2 Freshman House Ds From Fla. Ripe For Defeat
By pilgrim Posted in 2008 | FL-16 | FL-22 | Florida | Nationalization | oil | Rahm Emanuel | Ron Klein | Socialism | Tim Mahoney — Comments (48) / Email this page » / Leave a comment »
Promoted from the diaries by Neil Stevens...
U.S. Reps. Ron Klein (left) and Tim Mahoney (right) join Rep. Rahm Emanuel, D-Ill. for 'Let's go Communist' bill to be introduced by Rahm Emanuel, Maurice Hinchey, Ed Markey, and Nick Rahall as co-sponsors. This is what Maurice Hinchley said on the House floor June 19, 2008:
We (the government) should own the refineries. Then we can control how much gets out into the market.
On Ron Klein's website he writes:
I am working to pass legislation
that gives the oil companies an ultimatum: “Drill It or Lose It.”
On Tim Mahoney's website he writes the following:
The Responsible Federal Oil and Gas Lease Act of 2008 employs a "use it or lose it" tactic that will compel oil and gas companies to either produce or give up the federal onshore and offshore leases they are stockpiling by barring the companies from obtaining any more leases unless they can demonstrate that they are producing oil and gas, or are diligently developing the leases they already hold.
Read on...
Rep. Cong. John E. Peterson has an excellent smackdown on this insane legislation in a New York Post op-ed piece
Since 1982, Congress has passed laws banning the production of oil and natural gas on our Outer Continental Shelf; the last three presidents went along. But the US Minerals Management Service estimates (conservatively) that the OCS holds 86 billion barrels of oil and 420 trillion cubic feet of natural gas - the equivalent of 35 years of imported oil from OPEC and an 18-year supply of natural gas.
The United States is the only country in the world that prohibits exploitation of such offshore resources.
Make no mistake, this mess is the result of Washington's foolish policy of restricting domestic energy production and discouraging investment in it.
All too often, Washington's energy debate revolves around the notion that support for increased domestic production of oil and natural gas means opposing renewable energy, conservation and sound environmental policy.
In fact, these shouldn't be competing priorities, but complimentary ones: America must produce more, conserve more and invest more in renewables.
For this country to remain a world leader in the global economy, Congress must develop a national energy policy that considers all means - including increased domestic production of oil and natural gas, on and offshore.
America depends on fossil fuels for 86 percent of our energy needs; wind, solar and geothermal power cover less than 1 percent. Renewable energy won't be available in sufficient quantity and at affordable prices for decades - so we have no other choice than to produce more of our own oil and natural gas - or further increase our dependence upon foreign sources.
And producing our own energy will create tens of thousands of jobs - and bring in hundreds of billions of dollars in royalties.
Look. I don't live in Florida, and I especially don't live in CD-16 or CD-22, but I know that folks that do live in these districts are paying over $4 per gallon to put gas in their vehicle. They really don't like it, and they don't believe the US Congress has ANY credible record of getting knee-deep into owning, obtaining, and distributing US oil so they won't pay so much money to put fuel in their vehicle. I spotted this news item on a Florida newspaper website PalmBeachPost,com Blog
One interesting comment from a Floridian who I don't believe is a member of RedState was this:
You know, these guys are embarrasing me. Mahoney’s worthless, not really a Dem and Klein should know better. Emanuel, needs to go away. We need better Dems, not more. Don’t these guys have research persons on staff
Anybody who lives in Florida, especially if you live in CD-16 or CD-22, please let me know if I'm mistaken in believing that these 2 freshmen CongressCritters™ are really ripe for defeat.
Extreme taxation, excessive controls, oppressive government competition with business … frustrated minorities and forgotten Americans are not the products of free enterprise.Ronald Reagan
you are walking the walk not just talking by putting local races out there for consumption....that is how we will win...people need to see their choices and idiots who now reign supreme in the congress at this time.
Freedom of Religion NOT Freedom from Religion
is so attractive to the do nothing no drill democrats.
But it is still a lie.
Tonight Judy Woodruff interviewed Minority Leader Boehner and he reminded her about this:
I remember in 1995, when both the House and the Senate, in a bipartisan way, sent the ANWR legislation opening up the Arctic National Wildlife Refuge for oil production. Bill Clinton, the president in 1995, vetoed that bill.Today, we'd have some ten -- or about a billion barrels -- a million barrels of oil per day if that bill would have been signed into law. And so the sooner we get started, the sooner we're going to have more production.
Extreme taxation, excessive controls, oppressive government competition with business … frustrated minorities and forgotten Americans are not the products of free enterprise.Ronald Reagan
The Industry will sit on leases, sometimes for good reason, sometimes not. Alaska is in a major beef with Exxon over their failure to develop the Pt. Thompson prospect near Prudhoe Bay and we did cancel the lease on them. Exxon being Exxon, they went in to their "we have more lawyers and money than you do" mode and sued us, of course. I figure we have ten years or so of fighting that out in the courts while a very promising prospect goes undeveloped. So far, they've used up 19 years in litigation over the Exxon Valdez spill, so Exxon knows well how to play this game. Don't start thinking there are any good guys.
In Vino Veritas
is not the sign of a bad guy.
But you sound specifically very well informed, and I thank you for your example and point.
But when a company makes decisions, it making them from the pov of how it can perform its mission.
Setting up the industry so you can go out nationalize them is not part of the mission, but is a significant rewrite of the mission.
and I am one since all of Alaska's oil is commonly held by the People of the State, it is not in our interest to bring on more production than is necessary to maintain our revenue and market share. The only other interest we have, though it isn't an issue at today's prices, is in maintaining the economic viability of the TransAlaska Pipeline System. Rest assured that the Greenies are well aware that the TAPS authorization requires that should it become non-viable, it is to be dissassembled and the property restored to its "pristine" state. The Greenies would like nothing better than to see Alaska and the North Slope producers forced to dissassemble the TAPS.
Right now, nobody who produces oil has any interest in adding production that would reduce the price. The US is the biggest "oil owner" around, and it has done nothing to add to its production, e.g., develop ANWR or the OCS. When and if it does, the other producers will have to take the steps necessary to maintain their market share.
In Vino Veritas
about national interest and good of country in your perspective.
Alaskans, like all Americans, are part of a union.
We all tend to forget this.
the good people of the Lower 48 concluded that we were "nowhere." I don't give a damn if every Escalade in the Lower 48 becomes a lawn ornament so long as I can afford gas for my boat. And right now, I'm doing a pretty good job of that with your money. Yeah, union allright; I think about that when I try to buy a $3.55 part from a Lower 48 supplier and the shipping is $9. But the Jones Act is good for Seattle and San Francisco.
We financed a two decade long boom in the Lower 48 by giving away oil and living through a depression here. You told us what you think of us. Won't get fooled again.
In Vino Veritas
Don't know much of what you are talking about, but I am surprised about the shipping charges.
You do know you are at the end of a very lightly travelled distribution route?
to the largest air cargo port in the World, Anchorage International, than, say, Atlanta or Charlotte are to UPS's hub in Louisville, KY. But, bridges and roads in Alaska go "nowhere," and the Jones Act forces surface freight on to the most expensive ships in the World.
In Vino Veritas
a substantial amount of traffic goes between Atlanta and Louisville.
And getting to the largest air cargo port in the world is a pretty good hike from the ROW.
I had forgotten about the Jones Act imposing domestic ships on intra-American trade. But after the Valdez, I thought you all wanted higher chances for pristine seashores, etc.
I am confused about giving away oil. I live in Texas and I am not aware of people giving away oil.
What you describe is a landowner attitude, not typical of most producers. As an independent, my company is driven to maximize current cash flow, and you can only do that by aggressively developing leases.
I will not defend the Majors; they have their own burueaucratic policies and agendas, and the North Slope is a special case all its own. Speaking for most independents, we are in the "drill it or lose it" mode; lease terms are 1-5 years and the cost to carry leasehold without developing is not insignificant.
Without deviation from the norm, progress is not possible. - Frank Zappa
Your business is producing oil and gas. My and my State's business is owning oil and gas and when it is in our interest hiring people like you to produce it for the market.
The majors with all their leaseholds are more like owners than producers.
In Vino Veritas
Who has an odd fascination for the layout of golf courses in Florida.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
No problems with your state getting back its own. It's just pretty hard to argue playing games in mine is going to help.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
Do you agree with the distinction he's making?
Part of my business involves selling to the energy industry, and from what I'm seeing, all the investment and activity is moving to upstream. Downstream seems to be dying on the vine, and the majors seem to be running away from it as fast as they can.
I think we're seeing a classic land-rush in the energy business. Part of what the Democrats in Congress want to do is to forestall it by deflating the long-term value of a leasehold.
Blowdown a loss
State: Producing Point Thomson gas first would mean 500M fewer barrels
Everyone seems to expect that gas from Point Thomson will be part of what initially fills a gas pipeline taking North Slope natural gas to market.
But Point Thomson, some 60 miles east of Prudhoe Bay, has both oil and gas, and Point Thomson oil has never been produced.
Blowdown at Point Thomson — producing the gas without producing liquids first, the quickest way to get gas into a North-Slope-to-market line — could result in a loss of hundreds of millions of barrels of oil when compared to production with gas cycling.
That is the conclusion of a study commissioned by the Alaska Department of Natural Resources Division of Oil and Gas.
“A gas blowdown scenario could recover over 500 million barrels less than a gas cycling scenario,” the division said in a May 16 summary of the study. “This difference is larger than the expected ultimate recovery from the Alpine oil field.”
Petroleum geologist Julie Houle, with the division’s resource evaluation staff, introduced the study May 30 during the administration’s Alaska Gasline Inducement Act forum in Anchorage.
Petroleum engineering is fundamentally a conservation discipline. I'm not going to pretend to know what's going on at Pt. Thompson after 5 minutes of internet research, but this seems like a case where there could be a conflict between "production as soon as possible" and "maximizing the value (and quantity) of hydrocarbons recoverable".
Again, the North Slope is a special case. The major international companies are special cases.
A lease is nothing more or less than an option to explore and develop a tract of land. Operators enter into leases for a set term (normally one, three, or five years, depending on the location), but they are not perpetual. It costs money to own a lease. When a lease expires without being drilled, the rights revert to the landowner, and the lease owner is out 100% of his costs.
Just like in commodities, blackhedd, sometimes options expire out of the money.
Oil companies do not make money by sitting on leases.
Without deviation from the norm, progress is not possible. - Frank Zappa
Why are they saying they want to legislate expiration of leaseholds when this already exists?
When you lease from the Federal government, who determines under what circumstances the lease is renewed? Does actual exploration and production activity trigger automatic lease renewal today? Can unexplored leaseholds be renewed in the sole discretion of the lessee today?
that government lease managers are just plain dumb or that the process is corrupt. I, for one, do not believe the "mistake" line from the Clinton Administration about the Gulf leases. It's by no means my area of expertise, but I would not be at all surprised to find that the leases have no specific performance provisions. For government, it's all about the lease money RIGHT NOW.
In Vino Veritas
on the North Slope. Gas re-injection is used to maintain well pressure. In recent times, sea water injection has seen some use, but sea water injection is both expensive and problematic in an area that is almost always below freezing nine months a year and can be below freezing at any time of the year. Even here in "balmy" Juneau, a thousand miles south of the North Slope, it is 38 degrees this morning.
This is a real issue with Gov. Palin's drive to develop a 48" natural gas line from the North Slope to the US interior. Throwing that gas on the market will almost immediately drive down the price of gas dramatically, so there won't be a lot of revenue, AND producing the gas will reduce the production of much more valuable oil.
As to Pt. Thompson, Exxon was neither developing the oil known to be there nor taking any steps to bring the gas to market, so the State moved against the lease. We'll fight it out in court with Exxon.
In Vino Veritas
I'm not particularly keen on nationalizing anything unless necessary in time of war or absolute natural catastrophe.
And lest that phrase be ill-parsed, I'm referring to imminent mass extinction by way of a particularly large extra-terrestrial rock.
Curiously, I'm not sure under which category a Vogon fleet would fit.
Rather, it's the global equivalent of the cops "raiding the game", or alternatively a celestial "do-over".
Besides, if the Vogons arrive, there won't exactly be time for Congress to pass a nationalization bill, now will there?
So they'd have to talk to the local unions before any work began, that might bide us some time.
Of course, they would bring Change, wouldn't they. And it would be Change we Could Believe In. At least until it killed everybody.
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how can the oil companies be expected to drill within a time frame, when they can't get the permits to do so? What is the default position with the leases? What has the government done with the money from the sold leases? If the leases under said law don't perform, then what happens?
The idea of government owned refineries is idiotic. It won't work any better here than it has for Hugo Chavez.
The use it or lose it, facts aside, is a little less crazy. I don't know if there are many unused oil leases out there, or if speculators expecting higher prices down the road have bought up leases and are sitting on them. Generally, though, when you have an asset holder whose revenues come as royalties or as a share of revenues generated, clauses of a use it or lose it type are not that unusual as otherwise you can get hosed by purchasers who just want to hold the option rather than get their hands dirty with actual production. Since the US government owns the asset, it makes sense to have contract provisions where the asset either produces revenue or the lease reverts.
And buying a lease is only one step of many on what to do with the lease.
There is seismic work, raising capital to explore, organizing equipment to do the work, and then the most important part,
Finding out if the purchase of the lease was even a wise choice in the first place.
Drilling for oil is a high stakes, expensive venture.
More drilling is unsuccessful than successful.
More holes are dry or non-economic, than are successful.
The rancid pap the democrats are pushing out there is particularly insulting when one considers how hard one has to work and how lucky one has to be to actually get oil form a dangerous, remote location.
And as for the specific anti-American, anti-patriotic scam of the day- nationalizing refineries: does even one of these socialists who are screeching about this have one tiny idea how hard it is to operate a refinery?
Has one of those corrupt twits ever even been inside of a refinery?
I have worked in them, studied them, known the people who designed and built them, and I can tell you that if there is one area that you do not want politicians imposing 'reality based' decisions on, it is a refinery.
A refinery is basically a very expensive, slow motion bomb.
DA politicians will bring out the worst in the bomb part while forgetting completely about the slow part.
Besides the moral repugnance of stealing an industry in the first place.
The International Herald Tribune has an excellent piece here about how exploiting new off-shore oil is hampered by a shortage of drilling ships. From the article:
As oil trades at more than $135 a barrel - up from $68 a year ago - drill ships around the world are booked solid for the next five years. Some oil companies have been forced to postpone exploration while waiting for a drilling rig, executives and analysts said.
Extreme taxation, excessive controls, oppressive government competition with business … frustrated minorities and forgotten Americans are not the products of free enterprise.Ronald Reagan
I live in CD 22. I'm not sure about Klein being defeated but in CD 16 Mahoney is ripe to be defeated. Keep your eye on Tom Rooney. You have to remember that people who live down here are from the Northeast, so they are brain dead. They absolutely HATE George Bush, so anyone with an R by their name gets associated with him. I think CD 16 includes more of area to the north and west of me, which is real Florida, not south Jersey, I mean south Florida which gets most of the national attention.
I remember that Mark Foley did hold the seat in CD-16, and I can't remember who was in CD-22 before Ron Klein. Does Klein have a GOP opponent in the fall? I understand 22 has more transplants from NY & NJ than 16, but I would think the GOP should still try to run someone to pick up 22 if they can.
Extreme taxation, excessive controls, oppressive government competition with business … frustrated minorities and forgotten Americans are not the products of free enterprise.Ronald Reagan
He's an embarrassed Floridian? You should have seen me ranting this morning when Florida's Democrat CFO Alex Sink was on CNBC's Squawkbox this morning on the topic of drilling. Paraphrasing a few gems like "We can't get a drop of oil for 10 years if we start drilling now, we need to work on a long term solution." Uh Alex, 10 years is sort of a long term solution as we work in other technologies over the coming decades. "No drilling in my State because we want to protect our number one economic asset, our beautiful beaches". No word from Alex on how many jets/cars full of people are not going to be coming to our beautiful beaches because of rising fuel costs. She was asked about a State referendum. No direct answer, just that she was confident that Floridians would see through "big oil's" money grab. I got the feeling the moderators were a little incredulous of her illogical assertions. Drilling is catching fire here and those two dems will get scorched if they follow the party line.
What the hell is going on out here? - Vince Lombardi
As I understand it, international oil & gas agreements and domestic leases with private owners are effective for a primary term after which they terminate unless held by production. BLM leases also expire at the end of the primary term set in the lease unless held by production. The primary term seems to be set by BLM at 5 years for competitive leases and 10 years for non-competitive leases.
Oil companies defer drilling within the primary term for various economic reasons. Sometimes companies want to wait for another company to drill a well that proves up or condemns a prospect. When the price of crude is low, drilling activity will be reduced, always with a careful eye on primary terms.
Obtaining permits for seismic work and drilling obviously may delay work. Depending on the location of the leases, permits may be difficult to obtain. Work may be allowed only during limited times of the year. Operations in Louisiana may have to wait on the mud bugs and those in south Texas for White-wing season. Also, lining up contractors can delay operations, especially when the price of crude is up and contractors' resources are busy.
With prices at recent levels, I seriously doubt that any real oil & gas company is hording leases hoping for higher prices. But that's just one lawyer's opinion.
Cheers,
Abu el Banat
Words fail me in describing the utter stupidity of the "Drill It or Lose It" proposal put forth by these two Congressmen (and sure to be embraced by the rest of their party). They obviously know nothing about oil and gas, and care even less. They're grandstanding for their constituents.
It sounds like half or more of the acres of undeveloped leasehold are in the Gulf of Mexico. Let me explain how a typical GOM OCS lease works.
The leases are competitively bid. Usually two lease sales are held per year, one for offshore LA, MS and AL, one for TX. Hundreds of companies participate. Each interested company selects the leases it wishes to bid on, with the value normally determined by their assessment of available seismic and other geologic information (which they have purchased or paid for.)
All lease blocks are not the same. In the GOM, you can't just poke a well anywhere and hope to find oil and gas. You have to apply a lot of geologic and geophysical interpretation to identify the best prospects - the ones with a high chance of oil and gas accumulation, in sufficient quantities, that can be recovered at a low enough cost to make it economic. Unlike some other basins, most of the oil and gas is trapped on geologic structures (think of them as buried hills; oil and gas are in the high spots). Seismic data can be pretty good at defining the structures and indicating the likelihood of accumulation, but it's still risky and always subject to interpretation.
The government can reject any bid it deems insufficient, based on its own internal evaluation of all available data (which it gets free). The minimum bid is $25 per acre for a 5000 acre lease block (5760 off Texas). Annual rentals are $6.25 per acre to maintain an undrilled block (so, in effect, the lease already contains "Drill It or Lose It" provisions). The lease term is five years on the shelf, 10 years in deeper water.
The minimum a typical 5000 acre block goes for is $125,000. I'd guess that the median is around $250,000, although sometimes leases sell in the $10s to $100s of million of dollars, or more.
The government's take on any production was historically 1/6th, increased in 2007 to 18.75% for future leases.
The reasons the Congressmen are full of crap are manifold.
"Big Oil" is not sitting on Gulf leases. They are non-existent on the shelf, and the ones that are active in deepwater are spending $billions drilling and developing their leases.
The typical shelf lease is owned by an independent like my employer. The shelf is a very mature oil and gas province. All of the low risk, high potential stuff has already been done. Most of the leases have been owned two or three different times by previous owners.
"Big Oil" is after new, unexplored basins because that's the only place where its still possible to find the world-class discoveries that they need to sustain their companies. Us little guys are just trying to scratch out a living on the scraps Big Oil left behind when they left the shelf.
Without deviation from the norm, progress is not possible. - Frank Zappa
I think the brightest prospect in the US right now is oil provinces accessible from State land here. Even the ANWR reservoir is accessible by slant drilling from State controlled offshore sites, and apparently there's nothing the US could do about it if we were to just build a gravel island just off ANWR and start sucking on their oil.
In Vino Veritas
That's when all the development work is done. Little chilly though.
I'll never forget my first experience of Interior Alaska temperatures: stepped out of my truck at the Yukon River bridge and the thermometer was pegged at minus 60. Not even an Eddie Bauer North Slope Parka can keep that from seeping right into your bones.
In Vino Veritas
The claim that Oil companies are stock piling leases is a demonstrable joke. The law is already on the books:
The Outer Continental Shelf Lands Act: (for offshore production): Stipulates that an oil company must produce energy between 5 to 10 years (in the government’s discretion) or surrender the lease. Source: 43 U.S.C. 1337(b)
The Mineral Leasing Act (for onshore production): Section 17(e) stipulates that an oil company must have a producing well within 10 years or surrender the leases. Source: 30 U.S.C. 226(e)
Taken from Rep. John E. Peterson's New York Post op-ed:
America must produce more, conserve more and invest more in renewables.
(I meant to preview the first post instead of post it. oh well).
That just sounds like a winning slogan.
"Produce, Conserve, Invest"
We need bumper stickers and t-shirts.
I just donated to Allen West's campaign. He is running against Ron Klein. Learn more about Col. West here:
http://spectator.org/dsp_article.asp?art_id=13406
Seems like just what the conservative doctor ordered!
Extreme taxation, excessive controls, oppressive government competition with business … frustrated minorities and forgotten Americans are not the products of free enterprise.Ronald Reagan
criteria RE LOCAL RACES and quality of work.
gc is jealous
I have major problems God is working on just now!
GREAT JOB PIL'
Mike DeVine’s Charlotte Observer columns
www.theminorityreportblog.com
"The way to stop discrimination on the basis of race is to stop discriminating on the basis of race." - The Chief Justice