EIN News says, "North American Oil Output Could Top 40-Year-Old Peak North America appears headed for an oil renaissance, with crude production expected to hit an all-time high by 2016, given the current pace of drilling in the U.S. and Canada, according to a study released by an energy research firm this week. (chron.com)".
This is wonderful news, especially since Obama has used his best efforts to thwart it
Friday, September 30, 2011
Wednesday, September 28, 2011
Turkish Political Conflict Is Based on Need for Oil
EIN News says, "Off Cyprus, the Hunt for Oil and Gas Threatens to Rekindle an Old Conflict Turkey has upped the ante in its dispute with Israel by sending an exploration team into disputed waters south of Cyprus in search of oil and gas. The move sharply escalates Ankara's conflict with its neighbors over energy rights in the eastern Mediterranean. (theglobeandmail.com)".
In 2009, Turkey used 600,000 barrels of oil per day, and produced only 50,000 barrels of oil per day. It probably hasn't changed much in the last two years. The key point is that they have been forced to import 550,000 barrels of oil per day.
Is it a mystery as to why Turkey would be pressing for new oil resources?
In 2009, Turkey used 600,000 barrels of oil per day, and produced only 50,000 barrels of oil per day. It probably hasn't changed much in the last two years. The key point is that they have been forced to import 550,000 barrels of oil per day.
Is it a mystery as to why Turkey would be pressing for new oil resources?
Monday, September 26, 2011
Good News for World Oil Production
EIN News says, "In Colombia, Violent Protests Threaten an Oil Boom At first, Pacific Rubiales Energy had the magic touch in Colombia. Forty-two of its first 48 exploratory wells struck oil — an almost unheard of success rate. The Toronto-based firm, whose Colombian operations are run by exiled Venezuelan oilmen, now pumps nearly one-quarter of the country's present crude production of 953,000 barrels per day, and it's the main driver behind a boom that may well see the country reach 1 million barrels per day by the end of the year. (time.com)".
Good news for the world oil supply. It's especially important, because it reduces the economic power of the Middle East.
Good news for the world oil supply. It's especially important, because it reduces the economic power of the Middle East.
Saturday, September 24, 2011
Fracking for Increased Natural Gas Supply Is a Great Development
EIN News says, "European Gas Giant Backs French Fear of Fracking Europe's largest natural gas firm, the Paris-based GDF Suez, agrees with the French government that hydraulic fracturing must be made safer for the environment before it is used to develop natural gas from shale resources in Europe. (forbes.com)".
GDF Suez
Let's first take a look at the relative size of GDF Suez, by using some production figures from its website http://www.gdfsuez.com/en/activities/our-businesses/natural-gas-exploration-and-production/natural-gas-exploration-and-production/. It reports its production in BOE. One BOE is equivalent to 164 cubic meters of gas. GDF suez produces 0.006 trillion cubic meters of natural gas per year. The supply comes from Germany, Netherlands, Norway, and the UK. It also has reserves of 0.1 trillion cubic meters.
For comparison, the total Euopean Union produces 0.2 trillion cubic meters (33 times more than GDF Suez). The EU also has conventional reserves of 2.3 trillion cubic meters (23 times that of GDF Suez).
Other country reserves of conventional gas are:
Russia 47.6 trillion cubic meters
Iran 29.6
Qatar 25.5
Turkmenistan 7.5
Saudi Arabia 7.5
US 6.9
Therefore, GDF Suez can be considered a minor supplier, with small reserves.
Fracking is estimated to increase the EU reserves by another 3.5 trillion, The likelihood that the fracking areas will fall in the areas where GDF Suez has existing conventional reserves is remote. Therefore, GDF Suez takes the position of opposing fracking, in order to preserve its existing business.
Environmental Considerations
One of the major objections to obtaining increased quantities of natural gas by fracking is a claim of environmental contamination put forth by environmental organizations.
I have said previously that environmental organizations have been taken over by leftists who really have little interest in the environment per se but are using it to reestablish world order and particularly place the United States in a position of what is presently considered a Third World country. Some of the political controversy is well documented in http://e360.yale.edu/feature/fracking_comes_to_europe_sparking_rising_controversy/2374/.
The best way to determine whether environmental contamination is a significant factor is to look at the detail.
Contamination
Let's first look at contamination in perspective. A volcano explodes and throws millions of tons of poisonous gases and particles into the air. Nature has its own way of handling that contamination. When we drive our automobiles, we generate poisonous carbon monoxide and nitrogen oxides. We handle that with catalytic converters. Each day we contaminate the environment with millions of tons of trash from food wrappings and waste food. We control that with landfill. Each day we personally contaminate the environment with urine and feces. We control that with sewage treatment.
On the input side, our food is contaminated with insects and microorganisms. We control that with cleanliness to reduce the concentration of contaminants and cooking to kill microorganisms. Our water in Lubbock is contaminated with calcium. We control that with water softeners. Water is used by the general public for flushing toilets, washing, lawn watering, cooking, and drinking. Only a very small portion is used for drinking, but cities and major towns have water treatment plants to treat water for all uses. Treatment plants treat the water to specifications. That means they take out most of the bad stuff. But treated water still has small concentrations of various minerals and, in some cases chemicals, such as pesticides and medicines, which leak into the supply from sewage treatment plants. Is this a source of concern? Yes, but the objective of water treatment plants is to keep the concentrations at low enough levels so that they are not health hazards.
Basic water supplies come from wells and reservoirs, such as lakes. Well water is generally contaminated with small concentrations of minerals through which the groundwater runs. Lake water comes from rain flowing across ground surfaces as rivers and streams, from which it takes up less mineral matter but more debris. As a side issue, New York City water comes from lakes in the Catskill Mountains. It is not subjected to contamination by fracking, which is an underground operation. It is silly to ban fracking in New York State, on the basis of protecting New York City water.
Methane
Methane is a major component of natural gas. Natural gas also contains some ethane and carbon dioxide. Note that these substances are not poisonous, and have no odor or taste. Natural gas from franking is piped from a level deeper than that of groundwater. Therefore in most cases, groundwater is not exposed to natural gas. There are exceptions and burnable well water has been observed. This can occur when natural gas dissolves in water water at high pressures. Subsequent release of pressure at ground level also allows the natural gas to come out of solution and be lighted. If the gas also contains higher hydrocarbons, it likely will have a taste and odor. However as indicated above, this can only occur with well water, which for cities and towns goes to a water treatment plant, where the taste and odor can be removed. Persons with private wells have more of a problem, but control is available, the cost of which can be borne by the value of the recovered gas.
Drilling/Fracking Contaminants
In the drilling operations and subsequent underground pressure fracturing of rock to release the natural gas, some chemical additives are generally used at low concentrations. These may occasionally find their way into well water but can be removed by water treatment techniques that would normally present no more of a problem than removal of trace amounts of pesticides and other chemicals from surface water in a water treatment plant.
Other Contaminants
As one Googles fracking, the only contaminants associated with well water are the methane and related hydrocarbons plus casual mention of drilling/fracking chemicals. Other than that, nothing is mentioned. This is not to say that some additional specific contaminants will not be discovered, but if they are, it is likely they could be easily controlled by standard water treatment techniques.
Conclusion
The new technology of increasing availability of natural gas by fracking from porous rock is a great development to increase our practical energy resources. Like anything else, there is a cost to obtaining it in the drilling and recovery process, and there are also environmental considerations. However those environmental considerations can easily be handled as minor costs within the gains of the energy itself.
GDF Suez
Let's first take a look at the relative size of GDF Suez, by using some production figures from its website http://www.gdfsuez.com/en/activities/our-businesses/natural-gas-exploration-and-production/natural-gas-exploration-and-production/. It reports its production in BOE. One BOE is equivalent to 164 cubic meters of gas. GDF suez produces 0.006 trillion cubic meters of natural gas per year. The supply comes from Germany, Netherlands, Norway, and the UK. It also has reserves of 0.1 trillion cubic meters.
For comparison, the total Euopean Union produces 0.2 trillion cubic meters (33 times more than GDF Suez). The EU also has conventional reserves of 2.3 trillion cubic meters (23 times that of GDF Suez).
Other country reserves of conventional gas are:
Russia 47.6 trillion cubic meters
Iran 29.6
Qatar 25.5
Turkmenistan 7.5
Saudi Arabia 7.5
US 6.9
Therefore, GDF Suez can be considered a minor supplier, with small reserves.
Fracking is estimated to increase the EU reserves by another 3.5 trillion, The likelihood that the fracking areas will fall in the areas where GDF Suez has existing conventional reserves is remote. Therefore, GDF Suez takes the position of opposing fracking, in order to preserve its existing business.
Environmental Considerations
One of the major objections to obtaining increased quantities of natural gas by fracking is a claim of environmental contamination put forth by environmental organizations.
I have said previously that environmental organizations have been taken over by leftists who really have little interest in the environment per se but are using it to reestablish world order and particularly place the United States in a position of what is presently considered a Third World country. Some of the political controversy is well documented in http://e360.yale.edu/feature/fracking_comes_to_europe_sparking_rising_controversy/2374/.
The best way to determine whether environmental contamination is a significant factor is to look at the detail.
Contamination
Let's first look at contamination in perspective. A volcano explodes and throws millions of tons of poisonous gases and particles into the air. Nature has its own way of handling that contamination. When we drive our automobiles, we generate poisonous carbon monoxide and nitrogen oxides. We handle that with catalytic converters. Each day we contaminate the environment with millions of tons of trash from food wrappings and waste food. We control that with landfill. Each day we personally contaminate the environment with urine and feces. We control that with sewage treatment.
On the input side, our food is contaminated with insects and microorganisms. We control that with cleanliness to reduce the concentration of contaminants and cooking to kill microorganisms. Our water in Lubbock is contaminated with calcium. We control that with water softeners. Water is used by the general public for flushing toilets, washing, lawn watering, cooking, and drinking. Only a very small portion is used for drinking, but cities and major towns have water treatment plants to treat water for all uses. Treatment plants treat the water to specifications. That means they take out most of the bad stuff. But treated water still has small concentrations of various minerals and, in some cases chemicals, such as pesticides and medicines, which leak into the supply from sewage treatment plants. Is this a source of concern? Yes, but the objective of water treatment plants is to keep the concentrations at low enough levels so that they are not health hazards.
Basic water supplies come from wells and reservoirs, such as lakes. Well water is generally contaminated with small concentrations of minerals through which the groundwater runs. Lake water comes from rain flowing across ground surfaces as rivers and streams, from which it takes up less mineral matter but more debris. As a side issue, New York City water comes from lakes in the Catskill Mountains. It is not subjected to contamination by fracking, which is an underground operation. It is silly to ban fracking in New York State, on the basis of protecting New York City water.
Methane
Methane is a major component of natural gas. Natural gas also contains some ethane and carbon dioxide. Note that these substances are not poisonous, and have no odor or taste. Natural gas from franking is piped from a level deeper than that of groundwater. Therefore in most cases, groundwater is not exposed to natural gas. There are exceptions and burnable well water has been observed. This can occur when natural gas dissolves in water water at high pressures. Subsequent release of pressure at ground level also allows the natural gas to come out of solution and be lighted. If the gas also contains higher hydrocarbons, it likely will have a taste and odor. However as indicated above, this can only occur with well water, which for cities and towns goes to a water treatment plant, where the taste and odor can be removed. Persons with private wells have more of a problem, but control is available, the cost of which can be borne by the value of the recovered gas.
Drilling/Fracking Contaminants
In the drilling operations and subsequent underground pressure fracturing of rock to release the natural gas, some chemical additives are generally used at low concentrations. These may occasionally find their way into well water but can be removed by water treatment techniques that would normally present no more of a problem than removal of trace amounts of pesticides and other chemicals from surface water in a water treatment plant.
Other Contaminants
As one Googles fracking, the only contaminants associated with well water are the methane and related hydrocarbons plus casual mention of drilling/fracking chemicals. Other than that, nothing is mentioned. This is not to say that some additional specific contaminants will not be discovered, but if they are, it is likely they could be easily controlled by standard water treatment techniques.
Conclusion
The new technology of increasing availability of natural gas by fracking from porous rock is a great development to increase our practical energy resources. Like anything else, there is a cost to obtaining it in the drilling and recovery process, and there are also environmental considerations. However those environmental considerations can easily be handled as minor costs within the gains of the energy itself.
Thursday, September 22, 2011
More Extreme Waste by the US Department Of Energy (DOE)
The July 11 issue of C&E News also has an article entitled, "Powering Innovation". It says that the Department of Energy (DOE) is accelerating innovative energy research and development in the US. It wants to give teams of scientists and engineers the resources to solve what it considers the US's pressing energy challenges quickly..
The DOE has developed a new term called Energy Frontier Research Centers (EFRCs). Twenty six of these have been funded by the DOE to "identify the gaps and challenges in the fundamental understanding of the science of energy". A second group is the Energy Innovation Hubs, which are focused on alternatives to petroleum based fuels, such as fuels from sunlight and nuclear reactor design/engineering. The third group is the Advanced Research Projects Agency-Energy (ARPA-E), which concentrates on high-risk projects, such as electric fuels using microorganisms to convert CO2 to liquid fuels.
There are 46 EFRC's costing $1.7 billion. There are three Hubs costing $75 million. There are 121 projects in ARPA-E's seven programs at a cost of about $120 million.
One of the Hubs is building new facilities which will employ 150-180 new government employees.
The above costs are on an annual basis and many of them are specified to continue for five years. It appears that total taxpayer-fund expenditures for this pie-in-the-sky operation will run almost $2 billion per year. I say pie-in-the-sky, because none of it is really necessary. We have in the US more than ample supplies of oil and natural gas. We also have private drilling companies in a position to develop these resources. The only inhibition is the US government, which has a twofold program. The first is to inhibit production of oil and gas and the second is to spend money on projects, such as the many above, which will have no practical significance in most of our lifetimes.
The DOE has developed a new term called Energy Frontier Research Centers (EFRCs). Twenty six of these have been funded by the DOE to "identify the gaps and challenges in the fundamental understanding of the science of energy". A second group is the Energy Innovation Hubs, which are focused on alternatives to petroleum based fuels, such as fuels from sunlight and nuclear reactor design/engineering. The third group is the Advanced Research Projects Agency-Energy (ARPA-E), which concentrates on high-risk projects, such as electric fuels using microorganisms to convert CO2 to liquid fuels.
There are 46 EFRC's costing $1.7 billion. There are three Hubs costing $75 million. There are 121 projects in ARPA-E's seven programs at a cost of about $120 million.
One of the Hubs is building new facilities which will employ 150-180 new government employees.
The above costs are on an annual basis and many of them are specified to continue for five years. It appears that total taxpayer-fund expenditures for this pie-in-the-sky operation will run almost $2 billion per year. I say pie-in-the-sky, because none of it is really necessary. We have in the US more than ample supplies of oil and natural gas. We also have private drilling companies in a position to develop these resources. The only inhibition is the US government, which has a twofold program. The first is to inhibit production of oil and gas and the second is to spend money on projects, such as the many above, which will have no practical significance in most of our lifetimes.
Pres. Obama Should Resign
EIN News says, "U.S. President Obama's Losing Charge on Energy President Barack Obama is racking up an impressive losing streak when it comes to energy. Under pressure from Republicans, he embraced offshore drilling just weeks before the BP oil spill. He offered support for nuclear power, only to watch a disaster unfold in Japan. Gas price hikes in the spring disrupted his economic message. Feeling the heat from Republicans again, he infuriated his green base by bailing out on a long-promised ozone standard. (politico.com)".
I don't accept everything said above, particularly the "embracing" of offshore drilling. President Obama has done everything possible to inhibit oil production in the US. However in general, this is the best news I've heard in a long time. I am impressed that Pres. Obama is losing charge on energy. In addition, everything he touches seems to turn to mud. He is a wonderful speaker, likable and apparently a great community organizer, but he has so far done this country terrible damage. We need him out, out, out, as soon as possible and remove from the White House the Fascist/Socialist team he has installed.
I don't accept everything said above, particularly the "embracing" of offshore drilling. President Obama has done everything possible to inhibit oil production in the US. However in general, this is the best news I've heard in a long time. I am impressed that Pres. Obama is losing charge on energy. In addition, everything he touches seems to turn to mud. He is a wonderful speaker, likable and apparently a great community organizer, but he has so far done this country terrible damage. We need him out, out, out, as soon as possible and remove from the White House the Fascist/Socialist team he has installed.
Monday, September 19, 2011
Release of Emergency Oil Supplies by the US Likely Had No Effect on Oil Price
Open e-mail to Rep. Neugebauer:
Randy,
EIN News says, "Oil Release by IEA Is a 'game-changer' Despite Price Bounce It might not sound like much of a victory. The US and other oil-consuming countries release emergency stocks of oil to put a lid on prices. The result: crude prices in London rise by $1 since the programme began three months ago. (gulf-times.com)".
The United States and more than two dozen other countries that make up the IEA put 60 million barrels of oil into the market this summer in an effort to drive down skyrocketing oil prices.
It is unclear to me how anyone could logically say that the putting of strategic oil supplies into the market had a significant effect on reducing oil prices. We have no way of knowing what the oil price would've been without the "putting". I also do not claim that the "putting" had no effect.
I do recognize that based on normal laws of supply and demand, if the price is increasing on a product, the product is desired and there is a shortage of supply or else the mode of payment has become poorer. I think we can reasonably speculate that while the dollar has been declining in value, there is still a substantial shortage of oil compared to the amount desired.
This leads me into my standard complaint that Obama and the Department of Interior have continually withheld drilling permits to limit the quantity of US oil production in favor of promoting "sustainable" energy.
I also revert to the suggestion of two major oil company CEOs, who claim we need more federal regulators, on the presumption that those additional regulators will speed up the issuance of drilling permits. This is obviously a silly supposition, because all of these people take orders from Obama and Salazar to limit oil production.
Randy, it is up to Congress to change the situation, I don't know how it can be done. Perhaps you have some imaginative technique which could work to increase drilling permits and get more oil flowing.
Randy,
EIN News says, "Oil Release by IEA Is a 'game-changer' Despite Price Bounce It might not sound like much of a victory. The US and other oil-consuming countries release emergency stocks of oil to put a lid on prices. The result: crude prices in London rise by $1 since the programme began three months ago. (gulf-times.com)".
The United States and more than two dozen other countries that make up the IEA put 60 million barrels of oil into the market this summer in an effort to drive down skyrocketing oil prices.
It is unclear to me how anyone could logically say that the putting of strategic oil supplies into the market had a significant effect on reducing oil prices. We have no way of knowing what the oil price would've been without the "putting". I also do not claim that the "putting" had no effect.
I do recognize that based on normal laws of supply and demand, if the price is increasing on a product, the product is desired and there is a shortage of supply or else the mode of payment has become poorer. I think we can reasonably speculate that while the dollar has been declining in value, there is still a substantial shortage of oil compared to the amount desired.
This leads me into my standard complaint that Obama and the Department of Interior have continually withheld drilling permits to limit the quantity of US oil production in favor of promoting "sustainable" energy.
I also revert to the suggestion of two major oil company CEOs, who claim we need more federal regulators, on the presumption that those additional regulators will speed up the issuance of drilling permits. This is obviously a silly supposition, because all of these people take orders from Obama and Salazar to limit oil production.
Randy, it is up to Congress to change the situation, I don't know how it can be done. Perhaps you have some imaginative technique which could work to increase drilling permits and get more oil flowing.
Saturday, September 17, 2011
Curbing CO2 Emissions at Power Plants Will Increase Electricity Costs
EIN News says, "Obama EPA Delaying More Pollution Curbs The U.S. Environmental Protection Agency will delay yet again plans to curb greenhouse gas emissions, its second delay of a major anti-pollution initiative in as many weeks. The head of the EPA said the agency needs more time beyond the Sept. 30 deadline to forge a plan to limit emissions of carbon dioxide from power plants. (msnbc.msn.com)".
It appears that Pres. Obama may be getting the message.
Notice that the September 30 deadline was to submit a plan for limiting carbon dioxide emissions. That deadline has now been extended to some non-determined date. However, Pres. Obama previously pledged that the US will cut its greenhouse gas emissions by about 17 percent by 2020, under 2005 levels, and the EPA is presumably still working under that directive.
What we do not know is what the actual plan will be. There is little doubt that it will be a combination of installation of carbon dioxide capture equipment in coal burning power plants, which supply most of the US electricity, or an alternative tax on those power plants, if they do not conform. This will lead to a significant increase in electricity utility rates.
Pres. Obama does not easily give up on his ideology of converting the US economy to sustainable energy use, which would include wind, solar, and fuels from agricultural products. However, it is likely that he is starting to see that a significant increase in electricity rates before the 2012 elections would seriously turn the electorate against him. For that reason, he wants to delay the EPA operation of instituting emission controls.
Watson is the head of EPA. She works for Obama, and Obama makes the rules and directives.
EPA emission controls would lead to an increase in electricity cost to the American public and would be counterproductive to Pres. Obama's bid for reelection. The flipside is that if Pres. Obama is reelected, you may be certain that all of these regulations will be put into effect, with the net result of further destroying our economy.
It appears that Pres. Obama may be getting the message.
Notice that the September 30 deadline was to submit a plan for limiting carbon dioxide emissions. That deadline has now been extended to some non-determined date. However, Pres. Obama previously pledged that the US will cut its greenhouse gas emissions by about 17 percent by 2020, under 2005 levels, and the EPA is presumably still working under that directive.
What we do not know is what the actual plan will be. There is little doubt that it will be a combination of installation of carbon dioxide capture equipment in coal burning power plants, which supply most of the US electricity, or an alternative tax on those power plants, if they do not conform. This will lead to a significant increase in electricity utility rates.
Pres. Obama does not easily give up on his ideology of converting the US economy to sustainable energy use, which would include wind, solar, and fuels from agricultural products. However, it is likely that he is starting to see that a significant increase in electricity rates before the 2012 elections would seriously turn the electorate against him. For that reason, he wants to delay the EPA operation of instituting emission controls.
Watson is the head of EPA. She works for Obama, and Obama makes the rules and directives.
EPA emission controls would lead to an increase in electricity cost to the American public and would be counterproductive to Pres. Obama's bid for reelection. The flipside is that if Pres. Obama is reelected, you may be certain that all of these regulations will be put into effect, with the net result of further destroying our economy.
Thursday, September 15, 2011
Congress Must Illuminate the Subsidy for Ethanol Use in Automotive Fuel
C&E News has an article entitled "E15 Controversy" in its August 13 issue. E15 is code for the concentration of ethanol in automotive fuel. Ethanol is presently added to gasoline for a 10% concentration and 90% of the US gasoline market uses this modified gasoline..
A group of ethanol supporters and 54 ethanol manufacturers are organized as Growth Energy. They want to increase the concentration of ethanol in automotive fuel from 10% to 15%. The obvious reason is to increase their business of making and selling ethanol. The group has apparently gained the support of the EPA in that the EPA has approved the increase for certain types of vehicles.
Several objections to this rule change had been registered, including damage to engines, but the most significant aspect has been completely ignored.
Ethanol in automotive fuel got its start through the Clean Air Act passed by Congress more than 30 years ago. When the Clean Air Act was passed, it was thought that there was only a short-term tangible supply of petroleum, and that the United States did not have significant reserves. The Act intended to extend the supply of automotive fuel by addition to gasoline and also to reduce dependence on foreign oil. However, that situation has completely changed. We now know that we have very significant oil reserves in the United States and the only reason we are not developing them is because of inhibition by the present Obama administration.
Ethanol is a more costly fuel than is gasoline, and the only reason for its continued use is that taxpayers subsidies artificially reduce its cost to an acceptable level for fuel. Not only should its use in automotive fuel not be increased, it should actually be eliminated through normal market forces. In other words, the only reason for the continued use of ethanol in automotive fuel is its subsidization by taxpayer dollars. That is equivalent to the old practice of digging holes and filling them in order to make work. It is inefficient and completely unnecessary.
Congress should get on with a modification of the Clean Air Act to eliminate the need for ethanol to be used in 2022 to the extent of 36 billion gallons. It must also completely eliminate subsidies for ethanol used in automotive fuel.
A group of ethanol supporters and 54 ethanol manufacturers are organized as Growth Energy. They want to increase the concentration of ethanol in automotive fuel from 10% to 15%. The obvious reason is to increase their business of making and selling ethanol. The group has apparently gained the support of the EPA in that the EPA has approved the increase for certain types of vehicles.
Several objections to this rule change had been registered, including damage to engines, but the most significant aspect has been completely ignored.
Ethanol in automotive fuel got its start through the Clean Air Act passed by Congress more than 30 years ago. When the Clean Air Act was passed, it was thought that there was only a short-term tangible supply of petroleum, and that the United States did not have significant reserves. The Act intended to extend the supply of automotive fuel by addition to gasoline and also to reduce dependence on foreign oil. However, that situation has completely changed. We now know that we have very significant oil reserves in the United States and the only reason we are not developing them is because of inhibition by the present Obama administration.
Ethanol is a more costly fuel than is gasoline, and the only reason for its continued use is that taxpayers subsidies artificially reduce its cost to an acceptable level for fuel. Not only should its use in automotive fuel not be increased, it should actually be eliminated through normal market forces. In other words, the only reason for the continued use of ethanol in automotive fuel is its subsidization by taxpayer dollars. That is equivalent to the old practice of digging holes and filling them in order to make work. It is inefficient and completely unnecessary.
Congress should get on with a modification of the Clean Air Act to eliminate the need for ethanol to be used in 2022 to the extent of 36 billion gallons. It must also completely eliminate subsidies for ethanol used in automotive fuel.
Wednesday, September 14, 2011
Top oil executives need to reevaluate their position on Federal drilling permits
EIN News says, "Shell's President Odum Calls to Ramp Up Oil Federal Regulators Shell Oil President Marvin Odum says the federal government's oil and gas regulators are understaffed, singing a similar tune to another Big Oil executive last week. (nationaljournal.com)".
More regulators? This borders on insanity! But, can two big oil executives be insane simultaneously? Unlikely. Let's take a look at their reasoning.
The reference article gives a more complete picture. Shell's Odum and Chevron's John Watson are trying to address the problem that new drilling permits are very slow in coming. They are presumably judging that increasing the federal staff will also increase the speed at which the permits will be issued. This is a reasonable supposition. While it is not insane, it certainly is naïve.
CEOs of major corporations have one thing in common. They are unusually adept in outmaneuvering their competitors within organizations for the top jobs. This means they have talent and experience in out-negotiating other highly intelligent contenders. It also means that they have little knowledge of how their organizations really work, in spite of the fact that they lead the organizations.
In industry and in government, the top boss has a philosophy of how his business should operate. Underlings quickly understand and conform to that philosophy for the purpose of improving their own careers. In the case of the Interior Department, Pres. Obama through Ken Salazar is the top boss. They have the philosophy that the US should reduce its dependence on foreign oil, not by developing local oil resources, but rather switching to renewable energy, such as wind and solar. To promote renewable energy, they take every opportunity to limit production of US oil, a portion of which program involves minimizing issuance of new drilling permits. The most effective way to do that is to micromanage all aspects of a drilling permit, which then requires additional time and ultimate delay in its issuance.
Because Odum and Watson do not understand that process, they assume that throwing more federal people at the drilling permit issuing problem will lead to increased speed at which drilling permits are issued. Wrong, wrong, wrong!
A simple fact of life is that if you want to speed up issuance of a permit, one must take a more cursory look at the permit and eliminate investigation of many of the minor details. This is not to say that we ignore major aspects, such as environmental considerations, but it would not be necessary to include the pay scale and qualifications of a person required for spill cleanup. That could all be covered by a general liability clause, which says that if you have a spill, you are required to clean it up within a certain period of time to the satisfaction of existing federal regulators and bearing all costs. Arguments among drillers, federal regulators, the general public and organizations thereof can be resolved in federal court. It is not necessary to foresee all eventualities on how to avoid going to court.
Odom and Watson need to look at the big picture. Increasing the staff of the federal federal regulators will only establish an opportunity for government to investigate more miniscule details on permit applications, which in the long run will further delay permit issuance. What is needed is a change in policy at the top levels of government (Obama/Salazar), and that is what Odum and Watson should be fighting for.
More regulators? This borders on insanity! But, can two big oil executives be insane simultaneously? Unlikely. Let's take a look at their reasoning.
The reference article gives a more complete picture. Shell's Odum and Chevron's John Watson are trying to address the problem that new drilling permits are very slow in coming. They are presumably judging that increasing the federal staff will also increase the speed at which the permits will be issued. This is a reasonable supposition. While it is not insane, it certainly is naïve.
CEOs of major corporations have one thing in common. They are unusually adept in outmaneuvering their competitors within organizations for the top jobs. This means they have talent and experience in out-negotiating other highly intelligent contenders. It also means that they have little knowledge of how their organizations really work, in spite of the fact that they lead the organizations.
In industry and in government, the top boss has a philosophy of how his business should operate. Underlings quickly understand and conform to that philosophy for the purpose of improving their own careers. In the case of the Interior Department, Pres. Obama through Ken Salazar is the top boss. They have the philosophy that the US should reduce its dependence on foreign oil, not by developing local oil resources, but rather switching to renewable energy, such as wind and solar. To promote renewable energy, they take every opportunity to limit production of US oil, a portion of which program involves minimizing issuance of new drilling permits. The most effective way to do that is to micromanage all aspects of a drilling permit, which then requires additional time and ultimate delay in its issuance.
Because Odum and Watson do not understand that process, they assume that throwing more federal people at the drilling permit issuing problem will lead to increased speed at which drilling permits are issued. Wrong, wrong, wrong!
A simple fact of life is that if you want to speed up issuance of a permit, one must take a more cursory look at the permit and eliminate investigation of many of the minor details. This is not to say that we ignore major aspects, such as environmental considerations, but it would not be necessary to include the pay scale and qualifications of a person required for spill cleanup. That could all be covered by a general liability clause, which says that if you have a spill, you are required to clean it up within a certain period of time to the satisfaction of existing federal regulators and bearing all costs. Arguments among drillers, federal regulators, the general public and organizations thereof can be resolved in federal court. It is not necessary to foresee all eventualities on how to avoid going to court.
Odom and Watson need to look at the big picture. Increasing the staff of the federal federal regulators will only establish an opportunity for government to investigate more miniscule details on permit applications, which in the long run will further delay permit issuance. What is needed is a change in policy at the top levels of government (Obama/Salazar), and that is what Odum and Watson should be fighting for.
Tuesday, September 13, 2011
Kudos to Congress on Stalling Oil Spill Response
Open e-mail to Rep. Neugebauer:
Randy,
As you know, much of my political writing is derogatory and generally negative with respect to government action. In this particular case, I congratulate Congress on its inaction.
The August 22 issue of C&E News has an article complaining that more than a year has passed since BP's Deepwater Horizon rig exploded in the Gulf of Mexico killing 11 workers and causing the largest marine oil spill in the history of the petroleum industry. The Interior Department immediately revised rules governing offshore oil drilling to include a lengthier and more extensive permitting process. C&E News is lamenting that Congress has made little headway toward addressing the safety issues raised by the disaster.
We have said before that the deaths of workers and the subsequent environmental problems caused by the oil spill are deeply regretted. While fault has been found with BP's operation prior to the spill, there is no doubt that the so-called disaster was also a result of unpredictable natural causes. No one realized that the upward pressure of the oil reserve exceeded the pressure at the bottom level of more than a mile of water. A favorable aspect is also that a completely new large body oil reserve had been discovered.
While fault can definitely be found with BP and its subcontractors, their drilling program was not unduly risky and the accident cost the company a tremendous loss, such that it almost resulted in bankruptcy. On the positive side, significant new information was obtained, which has resulted in improved technology not only for BP but also other deepwater drillers. Let's keep in mind that the business of deepwater drilling is to obtain usable oil and anything that works against that is a detriment to the program. More simply, deepwater drillers avoid unnecessary risks wherever possible, but risks are inherent in any development.
While the oil spill caused considerable damage per se, the action of the Interior Department has probably done more damage to our economy. Our society runs on oil, and the limitations imposed by the Interior Department have significantly reduced our domestic oil production and contributed to our poor balance of international payments, by forcing oil importation. I and others have been fighting that ever since, with our watchwords, "Drill, Drill, Drill".
Reverting to the good news, Congress has been inactive in applying safety rules. These are not needed. The oil industry knows what it has to do, and the Interior Department has already placed more restrictions than we should have. My heart is warmed by the comments of Rep. Doc Hastings, Chairman of the National Resources Committee. I now quote from the Chemical and Engineering News article on what Rep. Hastings had to say, "The regulatory cobweb of red tape and constantly moving goalposts created by the Obama Administration after the Gulf of Mexico oil spill have resulted in a de facto moratorium on deepwater and shallow-water drilling permits. From day one I've said that we need all the facts surrounding the course of this tragic event before jumping to conclusions and passing reforms with long-term consequences."
Let's hope that in the final analysis Rep. Hastings finds it more necessary to limit the the detrimental actions of the Interior Department. rather than develop another set of rules, which would contribute to the destruction of our economy.
Randy,
As you know, much of my political writing is derogatory and generally negative with respect to government action. In this particular case, I congratulate Congress on its inaction.
The August 22 issue of C&E News has an article complaining that more than a year has passed since BP's Deepwater Horizon rig exploded in the Gulf of Mexico killing 11 workers and causing the largest marine oil spill in the history of the petroleum industry. The Interior Department immediately revised rules governing offshore oil drilling to include a lengthier and more extensive permitting process. C&E News is lamenting that Congress has made little headway toward addressing the safety issues raised by the disaster.
We have said before that the deaths of workers and the subsequent environmental problems caused by the oil spill are deeply regretted. While fault has been found with BP's operation prior to the spill, there is no doubt that the so-called disaster was also a result of unpredictable natural causes. No one realized that the upward pressure of the oil reserve exceeded the pressure at the bottom level of more than a mile of water. A favorable aspect is also that a completely new large body oil reserve had been discovered.
While fault can definitely be found with BP and its subcontractors, their drilling program was not unduly risky and the accident cost the company a tremendous loss, such that it almost resulted in bankruptcy. On the positive side, significant new information was obtained, which has resulted in improved technology not only for BP but also other deepwater drillers. Let's keep in mind that the business of deepwater drilling is to obtain usable oil and anything that works against that is a detriment to the program. More simply, deepwater drillers avoid unnecessary risks wherever possible, but risks are inherent in any development.
While the oil spill caused considerable damage per se, the action of the Interior Department has probably done more damage to our economy. Our society runs on oil, and the limitations imposed by the Interior Department have significantly reduced our domestic oil production and contributed to our poor balance of international payments, by forcing oil importation. I and others have been fighting that ever since, with our watchwords, "Drill, Drill, Drill".
Reverting to the good news, Congress has been inactive in applying safety rules. These are not needed. The oil industry knows what it has to do, and the Interior Department has already placed more restrictions than we should have. My heart is warmed by the comments of Rep. Doc Hastings, Chairman of the National Resources Committee. I now quote from the Chemical and Engineering News article on what Rep. Hastings had to say, "The regulatory cobweb of red tape and constantly moving goalposts created by the Obama Administration after the Gulf of Mexico oil spill have resulted in a de facto moratorium on deepwater and shallow-water drilling permits. From day one I've said that we need all the facts surrounding the course of this tragic event before jumping to conclusions and passing reforms with long-term consequences."
Let's hope that in the final analysis Rep. Hastings finds it more necessary to limit the the detrimental actions of the Interior Department. rather than develop another set of rules, which would contribute to the destruction of our economy.
Monday, September 12, 2011
Obama Must Approve a Five-Year Oil Drilling Plan in the Atlantic before July 1
EIN News says, "U.S. Scrambling to Meet Offshore Drilling Date. The Obama administration has less than 10 months to finish assembling its plan for selling offshore drilling leases over the next five years, and some oil industry leaders are worried the government is barely on track to meet a July 1 deadline for issuing the document. (chron.com)".
This issue has been made unnecessarily complicated. There is so much written about it that it takes a tremendous amount of time to sort out the relevant facts.
However, the Outer Continental Shelf Lands Act was created by Congress in 1953. Congress designated the Secretary of the Interior as the administrator of the act. The Minerals Management Service (MMS) was the bureau within the Department of the Interior that is
responsible for implementing the requirements of the Act. A 1996 study by the US Minerals Management Service (MMS) estimated undiscovered conventionally recoverable resources in Atlantic federal waters to be 7,200,000,000 barrels (1.14×109 m3) of oil and 27.5 trillion cubic feet (TCF) gas. This means we are really talking about a large potential increase in US oil production. Previous drilling under the old five-year plan was not productive, but there has been significant improvement in drilling technology.
Section 18 of the Act calls for the preparation of an oil and gas leasing program indicating a 5-year schedule of lease sales
designed to best meet the nation’s energy needs.
The MMS is in the process of preparing a possible new 5-year program for 2010-2015, to replace the current program for 2007-2012. The last five-year plan will end on June 30, 2012. It must be either reinstated or replaced by a new plan. In either case, Congress and the President must approve the plan before it can become effective, which means leases can be offered. Required by law, the document lays out every planned government auction of drilling leases in federal waters for a five-year period. If a sale doesn't make it into the plan, it can't happen. "In the offshore, nothing happens without the five-year program," noted Dan Naatz, executive vice president of the Independent Petroleum Association of America. "It is the bible" of how offshore development moves forward.
My concern is the integrity of the approval system.
Elizabeth Birnbaum was head of the Minerals Management Service at the time of the BP oil spill in the Gulf. She was forced to resign. Her replacement is Michael R. Bromwich and the MMS name has been changed to Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). The key point is that Bromwich works for Interior Secretary Ken Salazar, who in turn works for Pres. Obama. The Obama/Salazar program has been to strongly support sustainable energy sources, such as solar and wind and to inhibit further petroleum production.
I caution Congress to not let the five-year lease plan default or be replaced by something which is contrary to further development of US oil production through its leasing program. More succinctly, Congress should pay close attention to what Obama and Salazar are doing in this area.
This issue has been made unnecessarily complicated. There is so much written about it that it takes a tremendous amount of time to sort out the relevant facts.
However, the Outer Continental Shelf Lands Act was created by Congress in 1953. Congress designated the Secretary of the Interior as the administrator of the act. The Minerals Management Service (MMS) was the bureau within the Department of the Interior that is
responsible for implementing the requirements of the Act. A 1996 study by the US Minerals Management Service (MMS) estimated undiscovered conventionally recoverable resources in Atlantic federal waters to be 7,200,000,000 barrels (1.14×109 m3) of oil and 27.5 trillion cubic feet (TCF) gas. This means we are really talking about a large potential increase in US oil production. Previous drilling under the old five-year plan was not productive, but there has been significant improvement in drilling technology.
Section 18 of the Act calls for the preparation of an oil and gas leasing program indicating a 5-year schedule of lease sales
designed to best meet the nation’s energy needs.
The MMS is in the process of preparing a possible new 5-year program for 2010-2015, to replace the current program for 2007-2012. The last five-year plan will end on June 30, 2012. It must be either reinstated or replaced by a new plan. In either case, Congress and the President must approve the plan before it can become effective, which means leases can be offered. Required by law, the document lays out every planned government auction of drilling leases in federal waters for a five-year period. If a sale doesn't make it into the plan, it can't happen. "In the offshore, nothing happens without the five-year program," noted Dan Naatz, executive vice president of the Independent Petroleum Association of America. "It is the bible" of how offshore development moves forward.
My concern is the integrity of the approval system.
Elizabeth Birnbaum was head of the Minerals Management Service at the time of the BP oil spill in the Gulf. She was forced to resign. Her replacement is Michael R. Bromwich and the MMS name has been changed to Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). The key point is that Bromwich works for Interior Secretary Ken Salazar, who in turn works for Pres. Obama. The Obama/Salazar program has been to strongly support sustainable energy sources, such as solar and wind and to inhibit further petroleum production.
I caution Congress to not let the five-year lease plan default or be replaced by something which is contrary to further development of US oil production through its leasing program. More succinctly, Congress should pay close attention to what Obama and Salazar are doing in this area.
Thursday, September 8, 2011
More Oil and Gas Drilling
EIN News says, "U.S. Supercommittee Should Boost Oil Drilling, Chevron CEO Says The CEO of oil giant Chevron Corp. said Wednesday that the bipartisan deficit supercommittee should expand U.S. oil-and-gas leasing, joining a senior House Republican in urging the panel to wade into energy policy when it meets this fall. (thehill.com)".
Well! Not only do we have a CEO with the right answer but one who also has the guts to say so.
Expanding US oil and gas leasing will lead to more drilling. This makes drilling jobs.
More drilling makes more oil and requires more employees to refine and transport it.
The increased oil supply reduces the price per gallon of gasoline and diesel fuel. This allows manufacturing companies to use more energy in their production operations, which will then require more employees.
This is a win-win situation, except for the Communist inclined US federal government, which wants pie-in-the-sky wind energy, solar energy, tidal energy and maybe even harvesting the energy of cows chewing their cud.
Well! Not only do we have a CEO with the right answer but one who also has the guts to say so.
Expanding US oil and gas leasing will lead to more drilling. This makes drilling jobs.
More drilling makes more oil and requires more employees to refine and transport it.
The increased oil supply reduces the price per gallon of gasoline and diesel fuel. This allows manufacturing companies to use more energy in their production operations, which will then require more employees.
This is a win-win situation, except for the Communist inclined US federal government, which wants pie-in-the-sky wind energy, solar energy, tidal energy and maybe even harvesting the energy of cows chewing their cud.
Wednesday, September 7, 2011
Drill, Drill, Drill
EIN News says, "Big Oil: To Create Jobs, Let Us Drill More Widely With job creation taking center stage in American politics, the oil industry made a pitch for drilling more widely. With looser restrictions, the industry says it could deliver 1.4 million new jobs, boost tax rolls by $800 billion, and increase domestic energy production almost 50%. (cnn.com)".
Does this make sense to you? It's kind of obvious to me. I have been saying for some time that the federal government has been inhibiting job creation by limiting drilling operations.
I'm not sure how the oil industry calculates comes up with 1.4 million new jobs, but I can tell you that with increased drilling operations, more oil will be available and gasoline prices will fall. This will then spur the economy by people not worrying as much about fuel costs and getting on with the major aspects of getting work done.
Does this make sense to you? It's kind of obvious to me. I have been saying for some time that the federal government has been inhibiting job creation by limiting drilling operations.
I'm not sure how the oil industry calculates comes up with 1.4 million new jobs, but I can tell you that with increased drilling operations, more oil will be available and gasoline prices will fall. This will then spur the economy by people not worrying as much about fuel costs and getting on with the major aspects of getting work done.
Monday, September 5, 2011
Evergreen Solar Energy Is Defunct
EIN News says, "60% of Gulf of Mexico Oil Output Shut by Storm More than half of U.S. crude oil output in the Gulf of Mexico was shut in on Sunday as Tropical Storm Lee hindered efforts to restaff and restart oil and gas platforms in the basin. (reuters.com)".
This is a regrettable incident, but must be taken as part of operational costs. In spite of what junk scientists say, we cannot control the weather. Fortunately, these storms last a short time and have an effect of only a few weeks at most.
Conversely consider man-made fiascoes. The Obama Administration held up the granting of drilling permits to limit production of US oil. It wanted and probably still wants to have what it calls a "sustainable" energy source. The problem is that while this may be a good idea in some centuries to come, it is not applicable at the present time with availability of significant quantities of cheap petroleum, if we are not inhibited from getting it.
Evergreen, a solar energy company, has just gone bust with their filing for bankruptcy. The state of Massachusetts put $58 million into subsidies and tax benefits for the operation. Mitt Romney was fortunately not the governor at the time. If he had been, he would be taking it on the chin now, on top of the Massachusetts health plan, which is a dead ringer for that of Obama's federal program and an economy killer.
It all boils down to pie-in-the-sky versus reality. Petroleum is reality. We use plenty of it and could use more. Solar energy and wind are pie-in-the-sky. Without subsidies, they cannot compete with petroleum in spite of the hurdles that the Obama administration has been placing on the petroleum industry.
This is a regrettable incident, but must be taken as part of operational costs. In spite of what junk scientists say, we cannot control the weather. Fortunately, these storms last a short time and have an effect of only a few weeks at most.
Conversely consider man-made fiascoes. The Obama Administration held up the granting of drilling permits to limit production of US oil. It wanted and probably still wants to have what it calls a "sustainable" energy source. The problem is that while this may be a good idea in some centuries to come, it is not applicable at the present time with availability of significant quantities of cheap petroleum, if we are not inhibited from getting it.
Evergreen, a solar energy company, has just gone bust with their filing for bankruptcy. The state of Massachusetts put $58 million into subsidies and tax benefits for the operation. Mitt Romney was fortunately not the governor at the time. If he had been, he would be taking it on the chin now, on top of the Massachusetts health plan, which is a dead ringer for that of Obama's federal program and an economy killer.
It all boils down to pie-in-the-sky versus reality. Petroleum is reality. We use plenty of it and could use more. Solar energy and wind are pie-in-the-sky. Without subsidies, they cannot compete with petroleum in spite of the hurdles that the Obama administration has been placing on the petroleum industry.
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