Daily Archives: April 11, 2011
His foreign policy is a mess; his war in Libya is causing many to have second thoughts about his Nobel Peace Prize; his path toward creating a government monopoly in health care is facing increasing resistance. But Barack Obama has succeeded in setting the world straight on one subject: using petroleum produced by Brazil produces less carbon and therefore causes less global warming than using petroleum produced in the United States.
Thank goodness for Mr. O. How would we have known if he hadn’t told us?
Here’s how he said it in a speech in Brazil on March 19:
“…we want to partner with Brazil…on the issue of energy…By some estimates, the oil you recently discovered off the shores of Brazil could amount to twice the reserves we have in the United States. We want to work with you. We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers. At a time when we’ve been reminded how easily instability in other parts of the world can affect the price of oil, the United States could not be happier with the potential for a new, stable source of energy.”
But dear reader, you didn’t see where he said Brazilian oil doesn’t cause global warming while our domestic product does? That’s because he didn’t say straight out. And why should he? After all, his Democrat predecessor is the guy who’s infamous for saying in sworn testimony: “It depends upon what the meaning of the word ‘is’ is.” So read on, and I’ll explain.
Obama refuses to allow oil drilling in American coastal waters (which hold between 66.6 billion barrels and 115 Billion barrels of oil) . He refuses to allow drilling in the Alaska National Wildlife Reserve (between 5.7 and 16 billion barrels) . He won’t allow drilling on most federally owned lands in the Lower 48 States (unknown gazillions). He is quite clear about the reasons he’s blocking domestic production. He says it’s an established “fact” that there is global warming, that global warming is caused by humans releasing carbon into the atmosphere by burning fossil fuels, and that the United States is the world’s primary culprit. Thus, he won’t allow drilling for oil on U.S. territory because that will force Americans to use alternative fuels and that will save the planet.
But if he says that the way to save the planet is to reduce Americans’ use of petroleum, logically it follows that he must believe that Americans should reduce their use of petroleum. Right?
But wait! He told Brazilians that the U.S. will start a “Strategic Energy Dialogue” to help Brazil develop its oil resources. The reason, he says is because “when you’re ready to start selling, we [Norte Americanos] want to be one of your best customers.”
But if blocking U.S. oil production will save humanity by forcing lower American oil consumption, how is humanity helped by Obama giving two billion of U.S. taxpayer bucks to help the Brazilian oil company Petrobras increase oil production in Brazil so that the U.S. can buy and burn more Brazilian oil?
There can be only possible logical explanation: Obama must believe that it’s okay to burn Brazilian oil instead of our domestic vintage because their stuff doesn’t cause global warming like ours does. And that can only be true if their oil doesn’t emit carbon.
But of course, that’s bunk. Oil is oil. A barrel of Brazilian oil leaves the same carbon footprint as the American variety. So there has to be another reason for Obama suppressing U.S. oil production while spending American tax dollars so we can buy more of it from Brazil. He reveals the answer elsewhere in that speech.
“In a region of the world where the legacy of colonialism is still fresh, there was a legitimate concern in the last century that opening your economies to more trade would lead wealthier countries to extract resources without regard to your own nation’s development. I understand that. At the same time, many Latin American nations, including this one, lived through decades of dictatorships where closed economies failed to produce decent standards of living for the vast majority of people…. But over the last decade, Brazil has.. that the spirit of capitalism can thrive alongside the spirit of social justice…” [emphasis added]
So with his own words, Obama lets slip his true reason for blocking domestic oil drilling while simultaneously providing U.S. funds for drilling elsewhere: he’s more interested in redressing what he believes is American guilt for what he perceives as past wrongs (“the legacy of colonialism is still fresh”) and to implement his concept of “the spirit of social justice.” Global warming and clean oceans are just phony fronts for this guy.
Recall that Obama is a man whose friends use the phrase “social justice” as a euphemism for Marxism. Redistribution of wealth, of healthcare, of the fruits of production and life.  This is a man, who like his friends and mentor, believes that “social justice” is achieved by destroying those who succeed in order to level the relationship between everyone, rather than allowing individual initiative to improve the condition of all.
And here we see Obama practicing “social justice” on the international scale. For his policy can only result in redistribution of wealth from the United States to other nations.
Oh yes, and there’s another result. His pal, George Soros, who considers the United States the main obstacle to world peace, has a huge investment in Brazilian oil. Those two billion American dollars will have the twin benefit of giving Soros a profit so he can put more money into groups such as MoveOn.org, People for the American Way and other radical groups that promote Obama and undermine the United States. Obama, for all his charm, expressed for example by his public handicapping of basketball tournaments, is a dangerous man, locked in and bemoaning the past.
One of this man’s very first acts as president was astonishingly petty, yet of stunning symbolic importance. He returned to Britain a bust of the great British Prime Minister (and supporter of colonialism) Winston Churchill. With this act Obama revealed much about himself. As he succeeded in diminishing the office of President by stooping to send a bit of bronze to England he will do whatever it takes to diminish our Nation as a whole. And transferring from us to others the ability to create wealth through the production of raw materials is simply a tiny part of his effort to accomplish that end.
 U.S. Department of the Interior, Minerals Management Service, Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation’s Outer Continental Shelf, 2006 and also has between 326 to 565 Trillion cu. ft of natural gas.
 U.S. Geological Survey Arctic National Wildlife Refuge, 1002 Area, Petroleum Assessment, 1998, Including Economic Analysis.
 A press release issued on the same day as Obama’s speech says a “U.S. oil and gas trade mission to be conducted in conjunction with the Latin Oil Week conference to be held at the end of May…” Clearly, Obama plans to increase oil production all over Latin America.
( Original Article )
In 1980, Brazil imported 77 percent of its oil. Now it imports 0 percent. During that same time period, America increased its oil imports from roughly 30 percent to 70 percent. If Brazil can become completely self-sufficient in oil, why can’t America start becoming more self-sufficient?
Brazil is one of the BRICs, an acronym that refers to the nations of Brazil, Russia, India, and China—the rising powers. The BRICs have been increasing their global economic power at such a fast pace that Goldman Sachs predicts they will become the four most dominant economies by the year 2050.
It’s no surprise that Brazil is among the nations with the biggest and fastest growing emerging markets. They have been making smart economic decisions.
Among those decisions was to stop depending on foreign energy sources. Since 1980, Brazil has increased its oil production by 876 percent. Now it actually has a surplus.
U.S. President Barack Obama has expressed his eagerness for Brazil to expand offshore oil drilling and export more oil. He recently said: “With the new oil finds off Brazil, President (Dilma) Rousseff has said that Brazil wants to be a major supplier of new stable sources of energy, and I’ve told her that the United States wants to be a major customer, which would be a win-win for both our countries.”
However, Obama does not share the same eagerness for America’s oil exploration. He would rather borrow more billions to purchase oil from Brazil.
Why would a president help a foreign nation while hindering his own? Some argue that it’s deliberate sabotage.
A “Human Events” editorial observes: “This dependence is the predictable result of deliberate policies, from locking private industry out of Alaskan oil fields, to hounding oil rigs away from the Gulf of Mexico…The Obama Administration is intentionally choking the life out of America’s dynamic, highly mobile economy… Everything becomes more valuable when its supply is limited. Rationing a limited supply of motion would bring great power to the masters of Big Government. Increasing the price of everything limits the consumption of everything.”
Columnist Victor Davis Hanson explains: “Apparently the common denominator here is a deductive view that high energy prices will force Americans to emulate European centrally planned and state-run transportation. That conclusion is not wild conspiracy theory, but simply the logical manifestation of many of the Obama administration’s earlier campaign promises.”
Already, gasoline prices have doubled under Obama. When Obama took office, the national average price of a gallon of regular gas was $1.79. Now it’s $3.58.
Under increasing pressure, Obama recently announced that he wanted a one-third reduction of oil imports within a decade. But what Obama says and what he actually does have historically differed.
Energy policies that fail to put America first did not begin with the Obama administration. They have been around for decades.
For example, environmental concerns have made it nearly impossible to expand drilling, extraction, and refining of oil in America. Ironically, these restraints have caused more harm to the environment than if they had never been put into place. Over the last four decades, roughly 60 percent of all oil spilled in American waters came from tankers and barges, while only 2 percent came from pipelines. There would have been much less spillage had we been allowed to get our oil by drilling domestically and transporting it via pipeline instead of having it delivered from other nations via tankers and barges.
And because America has increased its oil imports, other nations have increased their drilling. Included among the top ten sources of U.S. crude oil imports are Saudi Arabia, Venezuela, and Iraq. Human rights in these nations are not very good. So how much concern do you think they have for the environment when drilling for oil? Is it more or less concern than America would have?
Not only have environmentalists suffered from these policies, but so have consumers. Drilling for our own oil is cheaper than importing it.
Environmentalists and consumers have also suffered from ethanol policies. Making corn ethanol requires more energy than other fuels, which defeats the environmentalists’ goal of getting away from fossil fuels. And the consumer has to pay more for food when crops are used for ethanol production instead of food production.
Despite corn ethanol’s shortcomings, the federal government has been subsidizing its production in response to the lobbying efforts of environmental groups and agricultural corporations. That it has to be subsidized is evidence that market forces have not responded positively to it. If corn ethanol were economical and efficient, consumers would demand it and producers would supply it.
U.S. President Ronald Reagan best summed up the government’s view of economics: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Subsidies to promote uneconomical and inefficient sources of energy waste taxpayer dollars. The free market will embrace any viable energy alternatives to fossil fuels that are clean, economical, and efficient. But until those alternatives are developed, fossil fuels are the lifeblood of our economy.
Despite failed energy policies, those in government still blame the oil industry for high prices. There have been federal investigations to denounce and indict “greedy” oil executives. But the investigations consistently clear the defendants of any wrongdoing.
Blaming the oil industry is an easier sell to the public than reality.
First, global demand for oil has been increasing, especially in China and India. When demand rises, prices increase.
Second, Obama’s anti-drilling policies have driven down the production of domestic crude oil and gasoline. When supply decreases, prices increase.
Third, the government has been taxing oil companies at every level of production. When oil companies have higher costs, prices increase.
Taxes contribute more to the price of gasoline than oil company profits. The government profits more from oil than the oil industry. So who is the “greedy” one?
Oil companies have made record profits in the last few years because of the record amount of oil they have been selling, not because of how much they have been charging for it. Oil companies have a profit margin of about 9 percent on gasoline. So they make about 9¢ in profit for every dollar of revenue. That’s lower than the 13¢ average of companies in the S&P 500 index.
America needs to make a change. What we should be importing from Brazil is its oil policy, not its oil.
( Original Article )
Monday, April 11, 2011
Aaron Klein, bureau chief for World Net Daily, reported that Frank Wisner, former ambassador to Egypt, secretly met with Issam El-Erain, senior leader of the Muslim Brotherhood, at the request of President Barack Obama. This is not the first time that Obama has been charged with affiliating with Egypt’s opposition. U.S. Ambassador to Egypt Margaret Scoby was aware of the coup since 2008 and kept Obama apprised of her continuing talks with activists.
A senior in the Egyptian Parliament told WND that they were concerned why Obama supports Muslim interests. Prior to the last election, Obama encouraged President Hosni Mubarak to use voter monitors to ensure a fair election. Having lost almost all seats, the Muslim Brotherhood lost little time getting Obama involved. Obama was quoted saying he was deeply concerned about a possible fraudulent election and asked Mubarak to hold another. According to WikiLeaks, a senior Egyptian diplomat told WND he suspects Obama has been aiding protest planning through Mohamed Elbaraei.
Elbaraei just happened to arrive in Egypt shortly after protesting began and was asked to become the key negotiator for the Muslim Brotherhood with an eye toward the presidency. Coincidentally, Elbaraei just happens to serve on the board of the International Crisis Group, headed by George Soros. Recently, Fox News reported that Obama and Soros, plus other socialist colleagues, just happened to visit Mubarak after the last election. Why would Obama take Soros and his band of socialist/Marxists to Egypt when clearly Soros lives and breathes socialism/Marxism. The Washington Post (Feb. 3) said Soros hates Jews and seeks an Egyptian government comprised by the Muslim Brotherhood with Elbaraei as its leader. Don’t forget that Egypt owns and operates the Suez Canal.
I’m not very proud of what I learned this week.
( Original Article )
InterOil Executes Agreement With Samsung Heavy Industries and FLEX LNG to Construct a 2 mtpa Floating LNG Vessel
SINGAPORE and HOUSTON, April 11, 2011 /PRNewswire/ — InterOil Corporation (NYSE: IOC) (POMSoX: IOC) today announced that InterOil and Pacific LNG Operations Ltd., have executed agreements, conditional upon Flex shareholder approval and final FID, with Samsung Heavy Industries and FLEX LNG Ltd. (Oslo:FLNG) related to the construction and operation of a 2 million tonne per annum (mtpa) floating liquefied natural gas (LNG) processing vessel (FLNG). The FLNG project is intended to integrate with and augment proposed infrastructure to liquefy natural gas from the onshore Elk and Antelope gas fields in the Gulf Province of Papua New Guinea pursuant to preliminary arrangements with Energy World Corporation and to link with InterOil’s proposed condensate stripping plant (CSP) being pursued in joint venture with the Mitsui Group and to accelerate the intended monetization of the Elk and Antelope fields. Commencement of the FLNG vessel’s operations is targeted for mid 2014.
FLEX LNG has informed InterOil that it has already completed the generic Front-End Engineering and Design (FEED) in 2009. The project specific FEED is targeted to start in May 2011, with all parties working towards reaching a final investment decision (FID) before the end of 2011. The agreements represent a continuation of the over 12 month collaboration between Samsung Heavy Industries, FLEX LNG, InterOil, Pacific LNG and Liquid Niugini Gas Ltd. (LNGL), InterOil’s joint venture LNG project company with Pacific LNG, to work together to develop the first floating facility to produce LNG.
FLEX LNG and Samsung Heavy Industries will be responsible for the design, engineering, construction and commissioning of the FLNG vessel. FLEX LNG will also be joint operator of the FLNG vessel together with LNGL. Construction of the FLNG unit will be fully financed by FLEX LNG and Samsung Heavy Industries.
The FLNG vessel is expected to be moored alongside the proposed jetty located in the Gulf Province, which will be shared with InterOil’s proposed land-based LNG facilities, and have a production capacity of up to 2 million tons of LNG per annum and to process an estimated 2.25 trillion cubic feet of gas over a firm 25-year period. FLEX LNG will receive 14.5% of the revenue, less agreed deductions and premiums, from the sale of LNG from the FLNG vessel for an initial 15-year period. Thereafter, for the next 5 years FLEX LNG will receive 12.5% of the revenue and 10% of the revenue for the last 5-year period. During the 25 year term of the contract, LNGL will become a part owner of the FLNG vessel.
As a part of the arrangements, InterOil and Pacific LNG will receive options, exercisable no later than 15 days after Flex LNG shareholder approval of this equity transaction, to acquire 11,315,080 common shares of FLEX LNG at an average strike price of 4.5909 NOK. This is approximately a 12% premium to the average FLEX LNG share price during October 2010 when an initial non-binding agreement was executed between FLEX LNG, InterOil and Pacific LNG.
Additionally, upon the project reaching FID, InterOil and Pacific LNG will receive FLEX LNG shares at par value equivalent to 5% of FLEX LNG. An additional amount of shares equalling up to 15% ownership in FLEX LNG may be issued to InterOil and Pacific LNG for $0.01 per share in three 5% tranches during the period from FID until 9 months after FID.
The agreements signed with InterOil, Pacific LNG, LNGL and Samsung Heavy Industries are all conditional upon FLEX LNG’s shareholders approving the proposed equity transaction with InterOil and Pacific LNG and achieving a positive project FID. Such approval is targeted for April/May 2011 and FID by the end of 2011.
Commenting on the agreements, the Chairman of InterOil, Phil Mulacek stated: “InterOil is proud to be partners with Samsung Heavy Industries, FLEX LNG, and Pacific LNG in a proposed project utilizing a FLNG vessel to accelerate the commercialization of our natural gas resources in PNG. The confidence of Samsung, the largest Korean conglomerate, to be the undisputed leader in FLNG, with a full completion guarantee, solidified our participation. All stakeholders benefit from higher utilization of the core infrastructure and high quality gas assets required for the project. The additional time required to increase upstream capacity and integrate the proposed marine facility to accommodate the FLNG vessel is warranted by the increased scale of the entire project and the incorporation of additional respected industry partners. In less than one year, we have negotiated agreements, contingent on FID, to construct facilities for the processing and sale of 5 mtpa of LNG (4.5 Tcf of natural gas) in addition to our expanded CSP project.”
( Original Article )
By Lawrence J. McQuillan
President Obama just released his new energy plan. After a bruising battle over “cap and trade” last year, Obama has set his sights on another target — oil and natural gas companies. Vilifying “big oil” might be good politics, but it’s bad policy. If we’re going to get serious about energy solutions, we first need to separate the facts from the fables.
Fable: Oil and gas companies aren’t paying their fair share of taxes.
U.S. oil and natural gas companies pay considerably more of their profits in taxes than other industries such as technology and financial services. In fact, the industry pays an effective corporate income tax rate that is 70 percent higher than roughly three in 10 S&P industrial companies.
As for those billion-dollar subsidies oil and gas companies supposedly enjoy, they don’t exist. The industry gets tax deductions, as any business does, but they are far less generous than those enjoyed by others in the energy sector. While oil and gas receive slightly more than 1 percent of government energy R&D funding, renewables receive 22 times as much funding.
Fable: Oil and gas industry profits are “excessive”.
Many lawmakers have long pushed to increase taxes on oil and gas companies.
After all, these companies are, in President Obama’s words, “doing just fine.” Why not spread the wealth?
The trouble is, oil and gas companies aren’t as flush as lawmakers make it seem. Like other commodity businesses, oil and gas profits are cyclical, making them prone to booms and busts. According to PricewaterhouseCoopers, in all but four years from 1987 through 2006, oil and gas companies actually earned a lower return on their capital investment than other industries.
This is a key measure of comparative economic performance.
The costs of finding and producing oil and natural gas are always steep.
With much of the world’s conventional oil and natural gas reserves already developed, companies are turning to increasingly expensive non-conventional and offshore projects to meet the nation’s energy demands. Whereas land-based drilling is relatively cheap-as low as $20 per barrel-production costs for offshore oil can run between $60-$70 per barrel. Oil sands are even higher.
Fable: Taxing oil and gas companies will reduce the national debt.
Besides the fact that oil and gas companies are already paying their fair share of taxes, there is another problem with this argument, namely, the oil and gas industry is a cash cow for government already. According to data from the U.S. Energy Information Administration (EIA), between 1981 and 2008, U.S. governments collected more in taxes from the oil industry than the industry earned in profits for shareholders. Raising taxes on the industry even more will only discourage investment, reduce exploration and production, and eliminate jobs.
Fable: Raising taxes on oil and gas companies will bring us closer to a “clean” energy future.
Oil and gas companies pour billions into alternatives to conventional energy. In fact, University of Texas researchers found that from 2000 to 2008, the oil and gas industry invested more in alternative energies than the federal government and all other U.S. industry combined.
For all the presidential finger pointing, the oil and gas industry is not the problem. Oil and gas are necessary parts of our current energy supply and, along with renewables, will play a critical role in securing America’s energy future. If President Obama wants his new energy plan to succeed, he’ll abandon energy fables and start dealing with realities.
( Original Article )