Marita: Oil and gas exports—one policy change, many benefits

Greetings!

As is often the case, this week I had to decide between three different story ideas for my column. Al Gore and his suggestion that climate change skeptics be punished certainly had appeal—but many others were addressing that, giving it plenty of coverage. The Obama administration’s federal-lands fracking announcement was also considered—but it made headlines and garnered the ire of Speaker Boehner and therefore didn’t need me to draw attention to the issue. I settled on the under-reported topic that allowed me to tie several stories together as I am fond of doing: Oil and gas exports—one policy change, many benefits (attached and pasted-in-below). I used Secretary of Commerce Penny Pritizker’s WSJ op-ed as my launching point and tied it throughout Oil and gas exports—one policy change, many benefits.

I am pleased with how Oil and gas exports—one policy change, many benefits penciled out (or keyed out). I hope you are too! Please post, pass on, and/or personally enjoy!
Thanks for your interest!

Marita Noon
Executive Director, Energy Makes America Great, inc.
PO Box 52103, Albuquerque, NM 8718

Marita: Oil and gas exports—one policy change, many benefits
“Businesses that sell to foreign markets put more people to work in high-quality jobs, offering more Americans the chance to earn a decent wage,” claimed the Obama administration’s Secretary of Commerce Penny Pritzker in a March 18 Wall Street Journal (WSJ) opinion piece.

She makes a strong case for U.S. exports: “jobs in export-intensive industries pay up to 18% more than jobs not related to exports.” Her premise is: “The U.S. economy ended 2014 on the uptick, and exports added to the momentum.” Noticeably absent is any mention of the potential for “high-quality jobs” and economic “uptick” that would come from the export of America’s abundant oil-and-natural gas resources—something an executive order could expedite; something her office could champion.

Pritzker states: “From large enterprises and multinational corporations to small startups and local manufacturers, an increasing number of businesses are realizing that their customer base is no longer around the corner, but around the world. They understand that 95% of the world’s customers live outside the U.S., and to succeed in the 21st century, they must find a way to reach consumers in ever-expanding markets.” Penny, this is especially true for American energy!

Due to the modern technologies of horizontal drilling and hydraulic fracturing—developed and refined within our borders—the U.S. is producing more oil and natural gas than in decades. So much that we are nearly out of places to store it. We know how to produce it safely and cheaply. But, unlike the airplanes Pritkzer’s co-author Jim McNerney, CEO of Boeing Co., builds, the oil-and-gas industry is prevented from sending its abundance to “foreign markets”—including our allies in Europe who are dependent on energy from a source that uses it as a weapon against them.

The same day WSJ published Pritzker’s piece, it featured a news story announcing: “some of the world’s biggest oil companies are starting to give up” on “hydraulic fracturing wildcatting in Europe, Russia and China.” This, despite the fact: “Eastern European officials who were eager to wean their nations off of Russian gas welcomed the explorers.” It explains: “Wells in Poland and China can cost up to $25 million each, while American wells on average cost about $5 million”—resulting in overseas costs to produce a barrel of shale oil that are higher than what it can be sold for with the current world-wide low prices.

In trade negotiations, the U.S., according to the New York Times (NYT), “typically argues that countries with excess supplies should export them.” We have excess supplies of both crude oil and natural gas that has driven down prices—resulting in “trouble for an industry that has done much to keep the national economy afloat in recent years.” We “should export them”—but we aren’t.

“Why can’t we export crude oil and natural gas?” you might ask—especially when the U.S. can export refined petroleum products such as gasoline, diesel, and jet fuel. The NYT explains: “In 2011, the country pivoted from being the world’s largest importer of petroleum products to becoming one of the leading exporters.” At that point, for the first time in 21 years, refined petroleum became our number one export product—though Pritzker never mentioned that.

The “energy world changed.” But, as NYT points out, exports could soak up the excess production, “but there are still political hurdles.”

For crude oil, the problem is energy policy enacted before the “energy world changed.” Signed into law in 1975, after the 1973 Arab oil embargo shook the U.S. with high oil prices, the goal of the Energy Policy and Conservation Act, according to the International Business Times, was “to stifle the impact of future oil embargos by foreign oil producing countries.” The result was a ban on most U.S. oil exports—though some exceptions can be made and the Commerce Department has recently given export licenses to two companies for particular types of oil. The WSJ reports: “Ten companies have applied for similar ruling to export oil.”

For natural gas exports, the problem is two-fold. Exporting natural gas is not prohibited, but it is not encouraged or made easy. In order to export natural gas, it must be converted into Liquefied Natural Gas (LNG)—which is done at multibillion-dollar facilities with long lead times for permitting and construction that require purchase contracts to back up financing. Many potential customers for U.S. LNG are non-Free Trade Agreement (FTA) countries. Currently, Breaking Energy (BE) reports, “the Department of Energy (DOE) has issued five final and four conditional approvals for LNG export to non-FTA countries.” The Financial Times says about two dozen U.S. LNG export facilities have been proposed with four “already under construction, which have contracts to back up their financing.” Last month, according to Reuters, looking to reduce dependence on supplies from Russia, Lithuania signed an agreement to purchase LNG from the U.S.’s first export terminal: Cheniere Energy Inc.’s Sabine Pass, which is expected to send its first cargoes by the end of this year.

Fortunately, as I predicted in November, there are fixes in the works that, as energy historian Daniel Yergin said, symbolize “a new era in U.S. energy and U.S. energy relations with the rest of the world.”

In January, Senators John Barrasso (R-WY) and Martin Heinrich (D-NM) introduced the LNG Permitting Certainty and Transparency Act to expedite DOE decisions on LNG export applications. It specifically requires a decision on any LNG export application within 45 days after the environmental review document for the project is published. Currently, applications to export natural gas to non-FTA countries require the Secretary of Energy to make a public interest determination which includes a public comment period. Not surprisingly, “environmental groups are lobbying the Obama Administration to veto the bill.” BE states: “The bipartisan bill could garner enough votes to gain a filibuster-proof majority in the Senate.”

A month later, Representative Joe Barton (R-TX), along with 14 co-sponsors, introduced a bill to end the crude oil export ban: HR 702. On March 25, the House Foreign Affairs Committee will meet to debate and vote on the bill—though its passage is not as optimistic as the LNG bill. Bloomberg sees that lawmakers on both sides of the aisle are weary, fearing “that they’d be blamed if gasoline prices climb after the ban is lifted.” Oil producers support lifting the ban, while refiners oppose it.

In October, David Goldwyn, the State Department’s coordinator for international energy affairs in the first Obama administration, said: “The politics are hard.” He added: “When the economics become overwhelming the politics will shift.” The NYT stated: The telltale sign of a glut will be a collapse in the West Texas Intermediate (WTI) price, the principal American oil benchmark, which is currently [October 2014] about $3 below the world Brent price.” It continues, “If the spread cracks open, the economic arguments for free export of domestic crude will probably win the day.”

That day may have come. On March 13, the WSJ editorial board announced: “WTI now trades 20% below the world market price.” Holman Jenkins, who writes the Business World column for the WSJ, says: “Oil producers are already being denied a premium of $12 a barrel by not being allowed to export this oil.” Thomas Tunstall, research director at the University of Texas at San Antonio’s Institute for Economic Development, reported: “Before the rapid increase in U.S. oil and gas production, WTI historically sold at a slight premium to Brent, typically about $1-$3 per barrel.”

“U.S. pump prices are mainly tied to the price of Brent crude, which is freely traded on the world market and is higher than it might otherwise be because of the ban on U.S. exports,” explains the WSJ. “If U.S. producers were allowed to compete globally, prices of Brent and WTI would converge over time, and U.S. gasoline prices would come down, all things being equal.”

Now, the “industry that has done much to keep the national economy afloat” is in trouble. There have been some 74,000 layoffs in the U.S. oil patch since November.

If Congress could muster up the political will to lift the arcane oil export ban, the U.S. could emerge as a major world exporter, which according to the NYT, would result in the “return to a status that helped make the country a great power in the first half of the 20th century.” Yergin adds: “Economically, it means that money that was flowing out of the United States into sovereign wealth funds and treasuries around the world will now stay in the U.S. and be invested in the U.S., creating jobs. It doesn’t change everything, but it certainly provides a new dimension to U.S. influence in the world.”

Pritzker brags that the Commerce Department has “worked with the private sector to help businesses reach customers overseas; … to open new markets for U.S. goods and services; to reform the export-control process; and to overcome barriers to entry.” For U.S. oil-and-gas producers the biggest barrier to reaching customers overseas and opening up new markets is our own energy policy—something the administration and Congress have taken steps to fix. According to Bloomberg, if they knew the public was with them, lawmakers could easily save American jobs and investment, lower gasoline prices, help balance our trade deficit, aid our allies, and increase U.S. influence in the world.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.

Marita Noon: Obama kicking again

Obama loves to sneak things under the door when few are watching.  Ms. Noon reports on his recent efforts involving the oil and gas industries.  As usual her reporting is spot-on.

Marita says:

Happy New Year!

Now the holidays are officially over. It is time to get back to work. Though I wrote this week’s column (attached and pasted-in-below): Obama Administration kicks the oil-and-gas industry while it is down, while I was still a bit into holiday mode—which means it is shorter than my usual. But I think it is good and complete. I hope you agree! The news about the new regulations the Obama Administration is introducing on the oil-and-gas industry came out during the holidays and likely was overlooked by most. I believe the news is worthy of additional attention. The new regulations also give the new GOP controlled Congress increased rationale for limiting the EPA’s aggressive power.

Please help me spread the work by posting, passing on, and/or personally enjoying Obama Administration kicks the oil-and-gas industry while it is down.

Marita Noon

Marita Noon

Marita Noon

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

For immediate release: January 5, 2014.

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

Contact: 505.239.8998, marita@responsiblenergy.org

Obama Administration kicks the oil-and-gas industry while it is down

For the past six years, the oil and gas industry has served as a savior to the Obama presidency by providing the near-lone bright spot in economic growth. Increased U.S. oil-and-gas production has created millions of well-paying jobs and given us a new energy security. The president often peppers his speeches with braggadocio talk about our abundant supplies and decreased dependence on foreign oil.

So now that the economic powerhouse faces hard times, how does the Administration show its appreciation for the oil-and-gas industry boon to the economy over the past six years?

By introducing a series of regulations—at least nine in total, according to the Wall Street journal (WSJ)—that will put the brakes on the US energy boom through higher operating costs and fewer incentives to drill on public lands.

WSJ states: “Mr. Obama and his environmental backers say new regulations are needed to address the impacts of the surge in oil and gas drilling.”

U.S. oil production, according to the Financial Times: “caught Saudi Arabia by surprise.” The kingdom sees that US shale and Canadian oil-sand development “encroached on OPEC’s market share” and has responded with a challenge to high-cost sources of production by upping its output—adding to the global oil glut and, therefore, dropping prices.

Most oil-market watchers expect temporary low-priced oil, with prediction of an increase in the second half of 2015, and some saying 2016. North Dakota Petroleum Council President Ron Ness believes “We’re in an energy war.” He sees “the price slump could last 16 months or even one to two years as U.S. supply stays strong, global demand remains weak and OPEC continues to challenge U.S. production.” However, Ibrahim al-Assaf, Saudi Arabia’s finance minister, recently said: “We have the ability to endure low oil prices over the medium term of up to five years, even if it means delving into fiscal reserves to cover a large deficit.”

While no one knows how long the low-price scenario will last—geopolitical risk is still a factor.

Many oil companies are already re-evaluating exploration, reining in costs, and cutting jobs and/or wages. “In the low price circumstance like today,” Jean-Marie Guillermou, the Asian head of the French oil giant Total, explained: “you do the strict minimum required.”

In December, the WSJ reported: “Some North American companies have said they plan to cut their capital spending next year and dial back on exploring for new oil.” It quotes Tim Dove, President and COO for Pioneer Natural Resources Co.: “We are seeking cost reductions from all our suppliers.”

Last month, Enbridge Energy Partners said: “it has laid off some workers in the Houston area”—which the Houston Chronicle (HC) on December 12 called: “the latest in a string of energy companies to announce cutbacks.” The HC continued: “Other key energy companies have also announced layoffs in recent days as oil tumbles to its lowest price in years. Halliburton on Thursday said it would slash 1,000 jobs in the Eastern Hemisphere as part of a $75 million restructuring. BP on Wednesday revealed plans to accelerate job cuts and pare back its oil production business amid crumbling oil prices.” Halliburton said: “we believe these job eliminations are necessary in order to work through this market environment.”

Civeo, a lodging and workforce accommodation company for the oil-and-gas industry has cut 30 percent of its Canadian workforce and 45 percent of its U.S. workforce. President and CEO Bradley Dodson said: “As it became evident during the fourth quarter that capital spending budgets among the major oil companies were going to be cut, we began taking steps to reduce marketed room capacity, control costs and curtail discretionary capital expenditures.”

I have warned the industry that while they have remained relatively unscathed by harsh regulations—such as those placed on electricity generation—their time would come. Now, it has arrived. The WSJ concurs: “In its first six years, the administration released very few regulations directly affecting the oil-and-gas industry and instead rolled out several significant rules aimed at cutting air pollution from the coal and electric-utility sectors.”

According to the WSJ: “Some of the rules have been in the works for months or even years.” But that doesn’t mean the administration should introduce them now when the industry is already down—after all, the administration delayed Obamacare mandates due to the negative impact on jobs and the economy.

Greg Guidry, executive vice president at Shell, recently said that he doesn’t want the EPA to “impose unnecessary costs and burden on an industry challenged now by a sustained low-price environment.”

Different from Obama, Canada’s Prime Minister Stephen Harper gets it. Under pressure from the environmental lobby to increase regulations on the oil-and-gas industry, he, during a question session on the floor of the House of Commons in December, said: “Under the current circumstances of the oil and gas sector, it would be crazy—it would be crazy economic policy—to do unilateral penalties on that sector.” He added: “We are not going to kill jobs and we are not going to impose a carbon tax.”

Introducing the new rules now kick the industry while it is down and shows that President Obama either doesn’t get it, or he cares more about burnishing his environmental legacy than he does about American jobs and economic growth.

(A version of this content was originally published at Breitbart.com)

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.

Spoken like a true Obama

Wreckord3WebCR-12_30_14

Stuck Between ObamaCare And A Republican Congress

If you are a fan of ObamaCare, you can keep it, if you can afford it. If you like the Republican congress that just helped insure amnesty and ObamaCare is with us, at least for the short-run, you are stuck with them for at least two or more years.

If you read the article following the link pasted below, you may decide your Ocare is not be so wonderful. I’m sad to say, “Merry Christmas, anyway.” No really; “Merry Christmas,” and follow the link below for your lump of coal.

The article you will access comes from Hillsdale College‘s house organ, Imprimis. You’ll need to click twice.

Obamacare_2014_11

 

Mr. Ego Head and His “I,” “Me,” & “My.”

From CNS.COM:

‘I,’ ‘Me,’ ‘My’—Obama Uses First Person Singular 91 Times in Speech on Immigration

November 27, 2014 – 10:52 PM

Coming from chicago

Flap of the cap to RebelPundit copyright owner of video

http://www.youtube.com/watch?v=BUSRZo1BE5o

Click on the link just above for the featured video

 

 

 

Marita Noon: Obama’s Nonsense SOTU 2014

Marita pulls truth from Obama’s nonsense.

Link to: Obama’s SOTU: Where are the opportunities?

Greetings!

Last night we saw Denver’s disappointing performance. Last week President Obama had much the same experience. Even his fans have been critical. In my column this week, Obama’s SOTU: Where are the opportunities? (attached and pasted-in-below), I dissect the SOTU looking at the energy implications and add in relevant data and observations. As I am fond of doing, I used the SOTU to connect some dots and introduce some information of which most people are unaware. I think it is a good piece—though it’s response on Townhall has been dismal. For those of you who post my work, I hope it does better for you.

Thanks for posting, passing on and/or personally enjoying Obama’s SOTU: Where are the opportunities?

Marita Noon, Executive Director

Energy Makes America Great, Inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

For immediate release: February 3, 2014

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

Contact: 505.239.8998, marita@responsiblenergy.org

Words: 1246

Obama’s SOTU: Where are the opportunities?

The State of The Union Address (SOTU) reminded me of the idiom, “on one hand, on the other hand.”

On one hand, President Obama extoled efforts to increase fuel efficiency to “help America wean itself off foreign oil.” He touted the new reality of “more oil produced at home than we buy from the rest of the world, the first time that’s happened in nearly twenty years.” On the other hand, he promised to use his “authority to protect more of our pristine federal lands for future generations”—which is code for more national monuments and endangered species designations that will lock up federal lands from productive use.   

 

Electricity and extreme poverty

Concern was expressed for Americans who “are working more than ever just to get by.” He wants to help Africans “double access to electricity and help end extreme poverty.” But his policies are limiting access to electricity in America and raising the cost (20% in the past 6 years). Higher-cost energy is the most punitive to those struggling “just to get by.”

The “Energy Cost Impacts on American Families, 2001-2013” report found: “Lower-income families are more vulnerable to energy costs than higher-income families because energy represents a larger portion of their household budgets, reducing the amount of income that can be spent on food, housing, health care, and other necessities. Nearly one-third of U.S. households had gross annual incomes less than $30,000 in 2011. Energy costs accounted for an average of 27% of their family budgets, before taking into account any energy assistance.” The report shows the 27% is an 11% increase over the 2001 energy cost impact. For households with an after-tax income higher than $50,000, the 2001 percentage was 5 and the 2013: 9—a 4% increase. For low- and middle-income families, energy costs are now consuming a portion of after-tax household income comparable to that traditionally spent on major categories such as housing, food, and health care—with black, Hispanic and senior households being hit especially hard.

 

All of the above

President Obama took credit for his “‘all of the above’ energy strategy” which, he claims has “moved America closer to energy independence than we have been in decades.” And, regarding natural gas, he says that he’ll “cut red tape to help states get those factories built and put folks to work.” POTUS proclaimed: “I’ll act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible.” The Department of Energy has dozens of permits for liquefied natural gas (LNG) export facilities languishing on some bureaucrat’s desk. One of the few approved terminals: Cheniere Energy’s Sabine Pass LNG Terminal Project in Cameron Parish Louisiana, created more than 2000 jobs in 2013 and looks to create another 2000 jobs in 2014. President Obama, please act on your own here. Cut the red tape and slash the bureaucracy. Let’s get those permits issued.

A January 16, 2013, letter sent to the White House from 18 environmental groups, whose opinions seem to be held in such high regard by the Obama administration, challenged the president’s approach—calling “all of the above” a “compromise that future generations can’t afford.” The letter states: “We believe that continued reliance on an ‘all of the above’ energy strategy would be fundamentally at odds with your goal of cutting carbon pollution and would undermine our nation’s capacity to respond to the threat of climate disruption.” They claim: “an ‘all of the above’ approach that places virtually no limits on whether, when, where or how fossil fuels are extracted ignores the impacts of carbon-intense fuels and is wrong for America’s future.” The groups see it as a threat to “our most sensitive lands.” Despite an abundance of evidence to the contrary, they posit: “clean energy and solutions that have already begun to replace fossil fuels” save Americans money. The letter concludes: “We believe that a climate impact lens should be applied to all decisions regarding new fossil fuel development, and urge that a ‘carbon-reducing clean energy’ strategy rather than an ‘all of the above’ strategy become the operative paradigm for your administration’s energy decisions.”

 

Climate Change

As if an executive decree could make it so, he announced: “the debate is settled. Climate change is a fact.” True, climate change is a fact—the climate changes, always has, always will. But the debate as to what causes it or what should be done about it is far from “settled.” “We have to act with more urgency because a changing climate is already harming western communities struggling with drought and coastal cities dealing with floods,” he announced. However, droughts and floods have been going on throughout history when CO2 emissions (which he calls “carbon pollution”) were much lower than today. His solution? “The shift to a cleaner economy,” which gobbles up taxpayer dollars in crony corruption (more than 30 such projects have gone bust since the 2009 stimulus bill released nearly $100 billion for “clean energy”).

A story in the January 25, 2013, Economist titled “European climate policy: worse than useless” starts: “Since climate change was identified as a serious threat to the planet, Europe has been in the vanguard of the effort to mitigate it.” Europe has been the global leader in climate change policies that are, according to The Economist: “dysfunctional.” The “worse than useless” piece states: “Had Europe’s policies worked better, other countries might have been more inclined to emulate the leaders in the field.” It points out that Europe’s “largest source of renewable energy” is wood.

A companion article in the same issue of The Economist, “Europe’s energy woes,” states: “Europeans are more concerned with the cost of climate-change policies than with their benefits. European industries pay three to four times more for gas, and over twice as much for electricity, as American ones.” Calling the EU “a lone front-runner without followers,” the article points out: “it is hard to sell the idea of higher energy prices, particularly when the rest of the world is doing too little to cut greenhouse gases.” Rather than learning from Europe, like a lemming, President Obama apparently wants to lead America off the same “useless” cliff.

 

Minimum wage

He believes that the minimum wage needs to be increased to $10.10 an hour. He wants to “Give America a raise.” Yet, in North Dakota’s boom economy, workers at Walmart and McDonalds are paid in the teens—without government meddling. The best wages are paid with a fully employed workforce. The Keystone XL pipeline would provide thousands of good paying (often union) jobs, but, it was never mentioned in the 2014 SOTU. (By the way, the long-awaited report on Keystone was released on Friday. It found that “the project would have a minimal impact on the environment.” Politico calls the report: “a major disappointment to climate activists.”)

President Obama, you are correct when you say, “opportunity is who we are,” but your policies hurt the poor and block job creation. My question for you echoes what you asked early in the SOTU address: “The question for everyone in this chamber, running through every decision we make this year, is whether we are going to help or hinder this progress.” Are you going to help Americans or hinder our opportunities? This question should run through every decision you make in 2014.

On one hand, you say you want to help. On the other hand, everything you do hinders.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

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Student Receives Lecture On Behavior

We first posted this in 2009.  Since Congress will not straighten him out, perhaps these two old fashioned detectives can get the job accomplished.

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Loose Lips Might Sink Ships

"Loose lips might sink ships" - NARA...

“Loose lips might sink ships” – NARA – 513543 (Photo credit: Wikipedia)

There is a saying in our military branches which states, “Loose lips sink ships,”  or “Loose lips might sink ships.” Meaning careless talk about military matters can cost damage to our military members, their equipment and their maneuvers.

The same can can apply to politics and political campaigns.  In other words; if you say it … you own it.  Such is the case with the three politicians presented below.  The videos  are sponsored by Americans For Prosperity:

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