Contributions to Coral-list discussion posted March 22, 2012

Hi,
I’m another Canadian reef scientist (wow! there are at least two of us). I support Mike Risk’s description of tar sands oil and the situation in Canada. I have not had the opportunity to speak directly to our government, although I’d love to take our Prime Minister on a dive on a coral reef. I have previously commented publicly on this topic, first in my book, Our Dying Planet, and more recently on my blog (petersalebooks.com) specifically on the Keystone XL pipeline. One point that Americans need to know is that the purpose of this pipeline is NOT to reduce US dependence on foreign oil — that myth is part of the spin. It is to permit a doubling of the output from the tar sands, because current distribution routes are close to maxed out. This extra output will be processed in Texas, and exported to Europe to fulfill their need for diesel fuel. The contracts for doing this are already in place (details in links on the blog). There is a second pipeline, the Northern Gateway, that will take this product from Alberta across to the Pacific coast. It is currently undergoing environmental impact assessment. Canadians have already been advised by our government that any opposition is one of: inappropriate foreign interference, foreign funded misceivousness, traitorous or terrorist behavior by Canadians. The purpose of this pipeline is also to boost the export of this product. Together the two pipelines will permit the operators to triple output. The benefits of this tripling of output, apart from a few jobs on the oil fields, flow to the shareholders of the multinational oil corporations driving the whole sorry mess. The implications of the environmental crisis for coral reefs are immense.

I think it is time we asked why it is necessary to rely on the oil industry to plan our energy policy? And also time to ask why it is necessary to extract every barrel of hydrocarbons from the earth as soon as we can? But rest assured, there are Canadian reef scientists who are trying to draw attention to the link between tar sands oil and the environmental crisis.

Peter Sale

http://usnews.msnbc.msn.com/_news/2012/03/22/10811855-drillers-environmentalists-not-buying-obamas-energy-pitch

Mandel Ngan / AFP – Getty Images
President Barack Obama speaks at the TransCanada Stillwater pipe yard in Cushing, Okla., on Thursday.

FirstRead on Obama’s support for Keystone’s southern leg
Data show increasing US oil supply won’t lower prices
Keystone pipeline could raise oil prices for some

By msnbc.com staff and news services
CUSHING, Okla. — Touting an “all-of-the-above” energy policy, President Barack Obama traveled to this oil town on Thursday to show his support for the southern leg of the controversial Keystone oil pipeline proposed from Canada to refineries along the Gulf Coast.

“I am directing my administration to cut through red tape, break through bureaucratic hurdles, and make this project a priority,” he said with dozens of pipes stacked up behind him at a yard used by TransCanada, the company proposing the Keystone pipeline.

But neither the oil industry, which insists Obama could send stronger market signals to lower prices at the pump, nor environmentalists, who cite the climate impact of fossil fuels, were on board.

“A true all-of-the-above energy strategy would include greater access to areas that are currently off limits, a regulatory and permitting process that supported reasonable timelines for development, and immediate approval of the Keystone XL pipeline to bring more Canadian oil to U.S. refineries,” Jack Gerard, president of the American Petroleum Institute, said in a statement. “This would send a positive signal to the market and could help put downward pressure on prices.”

Obama in his speech noted that domestic production has risen during his term. “America is producing more oil today than at any time in the last eight years,” he said. “Over the last three years, I’ve directed my administration to open up millions of acres for oil and gas exploration across 23 different states. We’re opening up more than 75 percent of our potential oil resources offshore. We’ve quadrupled the number of operating oil rigs to a record high.”

As for the overall Keystone project, Obama said the delay in the northern leg came about because Nebraska lawmakers — both Republicans and Democrats — raised concerns about the potential impact on the state’s water supply if a spill happened. “So to be extra careful that the construction of the pipeline in an area like that wouldn’t put the health and safety of the American people at risk, our experts said that we needed a certain amount of time to review the project,” he said Thursday.

Environmentalists, for their part, oppose the pipeline because it promotes the expanded use of fossil fuels, which emit greenhouse gases tied to global warming. The activist group 350.org planned to make that case by protesting Obama’s visit to Ohio State University later Thursday.

Some have even made the argument that Keystone’s southern leg won’t help domestic oil producers much since most of the oil will be coming from Canada.

It “simply is not designed to move significant volumes of domestic crude,” Anthony Swift, an international law attorney for the Natural Resources Defense Council, wrote in a blog post. “The 900,000 barrel per day (bpd) pipeline only has two comparatively small on-ramps in the United States,” he added, citing company documents filed with the U.S.

“The first, in Montana, includes an on-ramp for a maximum of 100,000 bpd of crude. The second in Cushing, Oklahoma, allows a maximum of 150,000 bpd … That means that at most, little more than a quarter of the oil on Keystone XL would be from domestic producers.”

Republicans dismissed Obama’s move as a publicity stunt that made little difference to the timeline of the southern project or the problem of U.S. energy security. “He’s taking credit for going forward on the only portion of the pipeline that he doesn’t need to approve,” said Sen. John Hoeven, R-N.D., at a press conference. “This is literally straddling both sides of the issue.” Hoeven has led the charge in the Senate to pass legislation that would bypass the administration and approve the full pipeline.
Construction of Keystone’s 485-mile southern leg is expected to start this spring.

TransCanada plans to submit a new proposal for the 1,200-mile northern leg, after which federal agencies will weigh in.

Reuters contributed to this report.

Special thanks to Richard Charter

http://www.ogj.com/articles/2012/03/boem-seeks-comments-on-proposed-eastern-gulf-lease-sales.html?cmpid=EnlDailyMarch192012

WASHINGTON, DC, Mar. 19
03/19/2012
By Nick Snow
OGJ Washington Editor
The US Bureau of Ocean Energy Management said it will open a public comment period and hold four public meetings concerning two proposed oil and gas lease sales in the eastern Gulf of Mexico.

OCS Lease Sales 225 and 226 would include 657,905 acres more than 120 miles off the Alabama and Florida coasts, where there are active leases and known or anticipated hydrocarbon potential, as part of the 2012-17 US Outer Continental Shelf leasing program, the US Department of the Interior agency said on Mar. 19.

Other eastern gulf areas are not part of the 5-year OCS program because they are under a congressionally imposed leasing moratorium until June 20, 2022, it added.

BOEM Director Tommy P. Beaudreau said the agency would use information from submitted comments and the public meetings to determine issues which would be addressed in an environmental impact statement. Planning for an EIS does not represent a final decision about the sales’ inclusion in the 2012-17 plan, he noted.

The agency has scheduled public meetings about the proposed lease sales on Apr. 3 in Tallahassee, Fla.; Apr. 4 in Panama City Beach, Fla.; Apr. 5 in Spanish Fort, Ala.; and Apr. 9 at BOEM’s New Orleans offices. Comments will be accepted until May 4, it indicated.

Contact Nick Snow at nicks@pennwell.com.

Special thanks to Richard Charter

http://www.pressdemocrat.com/article/20120317/WIRE/120319638/1033/news?Title=How-an-oil-and-gas-boom-is-interrupting-greening-of-America

By CAROLINE BAUM
Published: Saturday, March 17, 2012 at 3:00 a.m.
Last Modified: Friday, March 16, 2012 at 10:18 p.m.

Anecdotes are no substitute for hard data. But when they start to reach a critical mass and they all tell the same story, you know something big is going on.

A longtime car salesman relocates to south Texas to capitalize on the soaring demand for truckers to haul sand to hydraulic fracturing sites across the Eagle Ford shale formation. Nearby, the Corpus Christie School District can’t find bus drivers, who are getting paid a lot more to cart sand.

Workers pour into Williston, N.D., drawn by offers of six-figure salaries for jobs connected with the Bakken shale formation. Even though housing development is sky- rocketing, the Wal-Mart parking lot looks like an RV park, packed with campers providing temporary living quarters until housing construction catches up with demand.

There is no oil-and-gas drilling in Idaho, but Fleetwood Homes has been ramping up production and hiring workers to build pre-fab homes for shipment to the Bakken oil field in North Dakota, according to the Wall Street Journal.

Energy independence, the Holy Grail for every U.S. president since Jimmy Carter, is within reach, oil-industry executives and analysts tell NPR. Within the next 10 years, the United States will no longer have to import crude oil and will be able to export natural gas, energy economist Philip Verleger says.

PFC Energy Chief Executive Officer Robin West compares the impact of the “shale gale” to the fall of the Berlin Wall.

Some long-haul trucking companies are converting to natural gas because of the cost advantage over diesel, according to Bloomberg News. Fleet owners that don’t convert a portion of their vehicles to natural gas will find themselves at an economic disadvantage.

For anyone who hasn’t read or heard about it yet, there’s an oil-and-gas boom under way in the United States. By some estimates, the U.S. has three times the proven shale oil reserves of Saudi Arabia.

Thanks to new drilling techniques for extracting oil and gas from shale rock underground, the price of natural gas has plummeted to 10-year lows, creating a market-based incentive – no government subsidies required! – for truckers to convert to the cheaper, cleaner fuel. All of this has broader implications for the U.S. economy.

Let’s start with Washington’s obsession: job creation. Oil- and-gas industries have added 33,300 workers since December 2009, the recent low point. The only industry coming close to a 21 percent increase is temporary-staffing agencies – not exactly an endorsement for the economy.

Granted, the energy industry represents an infinitesimal 0.14 percent of the workforce, but it has a relatively large footprint. Oil-and-gas drilling crews need equipment, food, clothing and lodging. They want to frequent bars and restaurants in the makeshift boom towns sprouting up in areas of North Dakota, Montana, south Texas and Pennsylvania.

Manufacturers of drilling equipment need raw materials, such as steel and chemicals. So there’s a natural multiplier effect. Think of it as fiscal stimulus without the government first taking from Peter to give to Paul.

The Bureau of Labor Statistics publishes Employment Requirements data tables for firms to assess the impact of opening a new factory or store on jobs and sales. James C. Franklin, head of the Division of Industry Employment Projections at the BLS, walked me through some of the statistics for the energy industry.

Every direct job created in the oil-and-gas extraction industry, for example, yields 2.3 jobs elsewhere in the economy, Franklin says. This is expressed as a multiplier of 3.3, higher than the average of 2 for the 195 industries tracked by the BLS.

Petroleum-and-coal product manufacturing (refineries) happens to have the highest multiplier at 8.2.
And yes, manufacturing industries are at once the most capital-intensive, the most productive and still have the biggest spillover effect when it comes to generating jobs.

The huge supply of inexpensive (to produce and to buy) natural gas has the potential to accelerate the return of manufacturing enterprises to the U.S. That trend is already under way as rising wages in China and higher fuel-related shipping costs reduce the appeal of outsourcing.

“Cheap natural gas is transforming the competitive economics of the marketplace,” says Daniel Yergin, the author of “The Quest: Energy, Security, and the Remaking of the Modern World.”

Natural-gas prices fell this week to a 10-year low of $2.27 per million British thermal units, half the price of eight months ago. After adjusting for the lower energy content, natural gas is now about 40 percent cheaper than petroleum fuel, according to calculations by the Energy Information Administration.

That’s why many trucking companies are choosing to convert. With the differential between oil and natural-gas prices at a record high, more and more homeowners are converting from oil heat to natural gas even though the switch may take anywhere from one to five years to pay for itself.

If the price trends continue, the focus may shift from concern about higher gas prices killing the economy (the glass is half-empty) to the realization that cheap natural gas can act as a tailwind (the glass is half-full). Not everyone will be happy, of course, including President Barack Obama. Cheap natural gas makes renewable energy even less competitive than it was before.

Caroline Baum, author of “Just What I Said,” is a columnist for Bloomberg View.
Special thanks to Richard Charter