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Waxman On Keystone: ‘We Don’t Need This Dirty Oil’

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Photo Credit: APRepresentative Henry Waxman (D-Calif.) – the top Democrat on the House Energy and Commerce Committee – said that America does not need the “dirty oil” that would be imported through the Keystone XL pipeline from Canada, which received long-awaited favorable environmental review from the U.S. government.

“We don’t need this dirty oil. To stop climate change and the destructive storms, droughts, floods, and wildfires that we are already experiencing, we should be investing in clean energy, not building a pipeline that will speed the exploitation of Canada’s highly polluting tar sands,” Waxman said in a statement on Friday responding to the government’s analysis.

In its draft environmental review released Friday, the State Department said the construction of the pipeline through much of the Midwest would not have a meaningful impact on climate change.

Read more from this story HERE.

Is BP Cutting Production To Blackmail Alaska?

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Photo Credit: Minale Tattersfield Roadside Retail BP’s tankers occasionally return to Valdez with millions of gallons of Alaskan oil on board, reports The San Francisco Chronicle, the Houston Chronicle, and the Fairbanks News Miner. With Valdez holding tanks 90 percent full, tankers top-off and return again to West Coast refineries that are still too full to receive their loads, because BP’s refining and retail capacity is maxed. Clearly BP is prioritizing just-in-time delivery to meet the maximum market share and profitability of BP’s West Coast refined products.

Alaska’s oil has been BP’s cash cow since their subsidiary Sohio Petroleum became their face in Alaska, in 1970. Before acquiring ARCO in 2000, BP successfully asked Congress to lift the ban on the export of North Slope crude. If BP were truly interested in exporting crude today, tankers wouldn’t be returning to Valdez with oil on board. However, after acquiring ARCO’s West Coast refineries and retail stations, BP’s incentives changed to the more profitable business of refining and retailing.

In 1981, I was in the Legislature when the biggest tax break giveaway ever was voted on; — a tax system nicknamed ELF. Prior to voting, an oil lobbyist told me they were losing so much money on their Alaskan investments, they were considering shutting down and leaving. Sound familiar? Shortly after voting for ELF, I uncovered a well hidden letter to stockholders from Sohio’s president. He explained that Sohio was practically drowning in cash. The letter was written before we gave them their 1981 tax break. –– I copied the letter and distributed it to all legislators, and soon became the first political target of BP’s surrogate, VECO.

In the mid 1980’s it became obvious that other countries were getting far more for their oil than Alaska. Even countries with expensive deep water platforms were making more. Between 1980 and 2000, BP went from the 13th largest oil company in the world to the 3rd largest. They did it with profits that rightfully belonged to Alaska. Profits that would have built roads and fattened dividend checks had it not been for VECO’s bribery and fraudulent representations by oil lobbyists. Given the chance, a jury might find the oil companies owe Alaska a few billion dollars.

BP controls Alaskan crude from the well head to the gas pump. They take Alaska’s oil for the cost of production and transportation, plus local, state and federal taxes. BP’s crude costs add up to about 28 percent less than independent nonproducing refiners pay. The life of BP’s cash cow is extended by trickling Prudhoe’s production; and Governor Parnell’s tax cuts won’t change BP’s incentives.

Read more from this story HERE.

Chicago-Style Diplomacy: Obama May Require Carbon Tax of Canada for Approval of Keystone Pipeline

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Photo Credit: Bloomberg Hello Canada! Are you ready — ready for a new national tax on carbon that will ding pocketbooks across the country? My bet is that a new carbon tax is coming, made almost inevitable by Prime Minister Stephen Harper’s full-bore push to secure Washington’s approval of the Keystone XL pipeline.

For early clues on the carbon tax/Keystone trade-off, tune in Tuesday night to President Barack Obama’s State of the Union address. As the president speaks, he will be alert to the chorus of Hollywood stars, environmental activists, editorial writers and industry leaders who are pushing for him to make the biggest climate-change decision he can possibly make: Impose a carbon tax.

It is time Canadians became aware of the giant trap being set in Washington over Keystone. The short version is this: The president approves Keystone, greatly expanding the flow of Canadian oil sands production into the United States. In return, however, Canada has no choice but to accept a carbon tax at home as part of a grand bargain.

I first mentioned the likely Obama pipelines-for-taxes strategy in comments at the annual Financial Post forecast luncheon at the New Year. “I see new taxes coming in the United States, including an energy or carbon tax, to try to cover the deficits. The new energy tax would serve as partial cover for President Obama’s approval of the Keystone XL pipeline.”

That Mr. Obama might offer some kind of carbon tax as a carrot to environmentalists and climate activists opposed to Keystone has since emerged as more than plausible. Wall Street Journal columnist Kimberley Strassel recently outlined how the president might demand a carbon tax in return for approval of energy projects, including Keystone. Getting a carbon tax through Congress looks tricky. But Ms. Strassel reported that California Senator Barbara Boxer outlined how a carbon tax could be imposed administratively through the Environmental Protection Agency.

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U.S. For Sale: Obama Lets China Gobble Up U.S. Energy

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Photo Credit: abangbay @ MalaysiaOil And Politics: Beijing plays the debt card as the Obama administration quietly lets China acquire major ownership interests in oil and natural gas resources across the U.S. at the same time it blocks the Keystone pipeline.

Normally, foreign investment in the U.S. is to be welcomed. It creates jobs, boosts economic growth and promotes trade and exports.

But when that investor is an ambitious and increasingly belligerent China to whom we owe over a trillion dollars, eyebrows and concerns need to be raised.

Reversing a Bush administration policy, the Obama administration is encouraging Beijing to acquire equity interests in U.S. energy. In 2005, the Bush administration blocked China on grounds of national security from buying California-based Unocal Corp. for $18.4 billion.

That was then, and this is now.

Read more on this story HERE.

Confirmed: Turkey Trading Gold for Iranian Oil

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Over the last six months, Iran has evaded U.S. sanctions by importing Turkish gold to pay for billions of dollars worth of energy sales to Turkey.

Turkey’s deputy prime minister has described what amounts to a gold-for-oil barter system.

“Why did, all of the sudden, Turkey’s gold exports, especially gold bullion, go up?” Ali Babacan asked while speaking before a parliamentary budget commission this month. The official transcript of his statements was published by a Turkish government website Wednesday.

“An important part of that is Iran,” he said. “When Turkey buys Iranian oil, we pay for it in Turkish lira. … However, it is not possible for Iran to take that money as dollars into its own country due to international restrictions, the U.S.A.’s sanctions. Therefore, when Iran cannot take this money back as currency, they withdraw Turkish lira and buy gold from our market. They take the gold back to their own country.”

According to Turkish government statistics, Iran has imported billions of dollars worth of gold from Turkey since it was ejected from the SWIFT international electronic banking system in March.

Read more from this story HERE.

BP Ordered to Pay State of Alaska $255 Million Over Lost Royalties Due to Negligent Spills

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A subsidiary BP has been ordered to pay the state of Alaska $255 million for royalties the state lost because of production shutdowns after two North Slope oil spills in 2006 and a subsequent pipeline replacement project.

A three-member arbitration panel unanimously ordered BP (Exploration) Alaska Inc. to pay the state $245 million, plus another $10 million in fines, by December 3.

The panel heard the case over four weeks last May and June in Anchorage, and reached its decision Oct. 31, the state said in a release Thursday announcing the award.

The amount of the settlement cannot be appealed.

‘We’re absolutely pleased with the result,’ Alaska Attorney General Michael Geraghty said.

Read more from this story HERE.

Oil Industry Targets Senators in Alaska Oil Tax Fight

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The energy industry is making a concerted push to defeat state senators in Alaska who have blocked a $2 billion tax cut favored by oil producers.

Through television and radio ads and direct mail, industry-linked advocacy groups are spending hundreds of thousands of dollars to urge Alaska’s 506,000 voters to cast their ballots for “oil tax reform.” That would entail ousting a bipartisan group of 16 state senators in the 20-member chamber, all but one of whom are up for re-election this year, political experts say.

The big three energy companies—Exxon Mobil Corp., XOM -1.45% ConocoPhillips, COP -1.32% and BP BP.LN -1.40% PLC—can’t legally make direct donations to campaigns. But oil-company-employee political-action committees have made contributions, energy executives have held fundraisers and two Republican senate candidates work for the industry.

“We’re proud that we’ve been part of the Alaska family of companies that has brought this wealth to its people,” said Bob Bell, a Republican Senate candidate from Anchorage whose engineering firm did nearly $1 million in work for BP last year and who favors the tax cut.

But the targeted senators raised and spent more than their challengers according to the latest campaign-spending reports, although a last-minute surge of spending could change that balance. They have received backing in part from government-employee unions, which have grown along with government payrolls because of an influx of oil taxes. The taxes and other oil-related payments account for 90% of state revenue.

Read more from this story HERE.

Exxon Gets Key Permit for Alaska’s Point Thomson Field

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Exxon Mobil Corp on Friday received a major federal permit it needed to start construction on the Point Thomson oil and gas field on the eastern North Slope of Alaska, officials said, after an extended delay that threatened some leases there.

The U.S. Army Corps of Engineers granted Exxon a wetlands-fill permit for construction of drill pads, roads, an airstrip, pipeline, and docking and other facilities needed for production at the long-languishing field – production the state of Alaska has accused the company of dragging its heels on.

The Army Corps permit followed a detailed environmental impact study that began in 2009. While there remain a few outstanding state permits, the wetlands-fill authorization was the major approval needed for construction, said Mike Holley, northern branch team leader for the state’s Army Corps district.

Holley said Exxon, backed by partners BP Plc and ConocoPhillips, hopes to begin construction soon.

“They are planning on doing as much of the construction this winter as possible,” he said, adding that ice roads, which are built by spraying water on the tundra, would accommodate that.

Read more from this story HERE.

Alaska Natives Lobby Obama Admin. Against Oil Development in NPR-A

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Native Alaskans have teamed up with environmental forces to urge the Obama administration to stick with a conservative management plan for the National Petroleum Reserve, despite oil industry protests that the proposal would block energy development in lands specifically reserved for extracting fossil fuels.

Joseph Sagviyuaq Sage, a whaling captain from Barrow, Alaska, and Lillian Stone, a teacher from Anaktuvuk Pass, are set to meet with Senate staffers and Deputy Interior Secretary David Hayes while in Washington, D.C. this week. The pair are collaborating with the Alaska Wilderness League to make the case that some areas in the 23-million acre reserve should be off limits to oil development.

The push comes as the administration nears a final decision on how to balance energy production and conservation in the 89-year-old reserve in northwest Alaska. In August, the Interior Department unveiled its “preferred” management plan, which would allow oil and gas development in 11.8 million acres of the National Petroleum Reserve-Alaska while blocking the activity in other areas that are home to caribou herds and polar bears.

The Interior Department’s Bureau of Land Management appears likely to make a final decision on whether to adopt its preferred approach sometime after the Nov. 6 presidential election.

Stone said she wanted policymakers in the nation’s capital to know “we are real people and we are directly impacted by any activity that goes on within NPR-A.” Oil drilling in the reserve threaten the caribou that roam the land, Stone said, as well as the Alaska Natives who hunt the animal for food and clothing.

Read more from this story HERE.

Fact Checking Romney’s Claim that Production of Oil on Public Lands is Down (+video)

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One of the most intense exchanges of the night arose over the question of permitting and oil production on public lands.

In the segment below, Romney claimed that hydrocarbon production on government land is down. He stated that oil production is down 14% and gas production is down 9%.

Although Obama vigorously denied this, the Washington Post states that “Romney’s telling the truth when he says, ‘Production of oil on public land is down 14 percent and production of gas on public land is down 9 percent.’ That’s because energy production on federal lands is down compared to 2010, according to the Energy Information Administration.” However, the Post adds that production is “still higher than where production stood under President George W. Bush.”

The National Journal has a different take because it evaluated three years of production (2008 to 2011) rather than comparing just the last two years. By reviewing production over the longer range, it found both candidates were right and wrong: “Oil production on public lands is up 12 percent from 2008 to 2011, according to a March report by the Energy Information Administration…Natural-gas production on public lands is down 16.5 percent between 2008 and 2011, according to the same EIA report…Coal production on public lands is down 7.8 percent from 2008 to 2011.”