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

Tag Archives: Fracking

Fracking’s Vicious Cycle Making Bondholders Nervous

This article appeared online at TheNewAmerican.com on Thursday, July 20, 2017:

King Abdullah ibn Abdul Aziz in 2002

King Abdullah ibn Abdul Aziz

Investors in high-yield bonds issued by small fracking companies are getting nervous. Last year those bonds, according to Bloomberg, gained some 38 percent as they rebounded from lows set earlier. In June they slipped two percent. In the bond business, that’s enough to make bond fund managers and individual investors nervous. It’s bad enough that the S&P 500 Energy Sector Index of energy stocks has lost 16 percent so far this year. What’s worse is the vicious cycle that frackers find themselves in.

For instance,

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Crude Oil’s Bear Market Is Crushing OPEC

This article appeared online at TheNewAmerican.com on Monday, July 3, 2017: 

Map of the territory and area covered by prese...

Map of the territory and area covered by present-day Saudi Arabia.

The world’s price of crude oil fell farther in the first six months of 2017 than in any six-month period in the last 19 years. From its peak in January it dropped by more than 21 percent by the middle of June, qualifying it in Wall Street jargon as a “bear market.”

This isn’t part of OPEC’s plan. The once-influential cartel was sure that by taking 1.8 million barrels a day of crude oil production off the world markets, the world price of oil would shortly hit its target of $60. And it almost made it, rising to $57 a barrel before beginning its long and crushing decline.

OPEC was sabotaged not only by noncompliance among its members and production from those to which it gave a pass (Libya and Nigeria), who produced more than was expected, but also by

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Enjoying Record Low Gas Prices? Thank a Fracker!

This article appeared online at TheNewAmerican.com on Tuesday, June 27, 2017:  

On November 17, gas prices had dropped to $1.9...

Of the estimated 44 million Americans who will travel over the upcoming Independence Day holiday weekend (a record, by the way), 37.5 million of them will drive to their destinations. Along the way they will not only spend nearly a dollar a gallon less for gas than they have over the last 10 years on average, they will spend less on gas than any Independence Day since AAA has been keeping records. In addition, this will be the first time in nearly two decades that they will be spending less for gas in July than they did in January. On average over the last decade gas prices have been 47 cents a gallon higher on the Fourth of July than on New Year’s Day.

Consumers are always the ultimate beneficiaries of improved technologies, as producers are

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Oil Expert Yardeni: OPEC Should Break Agreement, Produce All It Can

This article appeared online at TheNewAmerican.com on Wednesday, June 21, 2017: 

In Dr. Ed’s Blog, Ed Yardeni, for 25 years one of the industry’s leading energy strategists, proposed on Wednesday that OPEC should consider going back to Plan A to fund members’ treasuries as Plan B clearly isn’t working:

Rather than [attempting to prop] up the price [of crude oil], maybe OPEC should sell as much of their oil as they can at lower prices to slow down the pace of technological innovation that may eventually put them out of business.

Plan A, it will be remembered,

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Alaska’s North Slope Oil Reserves Are “Open for Business”

This article appeared online at TheNewAmerican.com on Thursday, June 1, 2017:  

Map of northern Alaska showing location of , A...

Map of northern Alaska showing location of , ANWR-1002 area, and the National Petroleum Reserve-Alaska (NPRA).

Following a six-day trip to northern Alaska, Trump’s Interior Secretary Ryan Zinke signed an order on Wednesday in Anchorage that reverses a 2013 Obama administration executive order. That 2013 order removed half of the immense National Petroleum Reserve-Alaska (NPRA) on Alaska’s North Slope from consideration for energy development. Said Zinke:

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OPEC to Extend Oil Production Cuts Another Nine Months

This article appeared online at TheNewAmerican.com on Wednesday, May 24, 2017: 

Now that “everyone is on board” with a nine-month extension of last November’s agreement to cut production by OPEC, tomorrow’s meeting of the cartel in Vienna is expected to rubber-stamp that extension. Saudi Arabia’s oil minister, Khalid al-Falih, upon returning from Iraq on Monday, said, “We think we have everybody on board. Everybody I’ve talked to indicated that nine months [is] a wise decision.”

Iraq was the most egregious cheater under the November agreement, first complaining that the production numbers upon which its “participation” was based were too high, and then being very slow in implementing those cuts. The slack was picked up by Saudi Arabia, which cut more than it agreed to.

The overall goal of the cuts is to

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North Dakota Oil Production Jumps as Access Pipeline Nears Completion

This article appeared online at TheNewAmerican.com on Monday, May 15, 2017:

The latest report from North Dakota’s state oil and gas division showed that crude oil production for March is back up over a million barrels a day, an increase of nearly nine percent since December and almost double what the state produced five years ago.

The boom is back.

In Bismarck there are hundreds more jobs being offered than takers, according to the Associated Press (AP), with “for hire” signs appearing once again in stores, shops, and restaurants downtown. In Williston there are 500 more job listings today than there were a year ago. Williston Republican state senator Brad Bekkedahl, whose district sits on top of the massive Bakken oil shale deposits, told the AP, “There is a long-term optimism that was not here a year ago.”

In the oil business, “long-term” is measured in months, not years or decades. In March 2012 there were 6,954 oil wells producing 580,000 barrels of crude every day. In March this year 13,632 wells produced 1.025 million barrels daily.

And it’s not all due to the Dakota Access pipeline,

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Bakken is OPEC’s Elephant in Its Living Room

This article was published by The McAlvany Intelligence Advisor on Monday, May 15, 2017:

Setting the stage for the OPEC meeting on May 25, Saudi Arabias Oil Minister Khalid al-Falih, promised on Friday that OPEC will do whatever it takes to rebalance the global oil market. Whatever that means, and whatever comes out of that meeting, it wont be enough torebalance the oil market (rebalance: raise the price of oil sufficiently to reduce significantly the deficits the cartels members are currently running).

If the cartel repeats and extends the present agreement by six months, its likely to have the same impact: immeasurably small. The last agreement promised to cut 1.8 million barrels per day (bpd) from its overall production. It managed to cut production by less than half that, 800,000 bpd. In the grand scheme of things (world production of oil is just over 80 million bpd), this represents a one percent reduction in global production of crude. Wahoo.

What will be discussed in Vienna will no doubt include who is going to be doing the heavy lifting, and how much. Will there be exceptions to the extension as there is in the present one? Will there be failures to comply, as there were under the present one? Will there be sanctions applied to those who cheat? What about non-members? Will they somehow be persuaded to engage in the farcical extension? From here the meeting has all the makings of Shakespeares comedy “Much Ado About Nothing.”

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OPEC Increasingly Irrelevant as Cartel Seeks to Extend Output-cut Deal

This article appeared online at TheNewAmerican.com on Wednesday, May 3, 2017: 

English: Flag of the Organization of Petroleum...

Gregory Brew’s statement from Oilprice.com on Tuesday was spot on: “OPEC Begins to Unravel.” Except that the unraveling began years ago as entrepreneurs in the United States found a way to tap underground shale profitably.

OPEC faces an essentially insurmountable task. On May 25, oil ministers from all 13 of the cartel’s members will meet in Vienna to decide whether or not its present oil output cut agreement should be extended. Either way, OPEC’s doom as the prime determiner of world crude oil prices is likely sealed.

If they decide not to extend the output cut, the world will know that OPEC is finished. The ministers will depart Vienna and tell their governments that

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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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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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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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Interior Secretary Repeals Another Obama-era Second Amendment Infringement

This article appeared online at TheNewAmerican.com on Monday, March 6, 2017: 

On his first day in office as Secretary of the Interior, newly minted Secretary Ryan Zinke (shown) issued Secretarial Order 3345 which “revokes Director’s Order 219,” effective immediately.

It’s a small thing, really, but hugely important in confirming that President Trump not only is intent on keeping his campaign promises but is determined to surround himself with people of like mind to help him keep them.

Director’s Order 219 was a parting shot issued by then-President Obama at the very end of his presidency that required the phasing out of the use of lead ammunition for hunting on Federal land. Specifically, it required that the

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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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Oil and Gas Prices Dropping in Anticipation of Trump Presidency

This article appeared online at TheNewAmerican.com on Monday, November 14, 2016:  

Even as prices for crude oil and natural gas were already declining thanks to continued overproduction by the OPEC cartel, the commitment of millions of dollars in new capital expenditures by major oil companies next year, and the stirring of recovery in the oil patch, last Tuesday’s election added additional impetus to the decline. The price for crude oil for December delivery has dropped more than $2 a barrel since the election, and Evan Kelly, writing at OilPrice.com, thinks it’s going to drop further, perhaps much further.

Reasons abound, mostly around Donald Trump’s promise to breathe new life into an industry hampered by overregulation driven by questionable concerns over global warming.  As Kelly wrote:

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The Four “Wild Cards” in Trump’s Handful of Advisors

This article was published by The McAlvany Intelligence Advisor on Friday, November 11, 2016:  

English: Logo of The Goldman Sachs Group, Inc....

Nervous conservatives are looking for signs that the “establishment” – i.e., Goldman Sachs, big banks, the Council on Foreign Relations, George Soros, etc. – having been unable to derail Donald Trump’s march to the presidency, is going instead to infiltrate and insinuate its operatives into the new Trump administration. Many of them remember the successful infiltration and subsequent manipulation of the Reagan administration with the naming of establishment insider James Baker as Reagan’s chief of staff.

At the moment there appear to be four “wild cards” out of the dozens Trump has already invited into his inner circle: Steven Mnuchin, Peter Navarro, John Paulson, and Carter Page.

The first and most obvious one is Steven Mnuchin, the head of Dune Capital Management and former director at Goldman Sachs, where he amassed a personal fortune estimated at more than $40 million as head of the firm’s trading desk. A graduate of Yale,

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Trump Adds to His List of Advisors

This article appeared online at TheNewAmerican.com on Thursday, November 10, 2016:  

English: Deck of cards used in the game piquet

In March, Donald Trump trotted out an early list of foreign-policy advisors on whom he would be relying if he were elected president. In an interview with the Washington Post, Trump said, “I can give you some of the names … Walid Phares, who you probably know, PhD, adviser to the House of Representatives Caucus, and counter-terrorism expert; Carter Page, PhD; George Papadopoulos — he’s an energy and oil consultant, excellent guy; the Honorable Joseph Schmitz, [former] inspector general at the Department of Defense; [retired] Gen. Keith Kellogg; and I have quite a few more.”

In August he added “quite a few more” and then, the day after he was elected, Trump added still more, this time in the economic policy area.

There are at least four “wild cards” in the deck that Trump is building,

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Why Voting for Donald Trump Is a Morally Good Choice

By Wayne Gruden

Some of my Christian friends tell me they can’t in good conscience vote for Donald Trump because, when faced with a choice between “the lesser of two evils,” the morally right thing is to choose neither one. They recommend voting for a third-party or write-in candidate.

As a professor who has taught Christian ethics for 39 years, I think their analysis is incorrect.

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Comeuppance in the Oil Patch

This article was published by The McAlvany Intelligence Advisor on Wednesday, August 3, 2016:  

Looking down from Heaven, George Mitchell must be pleased with what’s going on below: oil inventories are growing to the point where offshore tankers and railroad tank cars are having to be used for storage, oil and gas prices are dropping along with the costs of all the other 6,000 consumer products made from petroleum, rig counts are increasing, production costs are dropping, and, best of all, OPEC’s influence is waning daily.

The Economist called Mitchell the father of fracking in its eulogy following his death in July, 2013. They referred to him as

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If Chosen as Hillary’s VP, Tim Kaine Would Be Invisible

This article appeared online at TheNewAmerican.com on Friday, July 22, 2016:  

Governor Tim Kaine of Virginia.

As chances continue to improve that Hillary Clinton will name Virginia Democrat Senator Tim Kaine (above) as her vice-presidential running mate later this afternoon, a closer look at the affable, non-controversial socialist reveals a man not likely to interfere with the Clinton presidency if she wins in November.

He has all the credentials of a socialist and all the charm that is sorely lacking in his would-be running mate.

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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.