See our Facebook commentary this morning re: Climate Change  -dh

From the Senate Energy Committee: See How Envronmental Extremism is Destroying California Lives

Aussie Oil and Gas Observer: The smashing of the Shanghai stock market yesterday – an 8.5% fall (the biggest one day decline in eight years) – has reverberated around the world in both stock markets and commodity markets, and oil was not left out of the carnage.    ***    Japan’s average LNG price (per mmbtu) for June was down again – at US$8.65.  Volumetrically this figure is largely driven by contract purchases.  At this price, few if any Australian LNG projects would have been sanctioned in the last decade.     ***     

Quote of the day, from the classic play (and movie) Glengarry Glen Ross, which captures something of the atmosphere within employee ranks in oil companies at present:

“As you all know first prize is a Cadillac El Dorado. Anyone wanna see second prize? Second prize is a set of steak knives. Third prize is you’re fired”.

Commentary:  We are very proud — and respectful — of one of our readers, an Australian energy expert, for acting on our suggestion that he begin writing an energy blog (Column Right).

We call him "Aussie" here, because his active energy investing and consulting do not allow him the flexibility of using his proper name on his blog at this time. 

Aussie is a brilliant thinker, observer of energy trends and realities, and writer.  He is also prolific, producing new commentary almost daily.  He knows North American energy issues well.

In short, we are delighted to begin bringing you his commentary.

We think you'll share our respect for his wisdom and insight as he tackles the effect of this week's economic crisis in China on energy projects, prices, projections and employees.

Following is a clip from his email today.  -dh

Dave,

Last year you suggested to me that I consider starting something like your website news/opinion service.  
 
Over the last 3-4 months I’ve taken your suggestion up – and been writing a blog 5 days a week on the oil & gas patch.  It's written from an Australian vantage point – but does look around the globe for strategic/market themes, etc.  It's opinionated and occasionally cynical – and hopefully therefore an enjoyable read!
 
Today’s email is attached below – and you can sign up for daily emails on the website (https://aussieoiloiloilandgas.wordpress.com/)  ….

-Aussie

REFERENCE: 

Our Face Book comment on this issue:

The science is not settled (See Praeger University comment below).

Believing that it is settled is justifying environmentally extreme movements designed to bloat bureaucracies and amass political power by forming critical partnerships with subsidized businesses that could not survive in a non-subsidized world.

This process is also known as "crony capitalism" which is designed to destroy capitalism and free enterprise over time.

One of many effects of "climate politics" is justifying massive income redistribution from economical fossil fuels, taxpayers and utility ratepayers to subsidize expensive alternate fuels represented by countless lobbyists.

This video is a true public service that can be useful in communicating basic facts to our fellow citizens, fellow taxpayers, and fellow utility ratepayers.

We are are being misled by armies of entrepreneurs with alternate energy profit motives who are major funders of political campaigns.

We can think of this wealth transfer alliance as the eco-crony capitalist-political cycle of life. -dh

 

 

New Video: What They Haven't Told You about Climate Change

Since time immemorial, our climate has been and will always be changing. Patrick Moore explains why "climate change," far from being a recent human-caused disaster, is, for a myriad of complex reasons, a fact of life on Planet Earth.

 

Senate Energy Committee – California Drought and ESA

ICYMI: This is a very interesting piece on the current drought in California that’s causing a “humanitarian disaster” in the Golden State. Charles Cook chronicles his firsthand experiences in California’s Central Valley that’s experiencing devastating economic impacts stemming from the state’s ongoing drought crisis.  –

From: Michael Tadeo, Senate Energy and Natural Resources Committee

Golden State Dust Bowl: How environmental extremism is destroying California’s Central Valley (National Review)

http://bit.ly/1IpMBbJ

August 10, 2015, Issue

By, Charles C. W. Cooke

Central Valley, Calif. — The road to Fresno is flanked by missed opportunities. Just ten years ago, to drive across this extraordinary valley was to be blinded by miles upon miles of burgeoning green life. Now, the fields that run alongside State Route 180 resemble the squares on a giant, schizophrenic checkerboard. On one block there are pistachios, almonds, tomatoes, and grapes, stretching as far as you can see; on the next all is brown and fallow, and the dust swirls upward toward the heavens. On the edge of the small farm town of Mendota, an abandoned sugar plant stands defiantly against the sky. It is beautiful, in a peculiar way — a fading Hopper sketch for an unsure world. This was a resolute place, once.

That was before the decline; before the worst drought in 1,200 years turned some of America’s most fertile ground into a Dust Bowl; before soft-handed politicians in a faraway city took a look at an economic miracle and concluded that it was expendable. There is no question that God has played His role in bringing about this crisis: It has not rained consistently in the Central Valley for half a decade now, and the reservoirs in the northern part of the state are dangerously low. But Caesar must share in the blame. Because the valley is liable to become parched in rainless times, California has constructed a complex system of pipes and pumps that funnel lifesaving water southward from the Sacramento–San Joaquin Delta. Since 2007, that system has been deliberately crippled. In that year, the Natural Resources Defense Council convinced a judge that, by operating the pumps at high capacity, California was killing too many smelts — a small fish that is explicitly protected within the Endangered Species Act. In consequence, the throughput was severely curtailed, and the farmers, who under the state’s “seniority” system have the last claim on the water, were all but cut off. Two years later the drought began, and a blow was struck upon a bruise.

On the edge of a field on the outskirts of Mendota, unemployed farmworkers have built a tattered town. In another era it would have been described as a “Hooverville”; today, it bears no appellation at all. These are forgotten people, and their hamlet is veiled by indifference.

I meet Frederico, a Guatemalan farmhand who has lived here for six years. He has only a few dollars to his name — kept in cash, of course — but he considers himself “one of the lucky ones” nevertheless. “I could have nothing,” he tells me, gesturing toward a hut that he has built from abandoned sheets of wood and a stretch of discarded canvas. “But I have a house.”

Frederico is one of the many workers in California’s Central Valley who have seen their livelihoods all but destroyed by the Great Drought. “I manage to work a little here and there,” he explains, “but the water . . . the water. Often I have to go 20 miles to find work.”

Above all else, he misses the shade. “In 2008 and 2009, they started to cut my hours,” he says. “Eventually, I couldn’t pay rent.” So he moved here, to a dusty pasture by the side of a highway, and he built his tumbledown shack. “I went to the recycling place and found the bits for my house,” he recalls. “There were trees here. But they burned down. It is so hot.”

Frederico’s neighbor, a new arrival to the camp, is burning trash in a hole. He, too, has come from Mendota. “I was living in an apartment building,” he tells me, declining to give his name. “But when I lost my job, I didn’t have money for rent.” His landlord wanted a long-term lease, and he couldn’t pay. Since moving out here, he has gained occasional employment. But it is barely enough to provide food and water. “If somebody finds a job,” he tells me, “they communicate it to the whole camp. That person becomes a hero.”

He does not expect to move out anytime soon. “I am working on a garden,” he says, with a proud smile. He has started to decorate, too, putting on a wooden front door and hanging a painted sign from the roof. There is a bank of dirt behind the first row of homes, and he has planted seeds into it — some oak, some pine. Eventually — in decades — they will accord him some relief from the sun.

I meet the town’s self-appointed leader, a Salvadoran immigrant who has been here for six years. “I felt super when I was able to work,” he tells me. “Now I can’t buy medicine; I can’t buy food. I used to work 40 hours a week. Now I work eight.” Compared with the elderly workers, who cannot compete in this market, he has it good. “The older people are getting into drugs and alcohol,” he says. “I resolve any conflict here. People have started to respect and look up to me.”

Happily, he has little to do as peacemaker. Generally, the camp’s 50 or so residents look out for one another, sharing skills and food and news of job openings. When things become especially dire, some ride broken bicycles around the fields, in search of bottles that might carry a small recycling value. And then they wait: for work, for the food bank, for a sign from above.

Some of these people are in the United States illegally; others are citizens who have fallen on hard times. The cynic will wonder whether it is America’s problem that a group of lawbreakers cannot find work. I caught myself wondering precisely this when touring the camps. And yet, wherever one’s sympathies lie on that thorny question, to look at the tents in isolation is a mistake. Mendota’s unfortunates are symptomatic of a much, much broader problem — a canary in the coal mine. A decade ago, the Central Valley was a wonder of the world — a place where anybody could find work. Today, it is playing host to a humanitarian disaster.

In the parking lot outside a gas station in nearby San Joaquin, Mayor Amarpreet Dhaliwal runs me through the decline. An immigrant from Punjab, in India, Dhaliwal has seen the region at its best and worst. “I’ve been here since 1983,” he says. “I worked in the fields for my first year and a half. I did everything that the farmworkers do. The picture has been slowly changing.”

The scene that Dhaliwal paints is best described as one of trickle-down poverty. “I’ve been running a small business here since 1991,” he says. “There aren’t so many customers these days. I also run an agricultural-hardware business here in town — and a small farm. We have seen the same trend. I have the numbers for the last 14 or 15 years, and there’s a downward trend. We’re just waiting for the rain.”

As we chat, a couple of older men amble slowly and unsurely down the fading railway lines that run through the city. One of them is wearing a ripped vest and a faded New York Yankees cap; the other is in a filthy Dickies shirt and a tattered Puma hat. Neither man has many teeth left, and those that do remain are rotten and brown. The heavy green stains on the pair’s jeans and sneakers reveal that they are returning from a shift in the tomato fields. This has been a good day.

Such days are few and far between. “They used to come and drag us out of the house,” one of the men tells me. Now, “they rotate people around to give us all a chance.”

“Sometimes people bring them food or clothes,” Mayor Dhaliwal says. “The charities have stepped up to the plate. We have a kitchen that comes two days a week. We also have a food bank. And that’s great. But these men want to earn their bucks. They don’t want handouts. This is about dignity. I want real jobs out there. I want people lining up around the block, not handouts.”

As we leave, the taller of the men clasps his hand around Mayor Dhaliwal’s arm and speaks quickly in Spanish. He is clearly nervous. “He is saying that he sleeps poorly because he lives next to the railway line,” Dhaliwal tells me. “He is worried that the gas tanks behind his home are going to explode and kill him.”

“I got this mark from a snake,” the mayor tells me, pointing to the long scar that runs along his elbow. He looks at up at the sky. “I could have died, but God saved me.”

In Huron, I meet with a peer of Dhaliwal’s, Mayor Sylvia Chavez. Home to 7,000 people, Huron is the fourth-poorest municipality in all of California. “Look outside,” Chavez urges me. “It’s June, and the town is empty — as if it were a winter day! Usually, we’d have trucks and buses coming through. Usually, there would be traffic lines at the four-way stop. Usually, there would be lots of new faces.”

Not anymore. Huron, which has a population that is 98 percent Hispanic, has an unemployment rate of 35 percent. “The guy at the gas station across the street no longer sells gas, because there’s nobody to sell it to,” Chavez tells me. “He just does contract work now.” This, it seems, is a fairly common story. Ten years ago, Huron Tire Service Inc. was in such demand that the owner was running out of space in which to keep his inventory. “There were piles of tires all over the place,” Chavez says. Today, he orders his supplies ad hoc.

The decline in commercial activity has hit the city’s government hard. Sales-tax and gasoline-tax receipts are down dramatically. Courtesy of harsh spending cuts, 2015 was the first year in five that the city was in the black. “We’re just holding on,” Chavez tells me. “We’ve had to cut a lot. It’s difficult to know what to do.”

The human cost is real. “People used to leave their doors open at night,” Chavez recalls. “Now they can’t leave anything outside. We have a lot of stealing now. There are break-ins at homes; there is theft from farms and stores. I don’t walk around late at night anymore.” Domestic violence and child abuse have become “big problems,” as has substance addiction. Chavez cannot work out why the decline of the area hasn’t become a bigger story. Why isn’t it leading the national news?

Even locally, there is a good amount of shoulder-shrugging. “I went to a meeting in Fresno,” she says, rolling her eyes, “and they were talking about putting together a new committee to regulate the supply of groundwater. I sat there listening to them and I thought, Another agency: That’s exactly what we need!”

Huron serves as a particularly extreme example of the Central Valley’s predicament. But the challenges that it is facing are by no means unique. In her downtown office, the sheriff of Fresno County, Margaret Mims, lays out the numbers. “Back in 2010,” she explains, “we just didn’t have the sales or property taxes. So we had to lay a whole lot of people off.”

“A whole lot” is no exaggeration. In the space of a few months, the county had to let 77 people go. “We lost deputy-sheriff positions. We lost correctional-officer positions. It affected everybody.” Things are improving — slowly. But, Mims sighs, the department is “still about 70 deputies short of where we were in ’09.”

“The unemployment rate has made the gangs worse,” Mims tells me, “especially if there is violence in the home. The kids look outside, and they see the gangs. They move from a dysfunctional family to a functional one.” Such behavior makes the economic picture considerably worse, contributing to a disastrous spiral that is going to be extremely difficult to break. A piece of copper from an automated pump may be worth around $10 to a criminal, but it costs around $2,000 to replace. Even worse, if farmers do not initially notice the theft, they may have to wait for replacement parts and end up losing their crops. This results in fewer opportunities for work, which leads more people to crime, which . . .

“In the ’09–’10 budget year, we closed down three floors of our county jail,” Mims recalls with a grimace. “We just couldn’t hold people who needed to be held. That was a horrible time to live through.” It was not just petty thieves who benefited from the absence of jail space. “There are 442 inmates per floor. We had to let 1,326 people go,” Mims says. “We couldn’t afford the staff that it took to guard them. I just hated the message that it sent. The feeling out there was, ‘We can do whatever we want because they don’t have jail space.’” Eventually, Mims had to draw a line — at murderers.

Todd Suntrapak, the CEO of Valley Children’s Hospital, knows all about such tough choices. The drought, he tells me, is “not a very sexy issue.” In consequence, the coverage of its ruinous fallout has been “limited to this valley.” “That this is not a bigger issue in Sacramento — or even nationally,” he submits, is “unimaginable.”

For the facility he manages, the drought has been little short of a disaster. Valley Children’s is the only pediatric hospital between San Francisco and Los Angeles, and it was short of doctors when times were good. Now, it simply cannot cope with the demand. “We have seen double-digit increases in volume to our ER for the last four years,” he records. “Thirty-three percent of kids in the area are living in poverty, and that number is likely to increase.”

Newly unemployed workers continue to stream in, mostly “coming for the primary care that they were unable to get in their communities.” By the time they get here, they’re invariably sicker. Because so many fields are fallow, the amount of particulate matter in the air has increased considerably. This has led to an increase in chronic respiratory diseases, and it has provoked lethal complications among those who are already ill. “The dust can be a death sentence,” Suntrapak concludes. “If you have a weak immune system, it’s catastrophic.” And it’s not just the environment. The “child-abuse-prevention team is busier than it’s ever been.”

This year, Suntrapak’s staff is already 20 percent over its budget assumptions. The state is paying, too. Eighty-two percent of the patients at Valley Children’s are on Medi-Cal, California’s version of Medicaid. Six years ago, that number was 70 percent. For many, it is no mean feat just to get here. “They use up whatever gas money they have for the month just to reach us,” he tells me. “And then they can’t pay for the medication they need.”

At an emergency meeting run by El Agua Es Asunto de Todos, attendees are tearing their hair out. El Agua was formed by a former consul to Mexico, Martha Elvia Rosas, in the hope that sustained action would draw attention to the water crisis and force the federal government to act.

The speakers are schoolteachers, charity workers, medical professionals, university professors, family farmers, and local politicians — not your typical critics of runaway environmentalism. But, having watched their communities crumble, they have been moved to act. “There has to be a compromise,” one woman tells me before the meeting starts. “People are suffering.”

“People go to the grocery store,” says a teacher from the city of Firebaugh, “and they see melons, they see lettuce, they see tomatoes — and they think it’s all okay. In San Francisco, they turn on the faucet and they see water. It’s all taken care of. Nobody cares. People haven’t seen the devastation that’s going on here.”

When I ask for information, the visitors surround me and share their stories of decline. A once “vibrant school system with lots of parent support” has been turned into a nightmare, in which families “starve and scrape together to survive”; there is abundant “domestic violence,” and “kids need constant counseling”; single-family homes are now “hovels for multiple families,” while “garages are shelters for out-of-luck workers”; the food banks have “gone from assistance to subsistence” — so necessary, perhaps, that “in 70 or 80 percent of communities, they are indispensable.”

One gentleman, a soft-spoken local politician whose constituents have been hit hard, strikes a desperate tone. “We’re losing hope,” he laments. “Is anybody out there listening to us?”

He is unsure that they are. “We’re starting to think of extreme ideas,” he says. Those ideas? Blocking the freeway; limiting the flow of produce to market — anything that will force people to pay attention.

It is clear that he is just blowing off steam with such talk. Even the most passionate of my interlocutors — a middle-aged Hispanic man who talks in fiery, urgent language — is aware that such courses of action would be counterproductive. “This is a population that wants to work, not cause trouble,” he tells me. “If they had their way, you would only see them early in the dawn hours of the morning, when they are going into the fields. Then you would see their shadows when they leave the fields at night. They are not going to do anything sensational. They don’t want to ruffle feathers.”

He will be setting no fires. But his anger is real, and it is palpable. “I love the environment,” he says. “I fought to protect the majestic redwoods. But when our group invited the EPA to meet with the farmworkers and families here, they declined.” So, disgracefully, have California’s elected representatives. Time and time again I hear it said that politicians outside California are more interested in finding a solution than those within. “Where is Barbara Boxer? Where is Nancy Pelosi?” Noting caustically that Hispanics are being disproportionately affected, some go so far as to suggest that there is racism at play.

There is not — just environmental zealotry and an arrogant indifference to its human cost, borne by these people suffering under the sun. People who walked into the fields looking for the American dream but found it dammed at the source. If it so wished, Congress could amend the Endangered Species Act tomorrow, and the valley could enjoy a little more of the water that it needs to raise its daily bread. But, for now at least, Congress will not do so — not, one suspects, until breakfasting grandstanders in Washington, D.C., come to ask in irritation why the orange-juice jugs are empty and there are no longer any melons in the fruit bowl.

Michael Tadeo

Deputy Communications Director

Senate Energy & Natural Resources Committee