[Graeme]

Read The Secret Trade Memo Calling For More Fracking and Offshore Drilling

The European Union is pressing the Obama administration to expand U.S. fracking, offshore oil drilling and natural gas exploration under the terms of a secret negotiation text obtained by The Huffington Post.

The controversial document is an early draft of energy policies that EU negotiators hope to see adopted under the Transatlantic Trade and Investment Partnership (TTIP) trade deal, which is currently being negotiated. The text was shared with American officials in September. The Office of the U.S. Trade Representative declined to comment on the document.

Environmental groups fear the broad language proposed for the deal would eliminate key restrictions on the export of crude oil and natural gas, fossil fuels that contribute to climate change. The document marks the first major bone of contention in the EU deal, amid an outcry from environmentalists over leaked terms of the Trans-Pacific Partnership, a separate pact that the U.S. and 11 Pacific nations are also negotiating.

"Exports of energy goods to the other Party shall be deemed automatically to comply with any conditions and tests foreseen in the Parties’ respective legislation for the granting of export licenses," the memo reads, defining "energy goods" as "coal, crude oil, oil products, natural gas, whether liquefied or not, and electrical energy."

huffingtonpost

[eastbay]

Hey, Graeme, I realize this article involves energy. I get that. And 10,000 other articles published every day involve energy, too. If if wouldn't be too much to ask, could you please offer an idea, even a clue, maybe a hint, about what inspired you to post this particular one. Thanks!

[Graeme]

I thought that was obvious. Do you know what is in the EU-US trade doc? It appears that the EU want the US to expand domestic o/g operations (for export to EU) as part of this deal, which the US badly wants. But this is in conflict with the O admin environmental goals. There is a similar controversy over TPP deal. There are several links in the article. The agreements are binding once signed. How will negotiations for both deals proceed?

[basil_hayden]

Binding.

You're kidding, right?

How will negotiations proceed for both deals? Like this:

The fossil fuels produced in the USA will be used to fuel all of the politicians jets, limousines and police forces as they attend the next bullshit G-whatever conference there is to discuss the environment.

Get it yet?

[ROCKMAN]

And just the obvious reminder: the US gov't neither drills for oil/NG nor exports any. There's nothing in any trade agreement that can force it to do what it isn't capable of doing in the first place. Of course there are things any gov't can do to inhibit or foster fossil fuel development. Consider the facts that the current US gov't has offered over 150 millions acres of offshore leases, increased coal exports from gov't leases to record levels, has imposed no federal restriction on frac'ng our shakes and has not banned the importation from Canada of the "dirtiest oil" on the planet. That last fact has allowed less oil imports to the US from the Middle East leaving more for the EU. And then compare that to the fact that a number of EU counties have banned frac'ng and that almost all the oil/NG resources belong to the govt's of the EU countries which many haven't made readily available as are the privately owned rights in the US. If someone wants to worry about new trade agreements encouraging more fossil fuel development IMHO they should be more concerned about demands the US might impose upon Europe to encourage greater fossil fuel development. Recent speeches by President Obama have been somewhat critical of EU govt's for not being more aggressive developing their own energy resources. Perhaps that's a hint as to what the US gov't might be laying on the negotiations table.

[Graeme]

For further background info, please read the contents of the wiki article on the Transatlantic Trade and Investment Partnership and Trans-Pacific Partnership including participating (and potential partnership) countries, benefits and criticisms. Last night, I did a bit of searching on the TPP (I live here; but it's similar to TTIP and NAFTA) and found this article by the Sierra Club, which attracted my attention. The second paragraph sums up their concerns:

This trade deal, the Trans-Pacific Partnership (TPP) - essentially an expansion of the North American Free Trade Agreement (NAFTA) - stands to erode our laws, further empower multinational corporations, and take away protections for our air, water, and climate. If agreed upon by the 12 negotiating countries, including the U.S., Japan, and Vietnam, the TPP could spell out environmental disaster.

What surprised me is that the US intends to sell it's gas to the Pacific nations as well!

This pact would also require the U.S. government to automatically approve all exports of U.S. liquified natural gas to countries in the agreement. The resulting increase in natural gas exports would open the floodgates for dangerous fracking in our country, sacrificing our air and water quality.

Please read entire article.

[Graeme]

Export Delusions: Why the rush to export natural gas is a fool’s errand

On a sweltering day in May last year I sat dumbfounded at a US Senate Energy & Natural Resources Committee meeting. Pat Outtrim, VP of Cheniere Energy, was arguing for fast-tracking approval of Liquified Natural Gas (LNG) exports because it would benefit energy consumers… in Great Britain.

A year later and the drum beat for approving LNG export operations is reaching a crescendo. This time it’s spurred by claims that we must save Europeans from the grip of Russia, who is using its position as the primary natural gas provider in Europe to annex Crimea and assert its power in the region.

In both cases, the rationale is the same: The US has an over-supply of natural gas—thanks to an explosion of hydraulic fracturing (“fracking”) for previously inaccessible shale gas—and it’s our duty as international citizens to make sure that our friends in Europe (not to mention Asia) can benefit from our lower-cost largesse.


What seems to be entirely missing from the debate are a few realities that should render this debate moot:

Reality #1: The U.S. is still a net importer of natural gas. Yes, you read that right. In 2013, we produced 24.28 trillion cubic feet (tcf) of natural gas, but consumed 26.03 tcf. Now, the gap between production and consumption has been shrinking in the last decade as shale gas drilling went into overdrive, but our storage of natural gas supplies (needed in preparation for the cold winter months) is at alarmingly low levels—more than 40% lower than it was just a year ago. The idea that we have a surplus of natural gas to export is bogus.

Reality #2: By the time these LNG export terminals are completed, the “shale revolution” may have come and gone. As Post Carbon Institute has documented in painstaking detail, shale wells deplete at breakneck speed—on the order of 70% for a typical well in the first year and between 30-50% for entire fields. That means industry must replace nearly half of production each year just to maintain current levels. But there are only so many economically viable drilling locations. Unless drilling rates grow dramatically, it appears that all the major shale gas plays—with the exception of the Marcellus—have already peaked. It’s likely that by the end of the decade, US natural gas production will again be in decline.

Reality #3: The industry is losing its shirt at current natural gas prices—the real motivation behind the LNG export push. The shale gas drilling frenzy led to a steep decline in natural gas prices; this was great for utilities and consumers but has led to a lot of companies writing off assets and even more to rely on debt to keep the drilling treadmill going, since many of these operators are losing money. Exporting natural gas would raise prices domestically, something the industry badly needs in order to earn a profit.

Reality #4: While the benefits are fleeting, the costs will be borne for generations. There is a lot of debate about the climate and health impacts of shale gas drilling, with studies showing conflicting findings (for a great, albeit wonky, resource for peer-reviewed papers on shale gas check out this library put together by PSE Healthy Energy). But a few things are difficult to dispute:

resilience

[Sixstrings]

The European Union is pressing the Obama administration to expand U.S. fracking, offshore oil drilling and natural gas exploration under the terms of a secret negotiation text obtained by The Huffington Post.

So why would the EU want this -- is it BP / royal dutch Shell / other euro gas corps wanting to expand in the US,

or,

Is it what's going on in Europe right now with Russia. And that they may need to import from us, and need us to boost production.

Or could be both, obviously.

Anyhow Europe needs the energy, we want the business, it's a national security thing so drill baby drill (seriously we can't let Quinn and Dorlomin just shiver with the gas shut off one day that's a bunch of BS.

Serious national security issues trump environmental concerns about fracking and offshore drilling.)

[Pops]

I had meant to comment on this article because one of the effects of the fracking bubble of associated gas resulting from press release stock pumps is it leads to the misadventures of politicians who believe the "reports" of duly constituted agencies reflect actual facts - regardless of disclaimers.

The USGS and EIA have for too long simply drawn a straight line through past growth to extrapolate future growth. Cut their budget and surprise them with an innovation like fracking and they run out and hire independent contractors to come up with reports like that on the Monterey. Not surprisingly, the contractor they hired has a history of doing studies on oil shale (Link, see reports & studies). They looked at a well or 2, extrapolated the results over 20 million acres and came up with a technicolor Unicorn, just as the bond rating agencies made money giving mortgage CDOs good ratings.

So now, everyone including the politicians here and abroad are convinced the US is the new KSA and are acting accordingly.

.

[ROCKMAN]

Six - And that brings us back to the point I made before: President Obama and the govt don't drill or frac. Foreign companies, like BP, already hold significant lease positions in federal offshore waters. And given the current administration has offered 150 million acres of new lease the EU company have already had plenty of access. Frac'ng opportunities? In the last few years She'll Oil spent $3+ billion drill and frac'ng just one small area of the Eagle Ford, got their ass handed to them, took a $2 billion write down and shut down all their US shale activity. So wide open door for EU countries and others to frac all they want. Then add the fact that the US govt has no restrictions on frac'ng it isn't clear to me what they are asking the US govt to do.

As far as exporting fossil fuels to the EU what exactly is the problem? The US govt has no restrictions on exporting refined products to the EU. We've been shipping them diesel for decades. Today a very significant portion of US refinery output is being exported to whoever can afford it. Oil? The govt has allowed dozens of exceptions to the ban in recent years. If an EU govt requested such I'm pretty sure with the happenings in the Ukraine it would be granted.

Coal? The EU is already the largest buyer of US exported coal. They are free to increase those purchases as much as they like. The US govt is currently fasttracking approval for the expansion of a coal export terminal in Texas that would aid EU imports.

NG and LNG? We'll just ignore the fact that the US is a net NG and LNG importer. A year ago the govt granted an LNG export license to Cheniere to ship to England. It will still be another 18 month before the infrastructure is completed to do so. The govt has already approved 6 new LNG export licenses and reviewing others. But even though it will take years for those facilities to be built any EU buyer will have to contract for that long term LNG supply now. And provide guarenteed proof of being able to pay for it. Very little of that exported LNG will be available as spot market purchases. And spot LNG often cost 2 to 3 times the price of NG so I doubt it would be popular in the EU.

So back to the question of what the EU is asking the US govt to do differently? Offshore leasing is wide open. The govt has no restrictions on frac'ng that need to be lifted. The govt allows all the EU countries to import all the refined products they want which is particularly helpful given EU refiners are having difficulty maintaining profit margins. About the only thing the US govt can do is ban any new LNG IMPORT contracts. I doubt free trade agreements would allow voiding existing long term contracts. But given the govt has just approved a new license permitting the importation of 180 bcf/year for the next 20 years Into Maine (that's 3.6 trillion cuft of future US NG production) such a ban seems unlikely.

Maybe the simple answer is that EU politicians just want to give the appearance they can do something on a political level to fix EU energy problems. Good luck with that.

[Keith_McClary]

Why the New Euro-Canada Treaty is a Gift to Oil Firms

But while climate activists were demonstrating and some 100 world leaders were making pledges to finally get serious about climate change many of those same leaders had already put their name to an international investment treaty parts of which seems to have been virtually written by the same oil companies targeted for criticism and calls for greater regulation. That agreement is called the Comprehensive Economic Trade Agreement (CETA), in the news recently because of yet another photo op with Harper signing it with European leaders.
...
CETA’s domestic regulation chapter would be more aptly called “Gifts for the Oil and Gas Industry”. These CETA provisions are so biased in favour of corporations it is easy to picture industry execs sitting at the elbows of CETA’s negotiators, guiding their pens as they draft the agreement. Short of an international treaty banning all government regulations outright, CETA gives the oil and gas industry virtually everything it has been asking for, for decades. Of course these anti-regulation gifts are also available to other sectors including the mining industry but given the special place in Harper’s universe reserved for Alberta’s oil patch it’s not hard to see where the impetus came from.
...
CETA’s Chapter 14 requires that all regulations that governments have not expressly excluded from the agreement must be “objective” and “established in advance”. (Article 2.2) Given that these terms are not defined they can mean anything that a trade tribunal decides they mean. While the word “objective” might not seem threatening in most contexts, here it is loaded with danger for public interest regulation. If a tribunal interprets “objective” to mean ”not subjective”, existing regulations could be challenged. Why? Because they are based on a government regulator’s effort to balance competing interests – a necessarily “subjective” exercise. If licensing approvals are based to some extent on public opinion of a project, this too could mean licensing decisions are not “objective.”

And what does it mean to say that regulations have to be “established in advance”? Does that mean that new regulations cannot be introduced? Even if this provision is just interpreted to mean that regulations cannot be changed once an application has been approved, there are very good reasons why a government might need to impose new regulations on operations that are already licensed. BC’s Mount Polley mine spill is a perfect example of where a government had to impose new requirements on established mines after a catastrophic regulatory failure. CETA could make that impossible in the future.

Disputes arising out of so-called “trade” agreements are decided by tribunals of corporate trade lawyers. These dispute panels are nothing at all like any public court of law. The model is taken right out of the international commercial dispute resolution process – designed to settle narrow disputes between commercial entities. As such there is almost no room for taking into account interests other than commercial interests. This is square-peg-in-a-round-hole territory.

But at least in other trade and investment agreements governments are allowed to defend their regulations as necessary to protect human health and the environment. Either by intent or sheer carelessness, this defence is not applied to the domestic regulation chapter of CETA.