Obama Administration Kicks The Oil-And-Gas Industry While It Is Down

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For the past six years, the oil and gas industry has served as a savior to the Obama presidency by providing the near-lone bright spot in economic growth. Increased U.S. oil-and-gas production has created millions of well-paying jobs and given us a new energy security.

So now that the economic powerhouse faces hard times, how does the Administration show its appreciation for the oil-and-gas industry that has been a boon to the economy?

By introducing a series of regulations—at least nine in total, according to the Wall Street Journal (WSJ)—that will put the brakes on the US energy boom through higher operating costs and fewer incentives to drill on public lands.

WSJ states: “Mr. Obama and his environmental backers say new regulations are needed to address the impacts of the surge in oil and gas drilling.”

U.S. oil production, according to the Financial Times, “caught Saudi Arabia by surprise.” The kingdom sees that US shale and Canadian oil-sand development “encroached on OPEC’s market share” and has responded with a challenge to high-cost sources of production by upping its output—adding to the global oil glut and, therefore, dropping prices.

Most oil-market watchers expect temporary low-priced oil, with prediction of an increase in the second half of 2015, and some saying 2016. However, Ibrahim al-Assaf, Saudi Arabia’s finance minister, recently said: “We have the ability to endure low oil prices over the medium term of up to five years, even if it means delving into fiscal reserves to cover a large deficit.”

Many oil companies are already re-evaluating exploration, reining in costs, and cutting jobs and/or wages. “In the low price circumstance like today,” Jean-Marie Guillermou, the Asian head of the French oil giant Total, explained, “you do the strict minimum required.”

In December, the WSJ reported: “Some North American companies have said they plan to cut their capital spending next year and dial back on exploring for new oil.” It quotes Tim Dove, President and COO for Pioneer Natural Resources Co.: “We are seeking cost reductions from all our suppliers.”

Last month, Enbridge Energy Partners said: “it has laid off some workers in the Houston area”—which the Houston Chronicle on December 12 called “the latest in a string of energy companies to announce cutbacks.”

I have previously warned the industry that while they have remained relatively unscathed by harsh regulations—such as those placed on electricity generation—their time would come. Now, it has arrived. The WSJ concurs: “In its first six years, the administration released very few regulations directly affecting the oil-and-gas industry and instead rolled out several significant rules aimed at cutting air pollution from the coal and electric-utility sectors.”

According to the WSJ: “Some of the rules have been in the works for months or even years.” But that doesn’t mean the administration should introduce them now when the industry is already down—after all, the administration delayed Obamacare mandates due to the negative impact on jobs and the economy.

Canada’s Prime Minister Stephen Harper gets it. Under pressure from the environmental lobby to increase regulations on the oil-and-gas industry, he, during a question session on the floor of the House of Commons in December, said: “Under the current circumstances of the oil and gas sector, it would be crazy—it would be crazy economic policy—to do unilateral penalties on that sector.”

Introducing the new rules now kick the industry while it is down and shows that President Obama either doesn’t get it, or he cares more about burnishing his environmental legacy than he does about American jobs and economic growth.

(A version of this content was originally published at Breitbart.com)

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Here’s What President Obama Could Learn From Governor Perry

Photo credit: Peter Stevens (Flickr)

Texas Governor Rick Perry embarked on campaign-style efforts in many states including California, Illinois, Connecticut, and New York. He’s hosted business meetings, appeared on TV and radio shows, and launched ad campaigns touting low-tax Texas.

Learning from Perry, President Obama could air ads and meet with leaders in Germany encouraging them to buy American coal. Ours is cleaner burning than theirs; we have plenty of it; the price has dropped; they can get it from a friendly supplier; and, most importantly, Germany needs it.

Thanks to Obama’s policies, we are prematurely shutting down our coal-fueled electricity generation—with the idea that we can replace it with wind and solar. Germany is prematurely shutting down its nuclear-powered fleet. It has already tried to go with wind and solar, but that is not working out so well. Since 2011, in an effort to wean the country off of nuclear and fossil fuels, the energy revolution, or Energiewende, was launched; greenhouse gas emissions have gone up; and the average price of electricity for companies has jumped 60%—now more than double those in the U.S. As nuclear plants are closed, they are being replaced with coal.

On August 27, Jochen Homann, President of the Federal Network Agency (Germany’s energy regulator) told an industry conference: “Those who call for an end to coal power generation don’t have much interest in a reliable energy policy.” Reuters reports: “Germany will continue to need coal-fired power plants.”

Instead of a Perry-esque campaign to encourage countries like Germany to buy American coal—rather than coal from a country like Colombia that has lower labor costs, lax environmental policies, and, therefore, a less expensive product—Obama, once again, has gone around Congress with his plan to seek a “non-binding international accord” at next year’s United Nations climate summit in Paris—which will encourage global reductions in coal usage.

It is bad enough that American policies hurt American workers, but why not encourage countries that are going to buy coal anyway, to buy from the U.S.?

Worse, the U.S. is importing Colombian coal and killing American jobs when we have the largest coal reserves in the world.

An August 13 WSJ story on surging coal imports from Colombia cites as one of the reasons—other than labor costs and a global coal glut—that Colombian coal is cheaper for utilities in the U.S. Southeast than coal from Appalachia: “It’s much more cost effective to move coal by ship… than by train.” It goes on to explain: “The problem with shipping U.S. coal by rail is supply. U.S. demand for rail transport to ship crude oil, grain and other products has soared, limiting the number of rail cars available to ship coal to power plants.”

The coal industry isn’t asking for import caps or tariffs as others do when cheap imports are harming producers and workers. But, it could benefit from some simple sound energy policy, for example: approve the Keystone pipeline—which would free up rail space, make shipping coal within the U.S. more competitive, create jobs, and boost America’s energy security. Politicians could also call for a removal of the stifling regulations on our own coal industry.

Despite California Governor Jerry Brown’s mockery, Perry’s efforts worked. In April, Toyota shocked California officials by announcing it was pulling up stakes in California and moving 3000 jobs to Texas.

Our chief executive has the power of the bully pulpit. He should learn from Perry’s efforts and promote America. A campaign-style push in countries like Germany might just work—and save American jobs and reduce the trade deficit in the process.


Photo credit: Peter Stevens (Flickr)

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Can The U.S. Fill The Gap Of Potential Oil Losses From Iraq?

Post-war Iraq has grown into a major force in the global oil market. Reaching a 30-year high, its production and exports have climbed steadily since 2011—making Iraq the second largest producer in OPEC, and the seventh globally.

Iraq has filled in the production gaps caused by violence in Libya and sanctions in Iran. Crude oil prices have been stable. The Wall Street Journal states: “crude volatility recently had ground down to multi-year lows.”

But that was before rapid gains by extremist insurgents in northern Iraq put all that progress in jeopardy, raised gasoline prices, and sent “shudders through financial markets.” A barrel of oil is now trading at its highest level since September.

The sectarian fighting in Iraq had already caused a 4 percent increase in world oil prices—which is expected to translate to a 5 to 10 cent a gallon bump in the price of regular unleaded gasoline.

Most of Iraq’s oil fields are in the south and are, so far, believed to not be at “immediate risk.” Yet, the New York Times (NYT) reports: “The collapse of Iraq would bring an international oil crisis. …It would mean crude oil would go up to $150 a barrel.” “But,” NYT continues, “oil prices have been rising modestly compared with what would be expected from a major crisis in the Middle East.” Why? According to the NYT, “growing oil production in the United States and Canada has helped cut American oil imports, helping to keep global supplies hardy.” The report states: “World oil supplies are relatively robust at the moment, which explains why oil price increases have not been significant. Global supplies are up a million barrels a day from a year ago, mostly because of North American production.”

If Iraq’s production continues to be threatened, as it looks like it will, John Kingston (global news director for industry tracker Platts Energy) asks the obvious question: “who is going to fill the gap?”

The obvious answer should be the United States—after all, North American production is credited with keeping prices relatively stable compared with what would normally be “expected from a major crisis in the Middle East.”

Unfortunately, President Obama failed to protect America’s economic security. He could have helped cut America’s dependence on Middle Eastern oil—about 300,000 barrels of Iraqi oil are used in the U.S. each day. Instead, he has presided over a decline in production on federal lands.

While U.S. production has helped blunt the short-term impact of the Iraq conflict, a recent report from the Congressional Research Service (CRS) makes the decline in production on federal lands clear.  According to the CRS report, under the Obama administration, oil production on federal lands has fallen 6 percent–while oil production on state and private lands increased by 61 percent.

By not developing available resources, and not approving the Keystone pipeline, Obama has made America more vulnerable to oil market instability. Had Keystone been approved, as originally expected more than five years ago, it could now be bringing additional resources to market and helping stabilize global supplies—filling the gap created by unrest in Iraq, Libya, Russia, Nigeria, etc.

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This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Welcome To The “No Pee” Section Of The Swimming Pool, America

America is poised to become the “no pee” section of the global swimming pool, and the useless actions will cost us a bundle—raising energy costs, adding new taxes, and further crippling the economy.

On June 2, the EPA released its new rules for CO2 emissions from existing electricity-generating plants—which the New York Times (NYT) states “could eventually shut down hundreds of coal-fueled power plants across the country.”

When the plan was released, there were two key aberrations. Much can be gleaned from what didn’t happen.

It was widely believed that President Obama would make the announcement himself. On May 10, regarding the proposed rule release, EPA Administrator Gina McCarthy said: “The president has indicated his intent to announce himself.” The Hill reported: “McCarthy called the move by Obama to announce the proposal ‘a strong indication of how important he sees this.’” But when it came right down to it, McCarthy made the announcement while Obama, according to the NYT, played “a supporting role by making a telephone call to the American Lung Association.”

The White House’s own website, in November 2009, announced Obama’s plans: “In light of the President’s goal to reduce emissions 83% by 2050, the expected pathway set forth in this pending legislation would entail a 30% reduction below 2005 levels in 2025 and a 42% reduction below 2005 in 2030.” Many media outlets, including the left-leaning Daily Beast, have indicated that “The EPA rules issued Monday are largely modeled on a March 2013 blueprint from the NRDC [Natural Resources Defense Council].” The NRDC plan projects 35-40 percent cuts in CO2 emissions over 2012 levels by 2025. As a result, it was reasonable to expect reductions in the 40 percent range.

The U.S. Chamber of Commerce did an extensive analysis of the impacts of carbon cuts of 42 percent—and the results aren’t pretty. But when the draft regulations came out, the goal was 30 percent, not 42, or even 35-40.

Bloomberg calls the new rule “politically painful” for Democrats from coal-producing regions “as it forces power-plant closures and threatens to increase electricity rates for consumers.”

It is clear that the administration has received pushback over the reported economic impacts of the regulations—which tells us why Obama didn’t make the announcement himself and why the required reduction was lower than expected. (It is important to note that within the proposed rule is an acknowledgement that the final number could be much higher—likely, closer to the expected 40-42 percent range.)

The Chamber reported that global emissions are expected to rise by 31 percent between 2011 and 2030; yet all the pain—economic and political—the new regulations, based on the reductions in the 40 percent range, would inflict “would only reduce overall emissions levels by just 1.8 percentage points.” Now, with the 30 percent reduction number, the global impact will be much smaller.

Bloomberg states: “The administration and its Democratic allies are bracing for a political fight over the rule, which is critical to Obama’s legacy on climate and his efforts to coax other nations to agree.”

Australia has already walked away from its previous administration’s stringent climate policies due to economic pain and public backlash. Germany is becoming more dependent on coal-fueled electricity. Wood is the number one renewable fuel in Europe. China and India have repeatedly refused to stop their economic growth by cutting back on their fossil fuel-based energy usage.

All the regulations the administration may impose will not “coax” the rest of the world to follow. Just because we declare that we won’t pee in the pool won’t stop the others.

Photo credit: Matthew Paulson (Flickr)

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

See How The Obama Administration Could Be Hiding Its Use Of Bad Science

President Obama’s pledge to run the most transparent administration was merely a campaign promise and not a statement of management style. We’ve seen a series of highly public scandals—Fast and Furious, Benghazi, IRS, NSA, and now the VA—where Oversight Committees have fought to pry information out of the Obama White House, only to receive stacks of redacted documents.

Due to court-ordered information provided to nonprofit government watchdog groups in response to Freedom of Information Act (FOIA) requests, it is very clear why the Administration wanted to keep specific contents hidden. The White House doesn’t want the public to know the rationale behind the policies that are having a negative impact on all Americans.

Together, the Endangered Species Act (ESA) and Clean Air Act restrict access to public and private lands for farming, ranching, and energy development, and reduce the availability of affordable electricity—often on faulty or questionable science.

In New Mexico, due to the newly protected meadow jumping mouse, the U.S. Department of Justice and the U.S. Forest Service are preventing cattle ranchers from accessing water to which two different court rulings have declared the ranchers’ have rights. The mouse was listed despite decades of scientific controversy over whether the meadow jumping mouse was a ‘valid subspecies’ or whether it really was vanishing. Current research from the University of New Mexico includes recommendations that would lead to a re-evaluation of the listing. Yet, “sue and settle” agreements prevent the public from seeing the science upon which such listings are based.

The Information Quality Act (IQA), enacted by Congress in 2000, requires that “quality” science be used in such cases.

In a Ranch Magazine article titled “Verify The Science,” Dan Byfield, CEO of American Stewards of Libertyshowed how the IQA can be used to prevent environmental organizations from “manipulating our government and federal statutes to their benefit and the detriment of everyone else.” He worked successfully with eight counties in the Permian Basin to stop the U.S. Fish and Wildlife Service from listing the dunes sagebrush lizard as endangered. He states: “What we found was anything but credible science. …and this is true with almost every proposed listing.”

Taking the IQA a step further, earlier this year, the Institute for Trade Standards and Sustainable Development (ITSSD) filed FOIA requests regarding the science underpinning the EPA’s 2009 greenhouse gas endangerment findings—identifying six greenhouse gasses as posing a risk of endangerment to public health and welfare within the meaning of the Clean Air Act.

An ITSSD press release states: “The objective of the FOIA requests has been to secure disclosure of government records substantiating each agency’s compliance with the provisions of the U.S. Information Quality Act.” ITSSD asserts that, based on its research, the required “peer review science process has likely been compromised on conflict of interest, independence/bias, peer review panel balance, and transparency grounds.”

ITSSD believes that the EPA’s endangerment ruling—which has triggered costly and burdensome greenhouse gas emissions control regulations—is based on bad science and is seeking records regarding the climate science-related peer review processes.

Requests for information are being stonewalled.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom