You say you want a revolution...

January 25, 2017 08:29 AM
Daily Energy Markets Report

The Trump Administration is ready to release the U.S. energy industry from the chains that bind and instead of demonizing the U.S. energy Industry, they are embracing it. White House Press Secretary Sean Spice said, “There is an energy revolution that is going to happen in this country...We are ready to move forward.” And move forward President Trump did by signing executive orders allowing the construction of the Keystone and the Dakota Access pipelines.

Trans Canada will resubmit its application for approval to the Department of State and direct the Secretary of State to reach a final determination in 60 days. Considering the previous administration studied Keystone for eight years before it came to a decision to not back the pipeline, I think there will be plenty of data to decide. If approved the Keystone pipeline could create as much as 9000 union construction jobs to build the pipeline and hundreds of thousands longer term jobs in refining and oil transport and maintenance. Most of these jobs would be high paying jobs, much more than the average job salary that we have created during the last few years. 

The oil pipeline became a line in the sand for environmentalists, which first complained about the dangers of the pipeline route only to eventually admit that what they really didnt like was the way Canadas oil was produced. They argued that it harms the environment as the process to produce the oil releases greenhouse gasses into the air. But that did not stop oil sands production and instead it put the environment more at risk as oil was then transported by more risky methods like rail and truck. We all remember the incidents of train explosions that were caused by oil high profile rail disasters.

President Trump also sign an executive order to move forward on the Dakota Access Pipeline. That was the pipeline that Barack Obama was for before he was against it. This $3.8 billion project will allow oil producers in the Bakken region to better compete with the global market as it will allow for a safer more efficient way to move oil. By building the pipeline it can remove more than 250 trucks from the road and reduce train cars by as much as 500-700 rail cars per day per Energy Transfer Partners. It will run from Dakota to Illinois and feed a hungry market for oil. It should reduce costs for the average American and create jobs. And they’ll be high paying jobs. While the environments are up in arms, the truth is we have done a lot to help foreign process to produce oil like Iran and Brazil, so it is high time that the U.S. energy producer gets to compete on a level playing field.

The U.S. energy industry is not evil. They do not want to ruin the earth. They want to create an environment where they can help power improving living standards around the globe by providing them with the energy that is needed to make that happen. Yes, they must do it in an environmentally safe way but we also must be reasonable because the production of energy has extended the average human lifespan by decades. We have furnaces to heat our homes and air conditioners to cool them. Not to mention electricity to run homes and hospitals. Let us all reflect on all energy does for families and the way it improves our lifestyles and longevity. 

For too long we have allowed fear not science to drive our energy policy. While climate change is a matter of concern, the predictions of the catastrophe the warming extremist have made just a decade ago has not come true. We need to drive innovation and not fear to solve the potential problems of climate change. 

In fact, the U.S. energy industry does not get enough credit for reducing U.S. greenhouse gas emissions. U.S. carbon emissions in 2016 are expected to be the lowest in nearly 25 years. The shale gas revolution unlocked natural gas production allowing us to replace some coal plants. That would not have happened without the U.S. energy Industry. The USDA corn ethanol significantly reduces more greenhouse gas emissions compared to conventional fuel adding to the reduction in greenhouse gas.

In fact a big threat to the environment is Congo swamp gas! Reuters reports that, “Scientists say a recently discovered area of peatland straddling the two Congo’s contains 30 billion tons of carbon dioxide, equivalent to 20 years of U.S. greenhouse gas emissions, and must be protected to prevent major environmental damage... The British and Congolese teams, who made the discovery in 2014, say it is the largest known tropical peatland -- home to rare gorillas and forest elephants -- and in Wednesday's edition of Nature they say development there would release the gas. Carbon dioxide is linked to climate change and peatlands, formed from the accumulation of dead plant material, act as 'carbon sinks.' Peat does not decompose in a water-logged state but when it dries, the organisms that break down plant material revive and the carbon seeps back into the atmosphere.”

Oil today is struggling on a report of a build by the American Petroleum Institute (API) in crude inventory and more talk of an increase in Libyan oil production. The API report said crude supply increased by  2.93 million barrels but has been way off with the Energy Information Administration. 

Natural gas was down on warm weather. 

About the Author

Phil Flynn is a senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. Phil is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets.