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Bill placing federal lands off-limits passes House

© 2009 McGraw-Hill, Inc. – The House of Representatives on Wednesday passed a public lands bill that would lock up 2.2 million acres of federal lands, including 1.2 million acres in the gas-rich Wyoming Range, potentially blocking them from future oil and natural gas production.

The bill passed the Democratic-controlled chamber by a vote of 285-140. A similar Senate measure passed easily last week, 77-20, and now heads to President Obama’s desk for his signature.

The opposition to the measure came mostly from Republicans, who argued that it would impede energy production on public lands. Democrats argued that protecting the lands for future generations took precedence over energy development.

Among other things, the bill would place 1.2 million acres of the Wyoming Range off-limits to oil and natural gas producers. The US Geological Survey estimates the range’s reserves at 1.5 Tcf of gas and 5 million barrels of oil.

The bill, which is known as the National Wild and Scenic Rivers Act, is intended to protect moose, lynx, mule deer and other animals on the range, and would prohibit the future leasing of the area for oil and gas production. More than 700,000 acres currently under lease would not be affected by the bill.

The Independent Petroleum Association of America blasted the passage Wednesday, calling it “a step in the wrong direction for our economy and our future. This legislation makes it harder to responsibly develop oil and natural gas resources on federal lands, and limits a main driver of economic growth: American energy production,” said Barry Russell, president and CEO of IPAA.

The lands “are already effectively protected,” Russell said, citing the “state-of-the-art technology” producers use to minimize the environmental impacts of drilling. “As our economy continues to struggle, the last thing we need is a self-imposed, unnecessary obstacle to recovery,” he added.

The bill earlier this month failed to pass the House when leadership brought it to the floor under rules that prohibited any amendments and required a two-thirds majority vote for passage. The measure subsequently was renamed after an unrelated bill that had already been passed by the House.

The maneuver allowed passage of the bill with a simple majority and without amendments now that the Senate has approved it. —Daniel Goldstein

Everyone Hates Ethanol

© 2009, Dow Jones & Company, Inc. – These days, it’s routine for businesses to fail, get rescued by the government, and then continue to fail. But ethanol, which survives only because of its iron lung of subsidies and mandates, is a special case. Naturally, the industry is demanding even more government life support.

Corn ethanol producers — led by Wesley Clark, the retired general turned chairman of a new biofuels lobbying outfit called Growth Energy — want the Obama Administration to make their guaranteed market even larger. Recall that the 2007 energy bill requires refiners to mix 36 billion gallons into the gasoline supply by 2022. The quotas, which ratchet up each year, are arbitrary, but evidently no one in Congress wondered what might happen if the economy didn’t cooperate.

Now the recession is hammering demand for gas. The Energy Information Administration notes that U.S. consumption fell nearly 7% in 2008 and expects another 2.2% drop this year. That comes as great news for President Obama, who is achieving his carbon-reduction goals even without a new carbon tax, but the irony is that the ethanol industry is part of the wider collateral damage.

Americans are unlikely to use enough gas next year to absorb the 13 billion gallons of ethanol that Congress mandated, because current regulations limit the ethanol content in each gallon of gas at 10%. The industry is asking that this cap be lifted to 15% or even 20%. That way, more ethanol can be mixed with less gas, and producers won’t end up with a glut that the government does not require anyone to buy.

The ethanol boosters aren’t troubled that only a fraction of the 240 million cars and trucks on the road today can run with ethanol blends higher than 10%. It can damage engines and corrode automotive pipes, as well as impair some safety features, especially in older vehicles. It can also overwhelm pollution control systems like catalytic converters. The malfunctions multiply in other products that use gas, such as boats, snowmobiles, lawnmowers, chainsaws, etc.

That possible policy train wreck is uniting almost every other Washington lobby — and talk about strange bedfellows. The Alliance of Automobile Manufacturers, the Motorcycle Industry Council and the Outdoor Power Equipment Institute, among others, are opposed, since raising the blend limit will ruin their products. The left-leaning American Lung Association and the Union of Concerned Scientists are opposed too, since it will increase auto emissions. The Natural Resources Defense Council and the Sierra Club agree, on top of growing scientific evidence that corn ethanol provides little or no net reduction in CO2 over the gasoline it displaces.

The biggest losers in this scheme are U.S. oil refiners. Liability for any problems arising from ethanol blending rests with them, because Congress refused to grant legal immunity for selling a product that complies with the mandates that it ordered. The refiners are also set to pay stiff fines for not fulfilling Congress’s mandates for second-generation cellulosic ethanol. But the cellulosic ethanol makers themselves already concede that they won’t be able to churn out enough of the stuff — 100 million gallons next year, 250 million gallons in 2011 — to meet the targets that Congress wrote two years ago.

So successful but politically unpopular businesses will be punished for not buying a product that does not exist — from companies that haven’t yet found a way to succeed despite generous political and taxpayer advantages. The next step is to use cap and trade to make green alternatives look artificially good by comparison. Even then they’ll probably still be bottomless money pits.

To recap: Congress and the ethanol lobby argue that if some outcome would be politically nice, it should be mandated (details to follow). Then a new round of market interventions is necessary to fix the economic harm resulting from the previous requirements, while creating more damage in the process. Ethanol is one of the most shameless energy rackets going, in a field with no shortage of competitors.

16/03/2009
The Wall Street Journal

Sonatrach/Rosneft-Stroytransgaz plans approved by Algerian National Agency for the Valorisation of Hydrocarbons Resources

Copyright 2009. SKRIN. – The Algerian National Agency for the Valorisation of Hydrocarbons Resources ALNAFT has approved the plans for development of the fields of Eastern Takuazet, Western Takuazet and Northern Tesselit located at Gara Tesselit area (block 245 South) at the oil and gas basin Illizy at the East of Algeria by Algerian-Russian alliance Sonatrach/Rosneft-Stroytransgaz Ltd. The Alliance has been formed in 2001 by Algerian National Oil and Gas Company Sonatrach (40%) and joint venture of Rosneft and Stroytransgaz – Rosneft-Stroytransgaz Ltd. (60%). The first plan includes the development of two oil fields Eastern and Western Takuazet, discovered in 2003-2004, and the second – gas condensate field Northern Tesselit, discovered in 2006.

In accordance with the Production Sharing Agreement on the terms and conditions of which the contract for the development of the block 245-South has been executed, each of the parties are entitled dispose on their own their share of oil, which will be produced at Gara Tesselit area. As regards to the gas, according to the framework agreement signed in 2008 Sonatrach shall be responsible for selling of all produced gas. The oil and gas fields would be put into operation within the period from 2009 to 2012. Within the period of exploration works, which has commenced at the year 2001 and has been completed on December 31, 2007, the seismic surveys 2D has been performed in the volume of 1,200 linear kilometers and 490 sq km of the 3D seismic surveys, and also 6 exploration wells have been drilled with the aggregate depth of 16.3 thousand meters. The total cost of exploration works amounted over USD 100 mln, Rosneft said at its official website.

Beneficial Alaskan Gas Pipeline on hold?

JUNEAU, Alaska — Two Alaska lawmakers have introduced a resolution that would call on Governor Sarah Palin to re-evaluate the natural gas pipeline license awarded to TransCanada Corporation.

The resolution was introduced today by Republican Reps. Jay Ramras of Fairbanks and Craig Johnson of Anchorage.

They say a review is warranted given the risks for project financing during the global economic recession.

If passed, the resolution would call for Palin and the attorney general to report back findings of their review within 180 days.

For now, the resolution has been sent to a House subcommittee.

Last year, Calgary-based Trans-Canada won an exclusive state license to build the gas line.

It includes up to 500 (m) million dollars in state incentive money.

BP and ConocoPhillips are working on a competing proposal, called Denali.

© 2009 The Canadian Press. All rights reserved.

Good News - Colorado Democrats kill Oil and Gas Jobs during Recession.

Mar. 13—DENVER — The state House voted Thursday to increase gas and oil companies’ obligation to respect the environment and the concerns of property owners when they drill in Colorado.

Note: This could just as easily read ‘The state House voted Thursday to make it more expensive and difficult for oil companies to drill in Colorado, ensuring U.S. dependence on foreign energy sources.’ john@hearit.com

After one more, pro-forma vote, a bill enacting new rules drafted by the state Oil and Gas Conservation Commission will go to the Senate, which is expected to approve it. The new rules are scheduled to go into effect on April 1.

Democrats who control the House swatted down Republican attempts to defeat, delay or diminish the bill, arguing that the health and safety of Coloradans who live in energy-producing areas should not be compromised.

Rep. Cory Gardner, R-Yuma, hammered on the assertion that the new rules would cost jobs in the state’s gas and oil fields. He said 12,000 jobs have been lost already in oil and gas.

“Why do we insist on trying to kill jobs in the middle of a recession?” he asked.

Rep. Frank McNulty, R-Highlands Ranch, claimed the rules would cost “tens of thousands of jobs.”

But it was Rep. Bob Gardner, R-Colorado Springs, who boiled the Republican argument down to its core. “People or prairie dogs?” he demanded.

About 300 demonstrators rallied at the Capitol to reinforce the Republican claims.

“We’ve seen boom and bust in Colorado before,” Sen. Al White, R-Hayden, told the rally. “But the busts that have come before have largely been accidents of economic nature. They shouldn’t be foisted on us by an unlistening government who is willing to forget who we are and who they work for and put us out of our jobs.”

Democrats insisted that the job losses were “accidents of economic nature” — the recession-induced collapse of demand for gas and oil and other market factors that the state cannot control. They argued that drilling companies have mothballed many of their rigs not because of rules that aren’t even in effect yet, but because it’s not worth drilling now.

Democrats pointed to statistics showing that the decline in oil and gas drilling was happening throughout the West, new rules or no.

“Commodity prices are what is killing the oil and gas industry in Colorado,” said Rep. Claire Levy, D-Boulder.

Copyright © 2009, The Gazette, Colorado Springs, Colo.