Tag Archives: Oil and Gas

Some Sanity From The Federal Bench

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With all the cries from hysterical Democrats that President Trump would be a dictator if he is elected, why don’t the Democrats look in the mirror? The student loan forgiveness has continued despite being ruled unconstitutional, domestic oil production has pretty much been shut down despite the fact that Congress passed no laws shutting it down, the border has been left open despite laws that would control the flow of illegal immigrants, and liquid natural gas exports have been shut down despite the fact that Congress never passed a law shutting it down (more on that in a moment). So who is the dictator?

On Friday, Hot Air posted an article about a recent decision by Judge James Cain of the Western District of Louisiana putting the Biden’s pause on LNG exports on hold.

The article quotes Politico:

A federal judge in Louisiana on Monday put the Energy Department’s pause on natural gas export permits on hold, dealing another legal blow to the Biden administration’s climate agenda.

Judge James Cain of the Western District of Louisiana, a Trump appointee, granted a request for a stay from 16 red states that had challenged the pause, arguing it will harm their economies.

The decision to stay the LNG pause upends one of Joe Biden’s major policy nods to climate-focused activists who have accused the president of not doing enough to mitigate planet-warming emissions despite Democrats passing the largest investment in climate in history via the Inflation Reduction Act.

The article also quotes The Wall Street Journal (behind the pay wall):

The Sierra Club, a vociferous and enthusiastic proponent of the January pause, is one of the more strident voices now encouraging our mush-brained hero to do an end-run around SCOTUS.

KEEP DOIN’ THAT VOODOO THAT YOU DO SO WELL

…Who cares what a court says? Not the Sierra Club, which says the judge’s ruling doesn’t compel the Administration “to issue any specific decisions.” In other words, the Administration can continue to slow-walk reviews, as it has been doing.

…Democrats fret that Donald Trump will ignore court rulings, but the Biden Administration defies them left and right. A federal judge in June 2021 ordered the Administration to resume quarterly oil and gas lease sales as required under federal law. It didn’t hold its first auction until June 2022 and waited another year to hold a second.

Progressives have no credibility when they warn about an imperial Trump Presidency after encouraging a lawless Biden Administration.

Laws only apply to Republicans.

Congress Strikes Back

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On January 26th, the Biden administration announced a temporary pause on pending approvals of liquefied natural gas exports, claiming that natural gas, as a fossil fuel, is partially responsible for climate change.

On January 27th, World Net Daily reminded us:

Natural gas is considered to be the cleanest variety of energy-dense fossil fuels, and and U.S. LNG is about 30% cleaner than Russian LNG, for example, according to ClearPath.

“Despite the White House’s claims to the contrary, it is profoundly absurd to claim this action will do anything to curb emissions. The natural gas to meet global demand will come from somewhere — either from the US, where it is produced more responsibly than anywhere else on earth, or from other nations with far fewer environmental regulations,” David Blackmon, a 40-year veteran of the oil and gas industry who now writes and consults on the energy sector, previously told the DCNF (Daily Caller News Foundation).

I am sure that Russia appreciated the pause.

Well, Congress has had enough.

On February 15th, The Daily Caller posted the following headline:

‘Easy Vote’: House Passes Bipartisan Rebuke Of Biden Admin’s ‘Radical’ Natural Gas Restriction

The article reports:

The House passed a bill Thursday that would effectively lift the Biden administration’s pause on new liquefied natural gas (LNG) export terminals.

The lower chamber of the legislature passed the “Unlocking Our Domestic LNG Potential Act,” introduced by Republican Rep. August Pfluger of Texas, by a 224-200 bipartisan vote, with nine House Democrats crossing the aisle to join Republicans in voting in favor of the bill. The bill would remove the Department of Energy (DOE) from the process of approving LNG export terminals and give the Federal Energy Regulatory Commission (FERC) exclusive discretion over whether or not to green light LNG export hubs, according to its text.

All of the Republicans in the House who were present voted for the bill. Nine Democrats also voted for the bill.

The article at The Daily Caller also notes:

“President Biden was pretty clear when, as a candidate, he said, ‘I guarantee you. We’re going to end fossil fuel.’ He has used every weapon and every tool available to make it more difficult on this industry,” Pfluger told the DCNF. “This export ban is just the latest strike in his efforts to appease his radical climate interest groups who refuse to accept the reality that American energy is the cleanest, most secure option for the U.S. and our allies. If you care about energy, about the security of the country, and about what the energy industry has done to lower prices for American households and strengthen our allies and partners, then this is an easy vote.”

If the  American economy is going to survive the Biden administration, we need to be able to harness domestic energy.

 

 

This Could Be Interesting

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One of the things that allows Russia to continue its war against Ukraine is the high price of oil. The sale of Russian oil finances that war. When America was energy independent, the price of oil was lower, and the Russian economy was struggling. Since the Biden administration declared war on American oil, the price of oil internationally has skyrocketed. That has been bad news for consumers, but good news may be on the way.

On Thursday, Zero Hedge reported the following:

Confirming a move which had been widely expected after the internal acrimony at the last OPEC+ meeting, moments ago Angola – also known as China’s gas station in Africa – announced it was leaving OPEC, the country’s news agency ANGOP reported on Thursday, quoting the African producer’s oil minister Diamantino de Azevedo.

The decision was taken at a meeting of the Council of Ministers, led by the President of the Republic, João Lourenço, the news agency noted. Jornal de Angola also reported the news.

As OilPrice notes, Angola and another African OPEC member, Nigeria, had a spat with the other cartel members before the latest meeting regarding their oil production quotas.

The chart below shows the impact of announcement on oil prices:

 

This could be good news for consumers. It also might result in peace negotiations in Ukraine if the trend continues.

The article concludes:

However, it seems now that Angola doesn’t see an OPEC membership as beneficial anymore after the recent spats over its production quota.  

Angola, which joined OPEC in 2007, holds untapped oil and gas resources estimated at 9 billion barrels of proven crude oil reserves and 11 trillion cubic feet of proven natural gas reserves.  

The news sent oil, which had caught a bid in recent days on fears about a protracted Red Sea blockage, sharply lower and back to Tuesday levels.

Stay tuned. This could change rapidly depending on the freedom of transport in the Red Sea.

Beginning To Level The Playing Field In Trade

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CNBC reported yesterday that China will lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year.  The Chinese economy is slowing down, and lowering tariffs is seen as a way to bring back previous growth.

The article also notes:

 

  • Next year, China will implement temporary import tariffs, which are lower than the most-favored-nation tariffs, on more than 850 products, the finance ministry said on Monday.
  • That compared with 706 products that were taxed at temporary rates in 2019.

The article cites a few significant tariff cuts:

The finance ministry said the tariff rate for frozen pork will be cut to 8% from the most-favored-nation duty of 12%, as China copes to plug a huge supply gap after a severe pig disease decimated its hog herd.

…China will also lower temporary import tariffs for ferroniobium — used as an additive to high strength low alloy steel and stainless steel for oil and gas pipelines, cars and trucks — from 1% to zero in 2020 to support its high-tech development.

…The tariff rate for frozen avocado was cut to 7% from the most-favored-nation duty of 30%, the ministry said.

…Tariffs for some asthma and diabetes medications will be set at zero, the ministry said, while duties on some wood and paper products will be lowered too.

Import tariffs on multi-component semiconductors will be cut to zero.

China will also further lower most-favored-nation import tariffs on some information technology products from July 1, the ministry said.

China has long been an unfair trading partner–manipulating their currency, disregarding intellectual property, and generally behaving badly. Hopefully President Trump’s ‘trade war’ will bring some balance into our trade relationship with China.

 

A New Role For America

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Yahoo Finance is reporting today that America has posted its first full month as a net exporter of crude and petroleum products since government records began in 1949.

The article reports:

The nation exported 89,000 barrels a day more than it imported in September, according to data from the Energy Information Administration Friday. While the U.S. has previously reported net exports on a weekly basis, today’s figures mark a key milestone that few would have predicted just a decade ago, before the onset of the shale boom.

President Donald Trump has touted American energy independence, saying that the nation is moving away from relying on foreign oil. While the net exports show decreasing reliance on imports, the U.S. still continues to buy heavy crude oil from other nations to meet the needs of its refineries. It also buys refined products when they are available for a lower cost from foreign suppliers.

“The U.S. return to being a net exporter serves to remind how the oil industry can deliver surprises — in this case, the shale oil revolution – that upend global oil prices, production, and trade flows,” said Bob McNally, a former energy adviser to President George W. Bush and president of the consulting firm Rapidan Energy Group.

Soaring output from shale deposits led by the Permian Basin of West Texas and New Mexico has been in main driver of the transition — but America’s status as a net exporter may be fragile. Many Texas wildcatters are predicting a rapid decline in production growth next year, while some Democratic contenders for the White House have called for a ban on fracking — the controversial drilling technique that unleashed the boom.

The article concludes:

Analysts at Rystad Energy said this week the U.S. is only months away from achieving energy independence, citing surging oil and gas output as well as the growth of renewables.

“Going forward, the United States will be energy independent on a monthly basis, and by 2030 total primary energy production will outpace primary energy demand by about 30%,” said Sindre Knutsson, vice president of Rystad Energy’s gas markets team.

So what does energy independence mean? It means that our foreign policy is no longer determined by our energy needs, but by forming alliances with countries with similar goals. It means that a change in the world production of oil will not result in the gas lines we saw in America in the 1970’s. It means that if Russia plays politics with the energy it supplies to Europe, we have the ability to step in and fill the need–ending the constant threat that Russia will cut off Europe’s fuel supply in the dead of winter. It means that in case of war, our ships and airplanes will have the fuel they need to fight.

Energy independence is a big deal. It is a goal that was seemingly unachievable until President Trump made it a priority. Thank you, Mr. President.

Are Oil Companies Really The Greedy Ones ?

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Below is a chart from the American Petroleum Institute showing gasoline taxes acoss the country.

Oil companies produce a product. They employ people in the production of that product. What oil product does the government produce? It would be interesting to compare what the oil companies make on a gallon of gasoline versus what the government makes on a gallon of gas.

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