Monthly Archives: March 2011
This letter is in response to Jeff Tittel’s column attacking the tea party for wanting limited government.
The writer needs to learn some American history. Nullifi-cation wasn’t a construct for slavery. But the idea originated from Kentucky and Virginia resolutions, which were first resurrected to be used against the Alien and Sedition Acts and later the War of 1812, in which New England states opposed that war because of their trading commercial interests with England, not to mention using state nullification before the Civil War against enforcement of the fugitive slave laws before they were ruled unconstitutional. States were sovereign entities that chose to form the union, and as such, had their own interests to protect and did so by writing protections into the Constitution. For example, the writer seems to ignore the 10th Amendment to the Constitution that limits federal power. If his concept of an all-powerful federal government is unchallenged, then states are little more than polite fictions with little power or meaning. While it’s true that Southern states later latched onto nullification to justify slavery, there were other reasons for the Civil War, not the least of which was the fight over taxes; import tariffs were the main source of federal revenue. States in the South disproportionately paid those import tariffs, while Northern states benefited since their industries were protected from foreign competition by those high tariffs. Had the South managed to secede, then low-tariff goods would have directly competed across the long frontier and hurt the North’s economy, thus giving meaning to the Civil War saying “A rich man’s war but a poor man’s fight.” I would note that it was the Democratic Party that led the Confederate states out of the union. And while Tittel appears to identify with New Jersey native Union Gen. George McClellan, the failed general fired by President Abraham Lincoln, had McClellan defeated Lincoln for the presidency, perhaps he would have made a negotiated peace with the Confederacy and allowed them to go their own way, with their slaves. Does that make Tittel a Southern sympathizer for admiring McClellan? Further, it was the Republican Party that passed the post-Civil War constitutional amendments that became the basis for the appeals for the 1960s civil right victories. It was the Democratic Party that created the Jim Crow laws in the reconstruction South. It was Democratic President Woodrow Wilson who re-segregated the federal government and had the KKK up to the White House in full hooded regalia for coffee and tea. It was Democratic President Harry Truman who desegregated the military. It was Republican President Dwight Eisenhower who sent in the National Guard to Little Rock schools. Southern Democratic senators led the filibusters against the 1960s civil rights laws.
But more to the point, the writer and his associates are little more than apologists for unlimited expansion of federal government power, as long as that power is used as he wants it to be used. President Barack Obama and his administration are refusing to grant any drilling permits in the Gulf of Mexico, so all those good, high-paying jobs and oil-drilling platforms are leaving America, not to return any time soon. Do remember the Sierra Club as you are paying $4, $5 or more per gallon of gas. But the environmentalist outrage doesn’t end there. Consider that California denied the ability to build solar panel farms in the desert. Worse yet are the recent water restrictions in California, denying water to farmers, which has turned some of the most productive farmland in the world into a modern-day Depression era dust bowl and family farm businesses built over generations, with all those jobs, just dried up and blew away, gone with the wind.
The tea party is for limited government because as Ronald Reagan once noted “… A government that can give you everything you want, can also take it all way.”
A mindless political class in thrall of the extremist environmental movement may offer to protect you from a little pollution today, while you starve from unemployment. May God spare us from the self-righteous elites who would direct every aspect of our lives for our own good.
( Original Article )
WASHINGTON (MCT) – Members of a presidential commission charged with investigating the Gulf of Mexico oil spill used a hearing on the hill Wednesday to make recommendations for regulating oil drilling in the far different but equally challenging environment off the coast of Alaska.
“The Arctic poses a different set of risks. It’s shallow water, but has its own threats of terrible fog, very severe hurricane-type forces, darkness over much of the year, ice … those are all going to need special attention,” William Reilly, co-chair of the commission, said.
Reilly told the Senate Committee on Environment and Public Works that the commission recommended against a moratorium on Arctic drilling, but added that it was one of the most divisive issues the panel considered.
In their written statement, Reilly and his co-chairman, Bob Graham, a former Democratic senator from Florida, offered several suggestions to avoid a new disaster.
Spill-response plans that are practical, both financially and technologically, need to be developed, they said. Companies already are required to develop response plans before they can get drilling permits, but Graham said that in the case of the Deepwater Horizon spill, BP offered a response plan that it was not capable of carrying out — a problem he said was common in the industry at the time.
“Few, if any, of the response plans, particularly for deepwater drilling, were effective in addressing the issues that would be faced or credible in the statement of the resources available to carry out containment and response,” Graham said.
In the case of Alaska, the commission also recommended that in future incidents the Alaskan Coast Guard and Arctic-based oil companies divide up responsibilities for tasks such as search and rescue. Congress should provide additional resources to the Coast Guard based on a report detailing gaps in capabilities, the commission said.
In addition, because a spill in the Arctic could affect several surrounding countries, the co-chairs proposed that “strong international standards related to Arctic oil and gas activities be established among all the countries of the Arctic.”
In turn, Graham said, the record of Alaska’s drilling industry offers lessons and examples for drilling in other areas.
“We feel that there is a model that has a lot of history and value in terms of answering the question of how to organize, and that model is Alaska,” Graham said.
He said things that Alaska has done well are balancing state and federal interests, utilizing citizens groups to assess local environmental and economic impact of accidents, and developing response plans that are long term, spanning over decades rather than just years.
( Original Article )
March 20, 2011
By Matt Smith
U.S. Rep. Bill Flores, R-Bryan, introduced legislation on Wednesday to expedite offshore drilling.
Flores and U.S. Rep. Jeff Landry, R-La., introduced legislation on Wednesday to amend the Outer Continental Shelf Lands Act to establish more stringent deadlines and requirements regarding the issuance of drilling permits in the Gulf of Mexico.
The bill, titled the Expedited Offshore Permitting Act, would establish certainty in offshore oil and gas development and increase domestic energy production helping promote American job growth and energy security, Flores said.
Permit delays have a direct impact on the development of American-owned energy resources, Flores said. Even small delays of several weeks can create a bottleneck, compounded by the difficulty of securing rigs and support services, Flores said.
The current slowdown in issuing permits has stretched to months, Flores said, which has created long delays for large, capital-intensive projects and led to negative impacts on potential production, investment and revenues.
The Expedited Offshore Permitting Act would reduce delays imposed by the Obama administration, he said. Those requirements slow the process with repeated requests for information before acting on a drilling application, he said.
Under the Flores and Landry bill, should an application, or amended application, not be approved, the lease holders may request a refund on their bonus bid for the lease plus interest.
“The Expedited Offshore Permitting Act aims to increase American energy production and reverse the Obama administration’s reckless anti-energy policies that are costing thousands of jobs, driving up gasoline prices and increasing uncertainty in the marketplace,” Flores said. “It’s time we put the Gulf of Mexico back to work and restore stability and certainty from unlocking access and tapping into the vast amounts of taxpayer-owned resources that currently sit idle.”
Landry voiced similar sentiments.
“Since the BP tragedy, the president has halted drilling operations in the Gulf of Mexico,” Landry said. “This reckless energy policy has caused thousands of hard-working Americans to lose their jobs and has kept over 200,000 barrels of oil off the market daily.
“If we want to reduce the pain at the pump and decrease our dependence on foreign oil, we have to stop the Department of Interior from dragging its fee in issuing drilling permits.”
( Original Article )
In view of a recent federal appeals court ruling that the Obama administration can’t be compelled to immediately approve deepwater drilling permits in the Gulf of Mexico, as a lower court last month ordered, one local oil company executive is wondering if our government’s system of checks and balances is working properly.
“You’ve got an unusual situation where the executive branch is saying we’ve got a job to do, and the judicial branch needs to butt out,” said Steve Maley, operations manager for Lafayette-based Badger Oil Corp.
Meanwhile, the Interior Department on Friday approved a deepwater drilling permit — its third since lifting the months-long moratorium in October.
Nonetheless, Maley, like many in the energy belt, said the Bureau of Ocean Energy Management, Regulation and Enforcement is dragging its feet, and he further points out that the permits aren’t new. They’re revised.
The most recent allows ATP Oil & Gas Corp. to resume a project about 90 miles south of Venice that was halted when the drilling ban was put in place after BP’s deadly blowout last April.
Maley said it’s encouraging, however, that Doc Hastings (R-Wash.), chairman of the House Natural Resources Committee, is on the side of energy producers and vowed last week, during hearings on the de facto moratorium, to introduce legislation that would speed up oil and gas drilling in the Gulf.
Badger, he said, has focused much of its activity in shallow water. While there have been a few dozen new permits granted recently that’s an extremely low rate. Most, if not all are for natural gas, which he said is a less risky endeavor than drilling for oil.
Shallow water operators have drilled thousands of wells since the 1970s with very few problems, and they shouldn’t be held to account for BP’s disaster, he stressed.
“It’s a safe well-understood segment of the industry,” he said.
But Badger isn’t going to sit on its hands waiting for the political winds to shift.
“Our company’s exploration and production is not exclusively offshore. That’s only been in the last six or seven years,” he added. “But the turns the regulatory environment has taken have caused us to relook our opportunities onshore.”
( Original Article )
By Steve Everley on March 11, 2011 2:06 PM
President Obama held a press conference today to discuss rising gasoline and oil prices. Gasoline at the pump now costs an average of $3.50 per gallon nationwide, and experts project prices to eclipse $4 per gallon this year, possibly by the beginning of the summer driving season.
But instead of providing a solution that most of America wants — more domestic drilling — President Obama used his presser to recite misleading talking points to justify his anti-energy policies, arguments that have all been thoroughly debunked.
Here are the three biggest myths from President Obama’s remarks this afternoon:
- “We can’t escape the fact that we control only 2% of the world’s oil.” This is a common refrain among anti-drilling Democrats and environmentalists, and it’s repeated enough that many people accept it as true. In reality, it’s 100% false. The number comes from a highly conservative estimate from the Energy Information Administration totaling America’s proven reserves where we are already drilling. It does not include the 10 billion barrels available in the Arctic National Wildlife Refuge. It does not include most of the 86 billion barrels available offshore in the Outer Continental Shelf, most of which President Obama has placed under an executive drilling ban. And it does not include the 800 billion barrels of oil we have locked in shale in Wyoming, Utah, and Colorado. Those shale resources alone are actually three times larger than the proven reserves of Saudi Arabia, so the claim that the U.S. only has 2% of the world’s oil is clearly false.
- “Industry holds leases on tens of millions of acres both offshore and on land where they aren’t producing a thing.” President Obama adds to this whopper by saying he wants to “encourage companies to produce [on] the leases they hold.” While this sounds like a common sense fix, it’s actually just blind rhetoric reserved only for people with a shocking ignorance of drilling. You can read more about this here and here, but it basically boils down to this: A lease is for exploration and production, not just production, and because oil is not equally distributed across the globe, one parcel of leased acreage may not hold any oil. Moreover, due to the circuitous and needlessly complicated permitting process, it can take years for companies who own a lease to complete their exploration activities. To get to the production phase, it could take as long as ten years. Ironically, President Obama wants to tax companies for not producing on their leases, even if the federal government’s refusal to grant permits is the reason why those companies are not drilling.
- “Last year…our oil production reached its highest level in 7 years.” This is pure spin. President Obama is deliberately trying to take credit for actions unrelated to his policies. The increased level of production is due to the actions of previous administrations and production in the Dakotas where most drilling is occurring on private land. By contrast, the Energy Information Administration projects that there will be a decline in production of 220,000 barrels of domestic oil per day in 2011, and in 2012 America will produce 150 million fewer barrels in the Gulf of Mexico, all because of President Obama’s policies to discourage or ban domestic drilling. In addition, President Obama’s drilling moratorium (and subsequent refusal to issue drilling permits) has forced at least 7 rigs to leave the Gulf and sign contracts in other countries, taking much needed jobs and revenue with them.
As gas prices skyrocket, Americans are reminded every day that the federal government’s refusal to allow responsible domestic drilling can have an incredibly destructive economic impact. Instead of trying to fix this problem, the Obama administration has worked every day to make sure that America produces less oil and has to rely more on OPEC for our energy needs.
No amount of White House spin or misleading talking points can change that tragic fact.
( Original Article )
Rigzone Staff 3/9/2011
The de facto moratorium in the U.S. Gulf of Mexico following the Macondo oil spill has delayed permits for all Gulf oil and gas activity, not just for deepwater drilling, and while some projects are moving forward, offshore service company officials say they anticipate seeing a gap of more than a year before work begins to pick up in the Gulf.
Optimism and drilling activity had begun picking up early 2010 among Gulf of Mexico companies in the aftermath of the global financial crisis restricted access to capital, resulting in cancelled drilling programs, layoffs and cold stacked rigs during 2009.
Houston-based drilling company Hercules Offshore had laid off 2,000 people during the economic recession, and had just started rehiring workers as drilling activity picked up. Instead, the Macondo oil spill and resulting moratorium made 2010 a difficult year for offshore service companies, particularly those mainly focused on the Gulf. Seahawk Drilling became “the canary in the mine” when it filed for bankruptcy, said James Noe, senior vice president, general counsel, and chief compliance officer with Hercules. The company’s jackups have been acquired by Hercules.
“We have some faith in the Gulf, but we’re treading water right now, trying to maintain workers and maintain operations,” said Noe during the panel discussion at the CERAWeek Conference in Houston on Tuesday. The regulatory uncertainty has already added to the expense of operating in the Gulf, which already includes costs associated with hurricane risks, corporate taxes, Jones Act and labor costs.
The government’s tone towards the oil and gas industry in light of the Macondo spill is one Noe has never seen before, with the government treating the industry like criminals. Instead, government needs to calm the rhetoric down and work with the oil and gas industry to find a solution to the “broken” permitting regime. “Obama wants to import more oil and tap the U.S. strategic oil reserves. These aren’t solutions,” said Noe.
Joe Dunbar, business unit manager with Parker Hannifin Corporation, contrasted the Obama administration’s response to Macondo of finger pointing and threats of prosecution to the UK government’s response to the Piper Alpha incident in 1998. “The UK government said, ‘we’re not looking to prosecute anyone, we just want to discuss what happened and what needs to be changed.'”
As a result of the permitting delays, Jim Johnson, executive director with Hunting Energy Services Inc., is seeing customers refocusing efforts on onshore U.S. shale gas or international operations. “With Wall Street high on shale plays right now, companies are focused elsewhere, and the Gulf of Mexico shelf has become a dead man zone,” said Jim Johnson. Luckily, the company’s businesses in Brazil, Australia and Angola have flourished, picking up for the slack in the Gulf.
John Nesser, executive vice president and chief operating officer with J. Ray McDermott International has seen its Morgan City, Louisiana fabrication facilities underutilized, while its business in Asia-Pacific and the Middle East are flourishing. However, the company’s derrick barge DB 16 has been cold stacked until opportunities arise for it in the Gulf.
The de facto moratorium in the Gulf means that companies that have vessels or rigs in the Gulf face millions in costs in mobilizing these assets to other markets. Jones Act vessels, which are manufactured in the U.S. and cost significantly more than vessels built elsewhere, have difficulty competing with cheaper-built vessels in other markets, Nesser said. “It would cost millions for us to send the DB16 to Brazil and back.”
Dunbar, who works mainly with independent oil and gas companies in the U.S. Gulf, has seen three of its clients stop drilling operations. He doesn’t see a light at the end of tunnel for Gulf of Mexico activity, as uncertainty over future permitting and the existing permitting regime in the U.S. Gulf will deter future investment.
Permitting delays will likely result in sales of Gulf of Mexico assets by companies seeking to focus on shale plays or operations in the Middle East and Asia; however, there are more sellers than buyers right now, said Noe.
The Gulf will likely see a different mix of operators when activity resumes, likely limited to four or five major oil companies; it will be years before independent companies return. “They will return, because there are some plays that aren’t economic for the majors to drill, but it will be a slower comeback,” said Johnson.
Offshore Logjam Breaking
An IHS Herold Special Update on the Oil Field Services Sector issued this month indicates a healthier growth outlook for the industry in 2011 now that the U.S. Gulf of Mexico drilling moratorium that was enacted in 2010 has been lifted and offshore service companies can get back to work in the deep waters of the Gulf. According to the update, a general recovery is being driven by continued strong oil prices and rising worldwide exploration and production (E&P) budgets, despite the negative impact of the drilling moratorium that constrained what would have been a strong rebound for the sector.
The update, which compared key oil company financial performance for the entire 2010 calendar year against sector performance for 2009, included multi-service companies such as Baker Hughes, Halliburton and Schlumberger as well as offshore drillers Transocean and Diamond Offshore among others.
“As we mentioned in our preliminary report issued last December, many of the service companies, and, in particular the offshore drilling companies, took a financial beating following the Gulf drilling moratorium. That negative impact constrained what was otherwise a substantial recovery for the sector compared to 2009 results,” said John B. Parry, principal energy analyst at IHS and author of the IHS Herold Update on the Oil Field Services Sector.
By Amanda Carey – The Daily Caller 12:16 AM 03/10/2011
In early February, Shell Alaska announced it was dropping any plans to drill in the Arctic’s Beaufort Sea in 2011. According to Vice President Pete Slaiby, the decision was based on the recent remand of air permits by the Environmental Protection Agency (EPA). Shell has been waiting five years to be given the go-ahead to drill.
Since 2005, the company has paid about $3 billion for leases to drill off the coast of Alaska. But after the BP oil spill last April, more than 4,000 miles away in the Gulf of Mexico, all drilling plans were put on hold per orders from the Department of Interior.
Shell isn’t the only company with ready-to-drill wells that is being prevented from drilling by the regulatory process that emerged from the BP oil spill. Hercules Offshore, a Houston-based oil company, has a developmental well in the Gulf of Mexico that has been ready since last April.
“We prepared the developmental applications,” Jim Noe, senior vice president of Hercules, told The Daily Caller. “Normally, we would have been developing and producing oil by June of 2010. But all the new rules and requirements and permit delays caused confusion and reluctance to submit the application.”
Hercules ultimately submitted the application in December 2010, but according to Noe, it took the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) 60 days to just “deem it submitted.”
According to the BOEMRE website, there are currently 13 pending permits for shallow and deep-water permits for new wells. The number sounds relatively low, a point noted by BOEMRE Director Michael Bromwich in a recent op-ed for the Houston Chronicle.
But Noe told a different story to TheDC, saying the reason the number of pending permits looks so low is because many are essentially in limbo, just waiting to be “deemed submitted” by the agency.
“There are applications made on a daily basis that aren’t being shown up on BOEMRE’s statistics for being submitted,” said Noe. “It’s disingenuous for Bromwich to point out relatively low number of pending permits for proof that there is low demand to drill.”
Another oil company, Texas-based Ensco, is fed up with the permitting process. Ensco’s permit applications were submitted in the weeks following the BP oil spill, and have all been pending for various lengths of time ranging from four to nine months. The company is leading the suit against the Department of Interior that resulted in a federal judge ordering the agency last month to act on five pending permits within 30 days. Last week, however, Salazar and Bromwich filed an appeal to the court’s decision.
The Hercules example is symbol of the dicey relationship between the Interior Department and the oil industry. After the BP oil spill last spring, the agency took the opportunity to, as Bromwich wrote, launch “the most sweeping reforms of offshore regulation in U.S. history.”
But the result has been a slow and uncertain regulatory process that has left ready-to-go wells sitting dry. And the deep-water permit issued last week to Noble Energy was received more as a taunt than a promise of better days ahead.
“The facts are there is demand to drill oil and gas wells in the Gulf,” said Noe, “and operators are ready and willing.”
“We need them to go back to their offices and do what they’re mandated by law to do and what is in the interest of the country: to review and process permits,” Noe added. “We’re not looking for a shortcut.”
When asked about the criteria used to deem an application submitted, a spokesperson for the Department of Interior simply told TheDC that submitted applications may be returned to the operator for further clarification.
( Original Article )
Posted By Tait Trussell On March 9, 2011
“Why,” asked Governor Sean Parnell of Alaska, “is Washington blocking oil exploration in states like Alaska and Louisiana when the Middle East is such a powder keg?” His op-ed article appeared March 3 in the Wall Street Journal.
The answer is easy and clear but also scandalous. The Obama Administration is so enthralled with ‘green’ energy, it wants to make fossil fuels unaffordable to Americans. It’s all part of “President Obama’s regulatory assault on domestic oil and gas production,” as Wall Street Journal columnist Kimberley Strassel put it. She also said in her March 4 column that Steven Chu, now Secretary of Energy, told the Journal in 2008: “Somehow we have to figure out how to boost the price of gasoline to the levels of Europe.” About 10 a gallon. All this because of the mongering of the climate change phobia.
“Instead of rushing towards expensive and unreliable ‘green’ energy sources that rely on American taxpayer dollars, it is time to stop the embargo against our own American oil supplies,” said Dan Kish, senior vice president of the non-partisan Institute for Energy Research. “In short,” he added, “the Administration is the cause of our energy problem, not the solution.” And the enormous rub is:
- Energy forecasts agree that fossil fuels will dominate the world’s energy market at least through 2030.
- Even policies to cut greenhouse gases and remove fossil fuel subsidies will only reduce carbon dioxide emissions from 39 billion metric tons of CO2 emissions to 35 metric tons.
- US emissions of CO2, a greenhouse gas from burning fossil fuels, will be less by 2030 than was earlier projected by the Energy Information Administration.
To carry out this foolish drive to dump billions into renewable energy sources are the energy Tweedledum and Tweedledee of the Administration: the Secretary of Interior Ken Salazar and the Secretary of Energy Steven Chu. Whether by land or by sea, the asininity over renewable energy continues to rob our nation of the energy it needs but is held captive by the Administration.
As recently as Feb. 7, these two Cabinet members announced plans to launch many offshore areas hundreds of miles at sea for wind farms, even though they admitted the expense would be unknown. Despite generous federal subsidies, wind power is expected to represents no more than 8 percent of the power generating electricity in the U.S. by 2030.
Millions of jobs and the cost of all goods and services have been affected by Secretary Salazar’s decision to place a moratorium on drilling in the Gulf of Mexico after the British Petroleum oil spill nearly a year ago. Salazar is notorious for his threat to keep a boot on the throat of British Petroleum during the company’s efforts to stop their massive oil leak.
“Boot on the Throat” Salazar finally let one deepwater drilling operation loose to find urgently needed oil in the Gulf of Mexico March 1, about 70 miles southeast of Venice, LA. This was done perhaps as a sweetener shortly before he was to appear before the Senate Energy and Natural Resources Committee to beg for a 59 percent increase in his $16 billion budget. At the hearing, Salazar was criticized sharply for creating uncertainty in the oil industry.
Oil industry officials have expressed concern that the tighter regulations Salazar has imposed could slow the issuance of other permits. Many drilling operations have left the Gulf to drill in other parts of the world.
The Gulf moratorium on oil and gas drilling was lifted in October in an obvious attempt to blunt a political issue before the November congressional elections. The director of the new Bureau of Management, Regulation and Enforcement said there had been “significant progress” in enhancing the safety of drilling operations.”
Salazar had suspended deepwater drilling moratorium in the Gulf in May after a federal judged threw out the ban. But, undeterred, the obstinate Salazar renewed the moratorium.
As oil prices and gas at the pump got more costly, the American Petroleum Institute Feb. 24 called on the Obama Administration to open up Alaska’s Outer Continental Shelf to vast oil and gas resources waiting to be developed.
Tweedledum and Tweedledee jointly announced in December “a comprehensive environmental analysis that has identified proposed solar energy zones on public lands in six western states…” It was said by Secretary Tweedledum Salazar to lay out “the next phase of President Obama’s strategy for “rapid and responsible” development of renewable energy on America’s public lands. Involved is one-sixth of our entire country.
Secretary of Energy Tweedledee Chu said, “It’s time to harness these resources and lead in the global clean energy economy…part of an integrated strategy to cultivate the entire innovation chain to create the jobs of the 21st century economy and put America on a sustainable energy path.” Solar power generates only about one percent of America’s electricity used. By 2030 it is expected to generate maybe two percent, with federal-dollar aid.
Chu is remembered for his startling idea to paint the roofs of all the houses in the world white to reflect the sun and thus reflect some of the sun’s heat and thereby save energy. His department’s budget now is $23 billion.
Logic, research, and experts’ forecasts seem to have little impact on the man in the White House and on Tweedledum and Tweetledee. Indeed, Washington is becoming an Alice in Wonderland.
( Original Article )