The Weekly Oil & Gas Follies

Posted: Dec 22 2013, 9:21pm CST | by


This story may contain affiliate links.

The Weekly Oil & Gas Follies
Photo Credit: Forbes

The Weekly Oil and Gas Follies – Volume 25, December 23, 2013

 In which we drill down into the @GDBlackmon Twitter feed to briefly chronicle the week’s silliness, foibles, fake news and real news related to the oil and natural gas industry.

Oil Patch Photo of the Week, Courtesy of @DouglasBerkley :


Winter Sets in in the Marcellus Region 

The shame is that this is still news to most people.  God Bless the University of Texas for telling the truth about it, again:  Fracking NOT Responsible For Water Shortages in Texas; In Fact, Natural Gas Saves Water In Power Generation - A new University of Texas, Austin study published in Environmental Research Letters will have huge implications for future decisions on electricity generation. According to the study, huge amounts of water could be saved if we changed from thermal to natural gas for electricity generation — even with including significant amount of water used in the hydraulic fracturing process (AKA “fracking”) needed to generate natural gas.  According to the study, the water saved in gas-based electricity generation is anywhere between 25 to 30 times the water consumed in hydraulic fracturing. The study will have huge implications for water deficient, drought-prone states. In addition, natural gas enhances drought resilience, according to the researchers, as it allows for increased wind generation that doesn’t require water.

Why yes, yes it is.  Oh, and is there any more over-used phrase in the English language today than ‘game changer’?:  Study:  Hydraulic Fracturing is a Game Changer for the U.S. Economy – “The Shale Revolution also has brought U.S. oil production to a 20-year high and created thousands of energy sector jobs, in addition to thousands of jobs outside the energy sector,” Orr observes.” Last year, U.S. oil production increased by 14 percent over the previous year, the greatest increase among countries annually producing a million barrels or more. The year 2012 also marked the largest one-year increase in oil production in U.S. history. In the process, oil imports as a percent of U.S. consumption have fallen from 70 percent in 2009 to 37 percent in February of 2013, despite policies from Washington that have caused production of oil, natural gas liquids, natural gas, and coal on federal land to fall in quantity and as a percentage of total production. Furthermore, North America is projected to become energy-independent by 2020, a development that would have been impossible prior to the invention of smart drilling.”

Great stuff from Dr. Mark Perry:  Imagine this letter – ‘Senator Menendez to Obama: Expanding car exports only enhances Big Three profits?’ – MP: Well, if that seems a little absurd, that’s because it is totally absurd. But the letter above essentially captures the spirit of a letter that Senate Foreign Relations Chairman Robert Menendez (D-NJ) just sent to President Obama (“Menendez to Obama: Expanding Crude Car Exports Only Enhances Big Oil Three Profits“). The only difference as you might guess from the revised title is that Rep. Menendez is objecting to easing the outdated, 1970s-era ban on crude oil exports, not a ban on car exports as I fictitiously present above.

Why yes, yes he does:  Sorry Eagles, The President Has a Double Standard When it Comes to Saving Birds – The Obama administration — defender of birds, prosecutor of Citgo — has decided to allow an industry to kill or injure bald and golden eagles for the next 30 years without reprisal.  This industry, protected more heavily than birds by the federal government — is wind energy. The mitigating factor is that wind energy is “clean” — except for its massive construction footprint on rural habitat and its endangerment of winged creatures such as birds and bats. It’s emissions-free, unlike what Citgo does.  Some say clean energy is a dirty business. But the “dirty” meant the aforementioned construction footprint of the turbines, the diversion of 40 percent of this nation’s edible corn crop to ethanol refining, the ethanol refining process itself, the increase in acreage dedicated to corn instead of other useful crops, wind and ethanol lobbyists — things like that. We didn’t know that “dirty” meant unjust.

And now for the Totally, Completely, 100% Self Serving Link of the Week!:  Merry Christmas, Texas, From Your Oil & Gas Industry – Then there’s the jobs report, as indicated in the quote from Mrs. Combs at the top of this story.  The ability of this state to have more than fully recovered at this point from the deepest recession in 70 years in the face of an otherwise moribund national economy is a testament to the state’s resource base, its people, its business climate and its leadership in Austin.  It is important not to discount how crucial the last part of that equation is.

Oh Be Still, My Beating Heart:  Exit Ethanol? – This year corn ethanol will account for 83 percent of the required 16.55 billion gallons of renewable fuels producers must use.  This has all become yet another big government boondoggle. It started with the Energy Policy Act of 2005, which mandated the blending, and the required amount grew almost yearly. But now, at long last, the light is beginning to dawn in Congress. In the face of markedly lower energy costs due to creative exploration of, and higher production of fossil fuels — especially natural gas, which is already easing the demand for oil-based energy supplies — ethanol has begun to be seen as a waste, an expensive alternative.

Certainly worthy of consideration:  U.S. Oil Supply Surge Brings Calls to Ease Export Ban – U.S. oil production is nearing a record, stoking calls to eliminate 1970s-era limits on petroleum exports as analysts warn that refineries could be overwhelmed as early as July.  Aided by new drilling techniques, U.S. production will grow to 9.5 million barrels a day in 2016, close to a record, according to the U.S. Energy Information Administration’s Annual Energy Outlook that was released yesterday. That surge has prompted an unusual assortment of policymakers — and the industry — to suggest it’s time to reassess the restrictions on crude-oil exports, something opponents say could lead to higher prices at home. U.S. Energy Secretary Ernest Moniz says Congress should review the restrictions. Senator Lisa Murkowski, a Republican from the oil-producing state of Alaska, plans to do that in a report next month, said Robert Dillon, her spokesman.

True, but more importantly, it will benefit Mexico:  Mexico’s Energy Reform Will Benefit the U.S. – Last Thursday, Mexico’s Congress passed the final hurdle to approve amendments to its constitution that herald a deep, positive change for the country. With all the bad news coming out of most everywhere else in the world, it is a relief to see a part of the western world where politics remain constructive.  The energy reform proposal will bring dramatic advances to Mexico’s energy market, allowing private investment in the country’s oil and gas sector for the first time since former President Lázaro Cárdenas nationalized oil in 1938. The reform will have profound economic implications for Mexico and the international energy supply equation.

No surprises here:  EPA’s Leading Climate Change Expert Pleads Guilty to Elaborate Fraud – …And the fraud didn’t even have anything to do with global warming! (Rimshot). Seriously, though, NBC News’ Monday report on the misconduct of former EPA official John Beale is must be read to be believed. Honestly, if the following details didn’t involve a lazy, greedy congenital liar swindling taxpayers out of nearly a million dollars over more than a decade of abuse, they’d be laugh-out-loud funny. Alas, it’s all true, so indignation is the only proper response.

Finally, we will close with this absolutely fascinating map.  It says as much about the politics of the time as it does about the oil supply and demand situation:  Standard Oil’s View of the Oil World, Circa 1940

 That’s all for now – see you next week!

Follow me on Twitter at @GDBlackmon

Source: Forbes

This story may contain affiliate links.


Find rare products online! Get the free Tracker App now.

Download the free Tracker app now to get in-stock alerts on Pomsies, Oculus Go, SNES Classic and more.

Latest News


The Author

Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




comments powered by Disqus