Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on March 6, 2014
Ukraine Crisis Means Drill Baby Drill
Russia’s invasion of the Crimea is a tipping point event that will further spur the North American oil boom. The European Union (EU) and United Statesin 2008 threatened toslap economic sanctions on Russia for invading Georgia. But after a while the criticism faded and sanctions threats were quietly dropped, because the EU is almost entirely reliant on Russia for energy supplies. A similar situation is unfolding today as the EU and U.S. are again making false threats they will to stop exports of Russian oil and gas as punishment for invading the Ukraine. But due to the latest humiliation by the Russians, a consensus is emerging that will demand the United States and its North American partners “drill baby, drill” for national security.
Twenty years ago on January 1st the United States, Mexico, and Canada implemented the North American Free Trade Agreement. The volatile Persian Gulf at the time supplied 35% of U.S. oil and most “experts” argued the world was approaching “peak oil” extraction point where supply would then dwindle rapidly. Although many Americans label NAFTA a failure, it has been highly successful in generating greater economic cooperation to prioritize and develop North America’s vast energy resources.
The United States since the 1950s was known to have the world’s largest potential oil reserves with over 900 billion barrels. But the cost of production with traditional techniques made the bulk of drilling opportunities uneconomical. American oil production has more than doubled since 1994, due almost entirely to the success of the shale revolution’s advanced extraction techniques that revitalized mature oil fields and opened up unconventional plays. While oil production cut America’s trade deficit by hundreds of billions of dollars, the greatest boon has been in tapping America’s immense natural gas reserves. The 50% increase in supply led to a 60% cut in natural gas prices and put the U.S. on the path to become the world’s largest global exporter of liquefied natural gas.
After a two decade effort to unlock Canada’s unconventional oil sands deposit, the nation’s productionhas more than doubled and Canada is now the sixth-largest global oil producer. Close to two-thirds of Canada’s 3.8 million barrels per day (mbpd) of oil is exported via pipeline to the U.S., making Canada by far the largest supplier of crude to America. Canadian tar sands production is constrained by a lack of low cost pipeline capacity for export to the U.S. It is estimated that within 5 years of approval of the Keystone XL Pipeline, Canada could increase production by another 2 million mbpd.
Mexico was slow to join the energy boom, but intends to catch up fast. Since the nationalization of oil in 1938, production from vast oil reserves has faltered due to lack of investment, corruption, and incompetent management. The Mexican Constitution made it nearly impossible for foreign companies to participate in any part of the energy supply chain, leading to technological stagnation and decreasing production. Mexico’s production today down to about 3 mbpd, causing the nation to drop since 1970 from the world’s 5th to the 10th largest producer.But Mexican constitutional reforms passed in 2013 now allow foreign joint ventures. U.S. corporations are expected to dominate the process, since they command the best technical expertise for deep-water offshore and unconventional onshore production that could add another 2 mbpd within 10 years.
Influential liberals are becoming incensed that the Ukraine humiliation may be a tipping point event that will spur oil and gas drilling. Apple CEO Tim Cook became so unhinged regarding North American oil and gas drilling that he threatened to commit corporate “hara-kiri” by suggesting: “Climate change deniers should get out of Apple Stock.” After ultra-liberal Cook took over Apple from founder Steve Jobs three years ago, he hired Lisa Jackson, former head of the EPA, to lead the company’s “sustainability” efforts. More than three-quarters of Apple’s worldwide facilities, including all of its data centers and Cupertino, CA headquarters are now run on solar, wind, geothermal, or hydro power. But while Cook focused on liberal political correctness, his legacy is largely comprised of incremental improvements in established products, tweaks to the supply chain, and more corporate transparency. Apple’s stock price seems to have recognized Cook’s leadership by dropping $179 from its September 2012 high of $705 to $526 today.
Russian President Vladimir Putin humiliated President Barack Obama by grabbing the Crimea, in spite of Obama’s threats that “We will stand with the international community.” As Joel Pollack at Breitbart wrote: “It is hard to recall a more complete setback for American power. Jimmy Carter’s response to the Soviet invasion of Afghanistan was more convincing.” The only option that the President and his Democrat allies have for redeeming themselves before the November mid-term elections is to declare “drill baby, drill” for national security.
11 Comments on "Ukraine Crisis Means Drill Baby Drill"
Nony on Thu, 6th Mar 2014 6:32 pm
We really would have been better off with Hilldog. 🙁
Northwest Resident on Thu, 6th Mar 2014 8:49 pm
Ukraine’s economy has been devastated by thieves and crooks in high places — the oligarchs and the communist party honchos left over after the fall of the Soviet Union. The Ukraine government has been one big criminal enterprise since at least 1990, and probably long before that. This may seem far-fetched, but I’m starting to think that this whole Ukraine situation has been in the planning for a long time, with the goal of removing the Ukraine government and extremely radical elements in Ukraine, and re-setting that country on a road to a less corrupt government and economy. If so, I hope they pull it off, for the benefit of the Ukrainian people who deserve a lot better than the mafia gangsters they’ve been subjected to for so long.
GregT on Fri, 7th Mar 2014 1:38 am
“We really would have been better off with Hilldog”
I assume Nony that you are talking about Hillary Clinton? Better off with? Or did you mean without?
Hillary and her ilk were very much involved in the uprising to overthrow the democratically elected government in the Ukraine. And yes NWR, this has been in the plans for a very long time. There is plenty of info on the WWW, that cuts to the chase of the western corporate media propaganda. Orlov’s post on this site might be a good place to start. Oh, and 200,000 people marching in Kiev, does not represent the majority of a country of 46 million people.
Makati1 on Fri, 7th Mar 2014 2:09 am
“…The Western economy has been devastated by thieves and crooks in high places…”
I inserted those names because they are just as correct as your statement NWM.
Russia did NOT invade the Crimea. They are allowed, by agreement, to have 25,000 troops there. That they were invited by the President of the Ukraine also points to legal right to be there.
The CIA funded goons trying to take over the country ‘invaded’ the Crimea, not Russia. Someone in DC must be insane (well, maybe there are a few who are not) to try to take over Russia’s front door and only warm water port.
I see either the Ukraine splitting East/West or war. The wealthy East Ukraine and the Crimea will go to Russia’s side and the West will get the poor Western half with huge debts. Another millstone around the German taxpayer’s neck.
Then there is the Russian spy ship in Cuba. I wonder what the US would do if Russia decides to build a military port there? Maybe with a few nuclear missile armed ships and subs? Interesting redo of the Cuban Missile crisis that almost brought the world to a nuclear war in 1962.
“…Yesterday it was revealed that Russia also has its eye on developing a military or naval base in Nicaragua, and Costa Rica is not thrilled about the idea…”
http://insidecostarica.com/2014/02/28/arrival-naval-ship-cuba-hint-russian-naval-base/
Interesting…
DC on Fri, 7th Mar 2014 2:46 am
I don’t see much evidence of any ‘thinking’ going on in this article, or even on a few *cough* of the comments. I stopped reading after ‘Russian Invasion’ part. An article that opens with made up occurrence, not worth wasting any brain cells on, seriously.
GregT on Fri, 7th Mar 2014 2:59 am
Speaking of Cuba,
Can anyone here explain to me why, or how, the US Navy has a base in Cuba with a prison that does not allow detainees the right to legal representation and/or a fair trial. Isn’t that against international law? Isn’t Cuba also a sovereign nation? Isn’t Cuba off limits to American citizens? Sorry, I really don’t understand this.
pete on Fri, 7th Mar 2014 3:13 am
Victoria Nuland U.S state dept. same one who used the f bomb about euro union.
“5 billion spent over 20 years by U.S. promoting democracy”
Estonia F.M. talking to Catherine Ashton
“snipers firing at both protestors and police hired by Maiden leaders”
tape just released. courtesy S.B.U.
Olga Bogomolets was head doctor of maiden mobile clinic, she gave the F.M. the evidence and also turned down the job of vice Prime minister of Humanitarian affairs by coup regime.
Ignorance is deadly in todays world.
Northwest Resident on Fri, 7th Mar 2014 4:31 am
GregT — I think America gained permanent rights to a little chunk of Cuba after the Spanish/American war. Somebody correct my faulty history if needed. When I was in the Navy, I was at Guantanamo Bay for about a month, when I wasn’t on my ship. Large mine fields cordon off that chunk of Cuba, with elevated watch towers and machine gunners always at the ready. Nice place. Great place to scuba dive, by the way.
Makati — When you say “The Western economy has been devastated by thieves and crooks in high places”, okay, that is true, but not until recent history. Sure, corruption always existed in the upper echelons, but TPTB were at least smart enough to give the “little people” a chance to earn a good living, to realize their dreams, and even to climb up the ladder with hard work and innovation to become one of the elite. Not so in Ukraine. The communist honchos and their cronies kept the wealth and the power and all the corruption within their circles, victimizing Ukrainians without remorse, never concerned about improving the economy to benefit Ukrainians because they already had theirs and that’s just the way they wanted to keep it. Pure thuggery – no comparison whatsoever to America or the West. And, by the way, the reason for all the financial fraud in America and the West these days is to buy time, to give you and me and them and anybody else with a brain and a good set of antennae an opportunity to prepare. But you never miss a chance to diss America, I understand that.
GregT on Fri, 7th Mar 2014 6:15 am
NWR,
I have heard that Americans are not allowed to travel to Cuba. Is this true? I know that I can’t buy my favourite Cuban rum in the States, which is an absolute shame because IMHO it is the best rum on the planet. Again, I must apologize, but I really don’t understand why the US would want a military base in a country that they don’t have diplomatic ties to?
GregT on Fri, 7th Mar 2014 8:11 am
I have my PADI certification, been a while since I’ve been on a dive though. I get scuba diving, but minefields and machine guns, not so much. They don’t really make much sense to me. I prefer women in bikinis, and cold beer.
Northwest Resident on Fri, 7th Mar 2014 3:13 pm
GregT — I’m with you on that! I’ll take women in bikinis and cold beer over minefields and machine guns any day.
I think America keeps its base in Cuba for strategic reasons — oh, and it is a good place to keep high value prisoners too, apparently.
America would have established diplomatic ties and re-allowed travel a long time ago if it was up to one of the political parties in America, but the other political party (backed by big money) is determined to keep Cuba off limits to Americans. The reasons for that, I’m sure, are confused and not entirely on the level. I wish I knew.