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The Facts on Chevron’s Blockbuster Deal to Acquire Anadarko

Today’s Energy Update
(Because Energy Fuels Our Lives)

Over the past few days I have posted up two separate pieces at Forbes.com analyzing the Chevron acquisition of Anadarko Petroleum. This largest takeover of an independent producer by one of the majors in this 21st century ended a half-year drought in the M&A space in America’s oil and gas industry, and moves Chevron up the ranks of the super majors, now ranking behind only ExxonMobil as the second-biggest privately-held major oil company.  Links to both pieces are below.  I hope you enjoy them.

The Competition For Permian Dominance Heats Up With Chevron’s Buyout Of Anadarko

7 More Things You Need To Know About Chevron’s Takeover Anadarko

 

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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The Evolution of American Natural Gas in the 21st Century

Today’s Energy Update
(Because Energy Fuels Our Lives)

The Evolution of American Natural Gas in the 21st Century

[This is the cover story for the new issue of Shale Magazine, where I serve as editor, a story that I really enjoyed researching and writing, since I’ve lived through all of it.  If you want to know how and why our amazing natural gas resource has developed during this century, and the potential for its further development in the coming decades, please give it a read. Thanks!]

Read the Full Piece

In the summer of 2002, the National Petroleum Council (NPC) gathered together some of the smartest minds from the oil and gas industry, academia and in the environmental community to study the potential for natural gas in North America. The study lasted for the better part of a year, after which a report titled “Balancing Natural Gas Policy – Fueling the Demands of a Growing Economy” was released.

As we sit here 16 years later, reviewing the findings of this study in light of the current situation where natural gas in North America and globally is concerned is a fascinating exercise — one that demonstrates the challenges presented to even the most informed and intelligent people when it comes to making accurate projections about how the oil and gas industry will evolve in years to come.

oil and gas processing industry. rectification column and storage of finished productI personally chaired one of several subcommittees that were established to conduct various aspects of this study, led by ExxonMobil and Burlington Resources, which was my employer at the time. When the study was issued, those of us who had worked on it were quite proud of it and were firm in our belief that it would stand the test of time, providing an accurate roadmap for the public and policymakers to use as a guidepost for years to come.

Providing such guidance is, after all, the role of the NPC, a federal advisory committee that reports directly to the U.S. Secretary of Energy. The NPC’s own website describes its role, in part, as follows:

The National Petroleum Council (NPC), a federally chartered and privately funded advisory committee, was established by the Secretary of the Interior in 1946 at the request of President Harry S Truman. In 1977, the U.S. Department of Energy was established and the NPC’s functions were transferred to the new Department. The purpose of the NPC is solely to advise, inform, and make recommendations to the Secretary of Energy with respect to any matter relating to oil and natural gas or to the oil and gas industries submitted to it or approved by the Secretary. The NPC does not concern itself with trade practices, nor does it engage in any of the usual trade association activities.

Even though the NPC had conducted a natural gas-related study in 1999, incoming Bush Administration Energy Secretary Spencer Abraham felt that the situation had shifted significantly enough by 2002 to warrant another look. It is important to keep in mind that, when the request came down from Secretary Abraham, natural gas was a commodity in short supply and subject to huge price swings. Because a large percentage of our country’s production came out of the Gulf of Mexico, it was also subject to being significantly interrupted by major hurricane events.

Large liquefied natural gas (LNG) carrier with 4 LNG tanks sails along the sea

In 2002, the Barnett Shale was the only major natural gas-bearing shale formation that had been discovered. The Barnett was in the early stages of its development, and the industry had little understanding of its ultimate potential. Nor did any of the experts assembled by the NPC for its new study have any inkling of the magnitude of domestic natural gas resource that would be discovered in massive reserves trapped inside formations with names like Marcellus, Haynesville, Bakken, Eagle Ford, Spraberry, Woodford and Wolfcamp.

One of the most popular bits of conventional wisdom said about any economic study is “garbage in, garbage out.” Our base of information for the 2002 NPC study wasn’t “garbage” — the information we had was high-quality, but it was also very limited. The study by its very nature had to be based on available data, and the data available at the time indicated that North American natural gas production through the year 2025 would be characterized by limited domestic output, rising imports of liquefied natural gas (LNG) coming into the country on huge tanker ships, and high commodity prices as a result.

It should come as no surprise that the study’s findings, some of which we will review here as examples, reflected this general outlook.

Every study based on economic analyses will include multiple cases that produce differing outcomes. Typically, these are described as a “base case” which assumes a status quo of outside-influencing factors going forward, an aggressive case that assumes some set of positive changes, and possibly even a non-aggressive case that assumes a set of negative changes.

One of the big decisions the NPC study committee had to make revolved around how many cases to include and how to structure them. In the end, the decision was made to include:

• “Balanced Future” case in which U.S. energy policy would evolve in ways that would encourage the development of new natural gas resources and the building-out of adequate midstream infrastructure and LNG import facilities; and

• “Reactive Path” case in which energy policy evolves, but mainly in reaction to various negative events such as shortages of supply or crises caused by lack of adequate infrastructure.

Given that background and knowledge about how the study was structured, the fact that most of the findings produced in our report have turned out be quite inaccurate should come as no surprise. Here are a few of them taken from the study’s Executive Summary:

• From page 32-33: “Given the relatively low production rates from non-conventional wells, the analysis further suggests that even in a robust future price environment, industry will be challenged to maintain overall production at its current level. This conclusion is reached even though new discoveries in mature North American basins represent the largest contribution to future supplies of any component of this supply outlook.”

• From page 33: “The NPC estimates that production from the lower 48 states and non-Arctic Canada can meet 75 percent of U.S. demand through 2025. However, these indigenous supplies will be unable to meet the projected natural gas demand.”

• From page 52: Price Projections: The NPC “Balanced Future” case projected a 2019 average price of between $3.20 and $5.00 per mmbtu. Its “Reactive Path” case projected a price range of $5.00 to about $6.90.

• From page 63: “To meet future demand, the NPC is projecting LNG imports will grow to become 14-17 percent of the U.S. natural gas supply by 2025. This will require the construction of seven to nine new regasification terminals and expansions of three of the four existing terminals.”

Of course, with the benefit of 16 years of hindsight, we now know that none of these key projections have come to fruition. For example, where prices are concerned, today’s natural gas producers can only long for a price per mmbtu of even $3.20, much less long-forgotten levels of $5.00 or $6.90.

LNG TANKER - Ship at dawn moored to the gas terminal

Far from being challenged to maintain overall current production levels, today’s natural gas industry struggles with finding adequate areas of demand to which to move their product, even as the number of active drilling rigs exploring for natural gas resources has fallen from 1,600 as recently as 2012 to around 130 at the first of 2019. In a way, producers are victims of their own expertise, having become so adept at maximizing volumes from each new well, that they threaten to oversupply the market―even with a dramatically-reduced rig count.

The nature of the shale plays discovered since 2003 has also played a large role in creating this new reality for gas producers. It’s not just the massive resource contained in natural gas plays like the Haynesville and Marcellus keeping the gas rig count low — it’s also the amazing volumes of methane flowing out of what are classified as oil wells being drilled in the Bakken, Eagle Ford and the Permian Basin. A little-recognized fact of life in today’s U.S. oil patch is that the oil-heavy Permian Basin is now the second-largest producer of natural gas in North America, behind only the Marcellus/Utica Basin.

Simply put: Today’s biggest problem for natural gas producers is not a lack of supply, but lack of demand.

It’s important to recognize that this sea-change in the supply/demand equation for domestic natural gas has taken place during a period of time when demand for natural gas has increased significantly. In 2003, Americans and American businesses consumed about 22.7 trillion cubic feet (tcf) of natural gas, according to the U.S. Energy Information Administration (EIA). By 2017, overall U.S. consumption had grown to 27.1 tcf, an increase of 20 percent.

More to the point, demand for natural gas over that period of time rose in all of its key demand sectors: It was up in power generation, up in home heating use, up in chemicals and plastics and all other key manufacturing uses. Indeed, the phenomenal new abundance of natural gas supply and the chronic low prices that abundance has produced has played a significant role in the ongoing renaissance of manufacturing in the U.S., making the country globally competitive in that space for the first time in several decades.

This newly-found abundance may be a curse to natural gas producers and their bottom lines, but it has been a true blessing to the country.

Read the Full Piece Here

 

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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Some Stunning New Facts About Texas and its Oil Industry

Today’s Energy Update
(Because Energy Fuels Our Lives)

#GodBlessTexas. – Last week at Shale Magazine, I put up a piece detailing some “Fun Facts” about the state of the oil and gas industry in Texas. That piece began with the following statement:

“Here’s a fun fact: If Texas were an independent country, it would now stand as the 5th-largest oil-producing nation on Planet Earth, behind only the rest of the U.S., Russia, Saudi Arabia and Iraq. According to projections by the U.S. Energy Information Administration (EIA), Texas will pass Iraq in this measure of economic might later this year.”

Boy, things sure do escalate quickly in the oil industry. Here we are, barely a week later, and the truth about that little factoid has already changed again, at least if the U.S. Energy Information Administration (EIA) has its numbers right.  EIA now says that the U.S. averaged 12 million barrels of oil per day (bopd) in January, the first time it has ever reached level. The agency further projects that the Permian Basin alone will produce 4 million bopd in March, roughly 1/3rd of total U.S. production.

So, before we get to some new amazing facts about all of this, let’s do a little math.  First, roughly 85% of total Permian Basin production comes from Texas, which in March would come to about 3.4 million bopd. Next, add in EIA’s estimate that the other behemoth Texas shale play, the Eagle Ford, will produce about 1.3 million bopd, and you are at a stunning 4.7 million. Oh, and there’s also all that oil coming out of deep south Texas, east Texas and the Texas panhandle, and all of a sudden you find Texas producing in excess of 5 million bopd.

All of which means that as of today, the great State of Texas, all by itself, would now rank 4th globally in crude oil production if it were an independent country, having now blown past Iraq.  Oh, and if the EIA’s projected trend for Permian production growth holds true, Texas will in all likelihood surpass the rest of the United States in total production at some point in either late 2021 or early 2022, and become the third-largest producer in the world.

But that’s not all.

EIA’s March projection of 4 million bopd coming out of the Permian Basin alone means that single basin, were it to secede from the union, would suddenly rank as the 5th-largest oil producing nation on earth, behind Iraq as well as the other countries mentioned above. The other amazing but little known fact about the Permian is that it ranks as one of the largest natural gas plays on earth, second in the U.S. only to the mammoth Marcellus Shale play in the northeast.

How incredible is that? Look at it this way:  Just a decade ago, the Permian Basin was considered to be a “dead” oil play. Downtown Midland was basically a ghost town, and the only real oil business going on out there was a bunch of small companies buying up old, depleted oil fields and going in to rework the wells in order to squeeze a few more barrels per day out of them.

Today, just 10 year later, it is the focal point of the global oil industry, the driver of booming economies of Texas and New Mexico, the main driver of the country’s burgeoning oil and LNG exports businesses. Because industries like chemicals, plastics, fertilizers and many, many more use petroleum products and natural gas as feedstocks, the Permian is also one of the the major facilitators of our country’s manufacturing renaissance over the last few years.

Stunning. And a real blessing.

God Bless Texas, indeed.

That is all.

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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Was 2018 Really the ‘Worst Year Ever’? Uh, no.

Today’s Campaign Update

(Because The Campaign Never Ends)

Andrew Cuomo’s Russia Collusion manifests yet again. – On Thursday, Bloomberg reported on the arrival in Boston Harbor of a tanker filled with liquefied natural gas (LNG) that was produced in … wait for it … RUSSIA! I swear I don’t make this stuff up.

Yes, friends, the New England states have, for the second straight winter, been reduced to having to import natural gas from the Russian Bear despite their close proximity to our nation’s largest natural gas field, the massive Marcellus/Utica Shale basin. This is not only for home heating purposes, but for electric power generation as well, as most electricity in the Northeast is generated by natural gas-fired power plants.

Now, think about how utterly ridiculous this is. Our country is literally awash in natural gas. The U.S. is in fact the world’s largest producer of the commodity, and possesses by far the world’s largest reserves, with many centuries of proven supply beneath our soil.

We have so much natural gas, in fact, that the U.S. price for the commodity is far below the price that other countries lacking such reserves pay for imports of LNG. Where the U.S. NYMEX price for natural gas sits this morning at $3.30, America’s producers export large quantities of their own gas to countries like Japan and China, where they can command prices more than double that.

So, why is New England having to bring in LNG from Russia, you ask? Two words: Andrew Cuomo. Despite the fact that his state of New York obtains the overwhelming majority of its home heating and electricity needs from natural gas, Cuomo decided several years ago to take demagogic positions against the production of the commodity and the building of new pipelines to transport it in and through his state in order to enhance his prospects for being re-elected to a second term.

It is a simple geographic reality that, in order to build new pipelines from the Marcellus/Utica Basin to carry enough gas to the New England states to fill winter demands there, the pipelines must pass through the state of New York.  You don’t have to believe me – just look at a map.

Thus, for the second straight winter, tankers carrying LNG produced in Russia will now be landing in Boston Harbor.

Insanity.

The ‘worst year ever’? Seriously? – No kidding, I heard some liberal nitwit on the radio this week wail that 2018 has been the worst year ever for Americans. You can see similar sentiments coming from those on the radical left expressed all over social media at any given moment of any given day.

Look, I can understand why anyone who gets their news from CNN, MSNBC or the three major TV networks might feel that way, given the unending barrage of doom and gloom emanating from the newsfakers working at those fake news outlets every hour of every day. But the expression of this belief shows a mind-numbing lack of situational awareness and historical context.

Let’s start with some situational awareness:

  • Current unemployment rate – 3.7%, the lowest rate recorded since the 1960s, and 2% below the average rate recorded from 1948 through 2018. In 2009-10, there were months this rate reached 10%. Black unemployment, Hispanic unemployment and female unemployment all are at all-time lows.
  • Economic Growth – we’ve averaged 3% GDP growth this year, the highest this century.
  • Consumer spending – over the holidays, consumer spending – always a sign of a growing, healthy economy – reached all-time record levels.
  • Gasoline prices – in most states, the price for regular unleaded gas is below $2.00 per gallon.  Yes, there are exceptions, like the states of New York and California, but those are due to the high-tax policies of years of Democrat rule in state governments.
  • Jobs – as I predicted would be the case two years ago, the biggest problem in our economy today is that we have too few qualified workers to fill all the job openings out there right now. It’s a great problem to have.
  • Stocks – Yes, the stock market has gone all wobbly since October, but as we sit here this morning, the Dow is about 23% above where it sat two years ago. I’d take an 11.5% return each year in my IRA – wouldn’t you?

Now, let’s talk about historical context.  Compared to most of the past half century, the United States is at relative peace in the world. The biggest problem there is that the opposition to President Trump – the liberals and neo-cons who got us into 7 different civil wars in and around the Middle East during the Bush and Obama years – cannot stand that to be the case. Which explains why they’ve reacted so furiously to Trump’s proposals to end U.S. involvement in the civil wars in Syria and Afghanistan.

You want to know what all the furor among our media/warmonger establishment regarding Jamal Khashoggi was really about? It was about trying to destroy the Trump Administration’s strong relationship with Saudi Arabia, a relationship that the President is now leveraging in order to enable him to bring our American troops home from the Syrian hell-hole that Obama got us into 7 long years ago. You might also want to note that, since the Washington Post admitted that Khashoggi was in fact a shill for the Qatari government last week, the fake news media has basically quit talking about him.  Funny how that works.

The Crazy Little Fat Guy in North Korea is contained. North Korea and South Korea have normalized diplomatic relations, an amazing event no one but Donald Trump thought possible just two years ago. Russia may be exporting LNG to Boston Harbor, but it is otherwise staying within its borders. The most violence Americans have seen on their TV screens in recent months has been video of the riots taking place in Paris, which is a reaction to leftist/socialist political policies.

The worst year ever? Even America’s poor are so much better off today than they have been in the past. The poor among us in America today live lifestyles similar to those lived by America’s middle class half a century ago.

The worst year ever? Go back and read a little bit about how screwed up America’s air and water were as recently as the 1970s. Despite all the alarmist messaging coming every day from the socialist “environmental” movement, our environment is exponentially cleaner than it was just 40 years ago.

The worst year ever? In the palms of our hands, most Americans hold more computing power each day than existed on earth just 70 years ago.

The worst year ever? A century ago, few Americans owned cars and there was no such thing as commercial air travel. 90 years ago, no penicillin. 80 years ago, television did not exist. 65 years ago, no polio vaccine or interstate highway system. 50 years ago, no high-speed copiers. 40 years ago, no fax machines. 30 years ago, there was no email. 20 years ago, no text messages. 12 years ago, no such thing as an I-phone.

The worst year ever?  Shut up, you hopelessly ignorant fools.

That is all.

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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The Oil And Gas Situation: Eight Predictions For 2019

Well, that all escalated – or rather, de-escalated – quickly, huh? During the course of a six-day vacation around Christmas, the WTI price for crude dropped from $50/bbl down to $42/bbl. That takes a situation on oil prices that was already troubling for most domestic producers into the potentially-calamitous range for companies saddled with heavy debt loads and high lifting costs.

This latest collapse in crude prices comes on the heels of a longer-term drop that lasted throughout October and November. From October 2 through November 30, WTI fell from $76.41/bbl to $50.93, a decline of about 33%, as it became obvious to traders and investors that the market had become significantly over-supplied despite the re-implementation of U.S. sanctions on Iran by the Trump Administration.

This overall 45% drop in the domestic benchmark price for crude took place during the same period when producers were setting their capital drilling budgets for 2019. While one might think that reality would cause a significant curtailment of drilling activity during the first half of 2019, consider that only about a third of that price drop had come about by November 1, by which time most of these companies were finalizing those budgets. With WTI sitting at $63/bbl at that time, few were anticipating a further drop of this magnitude by the end of December.

Here’s the thing: Thousands of domestic drilling projects that are economic to drill at $63/bbl are uneconomic to drill at $42/bbl. So right now we are already beginning to see reports that some companies are going back and reconsidering some budgeting decisions that were made just a month ago. Others are likely still in wait-and-see mode as they try to assess whether the December price drop is a temporary result of panic-selling or a more long-term phenomenon related to a weakening global economy.

Given all of this, my first prediction is that we will see a gradual fall in the domestic U.S. rig count throughout the first half of 2019.

 

Read the Rest Here

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Crude And LNG Export Facilities Work To Solve Bottlenecks Before They Can Start

Several recent big items of positive news relating to exports of oil and LNG along the Texas Gulf Coast might come just in time to help allay fears of new, downstream bottlenecks for production coming out of the Permian Basin and Eagle Ford Shale plays.

The current bottleneck, of course, involves a lack of needed pipeline takeaway capacity for oil and gas coming out of the Permian Basin. But a dozen or more pipeline expansions and new-build projects currently in progress promise to quickly alleviate that situation during the course of 2019 and 2020. The vast majority of takeaway capacity in these projects will be designed to move the production to ports along the Texas and Louisiana Gulf Coast, with several of the lines picking up crude and natural gas produced in the Eagle Ford along the way.

This outlook has in recent weeks produced a new concern that, as those new pipelines get filled up with more and more volumes coming out of West and South Texas, new bottlenecks could materialize related to the capacity along the Gulf Coast to refine and export the production. Several recent developments in the Corpus Christi area hold the promise of heading the potential new bottlenecks off before the can form.

Where natural gas is concerned, Cheniere Energy this week was able to load its first shipment of LNG out of its new Corpus Christi LNG terminal . The Maria Energy tanker, which has a capacity of 174,000 cubic meters of LNG, left the terminal with a full load on December 11, the first load of LNG to ever ship out of a Texas-based facility. “Exporting the first commissioning cargo of LNG from Texas demonstrates Cheniere’s ability to deliver projects safely and ahead of schedule, including the first greenfield LNG export facility in the lower 48 states,” Cheniere chief executive Jack Fusco said.

Read the Rest Here

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Everyone Chill Out, OK?

Just a little perspective on the current situation, and then I’ll shut up for the day:
 
  • The current effort by the fake media/Democrat Party ministry of disinformation to tar President Trump as a racist and run him out of office is just a repeat of the playbook they used against Ronald Reagan in 1981-84. Same tactics, same false claims, same inflammatory protests and rhetoric. We have, in other words, seen this movie before.
  • We should all remember that the ending to that movie in 1984 was the single greatest landslide re-election of any sitting president in the history of the American Republic. The average American is much more perceptive than Democrats believe they are.
  • We also need to remember this key difference between 1984 and today – The Democrat Party’s status has radically changed:

    • The Democrat Party in 1984 was a majority national party in almost every respect outside of the Oval Office.  It controlled both houses of congress, a majority of state governorships and a majority of state legislative houses.  It was the majority party in the West, the majority party in the Rust Belt, the majority party in the Midwest, and the majority party in the Northeast.  It had real leadership in congress, and a strong bench of younger, upcoming leaders.  What it didn’t have was a strong candidate to challenge Reagan, whose popularity boomed along with the national economy, which had come roaring back in response to his program of tax cuts.
    • By contrast, The Democrat Party today is in complete and utter disarray. It has no leadership that is attractive outside one fringe group or another.  It is now nothing more than a regional party comprised of an often-conflicting collection of single-issue grievance constituencies.  Its only unifying core philosophy is one of hate:  Hate Trump, hatred of white men, hatred of the police, hatred of the military, hatred of fossil fuels and pipelines.  It has no real leadership outside of the evil George Soros and the termed-out Barack Obama and the twice-failed presidential candidate Hillary Clinton.  It has no bench of young, upcoming stars to replace its current sclerotic leaders.  It is the majority party only on the West Coast and in some of the Northeast.  It controls neither house of congress, only 4 of 9 seats on the Supreme Court, only 15 of 50 governorships, and an even smaller number of state legislatures.  It is an utterly corrupt and dying entity.
    • Even better for the Republicans, the termed-out Barack Obama, whose feckless and corrupt rule from the radical left and deployment of Alinskyite tactics against his political enemies led directly to the fall of the Democrat Party, is promising to move back onto the political stage this fall.  This can only work to the GOP’s advantage.
  • So tonight, when you turn on CNN or MSNBC (for what reasons I can’t even fathom at this point other than self-abuse)  and see a panel made up of 4 squealing liberals, 2 pontificating fake Republican Trump-haters, and a token real Republican who is there for “balance”, realize that fewer than 1 out of 3000 other Americans are joining you in that inexplicable activity.  Most of them are hopelessly lost souls, but they do not a majority make.
  • Meanwhile, the U.S. economy continues to heat up; the FBI and Justice Department appear to be turning back into real, functioning law enforcement entities again; U.S. foreign policy is working again, even at the previously worthless United Nations; the swamp creatures who have infested and corrupted the State Department, the IRS, the Interior Department, the Energy Department, the EPA and the Department of (no) Education are being run off in droves; the rapidly rising production and exports of oil, coal and liquefied natural gas are turning the U.S. into an energy powerhouse on the international stage; and there have been more than 1 million new jobs created in our country during the first half of 2017.
  • As we sit here today, all of these factors and many more mean it is very likely, given good health, that Donald Trump will be a two-term president.  So do what I’m going to do this evening:  stop worrying and be happy.

That is all.

 

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Is The U.S. Close To Achieving ‘Energy Dominance’?

 

If you hadn’t heard, the Trump Administration has declared this week to be “Energy Week”, a week during which the President and his senior officials are focusing on the theme of “U.S. Energy Dominance.” Not “energy independence” or “energy security”, both themes past presidential administrations have focused upon – “energy dominance.”

So, what does it all mean, and can the United States actually achieve it? Good questions. Here are some answers.

First, when President Trump talks about his goal of Energy Dominance, he’s referring to a plan that envisions implementing policies that encourage four major elements:

 • Taking full advantage of America’s amazing abundance of oil, natural gas and coal;

• Increasing exports of all three of those fossil fuels and their related products;

• Relying more on imports of oil from Canada, Mexico and other Western Hemisphere nations, and less on imports from the Middle East and North Africa; and

• Leveraging all of those three elements to enhance U.S. bargaining positions in its foreign policy initiatives.

Right on cue, we saw the President engage in a bit of energy-leveraging during his discussions this week with Indian Prime Minister Narendra Modi, folding India’s growing reliance on U.S. LNG imports into his request for a lessening of the rapidly growing nation’s import tariffs on U.S. goods. We should expect to see the President rely more and more on this sort of leverage as U.S. exports of oil, LNG and coal continue to rapidly grow in coming years. This, more than anything else, is what the President means when he talks about Energy Dominance.

Critics point to the reality that the U.S. currently imports about half of its daily crude oil needs, but they miss the point. This is not a discussion about energy “independence” – the President clearly understands that the U.S. will always be a net importer of crude oil.

Read The Rest Here

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Is The Constantly Changing Natural Gas Market About To Change Again?

The growing glut of natural gas on the global market – spurred in part by increased exports of Liquefied Natural Gas (LNG) by U.S. producers over the last year – reminds us of the dynamic nature of the domestic natural gas market, and the role shifting public policies have played into that over the years.

My own frame of reference here begins during the summers of 1977 and 1978, when I earned college tuition money by taking summer jobs on pipeline crews in deep South Texas.  In 1978, the Congress and the Carter Administration had become convinced by some really bad science that the U.S. would actually run out of natural gas in a few decades, and thus needed to conserve what little remaining reserves it had on-hand for home heating usage.  Acting on this belief, then-President Jimmy Carter signed into law the Natural Gas Policy Act (NGPA) and the Fuel Use Act (FUA), both of which had major impacts on natural gas markets, and both of which inhibited investment in new natural gas-buring infrastructure.

The NGPA discouraged investment in drilling for new natural gas reserves by allowing the federal government to establish ceiling prices producers could receive for various categories of natural gas that were established under the law.  The FUA was even more prohibitive on the demand side of the natural gas ledger, prohibiting utility companies from building new gas-fired power plants.  The result?  A Democratic Administration ironically actively encouraged the building of dozens of new coal-fired and nuclear power plants all over the United States, many of which are still operating, much to the chagrin of today’s climate alarm lobby.

 

Read The Full Piece Here

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