Fracking OPEC

Well, we’ve mentioned that this would happen a few times, here and elsewhere. And it has. Jazz Shaw wrote back in December.

If you’ve been watching the oil market half as closely as Wall Street in general you’ve seen something rather remarkable happening this week. At the end of last month, OPEC finally decided that they were getting beaten badly enough with scandalously low oil prices and decided to jointly cut production. Since oil is always a significantly volatile global market, the system responded almost immediately, with oil climbing back up above the $50 per barrel mark for the first time in a couple of years. That helps out some of the member nations while not being high enough to significantly spike gas prices at the pump back in America.

So why not trim the flow back even further and bump those prices higher still? One OPEC spokesperson was extremely open about their strategy. The low prices have largely pushed U.S. shale oil production into low gear. It’s simply not profitable to produce when the price is down in the forties or even thirties. But if the price gets up to a few bucks above sixty dollars per barrel it will be rich times in the shale fields again and we’ll bust the market open, leading to another round of depressed prices. The Nigerian petroleum minister was quite clear about it in an interview this week. (Bloomberg)

Later on, he refers to it as not an evil conspiracy but just business, which is kind of true. It’s a would-be monopoly trying to set the price of a commodity, instead of letting the market do its thing. And you know something, it never works for long. Something always changes things. Here too.

Last Thursday, John Sexton wrote this.

OPEC, the oil cartel really cares about the world. That’s the message of a new monthly report issued Thursday. OPEC says what the world needs now is a bit less supply on the global oil market. In particular, they would really appreciate it if the United States would stop producing so much damn oil…for the good of the world of course. From CNN Money:

The report said that balancing the market would “require the collective efforts of all oil producers” and should be done “not only for the benefit of the individual countries, but also for the general prosperity of the world economy.”

OPEC said that one producer in particular is to blame: The U.S., where shale producers have continued to ramp up their drilling despite lower crude prices.

The increased production has undermined OPEC’s efforts to keep prices between $50 and $60 per barrel.

But the OPEC effort didn’t work for long. Prices are back below $50 a barrel now and thanks to increased efficiency, U.S. producers can still make money at those prices. Now OPEC has to decide whether to extend the production cuts into the latter half of the year or simply give up on the effort. Nitesh Shah, a commodity strategist at ETF Securities, says OPEC’s strategy has been a bust. He writes, “repeating the same strategy for another six months will do little to shore up oil prices.” “OPEC nations have given up market share and have barely reaped any price gains,” he adds.

OPEC could try even deeper production cuts but OPEC members won’t like that. So OPEC is left begging the U.S. to give them a break for the good of the world economy. We could do that, but here’s another thought: Let’s continue taking their market share and reducing their control over the world’s energy market.

Heh! Yep, we could do that, but why would we? Our people like to work and make money for their families, and they’re damned good at it, as well. Our country is designed for cheap energy, that’s why we have been a bit sluggish since the seventies. We are also free marketeers, buccaneers, really, who always find a way to make money while providing a better service, cheaper.

It’s our way in geopolitics as well, it’s how we destroyed the Soviet Union. And for anybody who still harbors the risible notion that Putin wanted Trump as President, well, this is certainly not in Russia’s interest either. Interesting, isn’t it, that American fracking that only last year needed oil prices of ~$60 per barrel to be profitable, is now profitable in the mid to high $30 dollar range.

The free market: What can’t it do?

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Fracking Freedom

CHRISTOPHER BOOKER: A new ‘Battle of Britain’?

Caving in to the anti-fracking fanatics is a craven surrender to mob rule | Mail Online

This may be the silly season, but we should be rubbing our eyes in disbelief at the insanity of what has been going on in Balcombe.

A handful of protesters have seemingly been allowed to threaten Britain’s entire energy future.

It was pitiful enough that, until yesterday, the police were apparently unable to stop a self-regarding gaggle of activists and mini-celebs from halting the wholly legal operations of a company planning to drill for oil in a Sussex field.

Green Party MP Caroline Lucas was arrested today at the anti-fracking protest in Balcombe, West Sussex

Green Party MP Caroline Lucas was arrested today at the anti-fracking protest in Balcombe, West Sussex

Furthermore, where it has been carried out responsibly, fracking has produced none of the environmental horrors the scaremongers have dreamed up (only one or two rogue operations have inflicted damage locally).

Altogether this has seemed like a miracle, not only enabling the U.S. to become energy self-sufficient for the first time in decades, but to reduce its carbon emissions to their lowest level in 20 years (because burning gas gives off only half the CO2 emitted by coal).

A colossal boon this may be for America, but there is no country on earth that needs such a miracle more than Britain, where our energy bills are still soaring.

That’s not least because of the disastrous skewing of our energy policy by the obsession of successive governments with one ‘green’ fantasy after another.

Not only are taxes and regulations closing down the coal-fired power stations that still supply more than a third of the electricity needed to keep our lights on, but the biggest make-believe of all is the target agreed with the EU.

Read more: http://www.dailymail.co.uk/debate/article-2397518/CHRISTOPHER-BOOKER-A-new-Battle-Britain-Caving-anti-fracking-fanatics-craven-surrender-mob-rule.html#ixzz2cSmnerjR

A few things about this story. First I’m very grateful she is not my Congresscritter.

Second. The story is correct, we are just getting started with large scale fracking, and already we are starting to produce hugely expensive truck engine to burn Compressed Natural gas (CNG). We will quite easily become energy self-sufficient without even going on public land for a considerable period (as long as we can keep the government in check). If we go onto public land we can take the entire first world with us. North America if you haven’t noticed is a bit more stable than the Middle East. We can usually be counted on.

And for the third thing, this could be troubling. We see energy self-sufficiency in our future, easily. In fact we’ve got enough to make what we used to call western civilization (when it was civilized) energy self sufficient. You know us, we’re pretty easy to get along with. Tolerant and all that. But, and this is a big but, when that happens, and everybody in the Middle East is as broke as they were when the Pasha of Tripoli ruled, what are they going to do? Sit around quietly and starve? Doesn’t seem likely, maybe we ought to start thinking about that a little.

And then there is the fourth thing, and its something the Brits have screwed the pooch on (and we’re not far behind). von Mises said this

If history could teach us anything, it would be that private property is inextricably linked with civilization.

Because  who are you (or me) to tell them how to use their property. Yes, we can enforce certain things to make sure they don’t harm us, or our property. But why would it be of any public concern if they wish to put a well on their property. We can have regulation that forces environmental controls, although civil and criminal law actually already covers us for damage they may do to us.

You see there is a general principle involved here. a man (or woman, of course) can parlay almost anything into a living if they be creative enough. It is stated well here.

Where self-interest is suppressed, it is replaced by a burdensome system of bureaucratic control that dries up the wellsprings of initiative and creativity.

—Pope John Paul II, Centesimus Annus

We need to return to trusting the citizen to pursue his own self interest, and to get out of his way

Self-interest is not myopic selfishness. It is whatever it is that interests the participants, whatever they value, whatever goals they pursue. The scientist seeking to advance the frontiers of his discipline, the missionary seeking to convert infidels to the true faith, the philanthropist seeking to bring comfort to the needy—all are pursuing their interests, as they see them, as they judge them by their own values.

—Milton Friedman with Rose Friedman, Free to Choose (1979)

Do note though in each of these examples we speak of the peaceable urging, not involving the use of force, if force is used, it become a form of assault, where perpetrated by a neighbor or by the state itself. A person has a right to make his own decisions as long as he is willing to pay the price (or reap the reward) that they incur.

And that is what is wrong, in reality, with that British story above (and many American ones as well). That property, and the drilling and extraction equipment, is all somebody’s property, which they have a God-given right to use as they wish, as long as they harm no one else. It is no part of the government’s place to have any input at all, into a private matter other than, perhaps, a minor interest in preventing damage to other property.

Let’s finish with a couple more quotes:

The fundamental error of socialism is anthropological in nature. Socialism considers the individual person simply as an element, a molecule within the social organism, so that the good of the individual is completely subordinated to the functioning of the socio-economic mechanism. Socialism likewise maintains that the good of the individual can be realized without reference to his free choice, to the unique and exclusive responsibility which he exercises in the face of good or evil. Man is reduced to a series of social relationships, and the concept of the person as the autonomous subject of moral decisions disappears

.—Pope John Paul II, Centesimus Annus

and finally

There exists another form of ownership which is becoming no less important than land: the possession of know-how, technology and skill. The wealth of the industrialized nations is based much more on this kind of ownership than on natural resources.

—Pope John Paul II, Centesimus Annus

 

Frackin’ B.S. – Marita Noon

 

 

Environmental Protection Agency Seal

Environmental Protection Agency Seal (Photo credit: DonkeyHotey)

 

Well, here we go again, the EPA has its agenda, and is not about to let the truth get in the way. What is its agenda? To make sure Americans freeze in the dark. This time they badly overreached on fracking. You, of course remember the propaganda film Gasland, you can forget it now, its been disproved, again. here’s Marita Noon again on the latest BS from EPA and other greens on fracking.

 

“Even a broken clock is right twice a day” is an adage we’ve all heard dozens of times. Today, it applies to the EPAas even it gets things right now and then.The EPA is well known for its attacks on virtually every kind of industry that might result in economic development—hitting the energy sector particularly hard. Despite the agency’s best efforts, it has not been able to match up the science with its desired claims of water contamination from natural gas extraction using hydraulic fracturing—which has been in use in America for more than 60 years.

In early December 2011, the New York Times ran a story declaring: “Chemicals used to hydraulically fracture rocks in drilling for natural gas in a remote valley in central Wyoming are the likely cause of contaminated local water supplies.” Environmental groups jumped all over the announcement. Amy Mall, a fracking opponent with the Natural Resources Defense Council, said the report “underscores the urgent need to get federal rules and safeguards on the books to help protect all Americans from the dangers of fracking.” An NPR story on the EPA’s draft study released on December 8, 2011, stated: “The gas industry and other experts have long contended that fracking doesn’t contaminate drinking water. The EPA’s findings provide the first official confirmation to the contrary.”

However, just three months later, on March 8, it was announced that the EPA had to backtrack as frequent attacks forced the agency to acknowledge that it had rushed to judgment. The chemicals supposedly found in the drinking water of Pavilion, Wyoming, were chemicals that could have come from a variety of sources—including the plastic piping. The EPA released the data and findings outside of the purview of two “working groups” made up of state and EPA officials, which had been examining the Pavillion pollution for the better part of a year. Following accusations that the EPA rushed the release of the report without peer review, the EPA backed down and agreed to retest. Now, the EPA and Wyoming, as well as U.S. Geological Survey and two American Indian tribes, are working together on further study of the Pavillion groundwater.

On April 1, a lawsuit the EPA had filed earlier this year against a Texas energy company, Range Resources, accusing it of contaminating water through hydraulic fracturing, was quietly dropped. Barry Smitherman, Chairman of the Texas Railroad Commission, the agency that oversees oil and gas development, responded: “By dropping their court case and enforcement actions, EPA now acknowledges what we at the Railroad Commission have known for more than a year: Range Resources’ Parker County gas wells did not contaminate groundwater. This announcement is a vindication of the science-based processes at the Railroad Commission.”

On April 7, 2011, the EPA released test results for Dimock, Pennsylvania, that “did not show levels of contaminants that would give EPA reason to take immediate action.” Despite the EPA’s test results, Water Defense executive director Claire Sandberg claimed that the “EPA’s test results continue to show what Dimock residents have claimed for years: the water is contaminated.”

Dimock became the “symbol of possible threats to water from hydraulic fracturing” through the anti-fracking movie Gasland. …

 

Continue reading Frackin’ B.S. – Marita Noon – Townhall Finance Conservative Columnists and Financial Commentary.

 

 

The Energy Roundup

Procession of men of the Blackfoot Confederacy...

Procession of men of the Blackfoot Confederacy on horseback (Photo credit: Galt Museum & Archives on The Commons)

I’ve managed to collect a few energy stories together for you. That’s about the only connection they have.

First off apparently Fairbanks-Morse got dinged on some engines.

Douglas Stewart over at Ameristroika brings us this good news. By now most know the end of coal production is coming soon if Obama and the EPA have their way.  U.S.Coal Industry-EPA Rule a setback for coal Now we learn, that it is not the only industry. From Doug Stewart:

I guess a small congrats is in order to the Obama administration. The first regulatory shakedown on marine equipment was a success. Fairbanks Morse Engines has been slapped with a $280,000 fine and has willingly “agreed” to spend upwards of half a million dollars “on an environmental project to resolve alleged violations of the Clean Air Act (CAA) and EPA’s marine diesel engine air rules”, according to the EPA’s report.:

Pollutant Impacts

No environmental harm resulted from the propulsion engines. The engines met EPA’s Tier 1 emission standards because they comply with international standards that pre-dated EPA’s Tier 1 emission standards.

Now, this actually gets interesting. Part of their violation comes from installing “32 uncertified FME engines as the main diesel generators on board eight new U.S. Navy’s auxiliary cargo and ammunition ship (T-AKE) class vessels.” Just so we all understand, they were working on government ships. Couldn’t there have been someone overseeing the installation just to make sure the proper engines were installed rather than letting the project proceed and fining them later?

Continue reading the story at Bunkerville.

It’s a pretty shoddy way to do business to let a government contractor go ahead and install a compliant product missing a label and then impose a sizable fine on the manufacturer but, I suppose that’s what we expect from the EPA.

Then there is a study from the University of Texas that indicates strongly that fracking does no harm to groundwater. That’s actually pretty much common sense but, there you go.

A University of Texas study has found no evidence that fracking — hydraulic fracturing of shale to extract natural gas — is contaminating groundwater.

Problems associated with the process have been reported in water, but they appear to occur at ground level or just below the surface, according to the study released Friday. Many are common to any natural-gas extraction process, or are the result of mishandling of wastewater, the researchers said.

“The bottom line was, in the areas we investigated … we found no direct evidence that hydraulic fracturing itself was contaminating groundwater,” said Charles Groat, professor of geology at the University of Texas at Austin.

Hydraulic fracturing, or fracking, involves injecting water, sand and chemicals at high pressure into shale, which shatters the rock, releasing natural gas. Wells are dug straight down into the ground and then branched off horizontally into the shale, making the gas far more accessible.

Like I said, that’s what common sense would tell us.
Continuing the theme on fracking.
A well in Glacier County undergoes hydraulic fracturing. Sun Times photo by Darryl L. Flowers

Ecosphere Technologies, Inc. a diversified water engineering, technology licensing and environmental services company, today announced that the Company, its majority-owned subsidiary, Ecosphere Energy Services LLC, and its sub-licensee, Hydrozonix LLC (collectively, the “Ecosphere Partners”) have signed a Letter of Commitment with the Blackfeet Nation to provide Ecosphere’s Ozonix water treatment services to oil and gas companies conducting hydraulic fracturing (“fracking” or “fracing”) operations on the 3,000 square mile Blackfeet reservation in Montana. Ecosphere Partners will be the exclusive provider of water treatment services on the Blackfeet reservation.

The Ecosphere-Blackfeet commitment will make available to operators a non-chemical approach for treating and reusing 100% of their flowback and produced waters on the reservation. Use of Ecosphere’s Ozonix technology will not only help preserve the Blackfeet Nation’s water resources, but also eliminate the need to truck wastewater to disposal sites off reservation, thereby improving the economics of shale oil and gas exploration on the reservation. This exclusive services agreement is part of a broad effort by the Blackfeet Nation to sustainably develop their heritage lands, bring jobs to tribal members and improve the economic well-being of the tribe.

Continue reading at The Montana Oil Report.

There are some hidden messages her that you should be aware of:

  1. When I lived up there, close to the Blackfeet, they were quite poor. The best paid members of the tribe were the smoke jumpers. So good for them.
  2. It’s looks like they have developed a method to retreat the fracking water so they don’t have the contamination problem when somebody screws up. and
  3. Glacier county is way over by Great Falls, almost to the Rocky Mountains and this is still the Bakken formation, which would indicate to a layman like me that the formation goes pretty much all across Montana.
Then there is this:

“We’re all in this together.”
-Paul Bellamy, Halliburton.

On Thursday, March 22, 2012, the brainchild of Pacific Steel and Recycling’s Tina Nolevanko and Sun Times owner and publisher Darryl Flowers, A Night in the Oil Patch, drew more than 100 business owners, geologists, drilling consultants, manufacturers, and landowners out to discuss oil activity on the Eastern slope of the Rockies.

Meetings have been taking place in Eastern Montana’s Richland County regularly over the last year as oil business picks up and local officials seek solutions on how best to handle the increased need for teachers, law enforcement, and infrastructure.

Choteau and Great Falls have entertained numerous round tables and listening sessions within the last few months in an effort to get a head start on the predicted boom in the area, educating the public about the lease and drilling processes.

Last Thursday, employees , associates, and spokesmen from companies as diverse as Primary Petroleum, Halliburton, and Anschutz joined representatives from local companies like Cascade Machine in Great Falls and Lewistown’s Wickens Construction at the Hilton Garden Inn to speak about better-business relations at the onset of a new economic boom.

The meeting opened with a statement from Jeff Millhollin, President and CEO of Pacific Steel. Asked after the meeting for his thoughts on how the evening went, Millhollin said, “Pacific Steel & Recycling was very pleased to have this opportunity to work with Darryl Flowers of the Fairfield Sun Times and co-host this event. It was a great opportunity for us to find yet another way to provide better service for our customers by recognizing opportunities coming their direction. We hope they will be able to utilize the information presented to support their businesses in the near future.”…

I like to see them telling the community something about what is likely to happen.

“We’re dealing with some pretty challenging circumstances.  We’ve learned that Porta potties do fly,” said Brent Temmer, “thanks to 80 mile an hour winds.”

In the spirit of social consciousness, attendees concluded the night with an auction to raise money for Lyndsey Tikalsky of Fairfield, who underwent brain surgery last December.  Tikalsky and her young family are without health insurance, and the means to cover Lyndsey’s recent medical expenses.

Fairfield artist and business owner Diane Hausmann donated an oil painting depicting a drilling rig on Halverson Road in Teton County.

Waterjet Extreme Technologies also donated artwork for the auction; a bronze replica of an “old time” oil well and derrick. The oil rig, complete with a Bloodwood base to represent the blood, sweat, and tears of the workers, was cut with highly pressurized water mixed with powdered garnet.  An American flag, reminiscent of tradition, completed the piece.

Read the entire article at The Montana Oil Report.

And look at that: All those terrible oil companies and 1%ers raising money so a young family can pay their medical bills.Sounds kind of like America to me.

Farm life, and energy

OK guys, it’s time for some updates, while were waiting for some miracle in D.C. to reduce government spending to some reasonable level, you know, like the rest of us have.

First, it seems like Washington doesn’t want your kids to drive tractors anymore, at least that is what Ann Barnhardt’s information is, and I see no reason to disbelieve it. I think we all know what will happen to the family farm (and its continuation) with this type of nonsense. Not quite as bad as the EPA regulating dust from gravel roads, but not all that much better either.

Over at American Thinker this morning David Paulin is writing about one of our summer rituals: corn detasseling. Go and read it, you’ll enjoy it. And I’ll add my condolences for those two young people and their families in Illinois.

And  this will be about all I can stand this morning. According to Platts Energy the EPA wants to reduce VOCs from natural gas fracking by 95%. Energy, the US doesn’t need any domestic energy.

Well, there you have it. One mostly good story and two not so good. Not as bad as usual for the age of Obama.

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