Posts Tagged ‘Oil’


Power To Spare

November 6, 2009

Power To Spare

IBD: 6 Nov. 09

Leadership: As Palin jousts with Biden on energy independence, the government reports that we lead the world in energy reserves. From oil to gas to coal, we are sitting on prosperity. So why are we importing anything?

One of the interesting sidelights of the NY-23 race was an exchange on energy independence between Vice President Joe Biden and the former governor of energy-rich Alaska, Sarah Palin. Biden, who came in to campaign for Democrat Bill Owens, was reminded of the issue of energy.

“The fact of the matter is that Sarah Palin thinks the answer to energy was ‘Drill, baby, drill,'” Biden said at an Owens fundraiser, referring to Palin’s own campaign slogan last year. “No, it’s a lot more complicated, Sarah, than ‘Drill, baby, drill.'”

Actually, it’s not, according to a new report produced by the Congressional Research Service, hardly an outpost of the vast right-wing conspiracy or on the payroll of Big Oil. The report says that if all our energy resources are added up and converted to a barrels of oil equivalent (BOE), the U.S. has the largest reserves in the world.

According to the CRS, the U.S. has 1,321 billion barrels of oil (or barrels of oil equivalent for other sources of energy) if you combine its recoverable natural gas, oil and coal reserves. Russia is close behind with 1,248 billion barrels BOE. Other energy-producing nations, including many that export oil to the U.S., lag behind.

Of course, much of our world-leading reserves are off-limits by government edict. We recently commented on the federal government designation of 200,541 squares miles off the coast of Alaska as critical habitat for the abundant polar bear, effectively killing hopes to exploit the vast energy riches of the American Arctic.

Alaska’s Chukchi Sea, part of the designated habitat, holds more oil and gas than anyone thought — 1,600 trillion cubic feet of undiscovered gas, or 30% of the world’s supply and 83 billion barrels of undiscovered oil, 4% of the estimated global resources.

The CRS report also notes the U.S. has 28% of the world’s coal reserves, with Russia again coming in second with 19%.

Biden, of course, is famous for his rope-line remark in the 2008 campaign in response to a question on energy: “We’re not supporting ‘clean coal,'” he said. “Guess what: China is building two every week — two dirty-coal plants. And it’s polluting the United States. It’s causing people to die.” He went on to say, “No coal plants in America. Build them, if they’re going to build them, over there.”

Memo to Veep: We are dependent on fossil fuel energy and will be for some time. The folks at Peabody Energy say replacing coal would require 2,400 times more solar generation, 40 times more wind power, 250 new nuclear plants, almost double the U.S. production of natural gas, 500 hydro plants the size of the Hoover Dam or halving electricity consumption.

“Our overwhelming coal, natural gas and oil resources represent tens of trillions of dollars in wealth and millions of American jobs,” said Sen. James Inhofe, R.-Okla., who released the CRS data.

In her Facebook response to Biden, Gov. Palin noted Biden “cast one of only five votes against the Alaskan pipeline that has produced more than 15 billion barrels of oil, supplied nearly 20% of the nation’s oil, created tens of thousands of jobs (and) added hundreds of billions of dollars to the U.S. economy.”

There’s more out there not only in the Chukchi Sea, but also locked in Rocky Mountain shale and under the Outer Continental Shelf. Sadly, the report stated that the U.S. has tapped into only 13%, or 21 billion barrels of its oil reserves, with the other 87% still untouched. Drill, Joe, drill.


A Theory Running Out Of Gas

October 9, 2009

Peak Oil: A Theory Running Out Of Gas


IBD: 9 Oct. 2009

One year ago, Congress responded to the chorus of Americans calling for more American energy by lifting the ban on offshore drilling. For the first time in a quarter-century, it became legal to drill for more oil and natural gas reserves offshore. This anniversary allows us to look back on how far we have come since 2008. The sad reality is we have barely moved.

Earlier this year, Secretary of the Interior Ken Salazar announced he would delay the comment period for offshore energy exploration by six months. Salazar claimed that the previous comment period, which would have ended in March, “by no means provides enough time for public review.”

Evidently 25 years of delays and bans was not enough. During that quarter-century Congress had to make the decision each year whether to renew the ban on offshore energy, yet Salazar suggested that we were somehow engaged in a “headlong rush” to explore for energy offshore.

One reason behind this bureaucratic delay has nothing to do with developing a responsible energy policy. It has to do with the myth known as “peak oil.”

Peak oil was a theory developed decades ago that suggests we will soon reach a point of maximum oil production, after which oil will only become harder and harder to find, leading to an enormous energy crisis.

In fact, many still believe this theory today, including Al Gore, who told CNN that “we are almost certainly at or near what they call peak oil.” The Sierra Club’s executive director, Carl Pope, once warned that peak oil could come in 2010 and that “we’re better off without cheap gas.”

Since anti-energy elites ignore the massive amounts of oil that we do have but are banned from extracting, they propose new energy taxes to supposedly save us from future energy crises by punishing the use of oil. After all, if oil is the problem, then coercing America away from oil usage would be the answer.

The problem is that peak oil is fundamentally wrong.

Geophysicist Marion King Hubbert first suggested in 1956 that peak oil was a reality, and that we would hit our maximum rate of production sometime around 1970. But recent estimates of oil are actually an astounding three times larger than peak oil predictions, meaning the newest discoveries simply should not exist according to the theory of peak oil.

In Brazil, there could be as much as 100 billion barrels of oil offshore, including the Tupi oil field, which is the largest oil discovery in this hemisphere in 30 years. Had Brazilians been banned from exploring and conducting new seismic tests, they never would have made this massive discovery. Now Brazil is set to become an oil exporter.

Researchers from the U.S. Geological Survey concluded earlier this year that there are massive amounts of oil and natural gas in the Chukchi Sea off Alaska’s coast. They estimated that there could be as much as 157 billion barrels of oil in the Arctic, or nearly twice as much oil as was previously known to exist in that part of the world. The natural gas discovery is also greater than all of the previously known reserves in the Arctic.

Last year the USGS had to increase its estimate of oil reserves in the Bakken formation in North Dakota and Montana by 2,500%. The area is now estimated to hold more than 4 billion barrels of oil.

In Israel, experts underestimated the size of a huge natural gas discovery made in January of this year. The field is actually 16% larger than what had been estimated. Experts now claim Israel can supply itself with enough natural gas for two decades and could be an energy exporter.

In the United States, we have a 100-year supply of natural gas. Last year geologists discovered that gas reserves in the Marcellus Shale formation in Appalachia are actually 250 times larger than they estimated in 2002.

And recently, in the Gulf of Mexico, BP announced they had made a huge new discovery of oil, estimated to be as large as the biggest oil-producing spots in the Gulf, which means it could supply as much as 300,000 barrels of oil per day.

All told, there have been more than 200 new oil discoveries around the world this year alone. What these discoveries mean is our energy future does not have to be dictated by OPEC or energy taxes on American businesses. It is possible to have abundant and reliable sources of low-cost energy.

This runs contrary to what environmental extremists claim, namely that we have to make a painful transition to alternative fuels and renewables to avoid the disastrous effects of peak oil. In reality, we have reached the end of peak oil as a theory.

• Gingrich, former Speaker of the House, is general chairman of American Solutions. Everley is the energy policy manager at American Solutions.


Chevron’s Shakedown

September 4, 2009

Chevron’s Shakedown


The Law: If there’s any doubt Ecuador’s $26 billion lawsuit against Chevron is nothing but a scam to shake down Big Oil, check out a new video of Ecuadorean operatives who prove how justice works in that country.

Read More: Latin America & Caribbean

Chevron, which has been battling the most expensive lawsuit in history from Ecuadorean environmental radicals, released a video Monday showing the “political coordinator” from Ecuador’s ruling party telling a couple of contractors that he’d be glad to get them contracts to remediate rain forest pollution — for a $3 million fee.

See, the fix was already in that an Ecuadorean judge would rule against Chevron on a $26 billion lawsuit. After that, the “remediation” gravy would flow. Nevermind that Ecuador’s state oil company created the pollution. It was already in the bag that the judge would make Chevron pay.

The $3 million the “political coordinator” of Ecuador’s ruling party tried to extort would be divided three ways: $1 million for the judge, $1 million for “the presidency” and $1 million for the plaintiffs — a radical group known as the Amazon Defense Coalition.

But little did the Ecuadoreans know, their mafioso way of getting paid so repelled the two contractors, Wayne Hansen and Diego Borja, that they recorded it.

We understand why — their 22-minute video showing the shakedown plays like a sleazy knockoff of “The Godfather.” One of the contractors, who had done work for Chevron in the past, gave it to the company. The film can now be seen by anyone who cares about the facts of the case (or who just likes mafia movies) at “If this was in the Onion, it would be funny,” Chevron spokesman Kent Robertson told IBD.

But the tapes confirm three serious things: the Ecuadorean judge has already decided to rule against Chevron later this year, even before he’s heard the evidence; that he can no longer preside over this case; that the government, though not a party to the lawsuit, will benefit from the $26 billion jackpot; and that the judge can no longer credibly preside over the case; and that any appeal of the court’s decision would be, in the judge’s words on the video, “a formality.”

Whatever this is, it’s not justice.

The merits of Chevron’s case are irrelevant to Ecuador, whose judge is internationally recognized as the arbiter of the case. And the U.S. government’s passivity in this case is foolish. Chevron’s fate should be a lesson: Ecuador’s crooks will shake down American corporations for everything they have — and then some.


Cartoon: Congress Drilling for Oil (Taxpayer Money?)

August 3, 2009


Pipeline, Not Pipe Dream: Credit Palin

June 15, 2009

Pipeline, Not Pipe Dream: Credit Palin


Energy: Exxon Mobil’s surprise decision to join Trans-Canada on a vast Alaska gas pipeline project is a big step toward making the U.S. self-sufficient in domestic energy. By defying naysayers, Sarah Palin is now vindicated.

Read More: Energy

It must be sweet vindication for Alaska’s governor. Against critics who said her 1,712-mile natural gas pipeline project would never get off the ground, who should the project bag but the “big gorilla” of American energy — Exxon Mobil.

In a major surprise, Exxon announced Thursday that it had forged a partnership with TransCanada, the Canadian pipeline company that holds the state license for Palin’s $126 billion Alaska Gasoline Inducement Act project.

It’s a big vote of confidence in Palin’s top project from a by-the-books company known for its rigid investment standards.

“We evaluated all the options and it came down to our belief that this approach with TransCanada and Exxon Mobil was going to be the most successful project,” said Marty Massey, U.S. joint interest manager of Exxon Mobil Production Co. He said Exxon might look at expanding its participation.

Rival oil firms had whispered to IBD that it would never happen. “It’s gonna happen and we’re very excited about this development,” Palin told “Good Morning America” on Friday.

Doubters of Palin’s pipeline plan were numerous.

Some said the pipeline would be too big to work, and that a rival BP/ConocoPhillips project, called Denali, would doom Palin’s plan because Alaska didn’t have enough natural gas for both.

Exxon’s tilt toward TransCanada suggests the oil giant believes that’s not true. Exxon is America’s largest company, with extraction rights to a third of all Alaska’s gas reserves. It can use them to fill either pipeline. “We will make a decision based on commercial reality,” Massey said. “But . . . why would we put our money and not our gas in the pipeline?”

Obama administration officials who had nothing to do with this, like Energy Secretary Ken Salazar, rushed to claim credit too.What better vote of confidence could there be?

Other doubters had suggested the pipeline could never happen because of a global gas glut, making the pipeline uneconomical. But with the project slated for completion in 2018, and the need for natural gas expected to rise between 20% and 40% by 2030, it’s precisely now that such a project should be built.

“I think it’s very shortsighted” to assume that “market conditions are going to stay as they are today,” Palin told CNN. In an interview with IBD last July when gasoline hit $4 at the pump, she noted that if drilling had started in the Arctic National Wildlife Refuge just five years ago, when policymakers were dismissing the idea of $100-a-barrel oil, “we wouldn’t be in our predicament today.”

This is another in a series of successful steps to build the world’s largest commercial construction project. For this, credit Palin. Despite the too-hip ridicule of comedians like David Letterman, she was the one who got the pipeline past Alaska’s legislature, something governors had tried — and failed — to do for 30 years.

Other partners are sure to join, and the near-impossible task of bringing Alaskan energy to the continental U.S. is that much closer.

If there are any doubts left, note that it’s Alaska’s officials giving Palin the most credit. As Deputy Natural Resources Commissioner Marty Rutherford told IBD, Palin relentlessly drove this project, walking the process through the bureaucracy, asking questions, even going to Texas on Thursday to hear from Exxon itself.

“We’re sitting here and in a short two-and-a-half years we have two premier companies in the world moving this process forward,” said Alaska Natural Resources Commissioner Tom Irwin. “Thank you Gov. Palin, thank you participants and thank you Alaskans.”

With praise like this, maybe it’s time Palin started getting some attention for helping to secure America’s energy future — and less for having to defend herself from the dirty jibes of over-the-hill comics.

For Americans tired of high energy prices and dependence on foreign energy, Palin’s hitting some very big home runs indeed.


Addicted to Oil

January 28, 2009

Oil – Islam – Terrorism