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      This is your public service 1-stop-shop for Alaskan and Canadian Arctic energy commentary, news, history, projects and people. We update it daily for you. It is the most timely and complete northern energy archive anywhere — used by media, academia, government and industry officials throughout the world. Northern Gas Pipelines may be the oldest Alaska blog; we invite readers to name others existing before 2001.  -dh

 

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7-28-15 Is Climate Change Science Settled?

28 July 2015 7:44am

See our Facebook commentary this morning re: Climate Change  -dh

From the Senate Energy Committee: See How Envronmental Extremism is Destroying California Lives

Aussie Oil and Gas Observer: The smashing of the Shanghai stock market yesterday – an 8.5% fall (the biggest one day decline in eight years) – has reverberated around the world in both stock markets and commodity markets, and oil was not left out of the carnage.    ***    Japan’s average LNG price (per mmbtu) for June was down again – at US$8.65.  Volumetrically this figure is largely driven by contract purchases.  At this price, few if any Australian LNG projects would have been sanctioned in the last decade.     ***     

Quote of the day, from the classic play (and movie) Glengarry Glen Ross, which captures something of the atmosphere within employee ranks in oil companies at present:

“As you all know first prize is a Cadillac El Dorado. Anyone wanna see second prize? Second prize is a set of steak knives. Third prize is you’re fired”.

Commentary:  We are very proud -- and respectful -- of one of our readers, an Australian energy expert, for acting on our suggestion that he begin writing an energy blog (Column Right).

We call him "Aussie" here, because his active energy investing and consulting do not allow him the flexibility of using his proper name on his blog at this time. 

Aussie is a brilliant thinker, observer of energy trends and realities, and writer.  He is also prolific, producing new commentary almost daily.  He knows North American energy issues well.

In short, we are delighted to begin bringing you his commentary.

We think you'll share our respect for his wisdom and insight as he tackles the effect of this week's economic crisis in China on energy projects, prices, projections and employees.

Following is a clip from his email today.  -dh

Dave,

Last year you suggested to me that I consider starting something like your website news/opinion service.  
 
Over the last 3-4 months I’ve taken your suggestion up - and been writing a blog 5 days a week on the oil & gas patch.  It's written from an Australian vantage point - but does look around the globe for strategic/market themes, etc.  It's opinionated and occasionally cynical - and hopefully therefore an enjoyable read!
 
Today’s email is attached below - and you can sign up for daily emails on the website (https://aussieoiloiloilandgas.wordpress.com/)  ....

-Aussie

REFERENCE: 

Our Face Book comment on this issue:

The science is not settled (See Praeger University comment below).

Believing that it is settled is justifying environmentally extreme movements designed to bloat bureaucracies and amass political power by forming critical partnerships with subsidized businesses that could not survive in a non-subsidized world.

This process is also known as "crony capitalism" which is designed to destroy capitalism and free enterprise over time.

One of many effects of "climate politics" is justifying massive income redistribution from economical fossil fuels, taxpayers and utility ratepayers to subsidize expensive alternate fuels represented by countless lobbyists.

This video is a true public service that can be useful in communicating basic facts to our fellow citizens, fellow taxpayers, and fellow utility ratepayers.

We are are being misled by armies of entrepreneurs with alternate energy profit motives who are major funders of political campaigns.

We can think of this wealth transfer alliance as the eco-crony capitalist-political cycle of life. -dh

 

 

New Video: What They Haven't Told You about Climate Change

Since time immemorial, our climate has been and will always be changing. Patrick Moore explains why "climate change," far from being a recent human-caused disaster, is, for a myriad of complex reasons, a fact of life on Planet Earth.

 

Senate Energy Committee - California Drought and ESA

ICYMI: This is a very interesting piece on the current drought in California that’s causing a “humanitarian disaster” in the Golden State. Charles Cook chronicles his firsthand experiences in California’s Central Valley that’s experiencing devastating economic impacts stemming from the state’s ongoing drought crisis.  -

From: Michael Tadeo, Senate Energy and Natural Resources Committee

Golden State Dust Bowl: How environmental extremism is destroying California’s Central Valley (National Review)

http://bit.ly/1IpMBbJ

August 10, 2015, Issue

By, Charles C. W. Cooke

Central Valley, Calif. — The road to Fresno is flanked by missed opportunities. Just ten years ago, to drive across this extraordinary valley was to be blinded by miles upon miles of burgeoning green life. Now, the fields that run alongside State Route 180 resemble the squares on a giant, schizophrenic checkerboard. On one block there are pistachios, almonds, tomatoes, and grapes, stretching as far as you can see; on the next all is brown and fallow, and the dust swirls upward toward the heavens. On the edge of the small farm town of Mendota, an abandoned sugar plant stands defiantly against the sky. It is beautiful, in a peculiar way — a fading Hopper sketch for an unsure world. This was a resolute place, once.

That was before the decline; before the worst drought in 1,200 years turned some of America’s most fertile ground into a Dust Bowl; before soft-handed politicians in a faraway city took a look at an economic miracle and concluded that it was expendable. There is no question that God has played His role in bringing about this crisis: It has not rained consistently in the Central Valley for half a decade now, and the reservoirs in the northern part of the state are dangerously low. But Caesar must share in the blame. Because the valley is liable to become parched in rainless times, California has constructed a complex system of pipes and pumps that funnel lifesaving water southward from the Sacramento–San Joaquin Delta. Since 2007, that system has been deliberately crippled. In that year, the Natural Resources Defense Council convinced a judge that, by operating the pumps at high capacity, California was killing too many smelts — a small fish that is explicitly protected within the Endangered Species Act. In consequence, the throughput was severely curtailed, and the farmers, who under the state’s “seniority” system have the last claim on the water, were all but cut off. Two years later the drought began, and a blow was struck upon a bruise.

On the edge of a field on the outskirts of Mendota, unemployed farmworkers have built a tattered town. In another era it would have been described as a “Hooverville”; today, it bears no appellation at all. These are forgotten people, and their hamlet is veiled by indifference.

I meet Frederico, a Guatemalan farmhand who has lived here for six years. He has only a few dollars to his name — kept in cash, of course — but he considers himself “one of the lucky ones” nevertheless. “I could have nothing,” he tells me, gesturing toward a hut that he has built from abandoned sheets of wood and a stretch of discarded canvas. “But I have a house.”

Frederico is one of the many workers in California’s Central Valley who have seen their livelihoods all but destroyed by the Great Drought. “I manage to work a little here and there,” he explains, “but the water . . . the water. Often I have to go 20 miles to find work.”

Above all else, he misses the shade. “In 2008 and 2009, they started to cut my hours,” he says. “Eventually, I couldn’t pay rent.” So he moved here, to a dusty pasture by the side of a highway, and he built his tumbledown shack. “I went to the recycling place and found the bits for my house,” he recalls. “There were trees here. But they burned down. It is so hot.”

Frederico’s neighbor, a new arrival to the camp, is burning trash in a hole. He, too, has come from Mendota. “I was living in an apartment building,” he tells me, declining to give his name. “But when I lost my job, I didn’t have money for rent.” His landlord wanted a long-term lease, and he couldn’t pay. Since moving out here, he has gained occasional employment. But it is barely enough to provide food and water. “If somebody finds a job,” he tells me, “they communicate it to the whole camp. That person becomes a hero.”

He does not expect to move out anytime soon. “I am working on a garden,” he says, with a proud smile. He has started to decorate, too, putting on a wooden front door and hanging a painted sign from the roof. There is a bank of dirt behind the first row of homes, and he has planted seeds into it — some oak, some pine. Eventually — in decades — they will accord him some relief from the sun.

I meet the town’s self-appointed leader, a Salvadoran immigrant who has been here for six years. “I felt super when I was able to work,” he tells me. “Now I can’t buy medicine; I can’t buy food. I used to work 40 hours a week. Now I work eight.” Compared with the elderly workers, who cannot compete in this market, he has it good. “The older people are getting into drugs and alcohol,” he says. “I resolve any conflict here. People have started to respect and look up to me.”

Happily, he has little to do as peacemaker. Generally, the camp’s 50 or so residents look out for one another, sharing skills and food and news of job openings. When things become especially dire, some ride broken bicycles around the fields, in search of bottles that might carry a small recycling value. And then they wait: for work, for the food bank, for a sign from above.

Some of these people are in the United States illegally; others are citizens who have fallen on hard times. The cynic will wonder whether it is America’s problem that a group of lawbreakers cannot find work. I caught myself wondering precisely this when touring the camps. And yet, wherever one’s sympathies lie on that thorny question, to look at the tents in isolation is a mistake. Mendota’s unfortunates are symptomatic of a much, much broader problem — a canary in the coal mine. A decade ago, the Central Valley was a wonder of the world — a place where anybody could find work. Today, it is playing host to a humanitarian disaster.

In the parking lot outside a gas station in nearby San Joaquin, Mayor Amarpreet Dhaliwal runs me through the decline. An immigrant from Punjab, in India, Dhaliwal has seen the region at its best and worst. “I’ve been here since 1983,” he says. “I worked in the fields for my first year and a half. I did everything that the farmworkers do. The picture has been slowly changing.”

The scene that Dhaliwal paints is best described as one of trickle-down poverty. “I’ve been running a small business here since 1991,” he says. “There aren’t so many customers these days. I also run an agricultural-hardware business here in town — and a small farm. We have seen the same trend. I have the numbers for the last 14 or 15 years, and there’s a downward trend. We’re just waiting for the rain.”

As we chat, a couple of older men amble slowly and unsurely down the fading railway lines that run through the city. One of them is wearing a ripped vest and a faded New York Yankees cap; the other is in a filthy Dickies shirt and a tattered Puma hat. Neither man has many teeth left, and those that do remain are rotten and brown. The heavy green stains on the pair’s jeans and sneakers reveal that they are returning from a shift in the tomato fields. This has been a good day.

Such days are few and far between. “They used to come and drag us out of the house,” one of the men tells me. Now, “they rotate people around to give us all a chance.”

“Sometimes people bring them food or clothes,” Mayor Dhaliwal says. “The charities have stepped up to the plate. We have a kitchen that comes two days a week. We also have a food bank. And that’s great. But these men want to earn their bucks. They don’t want handouts. This is about dignity. I want real jobs out there. I want people lining up around the block, not handouts.”

As we leave, the taller of the men clasps his hand around Mayor Dhaliwal’s arm and speaks quickly in Spanish. He is clearly nervous. “He is saying that he sleeps poorly because he lives next to the railway line,” Dhaliwal tells me. “He is worried that the gas tanks behind his home are going to explode and kill him.”

“I got this mark from a snake,” the mayor tells me, pointing to the long scar that runs along his elbow. He looks at up at the sky. “I could have died, but God saved me.”

In Huron, I meet with a peer of Dhaliwal’s, Mayor Sylvia Chavez. Home to 7,000 people, Huron is the fourth-poorest municipality in all of California. “Look outside,” Chavez urges me. “It’s June, and the town is empty — as if it were a winter day! Usually, we’d have trucks and buses coming through. Usually, there would be traffic lines at the four-way stop. Usually, there would be lots of new faces.”

Not anymore. Huron, which has a population that is 98 percent Hispanic, has an unemployment rate of 35 percent. “The guy at the gas station across the street no longer sells gas, because there’s nobody to sell it to,” Chavez tells me. “He just does contract work now.” This, it seems, is a fairly common story. Ten years ago, Huron Tire Service Inc. was in such demand that the owner was running out of space in which to keep his inventory. “There were piles of tires all over the place,” Chavez says. Today, he orders his supplies ad hoc.

The decline in commercial activity has hit the city’s government hard. Sales-tax and gasoline-tax receipts are down dramatically. Courtesy of harsh spending cuts, 2015 was the first year in five that the city was in the black. “We’re just holding on,” Chavez tells me. “We’ve had to cut a lot. It’s difficult to know what to do.”

The human cost is real. “People used to leave their doors open at night,” Chavez recalls. “Now they can’t leave anything outside. We have a lot of stealing now. There are break-ins at homes; there is theft from farms and stores. I don’t walk around late at night anymore.” Domestic violence and child abuse have become “big problems,” as has substance addiction. Chavez cannot work out why the decline of the area hasn’t become a bigger story. Why isn’t it leading the national news?

Even locally, there is a good amount of shoulder-shrugging. “I went to a meeting in Fresno,” she says, rolling her eyes, “and they were talking about putting together a new committee to regulate the supply of groundwater. I sat there listening to them and I thought, Another agency: That’s exactly what we need!”

Huron serves as a particularly extreme example of the Central Valley’s predicament. But the challenges that it is facing are by no means unique. In her downtown office, the sheriff of Fresno County, Margaret Mims, lays out the numbers. “Back in 2010,” she explains, “we just didn’t have the sales or property taxes. So we had to lay a whole lot of people off.”

“A whole lot” is no exaggeration. In the space of a few months, the county had to let 77 people go. “We lost deputy-sheriff positions. We lost correctional-officer positions. It affected everybody.” Things are improving — slowly. But, Mims sighs, the department is “still about 70 deputies short of where we were in ’09.”

“The unemployment rate has made the gangs worse,” Mims tells me, “especially if there is violence in the home. The kids look outside, and they see the gangs. They move from a dysfunctional family to a functional one.” Such behavior makes the economic picture considerably worse, contributing to a disastrous spiral that is going to be extremely difficult to break. A piece of copper from an automated pump may be worth around $10 to a criminal, but it costs around $2,000 to replace. Even worse, if farmers do not initially notice the theft, they may have to wait for replacement parts and end up losing their crops. This results in fewer opportunities for work, which leads more people to crime, which . . .

“In the ’09–’10 budget year, we closed down three floors of our county jail,” Mims recalls with a grimace. “We just couldn’t hold people who needed to be held. That was a horrible time to live through.” It was not just petty thieves who benefited from the absence of jail space. “There are 442 inmates per floor. We had to let 1,326 people go,” Mims says. “We couldn’t afford the staff that it took to guard them. I just hated the message that it sent. The feeling out there was, ‘We can do whatever we want because they don’t have jail space.’” Eventually, Mims had to draw a line — at murderers.

Todd Suntrapak, the CEO of Valley Children’s Hospital, knows all about such tough choices. The drought, he tells me, is “not a very sexy issue.” In consequence, the coverage of its ruinous fallout has been “limited to this valley.” “That this is not a bigger issue in Sacramento — or even nationally,” he submits, is “unimaginable.”

For the facility he manages, the drought has been little short of a disaster. Valley Children’s is the only pediatric hospital between San Francisco and Los Angeles, and it was short of doctors when times were good. Now, it simply cannot cope with the demand. “We have seen double-digit increases in volume to our ER for the last four years,” he records. “Thirty-three percent of kids in the area are living in poverty, and that number is likely to increase.”

Newly unemployed workers continue to stream in, mostly “coming for the primary care that they were unable to get in their communities.” By the time they get here, they’re invariably sicker. Because so many fields are fallow, the amount of particulate matter in the air has increased considerably. This has led to an increase in chronic respiratory diseases, and it has provoked lethal complications among those who are already ill. “The dust can be a death sentence,” Suntrapak concludes. “If you have a weak immune system, it’s catastrophic.” And it’s not just the environment. The “child-abuse-prevention team is busier than it’s ever been.”

This year, Suntrapak’s staff is already 20 percent over its budget assumptions. The state is paying, too. Eighty-two percent of the patients at Valley Children’s are on Medi-Cal, California’s version of Medicaid. Six years ago, that number was 70 percent. For many, it is no mean feat just to get here. “They use up whatever gas money they have for the month just to reach us,” he tells me. “And then they can’t pay for the medication they need.”

At an emergency meeting run by El Agua Es Asunto de Todos, attendees are tearing their hair out. El Agua was formed by a former consul to Mexico, Martha Elvia Rosas, in the hope that sustained action would draw attention to the water crisis and force the federal government to act.

The speakers are schoolteachers, charity workers, medical professionals, university professors, family farmers, and local politicians — not your typical critics of runaway environmentalism. But, having watched their communities crumble, they have been moved to act. “There has to be a compromise,” one woman tells me before the meeting starts. “People are suffering.”

“People go to the grocery store,” says a teacher from the city of Firebaugh, “and they see melons, they see lettuce, they see tomatoes — and they think it’s all okay. In San Francisco, they turn on the faucet and they see water. It’s all taken care of. Nobody cares. People haven’t seen the devastation that’s going on here.”

When I ask for information, the visitors surround me and share their stories of decline. A once “vibrant school system with lots of parent support” has been turned into a nightmare, in which families “starve and scrape together to survive”; there is abundant “domestic violence,” and “kids need constant counseling”; single-family homes are now “hovels for multiple families,” while “garages are shelters for out-of-luck workers”; the food banks have “gone from assistance to subsistence” — so necessary, perhaps, that “in 70 or 80 percent of communities, they are indispensable.”

One gentleman, a soft-spoken local politician whose constituents have been hit hard, strikes a desperate tone. “We’re losing hope,” he laments. “Is anybody out there listening to us?”

He is unsure that they are. “We’re starting to think of extreme ideas,” he says. Those ideas? Blocking the freeway; limiting the flow of produce to market — anything that will force people to pay attention.

It is clear that he is just blowing off steam with such talk. Even the most passionate of my interlocutors — a middle-aged Hispanic man who talks in fiery, urgent language — is aware that such courses of action would be counterproductive. “This is a population that wants to work, not cause trouble,” he tells me. “If they had their way, you would only see them early in the dawn hours of the morning, when they are going into the fields. Then you would see their shadows when they leave the fields at night. They are not going to do anything sensational. They don’t want to ruffle feathers.”

He will be setting no fires. But his anger is real, and it is palpable. “I love the environment,” he says. “I fought to protect the majestic redwoods. But when our group invited the EPA to meet with the farmworkers and families here, they declined.” So, disgracefully, have California’s elected representatives. Time and time again I hear it said that politicians outside California are more interested in finding a solution than those within. “Where is Barbara Boxer? Where is Nancy Pelosi?” Noting caustically that Hispanics are being disproportionately affected, some go so far as to suggest that there is racism at play.

There is not — just environmental zealotry and an arrogant indifference to its human cost, borne by these people suffering under the sun. People who walked into the fields looking for the American dream but found it dammed at the source. If it so wished, Congress could amend the Endangered Species Act tomorrow, and the valley could enjoy a little more of the water that it needs to raise its daily bread. But, for now at least, Congress will not do so — not, one suspects, until breakfasting grandstanders in Washington, D.C., come to ask in irritation why the orange-juice jugs are empty and there are no longer any melons in the fruit bowl.

Michael Tadeo

Deputy Communications Director

Senate Energy & Natural Resources Committee

 

Categories:

7-27-15

27 July 2015 5:18am

Alan Bailey, Petroleum News, Shell, BSEE, Burger prospect, Chukchi Sea, Photo by Dave HarbourPetroleum News by Alan Bailey (NGP Photo).  On July 22 the federal Bureau of Safety and Environmental Enforcement issued permits allowing Shell to drill the top hole sections of two wells in the Burger prospect in the Chukchi Sea. Shell now has all of the permits that it needs to start drilling.  However, BSEE is prohibiting Shell from drilling into hydrocarbon bearing zones until....

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7-26-15 Canada-owned oil sands mine in Utah to begin producing in fall

26 July 2015 4:23pm

Canada-owned oil sands mine in Utah to begin producing in fall

Mining by  Cecilia Jamasmie.  Canada’s U.S. Oil Sands (TSX-V:USO) is fine tuning details to begin production at its mine in eastern Utah, the first commercial oil sands operations in the United States, after receiving final regulatory approvals from local officials late last week.

While the mine had already been approved for construction, the Calgary-based company recently submitted a proposal to expand it. The Utah Division of Oil, Gas, and Mining approved that plan, but ThinkProgressreported it did so on the condition that the company submits a comprehensive strategy to monitor air and water quality.

Environmentalists who have been fighting the project called the decision a victory, despite the fact that both the company and Utah authorities have argued there would be little risk to water contamination from the mine, since the operation doesn’t have any connection to a groundwater source.

More here....

7-25-15 Raiding the Strategic Petroleum Reserve

25 July 2015 1:00pm

Senate Energy & Natural Resources Committee Communications Director Robert Dillon writes us that, "Reuters senior energy market analyst John Kemp today weighed in against a plan to raid the Strategic Petroleum Reserve (SPR) to pay for three years of a six–year highway bill."  Following is the article:

SPR oil sales would be a mistake before strategy review is concluded: John Kemp

Lisa Murkowski, Strategic Petroleum Reserve, US Senate, Energy Policy, Robbing the SPR, highway funds“The Strategic Petroleum Reserve is not an ATM,” Lisa Murkowski (NGP Photo), chair of the Energy and Natural Resources Committee warned the Senate this week. “It is certainly not the petty cash drawer for Congress.”

The senator from Alaska was criticising a proposal to sell 101 million barrels of crude from the government’s stocks to offset a shortfall in funding in the highway trust fund, used to pay for repairs to roads and bridges.

“Others are potentially looking to our Strategic Petroleum Reserve as nothing more than a piggybank,” Murkowski admonished her colleagues in a floor speech delivered on Wednesday.

There is nothing new or particularly surprising about Congress raiding pots of apparently surplus assets to pay for short term spending priorities.

Between fiscal 1993 and fiscal 2005, almost $6 billion worth of raw materials, previously considered critical, were sold from the national defence stockpile and the revenues used to meet spending needs elsewhere.

The stockpile sold a range of materials from aluminium oxide and chromium to cobalt, iodine, platinum group metals and tin.

Sale receipts were used to pay for everything from armed forces readiness to the provision of military equipment to foreign countries, a hospital trust fund and a memorial to the veterans of World War Two.

In Washington, where legislators are always looking for ways to spend money without raising taxes, seemingly under-utilised assets and unspent funding offer an irresistible target.

Recycling funding from old and outdated programmes to meet new and pressing requirement is not necessarily wrong.

Some of the oil stored in the SPR may be surplus to current requirements as a result of the U.S. shale revolution.

But it would be a mistake to sell SPR oil before Congress has conducted a proper debate about the stockpile’s future role in energy security.

NET IMPORT COVER

The United States is obliged to hold stocks equivalent to 90 days net imports in government or private stocks as part of an agreement with its partners in the International Energy Agency concluded following the Arab oil embargo in 1973-74.

As recently as 2005, U.S. government stocks were equivalent to only 55 days worth of net imports, which were then running at 12.5 million barrels per day (bpd).

But thanks to shale, net imports have fallen to just 5 million bpd, while the stockpile has remained largely unchanged, pushing up the amount of import cover enormously.

At the end of 2014, the SPR’s was storing almost 691 million barrels of crude in giant salt caverns along the U.S. Gulf Coast. Stocks were equivalent to 137 days’ worth of net imports of crude and refined products.

In theory, the United States could sell up to 240 million barrels of crude and still comply with the requirement to hold stocks equivalent to at least 90 days worth of net imports.

If all those barrels could be sold at the current market price of around $50, the government could raise up to $12 billion from the sale of surplus oil.

POLITICAL BLACKMAIL

Crude from the SPR has been released on only three occasions since it was established in the 1970s.

The first drawdown came in response to the beginning of Operation Desert Storm when the U.S. and its allies moved to oust Iraqi troops from Kuwait in 1991.

The second drawdown was ordered in response to Hurricane Katrina in 2005. And the third came in June 2011 in reaction to unrest in Libya and other Arab countries disrupting oil supplies.

The amount of crude released on each occasion was relatively small.

As a matter of law, the SPR was established to counter any “severe energy supply interruption” which could have a major adverse impact on national security or the national economy.

But its real purpose has been to protect the United States and its allies from attempted political blackmail by oil-exporting countries.

In 1973, Saudi Arabia and a number of other Arab countries cut oil production and banned the sale of crude to the United States in protest U.S. support for Israel.

In the event, the embargo was short-lived and not very effective. But the SPR was meant to ensure the United States could never be threatened in this way again by ensuring there was always enough crude on hand to enable the country to withstand an attempted economic siege.

The SPR’s effectiveness should be measured not by the number of releases or their volume but by the fact it has so rarely been needed.

Never again has there been a serious attempt to cut oil supplies to the United States to alter the country’s foreign policy.

The federal government has spent a total of $20.7 billion buying oil for the SPR over the last four decades at an average price of $29.70 per barrel, according to the Department of Energy.

The replacement cost of the oil is probably somewhere between $35 billion (at today’s price of $50 per barrel) and $105 billion (at the recent high of about $150).

The SPR looks like a fairly cheap insurance policy, especially since costs are basically sunk (most of the oil was originally purchased in the 1980s).

AN EFFECTIVE OIL SHIELD

While there have been occasional calls for Arab countries to wield the “oil weapon” to influence U.S. policy, there have been no serious attempts since the 1970s.

How much of this has been due to the deterrent effect of the SPR rather than other changes in the oil market and the Middle East is impossible to say.

A new generation of Arab leaders took power after 1973 much closer to the United States. Iran’s revolution fundamentally altered the key relationships between Washington, Riyadh and Tehran and pushed the U.S. and Saudi Arabia closer together.

The rise of competing oil supplies from outside the Middle East, including from the North Sea, Alaska, the U.S. Gulf and the Soviet Union, radically changed the balance of power between OPEC and the consumer countries in the 1980s and 1990s.

And since 2008, the shale revolution has almost doubled indigenous oil supplies within the United States and given the country a much higher degree of energy independence, or at least self-confidence.

But the SPR has likely played a deterrent role. The SPR has acted as an effective “oil shield” which has given the U.S. government more freedom and confidence to face down threats and turmoil in the Middle East and other exporting regions.

STRATEGIC REVIEW NEEDED

It would be a mistake for Congress to use the SPR as a source of short term funding. Raiding a one-off asset to pay for highway maintenance and other recurrent expenditure makes no sense.

There does need to be a proper debate about the future of the SPR. Everyone agrees on this point, including the U.S. Department of Energy and the Government Accountability Office (the congressional spending watchdog).

“The Strategic Petroleum Reserve must be modernised for the 21st century,” Murkowski told her Senate colleagues this week. “Its size, its geographic disposition, the quality of the oil it stores ... these are all issues that merit further attention but we need to have a deliberative process ... what we do not need is a spur-of-the-moment deal”.

The Department of Energy is already conducting a review. But the strategy rethink should precede any sales, not the other way around. In the 1990s, the sale of formerly critical materials from the defence stockpile came only after the Department of Defense concluded they were no longer needed, not as a revenue raising measure.

There is a legitimate debate to be held about the future size, shape and role of the SPR. In the meantime, however, Congress should resist the temptation to make a short-sighted raid on the nation’s emergency crude reserves.

Categories:

7-24-15 Northern Pipelines, Economies, Alaska Native and Canadian Aboriginal People Are Interdependent

24 July 2015 8:51am

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Northern Pipelines, Economies, Alaska Native and Canadian Aboriginal People Are Interdependent

Our Comment:

Dave HarbourAlaska Natives, Canadian Aboriginals and Northern economies depend on oil and gas development and the transportation systems moving the resources to market.

Transportation systems like pipelines require rights of way.  Rights of way and subsistence hunting and fishing and agricultural areas very often overlap proposed pipeline routes.

All stakeholders care about the safety of pipeline operations.  For sure, all stakeholders wish to maximize their own income streams.   Without access to natural resources, natural resource companies cannot survive.  

Without the revenue provided by natural resource companies, rural, regional and even national economies would have difficulty sustaining their citizens' ways of life.  We could think of this economic cycle of life as, "mutually assured sustainability".

Some legal gladiators, like environmental groups, however, may have multiple goals of minimizing ecological effects of (or flat out stopping) development, fund raising, member recruitment and crisis management as a key to attracting new and greater levels of contributions.  

However, one should carefully note that the total disapproval of a project that environmental activists  oppose may enrich their far-away NGO coffers while impoverishing citizen stakeholders in all directly affected rural, regional and national economies.

This excellent Calgary Herald story by James Wood demonstrates the a laudable appreciation of both developers and traditional peoples to create sustainable models of cooperation and development.

In Alaska, we are encouraged by Alaska Native Corporation relationships with Shell's Arctic OCS program--and other natural resource projects.  But, as above, we note that environmental activists seeking destruction of the project could seriously diminish the entire future economy of Alaska, with negative impacts, as well, on the national treasury and national security interests in the Arctic.

-dh

Calgary Herald by James Wood.  The head of the Assembly of First Nations told a Calgary business crowd Wednesday the energy industry must do a better job on safety and protecting the environment if it wants to earn the trust of Canada’s aboriginal people.

Perry Bellegarde, speaking at a Calgary Chamber of Commerce luncheon, said First Nations are watching the recent spill of bitumen from a state-of-the-art Nexen pipeline south of Fort McMurray.

“They have the best technology in place. What happened? That shouldn’t happen,” said Bellegarde, who comes from the Black Bear First Nation ....

First Nation opposition has been a major factor in stalling Enbridge’s Northern Gateway pipeline proposed to connect Alberta’s oilsands to Kitimat, B.C., for shipment to Asia. Resistance by aboriginal groups could also hamper TransCanada Corp.’s proposed Energy East line to the Atlantic coast.

Bellegarde noted there is a vast difference of opinion among individual First Nations toward pipelines, with some interested in the economic potential of the projects and others fiercely opposed.

“If the industry can assure people there are systems in place — better systems — they will be more open to transportation, to the pipelines,” he said.

...

Bellegarde said the oilpatch needs to engage with indigenous people, suggesting a system in which resource companies must demonstrate their commitment to aboriginal economic development and employment before development permits are issued.

...

“We’re not opposed to development, but we want to make sure the footprint’s not like this,” he added, holding his arms wide.

Greg Stringham, vice-president with the Canadian Association of Petroleum Producers, was in attendance for Bellegarde’s speech at the Hyatt Regency and said it was “inspiring.”

(Note today's Petroleum News Alaska article by Gary Park.  A new report cites urgency in getting LNG projects approved.)

...

Blaine Favel, another former FSIN chief who is now the executive chairman of Calgary-based One Earth Oil and Gas Inc., told the chamber crowd that “the old way of doing things can’t work anymore when it comes to energy issues.”

....

Excerpts above; read full story here.  -dh

With files from Deborah Yedlin, Calgary Herald and The Canadian Press.

jwood@calgaryherald.com    Twitter.com/JamesWoodHerald

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7-23-15

23 July 2015 9:44am

Senator Lisa Murkowski by Dave HarbourU.S. Sen. Lisa Murkowski, (NGP Photo), yesterday issued the following response to the Interior Department’s approval of two conditional permits to Shell to resume its exploratory drilling in Alaska’s Chukchi Sea:

“Today’s approval by the Department of Interior of the permits Shell needs to resume drilling in the Chukchi Sea is good news for Alaska and our country. However, it is not the final regulatory hurdle Shell faces and it is important that the agencies continue to work in good faith and in a timely fashion to complete the remaining regulatory requirements.

“With an estimated 25 percent of the world’s undiscovered conventional oil and gas resources and active exploration by countries like Russia, it’s critical that the United States set the standard for responsible development in the Arctic. America will only truly assume that role when it actively engages in developing its resources.

“My attention remains focused on ensuring exploration proceeds safely this season and that Alaskans benefit from the development of our resources through revenue sharing.”

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