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In Remembrance of JPOTTS..

By David Lee Smith
November 21, 2011

Amy Myers Jaffe, the widely recognized director of Rice University's Energy Forum, is propounding a theory, "By the 2020s, the capital of the energy world will likely have shifted back to the Western Hemisphere, where it was prior to the ascendancy of Middle Eastern megasuppliers such as Saudi Arabia and Kuwait in the 1960s."

As most Fools with a taste for energy can discern, her thesis is based largely on the technological advancements that have been perfected during the past decade. Those steps have rendered it progressively more possible for oil and gas companies and their oilfield service helpers to readily extract the "plentiful hydrocarbons trapped in hard-to-reach offshore deposits, on-land shale rock, oil sands, and heavy oil formations."

Hydrocarbons from north to south
Those challenging deposits, in their various forms, stretch from the frigid waters surrounding Alaska and northwestern Canada, through much of the U.S., and south to Brazil, Argentina, and other South American nations. Unfortunately, however, Ms. Myers' estimated potential production increase of at least 8.5 million barrels a day from the Americas could be hindered by threatening geopolitics.

Obviously, the most immediate issue in the expanded production and use of oil in North America involves a kerfuffle over TransCanada's (NYSE: TRP ) desire to expand its Keystone Pipeline System, which begins at the Athabasca Oil Sands in northeast Alberta, Canada, and, if the company has its way, eventually would run to refineries along the Texas Gulf Coast.

But a decision on whether to permit the line's proposed extensions and capacity increases to allow more Canadian crude to be transported to the refineries has been put on hold (not surprisingly until after the 2012 quadrennial election) by the Obama administration. The administration and the State Department have been squeezed between two of their primary constituencies: environmentalists, who seek to have the entire project scrapped, and labor unions, who view its go-ahead as a source for jobs.

Would that I'd studied that much
President Obama maintains that the delay was mandated by the State Department in order that the project's environmental aspects might be considered more completely, despite a pair of studies on those issues that spanned three years. On that basis alone, it's tough to dispute a conclusion by Jack Gerard, director of the American Petroleum Institute that, "This is clearly about politics and keeping a radical constituency opposed to any and all oil and gas development in the president's camp for 2012."

It's worth noting, however, that the extended line, in addition to transporting crude originating in Canada, would also constitute dependable and lower-cost shipping opportunities for expanding volumes of crude from the Williston Basin in the north-central U.S. Further, it would provide raw materials replacements for the refineries' dwindling crude supplies from Venezuela and Mexico.

We've surrendered the final option
Notwithstanding the delayed Keystone XL decision, TransCanada is hardly without other options for dealing with expanding volumes of Canadian crude. At the top of the list is the alternative of sales to Asia, primarily China, using either TransCanada's Calgary neighbor Enbridge's (NYSE: ENB ) Northern Gateway Pipelines or Kinder Morgan's (NYSE: KMI ) Trans-Mountain line. But given the need in the U.S. for nearly 10 million barrels a day of imported crude, such (an understandable) switch by TransCanada would place our country in the position of continuing to obtain imports from far less dependable sources.

On a related front, Enbridge has recently agreed to pay $1.15 billion for ConocoPhillips' (NYSE: COP ) half interest in the Seaway Crude Pipeline System's pipeline, which connects the Gulf Coast refining complex to the primary U.S. storage facility at Cushing, Okla. The flow of the Seaway line will now be reversed to carry oil from Cushing to the refineries, thereby reducing the current glut at the Oklahoma facility.

China's expanding reserves in the West
Moreover, while Ms. Jaffe's contention of a likely return of energy's de facto capital to the Western Hemisphere is packed with logic, it also appears that by the time the move has been completed, a surprising percentage -- I won't attempt more specificity -- of the crude that's buried in our half of the world will be counted among China's reserves. In just the past year-and-a-half, Chinese companies have forked over about $15 billion to better position themselves in Alberta's oil sands.

Last year, for instance, China Petroleum & Chemical Corp (NYSE: SNP ) -- Sinopec to its friends -- spent $4.65 billion for a 9% interest in Syncrude Canada, the world's No. 1 oil sands producer. And during the past summer, CNOOC (NYSE: CEO ) , the big Chinese offshore producer, handed over $2.1 billion for OPTI Canada, which, while bankrupt, still held 35% of a Nexen oil sands project in Alberta.

In the U.S., CNOOC has reached a pair of deals with Chesapeake (NYSE: CHK ) -- one each in the Niobrara oil play and the Eagle Ford Shale -- for what ultimately will amount to a total cost approaching $2.4 billion. And in South America, China continues to expand its presence in the continent's energy scene. Included in the countries where the Chinese have significantly cast their footprint are Venezuela, Brazil, and Argentina.

The Foolish bottom line
For my money, then, unless it's altered soon, the administration's Keystone XL postponement could work to the severe detriment of U.S. energy interests and consequently to the benefit of China. From an investment perspective, I'm inclined to monitor TransCanada carefully, given its alternatives regarding the ultimate buyers of its Canadian oil. I'll do so in part by placing the company on my version of the Fool's My Watchlist. I suggest you do the same.

I posted this in another thread. This is bothersome.

We have "friendly" oil waiting for us to finish the pipeline and we could use it to expand existing production as well. Instead we have this mess.

There's another story which I'll post that just smacks of cronyism!

damn Bambi huggers....

lol. This pipeline would go straight to the refineries on the gulf coast and then be sent out to the world market. There is no such thing as 'our' oil. This won't have any effect at all on gas prices, it will only create one or two thousand jobs and cost us environmental damage, (these pipes leak and polute all the time) and the only benefit is to the oil companies, particulary a foreign oil company. It's a corporate boon-doggle and you guys are acting like it will save the country. Ridiculous. The benefit to the American people compared to the risks and who we're subsidizing just isn't worth it in the long run.

White House threatens veto of highway bill over Keystone pipeline provision


The White House on Tuesday threatened to veto House legislation to extend transportation programs because it contains GOP language that mandates approval of the Keystone XL oil sands pipeline.

The House is slated to vote Wednesday on the bill that keeps the transportation programs funded through September, the end of the fiscal year.


It would take permitting of the proposed Alberta-to-Texas pipeline away from the State Department and task the Federal Energy Regulatory Commission with approving the project.

“Because this bill circumvents a longstanding and proven process for determining whether cross-border pipelines are in the national interest by mandating the permitting of the Keystone XL pipeline before a new route has been submitted and assessed, the president’s senior advisers would recommend that he veto this legislation,” the White House said in a formal “statement of administration policy” Tuesday afternoon.
The threat continues the political thrust-and-parry between the White House and Republicans over the controversial project that is increasingly at the center of election-year energy battles.

The White House in January rejected TransCanada Corp.’s permit for the pipeline, but stressed the decision was not on the “merits.”

Instead, the White House said that a permitting deadline the GOP demanded in late 2011 payroll tax legislation would short-circuit proper review of Keystone, including the route around ecologically sensitive regions of Nebraska.

The White House has invited TransCanada to reapply but does not plan to make a decision until 2013.

The statement issued Tuesday says the House bill wrongly demands approval of the project “despite the fact that the pipeline route has yet to be identified and there is no complete assessment of its potential impacts, including impacts on health and safety, the economy, foreign policy, energy security and the environment.”

Republicans and business groups have in recent months launched a political assault against the White House over the lack of a permit for Keystone, alleging Obama is missing a chance to boost U.S. energy security and create thousands of jobs. Some Democrats and major unions also back the project, although labor is not unanimous on the matter, and the AFL-CIO has not taken a position amid the divide.

Environmentalists and a number of Democrats strongly oppose Keystone because of greenhouse gas emissions from extracting and burning oil sands, forest damage from the massive projects and fear of spills along the pipeline route.

The Senate in March blocked an amendment to its multi-year transportation package that would have forced approval of the project using somewhat different language than the current House plan.

But 11 Democrats broke ranks with the White House even though President Obama personally lobbied against the GOP-led amendment.

Tuesday’s White House statement also criticizes other aspects of the House bill to extend transportation programs, noting the administration “strongly opposes” the bill.

“By simply extending current authority through the end of the fiscal year, this legislation would miss a critical opportunity to provide more certainty to states and localities as they undertake the long-term planning and execution of projects and programs that are essential to creating and keeping American workers in good paying jobs, improving the nation’s surface transportation infrastructure, and ensuring roadway safety,” the White House said.

http://thehill.com/blogs/e2-wire/e2-wire/222067-white-house-citing-keystone-pipeline-threatens-to-veto-house-highway-bill


Yet, he's going to be for this? Then he'd be called a liar! No, see it for what it is. Another failed policy from the absolute worst administration of all time. I never thought it was possible to make a buffoon like Jimmy Carter seem astute. The Kenyan King has though. This moron has the wrong people at the wrong place with the wrong mindset ripping apart the Constitution like a piñata and acting like King Louis and Marie Antoinette in their private lives rubbing it in your faces!

House clears highway bill with Keystone pipeline mandate, thwarts Obama


Defying a White House veto threat, the House on Wednesday passed legislation that extends transportation program funding through September and mandates construction of a controversial oil pipeline from Canada to the Gulf Coast.

All but 14 Republicans, with support from 69 Democrats, voted 293-127 for legislation that falls far short of Speaker John Boehner’s (R-Ohio) earlier plan to move a sweeping five-year, $260 billion package.


But Boehner’s retreat serves two crucial tactical and political purposes for the Speaker. It sets up talks with the Senate on the highway bill and keeps the Keystone pipeline — a centerpiece of GOP attacks on White House energy policy — front and center ahead of the November election.

Republican leaders hailed the bipartisan vote as a rebuke of President Obama. Two senior Democrat leaders, Reps. James Clyburn (S.C.) and John Larson (Conn.), approved the measure.

“The House is on record again in support of the Keystone XL energy pipeline — a project President Obama blocked, personally lobbied against, then tried to take credit for, and now says he’ll veto,” Boehner said in a statement. “There’s no telling where the president stands from one day to the next on Keystone, but he knows the pipeline has broad and bipartisan support in Congress and among the American people.”

The House and Senate transportation committee chairmen said they hoped conferees would be appointed quickly.

“The purpose of this extension is that we can hopefully bring about resolution and conference legislation to complete our transportation bill,” Rep. John Mica (R-Fla.), the chairman of the House Transportation and Infrastructure Committee, said Wednesday.

A number of key Democrats also said they were supporting the plan as a way to get to a House-Senate conference.

“It appears that the House has finally found the path out of dysfunction junction,” said Rep. Peter DeFazio (D-Ore.), a member of the House Transportation and Infrastructure Committee. “We’ve been there too long.”

The bill creates another clash with the White House over the Keystone pipeline — a project at the heart of the Republicans’ energy agenda and their election-year attacks against the president.

Obama, facing divisions in his political base, has delayed a permitting decision on the project until after the election and threatened to veto the House bill over the pipeline language.

The House vote continues what has been a difficult path forward for transportation program funding, which often has bipartisan support.

Congress last month enacted a 90-day extension of highway programs before it left for a two-week recess, and the Speaker had hoped to use the break as one more chance to win support for the five-year transportation bill he has been pushing for months over objections from his conference.

Yet it was clear as lawmakers returned this week that Boehner had not succeeded.

“If I had my druthers, H.R. 7 would have been on the floor six weeks ago. But there weren’t 218 votes to do this,” Boehner told reporters, speaking of the failed five-year package. “You’ve heard me talk about allowing the House to work its will. It’s not about the House working my will. The House ought to be allowed to work its will. And when it came to this bill, the House decided they didn’t want to vote for it.

“So you have to go to Plan B, and Plan B is on the floor today, and I’m hopeful we’ll be in conference soon.”

The Senate last month passed a two-year, $109 billion transportation bill with bipartisan support, but House Republican leaders oppose it because it does not contain their favored reforms for highway programs. Boehner wants to link revenues from expanded domestic energy production to infrastructure spending.

The Speaker’s goal now is to win as many reforms as he can during a conference committee negotiation centered on the Senate measure.

The new strategy caught some Republicans by surprise.

Conservatives on Tuesday had complained that they hadn’t seen the new highway extension, and aides and lawmakers said the leadership was not formally whipping support for it.

Ten Republicans voted against the 90-day extension the House passed before the recess, but a few of those members said Wednesday they were open to the latest extension because of the addition of the Keystone provision and plans to initiate talks with the Senate.

“This extension I’m trying to support because I’ve been told this is our vehicle to move things forward, to get a longer-term bill and to get something in terms of an agreement from both chambers,” Rep. Robert Dold (R-Ill.) told The Hill.

Rep. John Fleming (R-La.) cited concerns in the construction industry about the uncertainty of short-term extensions, but said he might support the latest House bill because it could lead to a deal with the Senate.

“I think the whole idea here is to force some sort of compromise, where we get something out of it that we wouldn’t otherwise,” Fleming said.

Still, there was widespread doubt that any long-term highway bill was likely to get done before the November election.

“I don’t see how you get a bill before the election, but stranger things have happened,” said Rep. Steven LaTourette (R-Ohio), a critic of the GOP leadership’s initial transportation proposal. “Maybe lightning will strike and they’ll come up with a conference report.”

LaTourette said he hoped a compromise would be “the Senate bill dressed up.”

Similarly, Transportation Secretary Ray LaHood said Wednesday that he doesn’t see Congress passing a multiyear bill before the November elections, instead predicting more short-term extensions.

“There will not be a bill before the election,” LaHood said. “I wish I could say we’ll get a transportation bill [in the next six months], but I know we won’t.” He has chastised Republicans for adding what he called unrelated provisions like the pipeline.

Republicans have hammered the White House for failing to approve Keystone, calling it a missed chance to create jobs and boost energy security.

“There is not a more shovel-ready project than the Keystone XL pipeline, period,” House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said Wednesday.

The project is tricky politics for the White House. Environmentalists bitterly oppose the pipeline due to greenhouse gas emissions from Canadian oil sands and other effects, while a number of major unions back it.

It’s uncertain whether Obama will get a chance to use his veto pen on the final package. The Senate in March turned back an amendment to its transportation bill that would have permitted the pipeline, so the new Keystone provision might not survive the conference negotiations.

But a conference could advance other priorities — including a long-term goal of Gulf Coast lawmakers from both parties.

Both the Senate and House package would steer 80 percent of what are expected to be billions of dollars in Clean Water Act penalties from the BP oil spill to the Gulf Coast for restoration.

Ok..so he's a huge liar then?

Look at the track record. The Quid Pro Quo is in motion.

The Pipeline with this assclown is dead.

I cannot imagine giving this dumbass with his crooked administration a 2nd go round.

Mittens is even starting to look good just to make sure he packs up and leaves DC!

Lying is not normal. It's dishonest and a despicable trait. There is nothing wrong with telling the truth.

The status quo isn't pay to play.

The Carter Administration gave us high inflation, high energy prices, a prolonged hostage debacle and a malaise about the nation that hasn't been around since the coronation of the Kenyan King.

Ron Paul is THE man. He is the only one that holds the Constitution in regard to decision making and would strip away all of the other nonsense from the Executive Branch. One single term would strengthen the nation. It's not going to be a reality though. The sheepeople and the MSM cannot break the shackles that bind them to doing the same old thing. Barring some convention wrangling it appears that Mittens is the GOP heir apparent. He has the hair. He has the smile. He has the 13 women behind him to act as First Lady. I was prepared to sit this out but I had a really good conversation with other like minded people and a point was raised. That point was this...Between a 2nd term of more failed policies, giveaways, wars and unchecked croynism or usher in a fresh face that has a record to run on and can perhaps get this nation back on it's heels. The choice is simple. A 3rd party vote ensures a 2nd term of more utter failure with Owedumba and Marie Hot Wings.

I will not vote for Mittens.


Different ties same suit.


I have no problem with those who take the argument DMV mentioned. I have a problem with a party pretending to be different than the other. Anyone hear Hatch's comments about libertarians? Career politicians are a cancer upon our republic. I miss the days when conversations lead to either a comprimise or an understanding. Sadly the left (not all but a damn large part) is extreme and rigid. The christian "conservatives" that wish to impose their life choices upon society as a whole cannot see the larger picture. And alot of people are staying in power and getting rich pitting these two groups against eachother. To me there are also centrist R's who just care about maintaining dinnerparty reservations and sunday conversations with pancake makeup on. They take the oppositions view and try to add ingredients to make it palatipable to their constituents they don't stand for their values that they may have once had.

In the next few months we will be attacking Syria.

Gas will go over 5$ a gallon this summer.

We still wont have a serious budget to fix spending and one side will talk about sticking it to the rich people who keep us down. While centrists poo poo and say we need to cut spending (which they havent done in their multiple terms that they've already had to do so).

People refuse to see a police state thats already in place because they don't want to bite the hand that feeds their EBT card. Public employees fail to see the destruction our spending has brought because lifes good for those in the protected class.


You cannot have a serious discussion when the real issues are ignored and inaction is the norm.

I know you don't take your decision lightly. I have had a sincere and strong feeling, for a very long time now that a great many people who strongly support Paul and despise Obama, would come to a realization that while Romney is terribly untasteful to them, he is still their better alternative.

As to our Governor, he cannot be voted out (hopefully) or termed out soon enough for me.

Maybe Charlie Crist will run again!

I miss Jeb Bush, Lawton Chiles, Bob Martinez, and Bob Graham.

Will you vote for him if he selects Condoleezza Rice to run with him..??

poor Señor Wences.....

Hell he could select Dorf and still have more brain power with him than ALL of Owedumba's Cabinet!!!!!

MITTENS/HAM SANDWICH - 2012


**** OBAMA!

Funny...I voted for John McSame because he had Palin!

Her acceptance speech foretold EVERYTHING in AMAZING technicolor. Every thing has come true and worse.

http://www.youtube.com/watch?v=UCDxXJSucF4


She's a force that STILL strikes fear in the heart of the Kenyan King and his Keystone Kop administration!

McSame...well let's say he prolly shudda just chosen that big lump on his head to run instead of him!

Romney should pick a honey badger as his VP. Then the honey badger would eat him.

President Honey Badger.

His poor numbers, IMO are not appropriate for a recall. He never had good numbers, even before election day. I wouldn't support a recall, despite my feelings about him. It is bad precedent without there being more to it.

Unless he plummets or gets "caught with his hands in the cookie jar", I don't see the Rs running anyone against him, but he might draw an opponent, just not one the Rs will support unless the opponent wins the primary run-off.

He is bad, IMO, because of the fraud and perjury surrounding Medicare; his blind pro-business agenda; his thrashing of most social service benefits- including those I feel to be most important to our society; his rape of educational dollars and budgets; his attempt to seize control of the judiciary, etc., etc...

As HD alluded to above: Where the hell is (a) Charlie Christ when we need one?