Skip navigation.
Home
Aggregating Energy Since 2006

Fossil Fuels

Oil, natural gas, coal

Shrieking for Energy

The "Coalition for Affordable and Reliable Energy" (CARE), a coal lobby marketing firm, has decided that laptop discoveries about coal will incite women to shriek out loud about "American Energy".

No spontaneous support shrieks have been reported on the Washington DC metro, where the advertisement is running.

There is a lot of support for "American Energy," including "American Energy Independence," "American Energy Security," and my favorite, "Americans for American Energy" (as opposed to Russians?!). The biggest "American Energy" front runners are wind energy, biofuels, and coal. No word yet on whether the European wind energy industry is thinking of changing their name in light of this development.

Minnesota energy historians may remember a similar "energy-excitement" marketing genre from the Padilla Speer Beardsley marketing firm (lesser known as Vanilla Pears and Birdseed), which was hired by the MN Department of Agriculture for their 2004 MN State Fair booth, which featured renewable energy.

Nothing says stereotype like white people in birkenstocks (and that lady second from the right is really whooping more than shrieking).  And no marketing campaign is cheaper than when you gather everyone in the office for the main photo op.  No word on whether the Dept of Ag feels shorted that they weren't invited to be in the picture.

Contrast that with the opposite trend for this Latin American wind energy campaign.

Now we're talking enthusiasm.  There's a wind turbine.  There's a guy.  Wind energy.

Details of the emerging energy marketing genre wars are unknown at this time, but will no doubt be vetted in future advertisements at other random locations where people are fairly oblivious to the point.

New LNG terminals going in

The New York Times today has an article on three new liquified natural gas terminals opening on the Gulf Coast in Lousiana, in the same area that was slammed by Hurricane Rita a year ago. The terminals would double the amount of LNG being imported into the country (currently around 3%).

Though NG prices are expected to drop in the short run, domestic reserves are predicted to fall in the coming decades, increasing the incentive to import more of our natural gas. LNG terminals pose environmental risks as well as security risks as possible terrorist targets.

Local Roundup

In what I hope will be a frequently recurring feature on Energista!, I browsed through the local papers to briefly note a few interesting stories.

Star Tribune

Pioneer Press

I didn't see anything from the local TV stations that was topical, but I would like to include them in these roundups as well. If you have ideas about what sources we should incorporate, comment.

Gas Prices Drop Most in MN

Last week's This Week in Petroleum notes that while every state has experienced a price drop in gas prices, Minnesota has been the greatest. Curious why?

[S]tates in the Midwest region (PADD II) are supplied from refineries within the region as well as by pipelines delivering products refined on the Gulf Coast. It appears that access to such extra supply may be why these states have seen larger price declines recently.

Of course, this assumes the prices are not being actually manipulated by the White House to benefit Republican candidates.

CA to Tax Oil Production?

I was writing up a nice piece about the ins and outs of Proposition 87 (pdf) in California which will tax oil production in the state and use the money to fund alternative fuels and reduce demand. But then I lost my work because I am an idiot.

So here. read an article about it that covers the players and motivations. Here is the site of advocates for the proposition.

Here is an insightful comment from the news article:

The cost of the tax would be relatively minor for many oil companies; Chevron, San Ramon, Calif., for example, which is leading the opposition, reported $4.35 billion in profit in the second quarter. But oil companies fear Prop 87's success could invite more government meddling that takes additional bites out of the bottom line.

Here is me getting back to work, a wee bit more frustrated.

NRDC Oil Ad

The National Resources Defense Council is raising money to air an ad (which you can watch via the link) to oppose drilling in the Arctic National Wildlife Refuge. Apparently, $300,000 will get this ad on the air.

It is a simple ad that makes the point that this oil will do little to get us cheaper gas while putting a protected area at risk from oil spills and pollution.

I'm impressed that we held off drilling up there for this long - though I expect the pressure to drill will not abate anytime soon.

Dept of Interior and Royalties

I recently posted a story about royalties in the Gulf that will not be assessed due to error. Now it turns out that Bush's Interior Department is not even collecting royalties it is entitled to.

The NY Times has a long article detailing this somber story. A number of auditors were ordered to stop trying to collect royalites owed by oil companies.

In two of the lawsuits, two senior auditors with the Minerals Management Service in Oklahoma City said they were ordered to drop their claim that Shell Oil had fraudulently shortchanged taxpayers out of $18 million.

In many areas of policy, the Bush Administration has claimed that it is more effective to work with businesses rather than fight them in courts. This is supposedly the idea behind its initiatives on air pollution and forest management. It sounds good and probably could be an effective strategy if done carefully.

The numbers suggest the Bush Administration is more interested in removing government oversite rather than creating effective government oversight. In the case of collecting royalties, Bush seems to think oil companies have better things to do that pay the amount they agreed to when they got the right to extract the oil wealth from our land.

Interior officials did not say how much money they had recovered from companies named by the auditors. But the agency’s own statistics indicate that revenue from auditing and enforcement plunged after President Bush took office.

From 1989 through 2001, according to a report by the Congressional Budget Office, auditing and other enforcement efforts generated an average of $176 million a year. But from 2002 through 2005, according to numbers that the department provided lawmakers last May, those collections averaged only $46 million.

Saudi Arabia Laughs at Peak Oil

The price of crude is down and Saudi Arabia has announced it is going to be pumping up oil production over the next several years.

Saudi Arabia plans to raise oil output to 12.5 million barrels a day by 2009 and will make new refinery capacity available by 2011, Oil Minister Ali al-Naimi said in Vienna today. Worldwide oil demand will be 84.7 million barrels a day for 2006, 100,000 barrels a day less than estimated last month, the Paris- based IEA wrote today in its monthly report.

Gulf Oil Royalties

Joe recently posted about the new oil discoveries in the Gulf Coast. It turns out that the oil extracted from these fields will be royalty exempt.

Doh!

Generally (in theory), when oil companies find oil in areas controlled by the federal government, they pay the government royalties for permission to extract. While the companies often seem to stiff the gov on how much they pay, this is the theory.

When oil prices are super low, the government still wants to encourage companies to search for new oil fields. This is because it takes so many years from finding a field to bringing oil from that field to market.

Without incentives to prospect in times of oil oversupply, the prices could be even more volatile than we are used to.

So when the market is oil rich (and the price is low), the government encourages companies to find new sources of oil by waving royalty payments for a period of time. It would appear that they did not include an expiration date for many of these contracts. Whoops.

This will cost the government billions while saving the already thriving oil industry that amount. Double whoops. If you have more of an interest in this, the Marketplace story (linked to above) talks about some Congressional attempts to figure out what is going on.

OPEC Meets

OPEC has declared it will keep production levels the same for now, but may slash production at the end of the year.

I had read somewhere that OPEC may be admitting new members to it during these meetings but I have not been able to find more information since then.

OPEC is the oil cartel responsible for supplying 40% of the world's crude.

Feeding the addiction

Those of us who want action on global warming will be less than thrilled about new oil reserves recently discovered in the Gulf of Mexico. The reserves are predicted to boost domestic reserves by 50%, though the article quotes energy analysts as saying the new discovery will do little to make us more energy independent or bring down prices at the pump. Maybe this will make ANWR more safe though. Heck, a lot of the Gulf is already a "dead zone" anyway, from all the pollution runoff from the Mississippi, right?

Chevron predicts 3 to 15 billion barrels of oil and natural gas in the 300 square-mile region. On balance, I would have to say that any new domestic natural gas reserves are a positive, however, since as natural gas prices rise, there is more and more pressure to build coal-fired power plants.

Coleman on Energy

Senator Coleman (R-MN) appeared in the Fergus Falls Daily Journal after giving an energy talk. He spoke about ethanol and energy independence.

As more alternative fuels are developed, more jobs are created. If we stop our dependency on foreign oil, it’s going to drive down fuel prices.

Does anyone has any idea how being less dependent on "foreign" oil will drive down local fuel prices? It seems to me that this is predicated on the belief that oil is expensive right now - which is true compared to its previous price, but not really true when you compare it to its usefulness. Double the price of oil, and purchasing it will still be "worth it."

Do politicians have any idea what it takes to become energy independent? Do they have any idea what the cost would be to replace all our foreign oil purchases with biofuels? I really don't think they do.

I am endlessly entertained by politicians who wax eloquent about free trade and how we need to expand it ... except for in the energy arena. When it comes to energy, we are supposed to believe that trade leaves us worse off. I haven't totally made my mind up on this issue, partly because no one has really addressed it on these terms yet.

I want to encourage ethanol, don't get me wrong. But it cannot work without substantial lifestyle changes in the United States. Ethanol will not help us unless we redevelop our land us patterns - especially here in the sprawling Twin Cities.

Wilson on Kennedy on Gas Tax

The esteemed Dr. E Wilson appeared on TV to discuss Mark Kennedy's gas tax suspension solution. He wants to temporarily suspend the 18 cent federal gas tax and subsidies to oil companies to solve high gas prices.

In other words, he is campaigning for Congress in the usual method - smoke and mirrors. It sounds nice but won't do much.

Notice how clean E's desk is ... I haven't seen it that clean since I first met her, days after she started!

BP Fouling up Alaska

An editorial in the Star Tribune this morning takes a peak at regulation and monitoring of oil pipelines in Alaska. They come down very hard on BP and Alaska state agencies. The impression is of a federal and state monitoring and regulation program that is only interested in preventing catastrophes.

"The rest result in official write-ups and fines that become a cost of doing business in the Alaskan oilfields, and perhaps create the misimpression that these pipeline operations are tightly monitored and regulated. In fact, the federal government limits effective oversight to pipelines whose high pressure and/or urban locations would mean catastrophe in event of a serious leak. The low-pressure, mostly rural lines that move oil around in Alaska are subject to much more lenient scrutiny, in which federal inspectors partner with industry-friendlier state agencies"

Additionally, there is the distinct possibility that BP was not satisfied with leniency from regulators also withhelding information that might have given indications as to the severity of the problems in the pipeline.

"This, then, is the environment in which BP may have been within the rules to operate a sludged-up, corroded pipeline for as long as 14 years, and well beyond its designed lifespan, without an internal inspection by electronic "smart pigs" -- despite plenty of external evidence that corrosion was thinning its walls to the danger point. Indeed, investigators are now reviewing allegations that BP not only brushed aside warnings from its own employees and consultants on this risk, but gamed its regulatory reporting to minimize the situation."

Oil Profits and Arms Purchases

An article at the TimesOnline links profits received due to the high oil prices to purchases of military goods. The month of July showed sales of $12.9 billion from the US to foreign governments – the largest single month during the Bush Administration. Besides being tied to the support for the US government’s foreign policy aims and other factors it is also related to oil profits.

"Other factors behind the leap in arms sales include the rising price of oil, which has given oil-producing nations more money to spend."

Syndicate content