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

Posts tagged ‘Natural Resources Committee’

Fine: NAFTA, natural gas and the San Juan Basin


As seen here in the Farmington Daily Times-> http://www.daily-times.com/story/money/business/2018/01/28/fine-nafta-natural-gas-and-san-juan-basin/1032781001/

The North American Free Trade Agreement is now in a final stage with the U.S. team looking over the “energy chapter,” which has been approved by Canada and Mexico. The Administration’s position, with a revisionist-protectionist core, offers President Trump a withdrawal-from-NAFTA option, at least a tactical move to shake up Canada and Mexico in the interest of American merchandise and agricultural exports.
However, not much is known from the inside on plans for natural gas exports to Mexico.  In 1992, the beginning of NAFTA, Mexico’s oil and gas industry was government owned and operated so it fell outside a free trade agreement.
Today, Mexico permits private capital to build, own and operate oil and gas exploration, production and transportation (pipelines) under its Energy Reform Law.
This admits natural gas into the NAFTA framework. Nearly $6 billion of Southwest natural gas was sold (exported) to Mexico last year.

Mexico imports 53 percent of its natural gas from the United States – with 60 percent on track. Needless to say, Mexico is dependent on American natural gas for its power generation.Texas natural gas pipeline entry points dominate the trade, while the Delaware and the San Juan basins are next as business and strategic sources.
The Mancos Shale natural gas below the Four Corners must access the expanding Mexican market in any revision of NAFTA terms. The Trump Administration’s understanding of American natural gas trade with Mexico should include regional economic integration. Energy is required for Mexican industrial growth, and Mexico has constructed the pipelines on its side border to receive and transport natural gas from the Permian and the San Juan Basin.

NAFTA revised should make natural gas exports from the U.S. Southwest a natural resource exemption from narrow foreign trade objectives. Natural gas reserves in the Southwest can be accessible to Mexican importers if pipelines to cross-border points attract American investment long-term. NAFTA changes
would create risk disincentives.

U.S. NAFTA negotiations can be aligned with the Trump-Zinke energy policy of world domination if the export “New Mexican natural gas” is designated a “win – win.”
If the Mexican market for American natural gas is lost, New Mexican natural gas would be mostly “stranded” without offset storage; and, it would push back on the Permian with an oil-only reality as the output of gas from Pennsylvania and Ohio output expands.

Unless Texas and New York media understand the history behind the oil price collapse history of 2014-2016 the industry and public will be compelled to repeat that history soon.

Oil prices are coupled into a “bubble”; or worse – speculation in a “coin” which exists as a product of computer software. Is Bitcoin speculation infecting the value of oil in commodity trading at least momentarily?
Will hedging create a trade?

With New Mexico oil production over 500,000 barrels per day (323,000 four years ago), the coming 30 days in Santa Fe (Legislative Session) should see a Democratic Party state budget expansion or plain spending offensive which would mirror 2018 primaries and general election conflict between progressives and centrists.
There is no threat from off-shore (Atlantic and Pacific Ocean) to New Mexican oil and gas development. President Trump is right to remove off-shore prohibitions, but now the market takes over. The cost of San Juan Basin natural gas is 80 percent less than exploration and production 50 miles out in North Carolina’s Atlantic Ocean.
Three or four dimensional seismic investments—yes; production—no; not as long as there is economic shale natural gas on-shore in New Mexico and the Southwest.

Daniel Fine is the associate director of New Mexico Tech’s Center for Energy Policy. The opinions expressed are his own.

Advertisements

ENERGY DOMINANCE NEEDS NAFTA 1/16/18 Heritage Foundation


Description

Last year, U.S. Trade Representative Robert Lighthizer notified Congress of the Trump Administration’s intent to modernize the North American Free Trade Agreement (NAFTA). After several rounds of negotiation among the United States, Canada, and Mexico, many critical issues remain unresolved.

Opportunities abound for negotiating a better NAFTA. As the Trump Administration pushes for modernization, one commonsense policy area that should be preserved and improved is energy. Canada and Mexico are two of America’s most important trade partners in energy markets. The Trump Administration should build off that success. Strengthening the integration of energy markets among the three countries will unleash the massive amount of energy abundance in North America.

Join us as we hear from experts on how enhancing energy trade with Canada and Mexico will result in more jobs and affordable power for American households and help achieve the Trump Administration’s goal of energy dominance.

Overcapacity and the price of oil Dr. Daniel Fine, New Mexico Center for Energy Policy


The full article is here-> http://www.daily-times.com/story/money/industries/oil-gas/2017/06/25/overcapacity-and-price-oil/397050001/

“With the Saudi Arabian-American strategy of removing ISIS and terror roots in Middle East societies and governments, the global oil and gas service companies have new projects to expand oil capacity of Saudi Arabia. This moves Saudi Aramco into overcapacity production range and a Second Downturn in early 2019 as forecast in this column six months ago.

Saudi oil production capacity should increase to 13 million barrels per day with Haliburton and others working on projects to increase reserves. This is prepared to flow into export markets to deprive Occidental of its short- term export of domestic oil which the production cut-back under the 1,800,000 barrels per day OPEC and Russian “deal” provided as a temporary marketing opportunity.  The price of de-terrorism in the Middle East is more Saudi Arabian oil and lower world prices.  Saudi Arabian demand forecasts are no more than 1 percent per annum growth:  its new capacity addition could reach 4 percent per annum in the next five years following the service company projects signed weeks ago.

OPEC production and imports to the U.S are up as this column is prepared for publication. The Commodity Market, which determines the price of world oil, would have a trading range breakout if Iranian gunboats break the isolation of Qatar and engage the U.S. Persian Gulf naval capability. However, such incidents would move traders for hours only.

Natural gas prices should continue to move upward as risk hedging begins to focus on buying gas and selling crude.  This is a contract which oil price risk is hedged
A laying of the risk of crude oil price declines with a simultaneous buying of natural gas.

Natural gas storage favors San Juan natural gas producers in the winter months ahead. This stimulates a regional Texas offset with new Eagle Ford dry gas promotion.
Lithium prices have sharply declined mainly because of South Korean mining production and investments. This explains the stock market and Tesla Motors. Tesla may not need its mining investment in Nevada to lower the cost of the battery pack.
This shift to downstream concentration which will re-start statewide competition for expanded facilities to relieve its Fremont, California plant. New Mexico economic development competed with three states to capture the giga-factory in Nevada. A second chance for Santa Fe to win in a second round? “

The Panhandle Import Reduction Initiative (PIRI) Calls for New White House Policy: Unfair Trade Endangers U.S. Oil Industry Too


The full press release is here-> http://www.businesswire.com/news/home/20170518005304/en/Panhandle-Import-Reduction-Initiative-PIRI-Calls-White

May 18, 2017 06:00 AM Mountain Daylight Time 

AMARILLO, Texas–(BUSINESS WIRE)–In a letter directed to the President of the United States and received by the White House, the founders of (PIRI), the Panhandle Import Reduction Initiative representing thousands of independent small producers of oil in the Southwest United States wrote, “We call upon President Donald J. Trump for a second Presidential Memorandum to order the Secretary of Commerce, to establish the crude oil industry as a “Core” industry to be added to steel, aluminum, vehicles, aircraft, shipbuilding and semiconductors. Crude oil should be recognized as one of the critical elements of US manufacturing and defense industrial bases, which we must defend against unfair trade practices and other abuses.”

“We call upon President Donald J. Trump for a second Presidential Memorandum to order the Secretary of Commerce, to establish the crude oil industry as a “Core”

The PIRI founders further stated in the letter “Following the Presidential Memorandum on the case for steel against Chinese export practices that you signed, PIRI further calls for an immediate Investigation by the Department of Commerce of Saudi Arabia and OPEC abuse between August 2014 and March 2016 of the American oil industry by expanding production to lower world oil prices to destabilize and cause hardships to American producers mainly of light tight oil (shale oil). This was an announced effort to undermine and shut-down producers with higher costs of production. According to one estimate some 150 US companies filed bankruptcy and $150 billion in capital outlay postponed or cancelled. More than 300,000 US industry-related jobs were lost.”

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.

New Mexico Energy Outlook Summit 2015 with Keynote leading energy expert Dr. Daniel Fine: Join us!


Join Albuquerque Business First for the 2nd Annual New Mexico Energy Outlook Summit. This Summit will offer business leaders unique access to energy insights that will affect your company in the year to come.

  • When: Thursday, November 12, 2015,7:30am-9:30am Add to my calendar
  • Where: Sandia Resort & Casino: Ballrooms A&BAlbuquerque NM
  • To register use this link–> http://www.bizjournals.com/albuquerque/event/115971#eventDetails
  • Sponsors

    Presenting Sponsor
    Supporting Sponsor
    Event Partner
    For more information on how your company can sponsor one of our events, please contact Tamra Fenstermaker at tfenstermaker@bizjournals.com or 505-348-8326.

    Event Information

    The second annual New Mexico Energy Outlook will offer business leaders unique access to energy insights that will affect your company in the year to come. Beginning with a keynote by Dr. Daniel Fine, this session will focus on how the evolving landscape of the energy industry and the world’s demand for energy will affect our state and economy. The 30-minute presentation will be followed by a panel discussion featuring executives from the top companies in New Mexico’s energy landscape. Moderated by Albuquerque Business First Publisher Candace Beeke, the panel will be driven by audience questions.

    Panelists include:

    • Dr. Daniel Fine, associate director, Center for Energy Policy
    • ConocoPhillips senior executive
    • Ron Darnell, senior vice president of public policy, PNM Resources
    • Regina Wheeler, CEO, Positive Energy Solar

    Session highlights include:

    • The OPEC price war and how it impacts NM
    • The price cycle for oil, natural gas and others, and outlook for prices
    • Production capacity – where it is rising, where it is falling
    • Outlook for employment in energy trades
    • Impact of and future for renewable energy in NM
    • Opportunities and challenges for the energy sector in NM as a whole
    • How the energy sector will shape the broader economy

    Daniel_Fine_Associate_Director_Center_for_Energy_Policy

    Keynote speaker:

    Dr. Daniel Fine
    Associate Director
    Center for Energy Policy

    New Mexico Tech

    Dr. Daniel Fine is the Associate Director of the New Mexico Center for Energy Policy and is a Senior Policy Analyst in the New Mexico State Department of Energy Minerals and Natural Resources.

    He is a long time research associate at the Mining and Minerals Resources Institute (MIT). Fine is also a policy adviser on nonconventional oil and gas. He is co-editor of Resource War in 3-D: Dependence, Diplomacy and Defence, has contributed to Business Week, the Engineering and Mining Journal and the Washington Times. He has given testimony on strategic natural resources before the U.S. Senate Committees on Foreign Affairs and Energy and Natural Resources.

    ABOUT NEW MEXICO CENTER FOR ENERGY POLICY
    The New Mexico Center for Energy Policy (NMCEP) is the first community-centered response to the challenge of national energy security in the United States. Its location in Lea County reflects the New Mexico Southeast as a historic and contemporary source of energy production and technology. Energy policy-making in Washington and in state capitals is often limited to “witness” appearances from “locals”. Energy policy developed and promoted by an energy production community has been non-existent until now.

    Registration & Networking  | 7:30AM
    Breakfast and Program | 8:00AM – 9:30AM

    Sandia Resort & Casino has overnight accommodations at a reduced group rate of $159 until October 11, 2015. RESERVE OVERNIGHT ROOMS HERE.

Governor’s energy plan sets up New Mexico for new opportunities by Ripon Advance News Service


Governor’s energy plan sets up New Mexico for new opportunities by Ripon Advance News Service | Friday, Sep 25, 2015 @ 2:57pm For a link to the plan and the full article –> https://lnkd.in/e4mVTVk

New Mexico Gov. Susana Martinez recently announced a sweeping, statewide energy plan aimed at embracing a wide array of energy sources, including oil and gas — which already accounts for more than $1 billion in yearly state revenues — solar, wind and new technologies. The far-reaching energy policy and implementation plan

entitled “Seizing our Energy Potential: Creating a More Diverse Economy in New Mexico,” is the state’s “first comprehensive energy policy and plan since 1991, nearly 25 years ago,” Michael Lonergan, Martinez’s press secretary, told Ripon Advance.

The plan put forth by Martinez, who is the nation’s first female Hispanic governor, calls for “an ‘all-of-the-above’ approach to energy development that promotes production from all sources” in order to create jobs, diversify a key sector of New Mexico’s economy and support the nation’s efforts to achieve energy independence, among other goals, Lonergan said this week.

Lonergan told Ripon Advance that the key components and initiatives of the plan include: improving New Mexico’s energy infrastructure; promoting greater production of all sources of energy; improving energy workforce training in the state’s higher education system; reducing freshwater consumption in production; streamlining regulatory processes; and exploring and potentially seizing on new energy opportunities.

Improving the state’s energy infrastructure, for example, will include new rail lines to improved electric transmission that will allow New Mexico to better move its energy and its products to markets in the Southwest and Southeast United States, as well as into Mexico and other markets.

In particular, rail from the Four Corners region to Interstate 40 would reduce the cost of transporting coal, crude oil and agricultural and other non-energy products from northwest New Mexico to markets throughout the state and beyond. Such improvements also would allow materials for energy production to be brought into New Mexico at a lower cost to producers.

In a statement unveiling her statewide energy plan earlier this month, Martinez called New Mexico “one of the most energy-rich and energy-diverse states in the nation.”

Tag Cloud