Analysis by the father of American Geopolitics Dr. Daniel Fine, MIT.

Archive for the ‘Governor Martinez’ Category

Texas Panhandle And Artesia New Mexico Strike Back With Import Quotas On Foreign Oil: A Reaction To Doha Meeting


The complete press release is here-> http://www.prnewswire.com/news-releases/texas-panhandle-and-artesia-new-mexico-strike-back-with-import-quotas-on-foreign-oil-a-reaction-to-doha-meeting-300253143.html

AMARILLO, Texas, April 18, 2016 /PRNewswire/ — The Panhandle of West Texas, a center of American oil since early in the 20th century, answers OPEC and Saudi Arabia with a call for a Presidential Proclamation to establish quotas on imports of foreign oil.

The counter to the Doha meeting is a “line in the sand” against further price and supply wars against oil communities, working families, and producers not only in Texas and the Southwest but across the entire US. The United States should no longer allowSaudi Arabia and the middle east to manipulate our economy by crippling our ability to produce and use our own natural resources. We have been forced to comply with the consequences of decisions made by a country whose intent was to take over a “market share” that was ours and make it theirs.  The results were oil prices plummeting to $26 a barrel.

The “bust” in oil exploration and production has left families, companies, both large and small, with bankruptcy and hundreds of thousands out of work.  Since Thanksgiving of 2014, Saudi Arabia has increased its production to lower prices to shut-in unconventional oil in all areas of the US but specifically in Texas, Oklahoma and Appalachia where “stripper or marginal wells” are more prevalent. It is a price war which has suspended the prospect of American energy self-sufficiency.

The Panhandle Import Reduction Initiative for oil import quotas on foreign oil is nothing new.  It aims to revive the 1959 quota system of President Eisenhower who acted to sustain a healthy oil industry and middle class communities which it employs for reasons of national security.  And it worked for 14 years to keep domestic oil from going out business because of foreign imports.

Import quotas on light tight oil will be 100% — no more imports within the first 60 days of the new American President’s term next year.  Light tight oil or oil from shale is an American technology triumph and the pathway to abundance and security against foreign oil supply cut-off threats. Southwest and Dakota oil will be unbound.  North American oil will avoid the risk of dependence on the world ocean as the transportation for imports.  Oil from shale has so far supported national income savings in the balance of payments of over 500 billion dollars in the last five years.

President Eisenhower’s import quotas limited heavy sour oil to 10-12% of yearly American oil demand — enough to take care ofCanada’s current exports to the United States.

The lower the oil price goes and the longer it stays there because of the Saudis flooding the market, the higher it will go and the longer it will stay there when demand gets greater than supply. This will happen because the US operators and other international companies are not investing in exploration, the oil that we will need in 5 to 10 years is not being discovered and developed today. OPEC cannot supply all the world’s needs. When demand outpaces supply, the price will skyrocket and stay there until the oil operations that are now curtailed can ramp back up. That may take years due to all the layoffs taking place today. All consumers will be hurt by the high prices. That would not happen if we had reasonable prices today to let us keep exploring for and developing new oil reserves for our future needs.

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This is what an oil bust looks like by Jonathan Thompson


Low prices have energy companies and communities reeling as rig counts plummet and unemployment climbs.

The full article is here-> http://www.hcn.org/articles/this-is-what-an-oil-bust-looks-like

“In early March, Daniel Fine, associate director of the New Mexico Center for Energy Policy, told a gathering of tribal energy officials that the oil bust is officially on. Those gathered, however, sure as heck didn’t need an expert to tell them that. In the oil and gas patches it has become clear that the economic gains of the so-called shale revolution are being wiped away by one of the worst fossil fuel downturns in U.S. history.

Now, the oil companies are crying for help. First, they got the crude oil export ban lifted. Next they want proposed federal rules on methane emissions weakened or scrapped. As if any of that will help.

Back in 2010, the price of a barrel of Brent crude (the international oil price benchmark) topped $80. That made it profitable to extract oil from tight shale formations, which is especially costly. A drilling frenzy ensued, domestic oil production skyrocketed, oil companies raked in profits and oil patch communities prospered.

But all that new oil on the market, plus China’s slowing economic growth, began to dampen oil prices in the summer of 2014. Instead of curtailing production to keep prices afloat, OPEC’s leaders launched a thinly veiled price war, clearly aimed at putting U.S. producers out of business. Here are some indicators that OPEC won the war:

The U.S. rig count has collapsed to levels not seen since, well, ever. With both oil and natural gas prices at near-record lows, it simply doesn’t make economic sense to spend up to $10 million to drill a well. So the rigs are shutting down. In September 2014, 1,931 oil and gas rigs were operating in the U.S.; today there are just 476. That’s a 75 percent decrease, and it’s still some 50 percent lower than the 1987 count, which followed what was considered the biggest, baddest bust ever, until now. Tom Dugan, who runs an oil and gas production company in northwest New Mexico, told the Farmington Daily Times, “It’s the hardest bust I’ve been through and I have been in this business for 57 years.”

Energy policy expert says oil slump a bust


by James Fenton, jfenton@daily-times.com5:02 p.m. MST March 5, 2016

The complete article is here-> http://www.daily-times.com/story/money/industries/oil-gas/2016/03/05/energy-policy-expert-says-oil-slump-bust/81289608/

FARMINGTON — “It’s officially a “bust.”

That’s the verdict from Daniel Fine, one of Gov. Susana Martinez’s senior advisers on energy policy. The U.S. oil and gas industry — and the San Juan Basin — is in a “bust” period, Fine said Tuesday at an inter-tribal energy conference at San Juan College’s School of Energy.

“This is what a bust is. You lose the workforce,” said Fine, who is associate director at New Mexico Center for Energy Policy at New Mexico Tech. “Loss to the country and to the Southwest will be the workforce. It will be decimated at levels of less than $30 a barrel (of crude oil).”

And 2015 was a year of layoffs and cutbacks.

Since the collapse of oil prices on the commodities market in fall of 2014, the number of  workers laid off from local oil and gas companies — from the large corporations to the smaller independents — has been in the thousands.

“We’re in a ‘bust.’  So be ahead of the curve, and think ahead in this business by at least six months,” Fine told the Native American and non-tribal energy leaders and business people in the Merrion conference room at the new $15.8 million school.

He said looming federal regulations such as the the U.S. Bureau of Land Management’s proposed Onshore Oil and Gas Orders Nos. 3, 4 and 5 along with proposed updates to its rule aimed at reducing “fugitive” atmospheric methane from oil and gas operations were doubling the pain already caused by low crude oil prices. He said that a third of all U.S. oil and gas producers — especially those burdened with debt — will inevitably go bankrupt.

But Fine’s sobering analysis wasn’t without one ray of hope for the industry.”

Fine: Washington, D.C., on oil and gas


by Dr. Daniel Fine, New Mexico Center for Energy Policy

The complete article is here-> http://www.daily-times.com/story/opinion/columnists/2015/12/28/fine-washington-dc-oil-and-gas/77979916/

The “deal” between the parties over the energy future of the United States and the San Juan Basin at the end of 2015 was the most misguided example of politics at the fuel pump since the 1970s. Then it was retail price control and now it’s a free-for-all in the price of oil in the world market with West Texas Crude approaching 10-year lows.

Lifting the restriction on exporting crude oil adds American oil to a world market which is over-supplied. Expect no cash flow increase for American producers and still lower world prices than with the restriction or ban in place.

This is not the place to assess the other side of the “deal.” However, tax credit extensions for wind and solar as alternative fuels to replace coal and later natural gas are no longer of concern to the Republican Party in Congress.

With petroleum economics based on market prices, there is virtually no way that the “deal” will bring about tens of thousands of new jobs in the oil and gas fields. How does exporting crude oil lead to increased drilling and rig deployment if this increases supply in an oversupplied world market? On the contrary, it leads to lower prices and negative cash flows for producers who must cut their workforces.

If oil and gas prices rebound in the next three years, the alternative fuels are beneficiaries as tax credits shape new non-fossil fuel investment, offsetting the risk of lower oil and gas prices, This was no doubt the objective of the climate change politics of Paris and the Democratic Party in Congress as well as the White House.

Although U.S. oil refiners will have a transportation cost tax adjustment from the “deal,” what prevents them from buying foreign oil at lower prices than American oil (North Sea Brent at declining prices)?

Daniel Fine is associate director, New Mexico Center for Energy Policy at New Mexico Tech, and project leader of the Energy Policy, state of New Mexico, Department of Energy Minerals and Natural Resources. The opinions he expresses in this column are his own.

Governor Martinez first Hispanic to lead GOP governors


LAS VEGAS, Nev. – Gov. Susana Martinez will hold the reins of the Republican Governors Association through the 2016 election cycle, after being elected Thursday by fellow GOP governors as the deep-pocketed national group’s new chairwoman.

The vote means Martinez’s national profile will likely rise, as she’s expected to spend large chunks of next year traveling out of state to raise money and rally support for Republican gubernatorial candidates around the country.

N.M. Gov. Susan Martinez

But she insisted the increased RGA duties – which began immediately with Thursday’s election – will not distract her from her day-to-day responsibilities in New Mexico.

“It’s an honor, and it allows me to showcase New Mexico throughout the country,” Martinez told the Journal during a break from the RGA annual meeting, held at the Encore at Wynn Las Vegas hotel. “I think that’s really an amazing opportunity.”

Martinez, who had been the RGA’s vice chairwoman, is the first woman and first Hispanic to lead the GOP governors group. She was recommended for the top position by the RGA’s executive committee and elected to the post Thursday by acclamation. Wisconsin Gov. Scott Walker, who recently dropped out of the Republican presidential race, was elected the group’s vice chairman.

No other Republican governors formally announced bids for the chairmanship.

NM Energy Outlook Summit: Forecasts hazy for industry in flux by Sal Christ Reporter Albuquerque Business First


For the complete article use this link–> http://www.bizjournals.com/albuquerque/blog/morning-edition/2015/11/nm-energy-outlook-summit-forecasts-hazyfor.html

Panelists at Business First’s second annual New Mexico Energy Outlook Summit yesterday offered but one common ground: Something needs to be done to turn the industry around.

Emceed by ABF publisher Candace Beeke, the event brought together Dr. Daniel Fine, associate director of the New Mexico Center for Energy Policy at New Mexico Tech and a senior policy analyst in the New Mexico State Department of Energy Minerals and Natural Resources; Ron Darnell, senior vice president of public policy for PNM Resources (NYSE: PNM); Bob Gallagher, president of RMG Consulting; and Regina Wheeler, chief executive officer of Positive Energy Solar.
Ron Darnell, senior vice president of public policy at PNM Resources, speaks during Thursday’s New Mexico Energy Outlook Summit while Regina Wheeler (left), CEO of Positive Energy Solar, looks on.

Over the course of 90 minutes, which included a keynote speech delivered by Fine and a panel discussion, the group addressed questions about the state of the energy industry in New Mexico and the United States, what 2016 might look like for the oil and gas industry and possible solutions to the current industry slump. While driven, in part, by audience-submitted questions, everyone offered a much differing perspective.

In his keynote speech, Fine said he was “coming with realism and bad news” and believed that while no one can forecast the price of oil, “we should prepare for 2003 prices.” He estimated that the price of oil could drop to the $22 to $28 range by June 2016.

Fine also said that the state could see a 10 percent reduction in shale production by that time, as well. He cited increased foreign production of oil over the last couple of years, China’s stabilization at a lower growth rate, decreased commodity demand and the Organization of Petroleum Exporting Countries’ (OPEC) price war with the U.S. shale industry.

Publisher’s Note: Energy Industry Critical to New Mexico, Your Business


For the complete article use this link–> http://www.bizjournals.com/albuquerque/blog/2015/11/publishers-noteenergy-industry-critical-to-new.html by Candace Beeke is the president & publisher of Albuquerque Business First

It’s time to talk seriously about the energy industry in New Mexico. And you have some work to do.

Whether your business is directly involved in this industry, it’s very much tied to its outcomes — and right now, there’s much concern about that in the state. After all, some 30 percent of New Mexico’s tax base comes from oil and gas. And you’ve read the headlines we’ve been reporting on how that sector is faring. If you haven’t, let me recap — it’s a fracking mess. The price of oil dropping more than a year ago has resulted in rapid cost cutting from many of the energy majors, including ConocoPhillips (NYSE: COP) and Halliburton Co. (NYSE: HAL), both of which have major operations and workforce in New Mexico — although smaller now.
Some 30 percent of New Mexico’s tax base comes from oil and gas.

But that’s just one sector of energy. At Albuquerque Business First’s Energy Outlook event Nov. 12, we will hear from the CEO of one of the fastest-growing companies in New Mexico — Positive Energy Solar. And Positive wasn’t the only energy player on ABF’s List of gazelle companies this year. Affordable Solar Group ranked high and made Inc.’s list of fastest-growing companies, as well.

In addition to solar, we will hear from New Mexico energy giant PNM Resources (NYSE: PNM), which has its hands stretched into multiple sectors of energy. We’ve also added oil and gas expert Bob Gallagher, whom many of our readers will remember from his decade of leading the state’s oil and gas association, NMOGA, as well as his time as advisor to the U.S. Secretary of Energy. Gallagher tells me it’s not all doom and gloom in New Mexico oil and gas. In fact, he knows of pockets in the state that are growing rapidly and seeing strong new investment.
But New Mexico doesn’t operate in an energy vacuum. It’s critical for our companies — whether involved directly in energy or on the periphery of it, as most of us are — to understand the global and national challenges facing this industry. Dr. Daniel Fine from the Center of Energy Policy at New Mexico Tech will give us that broad overview and tell us what’s coming in the future.

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