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Category Archives: Keystone

News round-up.

Here are some brief notes on a few news items of the past week or two, most of which were overlooked by the mainstream press.  I’ll really try to keep it all brief (though I am not very good at that and am more known for my enthusiastic verbosity), so if you are one of those people who is wrecking the attention span and memory functions of your brain by overusing “twitter” and such shit, you can skim quickly and not have to digest too much at a time.  I won’t use hashtags, though.  One has to draw the line somewhere.

As of November this year, 164 detainees remain at the Guantanamo Bay prison camp without charge or trial; many of them have been held for more than 11 years. Since 2010, 86 detainees have been approved for release by the Administration’s Guantanamo Review Task Force, yet only 2 have been transfered in the past year.

The U.S. will no longer report to the public any hunger strikes taking place among the prisoners at Guantanamo Bay.  Disclosure of hunger strikes at the prison are “not in the interest” of the military.  This would be called censoring the news were it to occur in the old USSR or modern North Korea.  Here, we don’t call it anything – we just do it.

MIAMI — The U.S. military will no longer disclose to the media and public whether prisoners at Guantanamo Bay are on a hunger strike, a spokesman said Wednesday, eliminating what had long been an unofficial barometer of conditions at the secretive military outpost in Cuba.

Hunger strikes have been employed by men held at Guantanamo since shortly after the prison opened in January 2002, and the United States has long disclosed how many are refusing to eat and whether they meet military guidelines to be force-fed.

Officials have determined that it is no longer in their interest to publicly disclose the information, said Navy Cmdr. John Filostrat, a spokesman for the military’s Joint Task Force Guantanamo.

“JTF-Guantanamo allows detainees to peacefully protest, but will not further their protests by reporting the numbers to the public,” Filostrat said in an e-mail. “The release of this information serves no operational purpose and detracts from the more important issues, which are the welfare of detainees and the safety and security of our troops.” […]

Human rights groups, lawyers and the media had long used the number of hunger strikers as a measure of discontent at the prison. A mass protest over conditions this year peaked in July at 106 detainees.

The Miami Herald reported that as of Monday, when the statistics were apparently released for the last time, 15 men were on hunger strike, up from 11 in mid-November.

http://www.washingtonpost.com/world/national-security/guantanamo-detainees-hunger-strikes-will-no-longer-be-disclosed-by-us-military/2013/12/04/f6b1aa96-5d24-11e3-bc56-c6ca94801fac_story.html

The FDA issued rules pertaining to the removal of antibiotics from animal feed; the overuse of antibiotics in feed has increased drug-resistant strains of infectious diseases amongst both animals and humans in what is being called an epidemic by the medical community.  Naturally, being the present-day FDA, run by former Monsanto employees, the new rules are voluntary, non-binding, and allow a three-year timeframe for phasing out the the use of antibiotics on healthy animals.

In response to concerns about the rise in drug-resistant superbugs worldwide, US regulators Wednesday issued voluntary guidelines to help cut back on antibiotics routinely fed to farm animals.

The plan described by the Food and Drug Administration is not mandatory, and applies only to certain pharmaceuticals that are given to healthy livestock in a bid to grow bigger animals and boost food production. […]

The FDA guidelines set out a three-year timeframe for phasing out the use of antibiotics that are important in human medicine for growth uses in farm animals. […]

The World Health Organization says inappropriate use of antimicrobial medicines in farm animals is one the factors underlying the spread of drug-resistant infections in people, including tuberculosis, malaria and gonorrhea. […]

Consumer advocates say 80 percent of antibiotics sold in the United States are destined for use in livestock, so leaving the responsibility in the hands of business is a mistake.

Louise Slaughter, the only microbiologist in Congress, described the FDA’s voluntary guidance as “an inadequate response to the overuse of antibiotics on the farm with no mechanism for enforcement and no metric for success.”

This guidance “falls woefully short of what is needed to address a public health crisis,” she added in a statement.

The Center for Science in the Public Interest said there are “several loopholes” in the FDA plan that could undermine its aim.

“Unfortunately it requires the drug companies who profit from sales of their drugs to initiate the process,” said CSPI food safety director Caroline Smith DeWaal. […]

http://www.rawstory.com/rs/2013/12/11/fda-issues-non-binding-rules-for-removing-antibiotics-from-farms/

We have killed 18 people via drone-bombing in Yemen in just the past week.  In one instance, there were 15 members of a wedding party murdered (what the hell else can you call it?) and a few days before that, three people traveling in a car were assassinated by a drone missile.

(Reuters) – Fifteen people on their way to a wedding in Yemen were killed in an air strike after their party was mistaken for an al Qaeda convoy, local security officials said on Thursday.

The officials did not identify the plane in the strike in central al-Bayda province, but tribal and local media sources said that it was a drone.

“An air strike missed its target and hit a wedding car convoy, ten people were killed immediately and another five who were injured died after being admitted to the hospital,” one security official said.

Five more people were injured, the officials said. […]

On Monday, missiles fired from a U.S. drone killed at least three people travelling in a car in eastern Yemen.

http://www.reuters.com/article/2013/12/12/us-yemen-strike-idUSBRE9BB10O20131212?irpc=932

We adopted the Volker so-called “rule” this week.  However, like Elizabeth Warren’s 21st Century Glass-Steagall Act and John Delaney’s infrastructure bill (see my recent articles on these subjects), the Volker rule has been watered down enough to make it essentially meaningless.  The banks have until 2015 to comply with the “rules”.  The “rules” will be overseen and enforced by the regulatory agencies now peopled largely by former Goldman, Sachs employees.  That there is what we call reform in these United States.

The so-called “Volcker rule,” adopted Tuesday by the main US bank regulatory agencies, is being hailed by the Obama administration as a major reform that will rein in Wall Street speculation and hold bankers accountable. In fact, it is a toothless measure that will do nothing to stop the speculative and fraudulent activities that triggered the financial meltdown of 2008 and have continued unabated since then.

The rule, named after former Federal Reserve chairman and Obama economic adviser Paul Volcker, is among the most contested parts of the Dodd-Frank financial regulatory overhaul that was signed into law by President Obama in July of 2010. The rule ostensibly bars commercial banks, which benefit from federally guaranteed retail deposits and other government backstops, from speculating with bank funds, including customers’ deposits, on their own account—a practice known as proprietary trading. […]

The document approved Tuesday by the Federal Reserve Board, the Securities and Exchange Commission (SEC), the Office of the Comptroller of the Currency (OCC), the Commodity Futures Trading Commission (CFTC) and the Federal Deposit Insurance Corporation (FDIC), spanning 953 pages, nominally restricts proprietary trading. But it incorporates loopholes and exemptions that will enable the banks to continue to make risky bets on stocks, bonds and other securities for their own profit.

The rule delays the date for compliance by the banks to July 2015, three years after the date laid down in the Dodd-Frank law. This is designed to give the banks and their lawyers ample time to devise ways to evade the rule’s provisions and, if they so decide, mount lawsuits to block all or part of the measure. […]

The measure requires bank CEOs to affirm annually that they have established programs to ensure that their firms are complying with the rule’s provisions. However, in another concession to Wall Street, its does not require that the executives attest that their companies are actually in compliance with the rule. […]

The Wall Street Journal in an editorial Wednesday was more blunt. The newspaper wrote: “Rest assured banks will find loopholes. And rest assured some of the Volcker rule-writers will find private job opportunities to help with that loophole search once they decide to lay down the burdens of government service.” […]

As the Wall Street Journal noted on Thursday, “Consultants wasted no time in starting to work with their banking clients on how to put in place the new rules… Law firm Shearman & Sterling LLP last year hired Donald Lamson, who had been a banking regulator at the OCC [Office of the Comptroller of the Currency] to help focus on Volcker-rule matters… ‘We’re already getting inquiries from our clients,’ said Robert Cook, a partner at Cleary Gottlieb Steen & Hamilton LLP, who until earlier this year was helping write the new financial rules as a lawyer at the SEC.”

http://www.wsws.org/en/articles/2013/12/13/volc-d13.html

The annual Mayors’ Report has been issued and it is not pretty – in fact, the statistics on poverty and homelessness in our cities are horrible.  This will not stop Congress from stripping federal aid from the poverty-stricken, the working poor, the jobless and the homeless as quickly as possible.  And until the majority of non-military Americans is completely decimated and living on the edges of starvation, I’m pretty sure most of the country has no problem with that – I cannot recall a period in my entire lifetime where so much of the population has had so much animosity and outright hatred toward the less fortunate.  The operative theory here is that giving money to the rich makes them work harder and entices them to “provide jobs”, while giving any amount of aid to the poor makes them stop working altogether.

And the military, via Pentagon funding, will continue to receive the bulk of federal funds so that we can continue in perpetuity the “war on terror”.  (Can I hear a “USA – fuck yeah!”?  I thought so.)

A new report on hunger and homelessness paints a devastating picture of the conditions facing millions of workers and poor people in America. The new US Conference of Mayors’ Task Force annual survey highlights the extent and causes of hunger and homelessness in 25 cities for the year between September 1, 2012 and August 31, 2013.

The report finds that 83 percent of the cities surveyed reported an increase in requests for emergency food assistance over the past year, and 52 percent saw an increase in the total number of people experiencing homelessness. Despite this growing need, mayors in the surveyed cities expect assistance for the hungry and homeless to decrease in the coming year.

This social catastrophe is unfolding as the federal government prepares deeper cuts to the food stamp program, now known as SNAP (Supplemental Nutrition Assistance Program), and Congress allows federal extended jobless benefits for 1.3 million long-term unemployed to expire after Christmas. […]

All but four of the surveyed cities reported a rise in emergency food assistance requests, and across all cities this need increased by an average of 7 percent. Among those seeking assistance, 58 percent were persons in families, 21 percent were elderly, and 9 percent were homeless. The working poor made up 43 percent of those requesting food assistance.  

The surveyed cities listed unemployment as the leading driver of hunger, followed by low wages, poverty and high housing costs. With unemployment insurance claims jumping to 368,000 in the week that ended December 7, from 300,000 the week before, and the Obama administration and Congress prepared to cut jobless benefits, the need for food assistance is certain to rise even further.

While cities reported a 7 percent average increase in the amount of food distributed during the past year, budgets for emergency food purchases increased by less than 1 percent. As a result, more than one-fifth of those needing emergency food assistance—21 percent—did not receive it. 

In all of the 25 cities surveyed, food pantries were forced to reduce the quantity of food people could receive at each visit, and emergency kitchens had to cut back on the amount of food offered per meal. In two-thirds of the cities, people were turned away due to a lack of resources. […] 

Based on a single-night count in 3,000 US cities and counties, the Department of Housing and Urban Development (HUD) estimates that more than 610,000 people were homeless across the US on any given night last year. Of these, 65 percent were living in emergency shelters or transitional housing, while 35 percent were living in unsheltered locations such as under bridges, in cars, or in abandoned buildings. Individuals comprise 64 percent of those experiencing homelessness, while families make up 36 percent.

The number of homeless families increased in 64 percent of the cities included in the mayors’ report. Sixty-eight percent of cities cited poverty as the main cause of homelessness among families, followed by lack of affordable housing (60 percent), unemployment (54 percent), eviction (32 percent), family disputes (28 percent), and domestic violence and low-paying jobs (12 percent each). […]

The surveyed cities were also asked to provide information on the characteristics of their adult homeless populations. The cities reported that, on average, 30 percent of homeless adults were severely mentally ill, 19 percent were employed, 17 percent were physically disabled, 16 percent were victims of domestic violence, 13 percent were veterans, and 3 percent were HIV Positive.

Seventeen of the 25 cities surveyed reported that emergency shelters had to turn away families with children experiencing homelessness because there were no beds available, while two-thirds of the cities were forced to turn away homeless unaccompanied individuals. The unmet need for emergency shelter ranged from 25 percent to 50 percent in eight cities. […]

http://www.wsws.org/en/articles/2013/12/13/conf-d13.html

The savvy Obama administration has made its usual move of killing the hostages itself before Congress has a chance to.  Immediately after working out a (bogus) interim agreement with Iran, Obama expanded the list of Iranian people and companies included in current sanctions.

In what some charge is a bid to ‘stave off congressional action,’ White House expands list of Iran-linked people and companies subject to financial blockade.

Iranian officials on Friday slammed a U.S. expansion of a sanctions blacklist of companies and people claimed to be linked to Iran’s alleged nuclear program, with Iranian Deputy Foreign Minister Abbas Araqchi declaring it “against the spirit of the Geneva deal.”

“We are evaluating the situation and Iran will react accordingly to the new sanctions imposed on 19 companies and individuals,” Araghchi, Iran’s deputy foreign minister, told the Iranian Fars news agency on Friday.

The late November interim agreement between Iran and the P5+1 nations required Iran to freeze its nuclear program, despite no evidence of nuclear weapons development, in exchange for a slight—and critics charge grossly insufficient—easing of sanctions in a bid to buy time for more talks.

The deal unleashed a wave of hope in Iran that an easing of US-led sanctions would alleviate severe economic hardship and shortages of medical supplies and equipment that hit Iran’s poor and working classes the hardest.

Yet, immediately following the agreement, the U.S. vowed to escalate enforcement of the sanctions that remained, the Christian Science Monitor reports.

Meanwhile, members of Congress are calling for more severe sanctions on Iran—a move that critics charge could jeopardize the deal and increase the risk of a regional war with dangerous and unknown consequences. The congressional move appears to be in step with vigorous efforts by both Israel and Saudi Arabia to prevent a deal with Iran.

Robert Naiman, policy director for Just Foreign Policy, told Common Dreams that the U.S. expansion of the black list is likely a bid on the part of the Obama administration to “stave off congressional action.”

http://www.commondreams.org/headline/2013/12/13-3

The southern leg of the Keystone pipeline, which despite not yet being officially approved, is beginning to ship oil through.  One might wonder how that is possible, given that it does not have approval yet, but such wonderment is simply the vague musings of a baffled mind.  In this nation of laws, the management is free to overlook said laws.  That’s how it works now. Still confused?  You must hate democracy.

TransCanada has begun pumping oil into the southern leg of the Keystone XL pipeline, a company spokesman announced on Tuesday. However, it remains to be seen whether President Obama will actually approve the project.

The corporation began moving oil into the stretch of pipeline that runs from Oklahoma to the Texas Gulf Coast early on Saturday. […]

The completed section of the pipeline will soon be filled with three million gallons of oil, the company said. […]

http://rt.com/usa/oil-pumped-southern-keystone-pipeline-031/

On the tentative budget agreement: it’s atrocious and keeps in place most of the sequester (except for the Pentagon part, which gets a raise).  Not surprising, though.  Once those fuckers in Congress got their cuts to the poor and the public good via the sequester, you knew they wouldn’t open their tightly clenched fists.  Yet as George W. Bush once said, “It’s clearly a budget.  It’s got a lot of numbers in it.”

US House and Senate negotiators reached agreement Tuesday on a budget that will leave in place over a trillion dollars in sequester spending cuts over 10 years, while slashing the retirement benefits of federal workers and military retirees and imposing regressive consumption taxes. 

The brutal character of the bipartisan agreement is underscored by the fact that it makes no provision for the extension of federal extended jobless benefits, threatening over a million unemployed people with the loss of their only cash income the week after Christmas. […]

By the White House’s own figures, failure to extend the unemployment benefits will end cash assistance for 1.3 million people immediately after the holidays and impact an additional 3.6 million people in the first half of 2014. […]

Obama added that “this agreement replaces a portion of the across-the-board spending cuts known as ‘the sequester’ that have harmed students, seniors, and middle class families.”

In fact, the proposed two-year budget restores only a small fraction of the more than $1 trillion in cuts scheduled over the next ten years, and the reduced level of cuts is more than offset by regressive consumption taxes in the form of “user fees,” increased pension costs for federal civilian workers, cuts in retirement benefits for military employees and further reductions in Medicare spending. 

Above all, the deal leaves intact the mechanism of automatic across-the-board cuts in domestic discretionary spending known as sequestration, which took effect last March and has already resulted in $85 billion in cuts, in part through unpaid furloughs affecting hundreds of thousands of federal workers. […] 

Under the proposed budget agreed to on Tuesday, $63 billion in government spending is scheduled to be cut back in 2014 and 2015, or about one third of the total in sequester cuts slated for those years, will be restored. The biggest chunk of restored funds will go to the Pentagon. 

This modest rollback in sequester cuts will be more than offset by an additional $85 billion in deficit reduction over the next ten years. One of the largest cuts, amounting to $12 billion over a decade, will be to retirement benefits for federal civilian workers and military employees.

Beginning January 1st, new federal civilian employees will increase their contributions to their pensions by 1.3 percent, slashing spending by $6 billion. This will come on top of a three-year pay freeze for federal workers and the loss of as much as 15 percent of their income as a result of sequester-related unpaid furloughs.

Military retirees between the ages of 40 and 62 will see their cost-of-living adjustments slashed, adding another $6 billion in deficit reduction.

The budget proposal also adds another $22 billion to the existing sequester cuts by extending cuts to Medicare providers through 2022 and 2023.

The budget will raise $12.6 billion by increasing security fees for airline passengers and another $8 billion by charging higher fees for insuring private-sector pensions. […]

http://www.wsws.org/en/articles/2013/12/11/budg-d11.html

 

Further reading:

EU announces token fines on banks caught rigging global rates.  “Token” is accurate, and it is stunning, to say the least, that these cartoonish fines (no criminal prosecutions for this group of economic hitmen) aren’t being broadcast with screaming headlines everywhere.

http://www.wsws.org/en/articles/2013/12/07/libo-d07.html

 

An article at vice.com describes how many major liberal news outlets (Mother Jones, Democracy Now) exploits unpaid interns while railing on about how horrible economic inequality is. Here is one nice quote:

“Meanwhile, Democracy Now!, venerable progressive broadcast hosted by journalist Amy Goodman, requires interns at its new, LEED Platinum–certified office in Manhattan to work for free for two months, for a minimum of 20 hours a week, after which ‘a $15 expense allowance is provided on days you work five or more hours.’ ”

http://www.vice.com/read/the-exploited-laborers-of-the-liberal-media

 

Very good essay on the latest re: Fukushima:

http://www.washingtonsblog.com/2013/12/fukushima-radiation-hits-west-coast.html

 

On Obamacare (h/t Kitt):

http://jacobinmag.com/2013/12/socialism-converting-hysterical-misery-into-ordinary-unhappiness/

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Gas prices do the darnedest things.

Look at those gas prices go!  Depending on where you get your news, gas prices are leaping, inching, crawling, surging, climbing, or soaring.  It’s as though gas prices are some new autonomous genera of animal acting of their own volition.  Genus Oleum pretium (gas prices); sub-species: normalis (regular), medius (mid-grade), superfluo (super), and diesel (maxius taxius? Sorry, no Latin for diesel).  Gas prices seem to have raised themselves 50 cents per gallon since the first of Jan.   No-one else is taking the blame, so they must have done it alone.  Nasty creatures, oleum pretium.

Gas prices at the pumps are obviously related to oil prices.  On the Brent market, oil, which was $80/barrel just 4 months ago, is now hitting over $120/barrel.  The Brent is important because that is the market which sets prices for gasoline in the US and most of the Eurozone.  It is rather funny how, just when the price per barrel was heading downwards because of weakening demand, a reason to inflate prices suddenly appeared.  It’s almost mysterious.

Perhaps the oil companies were losing money and had to increase prices.  (Snort.)  The five largest oil companies made 137 billion in profit last year (that’s profit after expenses); in the past decade, they have made 1 trillion in profits.  There is no doubt that in April, when the first quarter’s reports come out, we will hear that Exxon made record profits – again.  Every quarter is a record quarter for Exxon.

Maybe it is high demand causing the rise in prices.  I have seen that postulated in a variety of places.  Yet demand is actually down, both in the US and globally.  China’s demand was blamed for the ’08 increase, but now their economy is beginning to get a little shaky and their oil demand growth is slowing.  Can’t blame it all on China this time.

Is it a supply problem?  No.  US supply levels remain fairly constant.  As a matter of fact, we have enough of a supply that we are now a net exporter.  We produce roughly 8 million barrels of oil a day as it is, and Obama opens new areas for exploration and drilling every day.  No tree-hugger, that guy.  It should be patently obvious that if we are a net exporter, there is no need to allow speculative drilling companies to tear up our country, use up our fresh water, and destroy our oceans.  At some point, we need to realize that having clean water, arable clean land, and edible fish is a bit more important than destroying everything based on somebody’s guess about where oil is.

Right now, it is estimated that we might have enough oil in the ground to continue producing for about ten years if we keep on at the same rate.  The only result of digging it up and using it up faster – which demand levels indicate is unnecessary – will be to run out that much sooner.  And as I pointed out in my post of 15 Jan, “Bakkan, Keystone XL, and Fracking”, the amount of oil and natural gas thought to be under US ground is based on pure speculative guesses from the oil companies looking for new drilling leases.  Take the time to read the linked article in the following if you haven’t done so already:

In a sadly overlooked article in the NYT (June, ’11) by Ian Urbina, industry insiders admit they have no idea how much oil and gas are in the shale formations and doubt that extracting the fuels will end up being cost efficient.  If you take the time to read the entire article (please do – it is amazing what the industry insiders acknowledge to each other), you will view fracking in a whole new light.  You might even want to look into green energy, mass transit, and other such assorted non-fossil-fuel alternatives. – Teri

Quoted article:  Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States.

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company,  wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company,  wrote in an e-mail on Aug. 28, 2009.

Company data for more than 10,000 wells in three major shale gas formations raise further questions about the industry’s prospects….

http://www.nytimes.com/2011/06/26/us/26gas.html?emc=eta1

As I thought we would, we are again hearing about how we must fast-track the Keystone XL pipeline.  The southern leg of this boondoggle is a go (which Obama “welcomes”).  Ah, the Keystone.  Such a deal.  Dirty tar sands oil from Canada, dug up by a Canadian company, running through a pipeline built by Canadian employees, going to refineries in Texas where the diesel will be sold on the open market.

Al­ready, U.S. re­finer­ies are ex­port­ing records amounts of the gaso­line they make. For the first time in 62 years, Amer­ica is now a net pe­tro­leum ex­porter. Valero En­ergy Corp., the largest U.S. ex­porter of re­fined pe­tro­leum prod­ucts, is a major lob­by­ist for Key­stone XL. Along with Mo­tiva (an oil re­finer jointly owned by Shell and Saudi Aramco) and Total (a French re­fin­ery), Valero has signed se­cret, long-term con­tracts with Key­stone’s owner (Tran­sCanada Corp.) and sev­eral tar sands oil pro­duc­ers to bring this crude to Port Arthur, Texas. All three have up­graded their re­finer­ies there to process diesel for ex­port.

Adding to Big Oil’s en­joy­ment is the fact that the Port Arthur re­finer­ies of Valero, Mo­tiva and Total are within a For­eign Trade Zone, giv­ing them spe­cial tax breaks for ship­ping gaso­line and diesel out of our coun­try. And adding to the dis­may of some U.S. con­sumers, Tran­sCanada has qui­etly boasted that Key­stone XL would cut gaso­line sup­plies in our Mid­west­ern states, thus rais­ing prices at the pump and si­phon­ing more bil­lions of dol­lars a year from con­sumers’ pock­ets into the vaults of multi­na­tional oil in­ter­ests.

http://www.nationofchange.org/keystone-xl-flim-flam-1330611946

In a pinch, Saudi Arabia will always rescue us, right?  They’ll shore up our supplies; they are our friends.  Except that Saudi Arabia’s reserves are falling 3% a year and they really want oil prices to keep going up.

So why are the gas prices leaping about?  Three reasons: speculators, the tension with Iran (which is part of what is driving the speculation), and because the oil companies want more money.  One minor thing was that the oil companies just lost their ethanol subsidy, and this immediately raised prices at the pumps on 1 Jan.  Hey, why should they endure any loss of profit at all?  Even if it does mean that the consumer will get hit with higher food and energy prices as well, which are affected by gasoline and diesel costs.  (Even without the subsidy, these guys make out okay on the ethanol switcharoo – adding ethanol reduces your gas mileage by about three miles per gallon so that you have to go fill up more often than you would if the gas were ethanol-free.  Great stuff.)  Truth is, they simply want money.  A lot of it.  They will raise prices whenever they want.  As one of my Southern cousins would say to emphasize a point or mark agreement, “Tell you what!”

Speculation in the markets is the same sort of crap that got us in trouble with the housing market, but this time they are wreaking havoc with the commodities markets.  It’s the same players though – Goldman, Sachs et al.  They managed to get a few loopholes quietly opened for speculation in the commodities markets – loopholes that exist for only a few very specific companies – and were allowed to create a new form of investment called index speculation.  They are screwing with the markets in brand new complicated ways and have completely thrown out the traditional role that speculators used to play, which was to provide a place for the producers and buyers of actual physical products to buy or sell their goods.

Equally important is the role of Wall Street financial speculators. According to the Commodity Futures Trading Commission, which regulates energy trading, the proportion of oil trades made by pure speculators—those who never take actual possession of the oil, but are simply betting on the price—has shifted in the last five years from 30 percent to nearly 70 percent of the total.

CFTC Commissioner Bart Chilton told ABC News that the “speculative premium” on oil was about $23 a barrel, or 56 cents for a gallon of gas. This vast sum goes straight into the pockets of the same Wall Street firms that crashed the world economy in 2008 through speculation in real estate mortgages and were bailed out by the Bush and Obama administrations.

http://wsws.org/articles/2012/mar2012/gaso-m03.shtml

 

“Speculation is now part of the DNA of oil prices. You cannot separate the two anymore. There is no demarcation,” Oppenheimer & Co analyst Fadel Gheit tells McClatchy News. “I still remain convinced oil prices are inflated.”

Carl Larry of Oil Outlooks and Opinions adds in a recent report that if Iran stops exporting altogether, crude market prices are estimated to hit around $130 a barrel in the immediate aftermath. Although the response would be the result of fear-induced speculation, the consequences could be catastrophic as the western world continues to teeter towards default.

“It is important to emphasize that a spike in oil prices would most likely inflict damage on the economic recovery,” Goldman Sachs say in their own just-published report. They expect crude to rise to $123.50 a barrel within 2012. [My note: As is usual with Goldman, Sachs “prophecies”, which somehow are unerringly accurate when it comes to predicting which funds are going to pay off, we see that they called this correctly. Brent crude is 123/barrel today.  How do they do that?]

http://rt.com/usa/news/prices-oil-us-iran-987/

 

Speculators are working off the rising tensions with Iran.  Tension, it must be noted, that we and Israel craftily created ourselves.  Iran hasn’t actually done anything that was not a response to something we did first.  We – or at least our media outlets, and at some point you better start trying to figure out who they really work for – claim that they are trying to create a nuclear bomb, yet this is not what the IAEA has found and not what our own generals think.  Iran is enriching uranium to 3.5%; a nuclear bomb needs 95%.  We began sanctions on Iran to get them to stop doing something they are not doing.  We then got the Eurozone to sanction Iranian oil (although those sanctions don’t begin in earnest until 1 July); just the threat of all these sanctions and embargoes has ramped up speculation in the markets.  My goodness, it was just in January that a US Treasury official (named “Anonymous”, the most frequently heard family name in American politics) claimed that the sanctions would not disrupt the global markets in any way.  Iran then said it will cut off oil deliveries to Europe peremptorily themselves, which seems a fairly reasonable response to the economic war we have already begun against them.  Most countries around the globe don’t care if Iran has a nuclear weapon, by the way, and find that the US and Israel are the greatest threats to world peace today.  Hell, until a year or two ago, most Americans didn’t care if Iran had a nuke.

So here we are, sanctioning and embargoing a country, deliberately trying to drive its people into poverty (still talking about Iran here, though you might sensibly begin to wonder about the true target), which another member of the Anonymous family admitted the other day – and the results are: some European countries may lose a significant source of oil, gas prices in Europe and the US are sky-rocketing, and a whole bunch of other countries (there are other countries out there – you know that, right?) are going off the petrodollar.  The big oil companies and too-big-to-fail banks are making out like bandits, as usual.  The American “recovery” may well be smothered in its infancy, as gas prices are followed inevitably by upticks in food and energy costs.  High oil and gas prices have preceded every recession since the 70’s.  Well, this will sure teach those Iranians a thing or two….oh, wait.  Who is being taught a lesson here?  I mean, think about it.  When you take a look at who is being affected by the Hate On Iran campaign, check out your last grocery bill or your last gas station receipt.  And your new little part-time job is not going to cover the bills as they continue to rise.  Actually, you may not have that job too much longer.  Any company that dared to start hiring recently may quickly find that they need to lay off workers again very soon, as their costs increase.  Just wait until March 20, when the Tehran bourse starts trading in other currencies besides the dollar, if you think gas prices are high now.  And, by the way, has it occurred to anyone that Iran is ironically helped by rising oil prices?  The funds they lose by the sanctions are partially replaced by the fact that the oil they do sell is bringing in higher prices.  And quite a few countries have declined to mess up their own economies or trading relationships by going along with the insane US/Israel “plan”; Iran will continue to sell its oil.

And our leaders are doing this knowingly.  They absolutely understand what is happening to commodity prices.  Why are they doing this?  Just to show support for Israel in its weird obsession with Iran, an obsession they have managed to entangle us in?  Iran has not threatened the US.  The US is daily threatening Iran.  Factually, Iran has not even threatened Israel.  Look, Israel is not part of the US.  If they want to go after Iran for some strange reason, have at it.  Knock your freaking socks off.  There is no sensible reason for us to allow ourselves to be duped into fighting a proxy war for them, a war that would be another trillion-dollar hole in our bucket, a war that would be yet another illegal, baseless war of aggression on a country which has caused us no harm and threatened us in no way.  In fact, the whole thing makes so little sense that one might wonder if there is more to all this than the Israel-first lobby testing exactly how far out on that limb they can shove us.

As our media obediently whips up the hate for, and fear of, Iran, they also prepare us for further gas price shocks.  “$5 a gallon gas by summer?” the headlines ask.  You read the articles and are given no good insights into the why of it all, just some nonsense about “summer prices arriving early”.  Oleum pretium did not see his shadow this year and has crept out early.  But the point of these articles is not to teach you about index speculation or the profits of commodities traders or even to point out that someone is making some kinda serious dough off all the cavorting around that gas prices are doing.  The media is doing its job and doing it well.  They are softening up the mark.  It all becomes a self-fulfilling prophecy, and we are being prepared to accept our fate.  We are the mark.  We ought to make some effort to find out who the grifters are.

 
 

Bakken, Keystone XL, and fracking.

A couple of interrelated topics for today.  First, let’s dispense with the Keystone XL pipeline.  The myths about the Keystone pipeline are truly absurd and would be laughed at in a reasonably intelligent society.  We don’t have that, so let’s look at the claims and explain a few things.

Claim 1: the Keystone pipeline will bring the US to “energy independence”.  Rebuttal: the Keystone pipeline begins in the tarsands of Alberta, Canada.   Canada is noticably not part of the US.  The tarsands projects, and the oil thus produced, belong to the companies that work the fields.  Currently there are 64 companies operating several hundred projects. The majority of production now comes from foreign-owned corporations.  I do not know how Canada handles profit-sharing with its oil companies and I am not going to bother looking it up.  It is irrelevant, since the fact is that a Canadian or British or any other foreign-to-the-US company running Canadian crude through a pipeline – whether or not it crosses US territory – in no way results in free gas to the US.  The oil does not come from under American soil and does not belong to America.  Once the crude gets to Texas, a company such as Exxon might be paid to refine it.  The refined product is then placed on the open market for bidding.  The US may or may not choose to bid on the products.  (According to presentations to investors, Gulf Coast refiners plan to refine the cheap Canadian crude supplied by the pipeline into diesel and other products for export to Europe and Latin America.  – http://tinyurl.com/3trhx2p)  The US does not get “freebies” from Exxon; that is not the way we handle our oil companies.  I.e., we do not have nationalized oil.  We invade countries with nationalized oil profits.  In any case, since this is Canadian oil (remember?) we would not have any right to it even if we did have nationalized oil.   Exxon may or may not form some sort of joint partnership with TransCanada and the other owners to share profits, or Exxon may simply be paid a refining fee for its services.  Regardless, the profits from selling the refined products belong to the oil companies involved, not to the US.

Claim 2: the Keystone pipeline will create jobs for America.  Rebuttal: it may create a few jobs.  Once the line is actually built, one can assume very few people will be needed to check the line or to make repairs along the way.  And poof!  The jobs are gone.  And the number of jobs being discussed is ridiculous anyway.  The pipeline will not create 20,000 American jobs.  The jobs to build the pipeline will mainly go to Canadians who work for the Canadian company that produces this oil.  TransCanada is a Canadian company, remember?  How many jobs does TransCanada think will be generated by building the pipeline?  Let’s ask them.  In 2008, TransCanada’s Presidential Permit application for Keystone XL to the State Department indicated “a peak workforce of approximately 3,500 to 4,200 construction personnel” to build the pipeline.  Since ’08, they have admitted that only a couple of hundred employees will be needed long-term for regular maintainance.  Where did the number 20,000 come from?  Someone made it up.  Here’s how: someone said, well, the construction workers will need to eat and some form of recreation.  Let’s assume that while the pipeline is being built, we will see new coffeehouses, restaurants and strip clubs (this is the truth; they included potential strip club jobs) opening up and doing business.  Let’s add those to the “jobs created” number.  Once the workers aren’t needed any longer, the strippers will lose their jobs, too, but after all, no-one has made the rash claim that these extraneous jobs will last forever.

Regarding the Bakken Formation shale oil field in North Dakota:  this is being touted as a wonderful source of fossil fuel which will lead to (what else?) energy independence for the US.  There is an e-mail going viral on the web which claims that this, for sure, is the answer to our woes.  The Bakken is all shale oil – so expensive to process that if it were our only source of oil (no matter how much oil is actually there, and estimates vary wildly on that), the price of gas would instantly quadruple.  Not to mention the little unpleasant fact that shale oil used more than a gallon of fresh water for each gallon of oil obtained.  Fresh water that is made toxic by the process and cannot be used for drinking or watering crops after being used in the shale extraction process.  Lots and lots of people are able to dispatch the claims made in that e-mail – this is but one:

Yes, there is indeed a lot of oil in the Bakken Formation, just as the email claims — BUT this oil exists in shale form. That means it’s locked in sand, gravel, and rock. The extracting of it is so galactically difficult and costly that the best estimates about how much can actually be extracted and used from the formation have ranged anywhere from 50 percent to 1 percent. The refining of it is also hugely difficult and costly compared to the refining of the light, sweet crude that just comes naturally to the surface during the early period of the developmental of a traditional oil field.

The email is also insanely slanted in its accusation that the only reason we’re not all dancing in the streets at our salvation from the energy crisis is because of those damned evil environmentalists who are threatening civilization by stopping us from tapping this messiah of an oil field. In fact, Bakken is being worked right now, and with a vengeance. Development of it has absolutely exploded over the past few years, and will only intensify…

Peak oil theory isn’t about the idea that “the oil is running out.” It’s about the end of cheap and easy to get oil. The crisis is found in the fact that our entire urban-industrial-technological civilization has been built upon, and can only continue to run upon, a foundation of cheap, plentiful, and ever-increasing oil. What’s going to happen is that this whole arrangement will start contracting and, maybe, imploding in interesting ways because of oil problems — not the problem of running out, which will never happen, but the problem of our cheap and plentiful supply shifting to a situation of ever-increasing cost and scarcity. Nobody in history has ever seen what’s going to happen over the next 20, 50, and 100 years, because the human race only started living on oil roughly a century ago (or actually a bit more recently than that; more like 1920 or 1930), so we’ve only ever known what life was like on the rising side of the oil supply curve, not on the falling side as we get into global depletion.

The fact that the Bakken Formation is being ferociously developed right now is actually evidence in favor of the peak oil scenario and its concerns, because we would never turn seriously toward working such a difficult deposit if the usual and traditional sources weren’t all drying up and/or being called seriously into question by geopolitical difficultieshttp://tinyurl.com/6pq2el6

The Bakken Formation is being “fracked” to get to the shale oil.  (Fracking is hydraulic fracturing.)  So now we get to fracking in general.  The process and some general notes (courtesy wikipedia) are as follows (if you want to skip the long wiki entry, jump to the end of the section between the lines of stars):

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Hydraulic fracturing is the propagation of fractures in a rock layer caused by the presence of a pressurized fluid. Hydraulic fractures may form naturally, as in the case of veins or dikes, or may be man-made in order to release petroleum, natural gas, coal seam gas, or other substances for extraction, where the technique is often called fracking or hydrofracking. This type of fracturing…is done from a wellbore drilled into reservoir rock formations. The energy from the injection of a highly-pressurized fracking fluid creates new channels in the rock which can increase the extraction rates and ultimate recovery of fossil fuels. The fracture width is typically maintained after the injection by introducing a proppant into the injected fluid. Proppant is a material, such as grains of sand, ceramic, or other particulates, that prevent the fractures from closing when the injection is stopped.

The practice of hydraulic fracturing has come under scrutiny internationally due to concerns about the environmental impact, health and safety, and has been suspended or banned in some countries.

The technique of hydraulic fracturing is used to increase or restore the rate at which fluids, such as oil, water, or natural gas can be produced from subterranean natural reservoirs….
A hydraulic fracture is formed by pumping the fracturing fluid into the wellbore at a rate sufficient to increase pressure downhole to exceed that of the fracture gradient of the rock. The rock cracks and the fracture fluid continues farther into the rock, extending the crack still farther, and so on. To keep this fracture open after the injection stops, a solid proppant, commonly a sieved round sand, is added to the fluid. The propped fracture is permeable enough to allow the flow of formation fluids to the well. Formation fluids include gas, oil, salt water, fresh water and fluids introduced to the formation during completion of the well during fracturing…

An estimated 90 percent of the natural gas wells in the United States use hydraulic fracturing to produce gas at economic rates.

The fluid injected into the rock is typically a slurry of water, proppants, and chemical additives…  Sand containing naturally radioactive minerals is sometimes used so that the fracture trace along the wellbore can be measured. Chemical additives are applied to tailor the injected material to the specific geological situation, protect the well, and improve its operation, though the injected fluid is approximately 98-99.5% percent water, varying slightly based on the type of well. The composition of injected fluid is sometimes changed as the fracturing job proceeds. Often, acid is initially used to scour the perforations and clean up the near-wellbore area. Then proppants are used with a gradual increase in their size and/or density. At the end of the job the well is commonly flushed with water (sometimes blended with a friction reducing chemical) under pressure. Injected fluid is to some degree recovered and is managed by several methods, such as underground injection control, treatment and discharge, recycling, or temporary storage in pits or containers while new technology is being developed to better handle wastewater and improve reusability. Although the concentrations of the chemical additives are very low, the recovered fluid may be harmful due in part to hydrocarbons picked up from the formation…

Environmental concerns with hydraulic fracturing include the potential contamination of ground water, risks to air quality, the potential migration of gases and hydraulic fracturing chemicals to the surface, the potential mishandling of waste, and the health effects of these. A 2004 study by the Environmental Protection Agency (EPA) concluded that the injection of hydraulic fracturing fluids into CBM wells posed minimal threat to underground drinking water sources. This study has been criticised for only focusing on the injection of fracking fluids, while ignoring other aspects of the process such as disposal of fluids, and environmental concerns such as water quality, fish kills and acid burns; the study was also concluded before public complaints of contamination started emerging. Largely on the basis of this study, in 2005 hydraulic fracturing was exempted by US Congress from any regulation under the Safe Drinking Water Act…. As development of natural gas wells in the U.S. since the year 2000 has increased, so too have claims by private well owners of water contamination. This has prompted EPA and others to re-visit the topic.

There are…documented incidents of contamination. In 2006 drilling fluids and methane were detected leaking from the ground near a gas well in Clark, Wyoming; 8 million cubic feet of methane were eventually released, and shallow groundwater was found to be contaminated. In the town of Dimock, Pennsylvania, 13 water wells were contaminated with methane (one of them blew up), and the gas company, Cabot Oil & Gas, had to financially compensate residents and construct a pipeline to bring in clean water; the company continued to deny, however, that any “of the issues in Dimock have anything to do with hydraulic fracturing”.

One group of emissions associated with natural gas development and production, are the emissions associated with combustion. These emissions include particulate matter, nitrogen oxides, sulfur oxide, carbon dioxide and carbon monoxide. Another group of emissions that are routinely vented into the atmosphere are those linked with natural gas itself, which is composed of methane, ethane, liquid condensate, and volatile organic compounds (VOCs). The VOCs that are especially impactful on health are benzene, toluene, ethyl benzene, and xylene (referred to as a group, called BTEX). Health effects of exposure to these chemicals include neurological problems, birth defects, and cancer.

A Duke University study…2011 examined methane in groundwater in Pennsylvania and New York states overlying the Marcellus Shale and the Utica Shale. It determined that groundwater tended to contain much higher concentrations of methane near fracking wells, with potential explosion hazard…Complaints from a few residents on water quality in a developed natural gas field prompted an EPA groundwater investigation in Wyoming. The EPA reported detections of methane and other chemicals such as phthalates in private water wells…. In DISH, Texas, elevated levels of disulphides, benzene, xylenes and naphthalene have been detected in the air, alongside numerous local complaints of headaches, diarrhea, nosebleeds, dizziness, muscle spasms and other problems.

Groundwater contamination doesn’t come directly from injecting fracking chemicals deep into Shale rock formations well below water aquifers but from waste water evaporation ponds and poorly constructed pipelines taking the waste water and chemicals to processing facilities. The evaporation ponds allow the volatile chemicals in the waste water to evaporate into the atmosphere and when it rains these ponds tend to overflow and the runoff eventually makes its way into groundwater systems. Another way groundwater gets contaminated relating to fracking is from the temporary, and poorly constructed pipelines to transport the waste water to water treatment plants…

The New York Times has reported radiation in hydraulic fracturing wastewater released into rivers in Pennsylvania. According to a Times report in February 2011, wastewater at 116 of 179 deep gas wells in Pennsylvania “contained high levels of radiation,” but its effect on public drinking water supplies is unknown because water suppliers are required to conduct tests of radiation “only sporadically”… In Pennsylvania, where the drilling boom began in 2008, most drinking-water intake plants downstream from those sewage treatment plants have not tested for radioactivity since before 2006…

Water is by far the largest component of fracking fluids. The initial drilling operation itself may consume from 65,000 gallons to 600,000 gallons of fracking fluids. Over its lifetime an average well will require up to an additional 5 million gallons of water for the initial fracking operation and possible restimulation frac jobs.

Chemical additives used in fracturing fluids typically make up less than 2% by weight of the total fluid. Over the life of a typical well, this may amount to 100,000 gallons of chemical additives…Some of the chemicals pose no known health hazards, some others are known carcinogens, some are toxic, some are neurotoxins. For example: benzene (causes cancer, bone marrow failure), lead (damages the nervous system and causes brain disorders), ethylene glycol (antifreeze, causes death), methanol (highly toxic), boric acid (kidney damage, death), 2-butoxyethanol (causes hemolysis).

The 2011 US House of Representatives investigative report on the chemicals used in hydraulic fracturing shows that of the 750 compounds in hydraulic fracturing products “[m]ore than 650 of these products contained chemicals that are known or possible human carcinogens, regulated under the Safe Drinking Water Act, or listed as hazardous air pollutants”. The report also shows that between 2005 and 2009 279 products (93.6 million gallons-not including water) had at least one component listed as “proprietary” or “trade secret” on their Occupational Safety and Health Administration (OSHA) required Material Safety Data Sheet (MSDS).

The MSDS is a list of chemical components in the products of chemical manufacturers, and according to OSHA, a manufacturer may withhold information designated as “proprietary” from this sheet. When asked to reveal the proprietary components, most companies participating in the investigation were unable to do so, leading the committee to surmise these “companies are injecting fluids containing unknown chemicals about which they may have limited understanding of the potential risks posed to human health and the environment”…Another study in 2011, titled “Natural Gas Operations from a Public Health Perspective”…. identified 632 chemicals used in natural gas operations. Only 353 of these are well-described in the scientific literature; and of these, more than 75% could affect skin, eyes, respiratory and gastrointestinal systems; roughly 40-50% could affect the brain and nervous, immune and cardiovascular systems and the kidneys; 37% could affect the endocrine system; and 25% were carcinogens and mutagens. The study indicated possible long-term health effects that might not appear immediately. The study recommended full disclosure of all products used, along with extensive air and water monitoring near natural gas operations; it also recommended that fracking’s exemption from regulation under the US Safe Drinking Water Act be rescinded.

A report in the UK concluded that fracking was the likely cause of some small earth tremors that happened during shale gas drilling. In addition the United States Geological Survey (USGS) reports that “Earthquakes induced by human activity have been documented in a few locations” in the United States, Japan, and Canada; “the cause was injection of fluids into deep wells for waste disposal and secondary recovery of oil, and the use of reservoirs for water supplies.” The disposal and injection wells referenced are regulated under the Safe Drinking Water Act and UIC laws and are not wells where hydraulic fracturing is generally performed. [I.e.; the fracking wells are at different locations than the disposal wells.]
Several earthquakes, that happened throughout 2011 in Youngstown, Ohio, USA are likely linked to a disposal well for injecting wastewater used in the hydraulic fracturing process, say seismologists at Columbia University.

The use of natural gas rather than oil or coal is sometimes touted as a way of alleviating global warming: natural gas burns more cleanly, and gas power stations can produce up to 50% less greenhouse gases than coal stations. However, an analysis of the well-to-consumer lifecycle of fracked natural gas concluded that 3.6–7.9% of the methane produced by a well will be leaked into the atmosphere during the well’s lifetime. Because methane is such a potent greenhouse gas, this means that over short timescales, shale gas is actually worse than coal or oil

Hydraulic fracturing has become a contentious environmental and health issue with France banning the practice and a moratorium in place in New South Wales (Australia), Karoo basin (South Africa), Quebec (Canada), and some of the states of the US.

Hydraulic fracturing [in the US] for the purpose of oil, natural gas, and geothermal production was exempted under the Safe Drinking Water Act This was a result of the signage of the Energy Policy Act of 2005, also known as the Halliburton Loophole because of former Halliburton CEO Vice President Dick Cheney’s involvement in the passing of this exemption. The result of a 2004 EPA study on coalbed hydraulic fracturing was used to justify the passing of the exemption; however EPA whistleblower Weston Wilson and the Oil and Gas Accountability Project found that critical information was removed from the final report.
Opposers of hydraulic fracturing in the US have focused on this 2005 exemption; however the more primary risk to drinking water is the handling and treatment of wastewater produced by hydraulic fracturing. The EPA and the state authorities do have power “to regulate discharge of produced waters from hydraulic operations” (EPA, 2011) under the Clean Water Act… Although this waste is regulated, oil and gas exploration and production (E&P) wastes are exempt from Federal Hazardous Waste Regulations under Subtitle C of the Resource Conservation and Recovery Act (RCRA) despite the fact that wastewater from hydraulic fracturing contains toxins such as total dissolved solids (TDS), metals, and radionuclides….

-wikipedia, Hydraulic Fracturing

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Now you know more than the average bear about fracking.  Regarding earthquakes and fracking, you may want to read the following link: ” ‘There has always been a scientific link between fracking and earthquakes,’ U.S. Geological Survey spokesperson Clarice Ransom told AlterNet.” – http://www.alternet.org/water/153717


Regarding toxins in our waterways due to fracking:  Damning New Letter from NY State Insider: ‘Hydraulic Fracturing as It’s Practiced Today Will Contaminate Our Aquifers’.  A former technician responsible for investigating and managing groundwater contamination for New York State opens up about risks from fracking.  – http://www.alternet.org/environment/153684

New EPA proposed guidelines on fracking:  http://www.rawstory.com/rs/2011/07/31/epa-proposes-new-rules-on-fracking/#.Tje3JeL9mPM.email

See also David Sirota’s June ’11 article, (“…Meanwhile, the White House’s one seeming tilt toward caution — its panel to study fracking — ended up being a sham, as six of the administration’s seven appointments have direct ties to the energy industry…”):  http://www.salon.com/2011/06/10/american_energy_problem/

In some communities, residents are being told they cannot legally stop fracking or the dumping of frack waste water into their groundwater: http://my.firedoglake.com/eclair/2012/01/11/18-3-million-worth-of-water/

But, but, but, fracking will save us and bring us to “energy independence”(!).  We need to tear the mountains up by the roots, get at what is under the rocks, use up all that fresh water, and dump the toxins back into our groundwater streams in order to have energy independence.  Who cares about some chemicals in the air and water or a few sick babies when shale oil/natural gas is the solution to, well, just about everything?  Lots of oil and gas under them there rocks, right?  It turns out there is actually not nearly as much as we have been led to believe.  In a sadly overlooked article in the NYT (June, ’11) by Ian Urbina, industry insiders admit they have no idea how much oil and gas are in the shale formations and doubt that extracting the fuels will end up being cost efficient.  If you take the time to read the entire article (please do – it is amazing what the industry insiders acknowledge to each other), you will view fracking in a whole new light.  You might even want to look into green energy, mass transit, and other such assorted non-fossil-fuel alternatives.

Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States.

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company,  wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company,  wrote in an e-mail on Aug. 28, 2009.

Company data for more than 10,000 wells in three major shale gas formations raise further questions about the industry’s prospects….

http://www.nytimes.com/2011/06/26/us/26gas.html?emc=eta1

 


 

 
 

Let’s get the story straight.

Gotta love it.  Read two stories in a row this morning, literally one after the other.  First one reads that the US supports Europe in imposing an Iranian oil embargo (ban on Iranian crude), and that said embargo could occur “without disrupting global oil markets”.  Followed immediately by an article stating that oil prices have soared because of the threatened oil embargo.  Both featured by yahoo news, both on the same day.  The multi-verse in action, or what?  No wonder everyone is running around dazed and confused.

WASHINGTON (Reuters) – The United States supports a European proposal to ban purchases of Iranian crude and believes Tehran’s oil revenues can be choked off without disrupting global oil markets, a U.S. Treasury official said on Wednesday.

The official, who requested anonymity, said a well-timed, phased-in effort to curtail purchases of Iranian crude could avoid market disruptions, and noted that new U.S. sanctions legislation envisions a phased-in approach.

(Reporting By Timothy Ahmann; Editing by Chizu Nomiyama)

http://news.yahoo.com/u-says-supports-europe-proposal-iran-oil-171330162.html

And here is the second article:

Oil prices spiked close to eight-month highs on Wednesday as the EU moved closer to an Iran oil embargo and Tehran warned the US to remove its naval forces from the Gulf.

Stepped-up rhetoric sent shivers through the markets worried that Iran might follow through on threats to disrupt shipping of Gulf oil through the crucial Hormuz Strait.

New York’s main contract, West Texas Intermediate (WTI) for delivery in February, jumped during trade to $103.74, a level last touched on May 11. The contract fell back to $103.22, down 26 cents from Tuesday’s closing level.

In London Brent North Sea crude for February rose to $113.97 per barrel, its highest level since November 14. It later stood at $113.70, up $1.57 from Tuesday.

“The market is trying to digest concerns about Iran,” said Jason Schenker of Prestige Economics.

“I don’t think Iran is going to do anything. But… the potential impact would be so large that people have to price it in to the market.”

On Wednesday Tehran renewed its warning to America against keeping a US naval presence in the oil-rich Gulf, adding to its ongoing threat to block Hormuz in reaction to Western sanctions.

“The presence of forces from beyond the (Gulf) region has no result but turbulence. We have said the presence of forces from beyond the region in the Persian Gulf is not needed and is harmful,” Defence Minister Ahmad Vahidi said, according to state television’s website.

The comments echoed a Tuesday warning that Iran would unleash its “full force” if a US carrier is redeployed to the Gulf.

“We don’t have the intention of repeating our warning, and we warn only once,” armed forces chief Brigadier General Ataollah Salehi said.

Meanwhile diplomats said the European Union was on target to impose an embargo on oil imports from Iran, to pressure the country to halt its alleged nuclear weapons program.

France said the embargo could come by the end of January.

“There is an agreement in principle to forge ahead” on the embargo, an EU diplomat told AFP.

The US also said that Treasury Secretary Timothy Geithner would head to China and Japan next week to discuss, among other things, Washington’s desire to pressure Iran via sanctions on its central bank.

http://news.yahoo.com/oil-soars-close-8-month-highs-iran-tensions-172551166.html

Ah, Timmeh, who managed to get the full US Senate to agree that Iran’s Central Bank is a “money-laundering scheme”, while simultaneously hiding the fact that the Fed and all the major US banks are money-laundering schemes.  And we can safely assume that oil prices will surge by the end of January, given that they are rising just on the threat of an embargo right now.  We may also assume, as I have stated before, that we will be told that the Keystone pipeline is a national must-do because oil prices are soaring with the Iranian sanctions and embargo.  Which will nonetheless be blamed on Iran – they made us sanction them.

Two other things are for sure.  We are going to invade Syria (I mean, do a “humanitarian intervention”, a la Libya) and start a world war in Iran.  But these items won’t make the news for yahoos.

Oh, a third thing is also true: your opinion on these matters is unwelcome and unnecessary, how it affects your life matters not one whit, how many humans die as a result of the pax Americana plan to steal all the earth’s resources and rule the entire planet is completely irrelevant.

 
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Posted by on January 5, 2012 in fossil fuels, Iran, Keystone

 

Eminent Domain

You may not have noticed, but we are losing a lot of property – both public and private – to both the military and to private corporations.  Cities are selling what used to be public resources to private companies for what amounts at times to pennies on the dollar.  The private corporations then make profits for themselves at the expense of the taxpayers, who also lose along the way the right to any discussion on the amount of fees collected or the intended usage and management of the resource.  Banks collect foreclosed homes daily, although what they will do with all these properties is an interesting question.  Right now, millions of them sit growing mold from lack of electricity and upkeep after the homeowners have been forced out.  Perhaps they will be left to crumble to the ground – ground the banks now also own and which will perhaps eventually sold to Saudi Arabia or China.  The government takes over more and more property to use as military sites, as they did recently in Hawaii, forever altering the sacred site at Mauna Kea. (Mauna Kea, the most sacred site to the native Hawaiians, has largely been turned into an air base with Osprey and Chinook helicopters constantly zooming in and out, and a live firing range located on its flanks.)  Our national parks and wild lands, which are supposedly held in trust for the people by the government, are instead being leased out to oil and gas companies who tear up the land, poison the water with their mining procedures and pollute the air at alarming rates.  I am pretty sure the Native Americans glommed onto all this quite some time ago, and luckily for us white people, they still lead the fight on the issue of land grab.  As I noted in an earlier post, the US military would like a piece of land larger than some of our states for a drone base.

Now, Congress would like to take over public and private land to create a massive, state-sized drone base and training/testing area in Colorado.  Air space above the land base would bleed out to include 60 million acres of airspace over both Colorado and New Mexico.

…Under this plan, 7 million acres (or 11,000 square miles) of land in the southeast corner of Colorado, and 60 million acres of air space (or 94,000 square miles) over Colorado and New Mexico would be given over to special forces testing and training in the use of remote-controlled flying murder machines. The full state of Colorado is itself 104,000 square miles. Rhode Island is 1,000 square miles.

The U.S. military (including Army, Navy, Air Force, and Marines) is proceeding with this plan in violation of the public will, new state legislation on private property rights, an exceptionally strong federal court order, and a funding ban passed by the United States Congress, and in the absence of any approved Environmental Impact Statement. Public pressure has successfully put the law on the right side of this issue, and the military is disregarding the law….

Not1moreacre is sistered with the Purgatoire, Apishapa, and Comanche Grasslands Trust to work on this specific issue.  They have managed to hold the hostile take-over of these lands at bay for now, but the plans to commandeer this land have been in the works for a long time, most vigorously pursued since 9/11… http://teri.nicedriving.org/2011/10/drone-state/

The definition of eminent domain is given as:
“eminent domain n. the power of a governmental entity (Federal, state, county or city government, school district, hospital district or other agencies) to take private real estate for public use, with or without the permission of the owner. The Fifth Amendment to the Constitution provides that ‘private property [may not] be taken for public use without just compensation.’ The Fourteenth Amendment added the requirement of just compensation to state and local government takings. The usual process includes passage of a resolution by the acquiring agency to take the property (condemnation), including a declaration of public need, followed by an appraisal, an offer, and then negotiation. If the owner is not satisfied, he/she may sue the governmental agency for a court’s determination of just compensation. The government, however, becomes owner while a trial is pending, if the amount of the offer is deposited in a trust account. Public uses include schools, streets and highways, parks, airports, dams, reservoirs, redevelopment, public housing, hospitals and public buildings.”  – from http://legal-dictionary.thefreedictionary.com/eminent+domain

George W. Bush set some limits on the taking of private property.

On June 23, 2006, President George W. Bush issued Executive Order 13406 which stated in Section I that the federal government must limit its use of taking private property for “public use” with “just compensation”, which is also stated in the constitution, for the “purpose of benefiting the general public.” The order limits this use by stating that it may not be used “for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken“. However, eminent domain is more often exercised by local and state governments, albeit often with funds obtained from the federal government.

– wikipedia, on eminent domain

President Obama recently declared he would wait until 2012 to decide on the fate of the Keystone XL pipeline, which will come from Canada, cross the US, and end up at the Gulf of Mexico.  For some reason, his announcement that he would postpone the decision was heralded as a “victory” by many liberals and progressives.  Strange sort of victory.  He isn’t making any concrete statements one way or another right now and there is no reason to think he will oppose the pipeline a year from now.  Let’s remember that this is the same guy who fast-tracked new deepwater drilling operations in the Gulf after the BP oil spill and did the same for new nuclear facilities here in the US while the Fukushima disaster still continues to unfold.  He may be forced by Republicans into promising opposition to the pipeline during the primary season, but I am hard pressed to think of any promise he has kept to date.  If he wins the next election, he’ll simply renege on the “promise”.  If he loses, the decision is up to whatever Republican wins – and that person will approve the pipeline as quickly as possible.  It is interesting how the politicians who want this pipeline talk about how it will “secure our energy independence”.  They know, although most of your average American citizens seem not to, that the pipeline merely carries the crude down to the Texas refineries for the private companies to sell on the open market.  It won’t end up in your car unless the US bids highest on it.  The oil does not belong to the US just because we are willing to tear up our land and risk poisoning our waterways to build the damn pipeline.

In the meantime, TransCanada, the owner of the proposed pipeline (not an American company, as you might surmise by the name) is already trying to force landowners into giving up their properties by threatening the force of “eminent domain”.

NYT, 17 Oct, 2011:

A Canadian company has been threatening to confiscate private land from South Dakota to the Gulf of Mexico, and is already suing many who have refused to allow the Keystone XL pipeline on their property even though the controversial project has yet to receive federal approval.

By its own count, the company currently has 34 eminent domain actions against landowners in Texas and an additional 22 in South Dakota.

In addition to enraging those along the proposed pipeline’s 1,700-mile path, the tactics have many people questioning whether a foreign company can pressure landowners without a permit from the State Department — the agency charged with determining whether the project is in the “national interest.” …

Eminent domain laws generally allow for the confiscation of private property if taking it is judged to serve a larger public good. These kinds of laws differ slightly from state to state as do the processes by which pipelines are approved and licensed. As a result, there is both debate and confusion over whether TransCanada has the right to use the courts to demand easements from property owners in advance of final approval for the project…

While it is impossible to say how many cases are working their way through the legal system, in addition to the 56 Texas and South Dakota cases, TransCanada acknowledges it has sent “Dear Owner” letters to dozens of families in Nebraska.  Timothy Sandefur, a lawyer with the Pacific Legal Foundation, a nonprofit advocate for property rights issues, said that if the project is approved, the company will be on firmer ground. As unfair as the laws might seem, he said, the right of way of pipelines and railroads as public goods has been well established, regardless of whether they are foreign-owned. “Property owners almost never win these suits,” he said…

Supporters of Keystone XL argue it will help bolster domestic energy security and spur job growth. But many politicians, particularly in Nebraska, oppose much of the pipeline’s route because they say it poses a danger to the Ogallala Aquifer, which provides more than a quarter of the water for the country’s agricultural crops.Environmental groups argue that extracting and burning the heavy crude drawn from Alberta’s oil sands will increase greenhouse gas emissions. They also warn that if there is a spill or a leak, it would cause severe environmental damage and be extremely hard to clean up.

http://www.nytimes.com/2011/10/18/us/transcanada-in-eminent-domain-fight-over-pipeline.html?_r=1

James Camaron, maker of the movie “Avatar”, was recently taken on an aerial tour of the Alberta tar sands area in Canada.

From Time magazine 22 Nov, 2011:

…Alberta’s oil sands…represent an enormously valuable resource for Canada and the U.S. Canada is already the biggest exporter of oil to the U.S., and the nearly 200 billion bbl. of oil available in the Albertan sands could make Canada richer and help shift the U.S. away from its politically problematic dependence on Middle Eastern oil. But nothing comes easy, and oil-sands development can be devastating to the environment, leading to water and air pollution and scarring the land for decades…

Cameron, a native of Ontario, had an opportunity to get both sides of the story. Accompanied by a few nervous energy executives, he toured a handful of the major oil-sands sites near the Albertan boomtown of Fort McMurray. Even with friendly experts touting all that the energy companies had done to clean up the oil-sands developments, there’s no avoiding just how extensively industry has altered the land. The first generation of Albertan oil-sands development involved open-pit mining, and there are still vast chunks carved out of what was once forest, though some exhausted sites are being reclaimed. The story was a little different at newer developments that employed a process called in situ mining. Instead of digging the sands from the surface, in situ involves injecting steam deep into the ground, which heats the sands into a viscous liquid and allows them to be pumped to the surface like conventional oil. The result is cleaner on the surface — less deforestation, less pollution…But in situ has its own drawbacks. Lots of natural gas is needed to generate all that steam, and the carbon footprint from a barrelful of oil sands can be significantly higher than with conventional oil. That worries Cameron. “We’re not talking about a millennial scale for climate change now,” he says. “We’re talking decades” — and oil sands might speed up that catastrophe…

For the indigenous people of Alberta, the catastrophe is hitting now. In the tiny, isolated village of Fort Chipewyan, downstream from the massive oil-sands mines, community members packed a town hall to see Cameron. They told stories of water pollution from the mines’ tailings ponds, higher cancer rates and early deaths… But the oil sands aren’t going away. There are plans to build a huge new pipeline to the U.S., cementing the oil sands’ role in American energy. In Alberta, for now at least, the machines will keep rolling, the oil will keep flowing, and not even the creator of the Terminator is likely to stop it.
Read more: http://www.time.com/time/magazine/article/0,9171,2030904,00.html#ixzz1fHgL91qv

Tomorrow, Friday Dec. 2, tribal leaders from the US and Canada have a meeting with Obama.  They will discuss the pipeline and present him with the Mother Earth Accord.

“This Friday, tribal leaders from across the continent will meet for their third summit with the president in Washington, and one of the prime items on the agenda will be the fight against the Keystone Pipeline. They’ll talk about the way both the pipeline and the process of approving it have violated treaties, and they’ll present the president with a copy of the Mother Earth Accord adopted in a special meeting at the Rosebud reservation a few weeks ago. It’s a strong document, full of details about the impacts of tar sands mining and pipeline leaks and carbon emissions — but it also speaks with the real power of the people who’ve lived longest and best on this continent. Indeed, it begins by affirming that ‘the earth is our true mother, our grandmother who gives birth to us and maintains all life.’ ”    –  http://www.huffingtonpost.com/bill-mckibben/native-leaders-keystone-xl-obama_b_1120697.html

The Mother Earth Accord, in full.  I realize that this is rather long, but the whole paper should be read:

Mother Earth Accord
September 2011

Tribal Government Chairs and Presidents, Traditional Treaty Councils, and US property owners, with First Nation Chiefs of Canada, impacted by TransCanada’s proposed Keystone XL tar sands pipeline and tar sands development present at the Rosebud Sioux Tribe Emergency Summit, September 15-16, 2011, on the protection of Mother Earth and Treaty Territories:

Recognizing that TransCanada’s proposed Keystone XL pipeline would stretch 1,980 miles, from Hardisty, Alberta, Canada to Nederland, Texas, carrying up to 900,000 barrels per day of tar sands crude oil, which would drive additional tar sands production;

Recognizing the existing resolutions and letters in opposition to the Keystone XL pipeline;

Guided by the principles of traditional indigenous knowledge, spiritual values, and respectful use of the land;

Affirming our responsibility to protect and preserve for our descendants, the inherent sovereign rights of our Indigenous Nations, the rights of property owners, and all inherent human rights;

Affirming our Indigenous view that the Earth is our true mother, our grandmother who gives birth to us and maintains all life;

Recognizing that the tar sands in northern Alberta, Canada is one of the largest remaining deposits of unconventional oil in the world, containing approximately 2 trillion barrels, and there are plans for a massive expansion of development that would ultimately destroy an area larger than the state of Florida;

Recognizing that tar sand development has devastating impacts to Mother Earth and her inhabitants and perpetuates the crippling addiction to oil of the United States and Canada;

Recalling in September 2010, the Assembly of First Nations of Canada called on the United States government to take into account the environmental impacts of tar sands production on First Nations in its energy policy, citing the high rates of cancer in the downstream Fort Chipewyan community, which prominent scientists say are potentially linked to petroleum products;

Recognizing the findings published in the Proceedings of the National Academy of Sciences that tar sands production releases 13 elements considered priority pollutants under the U.S. Clean Water Act, including lead, mercury, and arsenic into the Athabasca River in northern Alberta, which flows 3,000 miles downstream to the Arctic Ocean;

Recognizing that tar sands production produces three times the greenhouse gas emissions of conventional oil and NASA climate scientist James Hansen has said that if the tar sands are fully developed, it will be “essentially game over” for the climate;

Recognizing that Canada’s greenhouse gas emissions from tar sands development have more than doubled since 1990, which is the main reason Canada is failing to meet its greenhouse gas emissions reduction targets under the Kyoto Protocol;

Concerned that Indigenous people are most vulnerable to the social, cultural, spiritual, and environmental impacts of climate change;

Recognizing that Exxon-Imperial and ConocoPhillips Heavy Haul shipments are attempting to haul more than 200 oversized loads of heavy oil machinery from the Port of Lewiston, Idaho along Highway 12 into Montana, then north to the tar sands project in Alberta, Canada;

Concerned that tar sands crude oil is more toxic, corrosive, and abrasive than conventional crude oil and poses additional pipeline safety risks that have not been fully assessed by the U.S. Department of State in its final Environmental Impact Statement for the Keystone XL pipeline, issued August 26, 2011;

Recalling that TransCanada’s year-old Keystone pipeline, from Manitoba, Canada to Patoka, Illinois and Cushing Oklahoma, has had 14 spills in the U.S. portion since it started operation in June 2010, and was temporarily shut down by regulators in late May, 2011;

Recognizing TransCanada’s extremely poor safety record for the Keystone pipeline, it is probable that the Keystone XL pipeline will have frequent spills because it will have similar design specifications;

Concerned that oil spills from the Keystone XL pipeline would destroy live-sustaining water resources, including the Ogallala Aquifer, which provides drinking water for millions of people and farmland irrigation throughout the Midwestern United States;

Concerned that construction of the Keystone XL pipeline will impact sacred sites and ancestral burial grounds, and treaty rights throughout traditional territories, without adequate consultation on these impacts;

Concerned that the Keystone XL pipeline would increase air pollution in the communities surrounding the refineries that the pipeline would service where people of color, Indigenous peoples, and poor people are already experiencing high rates of cancer and respiratory illness;

Recalling that TransCanada’s permit application to the Canadian government for the Keystone XL pipeline said it will increase oil prices in the United States by $4 billion per year;

Acknowledging that the Keystone XL pipeline is not designed to provide the United States with energy security and that industry documents indicate Gulf Coast refineries operate in a free trade zone and plan to refine tar sands oil into petroleum products that are intended for export overseas;

Therefore, we are united on this Mother Earth Accord, which is effective immediately, that it be resolved as follows:

We support and encourage a moratorium on tar sands development;

We insist on full consultation under the principles of “free, prior and informed consent,” from the United Nations Declaration on the Rights of Indigenous Peoples both in the United States and Canada;

We urge regional authorities to halt the Exxon-Imperial and ConocoPhillips Heavy Haul shipments of tar sands equipment through the United States and Canada;

We urge the United States and Canada to reduce their reliance on oil, including tar sands, and invest in the research and development of cleaner, safer forms of sustainable energy and transportation solutions, including smart growth, fuel efficiency, next-generation biofuels and electric vehicles powered by solar and wind energy.

We strongly believe that the proposed Keystone XL tar sands pipeline is not in the national interest of the United States or Canada; and

We urge President Obama and Secretary of State Clinton to reject the Presidential Permit for the Keystone XL pipeline.

I will offer this quote (again):
“They made us many promises, more than I can remember, but they never kept but one; they promised to take our land, and they took it.” 

– Red Cloud (Mahpiya Luta), Oglala Lakota Chief

 

Update:  Received from CredoAction Sat., 3 Dec.:

President Obama may have delayed his decision on the pipeline, but Republicans have redoubled their efforts, and could be dangerously close to forcing its approval.
House Republicans said Friday that they are planning to push a bill to force a decision on the pipeline and strip the President’s authority to make that decision. Worse, they will attach this bill to the President’s payroll-tax and unemployment benefit extension package — considered a must-pass piece of legislation that contains crucial help for our long-term unemployed.
According to Politico’s reporting of the closed-door meeting of House Republicans:
Speaker John Boehner referred to the package he’s putting forward as turning “chicken-sh — into chicken salad,” according to people who attended the meeting in the Capitol basement.
Translation: He’s going to pass President Barack Obama’s preferred tax cut, but he wants some skin from Democrats for it.
That skin is the Keystone XL pipeline. The House bill would take Keystone XL decision making authority away from the President and State Department and force the Federal Energy Regulatory Commission (FERC) to make a decision in 30 days, substantially restricting FERC’s discretion to reject the project in the process.
The current review process by the State Department has been restarted to evaluate a new route in Nebraska, and unlike FERC, will notably consider the climate change impacts of the project, an area that wasn’t taken into account in the State Department’s initial sham process.