Posted July 7, 2011
The Wall Street Journal: Jobs in the Pipeline: With 9.1% unemployment and gasoline prices in the stratosphere, President Obama must sometimes wish that some big corporation would suddenly show up and offer a shovel-ready, multibillion-dollar project to create 100,000 jobs and reduce U.S. reliance on oil from dictatorships. Oh, wait. His Secretary of State has had that offer sitting on her desk since she was sworn in. The trouble is that the Administration can't approve it without upsetting its anti-fossil fuel constituency. And so the proposal sits. In September 2008 TransCanada applied to build a new pipeline -- the Keystone XL -- to bring diluted bitumen from the oil-rich tar sands of Alberta to thirsty American refineries on the Gulf Coast. It is hardly a radical proposal. Canadian crude has been flowing to the U.S. for decades. Another Canadian company -- Enbridge -- operates the Clipper pipeline across the Canadian border to Chicago. In July 2010 TransCanada began operating its Keystone pipeline from Alberta to Cushing, Oklahoma, which is a major storage and pricing depot...TransCanada estimates that building the pipeline will mean more than $20 billion -- $13 billion from TransCanada itself -- in investment and 13,000 new American jobs in construction and related manufacturing. The company also expects more than 118,000 "spin-off" jobs during the two years of construction. TransCanada says it has signed building contracts with four major U.S. unions. It projects that construction will generate $600 million in new state and local tax revenue and that over its life the pipeline will generate another $5.2 billion in property taxes. The Energy Policy Research Foundation in Washington estimates that by linking to the XL, oil producers in North Dakota's Bakken region will enjoy efficiency gains of between $36.5 million and $146 million annually. Lower transport costs will mean savings for Gulf Coast refiners of $473 million annually if the pipeline meets conservative expectations of shipping 400,000 barrels per day. The Virginian-Pilot: Webb, Warner Push to Start Offshore Oil and Gas Exploration: U.S. Sens. Jim Webb and Mark Warner introduced legislation Wednesday that would speed up the timetable for natural gas and oil exploration off Virginia's coast and expand the state's share of offshore territory...If approved, the Webb-Warner bill would require that the sale of oil and gas leases for areas off Virginia's coast be included in a 2012-2017 federal plan. The Virginia sales were expected to begin this year but were put on hold by President Barack Obama's administration until at least 2017 in the wake of the Deepwater Horizon oil spill last year in the Gulf of Mexico. "Opening up and expanding Virginia's offshore resources to responsible natural gas and oil exploration holds significant promise for boosting needed domestic energy production, while bolstering the commonwealth's economy," Webb said in announcing the bill, called the Virginia Outer Continental Shelf Energy Production Act of 2011...The proposal was praised by Gov. Bob McDonnell, a Republican, who successfully pushed for a state law last year that requires that most revenues from offshore drilling be used to fix the state's transportation system. If approved, offshore drilling "will help move our nation closer to energy independence, while bringing much-needed jobs and revenue to the commonwealth," McDonnell said.
Fuel Fix Blog: Geosciences Prof: Natural Gas Drillers In It for the Long Haul: "The economic models that are being run by the major players in these gas shales recognize an eight- to 10-year payout," Engelder said, adding that the decade-long timeline factors in the initial expenses of leasing the area, drilling wells and establishing infrastructure at the sites. "The economic models that I've seen recognize a tremendous front-end expense" ultimately paid for by future production. "There's a disconnect between industry and their particular statements about what this business is -- and it really is a long-term investment -- and Berman's view that it has to pay off in a relatively short period of time," Engelder said. To be sure, Engelder said, it may take a while for the economics underpinning the new wave of natural gas drilling to shake out. "The liftetime of gas wells . . . is considerably longer than a lot of the conventional wells. and so then there is going to be a fundamental shift in the way that industry deals with the economics of these gas shales," Engelder added. "The details of this, of course, will have to be worked out by industry and the capital markets and people who fund all of this. There is going to be some shift in how the economics of this type of hydrocarbon work."
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