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

Posts tagged ‘SaudiArabia’

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 A-J Editorial Board

The full article is here-> http://lubbockonline.com/filed-online/2016-04-28/our-view-limiting-oil-imports-would-help-protect-american-producers#.Vyf6UPkrLIU

“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.”

Texas, New Mexico oil producers push for import limits (AP)


Apr. 19, 2016 6:40 PM EDT

ALBUQUERQUE, N.M. (AP) — Oil drilling companies and royalty owners from the Texas Panhandle to New Mexico’s stretch of the Permian Basin are embarking on a grass-roots campaign to limit foreign oil imports, salvaging what they say is a major sector of the U.S. economy.

“American oil is competing against a cartel of government operators which has a stated initiative of driving an American industry out of business,” said Tom Cambridge, one of the Panhandle producers leading the campaign.

The grass-roots movement is pushing for the next president of the United States to issue a proclamation setting quotas for imports — something that hasn’t been done in more than four decades.

“It’s not that this is the first time but this is a more concerted, deliberate effort and I think it’s gaining ground,” said John Yates Jr., a member of a well-known family that is a leader in the industry and has over the last century developed some of New Mexico’s largest and most significant oilfields. The complete article is here-> http://www.bigstory.ap.org/article/74b8fac6517649d7a0ecac7fa55951ad/texas-new-mexico-oil-producers-push-import-limits

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.”

Column: International production means oil prices likely to remain low By Daniel Fine


For the complete article use this link–> http://www.daily-times.com/farmington-opinion/ci_28613365/column-international-production-means-oil-prices-likely-remain “The price of West Texas Crude oil has declined below $50 per barrel as a reaction to the expectation that oil export sanctions against Iran will be lifted within the framework of the multi-nation “deal” to slow the country’s progress toward developing nuclear weapons. The global market is oversupplied and Saudi Arabian production is approaching its highest level since the 1970s.

San Juan and Delaware basin oil producers have sharply reduced costs through efficiencies. American higher-cost production shows no sign of a decline while OPEC lower-cost production increases in spite of lower prices. Saudi Arabia has decided to fight the Americans for market share.

The outlook for Iraq places still more production in the global market. Iraq production, now at 4 million barrels per day and rising, could reach 6 million in two years. The Iranian Oil Company could attract BP and Total to invest capital and technology if sanctions permit. This would drive Iranian production to equal Iraq. In the short-term Iran has the capability of expanding exports by 1.2 million barrels.

Should the “deal” fail or be changed by Congress to a phase-in of Iranian oil exports over a longer period of time and the White House goes along, the price of oil should recover to $60 per barrel. This is a long-shot scenario, however.

There will be more Middle East production for export than anticipated and its impact on American shale oil production will be a three-year, low-price oil regime. On the other hand, the current price war is moving quietly to an old variable. From 2009 to early last year, Saudi Arabia and the Gulf States assumed that American shale technology (horizontal drilling and hydraulic fracturing) was unsustainable. They changed course last year and resorted to the price war for market share.

The reason for this change in strategy was first, the decline ratio of shale horizontal wells; and second, the regulatory obstacles. Simply put, OPEC perceived the environmental/global warming/climate change political group mobilization as capable of winning tighter federal regulations that would cause higher costs to the oil industry stopping the “technology play.”

OPEC now regards the appearance of new methane rules as a revival of its earlier “unsustainable” scenario. Methane mitigation regulations can setback natural gas production but also the associated gas from oil production. San Juan Basin oil producing formations are heavy in associated gas. If methane emissions, leaks or flaring persist, OPEC calculates, it will cause regulatory intervention as part of the new International Treaty on Global Warming.”

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