Monthly Archives: November 2011

Obama Admin Seals Records of Murdered Border Patrol Agent Implicated in Fast and Furious

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By MARK HEMINGWAY 

And to think that Attorney General Eric Holder is getting testy about congressional calls for his resignation. After all, the Justice Department has nothing to hide, right?:

The Obama Administration has abruptly sealed court records containing alarming details of how Mexican drug smugglers murdered a U.S. Border patrol agent with a gun connected to a failed federal experiment that allowed firearms to be smuggled into Mexico.

This means information will now be kept from the public as well as the media. Could this be a cover-up on the part of the “most transparent” administration in history? After all, the rifle used to kill the federal agent (Brian Terry) last December in Arizona’s Peck Canyon was part of the now infamous Operation Fast and Furious. Conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the disastrous scheme allowed guns to be smuggled into Mexico so they could eventually be traced to drug cartels.

Link via Judicial Watch. The murder of a U.S. Border Patrol agent is related to the Justice Department willingly turning over thousands of guns to Mexican criminal gangs, and Obama administration is hiding information about his death from the public. Amazing.

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Washington’s Clumsy China Containment Policy

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by Ted Galen Carpenter

Although U.S. officials have insisted for years that they do not regard China’s rise to great-power status as a threatening development, Washington’s statements and actions increasingly belie those assurances. Any doubt on that point disappeared following President Obama’s November 17 speech in Canberra, Australia. In his address to the Australian parliament, Obama boldly asserted that “the United States is a Pacific power, and we are here to stay.” Observers in Australia and throughout the region interpreted that comment as sending a message to China that the United States was not about to quietly relinquish its hegemony in East Asia and let the PRC become the leading power.

The Canberra speech was not the only measure that suggested that Washington was adopting a harder line toward Beijing on security issues. Just hours before his address to parliament, Obama announced that the United States would send military aircraft and as many as 2,500 Marines to northern Australia over the next few years to develop a training hub to assist allies and protect American interests throughout the region.

The next day, while attending an East Asian economic summit in Bali, the president went out of his way to emphasize the importance of the U.S. defense alliance with the Philippines and pledged to strengthen that relationship. His comment followed a blunt statement from Secretary of State Hillary Clinton regarding the ongoing dispute between China and several of its neighbors (including the Philippines) over territorial claims in the South China Sea. “Any nation with a claim has a right to exert it,” Clinton stated during a visit to Manila on November 16, “but they do not have a right to pursue it through intimidation or coercion.” She added that “the United States will always be in the corner of the Philippines and we will stand and fight with you.” Although the latter remark could be interpreted merely as a restatement of the rationale for the six-decade-old mutual-defense treaty, given the secretary’s comments about the South China Sea dispute Beijing could certainly view her statement as a specific warning regarding that issue.

Those moves, along with previous efforts to strengthen cooperative military ties with other traditional allies such as South Korea and Japan and one-time U.S. adversaries such as Vietnam, have all the earmarks of a rather unsubtle containment policy directed against China. It is a foolish strategy that will complicate and perhaps permanently damage the crucial U.S.-China relationship. Perhaps even worse, it is a containment strategy that is long on symbolism and short on substance, thereby managing to be simultaneously provocative and ineffectual.

Take the U.S. decision to send 2,500 Marines to Australia. It is hard to imagine a scenario in which such a small deployment would be militarily useful. If there is a security contingency somewhere in East Asia, it is likely to be decided by air and naval power, not a meager force of Marines. Yet, while militarily useless, such a deployment conveys a hostile message to Beijing, thereby managing to antagonize the Chinese.

A similar conclusion is warranted with regard to the Obama administration’s transparent effort to revitalize the nearly moribund alliance with the Philippines. That chronically misgoverned, third-rate military power would hardly make a good security partner in any crisis. Yet by siding with a country that is deeply embroiled with China over territorial claims in the South China Sea, the United States once again appears to be going out of its way to antagonize Beijing.

That would be an ill-advised approach under the best of circumstances. But to embrace a containment policy—especially one that is primarily bluster and symbolism—when Washington badly needs China to continue funding the seemingly endless flow of U.S. Treasury debt verges on being dim-witted. It’s never a good idea to anger one’s banker. And one can assume that Beijing is watching U.S. actions, not just the pro-forma assurances that the United States wants good relations and does not regard China as a threat. Those assurances ring increasingly hollow, and one can assume that Chinese leaders will react accordingly. That does not bode well for the future of the U.S.-China relationship.

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OPEC and Obama Team Up to Fight Major Energy Breakthrough

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The world’s energy markets are being completely transformed.

The results of the changes will affect the global power structure, and America is going to be a major benefactor of it all.

If you believe we’re going to live in a utopia of solar panels and windmills, think the world is coming to an end because of carbon dioxide, or happen to be an Arab sheik that’s made a fortune off of America’s endless thirst for oil, you’re not going to like the change.

But if you want to invest in the future of American energy — and make some “evil” profits by helping accelerate the real American energy boom — then you’re going to like where things are headed…

Environmentalists on a Mission

Our helicopter touched down in the middle of a remote forest in the Western Canadian countryside.

The pilot asked, “How long you guys planning to be here?”

“Maybe four or five hours.”

He breathed a sigh of relief.

“That’s good?” we wondered.

“Yes. Last time some people wanted to come out here, I ended up sitting here for 14 hours. A bunch of college kids… they were looking for a rare bird, or a salamander — any kind of animal, really.”

“I take it they weren’t successful.”

“Nope. If they had found what they were looking for, none of what we flew over would be here right now.”

We were up in Northern Alberta, just outside Ft. McMurray. The pilot was talking about the flying he was hired to do for a group of environmentalists on a mission.

They were scouring the region for any reason to shut down all of the oil sands projects. Their last desperate hope was to find a cute, cuddly animal they could use to turn the public against more oil, lower gas prices, and an ample supply of conflict-free energy…

They didn’t find anything, and the boom followed.

As Nick Hodge shows you in this video, the town is absolutely booming. Waitresses are making $20 an hour; mobile homes are on the market for $600,000 — and getting multiple bids!

It’s been building for five years. And there are still new projects being built, expanded, and discovered.

More importantly, it’s just part of what’s changing the future of American energy.

America’s Real Energy Future

America’s energy future will be much different than what most people picture today.

Al-Falih, President and CEO of state-owned Saudi Aramco, summed up what’s really going on in America’s energy industry best when he said earlier this week:

The confluence of four new realities — increasing supplies of oil and gas, the failure of alternatives to gain traction, the inability of economies to foot the bill for expensive energy agendas, and shifting environmental priorities have turned the terms of the global energy dialogue upside down. Therefore, we must recast our discussion in light of actual conditions rather than wishful thinking.

He’s absolutely right.

We won’t be surrounded by solar panels and windmills. The cover has been blown off the scam, and the world is waking up to this fact fast.

But hopes for more energy independence aren’t dying as a result. They’re actually becoming more of a reality than they’ve been in decades.

The U.S. currently imports just 46% of its oil from foreign countries. That’s down from 60% a few years ago. On top of that, less than 20% of those imports come from outside the Western Hemisphere.

Great news, right?

It is for many who want more secure fuel supplies and (eventually) lower prices.

But it’s not good news for everyone. And some very powerful interests are fighting this change every step of the way.

Winning Fighting the Future

The few but powerful are fighting the transformation and breaking out all the old cronyist tools to do so: political influence, fear mongering, etc.

The biggest (and most ridiculous) example came last week when the Obama administration announced it was punting on a “controversial” pipeline.

The project, known as the Keystone XL Pipeline, is to stretch from the oil sands in Alberta down to the refineries on the Gulf Coast. It would also pick up oil from the Bakken formation in North Dakota…

In all, the pipeline would add a steady flow of 435,000 barrels per day to the United States and create as many as 20,000 jobs to build it.

Sounds perfect. A slew of jobs and energy, all paid for without a single dime of government “investment.”

But there’s a problem.

Groups opposing the pipeline claim one of the nation’s largest and most important aquifers — the Ogallala Aquifer, which accounts for 78 percent of the water used by residents and industry and 83 percent of the state’s irrigation water — would be greatly harmed by a spill.

They claim a single spill from the proposed pipeline would endanger the Heartland’s water supply and well over half of the nation’s food supply.

Inside Climate News reports:

Even a fairly localized spill could cause serious problems. The Ogallala is already under threat from over-depletion, because people are pumping out groundwater faster than it can be replenished by rain and snow. The strain is apparent in northern Texas, where some fear another Dust Bowl as the water table continues to drop.
When TransCanada evaluated the risk of spills on the pipeline, it found that over the next 50 years there could be 11 spills, each releasing more than 50 barrels of oil. (A barrel holds 42 gallons.) But a recent research paper by John Stansbury, a professor of environmental and water resources engineering at the University of Nebraska places the risk at 91 such spills over 50 years.

Sounds ominous, I know.

We’ve got to stop a pipeline from going through this aquifer.

The risks don’t justify the rewards…

What they don’t tell you, however, is that the aquifer is already crisscrossed by pipelines (see map below.)

Ogallala Aquifer Pipeline Map

There are dozens of pipelines carrying oil, natural gas, petrochemicals, and more through the aquifer. And they’ve been there for decades.

It makes you wonder, is it really the aquifer they’re fighting?

Of course not. They’re fighting the oil.

And there are a lot of powerful interests on board…

Saudi Arabia probably has the biggest stake in preventing the Keystone XL from ever being built. And it’s only going to get worse.

In order to prevent the riots and upheaval that have swept through many of its neighboring nations, Saudi Arabia has lavished cash on its citizens through public works projects, services, and handouts to the tune of $130 billion.

The aggressive spending has pushed the oil-rich nation to the point at which it needs oil to trade above $88 a barrel just to break even.

But that break-even price is only going higher as its best customer is becoming less dependent…

The United States is now important less oil from Saudi Arabia than it has in ages.

The percentage of oil imports coming from Saudi Arabia have declined from 11.2% to 9.3% five years ago.

The successful completion of a rapid, cost-effective transport system for the massive amount of oil being pumped out of the ever-growing supplies in the Bakken and Canadian oil sands would only further reduce Saudi Arabia’s geopolitical stronghold in the energy industry.

So Long, Wishful Thinking… Hello, Growth and Prosperity

One of the things we like to do in Freedom & Capital is to look back from the future. We do this to put current events in perspective and in the context of a bigger picture.

That’s why we can see these current events from 20 years down the line as the point when the energy world really changed.

Old entrenched interests fought against change and advancement…

Governments and their cronies tried to prevent new energy sources from coming online…

Environmentalists tried anything they could to advance their vision of what the future will look like, regardless of how inefficient and costly…

In the end, simple economics won out.

The old energy companies responded to demand and high prices and they pushed forward, developing everything they could.

And investors who looked beyond the week-to-week madness of the markets, politics, and other events made absolute fortunes.

Good investing,

Andrew Mickey Signature

Andrew Mickey
Editor, Wealth Daily

 

 

Gulf drilling, economies remain sluggish

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BY LAWRENCE J. MCQUILLAN

The House Natural Resources Committee held a hearing recently on President Barack Obama‘s drilling moratorium in the Gulf of Mexico one year after the ban was lifted. The results are not pretty if you’re concerned about rising energy prices and lost jobs.

Though drilling in the Gulf is allowed again, slow permitting and burdensome regulations are hindering operations. Activity has yet to rebound to pre-moratorium rates. A study by Quest Offshore Resources shows the number of active rigs is 37 percent less than before the Deepwater Horizon oil spill.

Before Obama imposed the deepwater drilling moratorium, there were 33 floating rigs with 29 drilling wells operating in the Gulf. The number of operating rigs was expected to reach 44 by mid-2012. Analysts now hope that activity will just climb back to pre-ban levels by mid-2012.

A robust oil sector is vital to Gulf economies and the country. Expediting drilling permits, which have tumbled by 59 percent, and facilitating the full return of oil operations will prevent the loss of thousands of jobs, boost economic growth and yield substantial government revenue.

During the moratorium, many companies shifted work to other offshore regions. Eleven rigs left the Gulf. Seven went to African countries; three to South America, and one to Vietnam. This translated to 60 wells lost and 11,500 jobs destroyed.

And the rigs that remained in the Gulf are not operating at capacity. The use rate of offshore drilling units in Gulf waters is 54 percent. Worldwide use rates average 80 percent. In Europe, rates regularly approach 90 percent.

Gulf economies are clearly underperforming, and there is no urgency from the Obama administration to change this alarming course. Interior Secretary Ken Salazar postponed auctions of leases scheduled for the remainder of 2011 until next year, potentially making 2011 the first year since 1965 that the federal government didn’t sell a lease in the Gulf.

The drop in Gulf drilling also impacts federal revenues. The economic forecasting company IHS Global Insight estimates that royalties, lease bids and rent payments amounted to more than $6 billion in 2009. Federal, state and local taxes related to Gulf offshore oil and natural gas operations totaled $13 billion. If drilling continues to stagnate, so will these revenues.

The ripple effect from a hurting oil industry extends to other sectors of the economy and beyond the Gulf area. Bruce Craul with Legendary Hospitality explained at the oversight hearing how the moratorium and sluggish recovery have damaged his industry. Many visitors to Florida are traveling on energy-related business. Without a thriving oil industry, they don’t come.

Inland states are bleeding jobs too. In Oklahoma, the Consumer Energy Alliance estimates slow government permitting is costing about 20,000 jobs in various industries.

The crisis is now. If the Gulf region’s enormous potential is to be realized, government obstacles to recovery must be eliminated.

McQuillan is director of business and economic studies at the Pacific Research Institute (www.pacificresearch.org).

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InterOil and Gunvor ink LNG supply deal

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InterOil and Pacific LNG have inked an Head of Agreement with Gunvor of Singapore for supply of one million tonnes of LNG per year from the Gulf LNG Project Papua New Guinea.

InterOil and Pacific LNG said that they were working to complete the negotiation and finalise a binding sale and purchases agreement with Gunvor by second quarter of 2012.

The Gulf LNG Project in Papua New Guinea comprises the Elk and Antelope gas fields and the planned liquefaction and associated facilities in the Gulf Province of PNG to be developed by Liquid Niugini Gas Ltd., InterOil and Pacific LNG’s joint-venture project company.

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