Could we be seeing $5-a-gallon gas again soon? That’s what the former president of Shell Oil has to say in USA Today. Plus, it’s a big week on Capitol Hill for the Keystone Pipeline. China sees its first decline in coal production in 14 years. And, another land grab by the Obama Administration. Those stories and more are below…
USA Today- Former oil exec: $5-a-gallon gas on the way (h/t The Daily Signal)
Now, with national gasoline prices currently averaging $2.05 a gallon, their lowest level since early 2009, the former president of Shell Oil 06is issuing another warning, telling motorists that their joy ride may end sooner than they think.
“The next round of high prices is likely to start later this year, as crude rebounds to the $80s and $90s, perhaps pushing to the $100 level by late in the year or early next,” Hofmeister told me the other day after a trip to Calgary, where he was promoting natural gas as a transportation fuel.
“The triggering mechanism will be global demand growth relative to how much capital constraint gets baked into future plans for production this year and next. If new production capital is deferred and demand growth continues at 2% or more, we’ll see capacity constraints during 2016, an election year of course, drive prices higher. Whether we reach $4 a gallon or push past, it’s too early to tell.”
The Daily Caller: Land Grab! Obama To Take Control Of ANWR
President Obama announced Sunday that his administration plans to lock up the oil-rich 1.5 million acre Arctic National Wildlife Refuge coastal plain and offshore areas in Alaska from oil and gas exploration.
Obama is asking Congress to designate 12 million acres of ANWR as a “wilderness” to keep it off-limits to development, despite widespread Native Alaskan support for drilling in the area. ANWR’s coastal plain alone is estimated to hold 28 billion barrels of oil.
The Hill reports that Alaska’s lawmakers are calling it a “war on Alaska’s future.”
Wall Street Journal: Obama Administration Moves To Block Drilling In Parts Of Alaska
“The Obama administration is moving this week to designate areas of Alaska off limits to oil and natural gas drilling in its latest effort to bolster its environmental legacy. The Interior Department announced on Sunday that it was proposing to preserve as wilderness nearly 13 million acres of land in the 19.8 million-acre Arctic National Wildlife Refuge, including 1.5 million acres of coastal plains that is believed to have rich oil and natural gas resources.
The efforts are drawing a strong rebuke from congressional Republicans. Sen. Lisa Murkowski (R., Alaska) vowed to fight the administration’s moves from her positions heading both the Senate Energy and Natural Resources Committee and the appropriations subcommittee responsible for funding the Interior Department. “It’s clear this administration does not care about us, and sees us as nothing but a territory,”
Alaska’s oil and gas production has dropped nearly 75% since its peak in the 1980s. North Dakota surpassed Alaska two years ago as the nation’s second-largest oil producer, behind Texas.”
After announcing a new land grab, and reports that gas prices could climb back upwards…check out this news from Politico’s Morning Energy:
Obama to Saudi Arabia: The president is cutting short his Indian trip to stop by Riyadh to visit the nation’s new king, Salman bin Abdulaziz. Notes the Washington Post: “And as the world’s largest crude oil exporter, Saudi Arabia’s stability is critical for the world economy. Saudi Arabia, for its part, needs U.S. help to protect its vast oil infrastructure and shipping lanes for its oil tankers.” http://wapo.st/1zGB2d5
Also of note…
– Coal production in China dropped last year for the first time in 14 years. New York Times: http://nyti.ms/15wDOUG
Meanwhile…The Daily Signal: The EPA’s Newest Strategy to Sneakily Restrict Fracking, Drilling
Recently the Environmental Protection Agency (EPA) announced major new regulations on the emissions of methane into the air from oil and gas production. It calls methane a “potent” pollutant and its new rules would require a 45 percent reduction by 2025 from 2012 levels. Most Americans support these new rules, according to polling from environmental groups. This isn’t surprising. Methane sounds like a dirty and dangerous pollutant and even deadly if leaked into water or the air.
However, methane is just another term for the main component of natural gas. Drillers have a powerful motive to stop leakage on their own, because they want to sell it, not spill it.
How much of a menace is methane from the oil and gas industry? The amount of leakage into the atmosphere is minuscule, says Dan Kish of the Energy Research Institute. “Cows emit more methane when they pass gas than the natural gas industry,” he notes. Look for the EPA to start regulating cattle.
The Hill: What Will Congress Get Done?
8. Keystone XL pipeline. Republicans made legislation approving construction of the pipeline one of their top priorities after taking power in January.
The House passed a measure during the first week of the session, and the Senate has been debating an identical bill throughout this month. But the House vote didn’t achieve the two-thirds majority necessary to override a veto threat from President Obama, and the Senate is unlikely to secure 67 votes, either.
That doesn’t mean an Obama veto will be the end of the Keystone fight. The House approval earlier this month was the tenth Keystone vote since 2011, and the third in sixth months, as the GOP sought to ratchet up pressure on Obama. More votes on the issue are probably a sure bet even if they have no real chance of becoming law.