Marita: What’s up with oil and gas prices

 

Greetings!

 

Wow! It’s been a rough ride in the markets the past few days. While I can’t pontificate on that, I can answer a related question that people have asked me—which became the theme for this week’s column: Oil’s down, gasoline isn’t. What’s up? (attached and pasted-in-below). While not as political as much of what I write, and more geared to the consumer, those who’ve read the review draft have been very supportive. My go-to guy on energy economics said: “If this doesn’t get you a call from FOX Business, nothing ever will. Fantastic article and very informative, you don’t need anything from me. It stands on its own!” Even my proofreader commented: “I’ve wondered the same thing. Thanks for an easy to understand explanation!” I hope Oil’s down, gasoline isn’t. What’s up? Helps you understand–or explain the situation to someone else.

 

Last week, just after we sent my weekly column out, I became aware that a local newspaper had published a letter-to-the-editor that I’d written weeks ago in response to a front page story someone had shared with me. I’d about given up that they’d ever publish it and was disappointed as I’d put a lot of effort into crafting my response—even consulting with experts to be sure everything was accurate. Here’s the original article: Tech climate researcher appears on ‘700 Club’–and my response: Use sound mind to evaluate climate alarms. I hope you’ll check them both out. Maybe even add your own comments!

 

For those of you who publish my work, one more thing: I have new headshots (attached). I couldn’t decide which I liked better so I bought them both. Please exchange your preferred shot for the older one you’ve been using.

 

Thanks for posting, passing on, and/or personally enjoying Oil’s down, gasoline isn’t. What’s up?

Marita Noon 2015 Turquiose

Marita Noon

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

 

 

For immediate release. August 24, 2015

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

Contact: 505.239.8998, marita@responsiblenergy.org

Words: 901

 

 

Oil’s down, gasoline isn’t. What’s up?

A little more than a year ago, oil prices were above $100 a barrel. The national average for gasoline was in the $3.50 range. In late spring, oil was $60ish and the national average for gas was around $2.70. The price of a barrel of oil has plunged to $40 and below—yet, prices at the pump are just slightly less than they were when oil was almost double what it is today.

 

Oil and gasoline prices usually travel up or down in sync. But a few weeks ago the trend lines crossed and oil continued the sharp decline while gasoline has stayed steady—even increasing.

 

Oil’s down, gasoline isn’t. Consumers are wondering: “What’s up?”

 

Even Congress is grilling refiners over the disparity.

 

While, like most markets, the answer is complicated, there are some simple responses that even Congress should be able to understand. The short explanation is “refineries”—but there’s more to that and some other components, too.

 

Within the U.S. exists approximately 20 percent of the world’s refining capacity. Fuel News explains that “on a perfect day,” these domestic facilities could process more than 18 million barrels of crude oil. But due, in large part, to an anti-fossil fuel attitude, it is virtually impossible to get a new refinery permitted in America. Most refineries today are old—the newest major one was completed in 1977. Most are at least 40 years old and some are more than 100. Despite signs of aging, refining capacity has continued to grow. Instead of producing at 70 percent capacity, as they were as little as a decade ago, most now run at 90 percent. They’ve become Rube Goldberg contraptions that have been modified, added on to, and upgraded. The system is strained.

 

To keep operating, these mature refineries need regular maintenance—usually done on the shoulders of the busy driving seasons and when systems need to be reconfigured for the different winter and summer blends. Even then, things break. Sometimes a quick repair can keep it up and running until the scheduled maintenance—known as “turnaround.” Sometimes, not. Fixing the equipment failures on the aging facilities can take weeks.

 

This year, several unexpected maintenance issues happened in the spring. Other refineries worked overtime to make up the shortage. That, plus low crude prices, means that many refiners didn’t shutdown for the usual spring turnaround. Fuel News notes, potential profit encouraged refiners to “get while the getting’s good.”

 

This pedal-to-the-metal approach is catching up with the sagging systems. On August 8, BP’s Whiting, IN, refinery, the largest supplier of gasoline in the Midwest, faced an unplanned shutdown due to a leak and possible fire hazard in its Pipestill 12 distillation unit—which processes about 40 percent of its 413,000 barrel per day capacity.

 

The closure of the largest of Whiting’s three units caused an immediate jump in gasoline prices in the Midwest. Stockpiles were drawn down to fill demand during summer’s peak driving season. Gasoline has been moved—via pipeline, truck, and train—from other parts of the country to balance out supply. So, while the biggest price increase was in states like Minnesota, Michigan, and Illinois, prices raised nationwide beginning on August 11.

 

Meanwhile, because the Whiting plant wasn’t sucking up crude oil, its supplies grew and drove crude prices down further—hitting a six-year low. The Financial Times reports: “An outage at Whiting’s main crude distillation unit could add almost 1m [million] barrels to Cushing [The OK oil trading and storage center] every four days as long as it is out.”

 

Making matters worse, another Midwest refinery, Marathon’s Robinson, IL, 212,000 barrels per day facility is down for repairs that are expected to take two months.

 

Others smaller outages include Philadelphia Energy Solutions and the Coffeyville Resources’ refinery in Kansas. BloombergBusiness states: “As many as seven other Midwest refineries could shut units for extended time this fall.” Though, other reports indicate that some of the planned maintenance may be put off due to profit margins that are at a seven-year high.

 

Adding to the price increases due to refinery issues, are two other factors—both having to do with the calendar.

 

First, we are almost to Labor Day, which is considered the end of the summer driving season. It is when families make that one last trip to the lake or to visit grandma—which always causes a jump in demand that tightens supplies. This year, with two big refineries down, the usual spike could well be exacerbated.

 

The other is hurricane season. While we are just past its peak, we’ve only had one hurricane so far: Hurricane Danny—which last week was barreling toward the Northern Caribbean islands, with potential to hit the refinery-rich Gulf Coast. On Friday August 21, it moved from Tropical Storm Danny to Category 3 Hurricane status. It has since weakened, but its presence caused risk and supply concerns.

 

High summer-driving demands and unscheduled refinery repairs have combined to reduce supply of gasoline, and raise the price, thus the need for crude oil—especially in the Midwest—is down. Crude oil inventories at the Cushing hub continue to increase and add to the current oversupply and slide in oil prices.

 

While there’s some other contributing factors, the current mix of supply and demand explains: “what’s up?” The lack of new refineries punishes the whole system. Gasoline prices are up—hurting consumers. Crude prices are down—hurting producers.

 

 

 

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. Follow her @EnergyRabbit.

 

 

 

 

 

 

Marita: You colored the Animas … Now leave our souls alone

As Marita reports, the idiots that colored the Animas (soul in Spanish) are intent on messing with our backyard in the very near future.  Have a peek at Marita.s latest:

Greetings!

Being based in New Mexico,  the obvious thing for me to address this week was the EPA’s disaster at the Gold King Mine. However, you know, I like to address stories that are underreported and the orange river got plenty of eyeballs. While I was making my decision on what to cover this week, a source sent me several links addressing WOTUS—which I haven’t written on at all. Upon investigation, I was surprised to learn that the deadline for the implementation of this new rule is nearly upon us—and it has big implications for America’s energy development. I thought: “If I don’t know about this, chances are high, my reader’s don’t either.”

While I was heading away from writing on the spill and toward WOTUS. I received a phone call from one of my mentors: Paul Driessen. He was writing on the spill and had some New Mexico questions for me. I was able to share some of my thoughts with him. Once I knew he was addressing the issues (including some of my ideas), I easily made the decision to go with WOTUS. Driessen did a great job with the topic. I hope you will check it out! I sent him my WOTUS draft and he liked it too: “This is an excellent in-depth article—maybe the best and most detailed analysis I’ve seen so far. Thank you for your hard work in bringing all this to my and all of our attention.”

Yes, The Agency that contaminated the Animas River is about to start regulating water that may be in your backyard (attached and pasted-in-below), is a bit of a “detailed analysis,” but I think it is easy enough for the average reader to get the hard message: The EPA is coming soon to a backyard near you. WOTUS is a major expansion of power and intrusion on private property rights.

 

Please post, pass on, and/or personally enjoy The Agency that contaminated the Animas River is about to start regulating water that may be in your backyard.

Thanks for your interest!

Marita Noon

marita Noon 1

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

Contact: 505.239.8998, marita@responsiblenergy.org

The Agency that contaminated the Animas River is about to start regulating water that may be in your backyard

Unless a federal judge issues a preliminary injunction, the definition of the “Waters of the U.S.” will change on August 28—giving the Environmental Protection Agency (EPA) the authority to regulate the water in your backyard (even the water that might be in your backyard due to a heavy rain). Even, according to West Virginia Attorney General Patrick Morrisey: “any area where agencies believe water may flow once every 100 years.”

 

Thirty-one states, in four districts, have filed motions with the federal courts to block the EPA and the U.S. Army Corps of Engineers (ACOE) from beginning to enforce the new “Waters of the U.S.” rule (WOTUS), which represents a new interpretation of the Clean Water Act (CWA). The Federal Register calls the new rule “definitional” and states: “The rule will ensure protection for the nation’s public health and aquatic resources, and increase CWA program predictability and consistency by clarifying the scope of ‘waters of the United States’ protected under the Act.”

 

WOTUS was published in the Federal Register on June 29 and will become effective on August 28.

 

The interpretation is important. The CWA used to apply to “navigable waters,” which now, as Texas Attorney General Ken Paxton recently said: “include almost any piece of land that gets wet and puddles.”

 

Morrisey calls the rule “regulatory lunacy.” He’s hosted town-hall meetings where he’s heard from citizens concerned that “this rule would infringe on their property rights and force them to pay thousands of dollars to do basic work around their homes, farms and workplaces.” Morrisey adds: “This rule expands a scheme whereby property owners have to ask the EPA for permission to do yardwork.” He claims: “Failure to comply with the new regulations could result in fines of up to $37,500 a day.”

 

While the word “navigable” hasn’t been removed from CWA—as that would require an act of Congress—the EPA has expanded that definition to include any water that has a “significant nexus” with navigable waters. This is where water in your back yard could be impacted. Regarding the final rule, Paxton explains: it “is so broad and open to interpretation that everything from ditches and dry creek beds, to gullies, to isolated ponds formed after a big rain could be considered a ‘water of the United States.’”

 

The CWA’s single word, “navigable,” has, for decades, been contentious with those who want to expand government control and limit industrial activity such as oil-and-gas development, mining, ranching, and farming. Former Representative Jim Oberstar (D-MN) fought hard to have the word navigable removed from the CWA and to expand its control to any waters. Despite repeated bites at the apple, prior Congresses refused to pass his legislation.

 

EPA, once again, uses rulemaking to do what its proponents couldn’t do through legislation—a hallmark of the Obama administration.

 

A July 28, 2015, a letter signed by officials from 31 states, sent to EPA and ACOE by North Dakota Assistant Attorney General Margaret Olson, requesting a minimum nine-month extension of the WOTUS effective date, states: “the new regulation will also have a significant impact on agricultural, homebuilding, oil and gas and mining operations as they try to navigate between established state regulatory programs and the EPA’s and ACOE’s new burdensome and conflicting federal requirements. This uncertainty especially threatens those states that rely on revenues from industrial development to fund a wide variety of state programs for the benefit of their respective citizens.”

 

On August 11, thirteen states—including oil-and-gas “heavyweights,” as Natural Gas Intelligence (NGI) calls them, Alaska, Colorado, North Dakota, and New Mexico—became the latest to ask a federal judge to block the controversial rule from taking effect. The states have asked for a hearing on the motion during the week of August 24. NGI states: “The oil and gas industry is opposed to the regulations because they believe it could stifle development.” A statement from the Independent Petroleum Association of America supports this assertion: “The 297-page rulemaking would require a federal permit for any activity that results in a discharge into any body of water covered by the new definition of ‘waters of the United States,’ including small streams and wetlands.”

 

The Texas Railroad Commission, which overseas oil-and-gas activity in the state joined the multi-agency, multi-state lawsuit because “the rule redefines navigable waters as used in the CWA, allowing the EPA and ACOE to regulate private land anywhere in the United States where water can conceivably flow—even dry creek beds and manmade ditches. The Texas economy is a proud beneficiary of shale drilling, and some of the water used in this process would move under the jurisdiction of the EPA with the implementation of this rule change.”

 

Luke Popovich, spokesman for the National Mining Association told me: “This rule embodies all that is wrong with EPA’s overall regulatory approach: its costs will far outweigh any benefits, it violates both the spirit and intent of Congress in the Clean Water Act, and it has been sold as a benign attempt to add ‘clarity’ and ‘certainty’ to the marketplace when in fact it only clarifies and makes certain the threat EPA poses to a wide swath of the economy—from mining and farming to home building and construction.”

 

Jason Bostic, Vice President of the West Virginia Coal Association, adds: “It’s no longer about water or discharges. It’s about regulating the landscape.”

 

The lawsuit filed in the U.S. District Court for the Southern District of Georgia filed on June 28, on behalf of 9 Southeastern states (now 11, including Indiana and North Carolina), received an expedited briefing. Oral arguments were heard on August 12. Morrisey’s office told me they are hopeful for a decision by August 28.

 

North Dakota’s Attorney General Wayne Stenehjem believes the States are entitled to an injunction “because implementation of the Rule will cause immediate and irreparable harm and deprive the States of the opportunity to present the merits of their case prior to this unprecedented jurisdictional over-reach taking effect.”

 

In addition to the 31 states, on July 2, a coalition of a dozen industry groups—from agriculture to manufacturers to mining—filed a complaint against the EPA and ACOE over the WOTUS rule.

 

The goal of the litigations is to delay or defeat the regulations before they go into effect.

 

Morrisey, in a statement, explains: “While the Clean Water Act gave the EPA and Corps authority to regulate ‘navigable waters’—defined as ‘waters of the United States’—Congress made sure that states would retain their constitutional, sovereign responsibility over non-navigable, intrastate lands and waters. The U.S. Supreme Court has twice rejected the agencies’ attempts to expand their authority (in Solid Waste Agency of Northern Cook County v. Army Corps of Engineers and Rapanos v. United States). However, this latest rule written by the two administrative agencies gives them virtually limitless power over these waters.”

 

Rules like WOTUS, and the recently announced Clean Power Plan, are lauded by environmental groups which are the likely impetus for the regulatory overreach. Senator David Vitter (R-LA), Chairman of the Small Business and Entrepreneurship Committee, sent a letter to EPA Administrator Gina McCarthy regarding “reports that the Agency inappropriately coordinated with outside organizations during the WOTUS rulemaking process.” His statement on the matter offers this reprimand: “For decades, the Department of Justice has recommended that federal agencies do not lobby the general public to build political support for policies promoted by the Executive Branch. In 2014, the EPA embarked on an unprecedented public relations campaign, which may have violated anti-lobbying laws, to promote the WOTUS rule by working closely with outside organizations including the Sierra Club and Organizing for Action, which is closely affiliated with President Obama’s 2012 reelection campaign.”

 

Apparently, the EPA—which allowed millions of gallons of toxic waste to spill into the Animas River—and its “far-left environmental allies,” believe the agency can do a better job of protecting waterways, streams and wetlands than the states. A wide majority of states and industry disagree. The coalition hopes the lawsuits—which are expected to be combined into one—will overturn the rule and prove that the EPA has gone beyond its jurisdiction with this expansion of regulatory authority.

 

 

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. Follow her @EnergyRabbit.

 

Tales of the Texas Rangers

This is the second episode of, Tales of the Texas Rangers.  I hope you will enjoy the complete series.  I have posted this and will post others to follow for a friend that says he knows everything Texas.  I doubt the veracity of his assertion because Texas is a “whole nother state,” as we all have been told at least two times.

Try the first link below for one of the show’s logo.  Then try the second link for the show itself.

Tales of the Texas Rangers

The White Elephant

Tales of the Texas Rangers

This is the audition for, Tales of the Texas Rangers.  I hope you will enjoy the complete series.  I have posted this and will post others to follow for a friend that says he knows everything Texas.  Which I doubt, because it is a “whole nother state,” as we all have been told at least two times.

Tales of the Texas Rangers

 Just click on the starter triangle below:

_

Marita: Iran will smother us with crude oil

I believe Marita says what the title states and much more.  Essentially she has reinforced what is generally known by any thinking person.

Thanks to Obama and our Secretary of State, we are going to be wearing nettle clothing.  We will suffer the sticking power of each nettle of thousands every time an Iranian barrel of oil touches our shore to be paid for with bucks manufactured out of thin air by this silly administration.

We know buying oil from Iran won’t come close to being the end of our stabbing torture because we have in Iran, an enemy government desiring nothing less than our death as a people and a nation.

Marita says it better than anyone I can think of … Let’s hear it from her:

 

Greetings!

Last week I told you my column on Mexico’s energy reforms was probably of more interest to those in the industry than the general public and that it lacked my usual political snap. Well, I’ve made up for it this week. Yes, as always, I am addressing energy. But the bigger picture is political.

I had fun writing Obama: Iranian oil, good. Canadian oil, bad. American oil, bad. (attached and pasted-in-below). I hope you can tell. Please note: the reference to Jeff Foxworthy is about a parody done in his style, not something he has released—but it was just so appropriate, I couldn’t resist incorporating the idea.

With everything I write, I hope to make a difference in the national dialogue. But, somehow, I feel even more strongly about the message of Obama: Iranian oil, good. Canadian oil, bad. American oil, bad. I send it to you today with an extra prayer that you’ll spread this message far and wide. Please pray with me that the media/talk show hosts pick up on this message and that I’ll be busy with radio interviews on this topic.

Please post, pass on and/or personally enjoy Obama: Iranian oil, good. Canadian oil, bad. American oil, bad.

marita Noon 1

Marita Noon

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

 

Obama: Iranian oil, good. Canadian oil, bad. American oil, bad.

President Obama’s confusing approach to energy encourages our enemies who shout “death to America,” while penalizing our closest allies and even our own job creators.

Iran’s participation in the nuclear negotiations that have slogged on for months, have now, ultimately, netted a deal that will allow Iran to export its oil—which is the only reason they came to the table (they surely are not interested in burnishing Obama’s legacy). International sanctions have, since 2011, cut Iran’s oil exports in half and severely damaged its economy. Iran, it is estimated, currently has more than 50 million barrels of oil in storage on 28 tankers at sea—part of a months’ long build up.

It is widely reported that, due to aging infrastructure and saturated storage, it will take Iran months to bring its production back up to pre-sanction levels. The millions of barrels of oil parked offshore are indicative of their eagerness to increase exports. Once the sanctions are lifted—if Congress approves the terms of the deal, Iran wants to be ready to move its oil. In fact, even before the sanctions have been lifted, Iran is already moving some of its “floating storage.”

On July 17, the Financial Times (FT) reported: “The departure of a giant Iranian supertanker from the flotilla of vessels storing oil off the country’s coast has triggered speculation Tehran is moving to ramp up its crude exports.” The Starla, “a 2 million barrel vessel,” set sail—moving the oil closer to customers in Asia. In April, another tanker, Happiness, sailed from Iran to China, where, since June, it has parked off the port City of Dalian.

Starla is the first vessel storing crude offshore to sail after the nuclear deal was reached—which is, according to the FT: “signaling its looming return to the oil market.” Reuters calls its departure: “a milestone following a months-long build-up of idling crude tankers.” Analysts at Macquarie Capital, apparently think the oil on Starla will not be parked, waiting for sanctions to be lifted. A research note, states: Iran is “likely assuming that either a small increase in exports will not undermine the historic accord reached or that no one will notice.” We noticed.

Already, before sanctions are lifted, global oil prices are feeling the pressure of Iran’s increased exports. Since the deal’s been announced, crude prices have lost almost all of the recent gains.

While the Obama Administration’s actions are allowing Iran, which hates America, to boost its economy by increasing its oil exports, they are hurting our closest ally but putting delay after delay in front of the Keystone pipeline—which would help Canada export its oil.

After six-and-a-half years of kicking the can down the road, and despite widespread support and positive reports, the Keystone pipeline is no closer to construction than it was on the day the application was submitted. It is obvious President Obama doesn’t like the project, which will create tens of thousands of jobs, according to his own State Department. Back in February, he vetoed the bill Congress sent him that would have authorized construction, saying that it circumvented “longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.” At the time, Senate Majority Leader Mitch McConnell (R-KY) said: “Congress won’t stop pursuing good ideas, including this one.” But he was not able to gather enough votes to override the veto and, since then, we’ve heard nothing about the Keystone pipeline. In Washington, DC, silence on an important issue like Keystone isn’t always golden.

There is no pending legislation on Keystone, but the permit application has still not been approved or rejected. I had hoped that the unions, who want the jobs Keystone would provide, would be able to pressure enough Democrats to support the project, to push a bill over the veto-proof line. But that didn’t happen. For months, Keystone has been silently dangling. But that may be about to change.

Reliable sources tell me that Obama is prepared to, finally, announce his decision on Keystone. According to the well-sourced, and verified, rumor, he is going to say: “No”—probably just before or after the Labor Day holiday. He’ll conclude that it is not in the “national interest.” So helping our ally grow its economy and export its oil is not in our national interest but helping our sworn enemy do the same, is? It’s like the “Channeling Jeff Foxworthy” parody states: we just “might live in a country founded by geniuses and run by idiots.”

Speaking of economic growth and oil exports, what about here at home, in the good old U.S. of A.? Senator Lisa Murkowski (R-AK) questions the deal that allows Iran to export its oil, while we cannot: “As Congress begins its 60-day review of President Obama’s nuclear deal with Iran, there are plenty of reasons to be skeptical about whether it is in our nation’s—and the world’s—best interests. Not least among them are the underexplored, but potentially significant consequences the deal will hold for American energy producers.”

Most people don’t realize that the U.S. is, as Murkowski says in her op-ed, “the only advanced nation that generally prohibits oil exports.” Due to decades-old policy, born in a different energy era, American oil producers are prohibited from exporting crude oil because it was perceived to be in “short supply.” (Note: refined petroleum product, such as gasoline and diesel, can be exported and is our number one export. We are also about ready to ship our major first tanker full of natural gas headed for Europe.) Today, when it comes to crude oil, our cup runneth over. The U.S. is now the world’s largest producer or oil and gas. Rather than short supply, we have an over-supply—so much so that American crude oil (WTI) is sold at a discount over the global market (Brent). This disadvantages U.S. producers but doesn’t benefit consumers because gasoline is sold based on the higher-priced Brent.

Murkowski argues that it is time to lift the 40-year-old oil export ban. She’s introduced bipartisan legislation that would do just that, but, if he was so inclined, President Obama could reverse the policy himself—if he found it to be in the national interest. And how could it not be?

Allowing U.S. crude oil into the world market enhances global energy security, as it would be less impacted by tensions in the Middle East. Our allies in Europe and Asia would have access to supply from a friendly and reliable source—remember the Arab Oil Embargo crippled Japan’s economy because it had no domestic supply and was overly reliant on Arab sources. Lifting the oil export ban would allow U.S. crude to be sold at the true market price, not the discounted rate, which would help stem the job losses currently being felt throughout the oil patch due to the low price of oil and exacerbated by the drop in the price of crude triggered by the Iran deal.

So, the Obama Administration is lobbying Congress to lift the sanctions on Iran, a country that views America as The Great Satan. Lifting sanctions would allow Iran to resume full oil export capabilities and boost its economy—while refusing to give our allies and our own country the same benefit. Iranian oil will enter the world market, while Canadian and American oil is constrained. How is that in the “national interest?”

It appears we might just be living in a country founded by geniuses and run by idiots.

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.

Conspiracy brews 7.25.15

ConspiracyBrews

Follow Conspiracy Brews on Facebook

If you like your coffee and your politics flavorful, served with a heaping dose of civility by a diverse group of interesting people from all parts of the political spectrum then you should be joining us every Saturday. Started in 2007 over coffee and lively conversation by a group of concerned friends and neighbors, ‘Conspiracy Brews’ is committed to finding solutions to some of our State’s toughest problems. Our zest for constructive political discourse is only equaled by our belief that the only way forward is to exchange our views in a relaxed and friendly setting. For additional information or to be added to our e-mail list contact: ConspiracyBrews@aol.com.
Conspiracy Brews

“Be civil to all; sociable to many; familiar with few; friend to one; enemy to none.”

Benjamin Franklin

Not your average political discussion group!

July 25, 2015
9:00 AM to 12:00 PM
at
Southwest Secondary Learning Center
10301 Candelaria Rd NE
(northwest corner of Candelaria and Morris)

We think that government should be open and honest at all times.
People from all political parties are welcome.

*** Quotes of the Week ***

“Let no man pull you low enough to hate him.”

Martin Luther King Jr.

“You may be disappointed if you fail, but you are doomed if you don’t try.”

Beverly Sills

Suggested Topics

— Should the historical markers be removed from old town?

— Another Domestic Terrorism attack…or was it inspired by international terrorism. Do you have an answer?

A Documentary will be shown on MTV (Jul 22) called “White People.” What do you think of the concept?
http://www.mtv.com/shows/white-people/

http://www.abqjournal.com/614609/news/mtvs-white-people-causes-a-stir.html

http://www.ew.com/article/2015/07/08/mtv-documentary-white-people-trailer

http://wapo.st/1J8gMAu

TBD NOTE: The following topic has been presented by one of our members as deserving a panel discussion of the sort we’ve had recently. Who would be good to be invited?

TBD I believe we are caught up in a well-orchestrated economy vortex and I think we need to spend time to discuss it at length. I think it is getting more and more difficult to see current events in black and white terms. There are several knowledgeable people that have better insights than I and I would appreciate a full discussion on this topic as soon as possible.

*** Light Quotes of the Week ***

“I only know two pieces; one is ‘Clair de Lune; and the other on isn’t.”

Victor Borge

“Enjoy life. There’s plenty of time to be dead.”

Anon.

“I strive to be as good a person as my dog thinks I am.”

Unknown

——-

Music & arts festival this weekend in edgewood

Including 7 hours of gospel music on Sunday from 11 AM to 6 PM and food by Dough Re Mi Bakery (umm good!)

Click this link (enlarged view) one time to enlarge below and call or email for detailed information as to time, etc.:

WildlifeWestMusic2015

Marita: Talks about Mexico’s new energy show

Here is Marita’s latest.

Let’s hurry to Ms. Noon’s article:

Greetings!

I’ve written a couple of times about Mexico energy reforms—first when they were announced by President Enrique Peña Nieto and then when the constitutional amendments were passed. This week’s column is somewhat of an update as the first international investors took the plunge in Mexico’s shallow waters. The first auction took place on July 15. While it wasn’t the success that the Mexican government had hoped it would be, it does get the reforms rolling.

Mexico’s energy reform is rolling, albeit with training wheels (attached and pasted-in-below) chronicles the difficulties of Mexico’s first international investment invitation in nearly eighty years, but concludes with optimism for the future—both for Mexico and American companies who partner with Mexico.

Mexico’s energy reform is rolling, albeit with training wheels doesn’t have my usual political snap, and may be too “inside” for the average reader, but I hope my regular readers will find it insightful. I’ve received positive comments from those who reviewed it prior to publication.

Remember, each week I host America’s Voice for Energy on AmericasWebRadio.com—which allows me to expand on the topic of each week’s column by interviewing related experts. If you have expertise on Mexico’s energy reforms and/or the opportunities it provides for American companies, I’d like to have you join me to record a segment. We can record anytime between now and Wednesday at noon ET. America’s Voice for Energy airs the first time on Thursday at 11:00 AM ET and then, a few days after the original air date, is available for indefinite online listening. Just respond to this email to advise me of your availability.

One more thing. Please take a few minutes to vote “No” on the poll regarding whether or not New England’s largest wind farm should be built. When I first received word of the poll, the “Yes” votes were about double the “No”. Thanks to an extensive network, the trend has flipped. Let’s keep it going.

Thanks for reading Mexico’s energy reform is rolling, albeit with training wheels. Please post it, pass it on, and/or personally enjoy it.

Marita Noon

marita Noon 1

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

For Immediate release: July 20, 2015

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

 

Mexico’s energy reform is rolling, albeit with training wheels

Understanding the connection between energy and economic growth, Mexico’s President Enrique Peña Nieto set out to reform his country’s energy policy and invite outside intelligence and investment to boost slumping oil output. In late 2013, he succeeded in getting the constitution amended to allow private and foreign companies to explore and produce oil and gas in Mexico—for the first time in nearly eight decades. The amendments put an end to the government monopoly. Foreign companies can now compete with, or partner with, Pemex—the national oil company. Nieto hopes his reforms will bring in $50 billion in investment by 2018.

The wheels of reform move slowly, but on July 15, the first international investors put their toes in the shallow water of Mexico’s oil prize—which could be “as big as the proven reserves of Kuwait.” The Financial Times (FT) calls Mexico’s potential 107.5 billion barrels of oil: “quite a feast.” FT adds: “The country is viewed as one of the dwindling number of opportunities to add substantial reserves to portfolios after several years when the oil majors have struggled to make big discoveries.”

Disappointing Start

Yet, despite the possibilities, Mexico’s first of three auctions expected this year, being called round 1.1, was disappointing, at best. In round 1.1, 14 shallow water blocks were offered. Only two had successful bids: block 2 off the coast of Veracruz and block 7 off of Tabasco. The winning bidder for both blocks was Sierra Oil & Gas—a Mexican company in a consortium with U.S. company, Talos, and Britain’s Premier Oil.

Thirty-eight companies—including majors such as ExxonMobil, Chevron, and Russia’s Lukoil—qualified to participate in the auctions, though only nine participated in round 1.1. BloombergBusiness reports: “Spokesmen for Exxon and Chevron said that while they weren’t interested in the shallow-water round of bidding, they hadn’t given up on being part of Mexico’s energy reform.”

When Mexico’s energy reforms began, oil was in the $100 a barrel range, the Mexican government expected four to seven of the blocks would be sold—representing a goal of 30-50 percent. On July 15, the success rate was a less-than-expected 14 percent.

Bad Timing

Unfortunately for Nieto, the timing couldn’t have been worse. Not only are global oil prices 50 percent of what they were when the constitutional amendments passed, the week during which the auction was scheduled, turned out to be bad news for Nieto’s hopes.

First, four days before the auction took place, “El Chapo,” Mexico’s most notorious drug lord, broke out of one of the country’s highest security prisons—again. The Economist states: “The escape of El Chapo is proof that the rule of law in Mexico is still shaky.” FT echoes the sentiment: the escape shows “impunity, corruption and the weak rule of law remain the norm in Mexico rather than the exception.”

The fields up for auction on July 15 were fields with lower probabilities of success—6-54 percent, according to a FuelFix report. While smaller companies are more willing to gamble on success, they can’t afford the security or kickbacks needed to co-exist with the cartels. The Economist explains: “Disorder does not always deter investors who can afford armoured cars and bodyguards, but it puts off smaller businesses, Mexican and foreign.”

One small U.S, company told me: “Mexico’s past history is one of political instability, expropriations, quick changes in government policies, graft and corruption, inefficiencies, and socialist-style attitudes and philosophy. With abundant opportunities in the U.S., and less risk here, why invest in Mexico?”

At the same time the news of El Chapo broke, reports indicated a deal with Iran was imminent. The nuclear accord was struck the day before Mexico’s historic auction. Concerns that Iran will soon begin exporting 1.5 million barrels of oil a day, making crude prices slide further, dampened interest in new exploration.

El Chapo’s escape highlighted the risk, while the Iran deal reduced the reward. The scales didn’t tip in Mexico’s favor.

Poor Offering

While the July 15 auction wasn’t the success it was hoped to be, there is cause for optimism. Perhaps to give itself time to work out the kinks, the National Hydrocarbon Commission offered the less desirable parcels first. The New York Times (NYT) states: “the lots offered in the first round of a multiyear auction process were not among the most commercially attractive.”

The majors, which skipped the first auction, are more interested in the deep water projects—scheduled for auction in early 2016—where the risk is lower and the reward is higher. NYT explains: “The biggest growth will probably come in deep water fields that are adjacent to bountiful American production fields and that have yet to be thoroughly explored. The fields are thought to be large and have the added advantage of being close to the vast pipeline network in the American portion of the Gulf of Mexico, as well as American refineries and the American market itself.”

Additionally, the onshore potential will be of more interest to the new Mexican oil companies—many of which previously worked for Pemex as oil-field service contractors. They have experience with drilling on land but will need foreign partners for offshore exploration. The onshore blocks are scheduled for auction in December.

Unattractive Terms

When the terms, designed to maximize Mexico’s take more than to attract investment, were first announced, they generated little interest. They have been sweetened twice since then—and will likely be revised before the next auction.

Winners, who were pre-qualified as able to meet the financial requirements, were determined by the highest amount of profit to be shared with the Mexican government and the amount of investment pledged above the required minimum—which was set by the finance ministry and kept in a sealed envelope that was opened at the auction. For the two blocks awarded in the July 15 auction, the winner offered 55.99 % for the first block and 68.99% for the second. In each case, an investment of 10% above the minimum was offered. Some of the blocks that were not awarded did receive bids, but they were below the minimum—though the Wall Street Journal (WSJ) reports: “several rejected bids fell just below the minimum.”

One of the terms of concern is the stringent guarantees required in case of a blowout such as the Deepwater Horizon. The Economist calls them: “beyond international norms” and the FT reports: “Four pre-qualified companies pulled out last week—at least one because of the guarantees” which are “essentially a blank cheque.”

Additionally, Mexico has reserved the right to rescind contracts—which reminds potential investors a bit too much of Mexico’s history of expropriation.

Pablo Medina, Latin America upstream analyst at Wood MacKenzie, said, in WSJ: “I would expect the government to incorporate what it’s learned in the next tenders.”

Cautious Optimism

Despite the various bumps in the road, many are cautiously hopeful. Juan Carlos Zepeda president of the National Hydrocarbon Commission, has, according to WSJ, “higher expectations for subsequent auctions.”

In OilPro.com, Richard Sanchez, IHS Petrodata’s lead Marine Market Analyst for the Americas, states: “Mexico has vast deepwater potential, comparable to oil fields found on the US side of the Gulf of Mexico.” It is too big to fail. A consultant working with the new Mexican oil companies told me: “The resources are world-class. Mexico’s energy reforms will ultimately be successful.”

“The government estimates almost half its unproven reserves lie in the deep waters of the Gulf of Mexico,” the FT reports. “In addition it holds the world’s sixth biggest technically recoverable shale gas and the eighth largest shale oil prospects.”

Jim Hoffman, an oil-and-gas training and education provider who has worked in the industry for 35 years, told me: “Over time, opening Mexico will provide a huge boost for both American producers and service companies at reduced cost. It won’t happen right away, but as the infrastructure gets built, results will become better and better.” He added: “How about jobs, for Mexicans, who won’t have to cross the border illegally? How about Americans who have the opportunity to bring new and better technology and practices to an underdeveloped industry location? What a great opportunity.”

Mexico’s energy reform is rolling. The July 15 auction gave the country a chance to try it out and start slowly—more of an evolution than a revolution. There is enthusiasm for the future. The oil-price issue will work itself out as it will take three to five years to develop the new fields. As the training wheels come off, the terms are tweaked and the offerings are more attractive, results will become better and better—delivering a whole new industry for Mexico and fresh opportunities for American companies.

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.

Link to: Mexico’s energy reform is rolling, albeit with training wheels

Greetings!

I’ve written a couple of times about Mexico energy reforms—first when they were announced by President Enrique Peña Nieto and then when the constitutional amendments were passed. This week’s column is somewhat of an update as the first international investors took the plunge in Mexico’s shallow waters. The first auction took place on July 15. While it wasn’t the success that the Mexican government had hoped it would be, it does get the reforms rolling.

Mexico’s energy reform is rolling, albeit with training wheels (attached and pasted-in-below) chronicles the difficulties of Mexico’s first international investment invitation in nearly eighty years, but concludes with optimism for the future—both for Mexico and American companies who partner with Mexico.

Mexico’s energy reform is rolling, albeit with training wheels doesn’t have my usual political snap, and may be too “inside” for the average reader, but I hope my regular readers will find it insightful. I’ve received positive comments from those who reviewed it prior to publication.

Remember, each week I host America’s Voice for Energy on AmericasWebRadio.com—which allows me to expand on the topic of each week’s column by interviewing related experts. If you have expertise on Mexico’s energy reforms and/or the opportunities it provides for American companies, I’d like to have you join me to record a segment. We can record anytime between now and Wednesday at noon ET. America’s Voice for Energy airs the first time on Thursday at 11:00 AM ET and then, a few days after the original air date, is available for indefinite online listening. Just respond to this email to advise me of your availability.

One more thing. Please take a few minutes to vote “No” on the poll regarding whether or not New England’s largest wind farm should be built. When I first received word of the poll, the “Yes” votes were about double the “No”. Thanks to an extensive network, the trend has flipped. Let’s keep it going.

Thanks for reading Mexico’s energy reform is rolling, albeit with training wheels. Please post it, pass it on, and/or personally enjoy it.

Marita Noon

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

For Immediate release: July 20, 2015

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

Contact: 505.239.8998, marita@responsiblenergy.org

Words: 1446

Mexico’s energy reform is rolling, albeit with training wheels

Understanding the connection between energy and economic growth, Mexico’s President Enrique Peña Nieto set out to reform his country’s energy policy and invite outside intelligence and investment to boost slumping oil output. In late 2013, he succeeded in getting the constitution amended to allow private and foreign companies to explore and produce oil and gas in Mexico—for the first time in nearly eight decades. The amendments put an end to the government monopoly. Foreign companies can now compete with, or partner with, Pemex—the national oil company. Nieto hopes his reforms will bring in $50 billion in investment by 2018.

The wheels of reform move slowly, but on July 15, the first international investors put their toes in the shallow water of Mexico’s oil prize—which could be “as big as the proven reserves of Kuwait.” The Financial Times (FT) calls Mexico’s potential 107.5 billion barrels of oil: “quite a feast.” FT adds: “The country is viewed as one of the dwindling number of opportunities to add substantial reserves to portfolios after several years when the oil majors have struggled to make big discoveries.”

Disappointing Start

Yet, despite the possibilities, Mexico’s first of three auctions expected this year, being called round 1.1, was disappointing, at best. In round 1.1, 14 shallow water blocks were offered. Only two had successful bids: block 2 off the coast of Veracruz and block 7 off of Tabasco. The winning bidder for both blocks was Sierra Oil & Gas—a Mexican company in a consortium with U.S. company, Talos, and Britain’s Premier Oil.

Thirty-eight companies—including majors such as ExxonMobil, Chevron, and Russia’s Lukoil—qualified to participate in the auctions, though only nine participated in round 1.1. BloombergBusiness reports: “Spokesmen for Exxon and Chevron said that while they weren’t interested in the shallow-water round of bidding, they hadn’t given up on being part of Mexico’s energy reform.”

When Mexico’s energy reforms began, oil was in the $100 a barrel range, the Mexican government expected four to seven of the blocks would be sold—representing a goal of 30-50 percent. On July 15, the success rate was a less-than-expected 14 percent.

Bad Timing

Unfortunately for Nieto, the timing couldn’t have been worse. Not only are global oil prices 50 percent of what they were when the constitutional amendments passed, the week during which the auction was scheduled, turned out to be bad news for Nieto’s hopes.

First, four days before the auction took place, “El Chapo,” Mexico’s most notorious drug lord, broke out of one of the country’s highest security prisons—again. The Economist states: “The escape of El Chapo is proof that the rule of law in Mexico is still shaky.” FT echoes the sentiment: the escape shows “impunity, corruption and the weak rule of law remain the norm in Mexico rather than the exception.”

The fields up for auction on July 15 were fields with lower probabilities of success—6-54 percent, according to a FuelFix report. While smaller companies are more willing to gamble on success, they can’t afford the security or kickbacks needed to co-exist with the cartels. The Economist explains: “Disorder does not always deter investors who can afford armoured cars and bodyguards, but it puts off smaller businesses, Mexican and foreign.”

One small U.S, company told me: “Mexico’s past history is one of political instability, expropriations, quick changes in government policies, graft and corruption, inefficiencies, and socialist-style attitudes and philosophy. With abundant opportunities in the U.S., and less risk here, why invest in Mexico?”

At the same time the news of El Chapo broke, reports indicated a deal with Iran was imminent. The nuclear accord was struck the day before Mexico’s historic auction. Concerns that Iran will soon begin exporting 1.5 million barrels of oil a day, making crude prices slide further, dampened interest in new exploration.

El Chapo’s escape highlighted the risk, while the Iran deal reduced the reward. The scales didn’t tip in Mexico’s favor.

Poor Offering

While the July 15 auction wasn’t the success it was hoped to be, there is cause for optimism. Perhaps to give itself time to work out the kinks, the National Hydrocarbon Commission offered the less desirable parcels first. The New York Times (NYT) states: “the lots offered in the first round of a multiyear auction process were not among the most commercially attractive.”

The majors, which skipped the first auction, are more interested in the deep water projects—scheduled for auction in early 2016—where the risk is lower and the reward is higher. NYT explains: “The biggest growth will probably come in deep water fields that are adjacent to bountiful American production fields and that have yet to be thoroughly explored. The fields are thought to be large and have the added advantage of being close to the vast pipeline network in the American portion of the Gulf of Mexico, as well as American refineries and the American market itself.”

Additionally, the onshore potential will be of more interest to the new Mexican oil companies—many of which previously worked for Pemex as oil-field service contractors. They have experience with drilling on land but will need foreign partners for offshore exploration. The onshore blocks are scheduled for auction in December.

Unattractive Terms

When the terms, designed to maximize Mexico’s take more than to attract investment, were first announced, they generated little interest. They have been sweetened twice since then—and will likely be revised before the next auction.

Winners, who were pre-qualified as able to meet the financial requirements, were determined by the highest amount of profit to be shared with the Mexican government and the amount of investment pledged above the required minimum—which was set by the finance ministry and kept in a sealed envelope that was opened at the auction. For the two blocks awarded in the July 15 auction, the winner offered 55.99 % for the first block and 68.99% for the second. In each case, an investment of 10% above the minimum was offered. Some of the blocks that were not awarded did receive bids, but they were below the minimum—though the Wall Street Journal (WSJ) reports: “several rejected bids fell just below the minimum.”

One of the terms of concern is the stringent guarantees required in case of a blowout such as the Deepwater Horizon. The Economist calls them: “beyond international norms” and the FT reports: “Four pre-qualified companies pulled out last week—at least one because of the guarantees” which are “essentially a blank cheque.”

Additionally, Mexico has reserved the right to rescind contracts—which reminds potential investors a bit too much of Mexico’s history of expropriation.

Pablo Medina, Latin America upstream analyst at Wood MacKenzie, said, in WSJ: “I would expect the government to incorporate what it’s learned in the next tenders.”

Cautious Optimism

Despite the various bumps in the road, many are cautiously hopeful. Juan Carlos Zepeda president of the National Hydrocarbon Commission, has, according to WSJ, “higher expectations for subsequent auctions.”

In OilPro.com, Richard Sanchez, IHS Petrodata’s lead Marine Market Analyst for the Americas, states: “Mexico has vast deepwater potential, comparable to oil fields found on the US side of the Gulf of Mexico.” It is too big to fail. A consultant working with the new Mexican oil companies told me: “The resources are world-class. Mexico’s energy reforms will ultimately be successful.”

“The government estimates almost half its unproven reserves lie in the deep waters of the Gulf of Mexico,” the FT reports. “In addition it holds the world’s sixth biggest technically recoverable shale gas and the eighth largest shale oil prospects.”

Jim Hoffman, an oil-and-gas training and education provider who has worked in the industry for 35 years, told me: “Over time, opening Mexico will provide a huge boost for both American producers and service companies at reduced cost. It won’t happen right away, but as the infrastructure gets built, results will become better and better.” He added: “How about jobs, for Mexicans, who won’t have to cross the border illegally? How about Americans who have the opportunity to bring new and better technology and practices to an underdeveloped industry location? What a great opportunity.”

Mexico’s energy reform is rolling. The July 15 auction gave the country a chance to try it out and start slowly—more of an evolution than a revolution. There is enthusiasm for the future. The oil-price issue will work itself out as it will take three to five years to develop the new fields. As the training wheels come off, the terms are tweaked and the offerings are more attractive, results will become better and better—delivering a whole new industry for Mexico and fresh opportunities for American companies.

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: The old, new nuclear country

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Greetings!

Chances are high that you didn’t know that on Friday, July 10, Japan completed the fuel-loading process at the first nuclear reactor scheduled for restart since the Fukushima accident in March 2011. No major news source covered it, so I did.

The other nuclear country (attached and pasted-in-below), covers the news story—but more importantly, it focuses on the economic impact “expensive energy” has had on Japan and, hence, the country’s decision to reboot its nuclear power. I chose the title to tie in with the focus on Iran’s nuclear ambitions—which it claims is for electricity generation.

While most of my text addresses the facts of Japan’s situation, the bigger message is between lines: the lesson for America. Bottom line? There is a clear correlation between expensive energy and a struggling economy. Japan has chosen to go nuclear because it is the right choice for powering the country with few natural resources; nuclear is its most cost-effective option and Japan’s economy needs low-cost electricity. In the U.S., we have many cost-effective options and nuclear is one of them. Unfortunately, the energy policies coming out of Washington don’t consider the economic impact—as the SCOTUS decision highlighted.

The other nuclear country provides a real-life example of what happens to an economy when low-cost energy is replaced with expensive energy—as America’s current energy emphasis is doing.

Please post, pass on, and/or personally enjoy The other nuclear country. Thanks for your interest!Marita82313

Marita Noon

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

For immediate release: July 13, 2015.

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

 

 

The other nuclear country

The fuel is now loaded into the reactor, following inspections, the switch will be flipped and, around August 10, the reactor will be fired up. Three days later, transmission of electricity is expected to start, ramping up to full power and commercial operation in September. The same process is expected to take place at a second reactor in September/October.

Despite public protest, Japan is going nuclear—again.

Following the March 2011 earthquake and tsunami that caused the severe accident at the Fukushima No. 1 nuclear reactor in northeastern Japan, all nuclear reactors were gradually switched off for inspections. No commercial reactor has been online in Japan for nearly two years. Due to safety concerns, the country’s nuclear power generation has been at a standstill. Meanwhile, new regulatory standards have been developed and reactors are undergoing inspections.

Prior to 2011, nuclear power provided nearly one third of Japan’s electricity. Lost power-generation capacity has been replaced by importing pricey fossil fuels. Japan has few natural resources of its own. The Wall Street Journal (WSJ) reports: “Japan imports more than 90% of its fossil fuels, and is particularly dependent on the Middle East for oil and natural gas.”

The loss of nuclear power has, according to the CS Monitor, raised household utility bills in Japan by 20 percent. A survey of Japanese manufacturers, conducted by the Osaka Chamber of Commerce and Industry, found that increases in power rates represented the greatest burden for more than 40 percent of the 335 firms who responded, and that “chronic power outages” and further increases in power rates “would do serious damage to industries located in the Kansai region.” The WSJ confirms: “businesses say the rise in electricity costs without the nuclear reactors makes it harder to run a factory in Japan.”

The economic impact of shifting from nuclear power to imported fossil fuels is evident in Japan’s trade deficits. In OilPrice.com, John Manfreda sees a direct correlation. He says: “Before the Fukushima accident occurred, Japan’s economy was driven by its large trade surpluses, which it achieved year after year. However, since Fukushima, Japan reversed that trend, and began posting trade deficits on a yearly basis.”

Japan’s reliance on nuclear power began after OPEC’s 1973 oil embargo that caused a severe energy shortage and nearly derailed its economic progress. Manfreda reports: “When this embargo ended, Japan conducted a national energy study to find out how the country could implement an energy policy that would protect supplies from future embargoes and geopolitical turmoil. The ultimate conclusion of the study was that Japan needed to invest heavily in the use of nuclear power, which could supplant imported fossil fuels for electricity. After that study, the development of nuclear power was considered a national priority.”

Japan has, once again, reviewed its energy needs. The fourth Basic Energy Plan, approved in June 2015, concludes: “Nuclear power is an ‘important power source that supports the stability of our energy supply and demand structure.’” The plan increases nuclear from current levels by restarting most of the idle plants, while calling for an approximate 10 percent reduction from the pre-Fukushima level of 30 percent. WSJ adds: “Japan also plans to continue its use of coal, the cheapest of its energy imports. …Already this year, the nation’s utilities have announced the construction of seven new coal-fired power plants.”

Due to its need for power and its reliance on fossil fuels, Japan revised its emissions targets, saying, according to the New York Times: “it would release 3 percent more greenhouse gases in 2020 than it did in 1990, rather than the 6 percent cut it originally promised or the 25 percent reduction it promised two years before the 2011 nuclear accident.” In 2012, Japan opted out of a proposed U.N. Kyoto Protocol extension. WSJ reports: “The government’s energy plan also seeks to reduce carbon-dioxide emissions, but doesn’t stop companies’ plans to spend billions of dollars on new plants powered by cheap coal from countries like Australia and the U.S.”

The Ministry of Economy, Trade and Industry (METI) favors nuclear power because it is a “quasi-domestic source” (four of the world’s top six manufacturers of nuclear plant technology are Japanese or Japanese-owned). Addressing Japan’s plan, World Nuclear News states: nuclear power “gives stable power, operates inexpensively and has a low greenhouse gas profile.”

Japan’s Prime Minister Shinzo Abe’s government reportedly wants to operate as many nuclear plants as possible “to meet the nation’s energy needs and grow the economy.” Twenty-five reactors are seeking a restart.

The plant, fueled up on July 10 and scheduled to start commercial operation in September, is one of two reactors being restarted at the Sendai Nuclear Power Station, owned by Kyushu Electric Power Company. With all six of its reactors idle, Kyushu Electric has been “reeling from losses caused by hefty imported fossil fuel costs to run conventional power plants.” Likewise, Chubu Electric Power Company, according to the Japan Times, has applied to restart the Number 3 reactor at its Hamaoka nuclear plant and hopes to resume power generation as soon as possible “to reduce its reliance on expensive fossil fuels.”

“There is no greater issue for the health of the Japanese economy,” Robert Feldman, managing director of Morgan Stanley’s MUFG Securities Co., opined in WSJ, “than energy.” Echoing the sentiment, Masahiro Sakane, chairman of a panel sponsored by METI that has been debating the energy mix, said: “The most important thing is energy self-sufficiency.”

Regarding Japan’s energy plan, Makoto Yagi, Federation of Electric Power Companies of Japan chairman, stated: “We believe that energy policy is a core policy of a nation and must be approached from a medium to long-term standpoint.”

Japan is restarting its nuclear program. Iran, supposedly, wants nuclear power. Driven by the need for clean reliable power, the need to bolster energy security, and reduce dependence on imported fuels, many other countries are pursuing nuclear power. Russia has eight reactors under construction—which will double its nuclear capacity.  China has 26 reactors in operation and 24 under construction and is now building identical power plants that allow for cost efficiencies that come with mass production. Many new plants, such as the reactors being built in the U.S., utilize “third-generation designs that improve safety and cut costs,” E&E News reports. Fourth-generation reactors, which use different coolants and fuels, are in the proposal stages.

The lesson is here is less about nuclear power and more about the need for energy that is cost-effective, reliable, and secure.

In a country like Japan, with limited natural resources, nuclear power meets the need. In the U.S., where we are rich in coal, oil, natural gas and uranium (the fuel for nuclear power), we have more options and should select the energy source that is right for specific needs and locales. As Japan has learned, energy is one of the most important components of the economy and expensive energy has hurt it.

Japan has an energy plan that is a “core policy” of the nation. In the U.S., instead of having an energy policy, we continue to drive up costs by regulating away our energy advantage and throwing money at expensive renewable energy—with the Clean Power Plan ignoring new nuclear. It is time for America to really evaluate our energy needs and maximize our advantage.

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.