Obama's Great Alaska ShutoutInterior bans drilling on 11.5 million acres of 'petroleum reserve.'

WSJ ^ | October 14, 2012 | Staff

[Snuph]

President Obama is campaigning as a champion of the oil and gas boom he's had nothing to do with, and even as his regulators try to stifle it. The latest example is the Interior Department's little-noticed August decision to close off from drilling nearly half of the 23.5 million acre National Petroleum Reserve in Alaska.

The area is called the National Petroleum Reserve because in 1976 Congress designated it as a strategic oil and natural gas stockpile to meet the "energy needs of the nation." Alaska favors exploration in nearly the entire reserve. The feds had been reviewing four potential development plans, and the state of Alaska had strongly objected to the most restrictive of the four. Sure enough, that was the plan Interior chose.

Interior Secretary Ken Salazar says his plan "will help the industry bring energy safely to market from this remote location, while also protecting wildlife and subsistence rights of Alaska Natives." He added that the proposal will expand "safe and responsible oil and gas development, and builds on our efforts to help companies develop the infrastructure that's needed to bring supplies online."

The problem is almost no one in the energy industry and few in Alaska agree with him. In an August 22 letter to Mr. Salazar, the entire Alaska delegation in Congress—Senators Mark Begich and Lisa Murkowski and Representative Don Young—call it "the largest wholesale land withdrawal and blocking of access to an energy resource by the federal government in decades." This decision, they add, "will cause serious harm to the economy and energy security of the United States, as well as to the state of Alaska." Mr. Begich is a Democrat.

[FroggyTheGremlim]

I am astonished that some poor, unemployed citizen with five or six children to feed who's just lost his job, hasn't started an action to storm the Interior Department Headquarters, dragged Ken Salazar out by the scruff of his neck, stripped him naked and

covered him with tar and feathers.

[Snuph]

Actually the Federal Reserve is buying around 60% of it. We are in effect taking it out the left pocket and putting it in the right pocket. Can you say massive inflation? its coming real soon.

[Carry_Okie]

Actually the Federal Reserve is buying around 60% of it.

I know. And the other 40%? Just who do you think "the Fed" is but those same big stockholders? And don't start with "institutions" because we both know how a corporation can be controlled with a very small fraction of the total voting stock.

[Snuph]

The Fed is owned by the very same banks it keeps giving money to.

[Carry_Okie]

The Fed is owned by the very same banks it keeps giving money to.

Uh, no, but you're getting warmer. The Fed is owned by the STOCKHOLDERS of the very same banks to which it keeps giving money. Now, who owns the controlling stock?

[The Duke]

The trains in my county would cut off public access to the parks and decrease access to the water front.

Can't you just let the train get by and scoot across the tracks? Also, in this neck of the woods we have train bridges, and you can just drive right under 'em!

[Snuph]

You are correct.

[Snuph]

Thank you all for the great comments

[Carry_Okie]

Sorry to shout, but my point in emphasizing this is that when we depersonalize influence buying on the part of corporations as if they were truly individuals, we detach from that discourse the motives of the people who in fact make those decisions to exert influence by which to benefit from those decisions. It is to put a nameless face on corruption that is in fact on behalf of influential families of stockholders owning said tax-exempt foundations.

This type of structural corruption was inserted into the Constitution from the beginning of the Republic. It replaced British royal mercantilism with a corporate fascism that is strictly American in character. They expand dependency to acquire the power I described above at the expense of the middle class by dilution of their assets. They sponsor regulations to stay on top, cloaking it as "environmental protection" while they rape the rest of the planet. They use that influence to make the export of middle class jobs abroad more profitable. They expect an impoverished public to fund their protection abroad.

I am not speaking of all wealthy people here. I love the rich entrepreneur. I am speaking of a specific group of individuals, often the heirs of great wealth, people who will take a tax cut and invest it abroad. These socialist idiots could get us all killed.

[Eva]

Before I finish reading your link, I ‘d like to mention that the Obama partners in the coal terminal in Whatcom County, are Warren Buffet’s BNSF, Goldman Sachs, as majority stakeholder in CARRIX (the self described largest cargo moving company in the world), Peabody Coal, and of course the unions, led by Richard Trumka as the former head of the United Mine Workers. Then there is is BP, which also has a vested interest in this coal terminal to ship its calcinated coke.

Basically what you are describing is fascism and so is this coal terminal. The Republicans, who are supporting the terminal are somehow blinded by Obama’s war on coal fired power plants. Obama wants to ship the coal to Asia, not burn it here.

[Eva]

Each train will take ten minutes and there is nothing saying that there won’t be another right in back of it. There will be no mitigation, no over passes, no under passes, and what will block the parks are sidings, where they let the trains sit, for hours or even days, often running their smelly, noisy diesel engines the whole time.

[Ladysmith]

Really?! How does he do that when the coal mines are shut down due to outrageous EPA regs and miners laid off?

[Eva]

It’s uninformed people like you that enable Obama to get away with it.

Obama is only waging a war against coal in the Eastern half of the country, real coal that is, from mines on privately owned land. While Obama fights coal in the East, he is facilitating and subsidizing the sub-bituminous coal in the Powder River Basin in Wyoming and Montana, which is on federally leased land, mostly owned by the Crowe Indians and other tribes. The federal government de-classified sub-bituminous coal as coal, back in ‘92, freeing it from government regulations. Obama doesn’t want to burn the sub-bituminous coal in the US. He wants to send it to China. That’s why he needs the coal ports in WA and Oregon. (California had one, but it was closed down)

China doesn’t really even want the coal, anymore. They told the Goldman Sachs people that the Chinese market for PRB coal was “extremely time-limited, 3.5 years at the outside and dependent on a weak US dollar. They said that if the US dollar increased by $.25 against the yen, it would kill the deal. We are a year and a half into this and no where near close to start up. So, who are they going to sell the coal to, if not to China. Oh, and the price of sub-bituminous coal has been dropping due to the world wide recession. Sub-bituminous coal is used in smelters and cement factories, mostly.

[thackney]

The primary reason coal prices have dropped in 2012 is utilities idling coal plants and running the Natural Gas turbines more. This is due to increase regulation on coal plants and lower natural gas price due to increased production from shale.

[Eva]

The primary reason that the price of sub-bituminous coal has dropped is because it is mostly used in smelters and cement factories. It doesn’t have adequate BTU value for power plants without expensive new technology.

The government hoped to force coal plants to make the switch to the sub-bituminous coal because it is lower in sulfur, by adding all the additional regulations and costs to regular coal. With the drop in gas natural prices, it didn’t make any sense for power companies to make the switch to sub-bituminous coal. Sub-bituminous coal is about half lignite.

It is the world wide recession that has caused the slow down. Australia was able to avoid the recession through their boom in mining and now between the slow down of the Chinese economy and added environmental regulations, mining in Australia is slowing, also.

It is not just the recession that impacting the Chinese market for sub-bituminous coal, though. The Chinese have recently developed their own coal field in Mongolia with the help of the same mining company that is Obama’s partner in the Powder River Basin, Peabody. Also, China is a partner in the huge LNG port that is being built off the shore of Australia, as well as other energy projects all over the world. China is diversifying their energy supply.

[thackney]

sub-bituminous coal has dropped is because it is mostly used in smelters and cement factories. It doesn’t have adequate BTU value for power plants

I do not agree.

In 2011, the US produced more Sub-bituminous coal than any other type, 510.05 million short tons. Bituminous was a close second at 500.5, Lignite was 81.0 and Anthracite on 2.3.

Coal Production, Selected Years, 1949-2011
http://www.eia.gov/totalenergy/data/annual/pdf/sec7_7.pdf

The electric power industry consumes 928.6, while the total industrial industry only consumes 71.7.

http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0703

Most sub-bituminous coal is consumed in electrical generation.

Look at figure 6.1, page 82 on the following link:

http://www.eia.gov/totalenergy/data/monthly/pdf/sec6.pdf

It is the power industry that has significantly reduced the coal consumption from fall of last year. The industrial market has changed relatively little.

[thackney]

sub-bituminous coal has dropped is because it is mostly used in smelters and cement factories. It doesn’t have adequate BTU value for power plants

I do not agree.

In 2011, the US produced more Sub-bituminous coal than any other type, 510.05 million short tons. Bituminous was a close second at 500.5, Lignite was 81.0 and Anthracite on 2.3.

Coal Production, Selected Years, 1949-2011
http://www.eia.gov/totalenergy/data/annual/pdf/sec7_7.pdf

The electric power industry consumes 928.6, while the total industrial industry only consumes 71.7.

http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0703

Most sub-bituminous coal is consumed in electrical generation.

Look at figure 6.1, page 82 on the following link:

http://www.eia.gov/totalenergy/data/monthly/pdf/sec6.pdf

It is the power industry that has significantly reduced the coal consumption from fall of last year. The industrial market has changed relatively little.

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Related info:

Natural gas-switching cutting glut
http://fuelfix.com/blog/2012/10/12/natural-gas-switching-cutting-glut/

Natural gas prices are poised for a third straight quarter of gains as U.S. power plants erode a supply glut by switching from coal at an unprecedented pace.

Gas may reach $4 per million British thermal units for the first time since September 2011 as winter heating demand picks up after mild weather a year ago, according to Mizuho Securities USA Inc., Bank of America Corp. and Tudor, Pickering, Holt & Co. Prices have jumped 8.7 percent to $3.488 since July as electricity generators used record amounts of the fuel.

A production boom that’s put the nation on course for energy independence drove gas to below $2 per million British thermal units in April for the first time in 10 years, encouraging power plants to buy the fuel instead of coal. Gas jumped 18 percent July through September as record heat in the lower 48 states stoked air-conditioning use. The market surged 33 percent in the previous three months...

Gas consumed to generate electricity surged as prices hovered near 10-year seasonal lows. Gas-fired power plants accounted for 34 percent of electricity output in July, up from 29 percent a year earlier, the department said Sept. 24 in its Electric Power Monthly report. Coal’s share fell to 39 percent from 42 percent.

[thackney]

It doesn’t have adequate BTU value for power plants without expensive new technology.

Try to relate that claim to the fact we have been using Lignite, a far lower BTU coal for decades almost exclusively for power generation.

http://www.eia.gov/cneaf/electricity/page/glossary.html#st

Subbituminous Coal: A coal whose properties range from those of lignite to those of bituminous coal and are used primarily as fuel for steam-electric power generation. It may be dull, dark brown to black, soft and crumbly at the lower end of the range, to bright, jet black, hard, and relatively strong at the upper end. Subbituminous coal contains 20 to 30 percent inherent moisture by weight. The heat content of subbituminous coal ranges from 17 to 24 million Btu per ton on a moist, mineral-matter-free basis. The heat content of subbituminous coal consumed in the United States averages 17 to 18 million Btu per ton, on the as-received basis (i.e., containing both inherent moisture and mineral matter).

Lignite: The lowest rank of coal, often referred to as brown coal, used almost exclusively as fuel for steam-electric power generation. It is brownish-black and has a high inherent moisture content, sometimes as high as 45 percent. The heat content of lignite ranges from 9 to 17 million Btu per ton on a moist, mineral-matter-free basis. The heat content of lignite consumed in the United States averages 13 million Btu per ton, on the as-received basis (i.e., containing both inherent moisture and mineral matter).

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Whatever anti Powder River Basin source you are getting information from, you need to recognize that they are lying.

[Eva]

The world-wide recession didn't hit China until 2012. Since January, the price of sub-bituminous coal has dropped about 50%. The Chinese trade representative warned local developers and investors that the Chinese market for sub-bituminous coal was extremely time limited and that the investors should not depend on China for a market for their coal. I'm not making this up. This is from a paper on a process to reduce the reactivity of the sub-bituminous coal. The problem is the added cost of the process makes the coal a poor alternative to natural gas. "Development of the K-Fuel technology began after the energy shortage of the early 1970s in the United States led energy producers to develop the huge deposits of low-sulfur coal in the Powder River Basin (PRB) of Wyoming. PRB coal is a subbituminous C coal containing about 30 wt % moisture and having heating values of about 18.6 megajoules/kg (8150 Btu/lb). PRB coal contains from 0.3 to 0.5 wt % sulfur, which is nearly all combined with the organic matrix in the coal. It is in much demand for boiler fuel because of the low-sulfur content and the low price. However, the low-heating value limits the markets for PRB coal to boilers specially designed for the high-moisture coal. Thus, the advantages of the low-sulfur content are not available to many potential customers having boilers that were designed for bituminous coal."

[Eva]

Well, no one seems to be telling your truth and the price history of sub-bituminous and lignite does not support your version, either. $7/ton was common before the boom in recent years, the high being about $20/ton.

I have a friend who managed two coke terminals and built one, Coke has a similar BTU value to sub-bituminous coal. My friend told me that they had trouble even finding a buyer for the coke and finally sold it to Brazil for $.05/ton. The cost of the transportation of the sub-bituminous used to be higher than the value of the sub-bituminous coal. That’s the reason that sub-bituminous coal was de-classified as coal in 1992 to relieve it from the expensive regulations that real coal is subjected to.

This coal could not even be moved without government subsidies for the RR. In this case, it’s Warren Buffet’s BNSF.