this past week we witnessed an elaborate kabuki in the Senate, wherein the Trade Promotion Authority (TPA) that Obama has sought at first appeared to have blocked by the Senate Democrats, and then within 48 hours, a deal was cut and we saw it pass...hence, the last chance to stop this TPA, and hence the passage of the Trans-Pacific Partnership, which will mandate exports of our gas and oil to Asia and turn half this country into a fracking resource extraction hell-hole, lies with the House, where we'll need a coalition of progressive Democrats and tea-party Republicans to stop it...if it is not stopped, any hopes for home rule in Ohio, or anywhere else in the nation, will be waylaid by the coming multinational corporate state, and we'll begin the transition into a world wherein our national laws and environmental regulations will be subservient to the international investors and corporations that will ultimately become the de facto new world government...
so, while we've discussed this issue before, most recently 7 weeks ago, it's worth reiterating what it's all about...for over 5 years, the Administration has been working in secret to get two major trade deals, the Trans-Pacific Partnership (TPP), with 12 nations on the Pacific Rim, and the Transatlantic Trade and Investment Partnership, between the US and countries of the European Union, completed and ratified...the larger purpose of these pending agreements is to benefit multinational corporations, who in doing business worldwide, must presently contend with different laws and regulations in each country they do business in, and the ultimate goal of these agreements, and of those that will eventually follow them, is to create what will be an overriding international corporate government with its own laws and court system that will trump the laws of the member nations, and give corporations free reign to do business everywhere, unencumbered by national laws, under this new system worldwide...under our own Constitution, such international treaties would normally need to be reviewed and ratified by a two-thirds vote of Congress; under TPA, aka "fast track", this administration, and the Jeb Bush administration to follow, will be granted the right to negotiate trade treaties without input from Congress, and once completed, these trade treaties will not be reviewable or amendable by Congress, who can then only ratify them with a simple majority...
as noted, these two agreements have been negotiated in secret, and most of what we know about them has come from Wikileaks, who has obtained and released a few of the 29 secret chapters of the TPP...the TPP has been negotiated by U.S. Trade Representative Michael Froman, in consultation with 605 corporate advisers, and their counterparts from the other 12 nations; and neither the people nor their representatives in Congress have had any input....in fact, if a Congressman wants to read the copy of the current text, he or she must go alone, to a guarded and locked room in the basement of the capital building, and surrender any notes they take after leaving; they are sworn not to reveal what they've read, and their staff, or advisors, who might be able to interpret the trade legalese, are not permitted to accompany them...so chances are that if you would read the TPP chapter on the environment released by WIkileaks, and the TPP chapter on the investor-state protections, you would know more about what's in these agreements than 90% of the congresscritters who are voting to allow them to go forward...
as the Sierra Club warned us two years ago, passage of these agreements would unleash a nightmare of increased oil & gas fracking activity, as not only will these agreements allow for oil and gas exports, they effectively mandate those exports, giving the signatories equal claim to our oil and gas resources as our own citizens, and supersede domestic energy policy and protections currently in place...furthermore, there will no longer be legal recourse available under US law to control this drilling activity...the investor-state provisions of these agreements set up a supra-national court under the World Trade Organization's Dispute Settlement Body, whereby corporations will be able to sue governments and obtain taxpayer compensation for whatever "expected future profits" that any state or local law encumbered...hence, the state of New York could be sued by the natural gas leaseholders in the Southern tier of the state who've been economically encumbered by the state fracking ban, Pennsylvania frackwater disposal operations could sue Ohio after being shut down for causing earthquakes in Trumbull county, and California oil companies could sue the counties who passed fracking bans last November...
furthermore, with the international price of oil running $5 to $10 dollars more than the US oil price, US frackers would take advantage of the higher prices they'd garner from selling their oil overseas, with the attendant increase in fracking, and hence eventually the US price would rise to the world price level...even worse, US domestic natural gas, now fairly landlocked with few approved LNG export terminals, would be sold in Japan near $15 per mmBTU, roughly five times the $3 per mmBTU that US natural gas has been priced at in recent months...even considering the additional costs of liquefying and transporting American gas to Asia, American producers stand to triple their profits or more by selling LNG overseas....and if they can get $15 from Japan, don't imagine that US prices will stay anywhere close to where they've been...so not only will passing this agreement upend our environmental regulations, it will also be the impetus for higher domestic prices for oil and gas and increased fracking in even the thinnest bands of shale that have been ignored up till now...furthermore, natural gas prices for heating and industry will skyrocket, and with natural gas priced higher than coal, utilities will return to coal, and strip mining of Appalachian communities will come back with a vengeance...
up until this week, it seemed that these trade deals could be stopped...but after seeing the quick turnaround of the Senate vote, where just enough concessions were made to the opponents to get the votes to pass the trade promotion authority, i'm not so sure....it seems the administration is willing to do what it has to, horse trade whatever it needs to, to get this done...and ominously, i've been seeing news of a number of gas export terminals in the planning stages, as if they're preparing for the eventual passage that they know will come...ie, just this week, Delfin LNG submitted applications for an offshore LNG facility in the Gulf and Cheniere Energy announced they'd begin construction on a sixth LNG export facility in Corpus Christi...oil & gas prices have been rising rapidly, too, despite the glut we've talked about, as if they're anticipating news that hasn't been obvious to me...so i dont know...
since the outcome on these trade agreements so obviously affects the future of fracking in our area, i'm going to start this week with selection of links on the news and opinion relating to them from the past two weeks, so you can see what's been going on with them...the regular fracking news stories, with a brief review of oilfield and production activity, will follow in a separate package...
Republicans push Barack Obama to rally Democrats for TPP vote - FT.com: The top Republican lawmaker on trade has called for US President Barack Obama to work even harder to build support among Democrats for a crucial trade bill on the eve of what are expected to be divisive votes in Congress. “We’ve still got a lot of raindrops to run through here without getting splashed,” Senator Orrin Hatch, chairman of the powerful Senate Finance Committee, told the Financial Times in an interview. The Utah Republican is one of the sponsors of a bill unveiled last month that would grant Mr Obama the “fast-track” authority he needs to wrap up the Trans-Pacific Partnership with Japan and 10 other Pacific Rim economies. If successfully concluded, the TPP, which covers about 40 per cent of the global economy, would be the biggest trade deal sealed in the world in two decades. The bill to grant the president what is formally known as “Trade Promotion Authority” is expected to come to a Senate vote as soon as this week and to be presented in the lower House of Representatives before the end of May. It faces stiff opposition from many Democrats who are coming under intense pressure from labour unions to resist Mr Obama’s trade agenda. But Republicans, who control both houses of Congress, insist they need Democratic support to offset defections by some Tea Party Republicans opposed to giving the president anything at all. Mr Hatch said he and fellow Republican Paul Ryan, chairman of the House Ways and Means Committee, were having a degree of success convincing some Tea Party Republicans. He also praised Mr Obama for taking on his critics in the Democratic party more forcefully in recent weeks.
Critical Alert': Jeff Sessions Warns America Against Potentially Disastrous Obama Trade Deal - Sen. Jeff Sessions (R-AL)is sounding the alarm to his colleagues Senate-wide, warning them and the American public with a “critical alert” published Sunday evening that voting for the Trade Promotion Authority (TPA) deal that would set up the Trans-Pacific Partnership (TPP) trade deal with Asian countries is fraught with problems and concerns. “Congress has the responsibility to ensure that any international trade agreement entered into by the United States must serve the national interest, not merely the interests of those crafting the proposal in secret,” Sessions’ team writes in a document that lays out the top five concerns with the Obama trade deal. “It must improve the quality of life, the earnings, and the per-capita wealth of everyday working Americans. The sustained long-term loss of middle class jobs and incomes should compel all lawmakers to apply added scrutiny to a ‘fast-track’ procedure wherein Congress would yield its legislative powers and allow the White House to implement one of largest global financial agreements in our history—comprising at least 12 nations and nearly 40 percent of the world’s GDP. “The request for fast-track also comes at a time when the Administration has established a recurring pattern of sidestepping the law, the Congress, and the Constitution in order to repeal sovereign protections for U.S. workers in deference to favored financial and political allies.” The Sessions document then goes point-by-point for five full pages through the TPA trade deal, laying out why it wouldn’t help Americans—rather, it would likely hurt American workers—and why the deal doesn’t in fact provide Congress with more power over trade despite talking points from the Obama trade deal’s proponents like House Ways and Means Committee chairman Rep. Paul Ryan, Senate Majority Leader Sen. Mitch McConnell , and House Speaker Rep. John Boehner..
Obama’s TPP doesn’t deserve free trade agreement treatment - The U.S. Congress is being asked to give President Barack Obama full “fast track” negotiating authority for the Trans-Pacific Partnership (TPP), supposedly a free trade agreement with 11 other mostly wealthy Pacific nations. Yet when you examine the Wiki-leaked version of TPP which is all we have, it is far more notable for the draconian intellectual property provisions than for any truly significant easing of trade barriers. I would argue that such tight intellectual property rights are an historic aberration, incompatible with a truly free market, so that TPP would overall raise barriers against free market exchange rather than lowering them. If it is to be economically beneficial, TPP needs a truly free-market negotiator at the U.S. end – which means it should wait until 2017. Like all regional trade treaties, TPP is in principle an unsatisfactory substitute for the real thing, which is a truly global free trade agreement along the lines of the moribund Doha round, hanging fire since 2001. Regional treaties allow countries to raise non-tariff barriers against non-members and erect innumerable incompatible international product standards which form barriers to truly free world trade. In TPP’s case there are some genuine advances, such as opening up Japanese agriculture (if that indeed happens). However trade among the TPP partners is mostly free with low tariff barriers already, since several of the TPP members already have free trade agreements with the United States.
President Obama Is Badly Confused About the Trans-Pacific Partnership - Dean Baker -- That was the main takeaway from a NYT article on his trip to Nike. According to the article, he made many claims about the Trans-Pacific Partnership (TPP) and opponents of the deal which are clearly wrong. For example, the article tells readers: "he [President Obama] scorned critics who say it would undermine American laws and regulations on food safety, worker rights and even financial regulations, an implicit pushback against Ms. Warren. 'They’re making this stuff up,' he said. 'This is just not true. No trade agreement’s going to force us to change our laws.'" President Obama apparently doesn't realize that the TPP will create an investor-state dispute settlement mechanism which will allow tribunals to impose huge penalties on the federal government, as well as state and local governments, whose laws are found to be in violation of the TPP. These fines could effectively bankrupt a government unless they change the law. It is also worth noting that rulings by these tribunals are not subject to appeal, nor are they bound by precedent. Given the structure of the tribunal (the investor appoints one member of the panel, the government appoints a second, and the third is appointed jointly), a future Bush or Walker administration could appoint panelists who would side with foreign investors to overturn environmental, safety, and labor regulations at all levels of government. (Think of Antonin Scalia.) President Obama apparently also doesn't realize that the higher drug prices that would result from the stronger patent and related protections will be a drag on growth. In addition to creating distortions in the economy, the higher licensing fees paid to Pfizer, Merck, and other U.S. drug companies will crowd out U.S. exports of other goods and services. Obama is also mistaken in apparently believing that the only alternative to the TPP is the status quo. In fact, many critics of the TPP have argued that a deal that included rules on currency would have their support.
A Trade Pact in the Corporate Interest - Spurred on by powerful multinational corporations and aided by their corporate lobbyists, the administration wants Congress to sign a blank check for yet another "free trade" deal, with the same inadequate safeguards as previous failed deals. The administration is pressuring Congress to pass special legislation, known as "fast track," intended to prevent a full and open discussion of an expansive new trade deal, the Trans-Pacific Partnership. Because tariff barriers are very low, this is not really a trade deal; it is about the protection of corporations. This deal contains major new provisions that would directly affect the lives of every American by moving important national decisions on regulating corporations, from product labeling to pollution out of the hands of the legislature and into those of special corporate dominated international tribunals. Neither the history of past trade agreements nor the way "fast track" has been handled to date should give the American people confidence that we can dispense with full Congressional discussion and a thorough examination of the proposed new agreement.
A Multinational Trojan Horse: The Trans-Pacific Partnership -- You don't have to know much about the "trade" deal called the Trans-Pacific Partnership (TPP) to be more than a little suspicious. First, there are the very peculiar bedfellows. Supporting the TPP are President Obama and most Congressional Republicans, the same Republicans who've vehemently opposed his every initiative for the past six and one-half years. Against the TPP are most (but not all) Congressional Democrats, Ford Motor Company, virtually all trade unions and environmental groups, watchdog groups such as Public Citizen, and usual Obama allies such as Massachusetts Senator Elizabeth Warren and Ohio Senator Sherrod Brown, who, in a testy open letter to the President on April 25, called for greater transparency on the TPP. Furthermore, when asked to lend his support for so-called "Fast Track" authority for the TPP, Obama water-carrier and former Senate Majority Leader Harry Reid chafed, "So the answer is not only no, but hell no."Also opposed: liberal icon Noam Chomsky, Democratic presidential hopeful Bernie Sanders, Republican hopeful Mike Huckabee, many Tea-Party groups, and conservative Republican editorialist and former presidential candidate Patrick Buchanan. Conspicuous by silence: Hillary Rodham Clinton. What's going on here? Why the strange alliances? Peel back the layers of the TPP and you'll find what some believe to be a "corporate Trojan horse." Disguised as "free trade," the TPP's provisions and tactics undermine Constitutional safeguards and national sovereignty. But there's also a silver lining. The TPP exposes who, in the marbled halls of political power, is working for whom. It forces politicians to put their cards on the table, and by their hands you will know them.
TPP: The Fascism Issue -- If the Trans-Pacific Partnership (TPP) Agreement will, if implemented, and as I’ve argued elsewhere, result in the death of national and state sovereignty, constitutional separation of powers, and democracy, then what system and what principles will replace these things? Eric Zuesse answers that it will be Fascism. And implicitly, that we are going through an evolution from representative democracy to fascism and that trade deals like the TPP, the Trans-Atlantic Trade and Investment Partnership (TTIP), and the Trade in Services Agreement (TiSA) mediate the transfer “. . . of democratic national sovereignty to international fascist bodies that represent global corporate management. . . . ” The motivation behind U.S. President Barack Obama’s trans-Pacific trade-deal TPP, and his trans-Atlantic trade-deal TTIP — the motivation behind both of these enormous international trade-deals — is the same, and Democratic U.S. Senators Elizabeth Warren and Sherrod Brown are correct: it is not at all progressive. It is instead to transfer political power away from the public in a democracy, and for that power to go instead to the international plutocracy (i.e., to go as far away from any national democracy as is even possible to go). This is to be done by switching the most fundamental thing of all: the global power-base itself. Instead of that power-base being democratic votes of the national publics, who elect their political representatives who determine the laws and regulations, that national democratic political system becomes instead the exact opposite: the global aristocratic stockholder votes of the international plutocracy who elect the corporate directors of international companies, who will, in their turn, then be selecting the members to the international-trade-panels which, in TPP and TTIP, will, in their turn, be determining the rules and enforcements regarding especially workers’ rights, product-safety, and the environment.
Extreme secrecy eroding support for Obama's trade pact - If you want to hear the details of the Trans-Pacific Partnership trade deal the Obama administration is hoping to pass, you’ve got to be a member of Congress, and you’ve got to go to classified briefings and leave your staff and cellphone at the door.If you’re a member who wants to read the text, you’ve got to go to a room in the basement of the Capitol Visitor Center and be handed it one section at a time, watched over as you read, and forced to hand over any notes you make before leaving. And no matter what, you can’t discuss the details of what you’ve read.“It’s like being in kindergarten,” said Rep. Rosa DeLauro (D-Conn.), who’s become the leader of the opposition to President Barack Obama’s trade agenda. “You give back the toys at the end.”For those out to sink Obama’s free trade push, highlighting the lack of public information is becoming central to their opposition strategy: The White House isn’t even telling Congress what it’s asking for, they say, or what it’s already promised foreign governments.
Trade with Asia Isn't About Jobs - - U.S. Defense Secretary Ash Carter is a very smart man who’s at home in the military-industrial complex, but he’s not very sharp on trade issues. Case in point: Carter’s recent claim in a speech at the start of his Asia trip: “We already see countries in the region trying to carve up these markets.” That was Carter’s attempt to show his support of the Obama administration’s big push to obtain fast-track authority to win eventual passage of the Trans-Pacific Partnership — the implication being that without TPP, America will lose ground in Asia. But all Carter did was show that when it comes to economics, he’s stuck in an earlier century. And with such scare talk, he and the administration are vastly overstating the benefits of TPP, which risks exacerbating America’s already tense relationship with China. Carter’s imagery of carving up markets unwittingly calls to mind one of the most famous political cartoons of all time: the iconic image by British caricaturist James Gillray that captured 18th century British Prime Minister William Pitt the Younger and Napoleon “carving up” the world into spheres of influence. But it doesn’t work that way with trade. There are no spheres of influence, there’s no winner-take-all game. In contrast to colonial-era territorial acquisition and mercantilism, the possibilities of who can trade with whom are, for all practical purposes, nearly endless. TPP will not provide American ownership of markets in the countries involved, nor will it cede that ownership to any other country.
WH takes on Reid over trade - The White House is criticizing Senate Democratic Leader Harry Reid for his promise to block a vote on fast-track trade authority for President Obama. White House spokesman Josh Earnest said the Senate should be able to move on fast-track quickly, taking issue with the Nevada senator's call for the chamber to take up other issues first. “We are setting the bar awfully low if the Senate cannot handle multiple issues at once,” Earnest said.We should be able to expect the United States Senate to do more than one thing over the next month.” Reid has long opposed fast-track, which would prevent Congress from amending trade deals negotiated by the Obama administration and make those agreements much easier to complete. He said Tuesday that he would work with other Democrats to prevent a vote on the measure and called on the Senate to first take up legislation on highway funding and the National Security Agency (NSA). Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday that his plan is to address fast-track after the Senate completes work on the GOP budget and an Iran bill. Reid’s office questioned whether McConnell can complete work on the highway and NSA bills if he also insists on taking up the trade legislation. Reid staffers noted that fast-track is expected to move with several other pieces of trade legislation, including bills to lower tariffs on imports from countries in sub-Saharan Africa and a bill to give assistance to workers who lose their jobs because of trade.
TPP: Obama’s Folly -- Barack Obama’s petulant criticism last Friday of Democrats who do not support his proposed Trans-Pacific Partnership reminds me of the old tongue-in-cheek advice to young lawyers: “If the facts are on your side, pound the facts. If the law is on your side, pound the law. If neither is on your side, pound the other lawyer.” The facts are definitely not on the president’s side. For two decades the trade deals negotiated by the last three presidents have lowered U.S. wages, lost jobs and generated a chronic trade deficit that requires our country to borrow more money every year in order to pay for imports. The president’s main argument that exports have risen, without mentioning that imports have risen much faster, is now transparently deceitful to anyone who can add and subtract. Neither is the law in his corner. As did his predecessors, Bill Clinton and George Bush, he assures Americans that this deal will be different because, you see, it will protect workers. But the secret draft, which had to be revealed to Americans by Wikileaks, shows that once again a trade agreement will be used to enhance the power of multinational corporate investors over people who have to work for a living. As AFL-CIO President Richard Trumka pointed out recently, the Office of the U.S. Trade Representative, which is charged with negotiating and enforcing the deal, does not even believe that murder and other brutal acts committed against labor union activists violate the “worker-protection” clauses to trade agreements.So, like a lawyer trained to defend the indefensible, Obama is desperately pounding the opposition. They are “just wrong,” he says, without showing us why. He accuses them of “making stuff up”—that is, that they are liars. He whines that they are “whupping on me.” He charges, nonsensically, that they “want to pull up the drawbridge and isolate themselves.”
Elizabeth Warren fires back at Obama: Here’s what they’re really fighting about - In an interview with Yahoo News that ran over the weekend, President Obama intensified his push-back against Elizabeth Warren and other critics of the massive Trans-Pacific Partnership trade deal, flatly declaring that Warren is “absolutely wrong.” That came after a speech Obama delivered at Nike headquarters, in which he continued making an expansive case for the deal as a plus for American workers — and not the massive giveaway to huge international corporations that critics fear. This week, the Senate will vote on whether to grant Obama “fast track” authority to negotiate the TPP agreement, which involves a dozen countries around the Pacific and could impact 40 percent of U.S. trade. If the “fast track” framework passes, Congress would hold only an up-or-down vote on the TPP once it is finalized, without amendments. But Congress could also repeal that fast track authority if the TPP is not to its liking, and try to push changes to it, before any final vote. Warren has previously claimed that the TPP’s controversial Investor-State Dispute Settlement provision, or ISDS, could undermine or chill public interest regulations in the U.S. and other participating countries, and could even undercut Dodd Frank financial reform, one of Obama’s signature achievements. The ISDS is designed to create a neutral international arbitration mechanism that creates a stable legal environment, facilitating investments in countries where investors might fear unfair legal treatment by foreign governments. Obama has strongly rejected Warren’s arguments in the interview with Yahoo and elsewhere. I spoke to Senator Warren about their disagreements. A lightly edited and condensed transcript follows.
5 Leading Legal Scholars on TPP: We Write Out of Grave Concern --We write out of grave concern about a document we have not been able to see. Although it has not been made available publicly, we understand that the Trans-Pacific Partnership (TPP) trade agreement currently being negotiated includes Investor-State Dispute Settlement (ISDS) provisions. ISDS allows foreign investors—and only foreign investors—to avoid the courts and instead to argue to a special, private tribunal that they believe certain government actions diminish the value of their investments. Courts are central institutions in the rule of law. Americans have much to be proud of in the evolution of our court system, which has evolved over the centuries and now provides equal access for all persons. Courts enable the public to observe the processes of development of law and to watch impartial and accountable decision-makers render judgments. We write because of our concern that what we know about ISDS does not match what courts can provide. Those advocating using this alternative in lieu of our court system bear the burden of demonstrating why such an exit is necessary, and how the alternate system will safeguard the ideals enshrined in our courts. Thus far, the proponents of ISDS have failed to meet that burden. Therefore, before any ISDS provisions are included in the TPP or any future agreements, including the Transatlantic Trade and Investment Partnership (TTIP), their content should be disclosed and their purposes vetted in public so that debate can be had about whether and if such provisions should be part of proposed treaties. Below, we detail the ways in which ISDS departs from the justice opportunities that U.S. courts provide.
Put Trade on the Right Track — Not the Fast Track -Time is growing short in a heated debate over the Obama Administration's ambitious new trade deals. As early as this Thursday, the Senate will vote on granting the President's request for "trade promotion authority" or what is more commonly known as "fast track." The bill before the Senate is procedural: it will provide for the fast tracking of the "Trans-Pacific Partnership" (TPP) negotiated with eleven other Pacific Rim countries and a trade and investment agreement with the European Union (TTIP) expected later this year. Fast track provides for an up or down Congressional vote on the drafts that the President's negotiators bring forward, without the possibility of further amendments by Congress. Getting fast track out of the Senate has been harder than the President expected, with Senators Elizabeth Warren, Bernie Sanders, Sherrod Brown and most progressive Democrats opposing the Pacific deal, which they say would undercut American labor, environmental protection and democratic government. The President has shot back with heated criticism of his opponents, assuring the public that the TPP is the "most progressive trade agreement in our history." But it is hard for outsiders to verify the President's claim, since the draft of the Trans-Pacific Partnership remains classified under a national security provision and is thus unavailable for public scrutiny. In fact, members of Congress can only see the draft trade agreement in a secure basement room, after leaving cell phones at the door. Those who have seen the text are later allowed to provide only broad descriptions of what it contains. While the draft TPP may be viewed by those with security clearance, the European negotiations are at a less advanced stage, and no draft of the TTIP is yet available to Congress. But the fast track authority being decided this week would authorize the same up or down Congressional vote on whatever the President's team eventually delivers. In fact, if Congress approves fast track, the grant will last for six years, guaranteeing this Administration--and the next--a chance to push forward the TPP, the TTIP, and any future trade agreements.
Fast Track Authority for Toxic Trade Fails Key Vote in Senate -- Yves Smith - The Senate gave Obama a decisive defeat by refusing to let fast track authority for the TPP and other pending trade deals advance to the stage of being debated. Thanks to all of your calls, e-mails and letters to Senators, Representatives, and local media. This is one of those rare cases where the process worked. From Reuters: Legislation giving U.S. President Barack Obama authority to speed trade deals through Congress failed a crucial procedural test on Tuesday, delaying a measure that may be key to President Barack Obama’s diplomatic pivot to Asia. In a setback to the White House trade agenda, the Senate voted 52-45 – eight votes short of the necessary 60 – to clear the way for debate on the legislation, which would allow a quick decision on granting the president so-called fast track authority to move trade deals quickly through Congress. The vote marked a big victory for Senate Democratic leader Harry Reid, an outspoken opponent of fast-track. The failure to garner the necessary votes came after key pro-trade Democrats, including Senator Ron Wyden of Oregon, announced they would vote no on the procedural vote because the measure lacked some trade protections. Bloomberg bizarrely has the heading for its Fast Track article, on its main page, in red, “Last Minute Rebellion”. Anyone who has been paying attention knows that most Democrat Congressmen opposed the deal; Obama has been trying to win over enough to give Republicans air cover so that they can claim these traitorous deals are “bipartisan”. From the story:Senate Democrats staged a last-minute rebellion against one of President Barack Obama’s top legislative priorities by blocking a test vote on a trade measure that didn’t include companion measures they sought. The vote, 52-45, effectively delays fast-track legislation Obama wants to expedite approval of trade accords. Supporters needed 60 votes to advance the bill to a final vote.
Senate Democrats Defeat The President: Why Obama Is Rushing To Fast-Track The TPP - Moments ago, in an embarrassing setback for the president, Senate Democrats in a 52-45 vote - short of the required 60 supporters - blocked a bill that would give President Barack Obama fast-track authority to expedite trade agreements through Congress, a major defeat for Obama and his allies who "say the measure is necessary to complete a 12-nation Pacific trade deal that is a centerpiece of the administration’s economic agenda." The passage failed after a leading pro-trade Democrat said he would oppose the bill: Ron Wyden, the top Democrat on the Senate Finance Committee, said he would vote no and his loss was a major blow to hopes of attracting a sufficient number Democrats to get 60 "yes" votes in the chamber. According to Reuters, the Senate vote was one of a series of obstacles to be overcome that hinged on the support of a handful of Democrats. The White House has launched a campaign blitz directed at them in support of granting the president authority to speed trade deals through Congress. Fast-track legislation gives lawmakers the right to set negotiating objectives but restricts them to a yes-or-no vote on trade deals such as the TPP, a potential legacy-defining achievement for Obama. Senate Majority Leader Mitch McConnell, hoping to shore up support, reminded his fellow senators that Tuesday's vote simply would pave the way for debating fast-track legislation. The WSJ cites Mitch McConnell who told reporters shortly before the vote, which he expected to lose, that “This issue’s not over" adding that "I’m hopeful we’ll put this in the win column for the country sometime soon.”
Senate Democrats Throw Obama Under the Bus: Fast Track Trade Bill Stalls; Right For Wrong Reasons -- In rare political reverse alignment, Senate republicans voted for Obama's Fast Track proposal while Sen. Tom Carper, D-Del., was the only Democrat to vote with Republicans. To proceed, the bill needed a super-majority of 60 votes. In a vote likely to shock president Obama, Fast Track Failed 52-45 Senate Republicans have been working with the Obama administration to reauthorize fast track negotiating authority aimed at assisting Obama in finalizing a trade pact with 11 Asia-Pacific nations. Fast track authority authorizes the president to submit to Congress negotiated trade deals that can only be approved or rejected, not amended, on an expedited basis. The Senate Finance Committee approved the bill, 20-6, in a bipartisan vote last month. Chairman Orrin Hatch, R-Utah, and Senate GOP leaders believed they had reached an agreement with the panel's top Democrat, Sen. Ron Wyden, D-Ore., to begin debate this week on the fast track legislation, with assurances that it would move in tandem with a trade adjustment assistance package to aid American workers negatively affected by trade deals. However, Democrats en masse demanded Tuesday that Republicans include in the deal two additional, committee-approved bills: a non-controversial measure supporting African economies and a customs enforcement measure that includes controversial language aimed at cracking down on China for currency manipulation.Wyden announced Democrats could not move forward unless there was assurances that "all four of the measures I've described are actually enacted." Republicans balked. "What I'm not going to put up with is the minority trying to craft a bill before we even get on it. That's just simply unacceptable," said Senate Majority Leader Mitch McConnell, R-Ky.
Obama’s Trade Backfire - WSJ: The trade bill failed a major procedural vote on Tuesday, with every Senate Democrat save one blocking debate on what President Obama continues to call an economic priority. The 52-45 liberal blockade doesn’t mean trade-promotion authority is dead. But preventing a setback from becoming a rout will require a Republican salvage operation to rescue Mr. Obama from the consequences of his governing methods. The politics of trade require Presidents to cultivate coalitions from the center out, building a majority between statist progressives and the protectionist right. But that is not Mr. Obama’s thing. His instincts are to govern from the left, treat Members of Congress as peasants who must bow before his superior wisdom, and then assail the motives and character of his opponents. Mr. Obama’s attack-and-polarize approach worked while he had overwhelming liberal majorities, despite private unrest among Democrats about the White House’s ex-cathedra habits. They didn’t mind when he attacked Republicans as moral cretins and dissemblers. The difference is that on trade Mr. Obama has turned his contempt on Democrats. At the Nike campus in Oregon over the weekend, Mr. Obama berated “my fellow-travellers on minimum wage and on job training and on clean energy. . . . And then on this one, they’re like whooping on me.” He added that these critics are “just wrong” and “they’re making this stuff up.”
Senate Reaches Deal To Vote Thursday On 'Fast-Track' Trade Bill -- One day after Senate Democrats blocked the "fast-track" trade authority bill that has been championed by both President Obama and Republicans, Majority Leader Mitch McConnell says an agreement has been reached to move forward.The solution calls for separate votes on bills that Democrats had wanted to move as a single package on the floor, according to NPR's Ailsa Chang. Ailsa says the Senate will vote on a customs enforcement bill that includes Sen. Charles Schumer's safeguards aimed at reducing currency manipulation.The customs bill "will get a vote tomorrow at 10:30 a.m.," Ailsa reports, along with "a vote on a bill giving trade preference to sub-Saharan African countries."Votes on final passage of those two measures is slated for 12:30 p.m. ET.The deal comes a day after the "fast track" bill that would give the president TPA — or trade promotion authority — fell eight votes short of the 60 needed to avoid a Senate filibuster. As Brian Naylor reported for The Two-Way on Tuesday, the trade authority "would ultimately clear the way for passage of the Trans Pacific Partnership — a complex trade agreement that its supporters say will provide new markets for American goods as well as new jobs."
After Lobbying by Obama, Senate Agrees to Vote on Trade Bill After All - Senate leaders, after personal intercessions by President Obama, reached an agreement Wednesday on a path to grant the president accelerated power to complete a sweeping trade accord ringing the Pacific Ocean — just a day after fellow Democrats had blocked him.The larger aim is to secure a 12-nation agreement known as the Trans-Pacific Partnership, spanning the Pacific from Canada and Chile to Japan and Australia and encompassing 40 percent of the world’s economic output. Mr. Obama sees the pact as a central part of his economic legacy, the largest trade deal in two decades and the realization of his foreign policy pivot toward Asia.It also means money. Major American business interests, from Nike to Boeing and Hollywood to Silicon Valley, want the deal badly. Labor and environmental groups see it as a threat to American workers at the expense of profits.A series of trade-related votes will begin Thursday and stretch well into next week. The trade promotion authority would give the president the ability to move more quickly on the deal, leaving Congress with the power to vote up or down on the agreement but with no ability to amend it. While the pathway to passage became clearer Wednesday, it is still treacherous. Most Senate Democrats will ultimately oppose the trade promotion bill, and with the stated opposition of Senators Rand Paul of Kentucky and Jeff Sessions of Alabama, both Republicans, there are now louder rumblings on the president’s right flank. “Now is not the time to celebrate,” said Senator Orrin Hatch of Utah, the Finance Committee chairman. “While this agreement solves a temporary procedural issue, now is when the real work begins.”
Fast Track will empower GOP president, McConnell says - Yesterday, Senate Democrats blocked the bill that would have given President Obama “fast track” authority to negotiate trade deals, subject only to a Congressional up-or-down vote later. Though this battle is far from over, this raises the possibility that Democratic opponents of the Trans-Pacific Partnership could ultimately succeed in derailing it by scuttling the Fast Track process itself.Now opponents of Fast Track may have inadvertently been given some new ammunition by an unlikely source: Staunch TPP-advocate Mitch McConnell. In an interview with John Harwood, McConnell said that Republicans should support Fast Track authority, explicitly because — and here’s the rub — it will empower the next GOP president to negotiate trade deals more easily, despite Democratic opposition to them in Congress:“If we had a Republican president right now, not a single Democrat would vote for Trade Promotion Authority. So what I’ve said to my members, if we want the next Republican president, who we hope will be sworn in less than two years from now, to have a chance to do trade agreements with the rest of the world, this bill is about that president as well as this one.” McConnell added, by way of illustration, that Fast Track is a “six year bill.” Expect Democratic opponents of Fast Track to grab on to this. It dovetails nicely with the argument they are making: That Fast Track could ultimately undermine achievements like the Dodd Frank financial reform bill.
Senate Passes Obama's TPP Fast-Track Trade Proposal -- Two days ago there was some rejoicing and much surprise when the "Warren-faction" of Senate liberals turned against Obama, and failed to vote for a fast-track approval of the TPP. That surprise lasted for about 48 hours when moments ago, in a 65-33 vote, the Senate finally advanced a measure allowing Obama to expedite approval of trade agreements, a bill with bipartisan support in that chamber which however according to Bloomberg may run into strong opposition from House Democrats. The vote followed separate votes sought by Democrats to pass proposals curbing currency manipulation and boosting imports from sub-Saharan Africa. The Senate plans to consider amendments to the fast-track trade proposal next week. As previously reported, a rebellion Tuesday among Senate Democrats seeking the currency provision previews what may be fiercer battle ahead between Democrats and House Speaker John Boehner, an Ohio Republican. “There’s a broad feeling we have to do something against China” on currency manipulation, New York Senator Charles Schumer, the chamber’s third-ranking Democrat, told reporters before the vote on advancing the trade bill. He called the currency measure “a shot across China’s bow that we’re not going to just sit there and do nothing.”
Influence peddlers seem to know more about the Trans-Pacific Partnership than Congress - The restrictions the Obama administration has placed on members of Congress wishing to peruse the text of the Trans-Pacific Partnership, a managed trade agreement among the United States and 11 other countries, are something of a shock in a democratic republic. Lawmakers can bring staff, but only those with the necessary security clearances. They can take notes, but must surrender them to the guards upon leaving. They may not bring in electronic devices such as cameras or cellphones that could be used to copy passages of the bill. As Sen. Barbara Boxer, D-Calif., pointed out in an impassioned floor speech attacking the restrictions, the document is not a matter of national security, but rather regulates commercial transactions among nations. The administration made the text available to Congress under the aforementioned restrictions in a bid to win its support for fast track trade authority, allowing the president to negotiate the deal and then submit it to Congress for an up-or-down vote, with no amendments. The extreme secrecy of the text hasn’t stopped interest groups from lobbying in its favor, though. The U.S. Chamber of Commerce is pushing the agreement, quoting studies on the unread document that project it will lead to a $124 billion surge in U.S. exports by 2025. A review of first quarter lobbying filings shows 134 corporations, 78 trade associations and 13 labor unions lobbying on the bill. The interests pushing the pact include industry groups like the Pharmaceutical Manufacturers and Research of America and the American Apparel and Footwear Association, corporations like Caterpillar and Coca-Cola, agricultural groups like the National Cattlemen’s Beef Association, the National Milk Producers Federation and the National Chicken Council, and the Emergency Committee for American Trade (ECAT).
The Secret Corporate Takeover -- Joseph Stiglitz --- The United States and the world are engaged in a great debate about new trade agreements. Such pacts used to be called “free-trade agreements”; in fact, they were managed trade agreements, tailored to corporate interests, largely in the US and the European Union. Today, such deals are more often referred to as “partnerships,”as in the Trans-Pacific Partnership (TPP). But they are not partnerships of equals: the US effectively dictates the terms. Fortunately, America’s “partners” are becoming increasingly resistant. It is not hard to see why. These agreements go well beyond trade, governing investment and intellectual property as well, imposing fundamental changes to countries’ legal, judicial, and regulatory frameworks, without input or accountability through democratic institutions. Perhaps the most invidious – and most dishonest – part of such agreements concerns investor protection. Of course, investors have to be protected against the risk that rogue governments will seize their property. But that is not what these provisions are about. There have been very few expropriations in recent decades, and investors who want to protect themselves can buy insurance from the Multilateral Investment Guarantee Agency, a World Bank affiliate (the US and other governments provide similar insurance). Nonetheless, the US is demanding such provisions in the TPP, even though many of its “partners” have property protections and judicial systems that are as good as its own. The real intent of these provisions is to impede health, environmental, safety, and, yes, even financial regulations meant to protect America’s own economy and citizens. Companies can sue governments for full compensation for any reduction in their future expected profits resulting from regulatory changes.
Sovereignty For International Investors (Trans-Pacific Partnership (TPP)) -- Elizabeth Warren makes a compelling case against the Trans-Pacific Partnership in The Trans-Pacific Partnership clause everyone should oppose, where she says: ISDS [Investor-State Dispute Settlement] would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court. Here’s how it would work. Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages. If that seems shocking, buckle your seat belt. ISDS could lead to gigantic fines, but it wouldn’t employ independent judges. Instead, highly paid corporate lawyers would go back and forth between representing corporations one day and sitting in judgment the next. Maybe that makes sense in an arbitration between two corporations, but not in cases between corporations and governments. If you’re a lawyer looking to maintain or attract high-paying corporate clients, how likely are you to rule against those corporations when it’s your turn in the judge’s seat?… I understand Senator Warren’s focus on the United States, but it diverts her from a darker issue raised by the TPP. The TPP gives international investors sovereignty equivalent to national governments.
this week's oil & gas & fracking related links
with benchmark natural gas prices 20% higher than they were at the end of April and oil prices up 30% from their March lows, the slowdown in drilling activity that we've been watching all year has just about stopped; in fact, many drillers are now speaking of adding rigs...while the number of rigs active this week fell for the 23rd consecutive week, the net 6 rigs that were idled this week was the least that have been shut down in any week since early December...Baker Hughes reported that a total of 888 drilling rigs were running in the US as of the week ending May 15th, down from 894 the prior week, of which 660 were oil rigs, 8 fewer than last week, 223 were gas rigs, 2 more than last week, and 5 were miscellaneous rigs, which was unchanged...that's down from 1531 oil rigs, 326 gas rigs, and up from 4 directional rigs that were in use in the same week last year....7 horizontal drillers were taken out of service this week, leaving 685, a directional rig was added, bringing their total to 89, and the count of vertical rigs was unchanged at 114....interestingly, Kansas, who shut down their injection wells due to earthquakes, saw 4 drilling rigs added this week, bring their total to 14; another 3 rigs were added in Louisiana, and Oklahoma, Utah, and West Virginia each also saw an additional driller active...on the other hand, Texas drillers idled another 6 rigs, dropping their count to 373, down from 891 active rigs a year ago, while Wyoming shut down 2, and drillers in Alaska, Arkansas, North Dakota, and Pennsylvania each idled one rig…meanwhile, the rig counts for Ohio and all other states were unchanged...
meanwhile, domestic production of crude oil has been holding fairly steady, inching up a few barrels a day in the most recent report, as our output of crude rose from 9,369,000 barrels per day in the week ending May 1st to 9,374,000 barrels per day in the week ending May 8th...our imports of crude also rose, from 6,541,000 barrels per day last week to 6,881,000 barrels per day with this week's report, while the weekly Petroleum Status Report (62 pp pdf) from the Energy Information Administration says that US crude oil imports averaged over 7.2 million barrels per day over the last four weeks, 2.2% below the same four-week period last year...even with our imports and production up, however, our inventory of crude oil in storage slipped, as U.S. commercial crude oil in storage fell by 2.2 million barrels, from last week's 487,030 million barrels to 484,839 million barrels this week...even so, our inventories remain 21.7% higher than they were a year ago, and are still at the highest level for the second week in May in at least the last 80 years...
Fracking's impact on air quality in Carroll County? More studies needed - Two researchers say that more studies are needed to determine what impact natural gas drilling has had on air quality in Carroll County. An initial study conducted in 2014 found that levels of polycyclic aromatic hydrocarbons (PAH) around active wells in Carroll County were higher than those sampled in Chicago, urban Egypt and near a petroleum refinery in Belgium. PAHs are organic compounds, some of which are toxic. Erin Haynes, of the Department of Environmental Health at the University of Cincinnati, and Diana Rohlman, of the College of Public Health and Human Services at Oregon State University, gave a presentation on the study to members of Carroll Concerned Citizens on Thursday. Rohlman described it as preliminary. “We just wanted to get a flavor of what’s going on,” she said. Before researchers from the University of Cincinnati and Oregon State University conducted the study, no one had published a paper on hydraulic fracturing, or fracking, Haynes said. The study was conducted in two phases. The phase one results show that PAHs were highest in the air closes to active wells. PAH levels decreased when the samples were further away from the wells. In phase two, conducted in May 2014, six samplers each were placed around five wells in Carroll County at varying distances. In addition, 25 volunteers living in the county wore passive personal sampler wristbands to monitor what chemicals they were exposed to during an average day. The volunteers also filled out health surveys. The results from phase two have yet to be analyzed. Haynes said she hoped to have data from the wristbands by early this fall.
Ohio study tracks air pollution from fracking - Summit County Citizens Voice -- Careful air sampling near active natural gas wells in Carroll County, Ohio showed the widespread presence of toxic air pollution at higher levels than the Environmental Protection Agency considers safe for lifetime exposure, according to scientists from Oregon State University and the University of Cincinnati. The study reinforces the need for more extensive air quality monitoring in fracking zones around the country, where exposure to the poisonous emissions are likely to lead to increased risk of cancer and respiratory ailments. “Air pollution from fracking operations may pose an under-recognized health hazard to people living near them,” said the study’s coauthor Kim Anderson, an environmental chemist with OSU’s College of Agricultural Sciences. Anderson and her colleagues collected air samples during a three-week period last February in a highly fracked area, with more than one active well site per square mile. The study was spurred by local residents who wanted to know more about possible health risks.The air samplers were placed on the properties of 23 volunteers living or working at sites ranging from right next to a gas well to a little more than three miles away. The samples were sent to Anderson’s lab at OSU, where the analysis showed high levels of PAHs across the study area. Levels were highest closest to the wells and decreased by about 30 percent with distance. Even the lowest levels — detected on sites more than a mile away from a well — were higher than previous researchers had found in downtown Chicago and near a Belgian oil refinery. They were about 10 times higher than in a rural Michigan area with no natural gas wells.
Fracking could increase risk of cancer, new study finds - Living near to active fracking sites could increase the risk of cancer as the process harmful chemicals into the air, a new study has found. Researchers from Oregon State University (OSU) and the University of Cincinnati found that hydraulic fracturing, commonly known as fracking, releases polycyclic aromatic hydrocarbons (PAHs), which are linked to cancers and respiratory diseases. Co-author Kim Anderson, an environmental chemist at OSU, said: "Air pollution from fracking operations may pose an under-recognised health hazard to people living near them." The study was published in Environmental Science & Technology. The team took air samples from sites near active natural gas wells in Carroll County, Ohio. The area is rife with fracking sites, having more than one active well per square mile. Aluminium boxes containing polyethylene ribbons, which absorb pollutants in a similar manner to living cells, were used to measure PAH levels in the air. Even the lowest PAH levels detected - those collected from air samples more than a mile away from a well - were 10 times higher than sites with no natural gas wells.The team calculated that the cancer risk posed to a person living or working close to the well and constantly exposed to the pollutant exceeded the US Environmental Protection Agency's safe risk levels.
Oil and gas companies exploit our state - Columbus Dispatch - The Thursday So to Speak column “ Deference to fracking demands shake-up,” by Dispatch Columnist Joe Blundo, set me off again. I think the following items need to be researched and exposed to the light of day:
- • Fracking tax increase: Thanks to some Republicans in the House and Senate, the oil and gas companies have been taking advantage of Ohio residents. These folks take campaign contributions and then do everything in their power to protect the companies. These politicians have a fiduciary responsibility to all Ohioans.
- • Disposal wells: The geologic structure of Ohio, I am told, is conducive to disposal wells where the geologic structures of Pennsylvania and West Virginia are not, thus we take their brine in addition to our own. Apparently the Supreme Court has ruled that Ohio must take others’ trash, citing “restraint of trade” if it doesn’t.
- • Old wells: The state (you and me) is paying to cap hundreds of wells that have been abandoned when businesses walk away.
- • New York trash: Ohio takes, and has taken for years, trash from New York City for disposal in our landfills. In Columbus, we wisely are paying to use a recycling system to limit the amount of trash we put in our landfills. Follow the money on that one, too.
- • Water: Where are the oil and gas companies getting the billions of gallons of fresh water? From Lake Erie? It’s from our groundwater, but are they paying what the market will bear for that Ohio resource, as well?
Ohio fracking regulator ODNR getting new earthquake monitors - The Ohio agency that regulates oil and gas drilling is getting four new seismometers to watch for fracking-related earthquakes. The new earthquake monitors won’t be in eastern Ohio, though, where oil and gas hydraulic fracturing is prevalent and has sparked concerns of seismic activity. Two monitors instead will go to western and northwestern parts of the state, while the locations for the other two are to be determined. The four new seismometers will give the state 23 total. See Also Fracking-earthquake link may impact insurance policies Source of quakes remains elusive in drilling circles “We’re filling in the gaps,” said Ohio Department of Natural Resources spokesman Eric Heis. “We already have a lot in the eastern part.” The agency asked for the devices as part of a $240,000 request the Ohio Controlling Board will hear next week. Two-thirds of that money will go toward the seismometers.
Ohio waterless fracking well's output lagging - The waterless fracking well tested in eastern Ohio has produced disappointing results, dealing a blow to the innovative technology that could help use less water in oil and gas operations and open up Ohio’s oil window. The $22 million test well, drilled by EV Energy Partners and eight other companies in Tuscarawas County, has produced for 90 days. The well, called Nettles, produced half the amount of oil as a nearby well fracked using a lot of water, EV Chairman John Walker told analysts Monday in an earnings call. "We clearly have work left to do in the volatile oil window to determine its economic potential," he said, "but are separately making progress working toward a drilling joint venture to provide the capital for drilling a portion of our operated Utica wet gas window acreage." A typical Utica well is in the $6.5 million to $8 million range, said director Ken Mariani. “So the $22 million obviously was a significant incremental cost over a more traditional completion,” he said. However, because the well flows back hydrocarbons, not water, that can be resold, the actual cost might be closer to $15 million, he said.
Waterless fracking test well isn't doing so hot - -- While the oil and gas industry was excited about the idea of waterless fracking and the environmental and health benefits that it would bring, it is sad to say the Ohio well testing waterless fracking isn’t exactly that bright light at the end of tunnel. The $22 million test well operated by EV Energy Partners LP, along with eight other companies, in Tuscarawas County, Ohio, has officially been producing for 90 days but didn’t quite meet expectations. Nettles, the test well, produced half the amount of oil that its neighboring well that used water produced. EV Energy Partners LP’s Chairman John Walker shared the information on Monday during an earning calls with analysts. Walker also commented on the amount of work the company needs to do: We clearly have work left to do in the volatile oil window to determine its economic potential … But are separately making progress working toward a drilling joint venture to provide the capital for drilling a portion of our operated Utica wet gas window acreage. EV Energy’s Director Ken Mariani said that the costs of drilling a typical well in the Utica shale formation usually costs $6.5 million to $8 million. As Mariani explained, it is obvious that $22 million on one well is a lot of money. He also explained that even though the well isn’t producing as much because it flows back hydrocarbons, which can be resold, the ending cost of the well could be closer to $15 million.As reported by Columbus Business First,“Waterless fracking isn’t over – Chesapeake Energy Corp. (NYSE:CHK), the biggest oil and gas driller in Ohio, is testing waterless fracking and EV Energy Partners said it’ll continue testing the Nettles well, specifically to evaluate the quality of the shale rock.”
Utica and Marcellus well activity in Ohio -- Activity in the Utica Shale formation and Marcellus Shale formation in Ohio have both seen little change when compared to the last activity report. Yet for one company, selling its Ohio acreage is top priority. Magnum Hunter Resources Corp., one of the more vocal advocates for the Utica Shale formation, shared that it is selling $450 million worth of its land in Ohio. The company is working out a joint venture deal with plans to sell some of its undeveloped and unproved acreage in the Utica shale play. The decision to sell is part of five different actions Magnum Hunter is taking to better its liquidity. After losing $105.9 million during the first three months of this year, the company decided that something needed to be done to boost its liquidity. As of now, Magnum Hunter has 130, 000 leased acres in eastern Ohio’s Utica shale but does not have any drilling rigs or plans to complete any wells. Evans said he is anticipating that there will be more cuts in service costs and improvements in the company’s capital position, and this is one way Magnum Hunter is preparing for that. The following information is provided by the Ohio Department of Natural resources and is through the week of May 2nd. Activity in the Utica Shale formation in Ohio has had a few slight changes when compared to last week’s update. According to this week’s report, 423 wells were permitted, 565 drilled, 861 producing, 13 inactive, 24 in final restoration and 3 abandoned. This brings the total number of wells in the Utica to 1,889. The Marcellus Shale in Ohio has zero change reported when compared to last week’s well report. The area is still sitting at 15 wells permitted, 13 drilled (up 1), 14 producing (down 1) and one well inactive. There are a total of 43 wells in the Ohio Marcellus Shale.
Marcellus permit activity in Pennsylvania - Over the last week, new permitting in the Marcellus Shale formation in Pennsylvania has seen quite an increase. However, permits aren’t the only thing getting attention in the state. Governor Tom Wolf’s proposed severance tax was recently put under the microscope for observation. Associated Petroleum Industries of Pennsylvania’s (API-PA) Executive Director Stephanie Catarino Wissman broke down the new severance tax study, titled “The Economic Impacts of the Proposed Natural Gas Severance Tax in Pennsylvania” in a recent press briefing. The study focused on the possible economic impacts Wolf’s proposed natural gas severance tax would have on unconventional natural gas producers in Commonwealth. It was conducted by Timothy Considine, along with Natural Resources Inc., and was approved by the American Petroleum Institution (API).During her briefing, Wissman explained how the current natural gas impact fee has benefitted the state’s Commonwealth greatly: The U.S. oil and natural gas industry delivers hundreds of millions of dollars to the Commonwealth. The current local impact tax, which is collected from every shale drilling site in the state, has distributed more than $630 million to communities since 2012 – including more than $224 million in just 2014. That’s on top of over $2.1 billion in state and local taxes already generated by our industry. The following information is provided by the Pennsylvania Department of Environmental Protection and covers May 4th through May 10th. New: 32 Renewed: 4
UGSG looks at microbiology, chemistry of Pa. fracked wells - - From the U.S. Geological Survey today: In a study of 13 hydraulically fractured shale gas wells in north-central Pennsylvania, USGS researchers found that the microbiology and organic chemistry of the produced waters varied widely from well to well. The variations in these aspects of the wells followed no discernible spatial or geological pattern but may be linked to the time a well was in production. Further, the study highlighted the presence of some organic compounds (e.g. benzene) in produced waters that could present potential risks to human health, if the waters are not properly managed. Produced water is the term specialists use to describe the water brought to the land surface during oil, gas, and coalbed methane production. This water is a mixture of naturally occurring water and fluid injected into the formation deep underground to enhance production. Although the USGS investigators found that the inorganic (noncarbon-based) chemistry of produced waters from the shale gas wells tested in the Marcellus region was fairly consistent from well to well and meshed with comparable results of previous studies (see USGS Energy Produced Waters Project), the large differences in the organic geochemistry (carbon-based, including petroleum products) and microbiology (e.g. bacteria) of the produced waters were striking findings of the study. “Some wells appeared to be hotspots for microbial activity,” observed Denise Akob, a USGS microbiologist and lead author of the study, “but this was not predicted by well location, depth, or salinity. The presence of microbes seemed to be associated with concentrations of specific organic compounds — for example, benzene or acetate — and the length of time that the well was in production.” The connection between the presence of organic compounds and the detection of microbes was not, in itself, surprising. Many organic compounds used as hydraulic fracturing fluid additives are biodegradable and thus could have supported microbial activity at depth during shale gas production.
Dimock, PA Lawsuit Trial-Bound as Study Links Fracking to Water Contamination in Neighboring County - A recent peer-reviewed study published in the Proceedings of the National Academy of Sciences has confirmed what many fracking critics have argued for years: hydraulic fracturing for oil and gas can contaminate groundwater. The study’s release comes as a major class action lawsuit filed in the District Court for the Middle District of Pennsylvania in 2009 winds its way to a jury trial later this year. The lawsuit over fracking groundwater contamination pits plaintiffs based in Dimock, PA against Cabot Oil and Gas Corporation. For the study, researchers examined groundwater contamination incidents at three homes in Pennsylvania’s Marcellus Shale basin in Bradford County. As The New York Times explained, the water samples showed “traces of a compound commonly found in Marcellus Shale drilling fluids.” It’s not the first time fracking has been linked to groundwater contamination in northeastern Pennsylvania. And that brings us back to Dimock, , located in neighboring Susquehanna County. As DeSmogBlog revealed in August 2013, the U.S. Environmental Protection Agency (EPA) had in its possession an unpublished PowerPoint presentation summarizing an Agency-contracted study that linked fracking to groundwater contamination in Dimock, a study the Agency later abandoned and censored. That presentation was subsequently leaked and published here for the first time.In its official July 2012 Dimock desk statement, EPA said “there are not levels of contaminants present that would require additional action by the Agency.” As Greenpeace USA researcher Jesse Coleman recently pointed out, EPA has done the bidding of the oil and gas industry on multiple instances during high profile fracking studies.
Fracking may affect air quality and human health - People living or working near active natural gas wells may be exposed to certain pollutants at higher levels than the Environmental Protection Agency considers safe for lifetime exposure, according to scientists from Oregon State University and the University of Cincinnati. The researchers found that hydraulic fracturing - a technique for releasing natural gas from below-ground rock formations - emits pollutants known as PAHs (polycyclic aromatic hydrocarbons), including some that are linked with increased risk of cancer and respiratory ailments. "Air pollution from fracking operations may pose an under-recognized health hazard to people living near them," said the study's coauthor Kim Anderson, an environmental chemist with OSU's College of Agricultural Sciences. The study, which appears in the journal Environmental Science & Technology's online edition, is part of a larger project co-led by the University of Cincinnati's Erin Haynes, OSU's Anderson, her graduate student Blair Paulik and Laurel Kincl, director of OSU's Environmental Health Science Center. Anderson and her colleagues collected air samples from sites near active natural gas wells in Carroll County, Ohio, over a three-week period last February. Carroll The rural county is a hotspot of natural gas prospecting, with more than one active well site per square mile. They placed air samplers on the properties of 23 volunteers living or working at sites ranging from right next to a gas well to a little more than three miles away.
Fracking may cause air pollution, respiratory issues - (UPI) -- The explosion of hydraulic fracturing, or fracking, in the oil and natural gas industry as a method of extracting fuels from shale basins has raised dozens of environmental concerns including increased risk of air pollution and respiratory issues among them. A new study found that contaminants in the air from fracking exceed levels deemed safe by the Environmental Protection Agency and may pose health risks to those exposed. The study, conducted by researchers from Oregon State University, was conducted in Carroll County, Ohio, the busiest county for fracking in the state with 354 horizontal wells spread throughout its 399 square-miles. Fracking causes polycyclic aromatic hydrocarbons (PAHs) to be released as a byproduct of the process. Some of these are linked to cancer and respiratory ailments. "Air pollution from fracking operations may pose an under-recognized health hazard to people living near them," Kim Anderson, an environmental chemist with OSU's College of Agricultural Sciences, said in a press release. Researchers placed passive air samplers near 23 properties up to 3 miles from natural gas wells, testing for 62 PAHs over the course of three weeks. The samplers detected 32 PAHs, with levels decreasing further away from wells. Samples showed that those living or working closest to wells would be at 30 percent higher risk than those a mile or more away. The data showed, however, that anybody in the study area, based on calculations using the EPA's worst case scenario of exposure 24 hours a day for 25 years would be exposed at to a risk higher than what the agency says is acceptable.
Frackademia Takes The Heat - Scientific journal: SU prof paid by Chesapeake for pro-fracking study — A leading scientific journal has run a lengthy correction clarifying that a Syracuse University professor and his co-authors were paid by the gas industry on a recent study. Environmental Science & Technology says that SU prof Donald Siegel was paid by Chesapeake Energy for his work, and at least one of his co-authors worked for Chesapeake during the study period. The original article, published online last month, simply said “the authors declare no competing financial interest.” The article was favorable to gas drillers because it found that drinking wells in Pennsylvania had not been contaminated with methane from nearby fracking wells. The study was touted by pro-fracking activists as evidence that the process is safe. Anti-fracking activists say they didn’t trust the paper because the water samples were provided by Chesapeake and because Siegel and one of the co-authors, Bert Smith, had financial ties to the company.
New rules to protect threatened bats could affect natural gas site construction - Little bats that are being decimated by a big disease in 28 states are now protected by the Endangered Species Act as a threatened species, a decision that could impact oil and gas operations. The oil and gas industry has decried the possible effects that protecting the northern long-eared bat, effective May 4, under the act could have on their operations, while pointing out that other industries are not facing the same restrictions. The Independent Petroleum Association of America (IPAA) has stated that because the U.S. Fish and Wildlife Service enacted the listing in response to a fungal disease called white-nose syndrome, and not habitat change, drillers should not be subjected to increased restrictions for new projects. The disease, which can often be identified in advanced stages by a white fungus on the bats’ bodies, has decimated about 5.7 million northern long-eared bats since 2006. The wildlife service said in its ruling that the disease is “the predominant threat to the species.” However, not all industrial activities in the wild are under the same restrictions. The ruling also said that accidentally harming or killing the bats is prohibited, except during activities like removing small numbers of trees, managing forests and performing maintenance on transportation and utility right-of-ways. This exemption, known as a 4(d) rule, is an interim decision that benefits industries like the timber industry, but not natural gas drillers wishing to establish new well pads.
Nat gas prices are on the rise - The U.S. Energy Information Administration shared today that U.S. natural gas stocks have increased by 111 billion cubic feet for the week ending on May 1 and that storage will see a small increase of about 125 billion cubic feet. As reported by 24/7 Wall St., “Natural gas futures for June delivery traded down about 1.1% in advance of the EIA’s report, at around $2.90 per million BTUs, and jumped to around $3.02 (up about 4.1% for the day) following release of the report. Last Thursday, natural gas closed at $2.73 per million BTUs and natural gas futures have increased by about 6% over the past five trading days. The 52-week low for natural gas futures is $2.48. One year ago the price for a million BTUs was around $4.20.” Thanks to the cooler spring weather northern point of nation is experiencing, the demand for natural gas has witnessed a little boost. The line of cool weather is expected to travel down to Texas and other states in the southern region of the U.S. sometime this week and next week. This will also help cool off warmer parts of the nation, but will also keep the demand for natural gas low. The small increase in storage is believed to be due to lower natural gas production in the nation’s prominent shale plays. Earlier this week, the EIA released its drilling productivity report, which said, “It expects natural gas production to drop by 112 million cubic feet per day in June.”
Construction to begin on sixth LNG export facility in Corpus Christi | marcellus.com: Cheniere Energy, Inc. has announced that the ink on final investments is drying and the awaited liquefaction export project near Corpus Christi, Texas is on the road to completion. On Wednesday, the company’s Board of Directors made the call to Bechtel Oil, Gas and Chemicals, Inc. to commence construction of the first two natural gas liquefaction trains. The CCL Project is designed for up to three trains, according to Cheniere Energy. The first train is expected to start operations as early as 2018, with the second train expected to commence operations approximately six to nine months afterwards. According to reports, the new LNG project includes expected aggregate nominal production capacity of approximately 13.5 million tons per annum (mtpa), three LNG storage tanks with capacity of approximately 10.1 billions of cubic feet equivalent (Bcfe), two LNG carrier docks and a 22-mile, 48″ natural gas supply pipeline. “We have initiated construction on our second LNG export facility, the Corpus Christi liquefaction project, located on the Coastal Bend of Texas along the Gulf of Mexico. Including our LNG export facility at Sabine Pass, we now have six trains under construction, with first LNG expected at Sabine Pass from Train 1 by year end,” said Charif Souki, chairman and CEO of Cheniere in a press release. “For these major projects, getting to the point of commencing construction represents the culmination of years of dedicated hard work by all of our employees, Bechtel, other strategic partners, and legislative and government officials. We would like to thank all for their efforts and look forward to successful project execution in Corpus Christi.”
NY releases final environmental review of fracking — New York regulators have released the final version of an environmental impact review of shale gas development that’s expected to lead to a state ban on fracking. Gov. Andrew Cuomo said in December that he would defer to the judgment of his health and environmental conservation commissioners, who said they’d recommend a ban on high-volume hydraulic fracturing. Under state law, a formal decision on whether to allow or ban fracking will come 10 days after the environmental review’s release on Wednesday. The environmental review that was launched in 2008 drew more than 260,000 comments over the course of several revisions. No shale gas wells have been permitted during that time. A state health study released in December found “significant uncertainty” over whether safety measures could adequately protect public health.
We Are Seneca Lake: Josh Fox & Fracking Opponents Fight Natural Gas Storage Site in Upstate NY | Democracy Now! (video, interview & transcript) - Josh Fox: When Governor Andrew Cuomo banned fracking in New York state on December 17th, 2014, a lot of fracktivists in New York thought their problems were over. It was a tremendous victory, a precedent for other states, a landmark decision for public health and for the science on fracking. But not every decision about fracking in New York was being made at the state level. FERC, the Federal Energy Regulatory Commission, decides about pipelines, storage facilities and other interstate oil and gas infrastructure. Because FERC is in charge of so many projects, they’ve been heavily criticized for having a lack of public input and for simply being a rubber-stamp commission for the oil and gas industry. One of the decisions that FERC has under its control is the fate of Seneca Lake, New York. Seneca Lake is 600 feet deep, home to nearly a hundred wineries, breweries and distilleries, a tourist destination and drinking water for 100,000 people. Its beauty is breathtaking, its water resource invaluable. But it has one other fairly unique physical feature. Under the lake are salt caverns, where salt has been mined for decades, huge underground hollow expanses. A company called Crestwood is eyeing the salt caverns to stuff natural gas down as a kind of natural storage facility, as a way station, a hub, a port, for fracked gas from Pennsylvania, West Virginia, Ohio and other places throughout the region. Sandra Steingraber, one of the founders of New Yorkers Against Fracking and an incredibly influential and outspoken fracking critic, is working with a group called We Are Seneca Lake. Since October, they’ve been blockading the Crestwood facility with protests that are both colorful and imaginative. With over 250 arrests and counting, We Are Seneca Lake is becoming one of the largest environmental civil disobedience protests in New York history.
Enbridge Agrees To Pay $75 Million For Massive Kalamazoo River Tar Sands Spill - Canadian oil company Enbridge has agreed to pay $75 million for its role in a 2010 pipeline rupture that resulted in the largest inland oil spill in U.S. history. Enbridge settled with the state of Michigan this week over the Kalamazoo River oil spill, a disaster that sent more than 800,000 gallons of Canadian tar sands crude into the river. Under the settlement, the oil company will pay $30 million to restore or create 300 acres of wetlands, in an effort to help to improve the health of the Kalamazoo River. The spill affected 38 miles of the river itself and 4,435 acres of shoreline, according to the Detroit Free Press. $18 million of the settlement will go towards removing a dam and making other changes to help the river flow more naturally, $10 million will go towards building and maintaining more boating and recreation access sites to the river, and $5 million will go towards additional river restoration. The remaining $12 million will go towards reimbursing the state of Michigan for attorney costs, as well as for the state’s role in the cleanup and restoration of the river. The cleanup of the spill proved difficult and expensive — tar sands is thicker than conventional oil, so instead of floating on top of the river’s water it sank to the bottom. That meant that Endbridge had to dredge the bottom of the river and the river banks to try to remove the oil, and then plant native vegetation along the banks in an attempt to restore the surrounding land. Enbridge puts the cost of cleanup of the spill at $1.21 billion, a figure that’s $85.9 million higher the company first estimated. In spite of this cleanup, residents who live near the river still say they see residual oil in the river, and they won’t fish in it. “Anybody that’s aware there was an oil spill doesn’t go in the river. I would say 80 percent of the community is very aware that the water isn’t safe,”
Michigan earthquake provides teachable moment on fracking -- Last weekend's earthquake in Michigan was more novelty than natural disaster, a point made by a popular Facebook meme picturing a tipped-over lawn chair and a tongue-in-cheek slogan: "We WILL rebuild." Still, the event has proved to be a teachable moment on the link between fracking and earthquakes. While the fracking process can trigger earthquakes, most quakes are not related to fracking and the Michigan event is an example of the latter, not the former. "This looks like very normal plate tectonics," said Michael Brudzinski, a geophysics professor at Miami University in Ohio. Brudzinski, who has studied the fracking-earthquake issue, is one of six scientists I've interviewed this past week. That includes geoscientists from the U.S. Geological Survey, the Michigan Department of Environmental Quality, Michigan State University and two geoscientists from Western Michigan University. They all said the earthquake can be blamed on Mother Nature, not Big Oil.To be sure, scientists say there is no question that the process of drilling for oil or gas can trigger an earthquake in some circumstances.
Delfin LNG proposes nation's first offshore LNG facility - There have been numerous natural gas liquefaction and export facilities proposed for the Gulf Coast. But what about offshore? Delfin LNG LLC announced Monday that it has submitted applications to the Maritime Administration and the U.S. Coast Guard seeking approval for an offshore liquefaction and export station. The Delfin LNG Project has been proposed for a location roughly 50 miles from the coast of Cameron Parish, Louisiana. The project would feature four moored floating liquefied natural gas vessels (FLNGVs) with a collective annual export capacity of 443.3 billion cubic feet per year. “This is a very exciting step for Delfin and our partners in the project,” said the company’s founder, Frederick Jones, in a press release. “We believe that floating liquefaction technology is faster to market, more flexible, and more environmentally friendly than land based liquefaction terminals. As the first floating liquefaction project in North America, Port Delfin will be a significant development in the world’s evolving natural gas markets and a historic milestone for the U.S. oil and gas industry.” In addition to Port Delfin’s operations offshore, the company has proposed the construction of a compressor station on the Louisiana coast that would take advantage of pipeline infrastructure that is currently underutilized. The station would feed compressed natural gas to the offshore facility through already existing pipelines, cutting down on costs. The appropriate application for the compressor station has been filed with the Federal Energy Regulatory Commission.
Brother of Hillary Clinton's Top Campaign Aide Lobbied for Fracked Gas Export Terminal Co-Owned by Qatar --Anthony “Tony” Podesta began lobbying in late 2013 on behalf of a company co-owned by ExxonMobil and Qatar Petroleum aiming to exportliquefied natural gas (LNG) to the global market. Tony is the brother of John Podesta, former top climate change adviser to President Barack Obama and current top campaign aide for Hillary Clinton’s 2016 bid for president. In October 2012, Podesta Group began lobbying on behalf of the proposed ExxonMobil-Qatar Petroleum Golden Pass LNGfacility in Sabine Pass, Texas, according to lobbying disclosure forms. The forms indicate that Tony Podesta himself, not just his staff, lobbied on behalf of the terminal beginning in quarter four of 2013. Tony Podesta’s name also shows up on the Golden Pass LNG lobbying disclosure forms for quarters one, two, three and four for 2014. During those quarters, Podesta lobbied for proposed federal legislation aiming to expedite the regulatory process for permitting LNG terminals. Lobbying disclosure forms for the first quarter of 2015 show that Podesta Group no longer lobbies on behalf of Golden Pass. The company now employs FTI Consulting’s Timothy Glassco to lobby for expedited permitting for LNGexport terminals. Glassco, a former staffer for Obama’s 2008 presidential run, recently departed after almost seven years on the job at Podesta Group, according to his LinkedIn profile. Glassco has lobbied for Golden Pass since the Podesta Group began lobbying for the company back in 2012, according to the federal lobbying disclosure database.
Details of the debate in US states on oil drilling, fracking: Clashes are growing between cities and states across America over oil and gas drilling and hydraulic fracturing, the practice of high pressure injections of water, sand and chemicals underground to free deposits of oil and gas. Energy-rich states are rushing to quash some of the local activism. Following is a summary of state debates. In Texas, which leads the nation in oil and natural gas production, a measure to limit local regulations to those deemed "commercially reasonable" has passed the Legislature and is expected to be signed into law by Republican Gov. Greg Abbott. Cities would be allowed to regulate surface activities such as noise, lights and traffic but not drilling itself. No less than 11 bills have been introduced to the Texas Legislature this session to put limits on local control. The Oklahoma House approved a wide-reaching bill last month that prohibits cities and towns from banning oil and natural gas drilling, or implementing restrictions that are not "reasonable." On the other side of the issue, New York state banned fracking statewide in December. In Pennsylvania, after fracking in the Marcellus Shale deposit began booming in 2008, the Legislature imposed a 2012 law restricting the ability of municipalities to dictate the location of drilling activity. The law was struck down by the state Supreme Court last year. After some Ohio cities passed municipal bans, that state's Supreme Court recently ruled the opposite, finding that the state had exclusive authority over all aspects of oil and natural gas drilling, including fracking. Colorado state law prohibits local ordinances that ban energy exploration such as fracking, but some towns have imposed them anyway, sparking lawsuits.
Oklahoma oil firms drilling but waiting to complete wells — Oklahoma energy companies are still drilling in spite of low oil prices, but they are putting off costly practices such as hydraulic fracturing until prices recover. Drilled uncompleted wells are a new trend in the oil patch, led both by lower oil prices and the drastic technological and procedural changes the industry has experienced over the past decade, The Oklahoman reported Sunday. Continental Resources Inc. CEO Harold Hamm has said completion processes typically represent about 60 percent of the cost of a modern shale well. “Why spend that money today to bring on production that’s going to be sold in a bad market? You don’t need to do that,” Hamm said at a recent energy summit in Houston. It’s difficult to track how many wells have been drilled and left uncompleted, in part because states have different reporting requirements. Wood Mackenzie Ltd. and RBC Capital Markets LLC in March estimated that more than 3,000 wells nationwide have been drilled but not completed. Data collected by Oklahoma City-based Oseberg indicates that companies are continuing to show interest in drilling wells. While the number of permitted wells has dropped in recent months, those numbers continue to far outpace the number of wells that have been fracked and completed.
Fracking Has Made Oklahoma the Earthquake Capital of the U.S. - With mounting evidence that the fracking industry is causing adramatic rise in seismic activity in Oklahoma, a growing chorus is calling for a moratorium on the use of disposal wells. But the rapid increase in hydraulic fracturing has coincided with a surge in the number of earthquakes. It isn’t the fracking itself that is causing more seismic activity, but the practice of disposing wastewater that follows. The US Geological Survey has noted the connection. “The increase in seismicity has been found to coincide with the injection of wastewater in deep disposal wells in several locations, including Colorado, Texas, Arkansas, Oklahoma and Ohio,” USGS concluded on a section of its website entitled “Induced Earthquakes.” The USGS chart below notes the sudden rise in earthquakes since 2010, with many concentrated in Oklahoma. Oklahoma has been slow to recognize the link. Oklahoma experienced 585 earthquakes in 2014 with a magnitude of 3.0 or greater, skyrocketing up from 109 in 2013, and just a handful each year over the course of previous decades. Still, Oklahoma’s seismologists did not officially come out and make the connection between disposal wells and the state’s extraordinarily high frequency of seismic events until April of this year. But after an extended period of time in which top officials with the state of Oklahoma declined to acknowledge a connection between disposal wells and earthquakes – a connection that federal seismologists came to quite a while ago – the fact that the state now accepts the connection has lent credibility to the rising tide of criticism of wastewater disposal.
Researchers: Fracking Responsible for 4.0-Magnitude Texas Earthquake - A 4.0-magnitude earthquake rocked Northern Texas on Thursday as one of the most powerful earthquakes to strike the region since November 2013. Now, some scientists are speculating whether fracking, the controversial oil-drilling method, is responsible for this seismic activity. The earthquake hit at 5:58 p.m. near Venus, which sits about 30 miles southwest of Dallas. It was felt from southern Fort Worth and Arlington south to Hillsboro, according to the Associated Press. The earthquake came weeks after researchers from Southern Methodist University in Dallas testified before a state House committee that 27 earthquakes which struck northwest of Fort Worth during November 2013 and January 2014 are linked to fracking. Last month, Southern Methodist joined the United States Geological Survey of Texas to study a string of earthquakes that took place between 2013 and 2014 near the city of Azle seeking to gather evidence that the earthquakes were caused by man-made activity, specifically fracking. This earthquake struck in a region that has experienced more than 50 tremors since November 2013, according to the USGS. “The model shows that a pressure differential develops along one of the faults as a combined result of high fluid injection rates to the west and high water removal rates to the east," said Matthew Hornbach, associate professor of geophysics at SMU. "When we ran the model over a 10-year period through a wide range of parameters, it predicted pressure changes significant enough to trigger earthquakes on faults that are already stressed."
New Research Suggests Fracking Causes Earthquakes -- As previously reported by Inquisitr, the U.S. Geological study recently published a report indicating that the continued rise in hydraulic fracturing — better known by its colloquial name “fracking” — is “almost certainly” behind spates of earthquakes in Alabama, Arkansas, Colorado, Kansas, New Mexico, Ohio, Oklahoma and Texas. CNN reports that the Dallas, Texas area alone has experienced “almost 40 small earthquakes” in 2015, including a two-day stretch in early January in which 11 earthquakes were logged over the course of 24 hours. According to the Dallas Morning News, a 4.0 earthquake rattled Johnson County on Thursday, May 7. Johnson County is just south of the Dallas-Fort Worth area. Bolstering the USGS report linking fracking to quakes are the findings of a new Southern Methodist University-led research team, which indicate that drilling in parts of Texas “most likely” caused a number of earthquakes in the area over the course of recent years. State Column reports that SMU researchers are especially concerned that a small earthquake could lead to another, especially where fault-lines are involved. However, the Texas Railroad Commission, an organization that oversees oil and gas affairs in the state, has been hesitant to accept findings that link the fracking industry to seismic activity.
What's causing Texas earthquakes? Fracking 'most likely,' report says - According to the U.S. Geological Survey, the Dallas area has suffered almost 40 small earthquakes (magnitude 2.0 or higher) since the beginning of this year, the latest a magnitude-2.7 quake near Farmers Branch on Monday. Many of the epicenters were recorded in Farmers Branch and Irving, with a couple to the south in Venus."The quakes don't sound like much to somebody from California," Jim Wells told CNN. "But when you are sitting right on top of them, they are more than noticeable. They will shake the entire house, and you have no doubt about it when you have gone through it. We have in my home perhaps 100 or more wall hangings, pieces of art -- prints, etchings, oil originals -- and none of them are hanging straight."On January 7 and 8, Irving experienced 11 earthquakes in about 24 hours. During one of those quakes -- a magnitude 3.6 -- Gail Wells says the rattling and shaking were so intense it knocked her off the sofa.Susan Hough, a seismologist at the USGS and the California Institute of Technology, says the epicenter of these types of earthquakes would produce "average-to-high shaking intensities close in, but low intensities" about six miles out.The Wells' home sits less than a mile from the epicenter of some of the Irving quakes, and they say they've felt at least 15 of them this year. Though there hasn't been "serious" damage yet, Jim Wells is worried there will be if the quakes continue.
How to Prevent Man-Made Earthquakes - Studies, including two reports issued in April, indicate that human activities, including activities related to oil and gas extraction, are beginning to play a significant role in triggering earthquakes in the central U.S. It is important to note that it is not the fracking process itself that usually causes these earthquakes; it is the rapid injection of fluid during wastewater disposal that sometimes pumps hundreds of millions of gallons of brine deep into the earth each year. A recent peer-reviewed scientific study I co-authored concludes that human activities, specifically water production and wastewater injection, represent the most likely cause of earthquakes in the Azle/Reno, Texas, region, where significant gas production and wastewater injection began five years ago. But this is not a fundamentally new discovery. For nearly a century, industry and academic researchers have recognized that human activities can and do sometimes trigger earthquakes.. What is unique and exciting about our Azle/Reno study is the unprecedented support and cooperation of the energy industry, which in many instances provided mission-critical data, technical support and constructive scientific reviews to allow scientists to better assess, model and understand earthquakes in the Azle/Reno area and across Texas.In our instance, industry researchers went far beyond state regulatory requirements by providing insight into the location and orientation of regional faults, injection reservoir pressures and subsurface flow. As our study and many other studies, including those conducted by industry, suggest, the key to understanding and mitigating earthquake hazards in Texas and elsewhere is high-quality data, especially data that monitor and assess subsurface pressures, fluid injection volumes, fluid extraction volumes and regional seismicity over time. There have been studies to develop a general hazard model for injection wells, as well as specific strategies on how to reduce risk during and prior to the injection process. These strategies generally include the early detection and location of potentially weak faults, choosing appropriate injection reservoirs that minimize the risk of increasing underground pressure, and adjusting wastewater injection practices to reduce or minimize seismicity. Scientists can also collect more detailed brine production and injection data, underground pressure data and regional seismic data to better predict how subsurface pressures and associated seismicity might evolve with time. These techniques are already being implementing with success at known induced seismicity sites.
Oil Patch Layoffs on the Verge of Breaking Their Uptrend - With the spot price of West Texas Intermediate crude oil havingbroken above $50 in the second week of April 2015, it now appears that the rebound in oil prices has now put new jobless claims in the eight high cost oil production states we've been tracking on the verge of breaking what had been their statistical uptrend for layoffs. The various lines we show on this chart actually represent key thresholds in a statistical hypothesis test. While the data points fall within the outermost red lines, the null hypothesis for that test holds, which in this case, means that the upward trend for layoffs still holds and that all the variation from week to week is the simply result of random variation or "noise". But once the data points start falling outside of that range, it is a clear indication that our null hypothesis no longer holds and that the previous trend has broken down - something other than random factors has caused the data to fall consistently outside the range where we would expect it to be if the variation were just the result of randomness. In this case, there's an obvious explanation for why the previous rising trend for layoffs would break down: a reversal in the trend for oil prices for the eight states where high cost oil production represents a significant part of their local economies and job markets. With oil prices now rising, firms engaged in that economic activity are able to avoid having to lay additional workers off in order to remain solvent. Meanwhile, in the other 42 states, the trend of new jobless claims remains on its long established downward trend, which has been the case since oil prices began to fall beginning in early July 2014.
Riding the oil price roller coaster in New Mexico - There's always been oil in Eddy County. It's one of the major oil-producing counties in southeastern New Mexico, part of the Permian Basin that encompasses much of the West Texas oil patch. But in the last few years, fracking has opened up new deposits, with names like Bone Spring and Wolfcamp, and oil companies have been hiring firms like Marbach's Allied Land Services to find and purchase rights to do exploratory drilling. But fracking is also expensive, and the economic viability of any new wells rides on the price of oil. Not that Marbach was following it last year, when it was up near $100. "We were so busy and the companies kept ordering work, I didn't pay attention to it until it really started going down." Last fall, he watched it with increasing trepidation as it dropped to $90, $80, $70 a barrel. "When it went below $50, that's when they started pulling the plug on a lot of these projects," he says.That happened in January, when his oil company customers cut him off en masse. He had to fire half his staff."I had one young guy that moved here from Fort Worth just specifically to work for me, and I had to lay him off," he says. "That was... that was rough." Months later, oil has crept closer to $60, and his business is just starting to come back. You can see the mood in the records room of the county clerk's office where landmen like Marbach do much of their work. When oil was $100, Marbach says these tables were packed shoulder to shoulder, but now there are just four people at each, one of whom is Wesley Burnett—the guy Marbach fired. He spent a few unemployed weeks doing odd jobs and watching TV at home, but he's back doing land title research for oil companies.
H2-Uh Oh - I feel honored to be subject to the ministrations and machinations of a seasoned professional, such as Ms Madsen, and I hold no grudge for any distortions of half-truths on her part; that is, after all, her job. Quite a few of her assertions are in the category of being 100% half true. It is true, as she asserts, that more water is extracted/produced by gas and oil fracking than is injected into the well. In fact, much more–as much as 16 times more. It is also true that these waters are used in agriculture. All this must be good, right? What is left out is what is in these extracted waters. They contain the chemicals used to frack and acidify the wells. Therefore the chemical stew enters both directly into the food chain (our bodies) and eventually penetrate into the aquifer. But that’s not all folks. The waters also contain natural pollutants from having lived with oil for centuries underground. Besides the salts and strontium there is a natural, if undesirable, oiliness.But there’s no evidence that fracking liquids are either unsafe or in the aquifer, the letter asserts. Really? One may not like the evidence but it is evidence, non-the-less: Clean Water Action reports that extracted waste water (from fracking) is put into open pits untreated. They both off-gas, adding to air pollution, and penetrate the aquifer.According to NBC (Nov 2014) gas companies pump nearly three billion gallons of such wastewater directly into our aquifers. This act, NBC reported, is itself against the law, the aquifers being legally off-limits.
BLM Leases more than 30,000 acres of Pawnee and Front Range - The U.S. Bureau of Land Management secured a $32.1 million oil and gas lease Thursday that includes acreage on both the Front Range and Pawnee National Grassland, The Denver Post reports. Despite cautions from environmental groups, which accused the BLM of ignoring pollution and climate concerns, about 75 percent of the 33,000 acres will be located on Pawnee Grassland. The BLM reportedly sold 73 of the 86 land parcels, which included acreage in Arapahoe, Adams, Logan and Weld counties. The largest sale was a nearly 2,000 acre plot sold to oil and gas land acquisition company Ironhorse Resources LLC for $19.4 million. Revenue from the sales will be split between Colorado, which will receive 49 percent, and the federal government, which will receive the remaining 51 percent.“The Pawnee is a healthy prairie ecosystem, and federal lands on the plains are few and fair between,” said Jeremy Nichols, who heads the climate and energy program at WildEarth Guardians. WildEarth alleges that BLM proceeded without properly assessing potential damages to the ecology, which the BLM dismissed as “too speculative to be useful.”
Could Fracking Ruin Your Vacation? -- As the start of summer draws ever closer, Americans and international tourists will begin to flock to U.S. national parks, forests and other public lands for summer vacations, recreation and appreciation of our natural heritage. But there is something threatening the future of these lands and the communities that surround our national parks.Fracking. President Obama’s Bureau of Land Management finalized thin, new rules for regulating fracking on public lands back in March. When these rules were proposed in 2013, more than 650,000 public comments were delivered demanding an outright ban on the practice instead. By the end of 2014, oil and gas companies had leases on more than 34 million acres of U.S. public land. More than 200 million more acres—about a third of all federal land—can be targeted with drilling and fracking. Here are a few more key statistics taken from Food & Water Watch’s new fact sheet that was released yesterday:
North Dakota oil production up 12,500 barrels daily in March — North Dakota oil drillers produced an average of about 1.19 million barrels of oil a day in March. The Department of Mineral Resources says the March production was up about 12,500 barrels a day from February’s average. Western North Dakota’s oil patch had a record 12,430 producing wells in March, up from 12,199 in February. The state also produced 47.1 million cubic feet of natural gas in March. That’s up from 41.3 million cubic feet of natural gas in February. The average drill rig count in March was 108, down from 133 in February. Drilling activity has slowed in recent months with slumping oil prices. The number of drill rigs operating on Wednesday was 83.
North Dakota posts surprising jump in oil output in March – North Dakota posted a surprising jump in oil and natural gas output in March, as producers leaned on newer technologies and processes to offset a slump in commodity prices. Many industry observers had expected output to fall for the third consecutive month in the wake of a more than 50 percent drop in oil prices since last summer. “We scratched our heads in the month of March” as to why production increased, Lynn Helms, director of the state’s Department of Mineral Resources, said during a conference call with reporters. Yet the increase shows producers’ willingness to wring efficiencies out of existing operations, as well as their attempt to maintain production, even at depressed prices, to safeguard relationships with service providers ahead of any future spike in crude oil prices. About 189 North Dakota wells were completed in March at locations owned by Exxon Mobil Corp, Hess Corp, Continental Resources Inc and ConocoPhillips, reversing a trend in which most producers delayed completions. “These four appear to be more in tune with having normal cash flow, and continue to complete their wells in a more aggressive manner,” Helms said.
Oil well flare sprays oil, brine into ND river tributary — North Dakota health officials say a natural gas flare at an oil pad has sprayed a mix of oil and brine into a tributary of the east fork of the Little Muddy River. The North Dakota Department of Health says less than 42 gallons of the mix were sprayed into the river. The incident happened 10 miles northwest of Ray. The site is owned by Continental Resources, Inc. A representative for the company did not immediately return a call from The Associated Press seeking comment on the incident. Saltwater, or brine, is an unwanted byproduct of oil production. It’s many times saltier than sea water and can easily kill vegetation. Health Department inspectors are expected to visit the site to investigate the incident and determine a remediation plan.
WPX Energy would add North Dakota rigs with $65 per barrel oil – Oil and gas producer WPX Energy Inc would add one or two drilling rigs in North Dakota if WTI oil prices stabilized around $65 per barrel, Chief Executive Rick Muncrief told Reuters on Friday. The forecast falls in line with U.S. shale peers, several of whom have pointed to $65 to $70 per barrel as the range in which they would add rigs and ramp up production. Indeed, Muncrief’s comments add to a body of evidence that the United States is now the world’s swing oil producer, able to ramp production up or down quickly. For WPX specifically, Muncrief’s outlook is part of a broader strategy to show Wall Street that after years of bloated spending, cash flow and cost management are top priorities. It’s a focus that appears to be working: WPX’s stock is up 15 percent so far this year, compared with a nearly 3 percent rise in the S&P 500. “If we saw some stability in oil prices around the $65 WTI level, we would probably be more apt to add rigs,” Muncrief said in an interview on the first anniversary of taking the top job at WPX.
Shale-Oil Producers Ready to Raise Output - After slashing the number of drilling rigs for months, U.S. shale-oil companies say they are ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices. Last week, EOG Resources Inc. EOG -0.95 % said it would ramp up output if U.S. prices hold at recent levels, while Occidental Petroleum Corp. OXY 0.16 % boosted planned production for the year. Other drillers said they would open the taps if U.S. benchmark West Texas Intermediate reaches $70 a barrel. WTI settled at $60.50 Wednesday, while global benchmark Brent settled at $66.81. An increase in U.S. production, coupled with rising output by suppliers such as Russia and Brazil, could put a cap on the 40% rally in crude prices since March and even push them lower later in the year, some analysts say. “U.S. supply could quickly rebound in response to the recent recovery in prices,” said Tom Pugh, a commodities economist at Capital Economics. “Based on the historical relationship with prices, the fall in the number of drilling rigs already looks overdone, and activity is likely to rebound over the next few months.” One factor will be whether shale companies can quickly pump more oil. AdvertisementShale producers drill into oil-rich rock horizontally, then break it up with water and sand to extract the fuel. The cost to get oil out of these wells varies widely. But producers can stagger outlays, for instance, by drilling but then waiting to pump the oil when market prices are optimal or extraction costs are lower.
US taxpayers subsidizing world's biggest fossil fuel companies - The world’s biggest and most profitable fossil fuel companies are receiving huge and rising subsidies from US taxpayers, a practice slammed as absurd by a presidential candidate given the threat of climate change. A Guardian investigation of three specific projects, run by Shell, ExxonMobil and Marathon Petroleum, has revealed that the subsidises were all granted by politicians who received significant campaign contributions from the fossil fuel industry. The Guardian has found that:
- A proposed Shell petrochemical refinery in Pennsylvania is in line for $1.6bn (£1bn) in state subsidy, according to a deal struck in 2012 when the company made an annual profit of $26.8bn.
- ExxonMobil’s upgrades to its Baton Rouge refinery in Louisiana are benefitting from $119m of state subsidy, with the support starting in 2011, when the company made a $41bn profit.
- A jobs subsidy scheme worth $78m to Marathon Petroleum in Ohio began in 2011, when the company made $2.4bn in profit.
“At a time when scientists tell us we need to reduce carbon pollution to prevent catastrophic climate change, it is absurd to provide massive taxpayer subsidies that pad fossil-fuel companies’ already enormous profits,” said senator Bernie Sanders, who announced on 30 April he is running for president . Sanders, with representative Keith Ellison, recently proposed an End Polluter Welfare Act , which they say would cut $135bn of US subsidies for fossil fuel companies over the next decade. “Between 2010 and 2014, the oil, coal, gas, utility, and natural resource extraction industries spent $1.8bn on lobbying, much of it in defence of these giveaways,” according to Sanders and Ellison . In April, the president of the World Bank called for the subsidies to be scrapped immediately as poorer nations were feeling “the boot of climate change on their neck”. Globally in 2013, the most recent figures available,the coal, oil and gas industries benefited from subsidies of $550bn , four times those given to renewable energy.
What would it take to free U.S. oil exports? -- Lawmakers pushing to repeal the 1970s-era ban on U.S. oil exports face a steep obstacle: The Obama administration sees no need to fully remove the restriction while the country is still importing part of its oil supply. And many politicians are wary of a voter backlash if gasoline prices go up just as they open the door to exports. However, Senator Lisa Murkowski, the Republican head of her chamber’s energy committee, is expected to introduce a bill as soon as Tuesday night that would lift the ban Congress passed in 1975 after the Arab oil embargo created fears of global shortages. Mainly because of the U.S. oil glut, domestic crude producers now get about $6 a barrel less than companies in many other countries. If the glut grows and deepens the discount of West Texas Intermediate futures in New York to London’s Brent oil futures by between $10 and $15 a barrel or more, it would create a dislocation politicians would find hard to ignore. “I am not sure that policy makers will act in advance of that problem developing,” “In response to that kind of market dislocation, people will feel very pressured to act.”A bill introduced in February by Representative Joe Barton, a Texas Republican, has slowly gained backing and now has 26 co-sponsors in the 435 member chamber, including four Democrats. It could see a surge in support if more Representatives from non-energy producing states sign on.
U.S. set to get more accurate oil production data:- “The data must be wrong,” according to veteran oil analyst Phil Verleger, who wrote in a blistering note that the Energy Information Administration is probably overestimating U.S. oil production by 1.6 million barrels per day. Verleger argues substantially lower U.S. production is the most likely explanation for why global stocks are not rising as fast as predicted and discounts for storing barrels are narrowing. Other reasons why the stock build is smaller and the forward price structure is firmer could be stronger demand and/or more oil stockpiling in developing countries. But if Verleger is correct, U.S. production would be only 7.7 million barrels per day (bpd) compared with the 9.3 million bpd reported in the agency’s most recent weekly and monthly statistics. In practice, it is highly unlikely EIA is making an error as large as 1.6 million bpd in its statistics on domestic oil production, but Verleger has drawn attention to the well-known shortcomings in this area of the data. The figures on U.S. oil production are subject to much more uncertainty than the figures for oil stocks, refinery throughput and imports because the EIA has to rely on state-level data rather than its own surveys. All that could be about to change: EIA has received approval from the White House to launch its own mandatory monthly survey of oil and condensate production. The first of the new survey forms have gone out and respondents are beginning to submit the data. It will take a few months for the agency to vet the results for data quality but the first survey data could be published in the next few months.
Are Dangerous Bomb Trains Rolling Through Your City? - This week in Heimdal, North Dakota another “bomb train” derailed and exploded. These dangerous trains carrying crude-oil fracked in the Bakken Shale are rolling through the backyards of America, across rivers and streams and into major cities like Pittsburgh, Pennsylvania and Albany, New York. Our Video of the Week from documentary filmmaker Jon Bowermaster exposes the daily threat that many Americans are now living with as the oil and gas industry continues its desperate and dangerous expansion of extreme fossil fuel development in America. You can see if dangerous bomb trains are rolling through your town here. Lee’s from Pittsburgh, so we looked them up first. Pittsburgh has bomb trains coming in and out on all sides. The red is 0.5 Mile U.S. Department of Transportation Evacuation Zone for Oil Train Derailments and the yellow is 1.0 Mile U.S. Department of Transportation Potential Impact Zone in Case of Oil Train Fire. It’s a terrifying map to look at. We’ve been looking at a lot of maps recently. Maps of bomb train routes. Maps of proposed pipelines and other infrastructure projects like LNG ports and gas-fired power plants. Maps of fracking wells and areas where fracking earthquakes are popping up like crazy.Looking at all these maps, We see each community that has been put on the fossil fuel chopping block and think about the people we know who are now forced to live their lives in these danger zones. Looking at map after map, we can also see the bigger picture of fossil fuel domination as it expands across our country, a dangerous web of pipelines and train tracks that connect fracking well pads to the rest of the world, threatening us all.
Latest 'bomb train' incident predictable - BNSF Railway carried the Hess Corp.-owned rail car, which carried highly volatile Bakken crude oil from North Dakota and appears to have followed the law. President Barack Obama weighed and rejected using executive authority to curb the transport of this explosive crude oil, rich in butane and propane, because he decided North Dakota state law should be the controlling authority. But the law North Dakota passed in December and went into effect just last month, only requires less than 13.7 pounds-per-square-inch vapor pressure inside the tanker, despite explosions at lower pressures. That’s almost 40 percent more than the average vapor pressure among the 63 tanker cars that exploded July 6, 2013, at Lac-Megantic, Quebec. That disaster killed 47 people, some of whom could not be found because they were vaporized, and is driving recent federal and state rail car regulations. According to an Albany, N.Y., Times Union investigation, the average vapor pressure among 72 tanker cars in the Lac-Megantic train was 10 psi. Hess Corp. tested the crude just before loading at 10.8 psi, according to Associated Press reporters Matthew Brown and Blake Nicholson, in their follow-up story about the derailment at Heimdal, N.D. While federal regulations only require flash point and boiling point to be measured, North Dakota now requires vapor pressure be measured. But measuring and labeling the danger does not make transporting it safe.
Experts: Train explosions won't stop under new rules - When a train hauling volatile crude oil derailed near Galena in March, witnesses said it took about only an hour for tank cars to explode, sending giant fireballs hundreds of feet into the sky. Authorities said the tank cars survived the derailment intact, only to be engulfed in a flaming pool of oil that leaked from damaged cars and was ignited by a spark. The heat built up so much pressure within the cars that they blew up. "If we could have stopped other tank cars from being impinged, it would have helped," Galena Fire Chief Randy Beadle said. "But once that first one opened up, we had to let it all burn itself out." The federal government on May 1 unveiled new regulations aimed at making tank cars stronger to survive such fiery derailments, but critics say the new rules don't provide adequate protection against fire and heat, factors that cause cars to explode. New and retrofitted tank cars must have thermal insulation and pressure relief valves to protect against heat and flames, under the updated standards, but the U.S. Department of Transportation retained a 20-year-old standard when it came to how long tank cars should be able to survive in a fire. Instead of imposing a tougher regulation, as some sought, the department allowed to stand a rule that tank cars be able to survive being engulfed in a pool-type fire a minimum of 100 minutes without failing. That regulation wasn't written with crude oil in mind, experts and industry officials say. Firefighters argue the new measures are inadequate when dealing with the threat posed by the multitude of mile-long oil trains that cross the country and pass through Chicago each day.
Oil Industry Suing U.S. Govt. Over Oil Train Safety Rules - America’s largest energy trade association is suing the US government, contending that its timeline for upgrading oil tank cars for freight trains isn’t realistic and, in some cases, is too expensive. In its suit filed on May 11 in the US District Court of Appeals for the District of Columbia, the American Petroleum Institute (API) asked the panel to block the new regulations, issued May 1 by both Canada and the United States, that would require reinforcing the tank cars and fitting them with advanced braking systems. The companies that build the cars, or those that have already leased them, were given between five and ten years to retrofit cars, called DOT-111 tank cars, that carry crude oil and other flammable liquids, depending on the nature of their intended cargo and each car’s current set of safety features. The API said that timeline doesn’t give them enough time to make the upgrades. It also said the cost of installing new electronic braking systems of the cars exceeded their benefits. API spokesman Brian Straessle argued that “retrofit timelines, braking systems and other actions must all be based on facts and science to maximize the safety impact of this rule.”
U.S. green groups sue in challenge to oil train safety rules - : Seven environmental groups filed a lawsuit on Thursday challenging safety rules issued earlier this month for trains carrying oil, arguing the regulations are too weak to protect the public. The groups, including the Sierra Club and Center for Biological Diversity, charge that the rules, issued on May 1, will allow industry to continue to use “unsafe tank cars” for up to 10 years and fail to set adequate speed limits for oil trains. “We’re suing the administration because these rules won’t protect the 25 million Americans living in the oil train blast zone,” said Todd Paglia, executive director for ForestEthics, one of the groups bringing the lawsuit. The United States and Canada issued the safety standards in response to the string of explosive accidents that have accompanied a surge in crude-by-rail shipments. Under the rules, tank cars built before October 2011 known as DOT-111 will be phased out within three years. DOT-111 tank cars are considered prone to puncture during accidents, increasing the risk of fire and explosions. Tank cars without reinforced hulls built after October 2011 and known as CPC-1232 will be phased out by 2020. In their filing, the green groups asked the 9th U.S. Circuit Court of Appeals to force the Transportation Department to reconsider the “unduly long phase-out period” for these tank cars, as well as the speed limit and public notification requirements in the rule.
US says Gulf oil spill could last 100 years - — A decade-old oil leak where an offshore platform toppled during a hurricane could continue spilling crude into the Gulf of Mexico for a century or more if left unchecked, according to government estimates obtained by The Associated Press that provide new details about the scope of the problem. Taylor Energy Company, which owned the platform and a cluster of oil wells, has played down the extent and environmental impact of the leak. The company also maintains that nothing can be done to completely eliminate the chronic oil slicks that often stretch for miles off the coast of Louisiana. Taylor has tried to broker a deal with the government to resolve its financial obligations for the leak, but authorities have rebuffed those overtures and have ordered additional work by the company, according to Justice Department officials who were not authorized to comment publicly by name and spoke only on condition of anonymity. Federal regulators suspect oil is still leaking from at least one of 25 wells that remain buried under mounds of sediment from an underwater mudslide triggered by waves whipped up by Hurricane Ivan in 2004. A Taylor contractor drilled new wells to intercept and plug nine wells deemed capable of leaking oil. But a company official has asserted that experts agree the "best course of action ... is to not take any affirmative action" due to the risks of additional drilling. An AP investigation last month revealed evidence that the leak is far worse than Taylor, or the government, has publicly reported during a secretive response to the slow-motion spill. The AP's review of more than 2,300 Coast Guard pollution reports since 2008 showed a dramatic spike in sheen sizes and oil volumes since Sept. 1, 2014.
One Of The World’s Most Pristine Coral Reefs Could Open For Drilling - A World Heritage Site could turn into an oil drilling site, if plans to allow oil exploration off the coast of Belize go through. A proposal from the Belize Ministry of Energy provides guidelines for oil exploration — and drilling, if oil is found — across most of the country’s land and water, including along the Belize Barrier Reef, one of the world’s most ecologically diverse environments. Oceana Belize, an environmental advocacy group, has launched a campaign to halt oil exploration and to get more information from the government about the plan and what went into creating it. “The general consensus we’re getting from Belizeans is… ‘Didn’t we already decide not to do this? Why is this still an issue?'” Janelle Chanona, a spokesperson for Oceana Belize, told ThinkProgress.Two years ago, the Belize Supreme Court ruled in favor of an Oceana suit to halt offshore oil exploration. Subsequently, though, the injunction was suspended, and two companies, including Princess Petroleum, continue to have exploration rights.According to documents submitted by Belize to UNESCO, the original concession included exploration rights at Great Blue Hole, a renowned underwater sinkhole, but Princess Petroleum voluntarily gave rights to that area up. If oil is not found, the current rights will expire in October 2015, which may be why the government is pursuing a new path to concessions. The Belize Barrier Reef Reserve System — made up of mangrove forests, tiny islands, and the famous Blue Hole Natural Monument — is recognized by UNESCO as a World Heritage site, and as “one of the most pristine reef ecosystems in the Western Hemisphere.”
Grabbing Paddles in Seattle to Ward Off an Oil Giant - — A dozen or so men and women, cinched into life jackets, paddles at the ready, were about to launch their kayaks into Elliott Bay early Thursday evening with Seattle’s glittering skyline as the backdrop. For some of the paddlers, it was a first-time experience, and with the water at 50 degrees and choppy, there were some obvious signs of trepidation.“O.K., what hazards are we watching for?” Elizabeth Chiaravalli, their instructor, shouted, and a smattering of answers immediately bounced back. “The waves!” “The dock!” “The pilings!”Then Cynthia Orr, a 67-year-old mental health counselor, spoke up. “Shell Oil!” she cried, standing by her boat. Her fellow kayakers — or kayaktivists, as they call themselves — roared.The standoff between Royal Dutch Shell, which proposes to lease a terminal in the Port of Seattle for its Arctic drilling fleet, and the opponents who want to block the company’s plans for environmental and other reasons, is going aquatic. The various groups organizing a “ShellNo Flotilla” for Saturday hope to attract 1,000 kayaks or other small boats, and are arranging temporary housing for people coming from elsewhere to train and participate.
Obama Administration Approves Shell’s Plan to Drill in the Arctic The Obama administration gave conditional approval today to Shell to start drilling for oil and gas in the Arctic Ocean this summer. Shell has been fighting for the right to drill in the Arctic for years, despite a number of botched forays in recent years, and it looks like they are still going to get their way. Last month, the Department of the Interior opened the door to selling offshore drilling leases in the Arctic, even though a court-ordered re-analysis showed that the environmental impacts could be far worse than previously thought. The decision is a devastating blow to environmentalists, who have pressed the Obama administration to reject proposals for offshore Arctic drilling. “Instead of holding Shell accountable and moving the country towards a sustainable future, our federal regulators are catering to an ill-prepared company in a region that does not tolerate cutting corners,” said Greenpeace senior research specialist Tim Donaghy. “Shell has a history of dangerous malfunctioning in the Arctic while global scientists agree that Arctic oil must stay in the ground if we’re to avoid catastrophic climate change.” Michael Brune at the Sierra Club agrees. “We are deeply disappointed that just days after the United States took over chairmanship of the Arctic Council, an international body dedicated to protecting the Arctic environment, the Obama Administration decided to allow Shell to move forward with its dirty and dangerous plan to drill in our Arctic waters,” Brune said. “This is exactly the wrong message to send to the world.
Obama Administration Says Yes To Drilling In The Arctic - On Monday, the Department of Interior’s Bureau of Ocean Energy Management (BOEM) approved Shell’s exploration plan for the Chukchi Sea, which entails drilling up to six wells approximately 70 miles northwest of Wainwright, Alaska. The plan is for exploratory drilling, a sort of first step that companies take to determine whether a region is feasible for large-scale production. In announcing the conditional approval, BOEM cited its recently-issued safety regulations for drilling in the U.S. portion of the Arctic Ocean, including the Chukchi Sea, where big oil companies have long been hoping to lay their claim. Those regulations require companies to have contingency plans for mishaps — companies must be able to “promptly deploy” emergency containment equipment to deal with a spill, and must build a second rig close to their initial operations so a relief well could be drilled in the event of a blowout, among other things. “We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea, recognizing the significant environmental, social and ecological resources in the region and establishing high standards for the protection of this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives,” BOEM Director Abigail Ross Hopper said in a statement. “As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards.” Still, environmental groups are not satisfied with those precautions, arguing that the Arctic is too remote, sensitive, and unpredictable an environment to expose to the risks of drilling. They point to an analysis by BOEM itself that showed a 75 percent chance of a spill greater than 1,000 barrels should an oil company like Shell discover and fully produce oil in the Chukchi leases. They also note that the closest Coast Guard station that could respond to a spill is more than 1,000 miles away. “It’s outrageous how our own government appears determined to sacrifice our precious Arctic Ocean for Shell’s profits,”
Shell hopes to begin Arctic oil drilling project this summer- The Obama administration on Monday announced conditional approval for Shell Gulf of Mexico Inc. to resume its long and troubled efforts to drill for oil in the Arctic Ocean, prompting a backlash from environmental groups that warned of the risks of operating in the extreme conditions off Alaska. Shell, which says it has spent about $7 billion on its exploratory efforts in recent years, hopes to begin drilling this summer, but there is no assurance that it will. The company had received federal permission to drill in the past only to see its plans interrupted by legal challenges, technical problems and the formidable perils of working in the remote Arctic. Amid stormy conditions on New Year’s Eve 2012, a Shell drill rig broke free from a tow line and ran aground in the Gulf of Alaska. Last year, Shell abandoned plans to pursue summer drilling after a federal appeals court found that the permitting process had been flawed. This time, according to the Bureau of Ocean Energy Management, the federal agency that oversees offshore drilling, Shell and government regulators are better prepared. The agency approved a Shell plan to drill as many as six exploratory wells, starting with two this summer, in a section of the Chukchi Sea called the Burger Prospect, about 70 miles northwest of the village of Wainwright, Alaska. The approval, although conditional, is essential to setting in motion a round of permitting that Shell must complete before it can begin drilling.
Port says to hit brakes; Shell rig coming anyway - Shell Oil says its offshore oil rigs will arrive shortly on Seattle’s waterfront to prepare for drilling in Alaska, despite a Port of Seattle resolution Tuesday asking it to delay while the Port challenges a city ruling aimed at keeping the rigs out. “Rig movement will commence in the days to come,” said Shell spokesman Curtis Smith in an email. Foss Maritime CEO Paul Stevens, whose company is slated to work on the Shell rigs at Terminal 5, was equally blunt: “We are going to proceed… These rigs and our operation will be in and out of here before there is any conclusion on the appeal process.” He said the first of the two drilling ships will arrive Thursday. The Port of Seattle commission voted Tuesday to appeal the city’s interpretation that the Port needs a new permit to host Shell’s fleet. But the commission also asked Foss to inform Shell that use of the terminal should be delayed pending that legal review. The Shell spokesman said the company has only a short window available to work in the Arctic, and believes the Foss lease and supporting contract are valid, so it intends “to utilize Terminal 5 under the terms originally agreed upon by the parties involved — including the Port of Seattle.” The commission vote came after three hours of public comment from 74 speakers with stakes in the decision. Along with environmentalists and members of the community worried about the risks that oil drilling pose to the environment and carbon emissions, there were speakers who flew down from Alaska to explain the importance of drilling to their state, and members of Seattle’s maritime community.
Plan OK'd to drill into BP's ill-fated Macondo reservoir - — Deep-water drilling is set to resume near the site of the catastrophic BP PLC well blowout that killed 11 workers and caused the nation’s largest offshore oil spill five years ago off the coast of Louisiana. A Louisiana-based oil company, LLOG Exploration Offshore LLC, plans to drill into the Macondo reservoir, according to federal records reviewed by The Associated Press. Harper’s Magazine first reported the drilling plans late Tuesday. LLOG’s permit to drill a new well near BP’s site was approved April 13 by the Bureau of Safety and Environmental Enforcement, an agency overseeing offshore oil and gas drilling operations. The company’s exploration plan was approved last October following an environmental review by a sister agency, the Bureau of Ocean Energy Management. The company, a privately owned firm based in Covington, Louisiana, will be looking to extract oil and gas deep under the Gulf of Mexico’s seafloor, an undertaking that proved catastrophic for BP. “Our commitment is to not allow such an event to occur again,” said Rick Fowler, the vice president for deep-water projects at LLOG. “LLOG staff keeps the memory of what happened … fresh in our minds throughout our operations, both planning and execution.”
Oil Sands Land Becomes Alberta’s Hot Real Estate as Oil Rebounds - An indication that crude’s recent rally has further to run can be found in the northern forests of Alberta, where companies are paying the most in eight years to lease land for oil sands development. Auctions attracted the highest prices since 2007 in the first four months of the year even as Canadian heavy oil slid below $30 a barrel, from $87.23 in June, and producers from Cenovus Energy Inc. to Royal Dutch Shell Plc slashed spending and jobs. The trend is a sign that companies see the decline to a six-year low in March as temporary. Western Canadian Select crude has bounced back, gaining about 70 percent since March, almost twice as much as U.S. oil futures, amid rising demand for heavy oil from American refiners. Producers are more efficient than before the downturn after companies including Canadian Natural Resources Ltd. cut costs as much as 20 percent. “Right now it makes a great deal of sense to go in and acquire rights in the oil sands,” Trevor Newton, chairman of Strata Oil & Gas Inc., said in a phone interview. “Let’s get this now while we can. We are going to get them cheaper.” The province holding most of Canada’s crude reserves, the world’s third largest, drew an average of C$476.14 per hectare ($160 per acre) in offerings of rights through April, the most seasonally since 2007, data on the province’s website show.
Revealed: FBI violated its own rules while spying on Keystone XL opponents --The FBI breached its own internal rules when it spied on campaigners against the Keystone XL pipeline, failing to get approval before it cultivated informants and opened files on individuals protesting against the construction of the pipeline in Texas, documents reveal. Internal agency documents show for the first time how FBI agents have been closely monitoring anti-Keystone activists, in violation of guidelines designed to prevent the agency from becoming unduly involved in sensitive political issues. The hugely contentious Keystone XL pipeline has been strongly opposed for years by a coalition of environmental groups, including some involved in nonviolent civil disobedience who have been monitored by federal law enforcement agencies. The documents reveal that one FBI investigation, run from its Houston field office, amounted to “substantial non-compliance” of Department of Justice rules that govern how the agency should handle sensitive matters. One FBI memo, which set out the rationale for investigating campaigners in the Houston area, touted the economic advantages of the pipeline while labelling its opponents “environmental extremists”.Between November 2012 and June 2014, the documents show, the FBI collated inside knowledge about forthcoming protests, documented the identities of individuals photographing oil-related infrastructure, scrutinised police intelligence and cultivated at least one informant.It is unclear whether the source or sources were protesters-turned-informants, private investigators or hackers. One source is referred to in the documents as having had “good access and a history of reliable reporting”.
Crude rally about to sputter? --There is a distinct possibility that the recent oil rally is about to run out of steam. We have two potential issues on the horizon for crude markets:
- 1. The physical market seems to be facing challenges - which is a disconnect from the futures market. Reuters: - Tens of millions of barrels are struggling to find buyers in Europe with traders of West African, Azeri and North Sea crude blaming poor demand. The deep disconnect between the oil futures and physical markets looks similar to the events of June 2014 when the physical market weakness became a precursor for a futures price crash. "Being large physical buyers of crude we have a direct pulse of the market and feel immediately when it is well supplied, as is happening now," "In the short-term, futures prices do not necessarily reflect accurately the physical market."
- 2. While US oil rig count continues to decline (see chart), the recent price increases have been sufficient to bring some rigs back online. Bloomberg: - For the first time in five months, a rig in the Williston Basin, where North Dakota’s Bakken shale formation lies, sputtered back to life and started drilling for crude once again. And then one returned to the Permian Basin, the nation’s biggest oil play, field services contractor Baker Hughes Inc. said Friday. Some forget that in the current price environment US firms are pushing rig efficiency to new levels and the cost curve is expected to shift lower.
This is not the oil rally you’re looking for -- Izabella Kaminska - Goldman’s commodity analysts are out with their take on last week’s oil price rally, which saw Brent oil trade just shy of $70 per barrel. But they’re not sold on the idea that the rally has legs, describing it ultimately as self-defeating. Furthemore, they add, the move up to $70 was probably an over-reaction.As the note on Tuesday explains, the issue is that US rig curtailment hasn’t been anywhere near large enough to put production on a persistent downward trend, meaning the supply overhang suspended in “fracklog” continues to threaten the market with an additional 250 kb/d of production at any given moment. Here’s the relevant report chunk: Further, recent Saudi, Iraq and Russia production growth has surprised to the upside and we expect this trend to continue as this represents the next logical step to raising revenues in the New Oil Order. This growth helps offset declining production elsewhere, with risk to our flat Iranian production path skewed to the upside. As a result, we believe that the recent price rally is premature. In fact, we believe that should WTI remain near $60/bbl, US producers would eventually ramp up activity, hedge and complete wells, given improved returns with costs down by at least 20%. We therefore believe that prices need to sequentially weaken, to resume the oil market rebalancing as well as help correct the still intact imbalance of too much capital looking for opportunities in the energy space. The longer this price decline takes to materialize, the greater the upside risks to our already projected high inventories into 2016, especially in the US. With evidence at hand that US producers responded aggressively to low prices, the burden of proof has nonetheless shifted to how they will respond to the recent recovery and whether low-cost producers can sustainably deliver higher production. This may as a result delay the sequential decline in prices until this fall as we approach seasonally stronger summer demand which will also help temper the petroleum product inventory build. The shift of the crude surplus into a product surplus, however, will be the additional driver to lower crude prices as rising product stocks will depress refining margins globally.
Oil pares gains despite crude inventory draw: Oil prices pared gains after initially spiking on Wednesday as the U.S. government reported crude stocks fell for the second consecutive week, while gasoline and distillate inventories declined. U.S. crude inventories fell by 2.2 million barrels in the last week, compared with analysts' expectations for an increase of 386,000 barrels, according to a report by the Energy Information Administration. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 990,000 barrels, EIA said. Refinery crude runs fell by 379,000 barrels per day, EIA data showed. Refinery utilization rates fell by 1.8 percentage points. Gasoline stocks fell by 1.1 million barrels, compared with analysts' expectations in a Reuters poll for a 429,000 barrels gain. Brent for June was up 64 cents at $67.50 a barrel by 10:39 a.m. (1439 GMT). Brent hit a high of $69.63 on May 6, its strongest since December. U.S. crude was up 49 cents at $61.24.
Crude Prices 'Spike' Despite Saudis Increasing 'Surge' Production -- As Barclays recently noted, there is a complete decoupling between futures and physical markets for crude oil and nowhere is that more evident than the high volume spike in crude that just happened after Saudi Arabia boosted crude production for a second month to the highest level in at least three decades, helping to raise OPEC output as U.S. growth showed signs of slowing. As Bloomberg reports, Saudi Arabia boosted crude production for a second month to the highest level in at least three decades, helping to raise OPEC output as U.S. growth showed signs of slowing. The Middle Eastern country increased daily crude output by 13,700 barrels in April to an average of 10.308 million, according to data the country communicated to the Organization of Petroleum Exporting Countries’ secretariat in Vienna. Prices collapsed by almost half last year as Saudi Arabia led OPEC in maintaining production rather than cede market share to booming U.S. output. The group has become more unified about keeping its daily output target of 30 million barrels because prices are now rising, according to Kuwait’s oil minister. Oil in New York has surged more than 40 percent from its March low amid as U.S. drillers pulled a record number of rigs from fields. “The Saudis must be content that their policy of protecting their market share has worked so well and prices did not stay below $50 for long,”said Christopher Bellew, senior broker at Jefferies International Ltd. in London, who had not seen the report. “They held their nerve and now see a stable market with their share preserved.”
Oil Jumps Above $61 After API Shows Larger-Than-Expected Inventory Draw -- Following last week's biggest inventory draw since September 2014 of 3.88 million barrels, expectations were for a relatively small 250k draw this week (with builds in gasoline and distillates). API reported a considerably bigger than expected 2 million bbl draw (with a 827k draw from Cushing). WTI Crude has pushed up above $61 on the news. (graphs)
Crude Pumps & Dumps After Inventory Draw Slows & Production Rises - Following API's data lastnight, DOE reported a 2.19 million barrel draw (more than expected) this week, crude oil prices immediately extended gains. However, that ramp quickly faded once it set in that the draw was actually notably lower than last week's. For some context, this leaves the total inventory still a near record 30% above average for this time of year. Prices were also not helped as total crude production rose modestly WoW.
US oil and natural gas rig count drops by 6 to 888 - Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by six this week to 888. Houston-based Baker Hughes said Friday that 660 rigs were seeking oil and 223 explored for natural gas. Five were listed as miscellaneous. A year ago, 1,861 rigs were active. Among major oil- and gas-producing states, Texas lost six rigs, Wyoming declined by two and Alaska, Arkansas, North Dakota and Pennsylvania each lost one. Kansas gained four rigs, Louisiana increased by three and Oklahoma, Utah and West Virginia each gained one. California, Colorado, New Mexico and Ohio were unchanged. The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.
How Much Longer Can The Oil Age Last? -- History has been so fascinated with oil and its price movements that it is indeed hard to imagine our future without oil. Over the last few months, we have witnessed how oil prices have fluctuated from a 6 year low level of $42.98 per barrel in March 2015 to the current levels of $60 per barrel. It is interesting to note that, in spite of the biggest oil cartel in the world deciding to stick to its high production levels, the oil prices have increased mainly due to falling US crude inventories and strong demand. However, the current upward rally might be short lived and there may yet be another drop in the international oil price when Iran eventually starts pumping its oil into the market at full capacity, potentially creating another supply glut. In these endless price rallies, it is important to take a holistic view of the global energy industry and question which way it is heading. Are the dynamics of global energy changing with current improvements in renewable energy sources and affordable new storage technologies? Can the oil age end in the near future? Will we ever stop feverishly analyzing the rise and fall of oil prices? Or, will oil remain irreplaceable in our life time?
Where Oilfields Are Still Booming - Oilpro: The international rig count is only down about 10% year-over-year while the North America (NAM) rig count is down about 50% over the same period. While the international oilfields tend to be less cyclical than the NAM rig count, the wide difference is due in part to the fact that some country markets outside the US are actually booming right now. Namely the OPEC powerhouses of the Middle East. Baker Hughes released its monthly international drilling stats. The rig count data shows the OPEC leadership's commitment to gaining market share and supplying the markets with their lower cost barrels in spite of depressed oil prices. While traders bidding up oil prices have been focused on the US oil rig count decline, we submit they should also be paying attention to the counter cyclical trend playing out in some oilfields of the Middle East. Saudi Arabia is running more rigs today than ever before and the rig counts in Oman, Algeria, and Kuwait look strong. Outside of the Middle East, Argentina is hitting record high drilling activity levels, and Indonesia's rig count is tracking above year-ago levels. Across most of Europe and Latin America though, the rig count trend is lower. Below is a snapshot of the country markets outside of North America that are booming. The busts are shown as well to provide some context. Notably, while some of the Middle Eastern powerhouses are seeing strength, other countries in the region are seeing their rig counts fall and fall significantly. In the Middle East, not everyone is winning. It's also important to note that booming activity in the Middle East does benefit foreign companies. The big oil service companies work on large contracts in the area, and the majors also partner with country NOCs to exploit these resources
EIA cuts 2015, 2016 U.S. crude oil production growth forecasts -- The U.S. government on Tuesday lowered its 2015 and 2016 crude oil production growth forecasts amid lower prices and fewer active drilling rigs. In its short term energy outlook, the U.S. Energy Information Administration lowered its 2015 crude oil production growth forecast to 530,000 barrels per day (bpd) from 550,000 bpd, while 2016 growth was seen at 20,000 bpd, down from 80,000 bpd previously. Meanwhile, it raised its 2015 U.S. oil demand growth forecast to 340,000 bpd vs 330,000 bpd seen last month and cut its 2016 demand growth forecast to 70,000 bpd from 90,000 bpd previously. Since last June, U.S. producers have reacted quickly to a nearly 60 percent drop in prices by cutting spending, eliminating jobs and idling more than a half of the country’s rigs. Active oil rigs last week declined for the 22nd week in a row, Baker Hughes reported. Still, “while there are fewer rigs drilling for crude, U.S. oil production this year is still on track to be the highest in more than four decades,” EIA Administrator Adam Sieminski said in a statement. The EIA added that U.S. crude oil production averaged some 9.3 million bpd in March, but is expected to decline from June through September before growth resumes. The EIA’s report comes after the Organization of the Petroleum Exporting Countries said that its oil output rose further in April while demand for its oil would be 50,000 bpd higher than previously thought. OPEC cut its forecast for the growth in U.S. oil output this year by 40,000 bpd to 700,000 bpd. It left the estimate for all non-OPEC countries’ supply growth unchanged.
Oil glut worsens as OPEC market-share battle just beginning - IEA – A global oil glut is building as OPEC kingpin Saudi Arabia pumps near record highs in an attempt to win a market-share battle against stubbornly resistant U.S. shale production, the International Energy Agency (IEA) said on Wednesday. The West’s energy watchdog said in a monthly report that although higher-than-expected oil demand was helping to ease the glut, growth in global oil consumption was far from spectacular. As a result, signs are emerging that the crude oil glut is shifting into refined products markets, which could make a recent rally in oil prices unsustainable. “Despite tentatively bullish signals in the United States, and barring any unforeseen disruption elsewhere, the market’s short-term fundamentals still look relatively loose,” said the IEA, which coordinates energy policies of industrial nations. Global oil production exceeds demand by around 2 million barrels per day, or over 2 percent, following spectacular growth in U.S. shale production and OPEC’s decision last year not to curtail output in a bid to force higher-cost U.S. producers to cut theirs. As a result, benchmark Brent oil prices more than halved from June 2014 to $46 per barrel in January. They have since rebounded to around $65, however, on fears of a steep slowdown in U.S. production growth. “In the supposed standoff between OPEC and U.S. light tight oil (LTO), LTO appears to have blinked. Following months of cost cutting and a 60 percent plunge in the U.S. rig count, the relentless rise in U.S. supply seems to be finally abating,” the IEA said.
OPEC Forecasts Oil As Low As $40 For Next Decade -- Whether it is more posturing ahead of OPEC's June meeting is unclear but the message from 'sources', according to The Wall Street Journal is "OPEC won’t agree to go lower," with regard global market share (which has fallen from more than 50-% to just 32% currently). The cartel's latest strategy report forecasts oil prices won't reach $100 - “$100 is not in any of the scenarios,” in the next decade (and could drop below $40) with its most optimistic scenario $76 in 2025 (which only Qatar and Kuwait can cover expenditures with). “If they want to sustain the organization, they have no choice,” but to reintroduce production quotas, adding any concession by stronger members would be temporary. As The Wall Street Journal reports,The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to a draft of the cartel’s latest strategy report. The report, seen by The Wall Street Journal, predicts that oil prices will be about $76 a barrel in 2025 in its most optimistic scenario, a reflection of OPEC worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplates situations where crude oil costs below $40 a barrel in 2025. “$100 is not in any of the scenarios,” said a delegate at the OPEC strategy presentation last week in Vienna
OPEC expects oil prices to be about $76 a barrel in 2025 - WSJ - The Organization of the Petroleum Exporting Countries (OPEC) expects oil prices to be about $76 a barrel in 2025 in its most optimistic scenario, the Wall Street Journal reported, citing a draft of the cartel’s latest strategy report. OPEC does not expect oil prices to consistently trade at $100 barrel again in the next decade, an assessment that has the group considering the return of production limits, the Journal said.. Oil slipped towards $65 a barrel on Monday as signs that U.S. shale oil production was recovering after a recent price rally renewed concerns of a growing global supply glut. The report also considers situations where crude oil costs below $40 a barrel in 2025, the Journal said. OPEC decided against cutting output in November, despite a huge oversupply in world markets. The report recommends that OPEC return to a production quota system that it abandoned in 2011 after fights over how much each country would get to produce, the Journal said.
Saudi Arabia's April crude output hits record high - Top global oil exporter Saudi Arabia raised its crude production in April to a record high, feeding its flourishing Asian market share and its own power plants and refineries. The world’s top oil exporter pumped 10.308 million barrels of oil per day in April, a Gulf industry source told Reuters on Tuesday, compared to 10.29 million bpd in March. “This is an indication of strong demand, especially from Asia, as well as increasing domestic consumption during summer,” the source said. The increase underlined Saudi Arabia’s determination not to cede market share to higher-cost producers, such as U.S. shale drillers. The kingdom and others in the Organization of Petroleum Exporting Countries (OPEC) had resisted cutting production to shore up oil prices. It also highlights the strength of global demand, which has helped lift refinery profit margins to their highest in years. Oil Minister Ali al-Naimi has said the kingdom’s output would likely remain around 10 million bpd, and that he was “very positive” about Asian oil demand outlook.
Saudi claims oil price strategy success - FT.com: Saudi Arabia says its strategy of squeezing high-cost rivals such as US shale producers is succeeding, as the world’s largest crude exporter seeks to reassert itself as the dominant force in the global oil market. The kingdom’s production rose to a record high of 10.3m barrels a day in April and there is no sign that it plans to reverse its policy at next month’s meeting of Opec, the producers’ cartel, in Vienna. “There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil including US shale, deep offshore and heavy oils,” a Saudi official told the Financial Times in Riyadh, giving a rare insight into the kingdom’s thinking on oil strategy. The International Energy Agency, the world’s leading energy forecaster, on Wednesday released data backing up the Saudi position. The agency said that with the number of rigs running in the US plunging by 60 per cent in response to lower oil prices, US shale oil production had “buckled” in April, “bringing a multiyear winning streak to an apparent close”. But the IEA also cautioned that it would be “premature” to suggest that Opec had “won the battle for market share”. It said global crude supply was growing, even from high-cost areas such as Brazil, as well as from other Opec member states such as Iran and Iraq. However, the Saudi official said he expected the kingdom to maintain its dominance of global energy, despite the growth of alternatives to fossil fuels and competition from rival oil producers within Opec and beyond. “Saudi Arabia wants to extend the age of oil,” he said. “We want oil to continue to be used as a major source of energy and we want to be the major producer of that energy.”
How Saudi Arabia Sets The Global (Currency) Markets -- Most investors believe that the U.S. dollar is the primary influence upon commodity prices. While there certainly is a strong correlation between the dollar and commodities, we would argue that the real dynamics in the market work slightly differently. Example: Oil has the potential to set the dollar price, which in turn puts pressure on the broader commodity complex. Has the world turned upside down? Please bear with us as we explain our view. There is an almost perfect negative correlation between crude oil and the U.S. dollar. Consequently, crude oil has a strong positive correlation with the euro. The next two charts show those relationships. Examine the oil/currency correlation. Crude oil is one of the largest markets with an annual value of $1.7 trillion so its moves strongly influence other markets. As the price of crude oil drops, there are fewer dollars in circulation. Consequently, the dollar price rises, and the euro falls. Moreover, it appears that oil exporting countries (think Saudi Arabia or Iran) trade oil in dollars but they invest part of their reserves in euros, according to Robert Gabriel Luta. When the oil price falls, their revenues decline, and they transfer fewer reserves from dollars into euros.Recently, Saudi Oil Minister Ali Al-Naimi said, “no one can set the price of oil – it’s up to Allah.” (source: Zerohedge)One of the most influential individuals in the oil market worldwide probably knows better. What is really occurring?The next chart says it all. The global oil supply and demand picture shows that OPEC increased oil production last September for the first time in more than 1.5 years, as marked with the green circle. Until that time OPEC was consistently reducing their oil production 0.5 to 1 million barrels per day.