Thursday 19th of May 2022

oil for thoughts...

oil...oil...

After Congress lifted a ban on crude exports in late 2015, oil and gas production in the Permian Basin soared while domestic consumption remained flat—leading to a massive build-out of pipelines and other infrastructure that culminated in the U.S. “flooding global markets” with fossil fuels at the expense of humanity, in general, and vulnerable Gulf Coast communities already overburdened by pollution, in particular.

That’s the focus of the third chapter of The Permian Basin Climate Bomb, a six-part multimedia report by Oil Change International, Earthworks, and the Center for International Environmental Law. The latest installment, released Wednesday, shows that the drilling and fracking boom that turned this area in the U.S. Southwest into “the world’s single most prolific oil and gas field” over the past decade was not driven by rising domestic demand, but by a surge in exports after 2015.

 

By Kenny Stancil, Common Dreams

 

Between 2015 and 2020, U.S. oil consumption actually declined by 7 percent. There was no corresponding decrease in extraction in New Mexico and Texas, however. Instead, fossil fuel production in the Permian Basin increased by 135 percent during the same time period.

That growth in output coincided with a simultaneous increase in oil and gas exports from the Gulf Coast, which skyrocketed by 589 percent from 2015 to 2020.

Before December 2015, when sales were restricted to Canada, crude exports made up 5 percent of U.S. oil and gas production. By 2020, they reached 30 percent.

According to the report, “The export boom is not confined to crude.” The authors cite Matt Schatzman, the CEO of a liquefied natural gas (LNG) company, who said in 2019 that “every incremental hydrocarbon produced [in the Permian Basin] from this day forward—whether it’s oil, liquids, or gas, needs to be exported.”

As the report notes, “It is no coincidence that production growth in the Permian Basin accelerated after crude oil export restrictions were lifted by Congress in late 2015.” But repealing the ban “was not enough on its own to trigger the twin booms of both production and exports in the Permian and Gulf Coast.”

For the surge in exports and production to materialize, “a vast network of pipelines, processing plants, storage tank farms, and export terminals had to be built,” states the report. “The build-out of pipelines in the last five years has been particularly intense,” as the following graphic makes clear.

“This infrastructure,” the report points out, “burdens communities with pollution and safety risks, and locks in a system of energy and chemical supply that the world can no longer sustain.”

In addition to the construction of over 12,000 miles of pipelines since the end of 2015, “Gulf Coast export terminal capacity has increased more than threefold” since the ban was lifted, the report says. “Additional export capacity could lower the cost of and accelerate crude exports,” which “could lock in gas supply to countries that could be moving more quickly to renewable energy.”

In response to Permian oil and gas producers’ plan to increase production by more than 50 percent from 2021 to 2030—the focus of the second chapter of the report—Lorne Stockman, research co-director at Oil Change International, said that “this must not happen.”

The third chapter of the report highlights several proposed export terminals facing community opposition, including the Sea Port Oil Terminal (SPOT) located near Surfside Beach, Texas; the Texas Gulflink Terminal near Jones Creek, Texas; the Rio Grande LNG Terminal near Brownsville, Texas; and the Plaquemines LNG Terminal near Ironton, Louisiana.

John Beard, a member of the Port Arthur Community Action Network, said in a statement that “gas from the Permian fuels the industrial beast of pollution in the Gulf coast, especially in Port Arthur, Texas, my home.”

“This ‘boom’ has contributed to environmental degradation, significant loss of quality of life, nonattainment air quality, water-borne pollution, and diminished health for my fenceline community,” Beard continued. “Fracked Permian gas contributes to our significantly higher risk of cancer, heart, lung, and kidney disease.”

Noting that unmitigated greenhouse gas pollution will increase the frequency and intensity of hurricanes and catastrophic flooding, Beard said that “Port Arthur, and the entire Gulf Coast, has become a sacrifice zone, so America can feed its thirst for toxic fossil fuels.”

“We can no longer afford to be the unwitting victim of this exploitation from the use of fracked Permian gas,” he added. “It needs to end, NOW! And utilize clean, green renewable sources of energy in its stead. We say, ‘Keep it in the Ground.'”

The International Energy Agency recently reiterated its message that there is no need for investment in new fossil fuel production, adding that the extraction and burning of dirty energy must decline this decade while the worldwide generation of clean energy must accelerate immediately.

Just before the start of COP26, meanwhile, the United Nations Environment Program lamented the fact that global fossil fuel use is projected to increase this decade even as annual reductions in coal, oil, and gas production are necessary to avert the worst consequences of the climate crisis.

According to an analysis released during the summit by Climate Action Tracker, the planet is currently on pace for 2.4°C of heating this century, unless countries—starting with the rich polluters most responsible for exacerbating extreme weather—rapidly and drastically slash greenhouse gas emissions, ramp up the transition to renewable energy, and enact transformative political-economic changes. 

As Common Dreams reported last month, there are nearly two dozen fossil fuel projects—among them the Line 3, Dakota Access, and Mountain Valley pipelines and several LNG export terminals—that President Joe Biden has the executive authority to block. In addition, his administration can halt the sale of new fossil fuel leases for public lands and offshore drilling.

There’s also room for Congress to act. The authors of the new report point to a study published in early 2020, which showed that “reinstating the oil export ban could lead to reductions in global carbon emissions by as much as 73 to 165 million metric tons of CO2-equivalent each year—comparable to closing 19 to 42 coal plants.”

 

Read more:

https://www.desmog.com/2021/12/02/congress-crude-oil-export-ban-climate-change/

 

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clinton's derivatives...

In April 1998, a decade before a historic crisis wreaked havoc on global financial markets, an obscure regulator saw a potential gap in the government’s oversight of Wall Street and tried to do something about it.

Now, newly released records show just how ardently some of the Clinton administration’s most prominent figures shot her down. The documents add to the story of how President Bill Clinton’s team took a stance, on derivatives and other issues, that shielded Wall Street from more aggressive oversight in the years leading up to the 2008 financial crisis.

At the time, Brooksley Born was head of the Commodity Futures Trading Commission (CFTC), a small agency responsible for overseeing lesser-known corners of the markets. At the April meeting, she asked other regulatory leaders if the government was doing enough to monitor trading in over-the-counter (OTC) derivatives—a type of financial tool, often used to hedge risk and place speculative bets, that would later feature prominently in the 2008 crisis.

Born’s question was not well received.

Treasury Secretary Robert Rubin, who had spent most of his career at Goldman Sachs and joined Citigroup shortly after his stint in government, said the “financial community” was “petrified” by the notion that OTC derivatives previously exempt from CFTC regulation would now fall under the agency’s purview, according to newly released notes from the April meeting.

The possibility of CFTC oversight would create “uncertainty over trillions of dollars of transactions,” Rubin warned, adding that if Born tried to solicit the public’s input on potential derivatives regulation, “Treasury will put out [a] statement that CFTC has no jurisdiction,” according to the notes.

Photo of handwritten notes 1

The Project On Government Oversight found the handwritten notes, taken during a meeting of President Bill Clinton’s Financial Markets Working Group, in a trove of documents posted online this month by the Clinton Presidential Library. The notes were contained in files of the Clinton White House’s Council of Economic Advisers, according to the library’s release, but it’s unclear who took the notes or if the notes reflect the exact words spoken by the meeting participants.

Born thought that “Rubin [was] asking CFTC not to uphold the law,” the meeting notes say. Rubin claimed he didn’t “disagree w/ substance of CFTC’s actions” but thought there was a “better way to proceed,” the notes say.

Photo of handwritten notes 2

His views were echoed by Larry Summers, then a deputy Treasury secretary, who likewise wondered if there was a “better way to proceed” given that regulators and the financial industry viewed the CFTC’s posture “as being disastrous for markets.”

Arthur Levitt, then the head of the Securities and Exchange Commission, said it would be “problematic” for the CFTC to publicly discuss changes to the regulation of OTC derivatives without the support of other agencies.

And Alan Greenspan, then the Chairman of the Federal Reserve, warned that increased regulation could “suppress OTC derivatives business.” Once regulators began tinkering with the rules, he said, they wouldn’t be able to “put [the] cork back in [the] bottle,” the notes say.

Greenspan was also concerned that derivatives trading would move overseas. “Worry, then, that OTC derivatives market could flee to London (or Europe) if this isn’t handled well,” the notes say. “That would be a failure on CFTC’s part.”

The notes also attribute this assessment to Greenspan: “There are contradictions in the CEA [Commodity Exchange Act] – but that shouldn’t induce us to do things that will undercut the system that we are beholden to serve…”

Born’s clash with other Clinton officials has been widely covered, including in reports by FrontlineThe Washington Post, and The New York Times. The newly released documents add to the historical record, offering a fly-on-the-wall account of a pivotal meeting on derivatives and taking the public inside Clinton administration discussions from that period.

Shortly after the April 1998 meeting, the derivatives dispute boiled over.

On May 7, 1998, the CFTC issued a concept release—a sort of regulatory trial balloon—raising a series of broad questions about the regulation of OTC derivatives. That same day, Rubin, Greenspan, and Levitt issued a joint statement saying they had “grave concerns” about the concept release “and its possible consequences.” They questioned the “CFTC’s jurisdiction in this area” and said they were worried about “reports that the CFTC’s action may increase the legal uncertainty.”

Behind the scenes, Clinton officials lobbied to keep the CFTC on the sidelines of derivatives oversight, according to other records newly released by the Clinton Library.

In a June 1998 email, a program analyst in the White House’s Office of Management Budget wrote that “Treasury, the FED, and the SEC all object to the CFTC’s concept release, and have drafted legislation that would prohibit the CFTC from any rulemaking until after FY 2000, while the President’s Working Group on Financial Markets studies the issue.” He added that “Treasury Secretary Rubin has talked with Gene Sperling”—director of the National Economic Council under Presidents Clinton and Obama—“concerning the legislative proposal.”

In an email commenting on testimony Treasury had prepared about the CFTC, Sarah Rosen, then a senior advisor on Clinton’s National Economic Council, identified weak spots in Treasury’s argument.

“Without better justification, sounds like Treasury wants to protect the traders from regulation,” she wrote.

In addition, she expressed concern about ongoing risks in the derivatives markets. “God forbid a major pension plan looses [sic] its shirt in OTC derivatives while we are performing this study and workers are at risk of loosing [sic] retirement benefits,” she wrote. “Wouldn’t we be better off if we had at least acknowledged the concerns now.”

 

Read more:

https://www.pogo.org/investigation/2014/04/how-clinton-team-thwarted-effort-to-regulate-derivatives/

 

 

See also:

pricing collateralised debt credibility...

 

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the heat is coming??...

 

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Australia could become the hottest place on Earth in the next week, with temperatures predicted to soar to 50 degrees in some parts of the country.

A mix of an “exceptionally hot air mass” and a lack of cloud cover over north-western Australia will bring “severe to extreme” heat in coming days, forecaster Weatherzone reports.

Models suggest temperatures will break the nation’s highest official record by Sunday. It came in December 2019 along the Nullarbor in South Australia, reaching 49.9 degrees.

 

“Towards the end of the week, this heat will drift towards the north-west and become more focussed over the Pilbara, Kimberley and North Interior districts of WA,” Weatherzone said.

“The hot air mass will cause severe to extreme heatwave conditions across a large area of central and northern Australia this week.”

A broad, stagnant area of low pressure will allow hot air to build over central Australia during coming days, peaking as it drifts north-west.

Tweet from @BOM_NT

Pilbara, Kimberley and north interior districts of Western Australia will be hit hardest.

Images predicting surface air temperatures for Saturday and Sunday forecast heat over 45 degrees in the regions.

“Both days of the weekend have the potential to see temperatures of around 50 degrees somewhere in the north of WA,” Weatherzone said.

Alice Springs is forecast to reach 39-41 degrees every day from Wednesday to Saturday – four-six degrees above its average for this time of year.

The forecaster said that while there was a chance of a 50-degree peak in the north of WA this weekend, it’s unlikely that it will be at one of the state’s official weather stations.

 

Meanwhile, Australia’s south-east will see less gruelling, but still hazardous, temperatures come the weekend.

According to the Bureau of Meteorology, South Australia is forecast for a “very hot” Friday with heat to exceed 37 degrees. Temperatures will rise in coming days.

Melburnians will experience a similar rise in temperature before their hottest day on Saturday with a top of 33 degrees.

NSW is forecast to have a potential high of 30 degrees on Saturday.

 

Read more: https://thenewdaily.com.au/weather/2021/12/15/australian-weather-heat-record/

 

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