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: oil

Gas Prices Ease as U.S. Oil Production Soars

This article was first published by TheNewAmerican.com on Monday, July 7, 2014: 

English: $4.06 Gas Prices, Lewiston, Maine, Cu...

Despite predictions to the contrary, the price of gas over the July 4 weekend dropped by two cents per gallon, confounding seers who were looking at gas approaching $4 a gallon. Those prognosticators were guilty of “straight-line thinking in a curvilinear world” — meaning that since gas this year was 20 cents a gallon more than a year ago, they believed it would continue to go up steadily for the foreseeable future.

With political disruptions in Iraq and Syria seriously reducing their contributions to the world’s oil supplies, one would think that prices would have to go straight up.

One would be wrong.

On July 4, Bank of America reported that U.S. production of crude oil (along with the liquids separated from natural gas) “surpassed all other countries this year with daily output exceeding 11 million barrels [per day] in the first quarter.” Francisco Blanch, BofA’s head of commodities research, told Bloomberg,

The U.S. increase in supply is a very meaningful chunk of oil. The shale boom is playing a key role in the U.S. recovery [from the Great Recession].

If the U.S. didn’t have this energy supply, prices at the pump would be completely unaffordable.

The nearly exponential growth in oil production, thanks to the free market’s invention and development of fracking technology, has put the United States firmly on the path of energy independence. As we become energy independent, disruptions in the supply chain from the Middle East will matter less and less.

Texas and North Dakota — which Professor Mark Perry calls “Saudi Texas” and “Saudi Dakota” respectively — are now producing almost half of all U.S. oil, and would rank as the fifth largest oil producing country as a separate nation. The growth in production is astonishing, according to Perry:

A decade ago the combined conventional crude oil production in the states of Texas and North Dakota … represented less than 21% of total U.S. crude oil output.

By 2008, the combined crude oil output in the two states … were producing one-third of all U.S. crude oil.

In eight out of the last nine months, their combined share exceeded 47% of all U.S. oil.

Perry predicts that it will exceed 50 percent sometime before the end of the year. And that prediction could come back to embarrass him, if the International Energy Agency (IEA) is correct. The IEA is estimating that total U.S. crude oil production (currently at 8.4 million bpd) will continue to soar, exceeding 13 million barrels per day in less than five years. That 50-percent increase in oil production would mean that the United States could be producing nearly 80 percent of its domestic needs for energy, closing in on energy independence.

In the very short run, gas prices will remain higher than they should be, thanks to the disruptions of supply in the Middle East, but with the continuing success of fracking making shale oil deposits now available with current technology, prices may reasonably be expected to decline further over time. Blanch admitted as much to Bloomberg:

The shale production story [in the United States] is bigger than Iraqi production, but it hasn’t made the impact on prices you would expect.

Typically such a large energy [production] growth should bring prices lower but in fact we’re not seeing that because the whole geopolitical situation outside the U.S. is dreadful.

Those involved in capitalizing on the fracking revolution, however, are taking a much longer view. The annual investment in oil and gas development and production hit a record $200 billion this year, one-fifth “of the country’s total private fixed-structure spending for the first time,” said Blanch.

The explosion in the oil patch is doing much to offset the otherwise nearly stagnant economy. In the last 10 years, direct jobs in the patch have almost doubled, while “indirect” jobs that support the industry have almost tripled in that same time period. As Professor Perry noted: “No other sector … has added as many jobs for American workers or made as much of an overall economic contribution to the US economy as the oil and gas sector.”

Citizens often don’t know how well they have it here. At present the average cost of gasoline is $3.69 a gallon for regular. In Norway it’s an astounding $9.79 a gallon, while in Germany it’s $8.50, and in England a gallon of petrol is $8.25.

The only thing that will keep the price of gas from continuing its two-year decline is government, either through restrictions on energy development or through increased taxation. At present about $2.37 of that $3.69 represents the cost of crude oil. Refining costs are about $.45 a gallon, while distribution, marketing costs, and profits (estimated to be between eight and 15 cents per gallon) cost another $.33 a gallon. Taxes (federal and state) take up the balance: $.42 a gallon. Federal excise taxes are $.184 cents a gallon, while state taxes average about $.24 cents a gallon. If gas continues to drop in response to the natural laws of supply and demand (greater supply means greater demand thanks to the lower price), the temptation to raise state and federal excise taxes will become overwhelming.

In Germany, for instance, half the cost of a gallon of gas is due to taxes. In Great Britain the tax take on a gallon of gas is more than 60 percent. In Sweden it’s even higher.

At present, however, the laws of supply and demand are providing an enormous advantage to American drivers compared to their counterparts abroad. And they continue to confound the experts predicting ever higher prices at the pump as well.

A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. He can be reached at badelmann@thenewamerican.com This email address is being protected from spambots. You need JavaScript enabled to view it. .

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Latest Keystone Pipeline Study Greeted with Cheers and Jeers

In the release on Friday of the fifth environmental impact study of the Keystone XL pipeline, partisans on both sides of the issue were quick to point to the key paragraph in that study:

Approval or denial of any one crude oil transport project, including [the Keystone XL pipeline project], is unlikely to significantly impact the rate of extraction in the oil sands [in Alberta, Canada] or the continued demand for heavy crude oil at refineries in the United States…

Supporters saw this as supporting the country’s economy and lessening its dependence upon foreign, less friendly sources of oil. Senate Minority Leader Mitch Mitchell declared:

The Keystone XL Pipeline is the single largest shovel-ready project in America, ready to go, but for years President Obama and his hard-left allies have stalled these jobs in a maze of red tape.

If the president meant what he said this week about a “year of action,” he’ll act now on this important project that won’t cost taxpayers a dime to build but will bring thousands of private-sector jobs to Americans who need them.

Mitchell’s comments were echoed by Senator Joe Manchin (D-W.Va.):

I have been incredibly frustrated for more than five years by the repeated and unnecessary delays in moving forward with the construction of the Keystone XL pipeline. I am pleased the State Department has confirmed there is no evidence of any negative environmental impact from building this pipeline.

The president of TransCanada, Russ Girling, expressed relief that his company’s project, first begun in 2008 but delayed with repeated requests for more analysis:

The case for Keystone XL, in our view, pre- and post this report, are as strong as ever. No matter how much noise [environmentalists] make or how much misinformation they spread, the facts do support this project…

It will have minimal impact on the environment…

Those opposed saw little in the report to cheer about, seeing in it confirmation that the continued extraction of the heavy oil from the Athabasca Oil Sands will threaten the environment. Senator Barbara Boxer (D-Ca.) saw the study as inaccurate:

I will not be satisfied with any analysis that does not accurately document what is really happening in the ground when it comes to the extraction, transport, refining and waste disposal of dirty, filthy tar sands oil.

My biggest concerns continue to be the serious health impact on communities and the dangerous carbon pollution that comes from tar sands oil.

Rep. Raul Grijalva (D-Ariz.) wrote off the report’s conclusion as well:

The State Department is asking us to believe this pipeline is in the national interest. How can a pipeline that ships Canadian tar sands to the Gulf of Mexico for export, that does nothing to increase our energy independence, and that will deal irreparable damage both to our landscapes and our air quality possibly meet that definition.

Environmentalists like Susan Casey-Lefkowitz of the Natural Resources Defense Council (NRDC) even saw something in the report that wasn’t there:

Even though the State Department continues to downplay clear evidence that the Keystone XL pipeline would lead to tar sands expansion and significantly worsen carbon pollution, it has, for the first time, acknowledged that the proposed project could accelerate climate change.

President Obama now has all the information he needs to reject the pipeline.

What really puts the president on the hot seat, however, is the support for the pipeline from one of his staunchest allies: Richard Trumpka, president of the AFL-CIO:

We think that anything that’s going to create jobs, help the country and do it in an environmentally sound way ought to be done.

This pits Obama supporters against each other while putting pressure on Democrats supporting the project if the president rejects it. Both Senators Mary Landrieu (D-La.) and Mark Begich (D-Alaska) are vulnerable in November and could suffer in their reelection campaigns if the president axes the project.

There will be no meeting in the middle on the issue, according to Professor Bernard Weinstein of the MacGuire Energy Institute. When I spoke with him following a presentation that he made in Colorado Springs last week, Weinstein said he was hopeful that the horrific derailment of 76 tank cars carrying Bakken oil in the town of Lac-Mégantic in Quebec last July which killed nearly 50 people and almost destroyed the town would persuade environmentalists that the Keystone pipeline would make more sense in that it was a much safer means to transport crude oil. Instead, he said, “The accident just proved to them that any transport of oil is dangerous and oil extraction of any kind should be ended altogether.”

Now that the report has been published, there is a 60-day period for public comment and input before any decision is made. Some environmentalist groups, including 350.org, have threatened to engage in non-violent protests at the White House similar to those that got 1,200 arrested in the summer of 2011 and another one a year ago where an estimated 50,000 protestors vented noisily their opposition to the project.

The State Department report, however, isn’t likely to speed up the decision-making process. President Obama has stalled before, putting off any final decision until after the 2012 election and he could well do so again. He is likely to let the problem descend onto the desk of Secretary of State John Kerry who, while still believing in the theory of climate change in spite of evidence to the contrary, has been invisible on Keystone. The report is an amazing seven volumes long which someone on his staff is going to have to read. And then he is likely to seek counsel from at least eight other government agencies before deciding what to recommend to the president: the Departments of Defense, Justice, Interior, Commerce, Transportation, Energy, Homeland Security, and the E.P.A. As Kerry’s assistant, Kerri-Ann Jones, noted, this report “is not a decision document … [it] is only one factor that will be coming into the review process for this permit.”

Instead of expecting a decision at the end of 90 days, some say it could take as long as a year, well past the November elections, neatly solving the president’s political problems. In the meantime, tar sands oil will continue to be harvested and shipped by rail if not by pipeline to meet worldwide demand.

 

 

Looking Ahead to 2014 – and a Brighter Future

The latest Rasmussen poll shows 41% of American adults expecting the year 2014 to be a good year “at the very minimum” while just 23% expect the year to turn out poorly. Even the briefest look back at a few of the momentous events of 2013 bode well for the future. There’s the catastrophe called Obamacare which reflects badly, as Lew Rockwell noted, on the Obama “regime, which hates nothing more than looking ridiculous and incompetent, and being the butt of the people’s jokes.”

There’s the continuing rollout of secrets from Edward Snowden which not only keeps the surveillance state on the defensive but has exposed it as untruthful and sinister.

There’s the Benghazi scandal that simply will not go away, as evidenced by the loud condemnation of a New York Times report that tried to deflect responsibility away from the Obama administration by repeating provable lies.

While each of these can be looked at as positives in the cause of freedom, a look ahead provides great encouragement as well. The home-schooling movement continues to thrive and has been enhanced by the employment of the new technology, which makes resources easily accessible and can bring the classroom into the home. Consider, for example, the online school Freedom Project Education (FPE), which offers “a classical education for students … rooted firmly in Judeo-Christian values … similar to that received by America’s Founding Fathers, promoting liberty, citizenship, and independent thinking.”

The fracking revolution, resulting in what economist Mark Perry calls the “Great American Energy Boom”, has the increasingly likely potential to wean the US off most if not all foreign suppliers of energy, perhaps as soon as 2030. The impact of such an event can scarcely be underestimated, ranging all the way from removing a primary excuse for continuing foreign military entanglements to a vastly more robust economy. At present Midland, Texas, has the third-highest per capita income of any city in the country, while the unemployment rate in North Dakota is the lowest of any state.

Favorable fracking news continues to roll in on nearly a daily basis. A study from the University of Texas at Austin last week showed that as coal-fired plants are converted to natural gas, the need for water drops precipitously:

The researchers estimate that water saved by shifting a power plant from coal to natural gas is 25 to 50 times as great as the amount of water used in hydraulic fracturing to extract the natural gas.

This is good news on two fronts: Texas is in its third year of serious drought conditions, and the greenies have used the amount of water used in fracking as an argument against it. Such good news reduces the impact of that drought on the state while defanging such environmentalists’ attacks.

Across the world remarkable improvements in living conditions are increasingly being enjoyed as advances in medicine and technology are reducing mortality and improving literacy while decreasing poverty and hunger. According to Chris Higgins, writing for Mental Floss:

We are making tremendous advances in life expectancy, disease prevention, poverty and hunger…

Every single country in the world has lower mortality rates overall than they had in 1950…

Global literacy rates are rising … with youth aged 15 and younger doing especially well…

We’re on track … to halve world hunger [compared to its 1990 rate] by 2015…

[Since the year] 2000, over 600 million people have been pulled out of extreme poverty. This represents the fastest decline in global poverty in all of human history. (Higgins’ emphasis)

Freedom is advancing on the micro level as well. The US Postal Service continues its downward spiral into irrelevance thanks to the internet and some are expecting it to disappear altogether within a decade. Cartels that protect taxi companies are being challenged by apps such as Uber, Lyft, and Sidecar which provide transportation services by connecting travelers with drivers over the internet.

The alternative cryptocurrency, the Bitcoin, continues to gain momentum even as competitors such as Zerocoin enter the digital currency arena offering the advantage of secure anonymity of transactions. There is also growing interest in making gold and silver legal tender — at least as an alternative to, if not replacement for, today’s fiat (unbacked) currency.

Free market options to the heavy-handed federal mandates of Obamacare are becoming increasingly available including cost-sharing ministries and doctors outside the system accepting cash-only patients along with monthly packages of services provided for a modest ($50 to $100) monthly fee. There are an increasing number of retail cash-only health care clinics opening in big box stores like Walmart and pharmacies like Walgreen’s.

There’s crowdfunding that’s allowing small investors to join with eager entrepreneurs offering inventive, creative alternative products and services. There’s 3-D printing. There’s Bitmessage  poised to replace today’s fully-surveilled email with encryption tools. There’s TOR which, coupled with the Deep Web will allow anonymous websurfing once again. The list goes on.

The Internet, of course, makes it possible to reach a much larger audience than otherwise would be the case. TheNewAmerican.com received more than 600,000 unique visitors during December, according to editor Gary Benoit. The parent of that website, The John Birch Society, has led the way in the freedom fight for over 50 years. In an email to members it reminded them that:

one highly effective attribute of the JBS is its focused coordination of efforts…

In 2013, JBS members worked on stopping Agenda 21, exposing Common Core, opposing gun control, blocking con-con calls, nullifying Obamacare, and educating others on the free trade agenda.

JBS CEO Art Thompson looked ahead to 2014:

Based on the knowledge we have at hand, the JBS and all of our affiliated efforts reach approximately 20 million people in our first layer of influence…

Increasing what we are capable of doing by doubling our size would give the JBS a geometric growth in influence. In other words, doubling in size would more than double our effectiveness.

After that, by again doubling our numbers we could impact a third of all the adults in America. And this does not take into consideration the accompanying indirect influence within a second and third layer of the population.

In 2013 the battle for freedom saw significant victories, even beyond those outlined briefly here. There’s nothing to show that momentum slowing in 2014.

 

 

 

 

 

Astounding Increases in US Oil Production Reported

This article was published at The McAlvany Intelligence Advisor on Wednesday, October 16th, 2013:

The advances in drilling and fracking technology coupled with the enormous untapped shale oil reserves are keeping the oil industry’s reporting agencies hopping, just trying to keep up with the gains in oil and natural gas production. For instance, the increase in US oil production in September was an amazing

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The Far-reaching Consequences of the Fracking Boom

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, September 25th, 2013:

Even the people at IHS, Inc. (one of the world’s preeminent global consulting and forecasting firms) missed perhaps the most important impact the fracking boom is likely to have: it just might dampen the enthusiasm for the empire builders in Washington to continue to

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Thanks to America’s Fracking Boom and Skilled Labor Force, Re-shoring of Jobs is Accelerating

More than half of 200 US companies with sales greater than $1 billion are moving jobs back to the US, or are planning to, within the next two years. The announcement by Boston Consulting Group (BCG) on Tuesday confirms a subterranean paradigm shift that’s been underway for at least

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US to Become the World’s Primary Energy Producer in Four Years

In its review of the latest report on world energy supplies from the international energy consulting firm IHS, Inc., writers at Yahoo.com were quick to point out several of the impacts likely to be felt as the United States becomes the number one producer of energy in the world by 2017. Fracking is the prime driver of the US’ resurgence and is bending, changing, questioning and even replacing many of the

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George Mitchell, the Father of Fracking, Dead at 94

With his determination and the ability to ignore naysayers, George Mitchell, the owner of a Fortune 500 company, Mitchell Energy & Development Company, poured himself and $6 million of his company’s money into the task of finding ways to access the natural gas he knew was underground of his property north of Houston, Texas. It took him more than 10 years to find those ways. Since 2000, his discoveries have changed the world and are responsible for

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Marc Rich, the oil trader Clinton pardoned on his last day, is dead at 78

In announcing the death of 78-year-old international oil trader, Marc Rich, commentators around the world nearly ran out of descriptors, calling him “friend”, “pioneer,” “colorful”, “great”, “controversial”, a “buccaneer”, the “King of Oil”, and the “King of Commodities.” Others weren’t so kind, calling him a

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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.