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Title: Drilling Ban Gone But De Facto One Still In Place
Source:
Forbes Blogs
URL Source: http://blogs.forbes.com/greatspecul ... t-de-facto-one-still-in-place/
Published: Oct 13, 2010
Author: Dr. Michael Economides
Post Date: 2010-10-13 01:54:58 by Hondo68
Keywords: American energy security, politically motivated ploy, regulatory hostility
Views: 2249
Comments: 1
Hu Jintao could teach us something about energy policy. Today, the White House announced it is lifting its ban on offshore drilling in the Gulf. While this announcement has received much attention in the media, energy experts know that this “news” is much more about “political energy” than actual energy policy. Coming just weeks before the November congressional elections, this politically motivated ploy does nothing to substantively remove the challenges faced by the U.S. energy sector. From new energy tax proposals, to activist opposition to hydraulic fracturing and climate change negotiations, to the continued de facto ban on offshore drilling that results from this climate of regulatory uncertainty-or perhaps more accurately, regulatory hostility-recent U.S. energy and environmental policy has been mired by silly, ideologically motivated disagreement rather than substantive debate. Meanwhile, China and Russia have been surging ahead of the U.S., strengthening their energy ties, and reshaping global oil and natural gas markets. Leaders from the two countries have recently negotiated several, mutually-beneficial energy deals that will resonate for decades, sadly at the expense of American energy security. First, Hu Jintao and Dmitry Medvedev met last month to inaugurate a new pipeline that will allow Russia to more-easily ship oil to China. This pipeline is a new addition to the southern portion of the massive West Siberia-Pacific Coast pipeline system. The system is currently under construction in Russia, underwritten with substantial Chinese financial support. Russian oil pipeline monopoly Transneft and the China National Petroleum Corporation (CNPC), the state’s largest oil and natural gas producer and supplier, are constructing the addition. Once completed, this pipeline is set to transport 15 million tons of oil per year (approximately 300,000 barrels per day); these new oil shipments will increase Russia’s share of Chinese oil imports to over 11 percent. Moreover, CNPC and Gazprom-not only the world’s largest natural gas producer, but also Russia’s biggest company-recently reached an agreement that tasks Gazprom with shipping 30 billion cubic meters of natural gas per year for 30 years, starting in 2015. These significant Russian gas imports into China provide a two-fold benefit: they would help meet more than 50% of the expected shortfall in supplies needed to meet China’s skyrocketing demand for energy and simultaneously help reduce the ill effects of pollution from the state’s coal-fired plants that still make up a primitive 70% of China’s power generation. In a different era, Russia-Chinese energy cooperation would arguably be the largest geopolitical development of the year. These strategic developments, however, are not even being covered by the media. Instead, the media obsesses over trivial developments such as the privacy concerns of a proposed vehicle miles tax and a toothless announcement that an ill-informed drilling moratorium has been lifted. All this goes on while Congress pushes taxes and regulations that hinder the competitiveness of domestic energy firms. Let’s face the facts: as China and Russia work together to lock up as many natural resources as possible, the U.S. government is making it difficult for American companies to even sit at the negotiating table. These important Asian energy deals are a sign of the times and highlight the misplaced national priorities of the U.S. American policymakers need to realize soon that our future energy security is directly threatened by such agreements, and further imperiled by the indifference of U.S. leaders to a pro-growth strategy. If they do not, consumers and businesses across the U.S. will need to prepare not only for a future of limited, more expensive energy, but also one in which China and Russia dictate the terms of the new global energy race.
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#1. To: hondo68 (#0)
OK. Let China eat it's oil. And not one word about the USbp Ecocide which is now at it's worst point.
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