In the Pipeline: 3/18/11

Bromwich does a great “Annie” impression: “Tomorrow! Tomorrow! I love ya Tomorrow! You’re permits are always a day away! Platts (3/17/11) reports: More deepwater permits in the Gulf of Mexico will be forthcoming “in the next few days,” Michael Bromwich, the director of the Bureau of Ocean Energy Management, Regulation and Enforcement told a House subcommittee Thursday…Bromwich said the number of pending deepwater permit applications exceeds 10 for the first time since last year’s Deepwater Horizon disaster…Bromwich, testifying before a House appropriations subcommittee on the proposed 2012 budget, said more permit applications are coming in since two groups announced last February that they would offer spill containment systems to exploration companies. 

I love it when a plan comes together. President Obama’s green dream being fulfilled on the backs of American motorists Business Week (3/18/11) reports: “If you want to make people switch toward cleaner energy sources,” says Nigel J. Gault (IHS), chief U.S. economist for IHS Global Insight, “you need to change the price incentives people are facing. One way to do that would be to make traditional energy much more expensive.”…When gasoline prices go up, Presidential approval ratings historically go down. So the current occupant of the White House is offering sympathy to drivers suffering sticker shock at the pump and publicly ruminating about releasing oil from the nation’s strategic reserves. “For Americans already facing tough times, it’s an added burden,” Barack Obama said at a Mar. 11 news conference…Still, there’s a silver lining in higher oil prices—or, rather, a green lining—for Obama, who has made clean energy one of his paramount causes. Rising fuel costs could go a long way toward advancing Obama’s “Win the Future” vision of an economy remade by green technologies, including electric vehicles, advanced batteries, wind and solar power, and high-speed trains

It doesn’t take a crystal ball to know that the Obama Administration’s national energy policy will – as promised – make costs necessarily skyrocket The Hill (3/17/11) reports: A dozen Senate Democrats are pushing U.S. commodities regulators to crack down on what they call excessive speculation in oil futures markets…The lawmakers — led by Sen. Bill Nelson (D-Fla.) — sent a letter Thursday to Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler urging the regulators to increase margin requirements for investors that trade in oil futures…Speculators are seizing on recent political turmoil in North Africa and the Middle East to drive energy prices to unwarranted levels,” states the letter, which is signed by 12 Democrats and Sen. Bernie Sanders (I-Vt.)…Backers include Sens. Sherrod Brown (D-Ohio), Maria Cantwell (D-Wash.), Barbara Boxer (D-Calif.) and Al Franken (D-Minn.).

New Rule: All elected officials must take econ 101 before taking the oath.  Barney, here’s your first lesson: if oil supply is reduced and demand increases, we will have higher prices New York Times (3/17/11) reports: “There is no question” that speculation is playing a role in the rise in gas prices, Rep. Barney Frank (D-Mass.), who empowered CFTC to crack down on oil futures traders in last year’s financial reform law, said in an interview….As Republicans aim to unite two incendiary energy issues by warning that U.S. EPA could drive up gas prices, Democrats are turning to their own dual argument — one that links oil-futures markets to fuel costs and attacks the GOP for proposing to cut the regulation of “speculators.”… Pinning an increase in gas prices on oil speculation is not a new maneuver for Democrats, who made similar calls for stricter regulation by the Commodity Futures Trading Commission (CFTC) when gasoline hit $4 per gallon in the summer of 2008. But the Democratic return to blaming pump prices partly on Wall Street comes as Republicans press to cut CFTC’s budget by one-third, giving Democrats a fresh pushback against the GOP message that reining in EPA would help drive gas costs down.

How to shut down energy production in the Gulf in three easy steps: 1.) offer a lease; 2.) delay permits; and 3.) shorten the term of the lease. Easy, peasy lemon squeezy! Fuel Fix (3/17/11) reports: The Obama administration is considering a carrot-and-stick approach to prod energy companies to move more quickly in producing oil and gas from federal drilling leases…President Barack Obama already proposed the punishment side of the equation, by asking Congress to impose a $4-per-acre “use it or lose it” fee on onshore and offshore leases as part of his federal budget plan. That proposal has been echoed in newly introduced legislation in the House and Senate…Today the nation’s top offshore drilling regulator hinted at incentives that also could be used to spur companies to move quicker…Options include shortening the term of offshore leases — which is customarily 10 years — and lowering the royalty rates that companies pay for production that happens early on…“With a shorter period of time, there is obviously incentive for them to do it faster,” said Michael Bromwich, the director of the Bureau of Ocean Energy Management, Regulation and Enforcement. “Another possibility we have talked about and explored is changing the royalty rate and charting a lower rate if the property is developed very quickly.”

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