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“I Hate That Oil’s Dropping”: Why Mississippi Governor Phil Bryant Wants High Oil Prices for Fracking

By: Steve Horn Tuesday November 25, 2014 9:14 pm

Cross-Posted from DeSmogBlog

Outgoing Interstate Oil and Gas Compact Commission (IOGCC) chairman Phil Bryant — Mississippi’s Republican Governor — started his farewell address with a college football joke at IOGCC’s recent annual conference in Columbus, Ohio.

“As you know, I love SEC football. Number one in the nation Mississippi State, number three in the nation Ole Miss, got a lot of energy behind those two teams,” Bryant said in opening his October 21 speech. “I try to go to a lot of ball games. It’s a tough job, but somebody’s gotta do it and somebody’s gotta be there.”

Seconds later, things got more serious, as Bryant spoke to an audience of oil and gas industry executives and lobbyists, as well as state-level regulators.

At the industry-sponsored convening, which I attended on behalf of DeSmogBlog, it was hard to tell the difference between industry lobbyists and regulators. The more money pledged by corporations, the more lobbyists invited into IOGCC’s meeting.

Perhaps this is why Bryant framed his presentation around “where we are headed as an industry,” even though officially a statesman and not an industrialist, before turning to his more stern remarks.

“I know it’s a mixed blessing, but if you look at some of the pumps in Mississippi, gasoline is about $2.68 and people are amazed that it’s below $3 per gallon,” he said.

“And it’s a good thing for industry, it’s a good thing for truckers, it’s a good thing for those who move goods and services and products across the waters and across the lands and we’re excited about where that’s headed.”

Bryant then discussed the flip side of the “mixed blessing” coin.

“Of course the Tuscaloosa Marine Shale has a little problem with that, so as with most things in life, it’s a give and take,” Bryant stated. “It’s very good at one point and it’s helping a lot of people, but on the other side there’s a part of me that goes, ‘Darn! I hate that oil’s dropping, I hate that it’s going down.’ I don’t say that out-loud, but just to those in this room.”

Tuscaloosa Marine Shale’s “little problem” reflects a big problem the oil and gas industry faces — particularly smaller operators involved with hydraulic fracturing (“fracking”) — going forward.

That is, fracking is expensive and relies on a high global price of oil. A plummeting price of oil could portend the plummeting of many smaller oil and gas companies, particularly those of the sort operating in the Tuscaloosa Marine.

Tuscaloosa and Oil Price

Governor Bryant’s fears about the price of oil are far from unfounded, serving as a rare moment of frank honesty from Mississippi’s chief statesman.

As discussed in Post Carbon Institute‘s recent report, “Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” the fracking industry relies on high oil prices to stay on the drilling treadmill and keep shale fields from going into terminal decline. Further, future projections of shale gas and oil fields are wildly over-inflated, argues the Post Carbon report.

“Other factors that could limit production are public pushback as a result of health and environmental concerns, and capital constraints that could result from lower oil or gas prices or higher interest rates,” reads a passage in the Post Carbon report. “As such factors have not been included in this analysis, the findings of this report represent a ‘best case’ scenario for market, capital, and political conditions.”

Recent articles published in the business press further highlight the key caveat in the Post Carbon report, as did a recent Halcón Resources Corp investor call that discussed the Tuscaloosa Marine.

“Tuscaloosa Marine Shale, I’m going to do my darndest to make sure that people understand that we’re highly confident and we like the play,” Halcón Resources CEO Floyd Wilson said on the call.

“However, it is currently a relatively high-cost play and with currently low crude prices we will not be devoting a significant portion of our resources to TMS in the near term,” Wilson continued. “Having said that the TMS is certainly more susceptible to low oil prices than our other crude plays due to the higher well costs, a tempered approach to drilling in this play in the near term is warranted.”

A recent report published by energy investment firm Tudor, Pickering, Holt &Co., described Tuscaloosa Marine as the shale basin most likely to face severe impacts from the falling price of oil. The Tudor report said that drillers operating in the Tuscaloosa require oil to sell at $70-$90 per barrel for fracking to remain economically viable there.

The $80 Mark

Mississippi does not stand alone in feeling the hurt associated with a drop in the global oil trading price.

Bloomberg reported that companies operating in Utah and Texas have already slowed down drilling as a result of the high oil prices they had previously relied upon. In total, 19 U.S. shale plays will no longer be profitable if the price of oil continues to fall.

“Everybody is trying to put a very happy spin on their ability to weather $80 oil, but a lot of that is just smoke,” Dan Dicker, president of MercBloc, said in an interview with Bloomberg. “The shale revolution doesn’t work at $80, period.”

Not all industry insiders, however, are trying to spin things.

Ralph Eads, a life-long friend of former Chesapeake Energy CEO Aubrey McClendon and global head of energy investment banking at Jefferies LLC, agrees with Dicker’s assessment.

“If prices go to $80 or lower, which I think is possible, then we are going to see a reduction in drilling activity,” Eads told Bloomberg. “It will be uncharted territory.”

As of November 25, 2014, the price of Brent oil has fallen to $78.33.

Wall Street Journal article from late October concurred with others who said the Tuscaloosa will take a beating with the fall of the price of oil. But it also concluded that for operators in many other more prolific shale basins like the Bakken Shale and Eagle Ford Shale, $60 per barrel is the break even point, not $80.

One Mississippi, Two Mississippi…

To the smaller companies operating in the Tuscaloosa, recent oil pricing developments are likely no laughing matter.

But that didn’t stop Governor Bryant from cracking a joke to conclude his presentation at the IOGCC annual meeting.

“Fraser Institute says Mississippi is the second in the world for oil and gas development…so we came up with this little idea,” Bryant joked.  “We have the number one and number three football teams in the nation: one Mississippi, two Mississippi, three Mississippi. That used to be a call signal for how long you could take before you could rush the quarterback.”

But as with all numbers, it depends on who’s counting. And the Fraser Institute is an associate member of the industry-funded State Policy Network “stink tanks.”

As with shale gas production numbers and figures, it always pays to consider the source.

 

Engelhardt: Iraq War 4.0?

By: Tom Engelhardt Tuesday November 25, 2014 5:58 pm

This article orginally appeared at TomDispatch.com. To receive TomDispatch in your inbox three time a week, click here.

[Note for TomDispatch Readers: Here’s a small suggestion as the holidays approach.  If you want to lend a hand to TomDispatch before the year ends, why not make a donation of $100 (or more) for a signed, personalized copy of my new book, Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World. If you’d like to have it signed for a friend this season, go to our donation page, make the necessary contribution, and email me telling me whom to sign it for. As for the rest of you, don’t forget to pick up a copy of the book for yourself or a friend. It’s a great way to spread the word about TomDispatch. By the way, if you want to read an interview Don Hazen and Jan Frel of Alternet did with me on the new book and our ragged old world, click here.

Note as well that there will be no TomDispatch post on Thanksgiving. Tom]

Russians Invade Afghanistan (Again!), Chinese Fight Iraq War (Again!) 
What If It Weren’t Us? 
By Tom Engelhardt

Let’s play a game, the kind that makes no sense on this single-superpower planet of ours. For a moment, do your best to suspend disbelief and imagine that there’s another superpower, great power, or even regional power somewhere that, between 2001 and 2003, launched two major wars in the Greater Middle East. We’re talking about full-scale invasions, long-term occupations, and nation-building programs, first in Afghanistan and then in Iraq.

In both countries, that power quickly succeeded in its stated objective of “regime change,” only to find itself mired in deadly conflicts with modestly armed minority insurgencies that it simply couldn’t win. In each country, to the tune of billions and billions of dollars, it built up a humongous army and allied “security” forces, poured money into “reconstruction” projects (most of which proved disasters of corruption and incompetence), and spent trillions of dollars of national treasure.

Having imagined that, ask yourself: How well did all of that turn out for this other power?  In Afghanistan, a recent news story highlights something of what was accomplished.  Though that country took slot 175 out of 177 on Transparency International’s 2013 Corruption Perceptions Index, though its security forces continue to suffer grievous casualties, and though parts of the country are falling to a strengthening Taliban insurgency, it has for some years proudly held a firm grip on one record: Afghanistan is the leading narco-state on planet Earth.

In 2013, it upped its opium poppy cultivation by 36%, its opium production by almost 50%, and drug profits soared. Preliminary figures for this year, recently released by the U.N., indicate that opium cultivation has risen by another 7% and opium production by 17%, both to historic highs, as Afghanistan itself has become “one of the world’s most addicted societies.”

Meanwhile, where there once was Iraq (171st on that index of kleptocracies), there is now a Shiite government in Baghdad defended by a collapsed army and sectarian militias, a de facto Kurdish state to the north, and, in the third of the country in-between, a newly proclaimed “caliphate” run by a terror movement so brutal it’s establishing records for pure bloodiness.  It’s headed by men whose West Point was a military prison run by that same great power and its bloodthirstiness is funded in part by captured oil fields and refineries.

In other words, after 13 years of doing its damnedest, on one side of the Greater Middle East this power has somehow overseen the rise of the dominant narco-state on the planet with monopoly control over 80%-90% of the global opium supply and 75% of the heroin. On the other side of the region, it’s been complicit in the creation of the first terrorist mini-oil state in history, a post-al-Qaeda triumph of extreme jihadism.

A Fraudulent Election and a Collapsed Army

Though I have no doubt that the fantasy of relocating Washington’s deeds to Beijing, Moscow, Tehran, or any other capital crumbled paragraphs ago, take a moment for one more experiment.  If this had been the work of any other power we thought less well of than we do of ourselves, imagine the blazing headlines right now.  Conjure up — and it shouldn’t be hard — what the usual war hawks would be spouting in Congress, what the usual suspects on the Sunday morning talk shows might be saying, and what stories cable news networks from CNN to Fox would be carrying.

You know perfectly well that the denunciations of such global behavior would be blistering, that the assorted pundits and talking heads would be excoriating, that the fear and hysteria over that heroin and those terrorists crossing our border would be somewhere in the stratosphere.  You would hear words like “evil” and “barbaric.”  It would be implied, or stated outright, that this avalanche of disaster was no happenstance but planned by that same grim power with its hand on the trigger these last 13 years, in part to harm the interests of the United States.  We would never hear the end of it.

Instead, the recent reports about Afghanistan’s bumper crop of opium poppies slipped by in the media like a ship on a dark ocean.

A Quick Whirl Around the Mining and Fracking Worlds: 25 Nov 2014

By: KateCA Tuesday November 25, 2014 2:32 pm

Celebrate the cycle of life with a Hoop Dance accompanied by Jazz music, both unique to this country.

Today’s article is a combination of news items for both Mining and Fracking, beginning with Mining.  Next week, it’s back to the usual schedule (Mining on Tuesdays, Fracking on Thursdays).  

MINING THE EARTH

*AKThe Pebble Mine is back in the news as a federal judge “temporarily blocked” the EPA’s efforts to stop the mine, following Northern Dynasty Minerals’ objections to the process.

*KY.  A judge has ruled that the Kentucky Energy and Environment Cabinet is “so understaffed they can no longer effectively enforce clean-water rules.”  He also tossed a “$310,000 proposed agreement” between the E&E Cabinet and the Frasure Creek mining company—and ruled that certain environmental organizations be included in resolutions.

*NY. Hedge funds are reportedly betting on the failure of big coal in the US.  8 major coal companies, on average, were down 29% on the NYSE this year. Hedge funds bet “against the stock and debt of mining firms . . ., then snap . . . up the bonds when their prices fall as low as 40 cents on the dollar.”  When/if things improve, the funds will sell the mines at a profit.

*TX.  Parts of TX’s clean air plan have been rejected by the US Environmental Protection Agency.  which, instead, thinks TX should “require 15 coal-burning generating units at eight Texas power plants to install or improve controls that limit emissions of sulfur dioxide.”  TX’s Commission on Environmental Quality had proposed 2155 as the date for TX to have achieved clear skies.  Seriously.

*WV.  Massey Energy ex-CEO Don Blankenship, pleaded “Not Guilty” last week to federal charges of conspiracy, lying to investigators and not complying with safety and health regulations.  He was ordered to not contact family members of coal miners killed in the April 2010 explosion at the Upper Big Branch Mine.  Possibility of 31 years in prison, currently out on $5 million bond.  Gag order imposed on Blankenship, mine-worker family members and lawyers.

*Africa.  Groupe Forrest International of Belgium “has consistently lied about the bulldozing of hundreds of homes in the Democratic Republic of the Congo . . . and has denied justice to those affected”.  Groupe Forrest operated the Luiswishi copper and cobalt mine in Kawama, Katanga until 2012.  Apparently there is involvement of the state in the destruction and cover-up.

*Australia.  Gina Rinehart, head of Hancock Prospecting, has plunked down $10 billion to develop the Roy Hill iron ore mine.  She’s complaining about the “negativity” toward mining which, she says, is “critical to Australia’s future.”  Presumably her $10 billion investment means mining is critical to her future, too.

*Australia.  Pssst, Gina RinehartBIS Shrapnel, an “economic forecaster”, says mining investment in Australia is to take the worst fall ever, and soon.

*Australia.  Another mining mogul, Clive Palmer, ran for office in 2013 and allegedly misused in the process $12 million in Chinese-government funds meant for iron mine investment. Why’d he do that?  He’s supposedly worth $1.22 billion, and he’s amusing himself these days by building full-sized replicas of Jurassic Park and the Titanic. He’s even named a political party after himself.

*China.  Following quickly on the heels of the G20 climate summit, China announced “it would cap coal use by 2020 [at] 4.2 billion tonnes”.

*ChinaIron ore’s down 48%, oil down 20%, coking coal down 20%, copper down 7%.  What a few months ago looked like great profits now looks like “a billion-dollar black hole” as China’s commodity prices nose-dive.

 

A QUICK WHIRL AROUND THE FRACKING WORLD

*USA.  The US Navy has announced it can turn seawater into fuel—at $3 to $6 a gallon!

*USA.  The “state department climate change envoy, Todd Stern, said the world would have no choice but to forgo developing reserves of oil, coal and gas” if global warming is to be stopped.

Cleveland Protesters Shut Down Major Freeway For an Hour

By: Ohio Barbarian Tuesday November 25, 2014 1:59 pm

Happening now, people protesting the Ferguson, Missouri, grand jury non-indictment are shutting down a major freeway near downtown Cleveland. In spite of the best efforts on the part of the local reporter to make it a race issue, most of the protesters are clearly white. So far, Cleveland Police are standing back and just observing. There’s no violence, at least not yet, but things are getting disrupted for sure.

More later as this develops.

<Update: The protesters left the freeway after an hour, apparently on their own volition. As for the police, no riot gear was in evidence; they just stood back and waited it out. How intelligent of them. If they had forcefully intervened, as some of the reporters seemed to be hoping for, there would have been violence and a lot of it.>

The Womb Lottery

By: Alan Grayson Tuesday November 25, 2014 11:56 am

I’m happy that President Obama finally has moved forward with immigration reform. But the six-year-long White House Bad Messaging Plague (WHBMP) continues unabated. We’re in danger of losing the public on this issue even before the first work permit is issued.

President Obama’s executive order removes the loaded guns pointed at the temples of five million human beings, who also happen to be undocumented U.S. immigrants. It is a sincere act of compassion and mercy that has eluded House Speaker John Boehner for years, Boehner’s utterly hypocritical nattering about the urgent need for immigration reform notwithstanding. If Boehner had ever looked up from his shot glass, he might have seen their sad eyes, and felt some urge to confer simple dignity on them.

But that’s not how the White House staff is telling it. Last night, I received the White House staff’s talking points, embargoed until 6 pm. (I received them at 6:03 pm, but nevermind.)

● The President will “help secure the border.” (This is the first thing – the very first thing! – that they said.)

● The President will hold undocumented immigrants “accountable.” How is he holding them “accountable” for entering or remaining in America without permission? By letting them stay.

● The President will “fix our broken immigration system.” How will he fix it? By not enforcing it.

● The President will “prioritize deporting felons not families.” Just as he has deported commas from that phrase, I guess. (Good alliteration, though.)

Please understand: I’m in favor of President Obama’s action – very much so. But this framing by the White House staff just . . . stinks.

Here is a test for you: Is there anything in these talking points that could not have come out of the Bush White House? Answer: No.

I’ve seen a poll or two in my life, so I understand that the terms “secure the border,” “accountability,” “fixing the broken [fill in the blank]” and “families” poll very well. Families, yay! Felons, boo! I’m very happy, and indeed relieved, that we Democrats now have established our bona fides as the anti-felon party.

I noted that the White House’s very lengthy (i.e., numbingly repetitive) talking points never mention Boehner or the Republicans – not even once. Instead, the White House extends its devastating six-year-long attack on “Congress,” which has succeeded in: (a) driving Congress’s approval rating down to single digits; (b) delivering the House to the Republicans in 2010; and (c) delivering the Senate to the Republicans in 2014. If some Higher Being did a retroactive global search and replace on every White House statement since Jan. 20, 2009, searching for “Congress” and replacing it in each instance with “Republicans in Congress,” Democrats would have supermajorities right now in both Houses.

Here is the basic problem: Fox News has gotten into their heads. If you think that the primary purpose of immigration reform is “securing the borders,” then your name is Rush Limbaugh, Bill O’Reilly or Sean Hannity, not Robert Gibbs, Jay Carney or Josh Earnest.

With all due respect, these White House staff talking points are a pitiful effort to put a right-wing mask on a left-wing policy – and a meritorious and virtuous left-wing policy at that. But as Professor George Lakoff has demonstrated, even when you rebut the right wing’s arguments, you’re inadvertently reinforcing them. (As he puts it, “Don’t think of an elephant!” You can’t. Once the subject of elephants comes up, you’re going to think about elephants, whether you like it or not.)

Look, this is important. The basic rules of existence for five million people are in play. Please, just this once, can’t we be progressives? What is so wrong with that?

Let’s try it this way: Every one of us draws a ticket in the womb lottery. Six Waltons had winning tickets; they were born billionaires. The victims of fetal alcohol syndrome have losing tickets; they suffer from terrible physical and mental disabilities.

There are seven billion people alive today. Only a quarter of a billion of them won the womb lottery, and they were fortunate enough to be born in the United States. Almost fifty million more worked the system well enough to acquire U.S. citizenship. But there are over ten million people who love America so much – so very much – that they left behind their communities, their families, their property, their jobs, and they came here or remain here without the permission of our government. They didn’t win the womb lottery, so it’s too late for them to be born here. They feel that they were born in the wrong country. Their passports are not blue. But they want to fix that problem. They want to make it right. They can’t be American citizens by birth, but instead, they desperately want to be American citizens by choice.

Isn’t that a good thing? That people love what we have created so much that they want to be a part of it, and contribute to it. This isn’t a threat, it’s a heartfelt compliment.

My mother is an immigrant. My grandparents were immigrants. We are all the sons and daughters of immigrants, and we are all the children of God. Can we please, please respect each other, and live together in peace and dignity?

Think of it this way: For whatever reason – lax enforcement of immigration laws, oppression in other countries, the need to survive, whatever – these five million people are our new sisters-in-law and brothers-in-law. The polite thing to do is to welcome them. Repeat after me: “Welcome to the American Family, and thank you for contributing to the American Experience.”

Courage,

Rep. Alan Grayson

Senator Schumer’s Chamber of Commerce Toadiness…

By: jaango Tuesday November 25, 2014 11:23 am

Senator Schumer’s Chamber of Commerce Toadiness

New York Senator Chuck Schumer is attempting to rewrite his history for being ‘captured’ by the Wall Street crowd as well as the Chamber of Commerce, with his latest pronouncement in which he disagreed with President Obama.  And such Schumer has repeatedly proven himself to be a hypocrite, as well.  a hypocrite too.

To wit, the following from Bloomberg Politics.

“Unfortunately, Democrats blew the opportunity the American people gave them” in electing Obama and a Democratic Congress in 2008 amid a recession, Schumer of New York said in a speech in Washington. “We took their mandate and put all our focus on the wrong problem — health care reform.”

Schumer said Democrats should have addressed issues aiding the middle class to build confidence among voters before turning to revamping the health-care system. He said he opposed the timing of the health-care vote and was overruled by other party members.

When the Democrats, back cloak room of the Senate chamber discussed Card Check and subsequently, Obama tossed Card Check into the proverbial trash can, Schumer’s allegiance to the Wall Street Crowd as well as the Chamber of Commerce, knew of no upper bounds in gentility when it came to addressing the prevalent issues facing the Middle Class and the Working Class.  However, he sure knew of the lesser bounds in gentility, and thusly, showed his true colors for his newly acquired neo-liberalism and this from a former Progressive in the House.  And obviously, he learned much at the knee and during the  reign of now stellar Senator Hillary Clinton from New York.

And for those of us and who are the “minority” know well that Schumer’s the Big Dunce in American politics. As such, he knows no Shame. And New Yorkers should be embarrassed for having an iconic two-fer, Cuomo and Schumer. And yet, he’s ascended onto the Power Curve as the “messenger” for the Democrats, and this has irritated the hell out me, given that I am a staunch Democrat.

Jaango

Methinks Robert McCulloch doth protest too much

By: Masoninblue Tuesday November 25, 2014 6:00 am

Cross posted from Frederick Leatherman Law Blog

Tuesday, November 25, 2014

Good morning:

Prosecutor Robert McCulloch’s angry, defensive and crazy rant last night criticizing the media and the internet for allegedly whipping up public support for charging Darren Wilson with a crime for killing an unarmed Michael Brown raising his hands in the universal sign of surrender proved beyond doubt that he is unfit to hold the office of Prosecuting Attorney for St.Louis County.

He believed all along that Wilson was justified in killing Michael Brown and should not have been charged. His obvious bias in favor of Wilson, when considered together with the unlawful release of information that was presented in secret to the grand jury, reveals that Wilson did not need a lawyer because McCulloch was his staunchest defender.

Little wonder that Wilson, the cop who refused to fill out an offense report about the shooting, decided to waive his right to remain silent and testify before the grand jury.

The outcome was rigged from Day One and has no legitimacy.

Look at these photographs of the diminutive Wilson, who is 6’4″ and 210 pounds.

Notice in particular the incredibly nasty suborbital eye socket fracture.

The secret reverse star-chamber proceeding seasoned with selective leaks cooked up by McCulloch should be universally condemned.

Over Easy: Putting it all together

By: cmaukonen Tuesday November 25, 2014 4:55 am

Transmitter 1933

Went to Westside Market today to do my shopping for the next two weeks. I knew that on Wednesday it would be a zoo, with tons of people doing last minute shopping for Thanksgiving. West 25th Street paving was finished, so not so big a hassle driving it today. Much warmer with the temps in the 60s but off and on rain.

One of the members of our theatre group set up a private FB group for us all to exchange photos and stories and memories of when we were together putting on shows at the university and sometimes elsewhere. A lot of them concerning how each of us often had to improvise and even make our own props. Or get the set to fit and work in the Science Auditorium, essentially a glorified, oversized janitors closet.

Amazingly we managed to get it all put together for opening night and nearly everyone said how fortunate they felt they were to have had the opportunity to do theatre there even though the facilities were crude at best. The experience had helped and empowered them once they were out in the real world. Such as this set for Journey’s End.

Despite this or maybe because of it, it was fun.

Kind of reminds me when after my father’s death and we had moved down to Florida, I had no money and my radio and electronic stuff was up north somewhere but neither my mother nor I knew where. My father gave it to someone since he did not want to move all that stuff to Florida. So I was there with essentially nothing. I scavenged from behind TV repair shops for old junked TVs and radios and such. Removed the tubes and parts and built amplifiers and shortwave things on pieces of wood and such. Not unlike this. But it was fun and like the theatre experience, I and everyone else learned a lot doing it.

And the satisfaction you get putting it all together.