Posts Tagged ‘energy independence’

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Top terror finance stories of 2013

December 30, 2013

From massacres on the streets of Syria to the streets of Boston, 2013 has offered far too many illustrations of how terror-borne bloodshed is financed:

  1. Sunni and Western powers risk funding Syrian rebels despite their Al Qaeda allegiance
    Saudi Arabia, Qatar, Turkey, the U.S., U.K., and France have provided money and supplies to the enemies of Syrian dictator Bashar al-Assad despite the risk of the materiel falling into the wrong hands.  Gulf-based support has gone directly toward Salafist fighters; Western aid has been targeted toward the supposedly moderate Free Syrian Army, but entire brigades of the FSA have pledged allegiance to al-Nusra Front—Al Qaeda’s affiliate in Syria—during 2013.  Reports this month of a “suspension” of U.S. aid have been somewhat exaggerated; as one official conceded, “the suspension of aid only applies to the opposition in northern Syria, adding that supply lines from Jordan in the south would continue.”  Foreign support has prolonged the conflict in Syria and increased the chances for Al Qaeda to take over the country.
  2. Boston marathon bombing made possible by Saudi money
    North Caucuses militants have been funded for decades by Saudi Arabia.  The Saudis and their wealthy expatriate terrorists like Ibn al-Khattab  and Osama Bin Laden and invested millions of dollars into the training and recruitment of fighters, the construction of radical mosques, and the creation of jihadist websites in Slavic languages.  Tamerlan Tsarnaev read and engaged with these websites and pursued support from these Saudi-sponsored sources when he traveled to Russia in 2012.  Tsarnaev and his brother Dzhokhar also learned from Inspire magazine by deceased terror imam Anwar al-Awlaki, who presided over Al Qaeda in the Arabian Peninsula.In effect, Saudi money created the breeding environment both online and on the ground in the North Caucuses in which the Tsarnaevs’ plot was hatched.

    Sadly, the media and public officials have been slow to recognize and expose the connections between the Saudis, the North Caucasus militants, and their followers living in North America.  Two Democrat-appointed federal judges inexplicably reversed the conviction this year of Pete Seda, a Muslim “peace activist” who sent money through a Saudi-based charity from Oregon to Chechen terrorists in the early 2000s.

  3. The U.S. became the world’s #1 energy producer in 2013.  This development reduces our dependence on Arab oil and the flow of petrodollars that fund terrorism.
  4. The compensation of victims of Iranian-sponsored terrorism was ignored during negotiations in Geneva on Iran’s nuclear program.
  5. The Somali Islamic terrorist group al-Shabaab’s finances rebounded in 2013 despite their loss of control in 2012 of the key harbor in Kismayo to Kenyan, African Union, and allied forces.  The main ingredients in their financial resurgence included an expansion al-Shabaab’s lucrative charcoal smuggling operation, the resumption of payments from the Dahabshiil money service to al-Shabaab, and indirect support from the Gulf.  The funding has allowed operations such as killing sprees in Mogadishu and the September terrorist attack on Westgate mall in Nairobi, Kenya.  Nevertheless, a British court injunction has forced Barclays to continue partnering with Dahabshiil to facilitate remittances to Somalia.
  6. Read the rest of this entry ?
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U.S. energy boom the “biggest strategic game changer since we won World War II”

October 25, 2013

Going back to the Wall Street Journal‘s remarkable finding that the U.S. is now the world’s largest energy producer, Fox News hosted a great discussion with Steve Moore and KT McFarland about the economic and strategic implications of the shift.  Please watch especially for McFarland’s insights on what this means for global affairs:

H/t to CJR for finding the video link on YouTube!

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Marcellus bolsters U.S. energy freedom

October 15, 2013

Fracking the Bakken in North Dakota, the Eagle Ford in Texas, and the Marcellus Shale in Pennsylvania and neighboring states yields more than job growth and economic opportunities for Americans—it’s creating a new era of independence from Arab oil.  Jim Cawley, the lieutenant governor of Pennsylvania, has written a column giving a very clear and vivid explanation of this sea change in global affairs and what it means for his constituents:

…In October 1973 oil exporting nations cut off exports to the United States as punishment for our support of Israel — the lone democracy in the Middle East.

Gasoline prices jumped. Home heating prices soared because the price of a barrel of oil dictated the price of everything else energy related.

Families were told to turn down the thermostats to 68 or lower, and cars lined up for miles outside service stations that were still running. Inflation combined with a slowed economy to usher in the “era of malaise.”

We were hostages in our own land.

Jump ahead 40 years and consider the words of Saudi Prince Alwaleed bin Talal: “Rising North American shale gas production is an inevitable threat” to the economy of Saudi Arabia.

Think about that.

Forty years after the embargo, a major OPEC country is worrying about America’s emerging energy independence. They have good reason.

Saudi oil exports to the United States have declined, as have exports from Algeria and Nigeria.

And as October got underway, The Wall Street Journal reported that the United States, home of the Marcellus fields, has ascended to the rank of top energy-producing country in the world.

We are talking about American energy independence – a term coined amid mile-long gas station lines and in the speeches of politicians who knew we needed to do something but had no idea what.

Our natural-gas resources are so abundant that the prices of oil and natural gas have become decoupled. There was a time when a jump in oil prices meant a corresponding rise in natural gas.

Not so today. Petroleum is selling at twice what it cost a decade ago. Natural gas prices have fallen by half.

Recently, the [Pennsylvania Gov. Tom] Corbett administration announced an initiative to expand natural gas refueling stations on our state’s highways.

It’s disappointing that some Harrisburg Democrats are lining up behind their state party’s call for an end to hydraulic fracturing, the technology that made energy independence possible.

They are, in short, calling for an abrupt halt to 30,000 direct jobs in the state’s natural-gas industry and an attack on 200,000 more jobs that depend on or benefit from the Marcellus Shale industry.

We’re talking about Marcellus jobs that sustain families, enrich communities and spin off countless economic benefits that reach from the gas fields to the neighborhoods of Philadelphia…

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Back on top: U.S. world’s biggest energy producer

October 14, 2013

Hydraulic fracturing is quickly changing the global balance of power.  This year U.S. has become or will shortly become the #1 producer of oil and gas on the planet.  This analysis comes from the Wall Street Journal:

U.S. Is Overtaking Russia as Largest Oil-and-Gas Producer

The U.S. is overtaking Russia as the world’s largest producer of oil and natural gas, a startling shift that is reshaping markets and eroding the clout of traditional energy-rich nations.

U.S. energy output has been surging in recent years, a comeback fueled by shale-rock formations of oil and natural gas that was unimaginable a decade ago. A Wall Street Journal analysis of global data shows that the U.S. is on track to pass Russia as the world’s largest producer of oil and gas combined this year—if it hasn’t already.

The U.S. ascendance comes as Russia has struggled to maintain its energy output and has yet to embrace technologies such as hydraulic fracturing that have boosted American reserves.

“This is a remarkable turn of events,” said Adam Sieminski, head of the U.S. Energy Information Administration. “This is a new era of thinking about market conditions, and opportunities created by these conditions, that you wouldn’t in a million years have dreamed about.”

The U.S. produced the equivalent of about 22 million barrels a day of oil, natural gas and related fuels in July, according to figures from the EIA and the International Energy Agency. Neither agency has data for Russia’s gas output this year, but Moscow’s forecast for 2013 oil-and-gas production works out to about 21.8 million barrels a day.

U.S. imports of natural gas and crude oil have fallen 32% and 15%, respectively, in the past five years, narrowing the U.S. trade deficit. And since the U.S. is such a big consumer of energy, the shift to producing more of its own oil and gas has left substantial fuel supplies available for other buyers. Nations that rely on peddling petroleum for their economic strength and political clout face dwindling market power as a result. Oil prices so far remain high, however, closing Wednesday at $104.10 a barrel, up 18% from a year ago.

Many analyses of energy markets look only at crude oil. But Russia and the U.S. also are major players in natural-gas markets, where they far outproduce countries such as Saudi Arabia, the world’s largest oil producer.

The U.S. last year tapped more natural gas than Russia for the first time since 1982, according to data from the International Energy Agency. Russia’s exports have been crimped by rising competition and the economic slump in Europe. Russia forecasts that its gas production will increase slightly in coming years, but its forecast for this year is below current U.S. production.

The U.S. is also catching up in the race to pump crude. Russia produced an average of 10.8 million barrels of oil and related fuel a day in the first half of this year. That was about 900,000 barrels a day more than the U.S.—but down from a gap of three million barrels a day a few years ago, according to the IEA.

The amount of crude from two of the hottest plays in the U.S.—the Bakken oil field in North Dakota and the Eagle Ford shale formation in South Texas—continues to rise rapidly…

Readers should take a look at this video from Fox News which addresses the strategic implications of this development for U.S. national security.  The shift means a reduced likelihood of U.S. entanglement in Middle Eastern affairs, less risk of disruption due to volatility in and hostility from that part of the world, and a reduced flow of petrodollars to regimes that fund terrorism.

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The Middle East and your price at the pump

September 30, 2013

What to do about Syria?  One thing is to rid ourselves of the remaining vestiges of oil dependence on that part of the world.

In a recent op-ed in the Fort Worth Star-Telegram, Chris Faulkner points out that Syrian energy output is minimal, but the political volatility puts a Middle Eastern premium onto our gas bills.  If we pursue further steps toward energy self-reliance in North America, we could minimize the risks of price volatility and supply disruptions.

Policies being proposed by the energy sector are making more sense than the policies being pursued by our elected officials.  Read it all:

Energy independence is the best response to Syria crisis

When an American missile strike in Syria seemed inevitable, oil futures shot up to a two-year high. Just days later, as U.S. officials began considering a diplomatic response, prices fell.

Many analysts have blamed these fluctuations on investor overreaction — Syria provides less than 0.1 percent of the world’s oil. But such assessments are dangerously naïve.

Any intervention in Syria would have impacted America’s access to oil and no one can safely assume there won’t be another Middle East crisis on the horizon.

That’s why the United States must reduce its dependence on Middle Eastern oil.

Syria might not be a major oil producer or exporter, but one of President Bashar Assad’s chief supporters, Iran, holds the world’s fourth-largest proven conventional oil reserves.

More than that, Iran controls the Strait of Hormuz, a shipping lane that’s essential to the transport of roughly 35 percent of all seaborne oil.

There’s no telling what an Iranian response to a U.S. attack on Syria might look like, but if the mullahs even hint at shutting down the Strait, oil prices could jump dramatically.

The ripple effects of a U.S. military action wouldn’t stop there. A strike against Assad’s regime would inflame relations with other oil-rich nations.

The conflict has already worsened sectarian tensions in Iraq, OPEC’s second-largest producer of crude oil.

Even defusing the Syrian crisis won’t end the civil war there, nor diminish the prospect of future strife, rebellions, or war. Indeed, the Syrian civil war has stoked anew the centuries-old enmity between Islamic sects that threatens to engulf the entire region — a region that holds more than half of the world’s proven conventional oil reserves.

The situation in Syria has made clear why it’s so important for the United States to make certain our energy interests aren’t tied to the volatile politics of the Middle East.

In practice, this means embracing technologies like hydraulic fracturing, horizontal drilling and projects like the Keystone XL pipeline. These represent historic opportunities for America to gain greater control over our own energy security.

In the case of Keystone XL, a proposed pipeline that would deliver crude from western Canada’s vast oil sands to America’s Gulf Coast, the Obama Administration could dramatically increase the amount of oil we receive from our neighbor to the north.

The U.S. Department of Energy has estimated that, once completed, the pipeline would deliver as much as 830,000 barrels of oil a day, or roughly half of what we currently import from the Middle East…

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Fueling ourselves leaves Saudi Arabia in the dust

September 9, 2013

Increased domestic energy production is enabling the United States to pursue its own foreign policy objectives without having to run a three legged race with Saudi Arabia.  Hydraulic fracturing allows America to begin to separate itself from a distant monarchy that imposes ruthless sharia law on its people and funds terrorism around the world.  Reuters has the story:

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Plan would reduce Canada’s need for OPEC oil

September 6, 2013

Canada is considering a proposal to fuel itself by building a pipeline from the oilsands of Alberta to the more heavily populated provinces of eastern Canada.  Although Canada is already a net energy exporter, this pipeline would be a further step in weaning North America off Arab oil and reducing the flow of petrodollars to de facto state sponsors of terrorism.

The rationale for the “Energy East” pipeline comes to us from a marvelous column by Ezra Levant (h/t Blazing Cat Fur) in the Sun:

Freedom oil: Energy East pipeline appealing and has a politically important spinoff

The largest oil refinery in Canada isn’t in Alberta. Neither is it in Ontario or Quebec, the biggest provinces with the most cars.

It’s the Irving Oil refinery in New Brunswick.

Trouble is, that refinery, like most of eastern Canada, buys imported oil, including from OPEC countries. It’s a paradox: Canada produces an enormous amount of oil, but we export the good stuff to the U.S. and import conflict oil for ourselves.

It’s not just that Canadian oil is produced in a more environmentally friendly manner than OPEC oil; we also use the proceeds for peaceful purposes, treat our workers well and respect human rights. It’s like the difference between Canadian diamonds and African blood diamonds.

There’s another difference, too: Canadian oil is cheaper – on any given day, oil from Canada’s oilsands sells at a $10 to $35 discount to world prices, mainly because of a pipeline bottleneck. So Irving Oil is spending literally millions of extra dollars every day on expensive foreign imports. All for a lack of a pipeline connecting Alberta to the East.

Which is why the proposed Energy East pipeline, announced last week by TransCanada Pipelines, is so appealing.

Its main purpose is to ship oil, of course. But politically it has a more important spin-off. At an estimated $12 billion cost, the pipeline is easily the largest infrastructure project in Canada. Construction will employ thousands of workers, mainly in eastern Canada. And the more affordable crude oil it ships will save thousands more jobs at refineries not just in Saint John but along the route in Quebec, where several refineries have recently closed and more are teetering on the brink.

The pipeline will carry a staggering 1.1 million barrels a day, enough to supply the refineries along its route and then some.

And so TransCanada and Irving Oil propose to build a tanker export facility in Saint John. Instead of Saudi tankers bringing shariah oil to Canada, imagine the possibility of Canadian tankers sending freedom oil out.

At the announcement ceremony at the Saint John refinery, rows of workers stood in hard hats for a photo, and behind them and around the site were simple banners reading “Alberta, Always Welcome.”

Nothing to do with economics, nothing to do with jobs. Everything to do with national unity and calling out the unseemly anti-Alberta bigotry that animates so many anti-oilsands extremists.

What a noble, dignified, grand answer to the critics, like the NDP’s Thomas Mulcair, who has called the oilsands an economic “disease.”

New Brunswick knows this pipeline is the most important economic opportunity they will have in a generation; their partisan provincial legislature issued a unanimous statement of support for it.

Alberta wins with a new path for its oil, a path that can’t be blocked by a pro-OPEC U.S. president.

Quebec and New Brunswick refineries win with affordable feedstock. Construction workers win.Canada wins with a deep-water port to export oil to the world.

Who loses? Saudi Arabia, Algeria and Angola, three odious dictatorships that will have to peddle their blood oil somewhere else…

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Libya mess shows need for energy independence

September 5, 2013

The apparent crumbling of the Libyan state and related, ongoing spike in global oil prices illustrate the importance of ending Western dependence on Middle Eastern and North African oil.  From The Telegraph:

“We are currently witnessing the collapse of state in Libya, and the country is getting closer to local wars for oil revenues,” said the Swiss-based group Petromatrix.

The country’s oil ministry said production has slumped to an average of 300,000 barrels per day (b/d) in August, down by more than four-fifths from its peak after the overthrow of the Gaddafi regime two years ago.

“Militia groups are behaving like terrorists, using control over oil as political leverage to extract concessions,” said Dr Elizabeth Stephens, head of political risk at insurers Jardine Lloyd Thompson. Port closures and strikes have compounded the damage but the deeper story is the disintegration of political authority.

Libya is the most extreme example of political mayhem around the world disrupting output and causing a chronic shortfall in oil supply. Production has slumped in Iraq, Nigeria, Iran, Yemen and Syria itself, each for different reasons.

This has cut daily global supply by 1.1m over the past year to 92m, explaining why Brent crude prices have remained stubbornly high despite the slump in Europe and China’s slowdown. To compound the problem, Libya’s oil is some of the highest quality produced in the Middle East and the kind preferred by European refiners. Jitters over Syria have already pushed Brent to $115, near levels that typically erode confidence and inflict serious economic damage…

Is it logical to remain reliant on a region fraught with despotism, Islamist rebellions, intra-Islamic sectarianism, corruption, and utter disrespect for the rights of religious minorities?

No.  The good news is that the U.S., Canada, and Europe do not have to entangle themselves in the Middle East if they are willing to bring the environmentally reactionary fringe under heel.  There is plenty of oil and gas beneath our very feet if we are willing to extract it.  And we will do so in a more environmentally responsible fashion than Arab oilmen anyway.

As part of the president’s proposal to punish Assad for gassing children to death, Obama should simultaneously announce his support for the Keystone XL pipeline, increased offshore and federal land drilling, and ease permit issuance for hydraulic fracturing.  What good is a solitary, short-term military campaign without a longer term strategy for peace?

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OPEC weakened thanks to fracking

August 15, 2013

Evidence indicates once again that hydraulic fracturing techniques in the oil and gas industry are helping to turbocharge North American energy production and reduce the thirst for oil from the Middle East and OPEC.  Rather than combating the financing of terrorism by maintaining onerous regulations on banks and intrusive data mining programs on bank customers, the more effective approach in the long run may be unshackling the private sector and encouraging growth in domestic oil and gas markets to reduce dependence on hostile regimes overseas.

FuelFix blog reports:

Demand for OPEC’s crude will slip by 300,000 barrels a day next year to 29.6 million a day next year, or about 2.6 percent less than the 12-member group is pumping now, the organization said in its first set of forecasts for 2014…

Dependence on OPEC’s crude is slipping as the U.S. and Canada unlock unconventional oil supplies from deep underground shale deposits with new drilling techniques. Brent crude futures have slipped 2.7 percent this year, trading at about $108 a barrel on the London-based ICE Futures Europe exchange today, amid signs of slowing growth in China and uneven recovery in the U.S., the world’s biggest oil consumers…

Energy in Depth blog adds:

This great news also comes on the heels of a report by the Energy Information Administration, which found that for the first time in 16 years, American crude oil production surpassed imports at the end of May.  Additionally, the Paris-based International Energy Agency (IEA) revealed in May that a major increase in North American oil production is sending “shock waves” throughout global energy markets, a phenomenon that could lead to North American energy independence by 2035.  As IEA executive director Maria van der Hoeven put it: “North America has set off a supply shock that is sending ripples throughout the world…A real game changer in every way.” IEA predicts that North America will provide 40 percent of new oil supplies by 2018, while the contribution from OPEC will slip to 30 percent. It’s not surprising, then, that one OPEC official has gloomily admitted: “Some member countries are really suffering from U.S. shale oil”…

Indeed.  Saudi mogul Alwaleed bin Talal recently made headlines after writing an open letter to his government warning that fracking has become a threat to the Kingdom.

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OPEC takes backseat to U.S. shale

June 25, 2013

Fracking continues to diminish the influence and domination of global energy markets by the Organization of Petroleum Exporting Countries by increasing American production.  The weakening of OPEC means:  1) a smaller chance of price shocks and supply disruptions, 2) less dependence on hostile Middle Eastern countries, along with a reduced need for political and military entanglement with those countries, and 3) less petrodollars flowing toward terrorism.

This June 4 editorial from the Houston Chronicle explains how technological advances are causing major shifts in the balance of global power:

Move over, OPEC

Things are getting interesting vis a vis OPEC and the U.S. shale industry.

The once-omnipotent oil cartel is taking serious notice of the impact of the shale boom on global oil prices and markets.

As well it should. Increased shale oil production domestically is pushing the U.S. toward potential energy self-sufficiency by 2018, analysts predict. Boosts in shale oil production in this country already are cutting deeply into OPEC’s share of the U.S. oil market.

And that isn’t even to mention the potential impact of shale gas on the oil cartel. It’s turning out that natural gas from shale is the true bonanza wrought by hydraulic fracturing and horizontal drilling, the two technologies that have given this country access to one hundred-plus year supplies of energy almost overnight.

Since 1992, expanded use of natural gas by the nation’s electric utilities has dropped greenhouse gas pollution by 20 percent.

Expansion of the use of environmentally friendly natural gas into this nation’s huge transportation sector is in its toddler stages. The possibilities here are enormous – and threatening if you are a global energy cartel beset by internal disagreements over where to set production levels.

For decades, OPEC enforced a “take no prisoners” position on oil prices that sent the global and U.S. economies on costly roller-coaster rides tied to price and availability of oil.

We wouldn’t go so far as to suggest that the U.S. take a formal position of tit for tat.

We’d simply say that the shale boom offers the country, and perhaps the world, the opportunity of slipping OPEC’s leash while stabilizing the U.S. and other economies.

Common sense tells us we should take it, and leave OPEC to deal with the consequences on its own…

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Freedom from Arab oil boosted by record production in North Dakota

March 29, 2013

770,000 barrels per day closer to independence

Texas, federal waters, and North Dakota constitute the holy trinity of the U.S. energy production, and North Dakota contributes an increasingly larger portion of the total.

Bakken output puts us the U.S. closer toward energy self-sufficiency, which, over time, will mean less power for OPEC, fewer petrodollars going to state sponsors of terrorism, a decreased risk of supply interruptions, and less pressure for America to become involved in the squabbles of the Middle East.

This encouraging data comes to us from PennEnergy on Mar. 18 (hat tip to Steve Maley):

http://www.pennenergy.com/articles/pennenergy/2013/03/north-dakota-oil-production-reaches-new-high-in-2012.html?cmpid=EnlDailyPetroMarch192013

North Dakota oil production reaches new high in 2012

North Dakota crude oil production (including lease condensate) averaged an all-time high of 770,000 barrels per day in December 2012. Total annual production more than doubled between 2010 and 2012 through the use of horizontal drilling and hydraulic fracturing of deposits in the Bakken Formation in the Williston Basin. North Dakota production in 2012 trailed only Texas and the U.S. Federal Offshore region, and the state accounted for 10% of total U.S. crude oil production.

Much of crude oil production in North Dakota is gathered and transported by truck to railcars leaving the state. In the four counties where production is concentrated, about 75% of production is transported by truck, and this can cause supply chain problems at times. Severe weather can impede truck travel, which may lower oil production in the state. Once on-site storage tanks at production sites are full, production stops until the trucks can move again. For example, in November 2012 North Dakota crude oil production fell slightly from the October level to 735,000 bbl/d because of weather-induced transportation problems caused by an unusually heavy snowstorm. Pipeline networks, which can be more efficient and less subject to storm disruptions than trucking, are currently being expanded.

Weather slowing or halting truck transportation can also affect the completion of wells that are not yet producing. According to the North Dakota Department of Mineral Resources (DMR), almost all (95%) wells drilled in North Dakota use hydraulic fracturing to produce the crude oil embedded in shale rock and tight (low permeability) formations. To start production, each well needs hundreds of truckloads of material (900-2,000, including 800 truckloads of water, according to the DMR) on-site that are delivered by tank trucks to storage tanks, unless a sufficient quantity of water is available at the wellsite. The total amount of water needed for hydraulic fracturing must be at the wellsite before hydraulic fracturing can begin.

Because over 80% of North Dakota’s wells are located in only four counties—Dunn, McKenzie, Montrail, and William—in the northwest area of the state, harsh weather in these areas can reduce the state’s total crude oil production, as happened in November 2012 and again in January 2013.

It’s also worth noting that pipeline expansion would help even further—a point lost on extreme environmentalists and Democrats.

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