We Have It, They Admit It, However, We Can't Use IT.

This is a GREAT Article.

Hey folks,

Happy Tuesday to ya. This is a GREAT Article. It really is. Just one problem, which it even admits. It's by News Chief - What U.S. energy crisis? Published: Monday, March 26, 2012 at 6:28 a.m.

Every election year, the politicians take malicious delight in panicking Americans with lurid predictions of an imminent energy crisis: We're running out of oil. We're running out of natural gas. The oil sheikhs will be dictating how we run the country.

The solution, of course, is always to elect the politicians making the charges. It's all nonsense.

OK remember this. To say we need to Elect a Politician to CHANGE Obama's Energy Policies is nonsense? We will look at this again in a few seconds.

A March 20 Wall Street Journal commentary by Citi's top commodities researcher, Ed Morse, contends that "in energy, North America is becoming the new Middle East."

That might have been an overstatement, but not by much.

The U.S. and Canada's proven reserves of oil and natural gas are increasing at rates that would have been considered fantasy only a few years ago.

The conservative calculations of the Energy Information Administration said oil reserves increased 8.6 percent from December 2008 to December 2009 and natural gas reserves rose 11.3 percent — and those were economically down years when exploration would presumably slow down.

Natural gas reserves reached their highest level since 1971.

Proven reserves are those that the EIA deems reasonably recoverable given existing technology and economic conditions.

Of course, the technology is constantly improving and high demand makes the recovery profitable.

And then there are new discoveries, like the Bakken Field underlying almost all of North Dakota and parts of South Dakota and Montana. It is estimated to hold 481 billion barrels of oil.

Indeed, because of our refining capacity, the United States became a net petroleum exporter last year for the first time since 1949.

In The Wall Street Journal, Morse writes, "The United States has become the fastest-growing oil and gas producer in the world, and it is likely to remain so for the rest of this decade and into the 2020s."

Now this is true. However, a bit misleading. This is IN SPITE of Obama's War on Energy. His outright hostility to anything Oil, Natural Gas, and Coal. IN SPITE of Obama standing in the way, we have been able to do this. Imagine what we could do if he would get OUT of the way.

Canada is enjoying a similar boom in production and explorations. And one can hope that the overregulation and underinvestment restricting production in Mexico and Venezuela won't last forever.

We would profit greatly from and WITH them if Obama would allow the Keystone Pipeline to be fully built. He is NOT. HE is standing in the way of this also.

In the United States, it would help if the federal government wouldn't get distracted by uneconomic and wasteful incentives for ethanol, electric cars, wind mills that chop up great numbers of birds for tiny contributions to the electricity grid and schemes for extracting fuel from random plants.

OBAMA!

The government's efforts should be directed to research, investment and regulation to insure that this energy, which our economy must have, is extracted cleanly and safely.

The "new Middle East" sounds pretty good energy-wise, but we'd just as soon skip the political turmoil. With the coming election, we have a surplus of our own.

OK, so? "The solution, of course, is always to elect the politicians making the charges. It's all nonsense?" THAT is nonsense. It is OBAMA that said the Coal Industry would go Bankrupt, and he was proud about that. It is Obama that said he likes $4.00 plus a gallon Gas. It is HIS Administration that said we need to find a way to INCREASE our Gas Prices to those of Europe. They have of course backed off that. It is OBAMA that put into place Moratoriums both actual and de facto, that have cost America hundreds of thousands of Jobs. It IS Obama standing in the way of the Keystone Pipeline. Oh, he attempted to take credit for that of which he could not stop if he wanted to, and what he has no say on, but he IS blocking the Majority of it for no other reason than Politics.

It IS OBAMA who keeps throwing hundreds of Billions of Dollars into Companies that do nothing but line the Pockets of their CEO's, fire Employees, produce NOTHING, and go out of business. No folks, it's NOT nonsense. It's FACT! We need someone in Office that understands REALITY, and is committed to doing what we need to do. Forget the Gas Prices, that we KNOW from History WILL go down. Forget the new Jobs it WILL create, that we know from History. We are talking nearly if not more than a TRILLION dollars in NEW REVENUE that it WILL generate. We have a President that just says no. While saying NO, continues to spend more money. Think about that.
Peter

Real Life Proof We CAN Drill Our Way Out

Complete and utter Election Time BS.

Hey folks,

Happy Tuesday to ya. Since it's Tuesday, time to check in at the Energy Front. Someone just asked me why I call it "The Energy Front." I call it the "Energy Front" because this Administration is at WAR with every form of Energy that makes the World work. From the Moratorium, to the De-Facto Moratorium, to the Oppressive Taxation and Regulations, to the OUTRIGHT Denial of anything that WILL actually work to: Create Jobs, Reduce Dependency, Increase Revenue and bring Costs Down.

They are in trouble folks. It really is that simple. We learned before that $4.00 Gas is a tipping point. Once the price hits $4.00 a gallon, people get angry. People start calling for action by Government. People start changing their Lifestyles. It gets loud out there. When it hit $4.00 a gallon, Obama attacked Bush saying he should do something. The Liberals attacked Bush saying he should do something. He did. He said we will use our own. He said we would Drill more and use more of our own resources. The Price of a Barrel of Oil dropped, overnight, like a rock.

So now, Oil is $108 a Barrel. Gas is near and in some places over, $4.00 a gallon again. This President is NOW saying there is nothing he can do. This President is NOW talking about it and completely LYING about it. He is coming out and attempting to get you to believe we are Drilling more and it's not working. {Sigh} Complete and utter Election Time BS.

It was Barack Obama who said he likes $4.00 a gallon Gas. It was HIS Administration that said they want to find a way to get American Gas Prices up to that of Europe. It is Barack Obama who said he would bankrupt the Coal industry, and your Energy Costs would "Necessarily Skyrocket."It is Barack Obama who imposed a Drilling Moratorium. Rigs all over packed up and took Tens of Thousands of American Jobs with them. It is Barack Obama who put into place a De-Facto Moratorium. Slowing and blocking the Permitting Process. It is Barack Obama who is attacking Natural Gas, it's too cheap. It is Barack Obama who is attacking Hydrofracking.

All this at the same time he is out there saying we are Drilling more and it's not working. Saying we can't Drill our way out of all this. Again folks. Complete and utter Election Time BS. What we CAN'T do Mr. President, is continue to throw hundreds of Billions of Dollars into Companies that line the pockets of Executives, while firing Employees, producing NOTHING, and going out of business.

What we can't do is get off Oil and flick a switch and go Green. There is NOTHING Green to switch to. NOTHING. I love this piece by Erick Erickson of Red State.

On Friday, the President of the United States accused his Republican opponents of being members of the Flat Earth Society because of their demands that the nation increase drilling.

In no small bit of irony, the President who bitterly lamented the rise of ATM’s and Internet travel options accused the GOP of wanting to bitterly cling to the past.

But what of Barack Obama’s energy policy? He likes to tout wind and solar technologies and batteries, but it seems while he accuses the GOP of being flat earthers, the reality is that the President is himself anti-science when it comes to the reality of domestic energy needs.

His solution to fueling our cars amounts to using unicorn farts as gas — which has just as much a chance of happening as the mythic battery powered cross country run.

{Laughing} "Unicorn Farts." Very funny. However, Farts are CO2 and that's a pollutant. Can't use that. {laughing}

So we can't Drill Our Way out? Look at North Dakota. Here is the entire Article. According to Personal Liberty Digest - The North Dakota Oil Boom March 16, 2012 by Chip Wood Yup. That's his name. Chip Wood.

The average prices of a gallon of gas and a barrel of oil are near 150-year highs. Most pundits expect them to go higher. Are you ready for $5-per-gallon gasoline?

In a recent speech, President Barack Obama said: “We’re not going to be able to just drill our way out of the problem of high gas prices.” Actually, to a large extent, we can. For proof, let’s compare what’s been happening in California to the extraordinary accomplishments in North Dakota.

According to the Fraser Institute’s 2011 Global Petroleum Survey, California is the worst State in the Nation for its hostility to drilling. In fact, measured against the rest of the world, California ranks 91st.

Thanks to years of placating environmental extremists, California’s anti-drilling regulations make it almost impossible to drill for new oil anywhere in the State, onshore or off. As a result, its production of oil has fallen by nearly one-third in the past 20 years. As oil production has declined, so has tax revenue. Even with several gigantic tax increases during that period, oil revenues in the State are down.

That’s too bad, because California needs every penny of income it can get. It has one of the highest State sales taxes and personal income taxes in the country. Still, it’s not enough. The budget deficit for the coming fiscal year will top $9 billion — the fifth year in a row of billion-dollar deficits. Governor Jerry Brown’s proposed solution? Raise taxes even higher.

So you won’t be surprised to learn that wealthy Californians are fleeing the State as fast as they can. According to census data, almost one-third of its wealthiest residents — those earning $500,000 a year or more — fled the State between 2007 and 2009. On our Left Coast, they won’t drill for oil. And pretty soon, they won’t be able to drill many millionaires, either.

Let’s contrast the near-bankruptcy of the People’s Republic of California with what’s been happening in one of the most independent and entrepreneurial States in the union: North Dakota.

In 1995, the U.S. Geological Survey estimated that there were 150 million “technically recoverable barrels of oil” in an area of North Dakota known as the Bakken Shale. In 2008, the number had climbed to 4 billion barrels. Two years later, it had doubled to 8 billion barrels.

Today, thanks to vast improvements in recovery technology as well as the discovery of vast new oceans of underground oil, estimates of “recoverable” oil in the Bakken Shale have tripled to 24 billion barrels. That is more oil than is being produced anywhere else in the United States, including Alaska’s famed Prudhoe Bay. But it’s a small fraction of what is possible.

Experts say that current technology can extract only about 6 percent of the oil they know is underground in North Dakota. Total estimated oil reserves are thus around 500 billion barrels. And new discoveries are happening all of the time.

Let me include an interesting footnote on the subject of “reserves.” In 1980, the oil reserves in the United States were estimated at 30 billion barrels. Yet in the intervening 32 years, this country actually produced 77 billion barrels of oil. In other words, we produced more than 2.5 times more oil than the leading experts said there was 32 years earlier.

Today, the numbers are even more staggering. The amount of “technically recoverable” oil in the United States is estimated at 1.4 trillion barrels. (Please note that is “trillion,” with a “T.”) Unfortunately for us, most of that oil is located in areas Obama says we can’t search for it: in portions of Alaska and in waters off our shores.

Combined with known resources in Canada and Mexico, total recoverable oil in North America exceeds 1.7 trillion barrels. How much is that? Let me put it in perspective: It is more than all the oil the world has used since the first oil well was drilled in Titusville, Penn., 150 years ago.

So far, all I’ve discussed is oil. When natural gas and coal are added to the total, the numbers are clear: We have enough energy reserves in the United States to fuel all of our needs for 100 years, even if we never made another discovery.

Back to North Dakota for a moment. The effect of the bonanza there has been extraordinary. Stephen Moore, my favorite Wall Street Journal writer, says that what is happening in Williston, N.D., “is what the Gold Rush might have looked like had it happened in the time of McDonald’s, Wal-Mart and Home Depot.”

The State has the lowest unemployment rate in the Nation, at just 3.3 percent. California’s, by contrast, is 11.1 percent. That doesn’t even count the unemployed people who have simply stopped looking for work. The true unemployment number is probably closer to 20 percent.

According to the Census Bureau, North Dakota led the Nation in job and income growth in 2011. While California is losing millionaires every day, North Dakota is creating them faster than anyplace else in the country. But even entry-level positions are benefiting. For example, a job flipping burgers at McDonald’s pays $18 an hour plus a “signing bonus” for new employees.

And while the State of California can’t begin to pay all of its bills — it even issued IOUs last year in place of tax refunds — the biggest argument in North Dakota’s State Capitol is how to spend all of the money that’s pouring in. Legislators in Bismarck have approved hundreds of “shovel ready” infrastructure projects, including roads, bridges, railroads and pipelines. But even while spending more on worthwhile projects, legislators also agreed to cut the State income tax.

What’s happening in North Dakota is a classic example of the one thing that would solve our energy problems everywhere — and most other problems in the economy, too. Unfortunately, it’s the one thing Obama and his team won’t even consider.

The solution is simple: Let the market work.

In his State of the Union address in January, Obama declared that “This country needs an all-out, all-of-the-above strategy that develops every available source of American energy.”

Like so much that comes out of our President’s mouth, the sentence was as misleading as his skilled staff of speechwriters could make it. What he meant was that his Administration would continue pouring billions of dollars into every wasteful alternative energy pipe dream they could think up, while continuing to slap higher taxes and more regulatory handcuffs on the businesses that can actually solve our energy needs and make money (and pay taxes) doing it.

Rather than foster energy independence, Obama wants to make us all dependent. Dependent on government, that is.

Want to reduce unemployment? Increase tax revenues? Get the economy humming again? Truly foster energy independence?

The answer to all of them is the same: Get government off our backs. Let the market work. The results will be amazing. Maybe next year we’ll have a government that’s willing to give it a try.

Until next time, keep some powder dry.

–ChipWood

It really is not hard to understand. To fix a problem cause by the attack on Oil, is to FREE Oil and let those that do, do what they do, and we will all benefit from it. Decreased dependency. Increase Revenue. Increase National Security. Increased Jobs. Lower Costs on EVERYTHING. Drill our way out of this Mr. President? Yes we can.
Peter

Sources:
Red State - Barack Obama’s Energy Policy: Unicorn Farts as the Fuel of Tomorrow Posted by Erick Erickson (Diary) Monday, March 19th at 4:46AM EDT
Personal Liberty Digest - The North Dakota Oil Boom

Obama Administration Continues to Lie About Gas Prices

This is plain Pathetic.

Hey folks,

This really is just plain pathetic. It really is. Obama comes out and outright LIES about his Energy Policy. I mean completely LIES about it. According to Obama on WHO-TV, Eyeball 13 news, Monday night, said this...

Our oil production right now is higher than at any time in the last eight years. We've seen more new rigs go up. We're opening up millions of acres to oil exploration, and so the issue here is not that we're not drilling enough.

NONE of this is TRUE. You Mr. President, are the one the imposed a ridiculous and pointless Moratorium in the Gulf. Rigs packed up and went home. Well, elsewhere. Causing hundreds of thousands of lost Jobs. YOU Mr. President, are the one that continues to STALL the Permitting Process, and STILL refuse new Drilling where we KNOW Oil is. YOU Mr. President, are the one that has been attacking Oil, Coal, Natural Gas, and YOU are the one Mr. President, that just said no to the Keystone Pipeline that would have created Tens of, if not Hundreds of Thousands of NEW JOBS. YOU blocked the Decrease of Dependency, and INCREASED Revenue. Not to mention bringing Energy Costs DOWN. YOU did all these things.

The problem is we only have 2% of the world's oil reserves and we use 20% of the world's oil.

Patently Absurd and an outright Lie.

Obviously what we want to do is to get gas prices as low as we can, as quickly as we can, but the most important thing in order to do that is to reduce our demand on oil.

This one is just convoluted to say the least. We are doing all we can to increase Oil Production but this is BAD and we need to get AWAY from Oil? Does that make any sense to you whatsoever? He continued..

I think the American people understand that, you know, we don't have a silver bullet when it comes to gas prices, but they're hurting right now.

No Mr. President. The American people KNOW we CAN do something about it. YOU are the one standing in the way.

You know, it's like a tax on your paycheck every time you fill up. And so what I've instructed my team to do, we're looking at every single thing we can do from relieving bottlenecks to try to see if we can impact internationally how the oil markets are operating. Ultimately, though, the single most important thing we can do is reduce our dependence on foreign oil, and the fact that we've reduced our dependence by about a million barrels a day, that over time is gonna have a big impact.

Alright, I'm done with the Liar and Chief on this issue. They are NOT looking for ways to reduce our Dependency on FOREIGN Oil. The way you do that is produce more DOMESTIC Oil. There is NOTHING to switch to. All your so called GREEN Energy Jobs are going away, because there is NOTHING to switch to. From Wind Companies, to Solar, to now even Battery Companies, once the Federal Money dries up and goes away, so do they. After the Executives line their pocket and contribute some back to Obama and Crew.

Then you have Chu. Remember him? He said we need to find a way to RAISE Gas Prices to EUROPEAN Prices. He is the US Energy Secretary. Remember, back in 08, Obama said he LIKES $4.00 a gallon gas. Just wished it got there slower. Then his Energy Sec. said we need to find a way, even if through Taxation, to raise Gas Prices. Well, now he changes his tune. According to

CNS News - Energy Secretary Renounces Call For Higher Gas Prices By Craig Bannister March 13, 2012

Under questioning by Sen. Mike Lee (R-Utah) today, Energy Sec. Steven Chu renounced his previous call for higher gas prices.

“Since I walked in the door, as secretary of energy, I’ve been doing everything in our powers to do what we can to reduce these gas prices,” Sec. Chu told the Senate hearing.

As we know is a COMPLETE Lie.

Sen. Lee then asked Chu: “Are you saying that you no longer share the view that we need to figure out how to boost gasoline prices in America?”

“I no longer share that view,” Sec. Chu said.

Because Obama slapped me upside my head and said you better not tell the truth about this. It's an election year. Now go lie. We're dying here.

Sen. Lee then followed up: “But, you did then, but you don’t now?”

“When I became secretary of energy, I represented the U.S. government, and I think now in this economic very slow return, these prices could well affect the comeback of our economy and we’re very worried about that,” Chu replied.

NO they are not. What they are very worried about is your VOTE!

“So, of course we don’t want the price of gasoline to go up; we want it to go down,” Chu concluded.

Earlier, Sen. Lee questioned Chu’s ability to empathize with the average American’s plight at the pump:

“I don’t know how much driving you, personally do, yourself. So. You may not personally be feeling the gouge at the pump. But, I assure you that hundreds of millions of hard-working Americans do feel this.”

Chu, of course, is chauffeured to and from work on the taxpayers’ dime.

It's an election year. Obama is hurting. 41 percent approval rating is the lowest of his Presidency. The majority of Americans, no mater what Political affiliation, Race, Status, or Sex, all say it's the Economy Stupid. One of the BIGGEST Chucks bringing the Economy down is Energy Costs. This is just FACT. So of course the Administration is going to come out and try to convince you that "They feel your Pain." and that they "Are working hard to find a way to help you." When we KNOW this couldn't be farther from the Truth. This is all BS. There is no other way to say it. It's not distortion. It's not exaggeration. It's not false assumptions. It is complete BS. Outright lies. It really is just this simple.

Listen to me folks. Hear what I am telling you here. I wish I had time to find it, but remember that report a while back that told us, no matter what, I think it was about Solar, even if completely successful, we would still get something like 60 percent of our Energy from Oil in the next 50 years? There will never come a day, here me, there will never come a day, EVER, that we will flip a switch and never use another drop of Oil. NEVER.

Problem is, Solar is not successful. Wind, NOT successful. Batteries, NOT a suitable switch. There is NOTHING. So we need to, and the only way to, reduce our dependency on foreign Oil is to produce more of our own. In doing so, we will create a SAFER America, boost the Economy, create hundreds of thousands of Jobs, and bring down the Price of Gas. There is NO other solution. Period.
Peter

All The Subsidies Will NOT Create Market

The most important fact left out.

Hey folks,

According to Carl Pope, Chairman, of the Sierra Club, we are losing the Green Revolution to places like China. He is not happy about that. He thinks it is unfair that they give all that money to THEIR Green Energy Manufactures, and we apparently, are not giving enough. According to Carl Pope, Chairman, of the Sierra Club, in the Huffy Posts yesterday:

There's no doubt the U.S. is losing the clean-energy race. In 2010 our level of investment in clean energy fell behind both China and Germany, with a growth rate that is 11th among the industrial nations. Last year, China gave $30 billion to its largest solar manufacturers, 20 times the amount that the United States gave, according to Jonathan Silver, former executive director of the U.S. Energy Department's loan program. As a result, in 2010 China sold more than half of the world's solar panels, and is now gearing up a similar effort to dominate global wind markets.

A, China HAS $30 Billion to throw away. We do not. What he HAVE thrown Money away, we have done so freely and even Joyfully, and we have NOTHING for it. B, our own President, who took over a Car Company and is PUSHING "Green Cars" is OUTSOURCING the Battery Manufacturing TO CHINA. We are GIVING them the Business on a Product NO ONE WANTS.

We are consistently losing both manufacturing and deployment leadership in clean-energy technologies that were pioneered and developed in the United States. That's simply not worth debating -- the interesting question is what should we do about it?

Uh, Manufacturing and Deployment to WHO? WHAT? Were is the Market?

OK. Remember OCAN? Looks look at this in the opposite way. Shall we? I create a Paint, that I SAY will save you hundreds, and in some cases thousands of Dollars. One Coat, all you need, EVER. However, the Price of my one can of OCAN is $1000.00 a Can. So, to paint something like a house, you would need to spend more than $6 to $10 Grand. Oh some out there would take the chance and buy it. But Working John and Mary, they will still buy the $50.00 a Can paint. They there will be others that ask, how do I know that it will last forever. If the idea is not believable, MANY will not even think about spending that money to TRY it out.

However, by me making this Product, one coat, ever, I can make the claim that I am saving the planet. Less garbage, less Paint. Less Fumes. ETC. I can now get into the Carbon Offset Business and sell offsets to others. Now the Government comes along and says, "We want in. We want to be seen as caring about the Planet." I say to the Government, "Well, no one is buying it, I may have to shut down." The Government then says, "No, never mind all that, here is $500 MILLION dollars. Just uh, you know, don't forget who loves you baby." However, just like Solyndra, if there is no one buying the Product, it does not matter how much money I have, how much Product I manufactured, there is NO WHERE to deploy it. Just like Solyndra, I may be tempted to take the money and run, attempting to cut my losses.

So this guy, Carl Pope, Chairman, of the Sierra Club, wants our government to give MORE money to a business so that they will SURVIVE, even though, there is NO MARKET for it. He is upset, and It's not fair, that China can give all this money away. It's just not fair. We need to do the same thing. In his Mind. Throw away more money we do NOT have.

Toward the end of his little rant here, he tells you the truth. He said this.

Manufacturing sits in the middle of a supply chain. You must invent wind-turbines before you can manufacture them, and you must have a market downstream before you can sell them. But if national policy makes this crucial middle link of manufacturing uncompetitive, then the whole supply chain will eventually shrink.

HOWEVER!!! The most important fact left out. Where is the DEMAND? There is NONE.

What we do have a Demand for, is what we already KNOW we have. That is what they World runs on. Our own, and the Worlds own, Natural Resources. Oil, Natural Gas, and Coal. With the advancement of Little Hitler {Ahmadinejad}, the Muslim Brotherhood taking over the entire Region, attempting to enact Sharia Law, which is a Stated Goal, one World under Sharia Law, our National Security is dwindling at light speed. Instead of throwing money away on what we Dream we could use, at the expense of what we KNOW we need, is insanity. With all this turmoil and chaos in the Middle East, we need stability here in this country. Not Dreams. Not a Supply of no Demand. But a Supply of what we HAVE a Demand for. This will cost us NOTHING. Just permission to go get it.
Peter

Sources:
The Huffington Post - China Should Play by the Rules, and America Should Play to Win

AP I / Blogger Conference Call, Keystone XL Pipeline

API/Blogger Conference Call

Hey folks,

Happy Thursday to you. A week ago Tuesday, I talked about the Keystone XL Pipeline. This past Thursday, API had one of their famous API/Blogger Conference Calls on this very subject. Here is the Trascript. Have a GREAT Day. See you soon.

Moderator:
Jane Van Ryan, API

Speakers:

Marty Durbin,Executive Vice President of Government Affairs,
API Cindy Schild, Refining Manager,
API John Kerekes, Director, Central Region,
API Janet Annesley, Vice President of Communications,
Canadian Association of Petroleum Producers
Rayola Dougher, Senior Economic Advisor,
API Peter Lidiak, Pipeline Director,
API Sabrina Fang, Media Relations Representative,

API Thursday, June 16, 2011
Transcript by Federal News Service Washington, DC

Brian Westenhaus, New Energy and Fuel
Gail Tverberg, The Oil Drum, Our Finite World
Geoff Styles, Energy Outlook
Joy McCann, Right Network, Little Miss Attila
Lew Waters, Right in a Left World

00:13 MS. VAN RYAN: And we’ve got a few people on line now, so why don’t we go ahead and get started? And I’ll remind you all what the rules of engagement are here today. First of all, the topic, as you know, is oil sands and the Keystone XL Pipeline. If you have other questions, we’ll try to address those, as well. The blogger conference call today will be recorded, as they always have been in the past. And we’ll put up the audio file and the transcript online at the Energy Tomorrow Blog as quickly as we can. We believe it probably will be Monday before we can actually get them posted, and at that point I’ll send a link out to all of you so you’ll have an opportunity to take a look at those. I’ve got several people on the phone with us today that can answer questions about oil sands and the Keystone XL Pipeline. Let me give that information to you:

The first person that we’ll address some questions to will be Marty Durbin. Marty is API’s executive vice president for federal relations. We also have Cindy Schild, who is API’s refining issues manager. John Kerekes has called in, he is API’s Central District director, and we have a special guest, Anna – I’m sorry – Janet Annesley, who’s the VP for communications at the Canadian Association of Petroleum Producers. So it’s always nice to have a representative from our friendly neighbor to the north, who’s on the ground and knows the oil sands probably better than any of us on the call because she sees it quite frequently. So Janet, thank you for joining us.

1:50 JANET ANNESLEY: My pleasure.

1:51 MS. VAN RYAN: Now, we’ve got quite a few bloggers on the call. I am expecting more. I think some will be joining us late because of Anthony Weiner’s announcement. So let’s go ahead and move forward. And Marty, the reason why I thought we should direct questions to you first is because this morning API put out a news release stating API’s support for a measure that was passedthrough a House subcommittee yesterday that would, in essence, force the administration tomake a decision on the Keystone XL pipeline by November 1st.

Can you perhaps describe API’s position on this?

2:35 MARTIN DURBIN: Hello, Jane, and again, thanks for – thanks, everybody, for joining us. And I’ll just make a brief – some brief comments, and then turn it over to Cindy for more of the detail here.

But as Jane said, you know, we’ve got that legislation moving through – moving through the House of Representatives that passed through a subcommittee of the Energy and Commerce Committee yesterday, that would essentially just mandate that, you know, a decision be made by November 1st on the Keystone XL pipeline approval. You know, we, of course, have been very strongly supportive of the pipeline for what we really see as a – just a win-win all the way around, from energy security to economic development and revenues for the government – you know, jobs immediately. You know, this is the largest shovel-ready project we have out there. And this is a – you know, a process that is now entering into its – into its third year – you know, taking much longer than we think it should have.

But again, I think we’re seeing growing support for the pipeline and for the further utilization of Canada’s oil sands both in the Congress and out in the states. I’m happy to say that we’ve seen a lot of governors and mayors and others join in support of the pipeline, as well as avery strong support from organized labor, both at the national level and again out in the local sand at the state council level, as well.

So, you know, we just think that as we look at the opportunities we have at a time of unemployment, high unemployment, and when we’re trying to help the economy recover and improve our energy picture, this is a clear win for everyone, including the administration. And we’re hopeful to work with them – continue working with them closely as they get to thatdecision point. So, Jane, why don’t I stop there? And you want to turn to Cindy?

4:30 MS. VAN RYAN: Sure. Cindy, do you have something you’d like to add?

4:35 CINDY SCHILD: Sure. Good afternoon. As Jane mentioned, today API is highlighting the enormous economic benefits of approving the Keystone XL pipeline. The $7 billion Keystone pipeline expansion will greatly increase the availability of crude oil from Canada’s oil sands to U.S. refineries, and will generate as many as 20,000 new U.S. jobs. Yet jobs from the pipeline represent just the tip of the iceberg of what Canadian oil sands development could do for U.S. economic growth and job creation. Almost 1,000 American companies from 47 states are already involved in the development of Canada’s oil sands. And according to the Canadian energy – (audio break) – U.S. jobs supported by oil sands development in Canada could grow from 21,000 jobs in 2010 to 465,000 in 2035. So for every two Canadian jobs supported by oil sands development, one job will be created here in the U.S.

And because Canada is already our largest trading partner, the economic benefits from oil sands development in both countries are significant. For every dollar the U.S. spends onCanadian products, including oil, Canadians return up to 90 cents through purchases of U.S. goods and services.

The Keystone XL pipeline will also significantly strengthen our energy security, because it will increase our capacity to import oil from a friendly, reliable neighbor and process it into usable products in U.S. refineries. We currently import more than 60 percent of our crude oil. About one-fourth of that comes from Canada, our largest foreign supplier. We are now importing more than 2.1 million barrels of oil a day from Canada. With a pipeline, our crude imports from Canada could soon approach 3 million barrels a day – twice of what we currently import from the Persian Gulf. Cambridge Energy Research Associates projects Canada could supply 5 million barrels of oil a day to the U.S. in 2035, or one in every four barrels Americans are expected to consume.

The Department of State has conducted an extraordinarily thorough environmental review of the Keystone XL project, involving multiple federal, state and local agencies, providing extended opportunity for public input throughout the process and including comprehensive analysis of alternate routes. And nothing in their supplemental draft environmental impact statement changes the bottom line. In the State Department’s own words, no new issues of substance emerged. So we continue to urge the department to finalize the EIS,to make its national interest determination and approve this critical project. Following nearly three years of review and assessment, it’s time to let this important project move forward.

Pipelines have a long history as a safe, reliable and well-regulated way to move crude oil and petroleum products. The Keystone XL pipeline will be built to the most advanced specifications, and will be monitored and maintained by state-of-the-art technologies.

It’s also important to recognize that the oil delivered by the pipeline to U.S. refineries isvery similar to crude from California, Venezuela, Mexico, crudes that are already processed here in some of the most advanced refineries in the world.

And as we say in our comments to the State Department, it’s time for this vital project to move forward. Oil will continue to be a critical part of the nation’s energy mix for the foreseeable future. We have the opportunity to enhance domestic energy security, cooperation with Canada – our largest trading partner, friendly neighbor to the north.

Canadian oil sands development will continue with or without approval of this pipeline; other nations will aggressively develop this key strategic resource for their future energy needs if we fail to act. The U.S. should approve this pipeline to utilize this resource to enhance our energy security, our national security, preserve our global competitiveness and maintain our role as a world economic leader.

We’ll now be happy to answer your questions.

9:10 MS. VAN RYAN: Thanks, Cindy. I appreciate that. And who’d like to begin?

Who has a question for any of our speakers today? While you’re thinking about your questions, by the way, let me mention that I neglected to say two things. First of all, Rayola Dougher is also in the room at API. She’ll be able to answer virtually any question you may have –(laughter) – about the oil and natural gas industry.

And furthermore, I’m also online at the same time that we’re on the phone, so if you have any questions that you want to submit by email, that’s fine; I’ll be monitoring my email account as well.

So, who’d like to go first?

9:49 GAIL TVERBERG: Hello, this is Gail. I was wondering, now, the proposal, you know, that’s covered by the legislation and such, would that extend the pipeline all the way down to the Gulf Coast, or just to Cushing? Because my impression is, really, what we need is a pipeline down to the Gulf Coast; dumping more oil into Cushing doesn’t help us nearly as much because the refineries there are pretty much full up. We need a way of getting the oil all the way down to the Gulf Coast where there’s plenty of capacity.

10:22 MS. SCHILD: Yeah, exactly, Gail. It is going – it would go down to the Gulf.

And you’re exactly right; that’s where it’s needed. That’s where the most refining capacity is in the U.S. And that’s where we have the most complex or advanced refineries that would be capable and have invested to be able to process this crude.

So you’re absolutely right. Maybe the little bit they use – the Cushing element is, there are two extensions to the pipeline. One would be to help alleviate some of the storage issues at Cushing, some of the terminals there. But it would still be bringing the crude to the Gulf Coast,the refining regions there.

In addition, the other arm would also create the ability to transport domestically produced crude oil and bring that via the pipeline down to the Gulf Coast.

This is Cindy.

11:29 MS. VAN RYAN: Do we have other questions?

11:34 MS. TVERBERG: So what exactly is the plan for November? I mean, that legislation – would that just get the president to act to consider the question in general, or you know, this is all come sort of piecemeal, that you kind of – then, you look at that piece, and then you decide whether – well, we’re just going to build another pipeline to Cushing, and we won’t decide on all of these different pieces, whether we’ll pick up the Bakken stuff from North Dakota or whatever else.

12:05 MR. DURBIN: Well, the purpose of the legislation is not – is really just to – oh, this is Marty Durbin – it’s just to accelerate the decision, to make sure that this decision by the administration is made before the end of the year. So it – you know, it will continue to require coordination among the various agencies. It’s just, you know, essentially saying, this has gone on long enough. We’ve had extensive review of the pipeline itself. It had, you know, meetings throughout every affected state and community where the pipeline is going – and trying to put a date certain on the endgame.

Again, in either case, we’re hopeful that the decision is going to be made, you know, before the end of this year to allow the project to move forward.

12:53 MS. TVERBERG: Thank you.

12:55 MS. VAN RYAN: Marty, this is Jane. It’s my understanding that Secretary of State Hillary Clinton was expected to make a decision on the pipeline earlier this year, and then it was delayed. Is that correct?

13:06 MR. DURBIN: Well, you can – actually, there’s a lot of different steps in the process here. And in all honesty, we expected a decision last – about a year ago. And it was –you know, concerns were raised within the environmental community, within the administration.

So they extended the process. At the time, we thought it was going to be a 90-day extension.

Well, it just – it continued to be extended.

So again, we think that the Department of State has done extensive review. They’ve not only did, you know, a draft environmental impact statement, they went back and did a supplemental draft environmental impact statement – continued to say, we’ve seen nothing in there-review that changes the earlier conclusions that this project should move forward.

13:49 MS. VAN RYAN: Very good. Thank you. I think that helps put it in context.

Does that help, Gail?

13:53 MS. TVERBERG: Yeah, thank you.

13:55 MS. VAN RYAN: OK. Additional questions – about oil sands development, about the Keystone pipeline?

14: 04 LEW WATERS: Jane?

14:05 MS. VAN RYAN: Yes.

14:05 MR. WATERS: This is Lew Waters. I got a question.

14:05 MS. VAN RYAN: Uh-huh. (Affirmative.)

14:08 MR. WATERS: She said earlier that the pipeline would be monitored by the latest state-of-the-art methods. Could she touch on those a little bit? We have a lot of environmentalists out here that are going to fight this tooth and nail, I’m sure. And it’d be nice to know just what she means by “state-of-the-art methods.”

14:26 PETER LIDIAK: This is Peter Lidiak. I’m the pipeline director at API. And when we’re talking about state-of-the-art methods, we’re talking about supervisory control and data acquisition systems where they have thousands of points along the pipeline that can monitor conditions, measure pressure drops, et cetera. That’s tied into leak detection systems. And you know, it’s already – that’s already been seen that these systems can catch changes in pressure at avery quick basis. And that’ll be a feature of these new – the new pipeline.

And in addition to that, it’s all the other technologies that go into modern-day pipelines.And that includes corrosion protection systems that will be put in place, as well, as part of thenormal construction that happens with modern-day pipes.

15: 22 MS. SCHILD: Thanks, Peter.

15:23 MR. WATERS: Thank you.

15: 25 MS. SCHILD: And this is Cindy again. One of the things that was considered in the application, and TransCanada is going to comply with, is an additional 57 special conditions that go above and beyond the regulations that would be required by the Department of Transportation in this permit for this pipeline.

15:54 MS. VAN RYAN: Very helpful. Other questions?

15:58 MR. WESTENHAUS: Brian Westenhaus.16:01

MS. VAN RYAN: Go right ahead, Brian.

16:03 MR. WESTENHAUS: Well, I’m just curious. How serious are these objections,and how much time is expected to get through them all?

16:09 MS. SCHILD: (Chuckles.) Well, it’s already been quite the process. I mean, you know, our understanding is, to permit a pipeline in this situation average, you know, 18 to 24 months. We’re already, you know, butting up on 34 months. So certainly can’t make any projections, but that’s why, you know, this legislation is valuable to set some time frames. The State Department certainly wants to get something out by the end of the year, but you know, EPA has come up with additional – it’s just some concerns with the assessment, although they have improved their rating.

So I think at this point, it’s to be determined. We’re waiting – I guess the next several weeks, we will see, as the supplemental draft becomes final, how the Department of State and EPA and the mutual agencies are able to come up with the answer – what the final environmental impact statement looks like. And we certainly believe they have done an extremely thorough analysis from all aspects and all accounts. So that’s what we’re going to have to see. And we certainly, you know, do not believe that any more time is needed to delay this project further.

17:40 MR. WESTENHAUS: Well, are that – does that make them stalling tactics, or is there anything realistic in it that will actually, you know, put – really cast some doubt on it?

17:47 MS. SCHILD: The concerns that are raised are similar to those in the past. It’s the same in the past, whether it was as far as what the route is, environmental justice, greenhouse gas analysis. And again, based on our review, these have been addressed in the supplemental analysis.

It’ll be up to the State Department to, you know, determine that and work with EPA on how they’ve been addressed and the thoroughness as to how they’ve been addressed.

18:21 MR. WESTENHAUS: Do you expect a court fight after the State makes up their mind?

18:27 MR. DURBIN: This is Marty Durbin. I think that’s – now, just seeing the way things have played out here, I don’t want to predict, but I won’t be at all surprised if there’s alegal challenge to the final decision. Again, this is a process that has been used many times, legitimate concerns are raised during the process; they’re addressed. And we think EPA – or Department of State has gone above and beyond.

And in fact, just as Cindy was saying, once the environmental impact statement is made final, they’ve already announced they’re going to hold six more public hearings – you know, one in each of the five states where the pipeline is traversing, and then another here in Washington, D.C. So you know, our view certainly is that there has been ample opportunity for anyone with concerns to, you know, have those addressed. And that – So once you get past that, yeah, I mean, it does start to look like you’re dealing with stalling tactics.

19:28 MR. WESTENHAUS: So we’re still looking at years, and not months.

19:30 MR. DURBIN: No, we’re – no, we’re going to continue to be as hopeful as we can. And the Department of State is still indicating that they want to make a – they want to make a decision by the end of this year. And certainly, for the project’s sake, for the investments that have already been made, and the plans for getting it up and running, if they don’t have that approval, it’s going to – it’s going to put some serious kinks in the plans, you know, to get it upand running.

19:57 MR. WESTENHAUS: Are there any consumer interests being heard, or is it all industrial and environmentalists?

20: 03 MR. DURBIN: I’m sorry, any –

20:04 MS. SCHILD: Consumers.

20: 06 MR. WESTENHAUS: Is there a consumer view, or is it – does it get expressed, or is it all environmental objections?

20: 11 MR. DURBIN: Well, I don’t want to make it sound like there’s only objections being raised. You know, we’ve just had – you know, during the comment period for the supplemental, there were nearly 90,000 positive comments submitted to the – you know, to the Department of State. And as I noted before, when you got the – you know, many of the national and local labor unions, mayors, governors and others, you know, they certainly are representing the consumer view, among others, not just – this wasn’t just industry views, you know, that had– industry versus environmental considerations.

Throughout the process, we’ve seen other groups – we had a group of veterans andretired military leaders that, you know, supported the pipeline for the national security benefits that come from this.

So we – I mean, again, our view is that there have been very broad support, you know, for the project. And again, yes, there are critics, and they’re going to continue to raise concerns.

But we think, you know, the job has been done to analyze the project. Time to move forward.

21:18 MR. WESTENHAUS: That helps. Thanks.

21:22 MS. VAN RYAN: Additional questions.

21:26 MS. TVERBERG: This is Gail again. I was wondering if you could talk a little bit about whether this, the products that are being sent – the bitumen – (audio break) – natural gas liquids or with whatever – a bunch of Canadian slag. Do they tend to separate out more than some of the other kinds of heavy oils? You know, I think that’s been one of the concerns raised by some, that there would be problems with the pipelines that way if you got separation.

21:59 MS. SCHILD: Gail, that’s a – this is Cindy – there’s certainly been some accusations to that regard. But what, you know, often gets misrepresented and should be considered is that anything that goes into a pipeline has to meet the same criteria across the board, so there’s not special circumstances or certain pipelines that are going to be built for certain types of crude oil. It’s going to be the same standard, the same stringent standards, between Canada, the U.S., to transport these crude oils.

So there’s nothing different about the crude, the nature of the crude that’s being transported. It’s not heated. It’s not more corrosive. Those kind of aspects are some of the things. The fact is, crude oil is crude oil, that’s being transported via pipeline.

And another myth is that this stuff is new. We’ve been processing oil-sands-derived crude for decades in the U.S. What we’re able and will be able to do is process more of it with this pipeline. It’ll create more supply flexibility for our refineries in the U.S.; but it’s not new.

23: 21 MS. VAN RYAN: Janet, would you like to weigh in on that, too, on the type of crude oil that’s being produced up there and its qualities?

23: 30 MS. ANNESLEY: Sure. As Cindy outlined, crude is crude. There’s specific pipeline standards that must be met to put crude into pipelines, and those are consistent regardless of the origin of the crude. We’ve been transporting bitumen and synthetic crude oil products basically in Canada for now over 50 years, and according to the Energy Resources Conservation Board, our primary regulator in the province of Alberta, there’s absolutely identical pipeline safety records for conventional crude and bitumen or synthetic crude oil pipelines. So it’s something that we know from experience can and will be done safely. And moreover, I think from the Canadian perspective, to – directed to the refinery flexibility question, you know, to bevery clear, our Alberta government here in the province of Alberta, as well as the Canadian federal government, support development of oil sands, within specific environmental guidelines.

So the decision to be taken by the U.S. is not whether the oil sands reserves will be developed; it’s a matter of whether or not the U.S. would like to have these crudes and for – to help meet their energy needs. And every barrel of oil sands crude that comes to the U.S. displaces a foreign barrel from another source. And particularly when it comes to the U.S. Gulf Coast, those other foreign sources are Venezuela and Mexico. Mexico, as you know, is in decline, and Venezuela has chosen to take its oil, which is very similar to Canadian crude oil, elsewhere. So, you know, Canadians are not suggesting that the U.S. should use more oil; we’re just suggesting that the U.S. should use more Canadian oil.

25:22 MS. VAN RYAN: Very good. Thank you. I think that helps a lot.

25:24 MR. STYLES: Jane, this is Geoff Styles.

25:26 MS. VAN RYAN: Yes, Geoff.

25:27 MR. STYLES: I’ve got – now I’ve got two questions. I had one question before.

MS. VAN RYAN: (Laughs.) Go for it.

25:30 MR. STYLES: If I can throw them both out there, the first question relates to the last piece of the conversation here. I guess this is the first time in more than 30 years around the industry that I’ve ever heard a refiner say that crude is crude. And I’d like to hear a little more about some of the investments that are being made in refineries in order to be able to run the oilsands crude, and particularly where those might be regionally, and how that relates to the pipeline.

And I guess the other question really goes more to the – what I think is a very interesting scenario that API has put out indicating that the vast majority of U.S. liquid fuel needs could be met by sources in North America within a relatively short amount of time, depending on access and transportation. And I’m interested, or sort of intrigued by the interaction between that and the shale gas revolution. I mean, to what extent is the explosion of shale gas production both in the U.S. and Canada actually changing the supply perspective for the oil sands? Is it making more oil sands projects economical and ultimately increasing the total amount of oil sands that can come to market?

26:47 MS. VAN RYAN: Who’d like to start? Cindy, do you want to talk about the changes being made at the refineries?

26:52 MS. SCHILD: Yeah, I can talk about the first one. And a good point, Geoff, in the– that crude is crude. And I guess maybe it’s a matter of semantics in the standpoint, yes, obviously there’s many different types of crude oils, natures, characteristics. And I think what we mean by that is crude oil is inherently crude oil. So, yes, there are a range of different characteristics, and obviously we know there’s lighter crude oils and heavier crude oils. But it – what we mean is if you have crude derived from oil sands, it still has to meet the same criteria other crude oils being transported via pipeline would meet to be processed; meaning some of the accusations in that, oh, it’s heated, or it’s being, you know, mixed with, you know, a – some sort of diluent that’s going to make it more corrosive – that these corrosive qualities are, you know, not true, because they have to meet the criteria, or the same standards, to be transported.

28:07 MR. STYLES: So what you’re saying is that to a pipeline, crude is crude.

28:08 MS. SCHILD: Yes, when it’s being transported. Exactly. Of course, there’s different natures of crude, yes. Yes. So, better qualification there.

As far as – to the point about a refinery, there are different investments being made in order to up – that would be to process the heavier grades of crude. Now while in the U.S., we’ve been processing heavier blends, we’ve been upgrading refineries for years to have some of the most complex refineries in the world. There may be a little bit more that needs to be done with –for some of these – for oil sands. So you may have the need for additional coking capacity, maybe some vacuum distillation. There may be the need to add some sulfur recovery units or hydrogen production, since the heavy oil processing demands more hydrogen use than a conventional – a light oil. You may have some more metallurgy upgrades if you’re processing some more of the bitumen on the site; hydroprocessing in order to produce the proper dieseldistillate product quality.

So it kind of depends, based on your product specifications, the size of your refinery, what you already have, what your conversion plans are, your feed stocks and the mix with the other crudes, in what exactly you would have to do. But that’s a little bit of the type of units or investments that you would need when considering, and what’s being done at refineries in order to be able to produce the clean fuels and meet the specifications that are required here in the U.S.

30:12 MR. STYLES: But could I just stop there and ask for a minor clarification? I definitely understand everything that you just described. And I’m just curious, I mean, to what extent are those investments factored into the overall economic impact of putting in this pipeline, particularly in terms of jobs, investment and things like that?

30:31 MS. SCHILD: You know, when – you know, in any estimates that we’re providing, they’re not being linked. They were when we were talking about it a little bit a few years ago, we’d be giving some estimates on the refinery jobs. I know there’s still a couple thousand contractors down at Port Arthur in Motiva, Motiva’s Port Arthur expansion. But the – you know, the fact is, I think, you know, as Janet just said, if they – if we don’t get the crude through the pipeline from Canada, you know, they’re – U.S. demand for oil is going to still be here for the foreseeable future. It’s going to be – so we’re going to get it from somewhere. So the Gulf is a prime area to be able to import from a foreign source, so if we don’t get it from Canada, we’re going to get – and it’s still going to probably be a heavier mix, because that’s how they’re configured. So the oil is going to go in, and we’re probably going to be refining a lot of it in the Gulf.

So, I mean, I think it’s just, you know, about what makes – what makes sense and what’s going to be best for – someone asked about consumers – what’s going to be best for consumers in this country. Do we want to, you know, be working with our number-one trading partner, where there’s a lot of reciprocity and benefits and the ability to help our economic recovery and manage it probably more environmentally sound in North America, or do we want to be looking elsewhere for our future oil needs?

32:10 MS. ANNESLEY: I’ll just add that, you know, the reciprocity – that involves the Boston Bruins winning the Stanley Cup. (Laughter.)

32:16 MS. SCHILD : Yeah, yeah, I guess they weren’t too happy up in Vancouver, huh?

32:20 MS. ANNESLEY Oh, you apparently made Vancouver very, very angry about things. (Laughs.)

32:25 MS. SCHILD : Yeah, you know, I think Canada’s nice image may have – took a little hit. (Laughter.)

32:35 MS. ANNESLEY : It’s too bad that about 30 people could really do all that, but, yeah, absolutely. (Laughter.)

But I thought I might just pick up and answer, I think, the second part of the discussion question around shale gas and how that interacts with the oil sands business. Natural gas is aprimary energy source for oil sands operations. The oil sands companies use natural gas togenerate heat and steam. That heat and steam needed to wash the oil off the sand. And we’ve made tremendous strides in actually reducing our greenhouse gas emissions by switching fromcoal-fired electricity to natural gas cogeneration processes in order to generate the heat and the power needed for our processes.

So for oil sands operators, the shale gas revolution has meant, actually, lower gas prices, which, in the context of their operating costs, has become a good thing. So while, I think, at amacro level, we take the view that, you know, we need the right fuel in the right place at the right time – and oil is a very fungible, transportable product – so when we look at the potential markets for oil sands vis-à-vis the markets for natural gas and whether or not they’ll lead majorfuel-switching in the economy, we see the areas where there will potentially be fuel-switching from in transportation fleets, for example, to natural gas.

But, as Cindy outlined, they’ll still be, in just about any scenario I’ve seen from the International Energy Agency or the DOE or some of our member companies or Cambridge Energy, there is still – the U.S. and Canada, for that matter, is still going to have a strong oil demand. So in a world where oil becomes more precious and more in demand because of thegrowth in India and China, the barrels that you see coming into North America today from Saudi Arabia, from Nigeria are likely to be in demand in those other markets.

So in that scenario, we see increased opportunity to have a North American domestic supply picture. And, you know, obviously, Canada’s oil sands are a part of that picture, but not in direct competition for natural gas. The world’s energy needs are growing and we’re going to need all sources of energy going forward, is the view.

35:02 MS.VAN RYAN: Thank you, Janet. May I ask who just joined us? I guess not. All right, let’s move forward. Geoff, did you have a follow-up question?

35:15 MR. STYLES: No, I think that really addressed everything that I was looking at. But, I guess just on the final piece there, does shale gas and the impact on prices actually translate into more oil sands?

35:30 MS. ANNESLEY: I would say it does not translate into more oil sands.

Producers who are investing in the oil sands business are – they’re looking at both the commodity prices and different strip prices in relation to oil and to gas on, you know, obviously, pricing for oil on the revenue side and for gas on the cost-input side.

So, you know, they’re looking at, obviously – when I – I used to be at one of the companies that started an oil sands project in 1999, when oil was at $11 a barrel. And I can’t remember what gas was at, but it was probably much higher in comparison to what it was today.

So there’s a variety of those factors. But none of them, I don’t think, would be short-term enough to actually impact what is ultimately a 30- to 50- year time horizon for investment decisions.

36:22 MR. STYLES: Yeah. I mean, maybe the other way to think about it is that the oil– that the shale gas is actually enabling oil sands not to compete so much for natural gas because, I mean, the common complaint that I see about the oil sands is that, in effect, in the views of environmentalists we’re turning a clean fuel – natural gas – into a dirty fuel. But if there’s plenty of natural gas, then you don’t have that competition.

36:55 MS. ANNESLEY: Yeah, and you’re right: There’s still the price – the price of natural gas is low. And I think the fact is, we used to really view natural gas as a more limited resource. But now, certainly with shale gas, it is a far more abundant resource. But I don’t think that argument from the environmental community has gone away. The bottom line is, at the end of the day, you’re trying to maximize your energy return.

So in our producers’ views, whether or not it’s natural gas, it’s used to generate electricity, they’re just simply looking for the most efficient way to do that. And also, in a world that contemplates – here in Alberta, we operate under carbon regulation of $15 a ton. It’s also ina world where that needs to be reflected.

They’re also looking for the most low-carbon source of electricity balanced against economics in order to deliver that.

37:41 MR. STYLES: Thank you.

37:43 MS. VAN RYAN: Very good. Additional questions? Questions perhaps about the oil sands development and production methods? Janet, we have two people on the phone call with us today who actually have been up to see oil sands. They’ve seen both the mining portionand the SAGD technology, which is quite impressive. Janet, is it fair to say that we’re going to see more SAGD as time goes on?

38:12 MS. ANNESLEY: Yes. In fact, I don’t recall the exact number, but CAPP [Canadian Association of Petroleum Producers] just issued in April – sorry, in May, our updated 2011 crude oil forecast. So if those on the call haven’t seen it, please visit the CAPP website at www.capp.ca. But, actually, just looking here, it is at – in 2015, we expect in situ production to actually be more than mining production for the first time. And that is quite a milestone for our industry as the largest projects today, and certainly the projects that started back in the ’60s, are allmining projects. So for us to cross that threshold in 2015, that actually sees in-itu production outpace mining production, it gives you the indication of where things are headed.

And, in fact, 80 percent of the potential oil sands resource cannot be developed using mining techniques. It must be developed using in-situ techniques. So that’s certainly where the future lies.

39:18 MS. VAN RYAN: For those of you who are – who are not familiar with the acronyms that we’re using, I apologize. There’s an awful lot of industry jargon that I guess we all have a tendency to fall back into, including myself. But Janet, maybe you can explain whatthe in-situ development is in a few words? What we’re talking about when we use the expression “SAGD,” which is S-A-G-D?

39:41 MS. ANNESLEY: Yeah, sure. In-situ is – yeah, it’s one of those engineering terms that’s Latin for “in place.” So it simply differentiates mining from drilling, essentially.

And the different technologies that fall under in-situ are drilling; the SAGD is one of them –steam-assisted gravity drainage. There’s also a number of other technologies that are used. There’s some that are being experimented with.

But at the bottom – the bottom line is that when you drill into the oil sands, the oil does not flow to the surface. So heat or steam or some type of enhanced oil recovery process is needed to actually get it to flow up. So there’s a number of different technologies that are used.

And I think we’re really excited about what other technologies are being experimented with right now.

ExxonMobil, Shell, Conoco – lots of large companies – are trying to find better ways to get the drillable bitumen out of the ground, and certainly do so with less environmental impact and less cost. So if there is an area where we should be watching in the future, given the size of the resource and the money being invested into research and development, certainly, in-situ is it.

40:56 MS. VAN RYAN: Very good.

40:57 SABRINA FANG: This is Sabrina here at API. I think we’d like to wrap up the call and we want to thank everybody for joining us. If you have any other questions about the Keystone XL pipeline, feel free to call the media relations line at 202-682-8114.

41:15 MS. VAN RYAN: Oh, sure. Or, if you prefer, just – I’ll be online; send your questions to me by e-mail and I’ll be happy to get them answered for you. And thank you all for joining us today. I’ll be happy, like I say, to answer any other questions you might have. We’ll be sending out the recording and the transcript probably late Monday, maybe early Tuesday. But you’ll get this information early next week. And thanks,everybody. Have a great weekend in the meantime. (Cross talk.) Bye now.

(END)

API Responds: H.R. 910, and Idle Leases

Welcome to Energy Awareness Week

Hey folks,

Welcome to Energy Awareness Week. Here at the OPNTalk Blog at least. Now just yesterday I told you about the Conference Call that I participated in on Tuesday, where I lead the Question portion off with a question about what they thought of H.R. 910.

Now at the time, it was being worked on in the House and API wanted to wait until they could actually read it. I then, yesterday, went into details on what it is and advised you that it moved forward Tuesday. With a 34-19 vote, all Republicans and three Democrats. The Bill now moves to the Full House for a Vote. Those in favor would like the Full Vote to come before Easter Break, and it is pretty assured to pass in the House.

So yesterday, I received the API response to this. Here it is.

API commends House action to block EPA from raising energy costs

WASHINGTON, March 15, 2011 — Marty Durbin, API executive vice president, applauded Members of the House Energy and Commerce Committee who today approved the Energy Tax Prevention Act of 2011. Durbin said today’s action is an important step toward blocking the EPA from raising energy prices on American consumers and stifling our fragile economic recovery:

“API commends the leadership of Chairman Upton and the bipartisan group of Members who have come together to oppose higher energy prices for American consumers. We are pleased to see this legislation moving forward to prevent EPA from imposing excessive and burdensome regulations that could harm our fragile economic recovery and jeopardize job creation. Congress, not the EPA, is responsible for setting the energy policy of the United States.”

I had a feeling that they would be for this. ANYBODY in their right mind would be for this. YOU, unless you like $4.00 to $5.00 a gallon Gas, should be all for this.

So then a bit later in the Conference Call, I brought up Obama's absurd comments about Idle Leases. I asked API Chief Economist John Felmy about this, and he answered pretty much how I thought he would. Why? Because it's the TRUTH. First, some of those Leases must go along with PERMITS. No PERMITS, no Drilling. Second, in some of these locations, there is just not significant supply to justify the expense of Drilling. Again folks, the Transcript will be posted here as soon as it becomes available.

However, Erik Milito, who is "the Director of Upstream and Industry Operations for API. Erik’s work covers regulatory and legislative matters related to domestic exploration and production, including access to domestic oil and natural gas resources both onshore and offshore. Prior to his current position, Erik served as managing counsel at API, covering a host of issues, including oil and gas leasing, royalty, environmental, fuels, transportation, safety, and civil justice reform." just posted a response to this concept that Sen. Reid attempted to further. Here is what Erik had to say over at Energy Tomorrow.

When it comes to crafting a sensible energy policy, once again politics carry the day. This notion of "use it or lose it" is a stale, invalid argument and a political distraction to rising gasoline prices combined with the fact that we're not doing enough in the Gulf to use our own resources and put Americans back to work. Let's get back on track with some facts:

The administration itself is preventing the industry from developing these leases because it is not issuing permits to drill or conduct seismic studies of these leases. They want the industry to develop the leases it already possesses, but they won't grant the permits to do so.

Companies pay millions of dollars to acquire these leases (each lease costs at least $250,000 and some have gone for more than $100,000,000), further fees for renting the leases and the leases have a finite term. If a company does not produce oil or gas from a lease then they are required to return it to the government. In other words "use it or lose it" is already the law.

These are very successful and sophisticated companies that are engaged in this business and it makes no logical sense for companies to pay millions of dollars to purchase leases, sit on them for 10 years, and then give them back to the government. They make money by supplying the American economy with the energy it needs to grow, not from sitting on assets. The level of capital expenditures by the industry to develop these leases demonstrates their commitment to find oil and gas. For example, the industry spent more than $37 billion (with a B) in capital expenditures to develop deep water Gulf leases issued between 1996 and 2000. In addition they paid more than $4 billion (with a B) in bonus bids to obtain those leases in the first place. With that level of investment, it is hard to argue that the industry is not working hard to develop the leases it owns.

Finally, these arguments simply ignore the basics of the oil and natural gas industry. Companies purchase leases for the right to explore for the resources. You don't know if a lease actually contains oil or natural gas until you move forward and drill an exploratory well. Companies purchase a large portfolio of leases to give them the greatest opportunity to find oil and natural gas. They work hard to survey and study all of their leases with the hope that they can narrow the list down to a subset that have the best likelihood of actually containing oil or natural gas. However, it is not uncommon for a company to spend $100 million to drill a well and find no oil or natural gas. In fact, companies drill more wells that have no oil or natural gas than wells that actually do.

With one election just concluded, the positioning for the next one has started, but it's time to stop the stupid and start getting smart on creating jobs, growing our economy and increasing our energy security.

So there you have it. Again, talk to those that KNOW the FACTS on any situation, and you will be better informed than you will listening to those that DON'T. Or those that have agendas and like to, well, LIE, to further their agendas.

Instead of playing games, this Administration needs to get out of the way, and LET those that actually KNOW what they are doing, have the tools to do it, ACTUALLY help us: jump start the Economy, lower the Unemployment Rate, Lower Energy Costs, and INCREASE Revenue to all levels of Government, Local, State, and Federal.
Peter

Bad Economy, High Energy Costs, Losing Jobs,

What to do what to do?

Hey folks,

Happy Tuesday to you. Seriously, Bad Economy, high Energy Costs and growing higher, losing more and more Jobs? The "Official" number of Unemployment is 9.8 percent, which EVERYONE knows and ADMITS to the fact, it is actually 17 percent. Even some in the Obama Administration. So what to do, what to do?

Well, the LOGICAL and REASONABLE, some would even say the INTELLIGENT thing to do, would be to use our resources and increase Jobs and Supply of Energy to DECREASE Costs and HELP the Economy in the process.

Think about that. It's amazing. Is it not? ONE thing. ONE. Bring down the cost of Energy. Bring down the unemployment number. Or at least ADD somewhere around 57,000 high paying, long lasting, REAL Jobs. Add Billions if not TRILLIONS to the Local and Federal Government Revenue stream. Which would decrease the Deficit? ONE thing. Just ONE could and WOULD do all these things.

So what does the Obama Administration do? The EXACT OPPOSITE! December 1st, 2010, Obama and Crew came out and said NO NEW Drilling. Period. For some fictitious 7 year period. According to Boston.com - White House won’t expand offshore drilling

WASHINGTON — The Obama administration announced yesterday that it had rescinded its decision to expand offshore oil exploration into the eastern Gulf of Mexico and along the Atlantic Coast because of weaknesses in federal regulation revealed by the BP oil spill.

Interior Secretary Ken Salazar said that a moratorium on drilling would be in force in those areas for at least seven years, until stronger safety and environmental standards were in place. The move puts off limits millions of acres of the Outer Continental Shelf that hold potentially billions of barrels of oil and trillions of cubic feet of natural gas.

And what happened right after this announcement? That's right, the price of Gas started to climb. Now $3.00 a gallon MANY places here in Sunny Florida.

The rest of this story is Gobbledygook. "We are thinking." No they are not. That is part of the problem. "We need to learn." No they are not even interested. They have an Agenda and they are sticking to it. "But we are looking at another potential sites." Complete and Utter BS. They are SAYING they are, but TALK is not going to do much. They will delay ANY new Drilling, or Production, by simply saying that they need to make sure it's safe with this and that study that could tie EVERYTHING up for YEARS to come. Meanwhile YOU will be losing YOUR Job. Paying $4.00 plus a Gallon of Gas. Skyrocketing Electric, Heating Bills, Food Costs, ETC.

Meanwhile China, and OTHER Foreign Government will be Drilling just fine off our shores. No problem with them using OUR resources to create Jobs for THEIR People and Increase THEIR Supply, and lower THEIR Costs. Drilling without falling under the insane Obama Regulations and Controls I might add. Meanwhile WE will have to PAY THEM more to use what WE should be getting for ourselves.

Like $4.00 a gallon? Like Sky High Energy Costs. LIKE Sky High Food Costs? Like High Unemployment? Thank Obama and Vote for him in 2012. This COMPLETELY Asinine decision is just another in a long line of Asinine decisions that depict EXACTLY why he is not fit for the Office of the President of the United States. Either he is completely incompetent, or he is doing this on purpose. Which one do you see as worse?
Peter

Sources:
Boston.com - White House won’t expand offshore drilling

China Increasing Supply, To Meet Their Growing Demand

Yet America is Reducing it's Supply AGAINST it's Demand.

Hey folks,

Happy Tuesday to you. As we check in at the Energy Front, we see what we were talking about last week is now being reported in the Mainstream Media. On Tuesday, last week, I told you about this. Backdoor Moratorium On Oil and Natural Gas Shale Projects

Well, what about Coal and Shale? They are not effected right? Wrong. This Administration, so beholden to the "Green Energy" Special Interests, and the Environuts, they will stand in the way of this as well. Why, because they are quick to dream, yet slow to think. Some of these Kooks actually BELIEVE that we can get off of Oil and Natural Gas overnight and become "Green" tomorrow. But we have talked about that as well. It simply is not possible, there is nothing to switch to. However, this is not stopping them from imagining, falsely, that if they reduce American produced Oil and Natural Gas Energy, increasing the cost, it will motivate others to come up with a viable solution quicker.

I told you about China, stepping in and buying up a third of the Shale Project in Texas from Chesapeake Energy. Why? Because Chesapeake Energy found it cost preventive, to jump through all the Hoops that Obama and Crew have put into place, just to get permission to START. Due to regulations, fines, and taxes, this Administration has accomplished what it wants to accomplish. Moratorium De Facto Still In Place.

So why is China doing this? Is it because they are greedy? Because they hate the planet? Is it because they are against the "Green Dream?" No. According to Reuters - China overtakes U.S. as biggest energy consumer: IEA

(Reuters) - China has become the world's largest energy user, having overtaken the United States, the head of the International Energy Agency said on Tuesday.

"China is now the largest energy consumer by our definition," the executive director of the Paris-based IEA, Nobuo Tanaka, told an industry conference.

"Probably half of the oil demand increase comes from China. Nobody knows when it (will) slow down."

The IEA advises 28 developed countries. China is not a part of the IEA but the agency monitors the country as its oil demand can have a significant impact on prices.

This is really not that hard to understand Their Energy Demands increase, they are looking to increase their Supply. They need to to keep Energy affordable for all of THEIR people. Since WE WON'T, they, and others, WILL. Then we will have to rely more on them, for our own product. I LOVE this piece from Investors Business Daily - China's Will To Drill

Energy Policy: The administration lifts the Gulf drilling moratorium in time for the election, but it's not as good as it sounds. Meanwhile, China buys up Texas oil land to develop the energy reserves we won't.

The lifting of the Gulf drilling ban imposed after the explosion of British Petroleum's Macondo well came as welcome news. But like anything this administration does, one must read the fine print.

Interior Secretary Ken Salazar announced that the ban was being lifted before its Nov. 30 target because of the "the higher standards we have set" for drillers applying for new permits.

However, the placement of further drilling restrictions by an administration openly hostile to the use of fossil fuels and domestic energy development does not bode well.

Told you this was PURELY Political, and does NOTHING. Senator David Vitter, R-La., echoed me.

"I guess this is movement in the right direction," added Sen. David Vitter, R-La., "but it's painfully slow. It's clear that President Obama is going to preside over a continuing de facto moratorium for months or years, with new drilling held back to a fraction of previous levels."

Yup. It doesn't say who wrote this, but the person sounds just like ME. {Smile} Like this.

While we dawdle, state-owned Chinese energy giant CNOOC is buying a multibillion-dollar stake in 600,000 acres of South Texas oil and gas fields. CNOOC announced Monday that it would pay up to $2.2 billion for a one-third stake in Chesapeake Energy assets.

They wrap it up with this.

From the Chinese perspective, this is a golden opportunity for them," said Ken Medlock, a fellow at Houston's Baker Institute and adjunct professor in Rice University's economics department. "They have identified shale resources in China, but they don't have the knowledge or technical expertise to go after those resources."

So we'll provide them with the technology to develop their oil resources at the same time we restrict our own exploration and development.

So they have an INCREASE in Demand, THEY look for ways to INCREASE their Supply. We have an Administration who is purposefully DECREASING Supply, in the HOPES that the INCREASE in Demand will somehow INCREASE Alternative Energy Supply. Meanwhile in the REAL World, China, and others to follow, profit from American Resources, at the expense of Americans. Just another reason we need to bring SANITY back to Government.
Peter

Sources:
OPNTalk - Backdoor Moratorium On Oil and Natural Gas Shale Projects
OPNTalk - Moratorium De Facto Still In Place.

Reuters - China overtakes U.S. as biggest energy consumer: IEA

Investors Business Daily - China's Will To Drill

E15, Liberal Dreams Have Consequences

We drive. They starve. Everybody PAYS.

Hey folks,

Not to mention, no one knows how it will ACTUALLY effect, well, ANYTHING. Happy Tuesday to you. YES. That WAS me on the Tom Sullivan Radio Show on Friday talking about Housing. I was on the Third Hour, first up. I was talking about the best, and only way, to speed up the Housing "Recovery." I will elaborate more on this tomorrow. However, since it is Tuesday, time to check in at the Energy Front.

So you may have heard, the E.P.A. is considering raising the maximum blend of ethanol in unleaded gasoline from 10 percent to 15%. Great. So what's the problem? No one knows how it will effect the Engine, Pollution, OR the World Food Source.

So let me ask you a question. You are a Farmer. You grow products that feed the the masses. You get X amount per acre. It's enough to barely get you by. Some years are better than others. Then along comes the Government. They say we will pay you a GUARANTEED amount for you to grow Corn. That's roughly 120 bushels per acre of Corn that yield 300 gallons of ethanol. They will even give you MORE to subsidize you, just in case. They will also herald you as someone on the cutting edge and a Hero, for doing your part, in saving the planet. Most stop growing FOOD, and start growing "Fuel."

Remember stories like these? Media Research Center - Ethanol Being Blamed for Global Food Riots New York Times columnist praised by Pulitzer board for 'clarity of vision' didn't foresee global food shortages that resulted from the realities of his vision. By Jeff Poor Business & Media Institute 4/11/2008 5:48:11 PM

As riots over food shortages are breaking out in Haiti, Egypt and other parts of Africa, the media are looking for a culprit. ABC’s April 10 “World News with Charles Gibson” identified one culprit of this global strife: biofuels.

“[P]rices are rising across Africa, pushed up by the cost of oil and demand for biofuels,” ABC correspondent Jim Sciutto said.

“Those biofuels are in fact a large part of the equation,” ABC correspondent David Muir added. “Many farmers around the world, who once grew wheat and rice, now grow corn and sugar cane instead to produce ethanol, a more lucrative market.”

It's pretty hard for most to turn down a GUARANTEE profit. Some Kooks, would LOVE to see Oil Prices out of reach. Some Libs back then even admitted it. Listen to this Idiot.

Flash back to two years ago – Pulitzer Prize winning New York Times columnist Thomas Friedman, author of “The World Is Flat,” appeared on ABC’s “Good Morning America” on March 9, 2006. He made a very bold statement about his preferred direction for the future of U.S. energy policy.

“[C]harlie, if they [Iran] cut off oil and oil went to $100 a barrel – that would make my day, because the sooner we go to $100 a barrel, the sooner we’re going to have everyone in America driving a plug-in hybrid car fueled by corn and ethanol,” Friedman said. “And I think that would be a great thing. And that would ultimately free us from having to worry about these people.”

Yeah the DREAM. But as we know, the Liberal Dream usually doesn't even come close to resemblance of any type of actual REALITY. Not only did this hurt the Food sources, but it was also blamed for INCREASED Pollution.

An April 7 Time magazine article also blamed ethanol for the quickened clearing of Brazilian rainforests, as farmers move to plant more soy to meet the demand created as American farmers switch from soy to corn to feed ethanol mandates.

Then you had THIS Story. From CNN - Riots, instability spread as food prices skyrocket

"In just two months," Zoellick said in his speech, "rice prices have skyrocketed to near historical levels, rising by around 75 percent globally and more in some markets, with more likely to come. In Bangladesh, a 2-kilogram bag of rice ... now consumes about half of the daily income of a poor family."

The price of wheat has jumped 120 percent in the past year, he said -- meaning that the price of a loaf of bread has more than doubled in places where the poor spend as much as 75 percent of their income on food.

"This is not just about meals forgone today or about increasing social unrest. This is about lost learning potential for children and adults in the future, stunted intellectual and physical growth," Zoellick said.

Dominique Strauss-Kahn, managing director of the International Monetary Fund, also spoke at the joint IMF-World Bank spring meeting.

"If food prices go on as they are today, then the consequences on the population in a large set of countries ... will be terrible," he said.

The UK Telegraph - Global warming rage lets global hunger grow By Ambrose Evans-Pritchard, International Business Editor Published: 12:01AM BST 14 Apr 2008

We drive, they starve. The mass diversion of the North American grain harvest into ethanol plants for fuel is reaching its political and moral limits.

"The reality is that people are dying already," said Jacques Diouf, of the UN's Food and Agriculture Organization (FAO). "Naturally people won't be sitting dying of starvation, they will react," he said.

Back in 2009, I talked about all this. I posted OPNTalk - Good Intentions Unintended Consequences

CHICAGO (AFP) – The use of crop-based biofuels could speed up rather than slow down global warming by fueling the destruction of rainforests, scientists warned Saturday.

Once heralded as the answer to oil, biofuels have become increasingly controversial because of their impact on food prices and the amount of energy it takes to produce them.

Yeah, remember the riots? The "Food Wars" that were breaking out? The poor could no longer afford Corn Products and Farmers were rewards a lot of money to set land aside to produce Harvests for Fuel only? That was a great plan.

They could also be responsible for pumping far more carbon dioxide into the atmosphere than they could possibly save as a replacement for fossil fuels, according to a study released Saturday.

So? Now, they want to INCREASE this. Add another 5 percent to EVERY GALLON of gas. So look for all this to also increase. Then you have the fact that they do not even know how it will actually WORK. According to Energy Tomorrow - Don't Blend Politics and Science On E15, API President, Jack Gerard, tell us this. Don't Blend Politics and Science on E15
By Jack Gerard Thursday 19 August 2010

Higher-level ethanol blends like E15 have not been proven safe or effective according to preliminary testing to date. These studies are scheduled to be completed in 2011. In addition, EPA is in the midst of the scientific review mandated by the Clean Air Act before new fuels, additives or fuel blends are introduced into commerce.

Despite these ongoing studies, EPA has indicated it may act as soon as September to approve E15 in vehicles. This has alarmed lawmakers and ordinary citizens alike. In July, the House Energy Committee warned EPA that renewable fuels must be introduced in "a manner that adequately protects consumers." A broad coalition of business, consumer and environmental groups also wrote EPA expressing similar concerns.

So untested, untried, and to hell with any unintended consequences, we have to realize the DREAM. I know, I know, that IS Liberalism defined. Quick to Dream, slow to think. Problem is, when you do this, you do not have the time to realize if it IS a dream, or a nightmare in the waiting.
Peter

Sources:
Media Research Center - Ethanol Being Blamed for Global Food Riots
CNN - Riots, instability spread as food prices skyrocket
UK Telegraph - Global warming rage lets global hunger grow
OPNTalk - Good Intentions Unintended Consequences
Energy Tomorrow - Don't Blend Politics and Science on E15