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Oil and Gas Roundup — April 5

April 05, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

Russian execs’ dismissal of U.S. shale boom rings untrue

Late last month, Alexey Miller, CEO of the Russian energy giant Gazprom, dismissed the energy boom occurring in the U.S. right now as a “soap bubble [that] will burst soon” – and said the United States was “not a competitor” to Gazprom.
“Currently, there aren’t any projects that we know of where shale gas production would be profitable,” Miller said. He added that “absolutely all the boreholes” in the U.S. are empty.
In the same article, published by Russia’s state-sponsored outlet Russia Today, Vagit Alekperov, president of Lukoil, another huge Russian energy firm, also dismissed the advancements the United States has made in shale drilling.
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“Of course, it is a great achievement on the part of U.S. engineers that America is now producing oil and gas from shale. In order to do it, they had to drill very tricky wells and do hydraulic fracturing,” he said – then added, “Undoubtedly, this is an achievement, but I wouldn’t call it a revolution.”
Coming from a typical business executive, these kinds of comments toward competitors could be dismissed as corporate bluster. It’s the same kind of talk that was heard during the Bush administration, when Russia seemed to celebrate each one of the U.S.’s multiple missteps in European and Iraq relations. 
Coming from Miller and Alekperov, the comments have weight and deserve attention.

Montana fracking boom sparks Keystone pipeline support

The contentious Keystone XL pipeline still hasn’t been approved, but one Montana town is excited about the project thanks to the recent fracking boom in the area.
Calgary-based TransCanada plans to build a pipeline from North Dakota's booming Bakken area to Baker, Mont., where it would tie into the proposed Keystone XL line.
Fracking Boom
CBC's Erin Collins takes a look at hydraulic fracturing in a four-part series this week on radio, television and online.
If approved, Keystone XL would take oil from Alberta’s oilsands through the heart of the U.S. Midwest to refineries on the Gulf Coast in Texas for shipment to consumers around the world.
Mona Madler, with the Baker Chamber of Commerce, says a pipeline is needed whether or not it ever connects to Alberta's oilsands.
“It does make sense because there is a great production increase in this area and it is going to continue to increase.”
Cliff Hornung, the mayor of Baker, also believes the Baaken Marketlink will be built no matter what happens with the Keystone XL plan.
“Whether or not that permit is accepted, in the back of my mind, I think they have other alternatives they can do until that is decided,” he said.

Boulder, Colo., editorial outlines anti-frackers’ hypocrisy

So you don’t like fracking, huh?
Hope you like blood for oil.
Surely you remember “blood for oil.” Blood for oil was the reason we invaded Iraq — at least that’s the way the local peace and justice crowd told it.
Blood for oil — or more precisely, the slogan “no blood for oil” — was all the rage in 2003. During the Iraq War the hyperactive activists at the Rocky Mountain Peace and Justice Center — the folks who are behind some of the local anti-fracking hysteria — were obsessed with blood for oil.
But that was then. Today the phrase “no blood for oil” seems almost quaint. That’s because U.S. petroleum imports peaked in 2005 and 2006 at about 13.7 million barrels a day (5 billion barrels a year), or about 73 percent of consumption, and started an abrupt decline. Last year they amounted to 10.6 million barrels a day (3.9 billion barrels a year, or about 62 percent of consumption), a 22 percent decline in the space of six years and the lowest level of imports in 20 years. A lot of analysts think imports could keep dropping at that rate indefinitely. Energy independence is a real possibility.
In no small part thanks to fracking.
Thanks to fracking, the United States’ strategic interest in what goes on in the Middle East is taking quantum leaps downward. The need to intervene militarily in the Persian Gulf, or anywhere else in the world for that matter, to secure access to oil is fading away like a Cheshire cat.
Blood for oil? Hey, that’s about to become a Chinese problem, not an American one.

Dems’ attacks on special energy industry tax breaks reveal … there are no special energy industry tax breaks

President Obama has been telling America for months that special tax breaks for the oil and gas industry must come to an end. The presidential demand always prompts puzzled gazes among tax and energy-industry experts, who ask: What special tax breaks?
Thanks in part to a bill sponsored by Rep. Chris Van Hollen, a Democrat from Maryland and ranking member on the House Budget Committee, it's all much clearer now. The congressman has inadvertently called attention to the fact that those special tax breaks just for the oil and gas industry don't exist. Mr. Van Hollen proposes to create some very special punishments instead. Regardless of the bill's fortunes on Capitol Hill, it has already performed a public service by illuminating the fallacy behind assaults on the industry.
Mr. Van Hollen's ''Stop the Sequester Job Loss Now Act" would raise taxes on individuals—what he calls the "Fair Share on High-Income Taxpayers"—and effectively hike taxes on the oil and gas industry by changing the way their taxes are calculated. The problem with the bill is that the so-called tax breaks the industry would lose are not specific to oil and gas at all. They are widely available to lots of industries.
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