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

Posts tagged ‘Regulation’

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.”

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.”

Link

No end in sight for NM’s oil boom


No end in sight for NM’s oil boom

A pumpjack operates near Carlsbad. New Mexico's oil production jumped 17 percent in 2013, with more growth projected this year. (Courtesy of NMOGA)

Copyright © 2014 Albuquerque Journal

The oil boom in southeast New Mexico just keeps growing, and there’s no end in sight.

Oil production jumped by another 17 percent in 2013, according to the latest statistics from the state Oil Conservation Division. That puts New Mexico production back to 1973 levels.

And, this year, experts project another 18 to 20 percent increase.

“Déjà vu,” said Daniel Fine, associate director of the Center for Energy Policy at the New Mexico Institute for Mining and Technology in Socorro. “We’re now back in the early 1970s, which was a period of energy self-sufficiency and independence. It’s a remarkable energy revolution.”

Output reached 99.1 million barrels last year, up from 85.1 million in 2012 and 71.3 million the year before. That represents two straight years of double-digit growth that has pushed production up 39 percent since 2011.

a01_jd_10may_oilOverall, oil output has grown 67 percent since 2008, when the state first began to reverse a three-decade decline that had begun in the early 1970s.

This year, the Center for Energy Policy expects production to expand to between 117 and 119 million barrels.

“We’re at about 270,000 barrels per day now, but we project that to reach between 320,000 and 325,000 per day in 2014,” Fine said. “That would give us the equivalent of about two-thirds of all the oil production in Alaska. In just a few years, we’ll be back at our all-time peak of 129 million barrels, which was achieved in 1969.”

The industry’s newfound fortune comes from modern drilling techniques, including three-dimensional imaging to pinpoint pools of oil and natural gas that producers ignored in the past, hydraulic fracturing to bust open extremely tough shale rock formations and horizontal drilling to push sideways into hydrocarbon deposits.

Those techniques have opened up vast new oil and gas plays around the country, while giving new life to aging basins, such as the Permian in West Texas and Southeast New Mexico, where production originally dates back to the 1920s.

Horizontal drilling in particular has allowed producers to slice into layers of shale bed, where huge pockets of liquids and dry gas are trapped.

“That’s made a huge difference,” said New Mexico Tech geologist Ron Broadhead. “More than half the active wells in New Mexico have been drilled horizontally. About 40 percent of the state’s production is due to that.”

Thanks to the new technologies, the Permian Basin is now estimated to contain some of the largest underground deposits of oil in the world, Fine said.

That’s good news for New Mexico, where royalties and taxes on oil and gas production account for about 31 percent of the state’s general budget, according to a new study released in January by the New Mexico Tax Research Institute. Last year, that amounted to $1.7 billion of the state’s $5.5 billion general fund.

Still, sustaining industry momentum depends on a number of things, especially adequate infrastructure. Road repair, construction of new pipelines and refineries, and more housing for workers are all critical.

“Oil production in New Mexico is no longer a drilling issue;it’s a matter of infrastructure development,” Fine said. “We need to work on that or it will begin to affect production.” For the complete story use this link–> http://www.abqjournal.com/397859/news/no-end-in-sight-for-nms-oil-boom.html

Link

State works to overhaul energy policies (New Mexico)


State works to overhaul energy policies (New Mexico)

Copyright © 2014 Albuquerque Journal

A statewide effort is underway to forge new, comprehensive policies and strategies to promote energy development.

The initiative, which the Energy, Minerals and Natural Resources Department launched last fall, aims to shore up the state’s energy-related industries as a force for job creation and long-term economic development.

That includes virtually every energy sector from oil and gas to biofuels, renewable electric generation and even nuclear power, said Daniel Fine, associate director of the Center for Energy Policy at the New Mexico Institute for Mining and Technology in Socorro.

New Mexico Tech is assisting in the initiative, which includes statewide “listening sessions” to collect public input.

“Underlying the whole effort is that today’s energy policy should emphasize economic development and jobs in New Mexico,” he said. “You hear everywhere that New Mexico is rich in natural resources, but it’s still such a poor state. We want to build policies that help resolve that contradiction.”

MARTIN: Policy must be renewed

That requires a comprehensive approach on a range of issues, including investment in infrastructure, deployment of new technologies, efforts to streamline bureaucracy, and creative solutions to water and environ-mental problems, said Energy, Minerals and Natural Resources Secretary David Martin.

Gathering direct input

And that, in turn, means creating a broad new policy framework based on direct input from industry and local communities.

“Policy must be renewed periodically,” he said. “The last comprehensive policy was in 1991 under former Gov. Bruce King, and a lot has changed since then.”

A drilling rig rises in the background near a pumpjack, both in operation in southeastern New Mexico. (Journal File)

Many basic issues are fundamentally different now, particularly in the oil and gas sector, Fine said. In the early 1990s, oil production was in decline. And while natural gas output was still climbing in the 1990s, by the turn of the century it, too, entered a sharp downturn.

As a result, policies in past decades focused largely on energy conservation and how to achieve energy security in the U.S. But today, thanks to advanced hydraulic fracturing and horizontal drilling technologies that have opened vast, untapped oil and gas deposits, New Mexico is enjoying an unprecedented boom in oil production.

The central issue now is how to maintain that momentum, Fine said.

Since the fall, the state has held five listening sessions around New Mexico, each one analyzing different energy issues of particular interest to local communities.

All energy sources

In Farmington and Hobbs, participants discussed oil and gas production, plus electric generation and nuclear power. In Santa Fe and Las Cruces, attendees analyzed renewable technologies, energy efficiency, biofuels and water issues. And in Socorro, they looked at water and environmental concerns related to hydraulic fracturing, as well as potential for small modular nuclear reactors to provide future electric generation.

Nearly 400 people have participated to date, including industry executives, energy experts, public officials and community representatives.

A final session is scheduled for May 29 at the Albuquerque International Balloon Museum, where the public is invited to discuss water issues related to hydraulic fracturing, including new technologies to tap brackish groundwater and recycle produced water. The session also will review battery storage technology for solar generation, and use of liquid natural gas for fuel.

The results of all sessions will be compiled in a final public document with proposals and recommendations in the fall, Fine said.Use the link above for the rest of the story–>

Link

Encana announces multi-million dollar drilling plans for 2014 in the San Juan Basin


http://www.daily-times.com/farmington-business/ci_24615895/encana-announces-multi-million-dollar-drilling-plans-2014

Encana announces multi-million dollar drilling plans for 2014 in the San Juan Basin

By Leigh Black Irvin The Daily Times

FARMINGTON — Encana Corporation announced earlier this month a new company strategy and vision, with much of that strategy being focused on the San Juan Basin where it plans to invest hundreds of millions of dollars in new oil and gas production beginning in 2014.

The announcement has prompted a flurry of speculation among those in the local oil and gas industry that the increased drilling will begin immediately after the first of the year.

In a Nov. 5 news release, the Calgary-based Encana outlined key points of its strategy, the first of which states that it will “focus its capital investment on five oil and liquids-rich resource plays in North America.”

The release goes on to state that Encana will “invest approximately 75 percent of its 2014 capital into five high return oil and liquids-rich plays: the Montney, Duvernay, DJ Basin, San Juan Basin and Tuscaloosa Marine Shale.”

In dollar amounts, this translates to 350 million to 400 million dollars in capital that Encana plans to invest in the San Juan Basin in 2014, said Encana spokesman Doug Hock.

“We will run two to four rigs in the area where oil and liquids are,” said Hock. “Our strategy is to develop oil and natural gas liquids plays in the Mancos Shale over the course of 2014.”

Hock said that to date, Encana has drilled some 20 wells in the Basin at a rate of approximately one well a month, and the increased production plans are a result of the positive drilling performance already seen in the basin, as well as economic conditions that make drilling in this area beneficial to the company. For more of the article use this link–> http://www.daily-times.com/farmington-business/ci_24615895/encana-announces-multi-million-dollar-drilling-plans-2014

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