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

Posts tagged ‘Mancos Shale’

Oil producers want U.S. to restrict imports


By Kevin Robinson-Avila / ABQ Journal Staff Writer

The full story is here-> http://www.abqjournal.com/803674/oil-producers-want-u-s-to-restrict-imports.html

“ALBUQUERQUE, N.M. — New Mexico and West Texas oil producers are gearing up for a national effort to draw all major U.S. oil basins into a grassroots movement to restrict crude imports from overseas.

Leaders of the Panhandle Import Reduction Initiative, which launched in April in the Permian Basin, are seeking public meetings and rallies in other oil-producing zones to convert what’s now a regional initiative into a national movement, said Daniel Fine, associate director of the New Mexico Center for Energy Policy, who is working with local producers.

Those efforts will kick off in September with a presentation at the fourth Southeastern New Mexico Energy Summit in Carlsbad. After that, initiative leaders expect to hold public meetings in other shale oil basins, including the Bakken in Montana and the Dakotas and the Eagle Ford in South Texas.

“We’ll take it to Carlsbad first, and then it goes national,” Fine said. “We want to organize public rallies with producers and field workers whose jobs are at stake. This is a grassroots effort in the basins where the oil bust has taken place.”

The initiative is a reaction to the Organization of Petroleum Exporting Countries’ aggressive oil-pumping policies since mid-2014, which have helped drive global oil prices to ten-year lows and thrust domestic U.S. production into crisis. Initiative leaders say those policies were a deliberate effort by the mid-Eastern members of OPEC, particularly Saudi Arabia, to drive U.S. producers out of business.

Banning crude imports from overseas would undercut OPEC’s ability to manipulate prices, they say, and allow U.S. producers to ramp up domestic production to supply the U.S. market.”

Energy group hopes to reduce foreign oil imports


by James Fenton

The full article is at–> http://www.daily-times.com/story/money/industries/oil-gas/2016/06/14/energy-group-hopes-reduce-foreign-oil-imports/85855044/

“FARMINGTON – A group of oil and gas executives and energy policy experts from the Texas Panhandle and New Mexico’s piece of the Permian Basin are pushing a plan to restrict seafaring imports of foreign oil from coming into the U.S. in order to stabilize the oil and gas industry and bring back lost oilfield jobs.

The group’s plan, which would exempt crude oil imported from Mexico and Canada, is an effort to push back against the price wars the group said are being waged by OPEC, or the Organization of the Petroleum Exporting Countries, led by Saudi Arabia.

Members met at the School of Energy at San Juan College Tuesday to promote  the “Panhandle Import Reduction Initiative,” which they say could be implemented in multiple phases within 90 days of the next administration, with the ultimate goal of reducing heavy crude oil imports to about 10 percent of demand.

Launched in November, the initiative aims to cut foreign oil imports enough to activate more domestic drilling rigs and boost domestic production to meet current demand levels within four years.

Former state legislator and Four Corners Economic Development Chief Operating Officer Tom Taylor said the drop in natural gas prices eight years ago and the fall of crude oil in 2014, has delivered prolonged pain to the regional economy.

“We find ourselves … in a situation now where we’re down about 6,000 jobs, most of those in the oil and gas industry,” Taylor said of the San Juan Basin. “We have about 11,000 people who have left (San Juan County) … So while we’re down 6,000 jobs and down 11,000 people, we’ve built seven fast-food restaurants, three more under construction, and two big box stores. It’s a different world out there.

“But the fact of the matter is that the economic base of the community is in trouble. And not only is the community in trouble, but the state of New Mexico is in trouble, and not only is New Mexico in trouble but our nation and its security. It’s all tied together. It’s a very difficult situation we find ourselves in when we have one country that can control oil prices. It goes beyond free trade. It’s a problem we need a solution to. We are at the dependence of foreign oil.”

Taylor said about a third of New Mexico’s general fund comes from the oil and gas industry in the form of taxes and fees.”

JOIN THE FIGHT TO GET OIL FIELD JOBS BACK! REDUCE FOREIGN OIL IMPORTS:


 

 

For Immediate Release Farmington, New Mexico
Contact: Dr. Daniel Fine 505-771-1865
Christa Rommé 505-566-3618
THE SAN JUAN BASIN IS JOINING THE FIGHT TO REDUCE FOREIGN OIL IMPORTS TO INCREASE LOCAL PRODUCTION
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. And they have asked the San Juan Basin to join this call. Presenters from Texas and New Mexico will be leading a local discussion about what measures can be taken to reduce our national dependency on foreign oil. Similar to “buy local” campaigns across the nation encouraging retail consumers to spend their dollars at home, this proclamation would have Americans buy oil produced in America. Demand for US production would then go up, putting recently laid-off workers back in the field. The United States should no longer allow Saudi 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. 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 of Canada’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 but it could be too late for the US 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.


We are at a cross road and its time we take a stand. Imported oil is rapidly increasing and could or will return our country into the same dependency which began in the late 1970s and lasted to 2010; therefore, risking our national security. American investment in major oil projects has been stopped by the price war. So far OPEC and Saudi Arabia are over-producing in world conditions of over-supply to lower prices enough to prevent required replacement of shale reserves. This is the Panhandle Import Reduction Initiative’s answer to Doha and later OPEC in June and beyond:
Import Quotas will start a new cycle.


The presentation, featuring Dr. Daniel Fine with New Mexico Tech and New Mexico State Energy Policy, T. Greg Merrion and other industry experts will take place on Tuesday, June 14th from 11:00am – 12:45pm in the Merrion Room at the School of Energy at San Juan College, 5301 College Boulevard, Farmington. This event is free and open to the public.

Our View: Limiting oil imports would help to protect American producers


by the Lubbock Avalanche-Journal editorial board

The full story is here-> http://lubbockonline.com/filed-online/2016-04-28/our-view-limiting-oil-imports-would-help-protect-american-producers#.VzaWRPkrLIU

“When the price of oil drops, so does the cost of gasoline. But while people are enjoying paying lower prices at gasoline pumps, plunges in oil prices can cause economic damage in Texas.

And it can put American oil producers out of business when the price of foreign oil imports gets cheaper than the costs of extracting oil from the ground in the U.S.

Oil producers in the Panhandle recently announced the Panhandle Import Reduction Initiative. Their hope is to limit the amount of oil that can be imported from other countries.

We wish them success in getting sympathetic ears to hear their initiative and gathering like-minded people to help further it.

They are right that a limitation should be set on the amount of oil imports from the Organization of Petroleum Exporting Countries.

Representatives of OPEC’s 18 nations recently met in Doha, Qatar. Among their topics of discussion was whether to freeze oil production levels.

The nations didn’t reach an agreement on the subject.

“OPEC and Russia and various countries met and decided they weren’t going to freeze oil and, in fact, OPEC said they will increase production again. This will drive the price down to $26 (a barrel) again,” said oil producer Tom Cambridge.”

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.

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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