Mexico’s Congress approved a bill to end a 75-year state oil monopoly and generate as much as $20 billion in additional foreign investment a year.
The nation’s most significant economic reform since the North American Free Trade Agreement secured the required two-thirds majority in a 353-134 lower-house vote yesterday. The proposal must be ratified by state assemblies, the majority of which are controlled by the alliance backing the reform.
The bill will change Mexico’s charter to allow companies such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) to develop the largest unexplored crude area after the Arctic Circle. Supporters say the overhaul could propel Mexico into the top five crude exporting countries while opponents say it will funnel resource wealth to foreign investors. The peso gained.
“The reform will energize Mexico’s economy,” Carlos Capistran, chief Mexico economist at Bank of America Corp., said in a telephone interview yesterday. “Congress was able to pass a better-than-expected constitutional reform.”
Producers will be offered production-sharing contracts or licenses where they get to own the pumped oil and will be allowed to log crude reserves for accounting purposes.
The rest here.
Capital New York reports:
The anti-fracking movement in New York state started with a series of ProPublica articles published in the Albany Times Union in 2008, according to a report revealed by Wikileaks.
That revelation came as part of a trove of files Wikileaks unearthed from Stratfor, an Austin-based global intelligence company. Stratfor was hired by oil and gas companies, as well as many other global corporations to investigate and profile activist groups and media organizations. One of its targets was the Pulitzer Prize-winning ProPublica, the nonprofit that distributes its investigative content to news organizations for free, including the Times Union. The report detailed the risks of drilling in the Marcellus Shale, which is the rock formation containing natural gas spread underneath the state’s Southern Tier.
The report concluded: “The growth of the Marcellus shale was largely not a controversial issue until mid-2008, when ProPublica stories given to the Albany, New York Times Union (and reprinted elsewhere) detailed researcher and activist reports of potential water contamination and carried the message that, according to ProPublica’s editor in chief, New York was about to ‘put legislative and regulatory protocols into place to give the industry carte blanche to drill wherever it chose.’ Out of this series of articles came the backlash by local groups and delays that continue to beset operations in the region.”
In 2009, Stratfor investigators provided a report to the American Petroleum Institute, which spent $503,903 on lobbying and activities including educational outreach in the first half of this year, that pinpointed growing environmental activism in the state. The group also produced a report detailing the early growth of anti-fracking groups in the state for ExxonMobil, which spent $2 million to promote fracking in New York in 2012.
The rest here.
Oppenheimer oil analyst Fadel Gheit believes oil prices are in a bubble.
Gheit says 20-30% of the current oil price reflects a “supply risk premium” that will disappear when Iran’s nuclear issue is finally resolved.
“We believe the current oil price bubble will burst eventually and the question is not if, but when and to what level,” writes Gheit in a note to clients. “Oil prices in the $75-$85 range would help spur global economic growth, keep inflation low, boost consumer confidence, and still fund many new oil projects. Settling the nuclear issue could open Iran’s vast oil and gas resources to western oil companies, increase supplies, lower oil prices and squeeze speculation out of the picture.”
The rest here.
We have to kill eagles in order to save them.
That’s now the official policy of the U.S. Interior Department. On Friday, the agency announced that it would grant some wind-energy companies permits that will allow them to kill or injure bald and golden eagles for up to 30 years without penalty.
Well then. We can now rest easy. Big Wind is saving eagles by getting permits to kill them.
Dozens of environmental groups, including the American Bird Conservancy, the Conservation Law Center, and the National Audubon Society, opposed the deal. Under the headline “Interior Dept. Rule Greenlights Eagle Slaughter at Wind Farms,” Audubon issued a statement calling it “a stunningly bad move” and quoting the group’s president and CEO, David Yarnold: “Instead of balancing the need for conservation and renewable energy, Interior wrote the wind industry a blank check.” He called it “outrageous” that “the government is sanctioning the killing of America’s symbol, the Bald Eagle.”
Another group, the San Diego–based Protect Our Communities Foundation, said it remains opposed to the new permit program “because it would harm eagles, has not been adequately studied, and violates federal law.” Kelly Fuller, a consultant working for the group, told me that the permit deal “is a gift to the wind industry and a disaster for eagles and the people who care about eagles.” She said the big question now is which environmental groups will take the lead in suing the Interior Department.
There are many stunning facets to this development. Among the most obvious: It was just two weeks ago that the Justice Department finally began enforcing federal wildlife laws against the wind industry. On November 22, Justice announced that it had reached a $1 million settlement with the owner of two Wyoming wind projects that had killed protected birds.
The plea deal, with Duke Energy, marks the first time that the federal government has enforced the Migratory Bird Treaty Act against the wind industry. By bringing criminal charges against Duke — for killing 14 golden eagles and 149 other protected birds — the Justice Department ended the double standard on enforcement of the act. Over the past few decades, federal authorities have brought hundreds of cases against the oil-and-gas sector for killing migratory birds, while the wind industry has enjoyed a de facto exemption. Then, just days after finally bringing one member of the wind industry to justice, the Obama administration appears ready to give away the store.
Want more outrage? The federal government wants to give decades-long permits allowing the wind industry to kill the bird that has been our national symbol since 1782. Never mind that the Continental Congress spent nearly six years haggling over the design for the Great Seal of the United States before finally settling on the one we now have.
Never mind that the bald eagle has been a protected species under federal law since 1940. The golden eagle gained similar protection in 1962.
Never mind that, under the Endangered Species Act, the bald eagle was protected from 1976 to 2007. It finally graduated from the federally protected list — it’s among only a handful of species ever to do so — thanks only to the investment of tens of millions of taxpayer dollars in conservation efforts, including captive-breeding projects. Some of those efforts were sponsored by the Fish and Wildlife Service.
Never mind the symbolism of the bald eagle or its history. The wind industry, which already enjoys lucrative subsidies and, in many states, mandates, has declared itself “green.” And the Obama administration, in its enthusiasm for all things environmental, gave Big Wind what it wanted.
If you want to get madder still, consider this: On September 11, some of the top raptor biologists at the Fish and Wildlife Service issued a report that found that the number of documented eagle kills by wind turbines has increased dramatically over the past few years, rising from two in 2007 to 24 in 2011. In all, some 85 eagles have been killed by wind turbines since 1997. And that figure is “an absolute minimum,” Joel Pagel, the lead author of the report, recently told me. Among the carcasses: six bald eagles.
In an interview shortly after the publication of his findings in the Journal of Raptor Research, Pagel told me that he and his colleagues have since documented additional eagle kills by wind turbines in Idaho, Montana, Nevada, and North Dakota. He refused to give a number but said “it’s quite a few.” There are now 14 states where the problem has been identified, he said, adding that more than half of the eagle carcasses have been found “incidentally” — that is, by people not out looking for them. And so the total of dead eagles is likely far higher than what Pagel and his colleagues are reporting.
Want yet more more outrage? Back in April, the Fish and Wildlife Service issued a report saying flatly that “there are no conservation measures that have been scientifically shown to reduce eagle disturbance and blade-strike mortality at wind projects.” That is, the more turbines we build, the more eagles are killed. The gift to the wind industry followed only months after this report.
But the biggest outrage of all — and yes, I know there are plenty to choose from — is the claim by both the federal government and Big Wind that adding more wind turbines will have some salutary effect on climate change.
In its press release, the Interior Department maintains that the new permits will “help the renewable energy industry,” which, says Secretary Sally Jewell, is “vitally important to our nation’s future.” Why it’s “vitally important” wasn’t spelled out; undoubtedly the underlying rationale relates to the issue of climate change.
For its part, the American Wind Energy Association in its press release once again repeated Big Wind’s Big Lie, calling wind energy “one of the cheapest, fastest, most readily scalable ways available now to address climate change.”
A bigger fib is hard to conjure.
As I wrote in these pages last month, wind turbines are nothing more than climate-change scarecrows. If we accept Big Wind’s claim that all U.S. wind turbines (whose total capacity is about 60,000 megawatts) are cutting carbon dioxide emissions by 80 million tons per year, then domestic wind energy is reducing global carbon dioxide emissions by a whopping two-tenths of 1 percent. That’s a burp in a hurricane.
The math is fourth-grade simple. Global carbon dioxide emissions are now about 34.5 billion tons per year. Since 1982, those emissions have been increasing by an average of about 500 million tons per year. Therefore, if we wanted to merely halt the rate of growth in global carbon dioxide emissions by using wind energy alone — and remember, this won’t displace any of the existing need for coal, oil, and natural gas — we would have to install about 375,000 megawatts of new wind-energy capacity every year. That much wind capacity would require setting aside a land area the size of Germany every year. The foolishness of such a scheme is readily apparent, and all the more so in light of the global backlash against the wind industry, from Australia to Wisconsin.
And to add one more dash of craziness to the insanity: The American Wind Energy Association is lobbying for an extension of the production tax credit, the 2.3-cent-per-kilowatt-hour subsidy given to wind-energy generators. A one-year extension of that subsidy will cost taxpayers $6.1 billion.
In short, the Obama administration wants to allow Big Wind to kill eagles even though one species, the bald eagle, our national symbol, spent three decades on the endangered-species list. This move comes after federal biologists have documented that the eagle-kill problem is increasing, and after the Fish and Wildlife Service itself has found no proven conservation measures that could reduce bird kills at wind projects.
Big Wind may be allowed to legally kill eagles for decades to come while doing effectively nothing to reduce carbon dioxide emissions or address climate change. Big Wind wants subsidies while it does so. And all of this is happening because no one — and I mean no one — on the green Left or in the Obama administration dares to do the math.
— Robert Bryce is a senior fellow at the Manhattan Institute. His fifth book, Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong, will be published in May.
Megabucks donor to the Democratic party and President Obama, Ted Steyer — profiled last month in the New Yorker — is keeping up his pressure on Team Obama and Keystone XL. From today’s Los Angeles Times:
Tom Steyer, the billionaire hedge fund executive and environmental activist from San Francisco, chose his venue carefully.
The reference was to a speech by Obama in June in which the president declared he would approve Keystone only if backers of the pipeline could prove that the project would not accelerate climate change. The pipeline is designed to move hundreds of thousands of barrels of oil daily 1,200 miles from Canadian tar sands to Gulf Coast refineries.
The conclusion reached at Steyer’s conference was unanimous and hardly surprising. Experts invited by Steyer and other conference organizers, all of whom oppose the project, declared that it would not meet the president’s test.
The event was another reminder of how politically awkward Keystone has become for Obama. Steyer is one of the president’s biggest donors. A fundraising event he held at his home during the reelection campaign was one of Obama’s most successful. Other deep-pocketed donors listen to Steyer. Democrats in Washington are eager to tap his funds.
And Steyer is on a crusade against Keystone. The billionaire not long ago quit his job running a major San Francisco hedge fund to spend all his time campaigning on global warming issues. Pressure applied by Steyer, the star of his advertising campaign against Keystone, has helped put into limbo a project that once seemed headed for approval.
Obama’s comments at Georgetown and elsewhere since that speech have indicated that he is strongly considering denying the project the approval it needs to go forward.
The rest here.
And in other Keystone XL news, the part of the pipeline that didn’t need President Obama’s approval is set to go live January 3. Via Bloomberg:
TransCanada’s Gulf Coast pipeline can carry 700,000 barrels of crude a day to Port Arthur, Texas, from Cushing, Oklahoma. The Calgary-based company disclosed its plan to start service on Jan. 3 in a filing yesterday with the U.S. Federal Energy Regulatory Commission. That adds to the capacity of the Seaway pipeline owned by Enterprise Products Partners LP (EPD) and Enbridge Inc. (ENB), which now carries 400,000 barrels a day to Houston from Cushing. The operators have said they expect Seaway’s capacity to reach 850,000 in the first half of 2014.
[. . .]
“This pipeline startup enables refineries to move significant amount of crude from the Mid-continent to the Gulf Coast,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “That reinforces that the logistical bottleneck is moving from Cushing to Gulf Coast.”
Building the 700,000-barrel-a-day Gulf Coast line will cost $2.3 billion, TransCanada has said. It began construction in August 2012. After the line’s initial capacity is reached, it will be able to expand to 830,000 barrels a day, according to the company.
The pipeline was originally part of TransCanada’s Keystone XL project, which entered its sixth year of U.S. review last month. President Barack Obama initially rejected the conduit in January 2012, citing concerns with its path through ecologically sensitive lands in Nebraska.
TransCanada reapplied with a new Nebraska route last year and split the project in two, proceeding with the Gulf Coast project — the southern portion of the network that doesn’t require federal permission.
Even with success on this Gulf Coast line, it’s foolish to think Steyer will give up. The WSJ reported: “Mr. Steyer and his group contributed some $8 million to the successful election of Democrat Terry McAuliffe as governor of Virginia last month.” With that kind of money, it will be hard for Dems to say no to Steyer’s environmental agenda.
Bjørn Lomborg writes the inconvenient truth in today’s New York Times. The greater threat to the world is poverty, not climate change:
PRAGUE — There’s a lot of hand-wringing about our warming planet, but billions of people face a more immediate problem: They are desperately poor, and many cook and heat their homes using open fires or leaky stoves that burn dirty fuels like wood, dung, crop waste and coal.
About 3.5 million of them die prematurely each year as a result of breathing the polluted air inside their homes – about 200,000 more than the number who die prematurely each year from breathing polluted air outside, according to a study by the World Health Organization.
There’s no question that burning fossil fuels is leading to a warmer climate and that addressing this problem is important. But doing so is a question of timing and priority. For many parts of the world, fossil fuels are still vital and will be for the next few decades, because they are the only means to lift people out of the smoke and darkness of energy poverty.
More than 1.2 billion people around the world have no access to electricity, according to the International Energy Agency’s World Energy Outlook for 2012. Most of them live in sub-Saharan Africa and in Asia. That is nearly four times the number of people who live in the United States. In sub-Saharan Africa, for instance, excluding South Africa, the entire electricity-generating capacity available is only 28 gigawatts – equivalent to Arizona’s – for 860 million people. About 6.5 million people live in Arizona.
Even more people – an estimated three billion — still cook and heat their homes using open fires and leaky stoves, according to the energy agency. More efficient stoves could help. And solar panels could provide LED lights and power to charge cell phones.
But let’s face it. What those living in energy poverty need are reliable, low-cost fossil fuels, at least until we can make a global transition to a greener energy future. This is not just about powering stoves and refrigerators to improve billions of lives but about powering agriculture and industry that will improve lives.
Over the last 30 years, China moved an estimated 680 million people out of poverty by giving them access to modern energy, mostly powered by coal. Yes, this has resulted in terrible air pollution and a huge increase in greenhouse gas emissions. But it is a trade-off many developing countries would gratefully choose. As China becomes wealthier, it will most likely begin to cut its air pollution problem through regulation, just as the rich world did in the 20th century. But, admittedly, cutting carbon-dioxide emissions will be much harder because these emissions are a byproduct of the cheap energy that makes the world go around.
The rest here.