For the last six years, the Obama administration has been mulling a controversial plan to open up the Atlantic coast for oil and gas exploration. It seemed inevitable that some sort of drilling would eventually occur in this previously untouched region.
For the last two years, global oil prices have been in free-fall, and no one seems to know when the bungee cord will catch. In June 2014, you had to plunk down $110 to purchase a barrel of Brent crude. By early 2015, that had dropped to $60. Today, it costs less than $30 to buy a barrel of oil — a level not seen since 2004. It's a breathtaking decline.
Oil fell briefly below $30 a barrel on Tuesday, extending a relentless selloff that has wiped almost 20 percent off prices this year amid deepening concerns about fragile Chinese demand and the absence of output restraint. The day's near 4 percent drop marks a seventh day of losses for oil. Traders have all but given up attempting to predict where the new-year rout will end, with momentum-driven dealing and overwhelmingly bearish sentiment engulfing the market. Some analysts warned of $20 a barrel; Standard Chartered said fund selling may not relent until it reaches $10.
Everyone is talking about President Obama’s decision to reject the Keystone XL pipeline proposal, but he’s not actually the hero of the story. The Keystone decision is the culmination of a startlingly successful grassroots activist campaign that defied the odds and convinced the Obama administration to change course against building a major piece of fossil fuel infrastructure. Here’s how it came together, as recounted by a few of the key players.
U.S. President Barack Obama on Friday rejected the proposed Keystone XL oil pipeline from Canada in a victory for environmentalists who campaigned against the project for more than seven years. "The pipeline would not make a meaningful long-term contribution to our economy," Obama told a press conference. He said it would not reduce gasoline prices, and shipping "dirtier" crude from Canada would not increase U.S. energy security.
In the fall of 2011, students in Katie Keranen’s seismology course at the University of Oklahoma buried portable seismograph stations around the campus, in anticipation of a football game between the Sooners and the Texas A. & M. Aggies. The plan was to see if the students could, by reading the instruments, detect the rumble of eighty-two thousand fans cheering for a touchdown. “To see if they can figure out if a signal is a passing train or a cheering crowd—that’s much more interesting for them than discussing data in theory,” Keranen, an assistant professor of geophysics, told me. Outside homes around Prague and nearby Meeker, Keranen and her students, along with Austin Holland, the head seismologist of the Oklahoma Geological Survey, buried their equipment.
Throughout the booms and busts of his Fort Worth oil empire and during his brother’s notorious murder trial, Kenneth W. Davis Jr. largely kept to himself. At 89, he still does. He puts in full workdays at his small downtown office, with drapes drawn against the North Texas sun. He usually dines at an exclusive club across the street, often alone, using distinctive silverware set aside just for him. Davis has long shut out politics, too. He remembers voting only three times – for Eisenhower, Goldwater and Reagan. Yet last year he thrust himself into the public eye by starting his own super PAC. His group, Vote2ReduceDebt, aimed to move the needle in eight key U.S. Senate races by energizing disengaged conservative voters.
Oil prices might have stabilized only temporarily because the global oil glut is worsening and U.S. production shows no sign of slowing, the International Energy Agency said on Friday. The West's energy watchdog said the United States may soon run out of spare capacity to store crude, which would put additional downward pressure on prices. That process would last at least until the second half of 2015, when growth in U.S. oil production is expected to start abating. Combined with an increase in global demand, the expected U.S. production slowdown would give some support to oil prices and respite to oil producers' group OPEC, the IEA said.
The White House has notified the Senate that President Obama has, as promised, vetoed congressional legislation to approve the Keystone XL pipeline project. "Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest," Obama said in the notification to the Senate. The U.S. State Department has been reviewing the pipeline for more than six years, working to determine if it is in the national interest. Congressional Republicans want to circumvent that process and grant a permit immediately.
The death of Saudi Arabia's King Abdullah, who passed away Friday due to complications from a lung infection, elicited a series of gushing tributes from American leaders. In his official statement, President Obama praised his "enduring contribution to the search for peace" in the Middle East. Secretary of State John Kerry called him a "man of wisdom and vision." Vice President Biden, meanwhile, announced he'd lead the American delegation to Saudi Arabia to mourn the king in person. The warm praise of Abdullah, 90, came as little surprise. Saudi Arabia and the United States have been close allies for decades. But the effusive reaction to the king's death reveals an uncomfortable truth about Washington's relationship to the kingdom.
MOST of the time, economic policymaking is about tinkering at the edges. Politicians argue furiously about modest changes to taxes or spending. Once in a while, however, momentous shifts are possible. From Deng Xiaoping’s market opening in 1978 to Poland’s adoption of “shock therapy” in 1990, bold politicians have seized propitious circumstances to push through reforms that transformed their countries. Such a once-in-a-generation opportunity exists today. The plunging price of oil, coupled with advances in clean energy and conservation, offers politicians around the world the chance to rationalise energy policy. They can get rid of billions of dollars of distorting subsidies, especially for dirty fuels, whilst shifting taxes towards carbon use.
When the fossil-fuel divestment movement first stirred on college campuses three years ago, you could almost hear Big Oil and Wall Street laughing. Crude prices were flirting with $100 a barrel, and domestic oil production, from Texas to North Dakota, was in the midst of a historic boom. But the quixotic campus campaign suddenly has the smell of smart money. One of the biggest names in the history of Big Oil – the Rockefellers – announced last September that they would be purging the portfolio of the Rockefeller Brothers Fund of "risky" oil investments. And that risk has been underscored by the sudden collapse of the oil market. After cresting at more than $107 in mid-June, the price of a barrel of West Texas Intermediate dipped below $50 a barrel in early January.
This morning the White House announced a new plan to crack down on the oil and gas industry's emissions of methane, a potent greenhouse gas. The move is the last major piece of President Obama's domestic climate agenda, following in the footsteps of tougher standards for vehicle emissions and a sweeping plan to curb carbon dioxide emissions from power plants. Like the power plant plan, the methane standards will rely on the Environmental Protection Agency's authority to regulate pollution under the Clean Air Act. The new rules will regulate the amount of methane that oil and gas producers are allow vent or leak from their wells, pipelines, and other equipment. Ultimately, according to the White House, the rules will slash methane emissions 40 to 45 percent by 2025.
Even as Saudi Arabia and its Gulf OPEC allies appear united in their refusal to cut output to boost global oil prices, they are becoming locked in an increasingly fierce battle to secure market share in Asia. Oil prices have slumped below $50 a barrel, the weakest since 2009, triggering a price war between producers to secure customers in Asia. And the price outlook remains grim with Goldman Sachs slashing its three-month benchmark crude forecasts to just above $40.[O/R]
It's been well established that the Keystone XL pipeline -- which congressional Republicans are seeking to authorize right now -- presents unacceptable risks to the planet. Keystone's completion would enable the full exploitation of Canada's tar sands oil deposits, raising global temperatures by an estimated 0.7 degrees Fahrenheit. This, according to leading scientific authorities, would mean "game over" in the struggle to save the climate. But approval of Keystone also presents a lesser-known risk: to America's economic future. For decades, Americans have been trapped in the boom-bust cycle of resource extraction. Approving Keystone XL will further bind America to an industry that is rapidly losing ground to more sensible and sustainable energy solutions.
The 114th Congress is officially underway, and in a move that speaks volumes about the Republican leadership’s agenda, the first order of business in the House and Senate is rubber-stamping the Keystone XL pipeline. The GOP is doing a big favor for Canadian oil interests by trampling the long-established process for making these important environmental decisions. In return, Americans get sharply increased risks to our climate and water quality. Republican leaders are claiming – in the same hair-on-fire mode we’ve seen for years now – that Keystone will create a fantastic number of jobs that no independent analysis supports. They’ve never accepted that the burden of proof is on them to establish the need for this polluting, environmentally risky project.
Republicans are pushing bills in both the House and Senate to fast-track approval of the controversial Keystone XL pipeline. But on Tuesday, the White House threatened to veto any such bill if it was similar to the ones debated in the previous Congress. A Keystone XL approval bill passed the House but failed in the Senate in November 2014. It's expected to pass this time around now that Republicans have more seats.
The average price of a gallon of gasoline in the United States fell 25 cents in the past two weeks, tumbling to its lowest level in more than five-and-a-half years, according to the Lundberg survey released Sunday. Prices for regular-grade gasoline fell to $2.47 a gallon in the survey dated Dec. 19, down 25 cents since the previous survey on Dec. 5.
Cathy McMullen taps the brakes of her white Toyota Prius after driving through a neighborhood of mostly one-story homes in Denton, Tex., about an hour northwest of Dallas. “There,” she says, nodding towards a limestone wall shielding from view a pad of gas wells. McMullen, a 56-year-old home health nurse, cruised past a stretch of yellowed grass and weeds. “They could have put that pad site on that far corner right there,” she says, pointing ahead. “The land’s all vacant.” Instead, the wells sit on the corner of Bonnie Brea and Scripture Street. Across the way: Texas Health Presbyterian Hospital. Across another street: the basketball court, picnic tables and purple playground of McKenna Park.
Oil, gas and coal interests that spent millions of dollars to help elect Republicans this year are moving to take advantage of expanded GOP power in Washington and state capitals to thwart Obama administration environmental rules. Industry lobbyists made their pitch in private meetings last week with dozens of state legislators attending a meeting of the American Legislative Exchange Council (ALEC), an industry-financed conservative state policy organization.