Warren Buffett, the Keystone Pipeline, and Crony Capitalism

Warren Buffett, the Keystone Pipeline, and Crony Capitalism

By Joe
Herring

A decades-long crusade by the environmental left to
convince us that oil is evil, unsustainable, and destroying our planet has yet
to accomplish its goal of eliminating oil as a fuel, but it has succeeded in
making oil damned expensive.  However, new technologies for the extraction and
transport of previously unrecoverable oil promise to reverse that
trend.

One such project is the TransCanada Keystone XL
pipeline, which will transport bitumen from the oil sands of Alberta to the
refineries and ports along the Gulf coast.  It will also feature a spur that
will pick up oil from the vast Bakken oil formation in North Dakota.  The
benefit to our economy and energy security is obvious.

I live in Nebraska, one of the states that will be
host to a segment of the pipeline. We have witnessed a remarkably contentious
debate locally regarding the construction of the Keystone XL, revealing some
rather disturbing attitudes regarding truth and its role in public discourse.  I
suppose it was naïve to think that the wild-eyed excesses of the radical leftist
environmental movement would find little purchase in the commonsense plains of
Nebraska, but the insupportable claims and charges being tossed about by the
anti-pipeline crowd have proven that green insanity can take root even in our
generally sensible state.

The opposition, led most loudly by a group called BOLD
Nebraska, claims a catastrophic risk of contamination to the Ogallala aquifer
should the pipeline suffer a breach.  The aquifer underlies virtually all of
Nebraska, and several other states, and supplies drinking water and irrigation
to millions of people.  It is understandable that reasonable people would
express concern over potential hazards to such a valuable resource, and it is
this reasonable concern that BOLD Nebraska is exploiting with a combination of
half-truths, innuendo, and outright lies.

As required by law, an Environmental Impact Statement
(EIS) has been prepared for this project.  The science reflected in the
statement is sound, and it illustrates a comprehensive examination of the
project’s effects, likely risks, and reasonable alternatives.  The EIS arrives
at a conclusion supported by recognized scientific method and was conducted by
top experts in their fields.  The proposed route for the Keystone XL pipeline
is, in fact, the safest of the available routes.

The reality of the geology and hydrology underlying
the proposed pipeline route precludes any wholesale contamination of the
aquifer.  To understand why, it is important to understand what an aquifer is –
and what it isn’t.  It is a geological formation that is structured in
such a way as to hold water in quantity.  It is not an “underground
lake.”  It is a vast filter system consisting of layer upon layer of sedimentary
rock, silt, clay, and sand that in Nebraska lies much closer to the surface on
the western portion of the aquifer than on the eastern
portion.

For this reason, the water flow within the aquifer is
easterly, making it a physical impossibility for any oil leaked along the
proposed route to flow “uphill” to the 75%-80% of the aquifer that lies to the
west of the pipeline.  Additionally, both the oil and the chemical additives
that make it easier to pump are lighter than water and would not emulsify.
Leaked oil will simply migrate toward the nearest substrate, remaining
localized.

This is according to Professor James Goeke, a
hydro-geologist who retired from the University of Nebraska earlier this year
after a forty-year career of studying the Ogallala aquifer and the Sand Hills
region that overlies it.  He is the foremost expert on the aquifer,
and he informs us that the geological structure of the formation precludes any
possibility that oil could travel for more than a few hundred feet in any
direction before encountering substrate.  Quite simply, the aquifer and the land
above it are not in any real danger from this project.

Given that the science clearly shows the that pipeline
opposition is persisting in perpetuating a demonstrable falsehood, it is
reasonable to question the opposition’s motives.  According to their own website
postings and
editorializing in
newspapers across the nation, their ultimate aim is not to reroute the pipeline,
but rather to halt its construction now and forever.  The thinking is, if the
pipeline is halted, then the oil will stay in the ground, thereby protecting the
earth from the ravages of such a “filthy fuel.”  Their tactic is to suggest a
simple rerouting around the aquifer for the sake of safety.

The environmentalists well know that changing the
route at this stage will result in the invalidation of the existing EIS (the
real aim of the protests), thereby creating a need to begin the entire process
anew.  This time, leftists are confident that they will be able to demagogue and
politicize that process sufficiently to preclude another approval, resulting in
the exercise of a “green veto” despite the clear conclusions of sound
science.

So what happens if the pipeline is never built?  Well,
to fully explore that, it is instructive to look at the players in this game.
One can find the usual suspects among the hysterical left: Hollywood
environmentalists such as Daryl Hannah and progressive agenda-driven scientists
like global-warming alarmist James Hansen of NASA.  These, however, are merely
the “useful idiots” in the process, and not the actual players.  I mentioned
BOLD Nebraska earlier.  This group is funded almost entirely by Dick Holland,
who has been a close friend and business associate of Warren Buffett since the
1960s.

Holland was an original investor in Buffett’s
Berkshire Hathaway, and the two have remained close friends ever since.  Buffett
and Holland also share a similar political philosophy, both being liberal
Democrats, with Holland giving exclusively to the Democratic Party.  So why does
this matter?  It potentially answers a few questions about the recent behavior
of Buffett and Obama, and perhaps the real reason behind the Nebraska-centric
animus toward the pipeline.

A year after the election of Obama, Warren Buffett
bought a giant railroad, the Burlington Northern Santa Fe.
The BNSF has more than 32,000 miles of track and
right-of-way in this nation, running from the west coast and through the
agricultural heartland of America.  It is also hauls coal from the mines in
Montana and Wyoming and is the railroad with the best existing north-south
infrastructure.  In fact, it’s quite well-situated to perform precisely the task
for which TransCanada has proposed to build a pipeline.

Should the pipeline fail, the oil will still be
extracted, but it will then
be transported by rail
,
and Mr. Buffett, thanks to the efforts of his friend Mr. Holland, will be
uniquely situated to derive a fortune from that business, as well as enhance the
value of his holdings in Conoco-Phillips petroleum.  Is it possible that Warren
Buffett’s assistance to Obama in both policy and public relations lately may be
his way of trying to tip the regulatory scales in his favor?  After all, nothing
says “I love you” to a Democrat better than a public plea for more
taxes.

In any case, the opposition to the pipeline is not
only tainted, but intellectually and scientifically bankrupt.  BOLD Nebraska are
correct when they screech that there is an agenda being served here, but it is
not big oil, environmentalism, or even green energy; it appears to be
garden-variety crony capitalism, an Obama administration
specialty.

The author writes from Omaha, NE and welcomes comments
at his website http://www.readmorejoe.com

Obama Nixes Safe Drilling

Obama Nixes Safe Drilling

By Jeffrey
Folks

 

Interior Secretary Ken Salazar was in Houston this weekend talking with oil
executives who are eager to start drilling again in the Gulf of Mexico. That may
sound like progress, but after the meeting Salazar said that nothing had
changed. He was not ready to approve any new drilling.
Despite everything that energy companies have done to devise advanced
containment systems, Salazar is unwilling to issue a single new permit. Systems
constructed by the nonprofit Marine Well Containment Company and other entities
are now able to handle a flow equal or greater than that experienced during the
Deepwater Horizon accident last summer. But that’s not enough for Salazar, who
stated
that
even the most advanced systems have “limitations on water depth and
barrel-per-day containment capacity.”
Well, yes. Any system that could be devised would have limitations on depth
and per-barrel capacity. But that’s not the point, as Mr. Salazar must know. The
question is whether the new systems are able to handle the sorts of accident
that might actually take place. Not the worst scenario that someone from the
Interior Department could dream up. Combined with safely protocols now in place,
the new containment equipment can do just that.
So why no permits for new drilling? It appears that the Obama
administration is more interested in kowtowing to environmental donors in
advance of the 2012 election than it is in controlling energy prices. Even with
a federal court order
to decide
on new drilling in the Gulf by March 20, the Obama administration
remains obdurate.
By refusing to grant a single deep-water permit in the Gulf, Obama has shut
down access to one third of America’s oil supply. With Libyan oil fields now
closed indefinitely and with uncertainty about future production elsewhere in
the Middle East, it is a dreadful time to be shutting down America’s oil fields
as well. Turmoil in Saudi Arabia, Iran, Kuwait, or Iraq would drive the price of
oil up above $150 a barrel, at the very least. A prudent policy would be to
increase domestic production in light of uncertainty abroad.
Some Americans are already paying $4 a gallon for gas, but this is not just
because of what’s happening in the Middle East. Government action on Gulf
drilling permits would immediately calm the oil markets and bring down prices,
even though new production would not come on line for several years. But instead
of reducing prices, Obama seems is intent on driving them up.
It’s not just the Gulf of Mexico that is off limits. Obama opposes drilling
anywhere offshore, including in the rich arctic region which is known to hold
billions of barrels of oil reserves.
Just as bad, in his FY2012 budget Obama proposes
cutting
$4.4 billion of annual tax deductions for oil and gas drilling –
deductions for depreciation and amortization that date back to 1913. Those tax
deductions help energy companies pay for exploratory projects that then result
in lower energy costs for all Americans. At a time when Obama is throwing away
$100 billion on risky alternative energy boondoggles, a number of which have
already gone bankrupt, he wants to end those modest tax advantages that actually
result in the production of large quantities of new energy. That sort of
accounting only makes sense to a politician.
Obama, in fact, is doing everything possible to curtail domestic energy
production, and yet he says that
“our dependence on foreign oil threatens our national security.” If reliance on
foreign oil puts America at risk, why not produce more oil at home? New drilling
techniques including fracking, horizontal drilling, and deep-water drilling now
make it possible to do just that, but Obama opposes all of these.
If the President knows that dependence on foreign oil threatens our
national security and that new drilling techniques can increase
domestic supplies, why is he intent on destroying our domestic oil and gas
industry?
America is going to need new oil and gas production in a big way. In a new
report
, Charles T. Maxwell, the dean of U.S. energy analysts, has gone on
record saying that regardless of what happens in the Middle East, oil prices are
going up, way up. In a Barron’s interview Maxwell stated that oil
prices will hit $300 by 2020. Maxwell arrives at this number by way of a
straightforward calculation. By about 2015 global oil production will peak, but
demand will continue to increase on a global basis.
That leaves Americans paying $12 a gallon for gas, which is just about what
Obama has said he wants. That certainly will help to end our dependence on
foreign oil. The problem is there won’t be anything to take its place.
At $12 a gallon, we won’t be driving around much in large SUVs or in small
SUVs, either. Nor will we be enjoying cheap air fares or discounted cruises. The
cost of transporting goods will triple, as will the cost of heating homes,
schools, and offices. And those who think that solar and wind will take the
place of fossil fuels are sadly mistaken.
As Maxwell points
out
, solar energy now supplies one tenth of one percent of America’s energy
needs. Even with massive subsidies — the kind of subsidies that have already
bankrupted the Spanish economy — solar and wind will never supply more than a
small percentage of America’s energy needs. Since Obama, through EPA
restrictions, is busy sabotaging coal and natural gas as well, and since America
has no serious nuclear program underway, we are left with nothing.
Only a president who is extraordinarily stupid would fail to see this.
Conclusion: Obama is either extraordinarily stupid, or he is willing to trade
America’s national security for the support of
environmentalist donors who are key to his re-election. Whichever it is, we’re
in trouble.
Jeffrey Folks is the author of many books and article on
American culture.

Obama’s drilling moratorium causes major company to go bankrupt

Obama’s drilling moratorium causes major company to go bankrupt

Ed Lasky

 

On top of tens of thousands of workers losing their jobs
when Obama imposed a drilling moratorium by executive order (and fudging what
scientists and experts believed in order to justify his moratorium) now comes
news that Seahawk Drilling, a major publicly-held drilling services company, has
declared bankruptcy due to the sharp decline in Gulf drilling work.
From USA
Today:

Seahawk Drilling Inc. said it has filed for bankruptcy protection and plans
to sell its fleet of offshore drilling rigs to a competitor for $105
million.
Seahawk, which announced the deal with Hercules Offshore Inc. Friday, has
been hurt by a slowdown in Gulf of Mexico drilling after the BP oil spill last
April. The government halted drilling in deep waters and imposed tough new rules
that have curtained all energy exploration in U.S. waters.

Employees will be let go; shareholders are suffering big losses as the stock
plunges. Gulf communities have already been stricken by big job losses and
declines in state tax revenues. We have become even more dangerously dependent
on overseas sources of crude and prices have skyrocketed as Obama turned the
handle to the off position when it comes to Gulf oil drilling.
There has been a lot of damage caused by Barack Obama’s policies and there
will be a lot more to come as long as he is in office.

 

Panel: Gov’t thwarted worst-case scenario on spill

Panel: Gov’t thwarted worst-case scenario on spill

By DINA CAPPIELLO, Associated Press Writer Dina Cappiello, Associated Press Writer Wed Oct 6, 11:48 am ET

WASHINGTON – The White House blocked efforts by federal scientists to tell the public just how bad the Gulf oil spill could have been.

That finding comes from a panel appointed by President Barack Obama to investigate the worst offshore oil spill in history.

In documents released Wednesday, the national oil spill commission reveals that in late April or early May the White House budget office denied a request from the National Oceanic and Atmospheric Administration to make public the worst-case discharge from the blown-out well.

BP estimated the worse scenario to be a leak of 2.5 million gallons per day. The government, meanwhile, was telling the public the well was releasing 210,000 gallons per day – a figure that later grew closer to BP’s figure.

Sarah Palin: Fuel America with Terrorist-Tarred Oil Instead of Drilling Our Own, Baby?

Sarah Palin: Fuel America with Terrorist-Tarred Oil Instead of Drilling Our Own, Baby?

Fuel America with Terrorist-Tarred Oil Instead of Drilling Our Own, Baby?
 Yesterday at 12:20pm
Am I the only one who wonders what could possibly be the agenda of any politician who would thwart our drive toward energy independence? Continuing to lock up America’s domestic energy reserves, including the energy-rich Last Frontier of Alaska, only equips dangerous foreign regimes as they fund terrorist organizations to harm us and our allies. I’m going to keep speaking and writing about this in the simplest of terms until someone can provide a simple answer as to why liberal Democrats don’t understand that we have safe, warehoused onshore and shallow water reserves waiting for permission to be extracted. They either choose not to understand the geology, science, and technology behind an “all-of-the-above” approach to energy security, or they understand it, yet for whatever frightening reason choose to be lap dogs to Chavez and Ahmadinejad.

Shoot, I must have lived such a doggoned sheltered life as a normal, independent American up there in the Last Frontier, schooled with only public education and a lowly state university degree, because obviously I haven’t learned enough to dismiss common sense (a prerequisite for power in Washington these days). Help me out, friends! Help someone like me – and the majority of Americans – understand why we would ever kowtow and bow to foreign regimes that hate us, instead of doing all we can to starve the beast of terrorism in our plight for security, prosperity, and peace.

There’s an obvious common sense answer to our need for security and energy independence, but don’t hold your breath waiting for common sense to surface in Washington – it’s an endangered species there. Obviously we must responsibly develop our God-given domestic oil and gas reserves right here, right now; we must conserve energy; and we must develop renewables that are based on sound science, not snake oil and favors for political pals.

Please read the following Newsmax article (posted below) summarizing GOP efforts to push the Obama Administration to produce a plan to potentially wean us off one source of dangerous foreign oil. (Of course, I think the prodding should be even more aggressive to shake up the naïve complacency of anti-development Democrats and some deer-in-the-headlights mainstream reporters who are finally realizing they’d been buffaloed into believing any politician had all the answers.)

We must understand the imperative nature of energy security, along with America’s life and death need to secure our borders. Baby, this is why I won’t sit down and shut up about the need to drill.

- Sarah Palin

Senators Demand Answers on Venezuela’s Links to Terrorism

A dozen Republican senators have sent a letter challenging the Obama administration to explain what it knows about Venezuela’s support for terrorism and suggesting that the country be declared a “state sponsor of terrorism.”

“Hugo Chavez’s relationships with Iran and other foreign terrorist organizations continue to grow and pose a serious threat to our hemisphere,” Sen. George LeMieux of Florida, one signer of the letter, said of the Venezuelan president.

“I encourage the State Department to thoroughly evaluate Venezuela’s actions and determine if the country needs to be added to the official U.S. list of state sponsors of terrorism.”

John Ensign of Nevada, who drafted the letter along with LeMieux, declared: “It’s no secret to the American people that Venezuela wishes harm to the United States. What is secret is how many more ties to terrorist organizations and state sponsors of terrorism does Venezuela need to be declared a state sponsor of terrorism.”

The letter addressed to Secretary of State Hillary Clinton points to a number of concerns raised by Chavez’s Venezuela:

  • Surface-to-air missiles and other weapons have reportedly been provided by Venezuela to FARC guerrillas in Colombia. An arms cache captured from FARC in 2008 included Swedish-made anti-tank rocket launchers that had been sold to Venezuela.
  • Venezuela provides cross-border sanctuaries for Colombian guerrillas.
  • A United Nations report last year disclosed that nearly one-third of all cocaine produced in the Andean region passes through Venezuela. The senators question how much terrorist groups such as al-Qaida profit from trafficking drugs that originate in or flow through Venezuela.
  • The U.S. has frozen the assets of two Venezuelans, including one working for Chavez, for providing direct support to the terrorist group Hezbollah. The senators ask the State Department for an assessment of the activities of Hezbollah inside Venezuela.
  • Chavez’s “extensive support” of the Castro regime in Cuba is calculated to amount to $1 billion a year, and Cuban advisors are involved in the intelligence and security apparatus of the Venezuelan government.
  • Chavez “has repeatedly expressed support” for Iran’s covert nuclear program and announced a plan for the construction of a “nuclear village” in Venezuela with Iranian assistance. Also, Chavez has pledged to provide Iran with 20,000 barrels of gasoline per day.
  • As for Iran’s Revolutionary Guards, “recent years have witnessed an increased presence in Latin America, particularly Venezuela.”
  • Weekly flights connecting Iran, Syria, and Venezuela raise suspicions of “nefarious purposes” because passengers on these flights have been subject to only “cursory immigration and customs controls.”

Newsmax magazine’s May issue disclosed that Iranian security officers seal off the airport in the Venezuelan capital, Caracas, two hours before Iran Air jets arrived. Those officers supervise cargo unloading with no inspection by local officials.

Iran could easily fly in highly enriched uranium that could then be carried into the U.S. from Mexico, increasing the risk of a terrorist attack with a nuclear weapon.

If the U.S. did declare Venezuela a state sponsor of terrorism, American arms sales to the country would be prohibited, as would U.S. economic assistance, and severe restrictions would be placed on bilateral trade.

“The Obama administration’s decision to pull the trigger on Venezuela may hinge on whether the United States can afford to forfeit petroleum exports from that South American country,” Roger F. Noriega, a former assistant secretary of state and a visiting fellow at the American Enterprise Institute, observes on the Institute’s journal, The American.

“Anticipating the argument that Venezuela’s oil supply is too essential to the U.S. economy to risk slapping that country with the terrorist label, the senators ask the administration to explain its ‘contingency plan’ for dealing with a ‘sudden and prolonged unavailability of Venezuelan oil exports to the United States.’”

In answer to the question, the U.S. would likely find new sources of oil on the international market — but Venezuela’s economy will be crippled by the loss of oil revenue and consumer imports, Noriega notes, adding: “Since the last years of the George W. Bush administration, U.S. diplomats have steered clear of Chavez for fear of ‘provoking’ him. Thanks to congressional oversight, we are about to confront the terrible downside of that naïve, passive policy.”

Other senators who signed the letter include John McCain of Arizona, Scott Brown of Massachusetts, and Republican Whip Jon Kyl of Arizona.

Oil could give kiss of death to recovery

Oil could give kiss of death to recovery

By Gregory Meyer and Michael Mackenzie in New York

Published: April 8 2010 18:51 | Last updated: April 8 2010 18:51

Oil graphic for Markets

This week oil climbed to $87 a barrel, its highest level since October 2008 and prompted concerns that triple-digit crude was once again in the offing.

This was after a period of eight months when oil traded between $70 and $80, a narrow band that pleased oil producers without hurting consumers too much.

The latest surge seems to have been prompted by rising confidence in a global economic recovery, even if most traders and bankers are still cautious about supply and demand fundamentals.

Worries about the Greek economy have pegged prices back over the last couple of days but the more bullish Wall Street banks see prices climbing further, with Barclays Capital forecasting $97, Goldman Sachs $110 and Morgan Stanley $100 next year.

But the higher prices go, the deeper the concerns that they will stifle global growth. Jeff Rubin, a former CIBC chief economist and author of a book on oil and globalisation, says: “Triple-digit oil prices are going to threaten a world recovery.”

Pricier oil and other key commodities, notably iron ore and copper, could ripple through the economy and financial markets, potentially triggering inflation and forcing central banks to lift interest rates from ultra-low levels. This could force bond yields higher, but lower the attractions of equities.

However, higher oil prices could lift energy shares. In the S&P 500 index, the energy sector is up just 2.4 per cent this year and was barely positive in the first quarter, lagging behind the index’s 6 per cent gain for the year.

Nicholas Colas, ConvergEx Group chief market strategist, says: “With crude oil prices marching steadily higher, portfolio exposure to the energy sector could well become a key determinant of overall investment performance through the balance of 2010.”

Oil prices first hit $100 a barrel in January 2008, before continuing their rapid ascent to peak at $147 in July of that year. They fell to a low of $32 in December 2008, before recovering again. On Thursday oil traded at about $85 a barrel.

The latest rise comes as the economic recovery fuels a jump in oil demand after the first global decline in a quarter century. Supply is not a worry, as the Opec oil cartel has more than 6m b/d of capacity to spare in a pinch.

One difference from last year is that then the oil price was rising against the backdrop of a weaker dollar. This year crude and the dollar have risen together.

Policymakers seem untroubled. Energy ministers at the International Energy Forum in Mexico last week embraced less volatility, not lower prices. Lawrence Summers, director of the US National Economic Council, in remarks this week bemoaned his country’s dependence on foreign oil supplies, but did not complain about prices.

Some economists do not view $80 oil as a threat to global growth, which the International Monetary Fund projects at 4 per cent this year. James Hamilton, an economist at the University of California, San Diego, is author of a paper that found oil’s 2008 surge to $147 a barrel helped tip a housing-led slowdown into a recession. This time, the relatively steady nature of the price rebound has allowed consumers to adjust.

“The shock value is gone now,” Prof Hamilton says.

Hussein Allidina, commodity strategist at Morgan Stanley, says the $100 oil he predicts next year would increase the “oil burden” – a function of demand, prices and global output – to about 4 per cent from 2.8 per cent late last year. This would hurt developed economies more than emerging ones, as the latter are powering global growth and can afford fuel subsidies, he says. The IMF estimates consumer petroleum subsidies will reach almost $250bn this year.

“If we were to move to $100 a barrel, economic growth would start to slow, but ‘derail’ is likely too strong a word,” Mr Allidina says.

A move to higher oil prices would not necessarily generate corresponding gains in retail fuel prices, as new refining capacity has made petrol markets more competitive. In the US, filling stations in most states still sell petrol for less than $3 a gallon, well below the peak of 2008. In the UK, however, petrol prices are close to record highs, even though crude is well below its peak.

In any case, prices are as much an effect of the economic expansion as a threat to it. China, the fastest-growing economy, is alone expected to consume 520,000 b/d more this year than last, contributing a third of global demand growth, according to International Energy Agency estimates.

“You can’t have a global recovery without the oil price recovering as well,” says Lutz Kilian, a University of Michigan economist who has studied the effects of oil shocks. Because demand is fuelling prices, “the only way to keep oil prices down is to remain in a recession, which hardly sounds attractive”.

The prospect of higher prices is still alarming to many observers. Olivier Jakob, of Swiss consultant Petromatrix, said in a note that the “recovery of 2009 was fuelled with crude oil at $62 a barrel, not at $90 a barrel or $100 a barrel. We fear that the latest run on WTI will be the kiss of death for a global economy that was trying to avoid the possibility of a double-dip recession.”

When oil prices last surged to $100 a barrel in late 2007, US and other rich-country consumers blunted the impact by drawing on home-equity loans and credit cards to finance petrol purchases, says David Greely, energy economist at Goldman Sachs.

“It does raise the issue if we’re in a much more credit constrained world going forward, are consumers able to do that or will they be more sensitive?” he asks.

Getting Gas Wrong

Getting Gas Wrong

Posted By Rich Trzupek On April 8, 2010 @ 12:04 am In FrontPage | 9 Comments

In an economy full of problems there are still a few high points. One of them, as you may have noticed if you pay attention to your utility bills, is that natural gas prices are relatively low. Back in mid-2008, natural gas prices hit record highs. The market reacted as it is supposed to: exploration took off, production increased and now, almost two years later, the cost of natural gas has stabilized [1] at a comfortable level, amid normal seasonal variations. We shouldn’t have to worry about this sector of the economy, but there is a dark cloud looming on the horizon in the form of yet another environmental initiative that the Obama administration is pushing forward, one that has the potential to cut domestic natural gas production, cost us jobs and revenue and force energy prices upward.

There is quite a bit of natural gas and oil trapped in shale and rock formations located thousands of feet underground. The tried and true technique of “hydraulic fracturing” has been used for about sixty years to coax these hydrocarbons to deep wells, where they can be recovered. In simple terms, hydraulic fracturing fluids are pumped down into a deep well under pressure. The fluid consists mostly of water and sand, with a small amount of other chemicals. As the pressurized fluid is distributed along a horizontal plane, it creates micro-fractures in the rock holding the natural gas. The sand particles hold these fractures open, allowing gas to flow along the path of least resistance up into the borehole of the well.

There are more than a million natural gas wells that utilize hydraulic fracturing in the United States. About ninety-five per cent of natural gas wells in the country use this form, or an analogous form, of reservoir enhancement to recover energy. The process is an important – some would say vital – piece of the puzzle if the nation is going to maintain some degree of energy independence. However, the technology caught the attention of Barack Obama’s EPA, which recently confirmed [2] that it is “studying the issue [3]”. When uttered by members of this administration those three words generally sound rather ominous and this is no exception. “Studying the issue,” whatever the issue, typically means more regulations, more restrictions and higher costs. When it comes to a part of our economy as vital as the energy sector, one has to wonder: how many more studies and subsequent “recommendations” can we afford?

Why is the EPA studying hydraulic fracturing? For environmental reasons of course. Scattered, unconfirmed and wholly anecdotal claims that hydraulic fracturing has contaminated drinking water in a few locations across the nation spurred the EPA into action. From a scientific point of view, it’s hard to understand why the EPA would lend any credibility to these tales, much less allocate $1.9 million dollars to take another look at a technology that has been studied to death, not only by the oil and natural gas industries, but by the EPA itself. A 2004 EPA study concluded that hydraulic fracturing didn’t present any threat to human health and the environment, but of course that was George W. Bush’s EPA, so any of its decisions are subject to a Barack Obama do over.

There are a number of reasons why it’s just plain silly to spend almost two million dollars to reconfirm what we already know. Chemically, as noted above, hydraulic fracturing fluid is overwhelmingly water and sand (or ceramic, or some other inert solid used to keep rock pores open). Other chemicals, which are often proprietary, represent a very small fraction of the whole. Geologically, the formations holding the gas and oil are located thousands of feed underground, under layers of different strata, while drinking water aquifers are typically no more than a few hundred feet below ground. The natural gas recovered, like the fracturing fluid, will naturally follow the path of least resistance and flow to the bore hole that’s been drilled for that purpose, rather than try to find a tortuous path through all of the layers of rock and sediment containing it. Plus, consider this: even as the EPA looks at ways to restrict an important means of producing energy, they’re simultaneously developing regulations that encourage another segment of the power industry to inject chemicals deep underground without the kind of relief valve that a bore hole represents. Carbon storage and sequestration is the leading, EPA approved way to reduce carbon dioxide emissions from coal-fired power plants. In this case, carbon dioxide is injected deep underground at high pressures, but because there is no well to relieve the pressure, it’s free to find fractures that will carry it, and any contaminants from the stack gas that remain, into aquifers.

The Environmental Engineering Committee (EEC) of EPA’s Science Advisory Board [4] is in charge of studying hydraulic fracturing. The EEC has sixteen members [5], fourteen of which are academics and two of which are consultants. Not a single industry expert sits on the committee. The energy industry will be free to comment on the committee’s work of course, but is Obama’s EPA likely to pay serious attention to experts who represent evil corporate interests?

According to a study conducted by IHS Global Insight [6], a ban on hydraulic fracturing would cost the United States $374 billion in lost Gross Domestic Product by 2014, would result in the loss of about 3 million jobs and would require a sixty per cent increase in imported oil and natural gas to make up the difference. Placing restrictions on the fluids that can be used for hydraulic fracturing would be slightly less painful, but painful enough. In that scenario, IHS’s study foresees a $172 billion reduction in GDP, 1.4 million jobs lost and a thirty per cent increase in energy imports.

It should be noted that hydraulic fracturing is already regulated on the state and federal levels. Studying the practice once again will lead to one of two results. Either the EPA will conclude that existing regulatory protections are sufficient, which doesn’t seem likely given this administration’s record when it comes to environmental issues, or the EPA will deem it necessary to pile another layer of crippling regulations onto an industry that has been one of the few bright spots in a floundering economy.

Oil in the Western USA and Obama is pushing Ethanol DUH!

Subject: Fw: oil – you better be sitting down when you read this!

 By the way…this is all true. Check it out at the link below!!! 

GOOGLE it, or follow this link.  It will blow your mind. 

 http://www.usgs.gov/newsroom/article.asp?ID=1911 

Here’s an interesting read, important and verifiable information : 

About 6 months ago, the writer was watching a news program on oil and one of the Forbes Bros. was the guest. The host said to Forbes, “I am going to ask you a direct question and I would like a direct answer;  how much oil does the U.S. have in the ground?”  Forbes did not miss a beat, he said, “more than all the Middle East put together.”  Please read below. 

The U. S. Geological Service issued a report in April 2008 that only scientists and oil men knew was coming, but man was it big.  It was a revised report (hadn’t been updated since 1995) on how much oil was in this area of the western 2/3 of North Dakota, western South Dakota, and extreme eastern Montana …… check THIS out: 

The Bakken is the largest domestic oil discovery since Alaska’s Prudhoe Bay, and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable…. at $107 a barrel, we’re looking at a resource base worth more than $5..3 trillion. 

“When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea..” says Terry Johnson, the Montana Legislature’s financial analyst. 

“This sizable find is now the highest-producing onshore oil field found in the past 56 years,” reportsThe Pittsburgh Post Gazette.  It’s a formation known as the Williston Basin, but is more commonly referred to as the ‘Bakken.’  It stretches from Northern Montana, through North Dakota and into Canada.  For years, U. S. oil exploration has been considered a dead end.  Even the ‘Big Oil’ companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken’s massive reserves….. and we now have access of up to 500 billion barrels.  And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL! 

That’s enough crude to fully fuel the American economy for 2041 years straight.  And if THAT didn’t throw you on the floor, then this next one should – because it’s from 2006! 

U. S. Oil Discovery- Largest Reserve in the World 

Stansberry Report Online – 4/20/2006 

Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels.  OnAugust 8, 2005 President Bush mandated its extraction. In three and a half years of high oil prices none has been extracted. With this motherload of oil why are we still fighting over off-shore drilling? 

They reported this stunning news:  We have more oil inside our borders, than all the other proven reserves on earth.. Here are the official estimates: 

- 8-times as much oil as Saudi Arabia 

- 18-times as much oil as Iraq 

 – 21-times as much oil as Kuwait 

 – 22-times as much oil as Iran 

- 500-times as much oil as Yemen 

- and it’s all right here in the Western United States . 

HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America become independent of foreign oil! Again, we are letting a small group of people dictate our lives and our economy…..WHY? 

James Bartis, lead researcher with the study says we’ve got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped.  That’s more than all the proven oil reserves of crude oil in the world today, reports The Denver Post. 

Don’t think ‘OPEC’ will drop its price – even with this find?  Think again!  It’s all about the competitive marketplace, – it has to. Think OPEC just might be funding the environmentalists? 

Got your attention yet?  Now, while you’re thinking about it, do this: 

Pass this along.   If you don’t take a little time to do this, then you should stifle yourself the next time you complain about gas prices – by doing NOTHING, you forfeit your right to complain. Copy and paste to your e-mail

Now I just wonder what would happen in this country if every one of you sent this to every one in your address book.

Americans more interested in energy than environment

Americans more interested in energy than environment

posted at 8:48 am on April 6, 2010 by Ed Morrissey
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Maybe it took an extended economic collapse for Americans to get practical about energy production.  It could also have some relation to the Climategate scandals and the collapse of credibility for anthropogenic global-warming advocates.  Either way, Gallup’s latest survey shows Americans prioritizing energy production over environmental concerns for the first time since Gallup began polling on the issue in 2001:

Americans are more likely to say the U.S. should prioritize development of energy supplies than to say it should prioritize protecting the environment, the first time more have favored energy production over environmental protection in this question’s 10-year history. …

The current data represent a continuing shift in opinion toward energy production. Since 2007, when Americans’ preferences for environmental protection were the greatest (58% to 34%), Americans’ opinions have shown significant movement each year in the direction of prioritizing energy production. This change has been evident among nearly every major demographic subgroup, although self-identified liberals have remained relatively steadfast in saying the environment should be a higher priority.

At the same time, Americans continue to advocate greater energy conservation by consumers (52%) over greater production of oil, gas, and coal supplies (36%) as a means of solving the nation’s energy problems. Americans have always come out in favor of greater consumer conservation, though this year marks the highest percentage favoring production (by a percentage point) in the last 10 years.

Interestingly, the change doesn’t come from crisis-mode thinking, at least not on energy supplies.  Two years ago, spiking gasoline prices inspired the “Drill Here, Drill Now” movement.  Today, though, only 34% of respondents think the energy-production situation in the US is “very serious,” a decline of eight points in a year.

Most likely, this comes from economic concerns.  The chart Gallup has on its site shows that support for prioritizing environmental restrictions over energy production peaked in 2007, just before the start of the recession.  Another poll earlier this month showed that respondents also prioritized economic expansion over environmental protection for the first time, and today’s chart shows that energy production has become more important as the economy worsened.  People understand that high energy prices retards growth, and that we need cheap energy to expand.

With this in mind, Barack Obama’s decision to drill in certain areas might be seen as a pre-emptive move to get ahead of this curve.  The poll also shows, though, that Republicans don’t need to support cap-and-trade in order to get better energy-production policies.  The public has grown up a bit in the last few years, something that adversity usually accomplishes.

Drill Maybe? Drill! (The Cartoon)

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