Link here.
The gap between domestic oil (i.e., Bakken) and foreign oil (e.g., Brent) continues to widen.
I have never followed these spreads very closely but something tells me the spreads will become more interesting over time.
Enbridge will be flowing only sweet crude oil through its system starting soon.
Enbridge will be shutting down its main pipeline for scheduled maintenance on two separate occasions sometime between February and March, 2011.
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Wednesday, January 19, 2011
Hydraulic Fracking and Ground Water -- It's No Longer Science, It's Political
The state will continue to try to educate North Dakotans about hydraulic fracking and ground water.
Link here. The link will be broken soon because it links to a regional newspaper. But it's nothing more than a story about NDIC trying to educate folks about fracking. Good luck.
It's no longer science; it's political.
Link here. The link will be broken soon because it links to a regional newspaper. But it's nothing more than a story about NDIC trying to educate folks about fracking. Good luck.
It's no longer science; it's political.
TransCanada's Bison Pipeline Complete -- Natural Gas Pipeline -- North Dakota, USA
TransCanada completed its 303-mile, 30-inch natural gas Bison Pipeline that runs from the Powder River Basin, north east Wyoming, up to North Dakota, where it will connect with the Northern Border Pipeline.
TransCanada says "The Rockies" was one of the last major North American natural gas basins that it was not connected to. Now, natural gas from the Rockies will flow to North Dakota, connect with the Northern Border Pipeline, and then flow to consumers in the Midwest.
The pipeline's initial capacity is 407 million cubic feet/day, all of which is already under long-term contract. The pipe's capacity if expandable to 1,000 million (1 billion) cubic feet/day.
TransCanada owns the pipeline indirectly through the firm's interest in TC Pipelines.
This new pipeline will do nothing for the natural gas flaring in North Dakota. That's a local problem. This TransCanada pipeline is simply a way of getting their natural gas from the Powder River Basin to their consumers farther east.
TransCanada says "The Rockies" was one of the last major North American natural gas basins that it was not connected to. Now, natural gas from the Rockies will flow to North Dakota, connect with the Northern Border Pipeline, and then flow to consumers in the Midwest.
The pipeline's initial capacity is 407 million cubic feet/day, all of which is already under long-term contract. The pipe's capacity if expandable to 1,000 million (1 billion) cubic feet/day.
TransCanada owns the pipeline indirectly through the firm's interest in TC Pipelines.
This new pipeline will do nothing for the natural gas flaring in North Dakota. That's a local problem. This TransCanada pipeline is simply a way of getting their natural gas from the Powder River Basin to their consumers farther east.
Seven (7) New Permits -- North Dakota, USA
Producers -- OXY (2), Oasis, Hess, CLR, XTO, Tracker
Fields: Capa, Dimond, Big Butte, Elidah, and two wildcats.
The wildcats are both in McKenzie County. Both OXY wells are in Burke County, Dimond field, on adjoining sections. As noted before, OXY USA pretty much owns Dimond field.
No other information on the daily activity report today (due to electrical outage yesterday; is NDIC trying to catch up; may be just one of those days that nothing was being reported -- but hey, this is the Bakken, that's not supposed to happen). Smile.
Fields: Capa, Dimond, Big Butte, Elidah, and two wildcats.
The wildcats are both in McKenzie County. Both OXY wells are in Burke County, Dimond field, on adjoining sections. As noted before, OXY USA pretty much owns Dimond field.
No other information on the daily activity report today (due to electrical outage yesterday; is NDIC trying to catch up; may be just one of those days that nothing was being reported -- but hey, this is the Bakken, that's not supposed to happen). Smile.
Reason for SSN Move? Thoughts -- Bakken, North Dakota, USA
Link here.
Magnum Hunter Resources acquires Bakken acreage through acquisition of NuLoch, Inc.
Will partner with Samson Oil and Gas and Baytex in the Williston Basin
Magnum Hunter Resources acquires Bakken acreage through acquisition of NuLoch, Inc.
Will partner with Samson Oil and Gas and Baytex in the Williston Basin
MHR Acquires NuLoch Resoures -- Bakken, North Dakota, USA
MHR acquires NuLoch Resources
Oil and Gas Journal link here
Magnum Hunter Resources
Corporate Presentation: January, 2011
Nuloch Resources, Inc. Acquisition (some numbers rounded)
Oil and Gas Journal link here
Magnum Hunter Resources
Corporate Presentation: January, 2011
- Market cap: $500 million
- Over last 18 months, new management with new strategy
- Strategy: acquire and operate properties in Eagle Ford, Marcellus, and Williston Basin (Bakken/TFS/Madison)
- Current Mix: Until today -- no CAPEX in the Bakken for 2011 (slide 5)
- The big jump in production started in 1Q10
- Production: 600 boe/day 4Q09 --> 2,800 boe/day 4Q10 (estimate)
- Bakken acreage: 15,000 gross acres; MHR interest 43%, --> 6,450 net acres
- Bakken acreage: not in the best Bakken; Burke, Renville, Ward, Bottineau, McHenry counties
- Bakken: 3 hz wells drilled 4Q09 with IP of ~600 boe (gross) combined
- Recently announced acquisitions: NuLoch Resources -- $327 million; NGAS -- $98 million
Nuloch Resources, Inc. Acquisition (some numbers rounded)
- $327 million acquisition
- Reserves: est proved reserves of 6 million boe; 85% crude; est probable, 3 million bbls
- 14 net Bakken/TFS wells producing; approx 1,550 boe/d productive capacity
- 71,600 net acres in Williston Basin (32,900 in Divide and Burke counties; 38,700 acres in Saskatchewan, right across the border from North Dakota); currently 1,070 boe/day productive capacity
- ND acreage: most of the acreage is in Divide county (24,500 net acres); other, Burke (6,700 net acres)
- 50,680 net acres in Alberta; currently 480 boe/day (50% light oil)
- Approx 267 net identified Williston Basin drilling locations (Bakken/Three Forks Sanish)
- No outstanding long term debt
- Expected to close on / before April 30, 2011
- Joint venture arrangements with operators in ND to include: Samson, Baytex
- 2010 CAPEX: $30 million in North Dakota
- 2011E CAPEX: $36 million in North Dakota
- After NuLoch and NGAS acquisitions
- NGAS: Marcellus natural gas asset
- NGAS a natural gas asset -- okay
- Only 54% of the new acreage in the Williston Basin is in North Dakota
- Significant increase in Bakken acreage, but not "prime" Bakken
- Explains recent price movement in Samson: new MHR management wants to drill in North Dakota and has partnered with Samson and Baytex [I changed this to "Samson" based on comment below; the presentation only used the word "Samson" and did not specify]
- The "Bakken" cachet will move price action on companies involved, but need to see results of some wells; one big well can make a big difference in these small companies
- A $1 billion market cap company overnight (MHR was a $500 million company before this acquisition) -- the deal is expected to close April, 2011
For Investors: Great 3-Page Article on Oil
Link here.
It was about thirty years ago when an article in Forbes magazine caught my attention that led me to buy shares in Phillips Petroleum, one of the first investment decisions I ever made. I've held those shares all these years and have continued to accumulate even after Phillips and Conoco, Inc., merged (2001) to create the third largest US oil producer at that time.
Now, I see another similar article in Forbes (not that there have not been others in Forbes over the years), and I wish I was thirty years old again. Talk about some great opportunities.
Martin T. Sosnoff has provided a great analysis of where we are likely to go from here.
He falls into the camp that oil is headed for $100/barrel, and as long as the increase is slow and steady, without spikes, it should not lead to undue demand destruction or another recession.
I think it is generally agreed that pricing revolves around OPEC, and by the percentage of the three-page article devoted to OPEC, it appears Mr Sosnoff concurs. (The other factor is the strength of the dollar, which influences the policies of OPEC.)
If so, the first question is whether Saudi Arabia has the reserve capacity to support the demand growth. Some analysts fear that Saudi Arabia has less than three million barrels of reserve capacity; others say Saudi has at least five million barrels of reserve capacity.
According to Sosnoff:
Sosnoff, again: "... assuming they [the Saudis] pump it out." There are actually three components to that assumption. First, whether Saudi has the ability to pump that much (if there is that much currently available to pump); second, if Saudi has the will (wants) to pump that much; and, 3) whether the global infrastructure can handle that increased production.
The first point: is there that much available to pump? The consensus is yes, but there are plenty of naysayers. The Saudis are now using water injection in their larger fields, suggesting that the fields are significantly depleted compared to the 1950's.
The second point: do the Saudis want to pump more oil? Some Saudis have been on record that they want to stretch their reserves out and are not interested in maximizing production. For their children and grandchildren this is altruistic and magnanimous, but it does place upward pressure on the price of oil, something that is neither altruistic or mangnanimous.
The third point: can the global infrastructure absorb increased capacity. I assume it can. I assume all analysts would argue that infrastructure is not a concern. But I have said a number of times that I'm not so sure. They say there are already tankers full of crude oil streaming slowly to port, slowed down by international agreements. How many empty tankers are there, really? Furthermore, I doubt refining capacity has increased all that much in the past few years. Besides demand destruction due to the global recession of the past couple of years, environmentalists have made it tough on new industrial projects, and, at least for the shareholder, refiners have been losing propositions for the past couple of years. Without refiners, that additional crude oil being pumped by Saudi is not going to do a lot of good. I haven't checked refiner utilization lately, but I know it's been way down, so most folks would argue I am wrong on this. I do remember just before the crash of 2008 (or whenever it was), refining capacity was an issue.
But there is further evidence for concern about the infrastructure: the recent Alaskan pipeline leak and the Enbridge pipeline leak. Of course that had nothing do with OPEC production, but I would assume other companies and other countries are not immune to disruptions in their supply lines due to old systems. I won't even mention political unrest and/or militants disrupting things. Or hurricanes.
But I ramble.
The Forbes/Sosnoff article is one that should be bookmarked and looked at again six months from now and a year from now.
Oh, by the way, for investors, what does Sosnoff like? COP, OXY, SLB, and HAL. All of those companies operate in the Bakken. OXY is a new and very visible player in the Bakken. COP participates through its wholly owned subsidiary, BR. Among other services, SLB and HAL provide fracking services.
It was about thirty years ago when an article in Forbes magazine caught my attention that led me to buy shares in Phillips Petroleum, one of the first investment decisions I ever made. I've held those shares all these years and have continued to accumulate even after Phillips and Conoco, Inc., merged (2001) to create the third largest US oil producer at that time.
Now, I see another similar article in Forbes (not that there have not been others in Forbes over the years), and I wish I was thirty years old again. Talk about some great opportunities.
Martin T. Sosnoff has provided a great analysis of where we are likely to go from here.
He falls into the camp that oil is headed for $100/barrel, and as long as the increase is slow and steady, without spikes, it should not lead to undue demand destruction or another recession.
I think it is generally agreed that pricing revolves around OPEC, and by the percentage of the three-page article devoted to OPEC, it appears Mr Sosnoff concurs. (The other factor is the strength of the dollar, which influences the policies of OPEC.)
If so, the first question is whether Saudi Arabia has the reserve capacity to support the demand growth. Some analysts fear that Saudi Arabia has less than three million barrels of reserve capacity; others say Saudi has at least five million barrels of reserve capacity.
According to Sosnoff:
In a demand driven scenario, if OPEC is serious about containing oil prices it must increase production midyear by at least 5 percent. If worldwide GDP grows at 4.5 percent, not 3.5 percent, the Saudi’s spare capacity disappears in under 2 years, assuming they pump it out. Emerging markets, alone, account for all the projected gains in consumption – some 3 million plus barrels over the next 2 years.It seems to me the world's laggard is the US, and analysts are now saying that US growth should be in the 3.5 to 4.0 range, which suggests to me that worldwide GDP should exceed 4.5.
Sosnoff, again: "... assuming they [the Saudis] pump it out." There are actually three components to that assumption. First, whether Saudi has the ability to pump that much (if there is that much currently available to pump); second, if Saudi has the will (wants) to pump that much; and, 3) whether the global infrastructure can handle that increased production.
The first point: is there that much available to pump? The consensus is yes, but there are plenty of naysayers. The Saudis are now using water injection in their larger fields, suggesting that the fields are significantly depleted compared to the 1950's.
The second point: do the Saudis want to pump more oil? Some Saudis have been on record that they want to stretch their reserves out and are not interested in maximizing production. For their children and grandchildren this is altruistic and magnanimous, but it does place upward pressure on the price of oil, something that is neither altruistic or mangnanimous.
The third point: can the global infrastructure absorb increased capacity. I assume it can. I assume all analysts would argue that infrastructure is not a concern. But I have said a number of times that I'm not so sure. They say there are already tankers full of crude oil streaming slowly to port, slowed down by international agreements. How many empty tankers are there, really? Furthermore, I doubt refining capacity has increased all that much in the past few years. Besides demand destruction due to the global recession of the past couple of years, environmentalists have made it tough on new industrial projects, and, at least for the shareholder, refiners have been losing propositions for the past couple of years. Without refiners, that additional crude oil being pumped by Saudi is not going to do a lot of good. I haven't checked refiner utilization lately, but I know it's been way down, so most folks would argue I am wrong on this. I do remember just before the crash of 2008 (or whenever it was), refining capacity was an issue.
But there is further evidence for concern about the infrastructure: the recent Alaskan pipeline leak and the Enbridge pipeline leak. Of course that had nothing do with OPEC production, but I would assume other companies and other countries are not immune to disruptions in their supply lines due to old systems. I won't even mention political unrest and/or militants disrupting things. Or hurricanes.
But I ramble.
The Forbes/Sosnoff article is one that should be bookmarked and looked at again six months from now and a year from now.
Oh, by the way, for investors, what does Sosnoff like? COP, OXY, SLB, and HAL. All of those companies operate in the Bakken. OXY is a new and very visible player in the Bakken. COP participates through its wholly owned subsidiary, BR. Among other services, SLB and HAL provide fracking services.
For Investors Only: Has The Focus in the Bakken Changed?
See link.
A Reuters story, the author's thesis:
To some extent, to someone not living or working in the Bakken, it all seems a bit boring now. We're seeing the same stories day after day: half a dozen new permits; new wells being reported with IPs that are almost predictable (based on the producer), and stories on infrastructure concerns.
I do think we have at least one more round of consolidation: some of the larger companies already in the Bakken will buy out some of the smaller players, simply because it is getting too cost prohibitive to drill for some of the smaller companies. But even so, I don't expect a lot of exciting headlines any time soon. The small players truly have so little acreage to sell that it won't impact the big companies all that much.
For me, I appreciate boring. The last thing I need is "exciting" news from the EPA.
By the way, Tudor Pickering Holt and Company, linked above, mention several companies they like including three big ones in the Bakken: CLR, BEXP, OAS; and a fourth one, new to the Bakken: OXY.
By the way, I don't know enough about OXY to comment, but I wonder if CLR satisfies the "manifesto" of Tudor et al. One can argue that CLR is chasing growth with its stated goal to double their number of rigs in the Bakken over the next three to five years. CLR already has the greatest number of rigs. Doubling would be a quantum jump, and huge capital expenses. I get the feeling that BEXP and OAS are pretty content with the number of rigs they currently have.
A Reuters story, the author's thesis:
Investors need to stop rewarding oil and gas companies for chasing growth, a pursuit that worked in the past but is now consuming too much capital, analysts at Tudor Pickering Holt & Company said in a self-described "manifesto" on Tuesday.
Instead, the focus should be on capital efficiency, returns and margins, the Houston-based investment bank and research firm said.To some extent, it looks like this is already happening in the Bakken. We're now in Phase III of this boom. Phase I: major players staked their territory; Phase II: the "hype" as the players raised capital; and, now Phase III: the matter of day-to-day drilling and fracking.
To some extent, to someone not living or working in the Bakken, it all seems a bit boring now. We're seeing the same stories day after day: half a dozen new permits; new wells being reported with IPs that are almost predictable (based on the producer), and stories on infrastructure concerns.
I do think we have at least one more round of consolidation: some of the larger companies already in the Bakken will buy out some of the smaller players, simply because it is getting too cost prohibitive to drill for some of the smaller companies. But even so, I don't expect a lot of exciting headlines any time soon. The small players truly have so little acreage to sell that it won't impact the big companies all that much.
For me, I appreciate boring. The last thing I need is "exciting" news from the EPA.
By the way, Tudor Pickering Holt and Company, linked above, mention several companies they like including three big ones in the Bakken: CLR, BEXP, OAS; and a fourth one, new to the Bakken: OXY.
By the way, I don't know enough about OXY to comment, but I wonder if CLR satisfies the "manifesto" of Tudor et al. One can argue that CLR is chasing growth with its stated goal to double their number of rigs in the Bakken over the next three to five years. CLR already has the greatest number of rigs. Doubling would be a quantum jump, and huge capital expenses. I get the feeling that BEXP and OAS are pretty content with the number of rigs they currently have.
The West's Largest Landowner: the US Government -- Sort of Related to the Bakken
From The American Pageant, Volume II: Since 1865, by David M. Kennedy, Lizabeth Cohen, and Thomas A. Bailey, c. 2006, p. 607:
This is the percent of land owned by the federal government in selected states (all numbers rounded):
I post this because I think it helps shed light on one of the reasons why the Bakken was so quickly developed and why the Barnett Shale and Eagle Ford in Texas will be quickly developed. (In Pennsylvania where much of the activity in the Marcellus Shale is centered, federal land ownership represents 3% of the state, a not uncommon figure for the eastern states.) The founding fathers were sincere to the concept of private land ownership, something that was lost once "modern" government was established and the west was settled. But I digress.
Bakken activity inside the Fort Berthold Indian Reservation in North Dakota was delayed until Senator Byron Dorgan intervened at the federal level to move things along.
"... the federal goverment is by far the West's largest landowner -- and that federal projects, especially dam-building, have done more to shape the region than all the cowboys and farmers put together."I wish I could insert the graphic that accompanies that caption (a picture is worth a thousand words).
This is the percent of land owned by the federal government in selected states (all numbers rounded):
- Utah: 67%
- Wyoming: 51%
- Colorado: 35%
- North Dakota: 3%
- Oklahoma: 3%
- Texas: 2%
I post this because I think it helps shed light on one of the reasons why the Bakken was so quickly developed and why the Barnett Shale and Eagle Ford in Texas will be quickly developed. (In Pennsylvania where much of the activity in the Marcellus Shale is centered, federal land ownership represents 3% of the state, a not uncommon figure for the eastern states.) The founding fathers were sincere to the concept of private land ownership, something that was lost once "modern" government was established and the west was settled. But I digress.
Bakken activity inside the Fort Berthold Indian Reservation in North Dakota was delayed until Senator Byron Dorgan intervened at the federal level to move things along.
SeekingAlpha: "Green Energy" Subsidies and Coal-Powered Cars
Link here.
And it's worse than that. Paul's new plug-in electric vehicle isn't even cost effective and won't be according to the government's own projection: oil has to get to between $174 and $250 for them to be economical.
The government projects that the price of oil will hold steady through 2035 and may, in fact, decrease in price, never rising above $100. That's the government projections, not mine.
In addition to traditional subsidies that create productive assets and make the nation richer, we're seeing a proliferation of consumption subsidies that enrich individuals while providing no meaningful benefit to society. The poster child for this unconscionable rape of the treasury is the $7,500 tax credit for buying a plug-in electric vehicle. The government is quite literally taxing Peter to buy Paul's new car.The author could have added that by buying less gasoline, Paul is paying less than his fair share in road taxes than others who cannot afford the expensive coal-powered car.
The credit will be available for the first 200,000 qualifying vehicles sold by a manufacturer at a direct cost of $1.5 billion per automaker. On the positive side of the ledger, Paul's new plug-in will reduce national oil consumption by about 100 barrels over its useful life at a cost of $75 per barrel. On the negative side, Paul's state, city, utility, employer and favored merchants will have to spend their own money adapting to Paul's increased demand for electricity and Paul's desire for a convenient charging infrastructure. I have to wonder if it wouldn't be cheaper to just give Paul a 10-year free gas coupon.
And it's worse than that. Paul's new plug-in electric vehicle isn't even cost effective and won't be according to the government's own projection: oil has to get to between $174 and $250 for them to be economical.
The government projects that the price of oil will hold steady through 2035 and may, in fact, decrease in price, never rising above $100. That's the government projections, not mine.
For Investors Only: ENB -- Bakken, North Dakota, USA
I have held ENB for many years. If I had the cash I would continue to accumulate ENB.
Yesterday I thought it was interesting that ENB had a bit of a down day on the market even though the general market was up and the price of oil held its own even as Alaskan oil came back on-line.
There were two stories out yesterday affecting ENB.
The ENB infrastructure projects will eventually add revenue to the bottom line. I assume credit is inexpensive and fairly easy to arrange.
Much of the spill costs will be covered by insurance.
An earlier story, January 6, 2011, said that Enbridge would shut down its major pipeline in February / March time frame for routine maintenance but I would assume this has already been "priced into the shares."
Yesterday I thought it was interesting that ENB had a bit of a down day on the market even though the general market was up and the price of oil held its own even as Alaskan oil came back on-line.
There were two stories out yesterday affecting ENB.
- Increased pipeline infrastructure moves forward (a capital expense)
- Spill costs estimates raised from $430 million to $550 million
The ENB infrastructure projects will eventually add revenue to the bottom line. I assume credit is inexpensive and fairly easy to arrange.
Much of the spill costs will be covered by insurance.
An earlier story, January 6, 2011, said that Enbridge would shut down its major pipeline in February / March time frame for routine maintenance but I would assume this has already been "priced into the shares."
Enbridge said January 4 that it plans to shut its Line 6B for two separate maintenance periods, starting about Feb. 7 and March 7 and lasting as much as five days each.By the way, that last link was a Reuters story. It's interesting to see how Bloomberg talks about the Bakken as if everyone knows all about the Bakken. The potential of the Bakken is gaining credibility.
Investors Only: Flashback -- TPLM -- Another Opportunity Missed -- Bakken, North Dakota, USA
TPLM has recently been in the news.
It's interesting to go back and read the message boards when it was first announced that TPLM had acquired all of 4,000 acres in the Bakken.
At the time of the announcement, TPLM was selling in the $3.00 to $4.50 range. Since then, TPLM hit a high of $9 and is currently selling around $8, or more likely, down to $7.
Who would have ever thought a "baby Bakken," as Zman calls it, would have done so well?
It's interesting to go back and read the message boards when it was first announced that TPLM had acquired all of 4,000 acres in the Bakken.
At the time of the announcement, TPLM was selling in the $3.00 to $4.50 range. Since then, TPLM hit a high of $9 and is currently selling around $8, or more likely, down to $7.
Who would have ever thought a "baby Bakken," as Zman calls it, would have done so well?
Arch Coal -- Not a Bakken Story
This is an interesting story for two reasons.
The story: Arch has announced deals to sell more Powder River, Wyoming, coal to Asia.
The story is interesting for two reasons:
I can't remember if I posted this story before or not, but Washington state has put the brakes on granting a permit to ship coal through its Longview, Washington, port.
I can't remember if I posted this story publicly but when I was alerted to it, I opined to a colleague that Powder River coal companies will simply ship coal to Asia through Canadian ports. This is a no-brainer.
Several sources have recently posted studies that show "green energy" jobs (such as wind energy) do not power the jobs market, and are, in fact, a drag on the economy, here's another example of where "green energy"policies are job killers for Americans. The rest of the world, in this case, Canada and China just press on.
For those who missed the thirteen (13) reasons why "wind energy" can't power the jobs market, this is the link. Unlike "wind energy" projects which bring few jobs to the local economy, ports hire local folks on a permanent and long-term basis.
By the way, the officials in Washington felt they had no choice to make this ruling (impede coal shipments through their state ports). When one reads the following from one of the linked stories, all I can say, is that the Chinese (and the Canadians) must think we are nuts.
Unelected government bureaucrats "suggested" county officials "expand their analysis more broadly." Wow. Elected officials did not step in at the time, on either side. Speaks volumes.
The unemployment rate in Washington state was 9.1% at the time this decision was made.
The budget deficit in Washington state, currently about $1 billion, will result in the following if governor's proposals are agreed to:
My hunch: the county commissioners will regain their footing. They will issue the permit with the caveat that rail and trucking companies in and around the port work harder to reduce greenhouse emissions.
And pay the state about $1 billion in "good faith" money to show they will work harder at doing this. The money, no doubt, will be earmarked for the Ecology Department. It takes money to make money.
I've seen this movie before.
The story: Arch has announced deals to sell more Powder River, Wyoming, coal to Asia.
The story is interesting for two reasons:
- It confirms Asia's need for energy (which will also affect oil)
- Arch isn't waiting for Washington or Oregon to okay to ship coal through their ports
I can't remember if I posted this story before or not, but Washington state has put the brakes on granting a permit to ship coal through its Longview, Washington, port.
Authorities in Longview, Washington, originally granted a shoreline permit for a Montana-Wyoming coal port on the Columbia River. The coal would be bound for China. However, environmental groups have appealed, arguing that greenhouse gases will result if China burns the coal.Of course this is crazy.
I can't remember if I posted this story publicly but when I was alerted to it, I opined to a colleague that Powder River coal companies will simply ship coal to Asia through Canadian ports. This is a no-brainer.
Several sources have recently posted studies that show "green energy" jobs (such as wind energy) do not power the jobs market, and are, in fact, a drag on the economy, here's another example of where "green energy"policies are job killers for Americans. The rest of the world, in this case, Canada and China just press on.
For those who missed the thirteen (13) reasons why "wind energy" can't power the jobs market, this is the link. Unlike "wind energy" projects which bring few jobs to the local economy, ports hire local folks on a permanent and long-term basis.
By the way, the officials in Washington felt they had no choice to make this ruling (impede coal shipments through their state ports). When one reads the following from one of the linked stories, all I can say, is that the Chinese (and the Canadians) must think we are nuts.
Under Washington law, the permitting the facility requires greenhouse gases be considered, which officials in Cowlitz County said they did.
The Washington Department of Ecology petitioned to intervene. The Ecology Department will be asked to issue environmental permits for the project and needs to be sure decisions made in the appeals process are legally sound, said a department spokeswoman.
Earlier, the Ecology Department had suggested that Cowlitz County “expand their greenhouse gas emissions analysis more broadly.” Wednesday, the department spokesman said the state wanted Cowlitz commissioners to consider greenhouse gases from truck and rail activity related to the port.
“Washington state isn't making a policy statement on the underlying project whatsoever,” the department spokesman said.Absolutely nuts.
Unelected government bureaucrats "suggested" county officials "expand their analysis more broadly." Wow. Elected officials did not step in at the time, on either side. Speaks volumes.
The unemployment rate in Washington state was 9.1% at the time this decision was made.
The budget deficit in Washington state, currently about $1 billion, will result in the following if governor's proposals are agreed to:
• Elimination of additional state funds for kindergarten through 4th grade class size reduction efforts for the entire 2010–11 school yearThis is absolutely nuts.
• Elimination of the Basic Health Plan beginning March 1, 2011. All insurance subsidized through the Basic Health Plan will be eliminated, which affects 66,000 individuals
• Elimination of the Disability Lifeline Grant and Medical programs
My hunch: the county commissioners will regain their footing. They will issue the permit with the caveat that rail and trucking companies in and around the port work harder to reduce greenhouse emissions.
And pay the state about $1 billion in "good faith" money to show they will work harder at doing this. The money, no doubt, will be earmarked for the Ecology Department. It takes money to make money.
I've seen this movie before.