Category Archives: Democratic Energy

6 Saudi Officials Supported Terrror Attack: 9/11 Commission Member

9.11Memorial

9/11 Memorial

One more reason to support domestic oil and gas production…Six Saudi officials are believed to have actively supported al-Qaida members in the run-up to the 9/11 attacks on America, former 9/11 Commission member and investigator John Lehman has disclosed.

Lehman, who was a member of the 9/11 Commission between 2003 and 2004, said there is documented evidence against employees of the Saudi Ministry of Islamic Affairs, and specifically against individuals who worked for the Saudi Embassy in the U.S., Saudi charities and the Saudi government-funded King Fahd Mosque in California.

“There was an awful lot of participation by Saudi individuals in supporting the hijackers, and some of those people worked in the Saudi government,” said Lehman, stressing that these individuals had strong ties with the Saudi government in Riyadh.

The issue is resurfacing now as pressure builds to release the 38 pages of the 9/11 Commission investigation that had been redacted. Lehman’s disclosure of this information to the media is expected to increase this pressure.

Lehman’s disclosures also come at a time when the long-standing relationship between the U.S. and Saudi Arabia is being questioned and re-evaluated.

The Commission member’s disclosures contradict previous statements from other Commission members.

The Commission’s chair and vice chairs, former Republican New Jersey Gov. Tom Kean and former Democratic Rep. Lee Hamilton of Indiana, released a statement in April saying that “only one employee of the Saudi government was implicated in the plot investigation.”

Still, Lehman—former Navy secretary under Ronald Reagan–stressed that “we have found no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization.”

In summary...Lehman also implored the pubic to remember that 15 of the 19 9/11 attackers were from Saudi Arabia. He is now calling for a new, thorough investigation into the extent of Saudi involvement. But more immediately, Lehman is calling for the remaining 28 pages of the redacted 9/11 Commission report to be declassified—a move that could spur along the already partial break in U.S.-Saudi relations.

First Tanker Of U.S. Crude Leaves Corpus Christi

Oil Tanker Leaves Port Corpus Christi Foreign-bound oil is first since 40-year ban recently lifted.

ConocoPhilips Co. and NuStar Energy, LP loaded the tanker pumped from the Eagle Ford Shale of South Texas.  Vitol Group, Dutch oil-trading company, is buying the oil according to NuStar.

The legislation lifting the 40-year ban was signed two weeks ago.

Whether lifting the ban will help or hurt oil pricing is to be seen. But, from a foreign policy point of view it seems that the United States should help its friends when they have a shortage of oil due to unforeseen tragedies.  After all, when Hurricane Katrina hit the gulf coast and curtained oil production, the United States had to rely on foreign oil imports.

OPEC has used crude oil as a tool to hurt the United States during the 1973 Opec Oil Embargo.  Why shouldn’t we use it as a tool to help those countries who support democracy and free enterprise?

There was one unanticipated country who apposed lifting of the crude oil export ban…that was Canada.  They were counting on the Keystone Pipeline through the United States to create new markets for its crude oil from its oil sands. Well there is always someone unhappy with any political  decision.

Time To Acquire Salt Water Disposal Properties?

Salt Water Disposal Wells Trucks Delivering Saltwater

Some oil producers are trying to sell parts of their lucrative saltwater disposal businesses in effort to raise cash due to low crude prices.

Many oil companies rely on outside contractors, which tend to be small, privately-held companies, to inject their salt water by product of oil production thousands of feet deep into the earth below the water table.

But for some producers which own such facilities, the high margin business,  also makes them appealing to investors seeking  high yields.

Putting such businesses up for sale suggests that some energy executives are coming under increasing pressure to part with good, albeit non-core, assets to ride out the crude market slump.

The U.S. Environmental Protection Agency figures show more than 9.5 million barrels of brine and other liquid byproducts get pumped into 28,000 saltwater disposal wells around the country.

Disposal fees range from 25 cents to $1 per barrel generating hundreds of millions of dollars in annual revenue for investors.

The volume of water extracted along with oil tends to increase as wells age, in some cases reaching as much as five barrels for every barrel of crude produced.  This may be a factor of why rates for saltwater disposal wells has held steady even as crude prices have tumbled.

So, is it time to acquire salt water disposal properties?  Maybe.

Source: Oil Producers Try Selling Parts of Salt Water Disposal Businesses, Oil And Gas Investor, September 11, 2015

Ethanol…Increase Or Decrease Emissions

SciCheck Dueling TV ads are running heavily in Washington, D.C. Those against claim the federal ethanol mandate “doubles greenhouse gas emissions.” At the same time, the ethanol lobby says that “the oil industry is lying” and the mandate will lead to lower emissions.

 A 2011 report by the National Research Council, part of U.S. National Academies, found the matter is under review by the Environmental Protection Agency’s internal watchdog.

In fact, the ethanol lobby misleads viewers by suggesting that only “big oil” is apposed to the mandate when several environmental groups oppose it as well.  Other coalition owners include restaurant owners concerned with the upward pressure on food prices and boat manufacturers are upset about the problem ethanol causes marine engines.

The heavy lobbying is taking place in advance of the November 30 deadline for the EPA to finalize requirements fo total volume of ethanol to put into gasoline.

National Research Council: [A]ccording to EPA’s own estimates, corn-grain ethanol produced in 2011, which is almost exclusively made in bio refineries using natural gas as a heat source, is a higher emitter of GHG than gasoline.

Former Vice President Al Gore has called the federal requirement for adding corn-based ethanol to gasoline “a mistake.” In a 2010 address in Athens, Greece, Gore said he had come to conclude that burning ethanol had helped increase food prices, and that he had erred in backing the requirement as a presidential candidate in 2000.

Is the EPA’s new regulations to increase, decrease, or keep the Ethanol mandate requirement as it has in the past?  Chcek in a few days to see if we will have a footnote to this report.

Source: Ethanol: Higher Emissions or Lower? FactCheck.org, by Brooks Jackson, November 23, 2015

West Texas Oil Production More Stable Than Saudi Arabia?

PumpingRigWTexas Pumping Rig In West Texas

Introduction…Oil production increasing in west Texas Permian Basin,  the largest U.S. shale-oil region, as the  Bakken and Eagle Ford are experiencing production declines.

West Texas two-lane county roads are congested with trucks as energy companies are searching for deals even though the oil markets are in the worst condition of decades.

On October 26, 2015 we reported (http://oilandgasinsider.com/?p=449) a Chinese investment holding company signed a letter of intent to purchase West Texas oil fields in Howard and Borden Counties for $1.3 billion.

Companies like Exxon Mobile, Corp. to Anadarko Petroleum Corp. have also searched for assets in this region the size of Syria.  Exxon purchased 48,000 acres in two deals in August and is reportedly looking for additional acquisitions.

“We’re already seeing companies targeting the Permian,” said Alen Gilmer, chief executive officer of Austin-based Drilling Info.  “If you were to look for the most stable area today to do anything, it’s going to be there.  Today you might even argue it’s more stable than Saudia Arabia.”

In summary…Oil production in the Permian is forecasted by the  EIA to rise 0.6% in December to 2.02 million barrels a day evan as drillers idled 59 percent of rigs.  The rival shale fields, the Bakken and Eagle Ford, have fallen 12 percent and 25 per cent respectively.

Source: “Oil Producers Hungary for Deals Drool Over West Texas Tiramisu,” BloombergBusiness by Dan Wethe, November 15, 2015.

The Chinese Are Coming To Buy Texas Oil Fields

ChineseBuyTexasOilFields Beijing (AP) A Chinese investment holding company said it has signed a letter of intent to purchase Texas oil fields in Howard and Borden Counties. for 8.3 billion yuan ($1.3  billion.)

In a disclosure to Shagnhai Stock exchange, Yantai Industry, Co, Ltd said the oil fields would be bought from Tall City Exploration and Plymouth Petroleum.

Does this mean the Chinese are just bottom fishing or are they just repatriating dollars that WalMart sent to China?

Do you think this is good or bad for Texas Oil business?  Seems to me the industry is experiencing a liquidity shortage, so bring it.

The Water Contamination By Fracking Myth

YaleStudy

The Myth Has Been Disproved

Yale researchers have confirmed that hydraulic fracturing – also known as “fracking” – does not contaminate drinking water.

The process of extracting natural gas from deep underground wells using water has been given a bad reputation when it comes to the impact it has on water resources but Yale researchers recently disproved this myth in a new study that confirms a previous report by the Environmental Protection Agency (EPA) conducted earlier this year.

After analyzing 64 samples of groundwater collected from private residences in northeastern Pennsylvania, researchers determined that groundwater contamination was more closely related to surface toxins seeping down into the water than from fracking operations seeping upwards. Their findings were recently published in the journal Proceedings of the National Academy of Science.

Researchers from Duke University also recently gave people a reason to trust fracking companies. In a study published in Environmental Science & Technology Letters, scientists explained that hydraulic fracturing accounts for less than one percent of water used nationwide for industrial purposes. This suggested that the natural gas extraction processes are far less water-intensive than we previously thought.

It’s hoped that these studies will help people better understand the safety of fracking.

In conclusion, underground drinking water contamination myth has been disproved by the Yale researchers which confirmed a previous report by the Environmental Protection Agency.

40-Year Ban To End: House Approves

Oil Tanker Oil Tanker Working

The 40-year ban on exporting American Oil to foreign nations was a response to the October 1973 OPEC oil embargo for the U.S. involvement in the Yom Kippur War.

Our reasons for the ban are long gone now that the U.S. has surplus oil production.  We have lost 35,000 (6.5%) good paying petroleum related jobs from October to April according to the US Bureau of Labor.  Finding more markets for our petroleum production seems like a reasonable idea.

On Friday, October 9, 2015 the House of Representatives, lead by our own Rep. Joe Barton, voted 261-159 with 26 Democrats joining  to lift the 40-year old ban on U.S. exporting oil.

One of the criticism of lifting the ban from the Natural Resources Council was Lifting the Oil Export Ban is a giveaway to the oil industry that would undermine the progress our country is making to use more clean energy and fight climate change.

Really?

The U.S. and Texas in particular has some of the most stringent environmental controls in the world.

I had an opportunity to speak with Ryan Sitton, Texas Railroad Commission a few months ago.  He has a degree in Mechanical Engineer and ran a 500 person oil and gas engineering firm.  Mr. Sitton worked all over the world.  Occording to Mr. Sitton’s experience, many OPEC producers have no concern for the environment.  Environmental destruciton is not a concern.

If we are really concerned about the environment, wouldn’t it be better to produce petroleum in Texas where we have the world’s seond largest EPA?

President Barack Obama is threatening to veto the legislation.  Maybe, but I am proud of our Rep. Joe Barton for bringing a little sanity to Washington, DC.

Posted by Bill Moist

Bill Moist is President and Founder of Professional Equities, Inc, a funder of real estate, oil & gas, and business projects.  He also trains people how to take advantage of funding projects with Crowdfunding.  Bill is a professional lecturer at Graduate Business Schools and professional organizations.  In addtion he is a Texas Real Estate Broker, Certified Public Accountant, Master of Science real estate tax expert, and Investor/Developer with 70+ successful projects.

 Sources: House Votes to end 40-year ban on sending American oil overseas, Star Telegram, by Sean Cockerham, October 9, 2015: US crude oil prices hit lowest since 2009, eliminating thouse of jobs, The Guardian, by Debbie Carlson, August 21, 2015; Commissioner Ryan Sitton, Railroad Commission of Texasrrc.state.TX.US

U.S. Oil Production Decline Accelerates

Midland County Drilling

New EIA data shows deeper contraction in U.S. oil production than previously expected.

The EIA reported that the United States produced much less oil than expected in the first half of 2015. On the whole, the country produced 40,000 to 100,000 fewer barrels than previously reported between January and May. The August report also showed that U.S. oil production peaked in April at 9.6 million barrels per day (mb/d), before falling to just 9.3 mb/d in June.

The declines suggested that the contraction in the U.S. shale industry was deeper than the world had initially thought. And one can only assume that the decline either kept up at a similar rate, or even accelerated in the intervening months since June.

Global supplies could actually increase between now and the end of next year, despite a significant pullback in U.S. oil production. Put in this context, it appears that OPEC’s strategy of pursuing market share by forcing higher cost producers to cutback could bear some fruit. Even if it takes longer and the adjustment is not as sharp as expected, Saudi Arabia will maintain its grip on the market, pushing U.S. shale to contract.

Who is Bill Moist?

Bill Moist is President & Founder of Professional Equities, Inc., a funder of real estate; oil and gas; business projects; and trains others to take advantage of Crowdfunding. Mr. Moist is professional lecturer at Graduate Business Schools and professional organizations. In addition, he is Texas Real Estate Broker, Certified Public Accountant, Master of Science real estate tax expert, and Investor/Developer with 70+ successful projects. He can be reached on LinkedIn and ModernFundRaising.info

 

 

Sources: “Decline In U.S. Oil Production Accelerates,” OilPrice, by Nick Cunningham, September 10, 2015: “Short-Term Energy Outlook,” U.S. Energy Administration, September 9, 2015

It’s Not A Matter If Oil Prices Will Head Upwards, But When

US Shale Oil Boom…

Looking solely at US Shale Oil production since 2007, it is no wonder that OPEC was caught off-guard by the pace of Shale Oil production growth. Production grew from just over a million barrels per day in 2007 to around 5.5 mmbbls/day at its peak earlier in April this year.

U.S. Shale Oil Production

US Shale Supply To Decline…

Shale production decline is a reality. Overall decline rates in the Bakken Shale are around 50%, Eagleford Shale 55% and the Permian is around 25% and the US rig-count has now fallen by over a half. So why have we not witnessed anything yet?

Well the answer to that is a mixed and somewhat cloudy one. Delays in completing some wells are clouding the decline picture as are delays in actual hard production data. The answer to the delays in both cases is around 4 months. We have to wait around 4 months to get the actual data for what is happening now, and quite often wells are not completed until some 4 months after they have been spudded.

Some have asked why oil companies in the US have not colluded to shut-in production and wait for higher prices. The simple answer, many smaller oil companies must continue producing to keep paying-off the loans that financed the well in the first place. A fact that the banks and bond-holders that have financed some of the more risky ventures are about to find out to their cost.

Iranian Crude Supply Fears Are Misdirected…

Despite the worries of extra supply coming back onto the table from Iran, perhaps as early as November, the expectations are perhaps a little exaggerated. Indeed Iran may have millions of barrels in storage ready to supply the market. However, as for immediate production abilities, that will take a little longer. Any production that Iran has shut-in over a long-period of time will take perhaps as much as 18 months to get back to full-swing. Beyond this, it is unlikely Iran will be able to increase its oil production much higher than 3.5 mmbbls/day without the aid of Western technology and know-how.

Worldwide Demand Trend Upwards…

Oil demand has resurged anew with the oil price currently below $50/bbl for both WTI and Brent. The IEA has had to revise its demand figures upwards again for this year and next with its forecast of 1.6 mmbbls/day growth this year. In fact, the underlying rate of demand growth is at just over 1.4 mmbbls/day year on year.

More recently, evidence of what exactly the low-oil-price-scenario has done for the world economy can be seen in the latest GDP releases. US GDP was reported at 3.7% last week, much higher than analysts were expecting. World GDP is likely to be above 3% this year and is forecast above 3% next year and into 2018, according to the World Bank group.

World Oil Supply vs. Demand

In conclusion…

As the commodities expert, Jim Rogers said last week, “The cure for low prices is low prices.” The decline in supply and the rise in demand is happening right now. It’s not a matter of if the oil price will head back upwards, but when?

Sources: Opinion: Why The Crude Oil Doom-Merchants Have Got It All Wrong, Oil Pro by Andy Douglas, September 3, 2015: Oil To Drop Again Before Sanity Can Return, Oil & Energy Insider by Evan Kelly, September 4, 2015