10 per cent and an increase in the minimum wage to $15 and hour by 2018.

— More tax brackets on high earners than the Tories are proposing: A 12 per cent tax rate on income between $125,000 to $150,000; 13 per cent on income between $150,000 to $200,000; 14 per cent between $200,000 and $300,000 and 15 per cent over $300,000. The NDP also plans to roll back the Tory health levy.

— The creation of 2,000 long-term care spaces over four years.

— A ban both corporate and union donations to political parties.

That last one looks like a conservative policy, since big corporations and unions are both leftist. So there’s a silver lining to this cloud. I’m sorry for my Canadian friends who will have to live with this, but the mistake was made last election, when they chose the Progressive Conservatives over Wildrose. One thing is for sure, Alberta supplies a lot of our oil here, so this NDP win will raise oil prices, and it’s going to put pressure on American families. Maybe we should be drilling for our own oil?

New study: federal control of land hurts job growth in oil and gas industry

The Daily Signal reports on a new study from the Heritage Foundation.

They write:

Current government regulations imposed by the Bureau of Land Management are harming energy production and holding back the U.S. economy, a new study reveals.

“While federally owned lands are also full of energy potential, a bureaucratic regulatory regime has mismanaged land use for decades,” write The Heritage Foundation’s Katie Tubb and Nicolas Loris.

The report focuses on the Federal Lands Freedom Act, introduced by Rep. Diane Black, R-Tenn., and Sen. James Inhofe, R-Okla. It is designed to empower states to regain control of their lands from the federal government in order to pursue their own energy goals. That is a challenge in an oil-rich state like Colorado.

“We need to streamline the process as there are very real consequences to poor [or nonexistent] management,” Tubb, a Heritage research associate, told The Daily Signal.

“Empowering the states is the best solution. The people who benefit have a say and can share in the benefits. If there are consequences, they can address them locally with state and local governments that are much more responsive to elections and budgets than the federal government.”

Emphasizing the need to streamline the process, Tubb pointed to the findings in the new report.

“The Bureau of Land Management estimates that it took an average of 227 days simply to complete a drill application,” Tubb said.

That’s more than the average of 154 days in 2005 and more than seven times the state average of 30 days, according to the report.

The report blames this increase in the application process on the drop in drilling on federal lands.

“Since 2009,” Tubb and Loris write, “oil production on federal lands has fallen by nine percent, even as production on state and private lands has increased by 61 percent over the same period.”

Despite almost “43 percent of crude oil coming from federal lands,” government-owned lands have seen a 13-point drop in oil production, from 36 percent to 23 percent.

So, if we were interested in more job creation (and lower gas prices) then what we would be doing is letting oil and gas companies hire more people and extract more oil. Streamlining the process for new new drilling permits would help a lot. Right now, we still have a very low level of labor force participation. If we want companies to hire more people, we need to make it easier for them to do it. That means a less anti-business climate.

Technological advances make the Keystone XL pipeline safer than alternatives

My Dad loves to read Fox News, and he sent me this article about the technology behind the Keystone XL pipeline. We got into a good discussion on this article, too. My Dad used to be a big believer in big government, but now he only cares about what problems the private sector can solve.

The article says:

The Obama administration continues to block the controversial Keystone XL pipeline that would transport nearly 35 million gallons of oil a day from Canada to the U.S., citing environmental concerns as the reason. But according to pipeline advocates, it would use the latest technology and best safety features to prevent spills.

Advanced steel is part of it. The current part of the Keystone pipeline that already exists uses 2,638 miles of hardened steel built to “withstand  impact from a 65-ton excavator with 3.5-inch teeth,” according to TransCanada, the company behind the Keystone pipeline.

The steel is also coated with alloys to prevent it from wearing out.

“They use all kinds of methodologies to reduce friction. Corrosion inhibition is pretty sexy stuff in this business,” Eric Smith, associate director of Tulane University’s Energy Institute, told FoxNews.com

Pumping stations are another critical part. All along the pipeline, pumps move the oil using centrifugal force: a motor spins and forces oil to the edges of the pump, which causes more oil to rush forward to take the place of the oil pulled to the edges.

Each pump has 6,500 horsepower – meaning that the pump exerts an amount of power roughly equivalent to that of 6,500 horses. Total pumping power on the existing pipeline is nearly half a million horsepower, according to TransCanada.

Another critical technology is leak detection systems. The existing Keystone pipeline, for instance, has sensors that collect data from 20,000 different points along the pipeline.

If a leak occurs anywhere along the pipeline, the pressure in the pipeline changes, and TransCanada notes that such changes travel through the pipeline at the speed of sound and so can be detected nearly instantly.

The company adds that the pipeline has “fail-safe” mechanisms that automatically reduce oil pressure in the pipeline to safe levels.

TransCanada also has airplanes monitor the pipeline from the sky, using both the eyes of human pilots and a “Laser Spectroscopy Unit” that shoots a laser near the pipeline and then analyzes the reaction of whatever material is hit by the laser beam. TransCanada says this is “capable of identifying tiny methane leaks at patrol altitudes.”

The human pilots also catch things. TransCanada reports that one of its pilots once noticed that a circus in Kansas had tethered an elephant to a pipeline stake, which posed a potential threat.

All the layers of security help, say experts.

“It’s a belt-and-suspenders kind of approach. You just don’t want even minute leaks,” Smith said, adding that pipelines are the safest way of moving oil across land.

Pipelines are actually much safer than transporting the oil by train, which is the method favored by environmentalist opponents to Keystone XL:

According to a 2006 study by Environmental Research Consulting using Department of Transportation data, pipelines have spilled far less than trucks or railroads per ton of oil transported.

Critics of President Obama’s delay of the Keystone XL construction say the holdup actually makes everyone less safe, as oil producers instead rely on comparatively dangerous railroads for transportation. From 2008 to 2013, the amount of oil transported by rail skyrocketed from 9,500 carloads in 2008 to 41 times that – 407,642 – in 2013.

My big point to my Dad about this is how the private sector responds to the desires of customers on their own, developing solutions for the people who they expect to buy their products. The government spends 2 billion on the Obamacare web site, and forces people to use it. They can never develop anything people actually want to buy. Government just taxes, regulates and restricts the businesses who seek to solve problems for customers.

It’s the private sector businesses who are the real heroes to customers – making the things that we want and need and competing with other businesses to sell the most quality at the lowest price. They even find solutions to our concerns about the environment, if we let them, because that is part of pleasing the customer, too. If we had to wait on public school teachers, politicians, Hollywood clowns and academics to innovate, we would be waiting a long time indeed. I stand with private sector business, and the free-market system in general.

UPDATE: Holy snouts. For the first time in 6 years I am actually proud of Obama for doing something:

The Obama administration has opened a new front in the global battle for oil market share, effectively clearing the way for the shipment of as much as a million barrels per day of ultra-light U.S. crude to the rest of the world.

The Department of Commerce on Tuesday ended a year-long silence on a contentious, four-decade ban on oil exports, saying it had begun approving a backlog of requests to sell processed light oil abroad. It also issued a long-awaited document outlining exactly what kinds of oil other would-be exporters can ship.

The administration’s first serious effort to clarify an issue that has caused confusion and consternation in energy markets for more than a year will likely please domestic oil drillers, foreign trade partners and some Republicans who have urged Obama to loosen the export ban, which they see as an outdated holdover from the 1970s Arab oil embargo.

The latest measures were wrapped in regulatory jargon and couched by some as a basic clarification of existing rules, but analysts said the message was unambiguous: a green light for any company willing and able to process their light condensate crude through a distillation tower, a simple piece of oilfield kit.

“In practice this long-awaited move can open up the floodgates to substantial increases in exports by end 2015,” Ed Morse, global head of commodities research at Citigroup in New York said in a research note.

[…]By opening the door to U.S. crude exports, the administration is offering a bit of relief to some domestic drillers that have said that they are forced to sell their shale oil at a discount of as much as $15 a barrel versus global markets as fast-rising domestic supplies overwhelm local demand.

Let’s hope Obama signs the Keystone XL pipeline in the new year, too. That will help people so much and hurt our enemies, Russia, Venezuela and Iran. There are ways to fight wars without firing a shot, and this is how you do it – he looks like Ronald Reagan, now. Well done, Barack Obama! Finally!

Good news: Venezuelan President complains that fracking is “flooding” oil markets

Gas prices vs domestic oil production
Gas prices vs domestic oil production

(Click for larger image. Source)

Why are gas prices so low all of a sudden?

Well, let’s ask the communist President of Venezuela:

The broadcast networks may not want to give credit to hydraulic fracturing for increasing U.S. oil production and lowering global oil prices, but at least one angry world leader did just that.

Venezuelan President Nicolas Maduro complained that fracking in the U.S. has “flooded” the world market and contributed to lower oil prices, a connection that broadcast networks’ evening news reports barely made recently.

“The oil they’re taking from (shale deposits) and the gas. They’ve flooded the international market to batter the Russian economy …, Iran and to hurt us, Venezuela,” Maduro said in a broadcast on VTV, a state-run TV channel in Venezuela, according to Fox News Latino.

Fracking has been one cause of increased oil production in the U.S. That increased production helped lower oil prices by more than 30 percent since September 29. The decline in oil prices since June has severely impacted Venezuela, since oil exports were a major source of government income. “Some estimates put the break-even price for Venezuela to balance its budget at around $121 a barrel,” CNBC reported on December 7. That’s more than double current oil prices. Oil closed at $59.15-per-barrel on December 11.

As of January 2014, Venezuela’s state-run oil company brought in 96 percent of foreign earnings, according to The Economist. Maduro announced on December 2 that the government would cut spending by 20 percent.

[…]Venezuela was experiencing particular difficulties. That economy was on the verge of collapsing, CNBC said on Dec. 1. If low oil prices continued, Venezuela may face a “game over” situation and “barbarity and people looting.”

Do you know who else is hurt by this? Russia. I sure hope they don’t do anything aggressive to their neighbors while their economy feels the pinch of lower gas prices.

It’s a good thing when villains shake their fists at us, but it’s a better thing when consumers pay less for gas:

Thanks in part to the widespread use of technologies like hydraulic fracturing and horizontal drilling, global oil prices plummeted in 2014. Energy experts even predicted the U.S. could be the top oil producer in the next several years.

[…]Fracking and other advanced technologies helped the U.S. nearly double its average daily output of oil, from 5 million barrels in 2008 to an expected 9.42 million barrels in 2015. The huge supply increase was one factor sending crude oil prices down. Crude fell by more than 32 percent, from $93 to $63 just since Sept. 29. This already drove gas prices down to a national average of $2.66 for regular on Dec. 9, according to AAA.

This is great news for consumers and businesses which could save as much as $1.3 trillion worldwide because of lower oil prices, according to Julian Jessop, chief global economist at Capital Economics in London. Here in the U.S., Americans could save $230 billion if prices remain low for the next year, The Washington Post said on Dec. 1.

The only bad side to this story is that fracking is an expensive way of drilling, so as the price of oil drops, energy companies will be scaling back fracking until it becomes profitable again.

I think this story is important, because it helps to explain what the people who oppose the Keystone XL pipeline are concerned about. They know that there are two results to allowing that pipeline to be built. First, a hell of a lot of jobs will be created, reducing dependency on government. Second, the price of gas at the pump will go down further. That’s what the environmentalists (and their Democrat allies in Washington) are seeking to avoid. They want more government dependency, and higher gas prices.