Tag: Oil

Deep (Freeze) in the Heart of Texas

 

The recent dramatic events in Texas are an early warning sign of the disasters that are likely to occur if the Biden administration continues its relentless effort to demonize the use of fossil fuels in the effort to combat climate change.

Assessing whether the climate is really changing requires looking at two numbers. The first is mean global temperatures across time. While that figure is increasing overall, it shows a complex up-down pattern that cannot be explained solely by the steady increase in carbon dioxide emissions. The higher the mean temperatures, the worse the supposed problem.

The second measure, though often neglected, is every bit as important: the variance in temperatures, whether measured in days, seasons, or years. A lower variance over a relevant time period means less stress on the power grid and other systems, even when the mean temperature increases. The general trend is that the variance in the temperature has gone down over time. Even today, for example, a large fraction of the record high temperatures in the United States took place in the 1930s—when carbon dioxide levels were far lower than they are today—with only three record highs after 2000.

Biden Goes Deep Green

 

It is amazing the difference that four years can make in environmental policy. On January 24, 2017, at the outset of his presidency, Donald Trump issued an executive order that salvaged the Dakota Access Pipeline (DAPL) from the Obama administration’s planned obstructionism. Obama had sought to upset the string of administrative approvals that the project obtained at both the federal and state levels. DAPL runs about 1,100 miles from the Bakken and Three Forks oil fields in North Dakota to Patoka, Illinois, where it is able to carry, far below ground, about 500,000 barrels of crude oil per day. Trump’s action allowed Congress to vote on whether to grant the last federal easement needed for the pipeline to proceed.

DAPL is now in service, even as litigation to shut it down continues. Environmental groups continue to allege attenuated theories of adverse effects under the National Environmental Policy Act (NEPA). Their efforts are consistent with the common practice among environmentalists of paying inordinate attention to highly remote contingencies while completely ignoring the large and immediate safety and efficiency advantages of getting crude oil to both domestic and foreign markets via DAPL. More concretely, the chances that any crude oil shipped by DAPL will escape in sufficient quantities to damage the fishing or water rights of the Standing Rock Sioux have always been infinitesimal, which is why the pipeline operations have caused no such harm for the past three years. The overall soundness of the pipeline grid will become truly dire if DAPL is shut down while Keystone is left incomplete.

For the moment, however, the immediate threat is to the Keystone pipeline. On January 20, President Biden issued an executive order aimed at “Restoring Science to Tackle the Climate Crisis.” One component of his major order was to revoke the permit for the Keystone XL pipeline. The pipeline started some twelve years ago, but since that time it has been beset with legal challenges, including one in May 2020 in which a Montana judge yanked the pipeline’s permit on the grounds that the Army Corps of Engineers had not consulted sufficiently with the US Fish and Wildlife Service on the alleged risks that the pipeline posed to endangered species and their habitat. Such orders overlook the benefits from that pipeline, which include its ability to ship up to 830,000 barrels per day of crude oil from the Alberta sands to American refineries along the Gulf Coast.

Join Jim and Greg as they discuss how the final debate was much more pleasant to watch and far more substantive than the first one. They also dissect Joe Biden’s many lies in the debate – from saying he never promised to ban fracking to suggesting that the Hunter Biden laptop story is just Russian disinformation to inexplicably contending no one lost their private health insurance plans because of Obamacare. And they appreciate many lefties revealing just how little they know about immigration policy by misunderstanding and mocking Trump’s reference to “coyotes” smuggling kids across the border.

Join Jim and Greg as they slam AOC’s economic lunacy and callously partisan response to Monday’s plummeting oil futures. They also shake their heads as CNN says Kim Jong Un is in grave condition and NBC has him brain dead, while Reuters has him fine just hours later. And they gag as Gayle King of CBS gushes that “everyone know” Stacey Abrams is “extremely qualified” to be Joe Biden’s running mate.

Join Jim and Greg for three crazy martinis that could easily be all bad. First, they comment on oil prices plummeting faster than we can keep up with them and discuss why our economy suffers if prices are too low for too long. They also recoil as one vaccine expert says the public should brace for the possibility that it may be very difficult or impossible to develop a coronavirus vaccine – although he is from the WHO. And they hammer New York City Mayor Bill de Blasio for urging New Yorkers to rat on their neighbors for not properly social distancing.

Join Jim and Greg as they discuss the gut-wrenching loss of another 6.6 million jobs over the past week but also note an economic silver lining. They also react to Dr. Fauci suggesting people permanently stop shaking hands and then muse about what should replace it. And they lose their appetites as they discuss another way China is a breeding ground for illnesses.

There’s not a lot of good news Monday, so let’s just tackle the bad stuff on Three Martini Lunch. Join Jim and Greg as they react to the massive Wall Street sell-off as investors are spooked by coronavirus, oil prices, and the bond market, and once again they call out irresponsible figures either whipping up panic or openly cheering for the virus to spell Donald Trump’s political doom. They also wince a bit as Montana Democratic Gov. Steve Bullock launches a challenge to GOP Sen. Steve Daines, adding another race where Republicans will have to work hard to keep a seat. And they react to the news that a CPAC attendee has tested positive for coronavirus, prompting Sen. Ted Cruz and Rep. Paul Gosar to self-quarantine themselves after interacting with that person.

Trump Admin Blames Iran for Oil Tanker Attacks in Gulf

 

Two oil tankers were attacked Thursday near the Strait of Hormuz amid escalating tensions in the region. Secretary of State Mike Pompeo has blamed Iran for the attacks, as he did with attacks on four tankers last month near a United Arab Emirates.

“The assessment of the United States government that the Islamic Republic of Iran is responsible for the attacks that occurred in the gulf of Oman today,” Pompeo said. “This assessment is based on intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication.”

Member Post

 

U.S. Ambassador to Germany Richard Grenell on Iran Sanctions Snapback, America’s Energy Competition with Russia in the EU, Chancellor Merkel U.S. Ambassador to Germany Richard Grenell occupies one of the most critical positions in American diplomacy, not only because Germany represents the EU’s largest economy and has disproportionate influence on the continent, but because of […]

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Data Is Just Like Oil, Other Than These Few Minor Differences

 

You may have heard something about “data being the new oil” or some such. Just as petroleum drove economies in the 20th century, so will digital information in the 21st. I really started hearing about this framing after a May 2017 cover story by The Economist. The piece had a pretty snappy lede:

An oil refinery is an industrial cathedral, a place of power, drama and dark recesses: ornate cracking towers its gothic pinnacles, flaring gas its stained glass, the stench of hydrocarbons its heady incense. Data centres, in contrast, offer a less obvious spectacle: windowless grey buildings that boast no height or ornament, they seem to stretch to infinity. Yet the two have much in common. For one thing, both are stuffed with pipes. In refineries these collect petrol, propane and other components of crude oil, which have been separated by heat. In big data centres they transport air to cool tens of thousands of computers which extract value—patterns, predictions and other insights—from raw digital information. Both also fulfill the same role: producing crucial feedstocks for the world economy. Whether cars, plastics or many drugs—without the components of crude, much of modern life would not exist. The distillations of data centres, for their part, power all kinds of online services and, increasingly, the real world as devices become more and more connected. Data are to this century what oil was to the last one: a driver of growth and change. Flows of data have created new infrastructure, new businesses, new monopolies, new politics and—crucially—new economics. Digital information is unlike any previous resource; it is extracted, refined, valued, bought and sold in different ways. It changes the rules for markets and it demands new approaches from regulators. Many a battle will be fought over who should own, and benefit from, data.

Why the US Will Become the “Undisputed Global Oil and Gas leader for Decades”

 

This new analysis and forecast from the Energy Information Agency, reflected in the above chart, is amazing:

A remarkable ability to unlock new resources cost-effectively pushes combined United States oil and gas output to a level 50% higher than any other country has ever managed; already a net exporter of gas, the US becomes a net exporter of oil in the late 2020s. In our projections, the 8 mb/d rise in US tight oil output from 2010 to 2025 would match the highest sustained period of oil output growth by a single country in the history of oil markets. A 630 bcm increase in US shale gas production over the 15 years from 2008 would comfortably exceed the previous record for gas.

Member Post

 

There’s an old adage that states: “buyer beware”. It was used commonly in times past. Borrowing from the legal dectionary: When a sale is subject to this warning the purchaser assumes the risk that the product might be either defective or unsuitable to his or her needs.This rule is not designed to shield sellers who […]

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I heard that a 20% tariff on all Mexican imports was being proposed to pay for Trump’s much talked about wall – I don’t like this idea, and I think maybe there’s a better way that I’d like to propose. Target the oil and refined petro products. I was never a guy wearing a wall […]

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Cannon Ball, North Dakota Just as Dallas-based Energy Transfer Partners thought they had dotted all the i’s and crossed all the t’s on their $3.8 Billion oil pipeline project, including the years it took to aquire every piece of land–in four states–along its 1,172 mile long route, a SJW-come-political appointee in the Interior Department killed the […]

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I drive a 2008 Acura RDX. Since my daily commute is about 9 miles (round trip), I don’t put many miles on it. As of today, it is just about to clock its 50,000th mile. Acura has a feature called “Maintenance Minder”, perhaps the most annoying feature of any car I’ve ever owned. When your […]

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Bernie Sanders’s Astoundingly Wrongheaded Tweet Of The Day

 

Leaving aside that I am not a fan of “corporate welfare,” the tweet below from Senator Bernie Sanders demonstrates a lack of understanding about the oil industry and corporate finance. First of all, most oil and gas companies are not large corporations. Furthermore, many of them are filing for bankruptcy due to low oil and gas prices. And as they provide vital commodities whose prices are subject to wild swings, perhaps it is understandable that they receive some advantageous tax treatment. This Forbes article, for instance, refutes the myth of “rich” oil companies not paying their “fair share;” it’s also a few years old, but its points remain valid.

Flyover 54 – There May Be Blood

 

This week, we are joined by Ricochet editor Tom Meyer! We hear about Terry’s job and the inner-workings of an oil rig. We engage in general conversation about the country, the electorate, history, and the future. We do our very best to answer the question on everyone’s minds: “Is it possible to have a podcast without talking about Trump?” Well, it took us nearly an hour and a half to find out. Stick with us; you won’t be disappointed.

Some references:

Member Post

 

Some recent stories from Venezuela, Brazil, and Nigeria caught my attention; they have some interesting similarities. They are all oil-producing countries–with state-owned oil companies–that have been impacted by falling oil prices. And they are also reaching levels of political maturity where corruption is becoming more scandalous. In Venezuela, the opposition has resolved to oust Chavez’s successor Nicolas […]

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According to the consultancy Wood MacKenzie, the cash cost of US’s shale oil is at US$15 per barrel and even at a price of US$30 per barrel, only 6% of production worldwide fails to cover its average variable costs and faces shutdown. Moreover, the US shale oil industry has been becoming more productive, with a […]

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