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.

woodsEnd Church Food Distribution 2.20.15

woodsendpagefeb14jpg1

Write text here…

Marita Noon: Oil At $200 a Barrel — Not Likely


OPEC prediction of $200 a-barrel-oil ignores market realities—or maybe not

OPEC’s Secretary General Abdulla al-Badri made headlines when he announced that the oil price may have bottomed out—indeed, we had four straight days of increase—and predicted “you will see more than $200 when it comes to future oil prices.”

Al-Badri makes a strong argument. In the current reduced-oil-price environment, we see oil companies cut back on budgets, curtail exploration, and pull in rigs—as in many places it costs more to get the oil out of the ground than the present sales price. The Wall Street Journal (WSJ) reports: “the number of rigs drilling in the U.S. has sunk to a three-year low.” Reuters states: “The rig count is down 29 percent from its October peak … a clear sign of the pressure that tumbling crude prices have put on oil producers.”

In today’s market for crude oil, a reduction in the number of drilling rigs in the U.S. does not mean overall production declines. It only means less future production, Tim Snyder, an energy economist with Lubbock, Texas, based Pro Petroleum Inc., who analyzes trends to help his company, and others, make educated decisions and manage risk, told me: “We anticipate a decrease in ‘new’ production in the U.S. as exploration and production companies reallocate capital expenditures and reduce drilling exposure.”

Economics 101 tells us that less supply results in higher prices. Addressing the recent up-tick in prices, Yahoo News says: “Investors bet supplies would tighten in the long term because major oil companies were scaling back investments and drilling to cope with falling prices.

Al-Badri extrapolates this scenario out to a future of $200 a-barrel oil.

What he apparently misses is that as soon as prices increase, activity in the oil industry will pick back up. Snyder says: “Once prices reach the $70-75 per barrel range, the more complex drilling solutions begin to become attractive and we will see new production increasing; putting downward pressure on prices all over again.

There are plenty of smaller companies that can be very nimble. The equipment they have pulled and the employees whose jobs they cut can get back in the field quickly—in fact, they must. Every day that equipment sits on a lot, they are losing money. The trained talent wants to be working.

Yes, it will take some time to get the bigger projects up and running again and to build the needed infrastructure, but as prices climb, more and more production will come back online—bringing balance to the markets.

When prices are high, human ingenuity comes in and finds a solution—which is how the technologies of horizontal drilling and hydraulic fracturing combined to unleash America’s new era of energy abundance and helped lower prices worldwide.

Maybe al-Badri’s comments were designed to talk the markets up—after all, several OPEC countries’ economies are grim due to the drop in oil prices. For example, oil-rich Venezuela is facing default and is rationing food. Business Insider reports: “The country is broke … in large part because oil prices are so low. And now … its economic crisis is leading to a health crisis”—a pack of 36 condoms costs about $750. Both Venezuela and Iran have called “for OPEC’s cooperation in stabilizing oil prices,” but Saudi Arabia—OPECs biggest producing member—is maintaining its current output.

Al-Badri is not stupid. He has held several high-ranking positions in his native Libya, starting in 1990 as Minister for Oil. He was appointed Secretary General for OPEC in 2007. His January 26 $200-a-barrel prediction focuses on the future production losses that will result from the industry pulling back—which, as outlined above, are not likely to result in $200 oil.

Snyder believes al-Badri may be signaling something bigger: “The only way for prices to reach the level mentioned is for there to be a decline in available supply through a disruption in production or a break in the supply chain.”

Libya, al-Bardi’s homeland, has the largest oil reserves in Africa. It, according to the WSJ, “helped trigger the world-wide rout in oil prices” when it “surprised the world with a sudden burst of new oil” last summer. However, as Reuters points out: “Libya is in the middle of a struggle between two governments and parliaments allied to armed factions fighting for legitimacy and territory.” In the WSJ, Richard Mallinson, an analyst at London-based consultancy Energy Aspects explains: “There was an implicit agreement between the different factions to avoid disrupting oil production. Now the parties have realized that controlling oil means power.” As a result of the fighting, “Libyan oil output has fallen to about 325,000 barrels a day in January from nearly 900,000 barrels a day in October.”

The situation in Libya is deteriorating and western oil companies are pulling out. Then, on Sunday, security guards at the last functioning export port, that used to export 120,000 barrels a day, went on strike because their salaries were not being paid—which closed the port and lowers Libya’s oil output to less than 300,000 barrels a day.

Libya does have one remaining port open, but it is used to supply the Zawiya refinery with crude rather than for export. Reuters states: “All other ports and most oilfields have shut down due to fighting nearby or pipeline blockages by rival factions.”

Snyder posits: “Maybe al-Badri is telling the world that, left unattended, the rapid increase in terrorist activity seen lately could be the only thing to lead to the $200 level in crude oil—which will have catastrophic results.”

With Jordan’s accelerated air strikes, and the United Arab Emirates rejoining the fight against ISIS, added to the already troubled situation in Libya, a major supply disruption becomes extremely plausible.

Maybe al-Badri is right—though not for the reasons he outlined. Maybe he knows more than his simplistic explanation revealed. If he is, if he does, the U.S. is going to need every drop of oil found within our borders, including the Arctic resources that President Obama just proposed be permanently put off limits.

With the current low oil prices, we can easily think that we have too much oil already—after all, last week’s sudden price drop came after the release of official data remain a factor and, if al-Badri is correct, America’s energy abundance can provide us with energy security and global stability—not to mention the economic benefit of supplying our allies with oil and refined-petroleum products. Suddenly, the Keystone pipeline’s critical role becomes perfectly clear.

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.

Is Marita Saying: An Illusion and a Delusion

Marita writes about Cape Wind and all of the missing parts and elements which might complete it as something real.  Alas, too many missing components to make it real. Components such as investors and funds to continue what seems to amount to another subsidy boondoggle.

Here’s what she has said:

Greetings!

With all of the news focus on the terror attacks in Paris, this important story has been almost totally overlooked—but it has huge implications. While Wind energy’s bluster peters out (attached and pasted-in-below) focuses on the latest in the long-running Cape Wind Saga, I’ve included three additional recent tidbits regarding the current status of wind energy—making this a national story.

I’ve written on Cape Wind and the Production Tax Credit many times before. Wind energy’s bluster peters out brings both up to date. Please help me spread the word by posting it, passing it on, and/or personally enjoying Wind energy’s bluster peters out.

Marita Noon

Executive Director, Energy Makes America Great, inc.

PO Box 52103, Albuquerque, NM 87181

505.239.8998

For immediate release: January 12, 2015.

Commentary by Marita Noon

Executive Director, Energy Makes America Great Inc.

Contact: 505.239.8998, marita@responsiblenergy.org

Wind energy’s bluster peters out

Touted as “America’s first offshore wind project,” Cape Wind became one of America’s most high-profile and most controversial wind-energy projects. Fourteen years in the making, estimated at $2.6 billion for 130 turbines, covering 25 square miles in Nantucket Sound off the coast of Massachusetts, the Cape Wind project has yet to install one turbine—let alone produce any electricity. Now, it may be “dead in the water.”

On January 6, the two power companies, National Grid and Northeast Utilities, that had agreed to purchase most of the electricity Cape Wind was to generate, terminated their contracts with the developers due to missed milestones. Under the terms of the contracts, Cape Wind had to secure financing and give notices to proceed to its suppliers to start work by December 31, 2014. Neither happened and both companies filed to cancel power purchase agreements. “The project is in cardiac arrest,” according to Amy Grace, a wind-industry analyst with Bloomberg New Energy Finance.

Cape Wind has faced stiff opposition since it was first proposed in 2001. Senator Edward Kennedy’s efforts, and those of his wealthy friends, to fight Cape Wind have been the most publicized, but Native Americans, fishermen, and local communities have also battled the industrialization of Nantucket Sound. The town of Barnstable has been particularly active in the fight. The Cape Cod Times reports that Charles McLaughlin, Barnstable’s assistant town attorney, said: “The town’s concerns include the possibility that a collision between a boat and the large electric service platform the project requires could spill thousands of gallons of oil into the sound.”

Massachusetts Governor Deval Patrick (D) positioned Cape Wind as the centerpiece of his renewable energy goals and invested significant political capital backing the proposal—including tying the NStar power purchase agreement to approval of the NStar and Northeast Utilities merger (given the unfavorable terms of the agreements, the companies may have been looking for any exit ramp). Yet, Ian Bowles, Patrick’s first energy and environment chief who, according to the Boston Globe, “helped shepherd the offshore project,” acknowledges that the loss of the power purchase agreements “may have spelled the end for Cape Wind.”

The announcement came two days before Patrick left office. While he claims: “We’ve done everything as a state government to get them over the regulatory lines,” Patrick concedes it is now “up to the market.” According to the Cape Cod Times, the former governor doesn’t know “if the project could survive without the contracts in place.”

Even the Department of Energy (DOE), which seems to indiscriminately throw money at any politically favored green-energy project, was tepid in its support for Cape Wind. DOE’s loan guarantees generally average about 60 percent of the project’s costs, but the $150 million offered to Cape Wind made up a mere 6 percent—and that, only after the project received commitments for about half of its financing. In most cases, the government guarantee comes before the private financing and signals a go-ahead for investors.

While both supporters and detractors believe the project is in jeopardy, environmentalists and Cape Wind Associates LLC have not yet waved the white flag. According to Kit Kennedy, director of the energy and transportation program at the Natural Resources Defense Council: “Cape Wind may be down, but it is not out.” The Boston Globe reports that Cape Wind’s president, James Gordon, believes the perpetual litigation “triggered a clause in the contracts that allows for more latitude in Cape Wind’s ability to meet the deadlines.” However, after the company already spent $50 to $70 million on the project, the fact that Gordon opted not to pay the utilities the mere $2 million needed for a six-month extension signals that he doesn’t have confidence that they can continue.

Additionally, the political winds have shifted. While Governor Patrick championed Cape Wind, Massachusetts’ new governor, Charlie Baker (R) is on record as being staunchly opposed to it—even calling it Patrick’s “personal pet project.” While campaigning, Baker “dropped his opposition to Cape Wind” because he believed it was a “done deal.” Now that the deal may well be undone, Baker says he “will not try to influence the outcome of the legal process surrounding the Cape Wind project.”

The cancellation of the contracts is “a near fatal blow” to Cape Wind according to Audra Parker, president of the Alliance to Protect Nantucket Sound, a Cape Cod based group which has led the fight against cape wind.

Wind energy’s future faces problems beyond Massachusetts.

While Massachusetts’ utility companies filed to cancel power purchase agreements, two Minnesota wind farms, operating as Minwind Companies, were filed for bankruptcy because the eleven turbines needed extensive repairs and the 360 farmers and landowners who invested in the projects can’t afford the maintenance. Minwind CEO Mark Willers explained: “Minwind Companies have enjoyed relative prosperity in recent years, but the April ice storm last year took a toll on equipment—and on the budget.” At a December 17 meeting, he told shareholders: “We were 200 to 300 percent over budget to make those repairs.”

Minwind’s nine separate limited-liability companies allowed investors to take advantage of federal wind-energy credits, USDA grants, and the now-discontinued state assistance program for small wind projects. The Star Tribune reports: “The owners stand to lose their investment, and the wind farms eventually may have to shut down.”

On the national level, the American Wind Energy Association (AWEA) has continued to lobby for a retroactive extension of the Production Tax Credit (PTC) for wind energy that expired at the end of 2013. Disappointing AWEA, the lame-duck Congress did approve a ninth extension—but just through the end of 2014. AWEA’s CEO Tim Kiernan groused: “Unfortunately, the extension to the end of 2014 will only allow minimal new wind development and it will have expired again by the time the new Congress convenes.” In response to the “bare-minimum extension,” Luke Lewandowsi, Make Consulting research manager, said it “casts doubt on the willingness or ability of Congress to revisit the PTC in 2015.”

Adding insult to industrial wind’s injury, wind turbine installation placed number three in the list of 10 dying U.S. industries—following only computer and recordable media manufacturing.

All of this news doesn’t bode well for the wind energy business, but for ratepayers and those who believe in the free market and who believe that government shouldn’t pick winners and losers, current wind conditions are a breath of fresh air. Governments, both state and federal, have given wind energy every advantage, to quote Governor Patrick: “It’s now up to the market”—and even Warren Buffet admits the tax credits are the only reason to build wind farms.

(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.

 

Conspiracy Brews 1.24.15

ConspiracyBrews

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!
January 24, 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 ***

“It is better to be hated for what you are than to be loved for what you are not.”

André Gide

“It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all – in which case, you fail by default.”

J. K. Rowling

Suggested Topics

— What do you think of the President’s State of the Union speech…what were the high points and what were the low points?

— Boko Haram…Does anyone give a hoot?

–Why can’t NM become an Entrepreneur Hub?

— What do you think of the Ferguson riots now?

(Light Quotes of the week)

“I am so clever that sometimes I don’t understand a single word of what I am saying.”

Oscar Wilde (The Happy Prince and Other Stories)

“Outside of a dog, a book is man’s best friend. Inside of a dog it’s too dark to read.”

Groucho Marx

“I love deadlines. I love the whooshing noise they make as they go by.”

Douglas Adams (The Salmon of Doubt)

——-

Silber on Stiglitz

Sigmund “Sig” Silber is a New Mexico writer and economist who makes it a habit to report on economics, water, water law and government.  He is recognized as an expert on New Mexico water issues and he has a great sense of humor … sometimes with a dark cutting edge.

He has given me permission to publish his “stuff,” on my blogs.

Sigmund Silber <sigmundsilber@q.com> wrote:
http://www.project-syndicate.org/commentary/politics-of-economic-stupidity-by-joseph-e–stiglitz#AL36G2Abwt15dk7V.99

He has won a Nobel Prize. But I have to disagree with him to some extent.

Yes for sure austerity policies are stupid. They are based on some false assumptions about debt especially when money can be created out of thin air. But even without that, one person’s debt is some other person’s asset so debt is overrated……until you get to the point where you can’t pay the interest. If you have a central bank that is never a problem. As an aside, Europe has its own particular issues which are addressed quite well in this article econintersect.com/a/blogs/blog1.php/stratfor-the-european-union-nationalism

But I certainly am not disturbed that we have fewer public-sector employees. In fact I am elated. In New Mexico we may have insufficient state and local employees. That is because we are a very large state with generally a low population density. But there are far too many Federal Workers. This data may be out of date or wrong but if correct it indicates that in 2009 the average Federal Employee earned $81,258 with $41,791 of benefits. Thus the Federal Bureaucracy is a tremendous drain on the economy. econintersect.com/b2evolution/blog2.php/2015/01/19/killing-the-american-dream And the Federal Government does not attract the best and brightest that is fairly obvious. Fail anywhere in society private or state and local government and off you go to the Feds for a nice sinecure.

The recommendation that we build roads to nowhere also does not impress me. Based on my research, which I suspect is as good as Stiglitz’s research or better, in developed nations infrastructure investments are not very effective at improving the economy. The n th road does not produce the same benefit as the first road. I wonder how you can not know that and still win a Nobel Prize. Infrastructure is usually based on major inventions. Has Stiglitz read Schumpeter? It might be a good investment of his time. Major paradigm shift innovations do not occur on a regular schedule. Chances are there will be some soon. Chances are the public sector employees that Stiglitz loves so much will slow their deployment or prevent their deployment entirely. Why do we not have automated highways or vehicles that drive themselves? It is not a deficiency of engineering expertise; it was public sector employees. Why does it take twenty years to get a new drug approved? Public Sector employees.

I think our problems are more complicated than Stiglitz thinks. But he has the Nobel Prize. And it is tax free. I suspect the reason for this article was shopping around for political clients. I am just speculating on that but that is how it struck me.

But for sure you do not improve an economy by extracting purchasing power from the citizens in the economy. So there I totally agree with Stiglitz. On the other hand, redistribution is a strange concept based on the probably correct assumption that some are more likely to spend than others but countered to some extent at least by the equally correct assumption that spenders are less likely to invest. In the olden days, investment was considered more effective than consumption at improving an economy. Does redistribution encourage innovation and investment? Is Europe doing better than the U.S.? How about Russia? To me it seems that a disrespect for private property is a negative for an economy growing. But Stiglitz may not be thinking about redistribution but simply helicopter drops. In fact neither is discussed in the above linked article but I am speculating that this is on his mind.

I agree with Stiglitz that it is not wise to deflate economies as the World has been doing. But I do not agree with his Marxist/Sayian/Reaganist/IBM Supply Side strategies. To have demand you have to produce things that people want badly enough to exchange labor for those things whether they be products or services. It is very difficult to mandate demand other than by draconian policies. One could mandate that every house have an outside outhouse. That will stimulate demand. Would the World be a better place? GDP would be higher.

Perhaps we have sufficient toys.

Yes with a helicopter drop of currency, sales of toys would increase. Is that progress?

Would more bridges improve things? Keeping bridges from falling down is certainly a good idea. One can call that investment and account for it as investment but it really is maintenance. There is no impact on the economy other than the spending associated with doing the maintenance. Those receiving the payment for their services are better off but the overall wealth of the nation does not change.

I think it is an old fashioned concept as applied to a developed nation. That is not to say that there are no infrastructure opportunities. There certainly are. But I think Stiglitz has made an incorrect diagnosis in that area but a correct one re austerity policies.

Sometimes one just has to wait for demand to materialize especially in developed nations. In less developed nations we need to avoid garroting their economies. I think that Stiglitz and I probably see monetary policy in the same light in this regard. But again time can solve a lot of problems. And in some cases growth is generational.

Charlatans and Conundrums

Imagine a visitor from another  “world,” is somehow plunked down in our midst.  This visitor is not familiar with our customs and mores, but it is able to reason and question in a perceptive way.  It doesn’t take the visitor long to realize there are deep divisions between the adherents of the world’s different religions.  The visitor sees so-called Islāmic wars being waged, outright massacres and attempts to establish “state,” religions.  With his interest piqued, he decides to set out on a course which will allow him to examine the world’s religions.

The visitor first finds very little to commend the religions and is able to find that all the negative aspects of this world’s religions have existed since the dawn of time.  What is more, the visitor sees a calendar of crusades, other “holy,” wars, pogroms, inquisitions and other partitions which have pitted neighbor against neighbor, brother against brother and father against son.

As our visitor continues he observes Sikhs versus Hindus, Muslims at odds with all other religions, fundamentalist protestants against those with a liberal bent, and catholics fighting within the faith with other catholics.  He sees hundreds — no thousands — of innocent men, women and children murdered as the perpetrators swear they are following the dictates of their religion as they look toward heaven for their god’s approval.  Our sojourner wonders at the effrontery of some of the world’s religious and political leaders as they expend more and more of their human resources to wage war on those whose religious beliefs run counter to their own. Wasted men and women, either dead, or mentally exhausted to the point of being unable to work as they once were.  He also sees food and other sustenance wasted which could have been better spent filling the stomachs of the less fortunate or filling the minds of their ignorant and illiterate with meaningful knowledge.

Our visitor sees the three main monotheistic religions have similar or common theme in their doctrine and formation (not the least being their shared lineage from Abraham).  Our “alien,” is chagrined at the rifts which have developed in the past and present among each religion’s adherents.  He finds the fault does not necessarily or solely lie with the doctrine or the “holy,” books and tracts, but with some of the world’s religious leaders and their charlatanistic spin which they nimbly apply during their demagogic diatribes.  He also sees followers blindly tagging along as they are fed the pablum of their very own “false prophet.”  He doesn’t miss the demonic instructions which causes a young child to become a human bomb in order to rid the world of one more “infidel,” or non-believer; the dictates which withhold aid and succor for the world’s hungry and downtrodden; the dictates which teach hate is acceptable as it is directed toward one that is different because of their religious beliefs, the color of their skin, or their historic and ethnic culture.

Finally exhausted and disappointed in the extreme, our alien friend departs our world, shaking his head as he thinks:

How strange so many of that world’s religious leaders sit on their hands while their religions renegade elements wreak havoc on others and lay waste to the potential of that planet.

I hope the thoughtful reader will find nothing offensive to their person or spiritual well-being in reading the above, but if the opposite be the case, perhaps an inward search toward the depth of their soul will reveal something which could be attended to….