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Exxon Awarded Gulf of Mexico Oil Leases Days Before Obama Announced CO2 Rule

5:58 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Exxon Logo

Steve Horn uncovers “last minute” energy deals at Exxon.

On Friday May 30, just a few days before the U.S. Environmental Protection Agency announced details of its carbon rule proposal, the Obama Administration awarded offshore oil leases to ExxonMobil in an area of the Gulf of Mexico potentially containing over 172 million barrels of oil.

The U.S. Department of Interior‘s (DOI) Bureau of Ocean Energy Management (BOEM) proclaimed in a May 30 press release that the ExxonMobil offshore oil lease is part of “President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production.”

Secretary of Interior Sally Jewell formerly worked as a petroleum engineer for Mobil, purchased as a wholly-owned subsidiary by Exxon in 1998.

Dubbed a “Private Empire” by investigative reporter Steve Coll, ExxonMobil will now have access to oil and gas in the Alaminos Canyon Area, located 170 miles east of Port Isabel, Texas. Port Isabel borders spring break and tourist hot spotSouth Padre Island.

ExxonMobil originally won the three leases at the Western Planning Area Sale 233, held on March 19. BOEM records show ExxonMobil was the only company to participate in the bid and paid over $21.3 million.

Transboundary Agreement Opens Floodgates

The U.S.-Mexico Transboundary Hydrocarbon Agreement signed into law by President Obama on December 23, 2013 — a key precursor to the ongoing debate over Mexico’s oil and gas industry reforms — served as the legal backdrop for BOEM awarding ExxonMobil with the lease.

“With the Agreement now in full force, we can make additional oil and gas along the resource-rich boundary between the United States and Mexico available and we have a clear process by which both governments can provide the necessary oversight to ensure exploration and development activities are conducted safely and responsibly,” Secretary Jewell said in a press release.

“These leases represent a significant step forward in U.S.-Mexico cooperation in energy production and pave the way for future energy and environmental collaboration.”

Over 1.5 million offshore acres opened for business as a result of the Transboundary Agreement.

Through the Agreement, U.S. companies agreed to develop the area jointly with Mexican state-owned company Petroleos Mexicanos (Pemex).

Mexico’s legislature is now debating the details of secondary legislation, coming after the country signed constitutional amendments in December 2013. The constitutional amendments-secondary legislation one-two punch will open up the rest of Mexico’s onshore and offshore oil and gas reserves to international oil and gas companies, working in partnership with Pemex.

According to a May 6 article appearing in Upstream Online, the legislature will open up an “extraordinary session” to debate the secondary legislation sometime this month.

Five Year Program

Beyond the Transboundary Hydrocarbon Agreement, in February the Obama Administration announced it would be opening up over 40 million acres of offshore land for oil and gas development, also doing so under the “all-of-the-above” banner.

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Joe Biden Turns Fracking Missionary On Ukraine Trip

1:39 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

Caricature of Joe Biden

Joe Biden: Global fracking evangelist.

During his two-day visit this week to Kiev, Ukraine, Vice President Joe Biden unfurled President Barack Obama’s “U.S.Crisis Support Package for Ukraine.”

A key part of the package involves promoting the deployment of hydraulic fracturing (“fracking”) in Ukraine. Dean Neu, professor of accounting at York University in Toronto, describes this phenomenon in his book “Doing Missionary Work.” And in this case, it involves the U.S. acting as a modern-day missionary to spread the gospel of fracking to further its own interests.

With the ongoing Russian occupation of Crimea serving as the backdrop for the trip, Biden made Vladimir Putin’s Russia and its dominance of the global gas market one of the centerpieces of a key speech he gave while in Kiev.

“And as you attempt to pursue energy security, there’s no reason why you cannot be energy secure. I mean there isn’t. It will take time. It takes some difficult decisions, but it’s collectively within your power and the power of Europe and the United States,” Biden said.

“And we stand ready to assist you in reaching that. Imagine where you’d be today if you were able to tell Russia: Keep your gas. It would be a very different world you’d be facing today.”

The U.S. oil and gas industry has long lobbied to “weaponize” its fracking prowess to fend off Russian global gas market dominance. It’s done so primarily in two ways.

One way: by transforming the U.S. State Department into a global promoter of fracking via its Unconventional Gas Technical Engagement Program (formerly theGlobal Shale Gas Initiative), which is a key, albeit less talked about, part of President Obama’s “Climate Action Plan.”

The other way: by exporting U.S. fracked gas to the global market, namely EUcountries currently heavily dependent on Russia’s gas spigot.

In this sense, the crisis in Ukraine — as Naomi Klein pointed out in a recent article — has merely served as a “shock doctrine” excuse to push through plans that were already long in the making. In other words, it’s “old wine in a new bottle.”

Gas “Support Package” Details

Within the energy security section of the aid package, the White House promises in “the coming weeks, expert teams from several U.S. government agencies will travel to the region to help Ukraine meet immediate and longer term energy needs.”

That section contains three main things the U.S. will do to ensure U.S. oil and gas companies continue to profit during this geopolitical stand-off.

1) Help with pipelines and securing access to gas at the midstream level of production.

“Today, a U.S. interagency expert team arrived in Kyiv to help Ukraine secure reverse flows of natural gas from its European neighbors,” the White House fact sheet explains. “Reverse flows of natural gas will provide Ukraine with additional immediate sources of energy.”

2) Technical assistance to help boost conventional gas production in Ukraine. That is, gas obtained not from fracking and horizontal drilling, but via traditional vertical drilling.

As the White House explains, “U.S. technical experts will join with the European Bank for Reconstruction and Development and others in May to help Ukraine develop a public-private investment initiative to increase conventional gas production from existing fields to boost domestic energy supply.”

3) Shale gas missionary work.

“A technical team will also engage the government on measures that will help the Ukrainian government ensure swift and environmentally sustainable implementation of contracts signed in 2013 for shale gas development,” says the White House.

ExxonMobil Teaching Russia Fracking

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Second US Tar Sands Mine, Owned by Former ExxonMobil and Chevron Exec., Approved in Utah

8:37 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

MCW Enterprises Ltd., a Canada-based corporation, announced on Nov. 19 that it has received all necessary permits to streamline tar sands extraction at its Asphalt Ridge plant located in Vernal, Utah starting in December.

Protest Banner: All Markets Peak, All Pipelines Leak

Tar Sands protest in New Orleans

The announcement comes just weeks after U.S. Oil Sands Company received the first ever green light to extract tar sands south in the United States.

Recently changing its name from MCW Energy, MCW Enterprises Ltd. owns MCW Oil Sands Recovery LLC as a wholly owned subsidiary. The company’s CEO, R. Gerald Bailey – often also referred to as Raymond Bailey or Jerry Bailey - is the former President of Exxon Arabian Gulf and also served as an Executive for Texaco (since purchased by Chevron) for 15 years.

MCW’s website explains that its stake in the Asphalt Ridge is a “proven/probable resource of over 50+ million barrels of oil” and that it “is seeking other oil sands leases in Utah, which contains over 32 billion barrels of oil within 8 major deposits.”

Bailey told Flahrety Financial News that he sees this first project as a crucible, or testing grounds, with the potential for more extraction to come down the road.

“This is really going to be a technology play,” he stated. “I don’t plan to build another Exxon out there in the desert.”

The Frac Sand Connection

In June 2012, Temple Mountain Energy (TME) – also based in Vernal, UT – cut a five-year oil sands supply agreement deal with MCW.

“Under this five year Supply Agreement, Temple Mountain will supply MCW with 8,333 tons of oil sands material per month until the year 2016,” MCW’s website explains.

Once the bitumen is extracted, TME plans on selling the fine-grained sand under which it sits to unconventional oil and gas companies forhydraulic fracturing (“fracking”).

“The recent rapid expansion of shale gas and shale oil drilling…has greatly increased the need for fracking sand in this region,” TME wrote on it website. “Asphalt Ridge is well-positioned to serve this high-volume market—both in terms of geographic location and in terms of sand quality.”

To date, frac sand mining companies have targeted five states - WisconsinMinnesotaTexasArkansas, and Iowa - transforming tens of thousands of acres of land into “Sand Land.” Utah is soon to become number six.

Race for What’s Left: End of “Easy Oil,” Heavy Price to Pay

With domestic unconventional oil and gas wells under-producing, setting the stage for the shale gas bubble to burst, the push to extract tar sands in the United States is a depiction of the oil and gas industry’s reckless push to extract every last drop in a “race for what’s left.”

The age of “easy oil,” to borrow the term from scholar Michael Klare, is over. In a May 2012 interview with FutureMoneyTrends.com, Bailey acknowledged this as well, stating that the “cheap, easy oil is pretty much behind us.”

Bailey defines “cheap” here with regards to the price of extracting the “tough oil” from a production point-of-view.

But as the Alberta tar sands north of the border have shown, it’s the ecosystem and climate that really pays the heaviest price of all. Read the rest of this entry →