Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Energy

Keystone XL Pipeline Granted Approval by State Department

This article appeared online at TheNewAmerican.com on Friday, March 24, 2017: 

Keystone XL demonstration, White House,8-23-20...

With the signing of the cross-border permit by the State Department on Friday, the real work on completing Phase IV of the Keystone Pipeline from Canada to refineries on the U.S. Gulf Coast begins. TransCanada, the owner and operator of the pipeline, still thinks the project is viable economically even though it has been stalled for 16 months by the previous administration. In a press release, TransCanada’s CEO Russ Girling said:

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Fitch Knocks Saudi Arabia’s Credit Rating Down Another Notch

This article appeared online at TheNewAmerican.com on Wednesday, March 22, 2017:

Fitch Ratings downgraded Saudi Arabia’s credit rating again on Wednesday, bringing it perilously close to “speculative,” from “investment grade.” It dropped the country’s long-term credit rating from A+ to AA-, but with a “stable” outlook, noting that the reduction was due to the country’s “continued deterioration of public and external balance sheets.”

Fitch sees what both Moody’s and Standard and Poor’s, the other two global credit rating agencies, see: declining oil prices hurting a country that once enjoyed the highest investment grade ratings thanks to high oil prices that not only paid for extravagant welfare programs and subsidies to its citizens but allowed it to accumulate three-quarters of a trillion dollars in foreign reserves — more than ample to ride out any conceivable storm.

The rating agencies have seen that an inconceivable storm arrived in 2014 when

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More Evidence that OPEC’s Influence is Waning

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 22, 2017:

A measure of the success – and failure – of OPEC’s agreement to limit crude oil production can be seen in the chart of NYMEX crude oil price behavior (Sources below) dating from last fall. When the agreement was inked back in November, crude was at $46.50 a barrel. The price soared and traders got excited, putting in long bets that set records.

By early January, reality began setting in as compliance among the cartel’s members and non-members (who agreed to go along for the ride) began to wane. The roof fell in a couple of weeks ago when inventory builds continued to set records, and the price dropped through support at $50.

In other words, in OPEC’s attempt to birth an elephant, it succeeded in birthing a gnat.

Saudi Arabia maintained a stiff upper lip during the Houston oil conference, stating flat out that

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Saudi Arabia Losing Influence in Global Oil Markets

This article appeared online at TheNewAmerican.com on Tuesday, March 21, 2017:

As it continues to wrestle with declining oil prices worldwide, Saudi Arabia, the de facto head of the OPEC oil cartel, is giving up ground. It said a week ago that it would not allow any “free riders” to enjoy higher oil prices if they rose due to Saudi’s singular attempt to keep them up. A week later it was reported that the kingdom cut its production by 800,000 barrels per day, 60 percent below its agreement. So much for disclaimers against those “free riders” who continue to violate the agreement by exceeding their quotas.

Now comes news that the kingdom’s exports to the United States for the week ended March 10

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OPEC: A Lesson in Why Cartels Fail

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 15, 2017:

OPEC countries

OPEC countries

Every cartel comes together when individual members think they can obtain a greater economic benefit working together than they can alone. Every cartel breaks apart when members think they can do better alone. If a cartel is sanctioned by a government, it becomes a monopoly.

Since 1960, OPEC has largely stayed together with the collusion of governments and Big Oil interests around the world. But the fracking revolution, operating in the free market, is blowing up the model. Specifically,

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Drop in Crude Oil Prices Threatens OPEC and Its Production Cut Deal

This article appeared online at TheNewAmerican.com on Tuesday, March 14, 2017:  

A report released on Tuesday from OPEC indicated just how phony and ineffective is its highly touted production cut “agreement” the cartel managed to lash together among its members and nonmembers last fall. The agreement was designed to remove some 1.8 million barrels a day (mbd) from worldwide production — enough, it was hoped, to drive crude oil prices higher. Before the agreement OPEC was producing 32.5 mbd. Tuesday’s report indicated that the agreement has reduced daily production to — ready? — 31.96 mbd.

The agreement was destined to fail from the beginning. First,

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OPEC’s Death Throes?

This article was published by The McAlvany Intelligence Advisor on Friday, March 10, 2017:

American Petroleum Institute

The tsunami threatening to sink OPEC into oblivion began early Tuesday. At the time, crude oil was selling for $54 a barrel, with expectations that the price would move higher. Those expectations were reflected in the highest ratio of longs to shorts that the Commodity Futures Trading Commission had seen in ten years.

And then came the announcement from the American Petroleum Institute that domestic crude oil inventories rose by a whopping 11.6 million barrels the previous week, against expectations of an increase of just 1.6 million. The selloff began, pushed along on Wednesday following the report from the U.S. Energy Information Administration that

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Crude Oil Price Plummets, Catching OPEC by Surprise

This article appeared online at TheNewAmerican.com on Thursday, March 9, 2017:

Wednesday’s crude oil price drop caught hedge fund managers, big money investors, day traders, and OPEC by surprise, with the sell-off, the biggest one-day drop in 13 months, continuing into Thursday. The five-percent drop on Wednesday pushed crude oil down to $50 a barrel, with Thursday witnessing a further drop to $49. Early Tuesday morning crude was selling at $54 a barrel.

The sell-off started with the announcement on Tuesday by the American Petroleum Institute (API) that

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IEA’s “Oil 2017” Forecast: Crude Oil Shortages Coming by 2020

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 8, 2017:

English: Oil rig platform and stand-by vessel ...

The IEA (International Energy Agency) really ought to stick to its knitting. This intragovernmental agency was set up following the oil shock in the mid-1970s, allegedly to inform various governments as to the status of world crude oil supplies. It was to serve as an information resource on statistics about the global crude oil and other energy markets. In addition, it required its 29 government-members to maintain 90 days’ crude oil supplies on hand to meet another crisis.

It stepped outside its core area of expertise by issuing its Oil 2017 forecast for the next five years, combining a mixture of opinion, crystal-ball gazing, wet-finger in the air experimenting, tea-leaf analysis, naval gazing, and outright guessing that concluded that the world will no longer have a crude oil surplus but a shortage instead by 2020.

And it’s a crisis! Exclaimed Dr. Fatih Birol, the outfit’s director since 2015:

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Crude Oil Shortage in Three Years?

This article appeared online at TheNewAmerican.com on Tuesday, March 7, 2017:

Worldwide demand for crude oil will exceed 100 million barrels per day (mbd) in two years, and exceed global supplies in three, according to the Paris-based intergovernmental group International Energy Agency (IEA). In its latest five-year forecast, Oil 2017, the agency says that demand growth will come primarily from developing countries such as India, while demand growth elsewhere, such as the United States, will be tepid at best. The only way the coming shortage can be overcome, said Dr. Fatih Birol, IEA’s executive director, is for massive new investments in exploration, discovery, and production to be made immediately:

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Coal Making a Comeback, Thanks to Trump

This article appeared online at TheNewAmerican.com on Friday, March 3, 2017:

English: Powell Valley, as viewed from Benges ...

Powell Valley, as viewed from Benges Gap in Wise County, Virginia.

The coal comeback in Appalachia appears to be significant, according to Fox News’ Johnny Giles, following interviews with miners in Wise County, Virginia, the very heart of Appalachian coal country. He observed, “The past month has seen a resurgence of the coal industry that once formed the backbone of the region’s economy, and locals credit President Trump’s aggressive, pro-energy agenda.”

Early in his campaign, Trump made a promise that some wrote off as campaign rhetoric. Now 40-plus days into his administration, it’s clear that he intends to keep, as far as we can tell, many of those promises. He stated:

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Saudi Arabia’s Troubles Mount: Public Sale of Part of Aramco Delayed

This article appeared online at TheNewAmerican.com on Friday, February 17, 2017:

Saudi Aramco's headquarters complex in Dhahran...

Saudi Aramco’s headquarters complex in Dhahran, Eastern Province

Under Saudi Arabia’s “National Transformation Program” (NTP), being pushed by Deputy Crown Prince Mohammed bin Salman, the sale of up to five percent of the country’s crown jewel, Saudi Aramco (officially the Saudi Arabian Oil Company), would boost private employment and diversify the kingdom away from oil. The initial public offering (IPO), if and when it happens, would be the largest IPO in history and value Aramco at around $2 trillion, making it the largest publicly traded energy company in the world.

The funds raised would flow into a “sovereign wealth fund,” which would then invest in foreign and national companies in the private sector. This, it is hoped, would entice others to join in turning Saudi Arabia into more of a capitalist economy rather than a state-controlled one.

In Salman’s grand scheme,

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OPEC’s Influence Wanes as Members Cheat on Production Cuts

This article appeared online at TheNewAmerican.com on Monday, February 13, 2017:

OPEC’s report on how its members are complying with the production-cut agreement hammered out last fall came out on Monday. As expected, it reported cheating among its members.

Per the November 30 agreement, members allegedly agreed to cut production to 32.5 million bpd (barrels per day) of crude. Iraq, Venezuela, Angola, and Algeria cut their production modestly but less than they agreed, while Nigeria, Libya, and Iran produced more. Because Nigeria and Libya are exempt from the production cuts, Saudi Arabia, Kuwait, and UAE (United Arab Emirates) were forced to over-comply. The total produced by the cartel in January came in just below the target of 32.5 million bpd at 32.1 bpd.

Accompanying the report was a statement that crude oil price “gains were capped by increased drilling activity in the US.”

Those crude oil prices are likely to continue to drop despite OPEC’s best efforts to force them higher. The headwinds the cartel faces are monumental:

First, U.S. rig counts jumped to 591 last week, the highest since October 23, 2015 and an increase of 114 since the OPEC agreement.

 

Second, the Department of Energy announced it will be reducing the U.S. strategic oil reserve later this month through the sale of 10 million barrels.

 

Third, crude oil inventories jumped by nearly 14 million barrels last week, bringing the stockpile of private oil inventories close to an 80-year record level at 508 million barrels.

 

In addition, U.S. oil and gas companies are raising new money through Wall Street equity offerings at rates not seen since at least the year 2000. In January alone, 13 different offerings raised $6.64 billion. And they are using that new money not only to develop existing oil fields, but to acquire additional reserves through mergers and acquisitions (M&A). Last year, M&A activity totaled $24 billion. For 2017, oil and gas companies have already invested half that much and it’s only February.

All of this illustrates the decreasing influence of OPEC in directing the price of crude oil on the world market. Aside from the cheaters, OPEC is also faced with other forces over which it has no control, mostly in the oil industry of the United States.

Army Corps to Issue Approval to Complete Dakota Access Pipeline

This article appeared online at TheNewAmerican.com on Wednesday, February 1, 2017:

Senator John Hoeven (R-N.D., shown), following a meeting with Acting Secretary of the Army Robert Speer and Vice President Mike Pence on Tuesday, announced that the Army Corps of Engineers will allow the Dakota Access Pipeline to be completed. He stated,

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Congress Plans to Repeal Obama Rules Through Congressional Review Act

This article appeared online at TheNewAmerican.com on Thursday, January 26, 2017:

To facilitated mining of a coal seam in Gillet...

To facilitate mining of a coal seam in Gillette, Wyoming, blasting was used to loosen the coal after the overburden was removed. Approximately half a million tons of coal in a seam 80 feet thick was loosened by this single blast.

House Majority Leader Kevin McCarthy explained in an op-ed in the Wall Street Journal on Tuesday just how Congress is planning to roll back numerous egregious and harmful rules promulgated by the Obama administration: the Congressional Review Act (CRA). The CRA was included in the “Contract With America Advancement Act of 1996” and allows Congress to review, and to cancel by majority rule, new federal regulations issued by federal agencies. There’s a window of 60 “legislative” days to disapprove, which explains some of the Trump administration’s haste in pushing to repeal them. Once passed by both houses, repeals then become effective with President Donald Trump’s signature.

There are plenty of targets, but McCarthy focused on just three: the Interior Department’s Stream Protection Rule impacting the coal-mining industry, new methane gas regulations that would cost up to $1 billion and force many small energy developers out of business, and the Social Security Administration’s new rule that states that if a S.S. recipient needs a third party to manage his finances, he will be added to the gun background check list.

The CRA shouldn’t be necessary. If Congress hadn’t unconstitutionally allowed power it alone possesses under the Constitution to make laws to pass over to the executive branch’s various and sundry regulatory agencies, the problems with the Obama administration’s overreach wouldn’t exist in the first place. Those agencies have grown into Leviathan, issuing rules, regulations, and mandates far beyond those imagined by Congress. Now Congress is in the backward position of having to limit the regulations pouring out of that unconstitutional “fourth branch” of government. The child is now threatening its parent.

Parsing the language of the Interior Department’s rules on its expanded regulation of coal miners proves the point:

Under [the Surface Mining Control and Reclamation Act of 1977], the regulatory authority may not approve a permit application [from a coal mining company] unless the application demonstrates, and the regulatory authority finds, that the proposed operation would not result in material damage to the hydrologic balance [i.e., streams and rivers] outside the permit area.

How does a coal mining company, in its application, “prove” a negative? How does it satisfy a bureaucratic unelected unaccountable and invisible agency that it will cause no harm, or at least not enough harm to avoid trespassing on that agency’s environmental sensitivities? What assurance does a coal mining company have that said agency won’t change the rules arbitrarily and capriciously in the future? Would not such future uncertainty tend to dampen said coal company’s interest in developing its reserves?

Similar charges could be levied against the federal agency issuing its rules on methane emissions, but the best example of egregious overreach is the Social Security Administration’s new rule that allows it to “deem” who shall have his or her name entered into the National Instant Criminal Background Check System (NICS) based on whether or not they receive third-party assistance in managing their finances. Here’s what the SSA says it will do:

We will identify, on a prospective [in the absence of evidence of any proclivity towards criminal activity] basis, individuals who receive Disability Insurance benefits … or Supplemental Security Income (SSI) payments … who meet certain criteria, including … a finding that the individual’s mental impairment meets or medically equals [various] requirements.

And just how, pray tell, would such “identification” take place? The SSA responds:

If we have information that the beneficiary has a mental or physical impairment that prevents him or her from managing or directing the management of benefits, we will develop the issue of capability.

And just how is that “issue of capability” to be determined? Again, the SSA provides the guidelines its bureaucrats should follow in making that determination:

Does the individual have difficulty answering questions, getting the evidence or information necessary to pursue the claim, or understanding explanations and reporting instructions?

 

If so, do you think this difficulty indicates [that] the beneficiary cannot manage or direct the management of [his or her] funds?

If the answer, by this nameless, faceless unaccountable bureaucrat, is yes, his or her name is entered into the NICS.

The agency then condescends to tell the soul who just had his Second and Fourth Amendment rights under the Constitution obliterated that they have just done so, and that if he cares to contest this arbitrary and capricious decision by said unnamed bureaucrat, he is free to hire an attorney and seek redress. Guilty until proven innocent.

Where is due process? Where is the beneficiary allowed to defend himself or explain himself or offer an explanation? What happens to the right to face his accuser in a court of law?

When Chris Cox, executive director of the National Rifle Association’s Institute for Legislation Action (NRAILA), learned of McCarthy’s plan of attack to repeal this particular rule, he was delighted:

Congress’ decision to review the Obama administration’s back-door gun grab is a significant step forward in restoring the fundamental Constitutional rights of many law-abiding gun owners.

 

The NRA has been fighting this unconstitutional government overreach since it was first discussed, and we look forward to swift congressional action to overturn it.

Those in the energy industry will likely be equally ebullient once Congress has righted the wrongs imposed by federal agencies on its businesses. Representative Greg Walden (R-Ore.), chair of the House Energy Committee, told Reuters that using the CRA will not only wipe out entire regulations but forbid them from writing new versions in their place.

In effect Congress’ use of the CRA will be equivalent to hacking off some of the branches of the Fourth Branch’s tree, but leaves the trunk and the root intact. It’s a start, but only a start.

President Trump Signs Executive Actions to Revive Keystone and Dakota Access Pipeline Projects

This article appeared online at TheNewAmerican.com on Tuesday, January 24, 2017:

President Donald Trump signed three executive actions on Tuesday reviving action on the Keystone XL and Dakota Access oil pipeline construction projects aborted by former President Obama.

Trump said he wants to seek a “better deal” on the Keystone XL Pipeline and asked TransCanada Corporation to resubmit its application for permission to complete the project. He added, “If we’re going to build pipelines in the United States, the pipes should be made in the United States.” Approvals of both projects are “subject to terms and conditions to be negotiated by us.”

Former President Obama iced the Keystone project in 2015 after seven years of stalling and delays, deciding after all that it wasn’t in the best interests of the United States to complete it. And the U.S. Army Corps of Engineers pulled its prior approval of completion of the Dakota Access pipeline last September following outrage, accompanied by violence, by environmentalist activists and members of Indian tribes allegedly concerned about water pollution and disturbing cultural sites.

Trump was careful to use “executive actions” on Tuesday, instead of “executive orders,” in his nod to move ahead with both projects. As Tom Murse, a contributing writer on U.S. government policies for About.com, noted:

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OPEC Claims That U.S. Shale Producers Won’t Threaten Its Efforts to Raise Crude Oil Prices

This article appeared online at TheNewAmerican.com on Wednesday, January 18, 2017:

English: Montage for the Davos article on Wiki...

Montage of Davos photographs

Speaking at the elites’ conference in Davos earlier this week, Saudi Arabia’s oil minister, Khalid al-Falih, erred when he said that U.S. oil shale producers weren’t a threat to OPEC’s plans to raise crude oil prices by cutting its production. He said that U.S. oil producers “will find they need higher prices” because existing fields (Permian, Bakken, etc.) are being exhausted, and because the costs of lifting new production are going up, thanks to U.S. “inflation on [in] the cost of doing business.”

The minister then engaged in straight-line thinking in a variable world and predicted that

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Obama Places Vast Majority of Arctic Ocean “Indefinitely Off Limits” to Drilling

This article appeared online at TheNewAmerican.com on Wednesday, December 21, 2016:  

The joint U.S.-Canada statement issued by the White House on Tuesday permanently blocked 115 million acres of the Arctic Ocean — including all of the Chukchi Sea and the vast majority of the Beaufort Sea — from energy development. Said the statement:

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EIA’s Energy Forecast for 2017 Laced With “Uncertainty”

This article appeared online at TheNewAmerican.com on Wednesday, December 14, 2016:  

English: Logo of the U.S. Energy Information A...

The U.S. Energy Information Administration (EIA) was hesitant to forecast where oil and gasoline prices might be in 2017. It said in its Short Term Energy Outlook published last week: “The values of futures and options contracts indicate significant uncertainty in the price outlook.”

Indeed they do. With a 95-percent confidence level, the EIA says the price of oil next year could vary anywhere between

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Oops! Trump Names Rick Perry as Energy Secretary

This article appeared online at TheNewAmerican.com on Tuesday, December 13, 2016:

Governor Rick Perry of Texas speaking at the R...

Former Texas Governor Rick Perry (shown) said that it’s likely his first presidential run ended during a Republican debate in 2011. He ran on a platform of cutting government and when he was asked by a moderator which agencies he would eliminate, Perry responded:

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.