REPOST: Ukraine crisis is about Great Power oil, gas pipeline rivalry

Is it about oil and gas? This article from TheGuardian.com discusses the link between the crisis in Ukraine and Russia's and US' intention on controlling energy pipelines in Eurasia.

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Russia's armed intervention in the Crimea undoubtedly illustrates President Putin's ruthless determination to get his way in Ukraine. But less attention has been paid to the role of the United States in interfering in Ukrainian politics and civil society. Both powers are motivated by the desire to ensure that a geostrategically pivotal country with respect to control of critical energy pipeline routes remains in their own sphere of influence.

Much has been made of the reported leak of the recording of an alleged private telephone conversation between US assistant secretary of state Victoria Nuland and US ambassador to Kiev Geoffrey Pyatt. While the focus has been on Nuland's rude language, which has already elicited US apologies, the more important context of this language concerns the US role in liaising with Ukrainian opposition parties with a view, it seems, to manipulate the orientation of the Ukrainian government in accordance with US interests.

Rather than leaving the future of Ukrainian politics "up to the Ukrainian people" as claimed in official announcements, the conversation suggests active US government interference to favour certain opposition leaders:

Nuland: Good. I don't think [opposition leader] Klitsch should go into the government. I don't think it's necessary, I don't think it's a good idea.

Pyatt: Yeah. I guess... in terms of him not going into the government, just let him stay out and do his political homework and stuff. I'm just thinking in terms of sort of the process moving ahead we want to keep the moderate democrats together. The problem is going to be Tyahnybok [Oleh Tyahnybok, the other opposition leader] and his guys and I'm sure that's part of what [President Viktor] Yanukovych is calculating on all this.

Nuland: [Breaks in] I think Yats is the guy who's got the economic experience, the governing experience. He's the... what he needs is Klitsch and Tyahnybok on the outside. He needs to be talking to them four times a week, you know. I just think Klitsch going in... he's going to be at that level working for Yatseniuk, it's just not going to work.

[...]

Nuland: OK. He's [Jeff Feltman, United Nations Under-Secretary-General for Political Affairs] now gotten both [UN official Robert] Serry and [UN Secretary General] Ban Ki-moon to agree that Serry could come in Monday or Tuesday. So that would be great, I think, to help glue this thing and to have the UN help glue it and, you know, Fuck the EU.

Pyatt: No, exactly. And I think we've got to do something to make it stick together because you can be pretty sure that if it does start to gain altitude, that the Russians will be working behind the scenes to try to torpedo it.

As BBC diplomatic correspondent Jonathan Marcus rightly observes, the alleged conversation:

"... suggests that the US has very clear ideas about what the outcome should be and is striving to achieve these goals... Washington clearly has its own game-plan.... [with] various officials attempting to marshal the Ukrainian opposition [and] efforts to get the UN to play an active role in bolstering a deal."

But US efforts to turn the political tide in Ukraine away from Russian influence began much earlier. In 2004, the Bush administration had given$65 million to provide 'democracy training' to opposition leaders and political activists aligned with them, including paying to bring opposition leader Viktor Yushchenko to meet US leaders and help underwrite exit polls indicating he won disputed elections.

This programme has accelerated under Obama. In a speech at the National Press Club in Washington DC last December as Ukraine's Maidan Square clashes escalated, Nuland confirmed that the US had invested in total "over $5 billion" to "ensure a secure and prosperous and democratic Ukraine" - she specifically congratulated the "Euromaidan" movement.

So it would be naive to assume that this magnitude of US support to organisations politically aligned with the Ukrainian opposition played no role in fostering the pro-Euro-Atlantic movement that has ultimately culminated in Russian-backed President Yanukovych's departure.

Indeed, at her 2013 speech, Nuland added:

"Today, there are senior officials in the Ukrainian government, in the business community, as well as in the opposition, civil society, and religious community, who believe in this democratic and European future for their country. And they've been working hard to move their country and their president in the right direction."

What direction might that be? A glimpse of an answer was provided over a decade ago by Professor R. Craig Nation, Director of Russian and Eurasian Studies at the US Army War College's Strategic Studies Institute, in a NATO publication:

"Ukraine is increasingly perceived to be critically situated in the emerging battle to dominate energy transport corridors linking the oil and natural gas reserves of the Caspian basin to European markets... Considerable competition has already emerged over the construction of pipelines. Whether Ukraine will provide alternative routes helping to diversify access, as the West would prefer, or 'find itself forced to play the role of a Russian subsidiary,' remains to be seen."

A more recent US State Department-sponsored report notes that "Ukraine's strategic location between the main energy producers (Russia and the Caspian Sea area) and consumers in the Eurasian region, its large transit network, and its available underground gas storage capacities", make the country "a potentially crucial player in European energy transit" - a position that will "grow as Western European demands for Russian and Caspian gas and oil continue to increase."

Ukraine's overwhelming dependence on Russian energy imports, however, has had "negative implications for US strategy in the region," in particular the strategy of:

"... supporting multiple pipeline routes on the East–West axis as a way of helping promote a more pluralistic system in the region as an alternative to continued Russian hegemony."

But Russia's Gazprom, controlling almost a fifth of the world's gas reserves, supplies more than half of Ukraine's, and about 30% of Europe's gas annually. Just one month before Nuland's speech at the National Press Club, Ukraine signed a $10 billion shale gas deal with US energy giant Chevron "that the ex-Soviet nation hopes could end its energy dependence on Russia by 2020." The agreement would allow "Chevron to explore the Olesky deposit in western Ukraine that Kiev estimates can hold 2.98 trillion cubic meters of gas." Similar deals had been struck already with Shell and ExxonMobil.

The move coincided with Ukraine's efforts to "cement closer relations with the European Union at Russia's expense", through a prospective trade deal that would be a step closer to Ukraine's ambitions to achieve EU integration. But Yanukovych's decision to abandon the EU agreement in favour of Putin's sudden offer of a 30% cheaper gas bill and a $15 billion aid package provoked the protests.

To be sure, the violent rioting was triggered by frustration with Yanukovych's rejection of the EU deal, along with rocketing energy, food and other consumer bills, linked to Ukraine's domestic gas woes and abject dependence on Russia. Police brutality to suppress what began as peaceful demonstrations was the last straw.

But while Russia's imperial aggression is clearly a central factor, the US effort to rollback Russia's sphere of influence in Ukraine by other means in pursuit of its own geopolitical and strategic interests raises awkward questions. As the pipeline map demonstrates, US oil and gas majors like Chevron and Exxon are increasingly encroaching on Gazprom's regional monopoly, undermining Russia's energy hegemony over Europe.

Ukraine is caught hapless in the midst of this accelerating struggle to dominate Eurasia's energy corridors in the last decades of the age offossil fuels.

For those who are pondering whether we face the prospect of a New Cold War, a better question might be - did the Cold War ever really end?

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Gas shortages amid the natural gas boom: What went wrong?

Some people may be going through one of the coldest winters ever, which may be caused not just by weather conditions. In many parts of the country, natural gas shortages have emerged due to the high demand. As a result, some customers have been asked to power down whenever possible out of fear that there may not be enough gas in power plants.

Image Source: specialevents.com

The shortage may come as a surprise to many because previous updates from the energy industry have highlighted abundance in natural gas. Even Texas, the largest producer of natural gas, has been reported to have issued a state of emergency. Amid the shortages in many states, one has to wonder what went wrong in the nation’s energy resources.

Image Source: processingmagazine.com

Experts note that the shortage is not just about the supply. There is plenty of natural gas in the giant fields of Texas, Pennsylvania, and Louisiana. The problem, however, is that the resources are not being distributed effectively to the places that need them most.

Image Source: usnews.com

Another problem is that with the advent of the natural gas boom, the country seems to have too abruptly dropped its reliance on fossil fuels. While the high supply makes the shift to natural gas sustainable, significant drops in the use of coal to generate power in plants may severely affect areas that natural gas supplies don’t reach.

Dr. Ali Ghalambor has made remarkable contributions to the oil and gas sector. For more news on the energy industry, visit this Facebook page.

REPOST: US drilling rig count sinks 12 units to 1,759

US drilling rig count fell to 1,759 as of June 21 of this year according to this Oil and Gas Journal article.


The US drilling rig count fell 12 units during the week ended June 21 to reach a total of 1,759 rotary rigs working, Baker Hughes Inc. reported. All of the losses were seen on land, with land-based drilling down 12 units from a week ago to 1,682 rigs. The offshore rig count and that for inland waters remained unchanged at 54 and 23, respectively. Of the rigs drilling offshore, 52 were in the Gulf of Mexico, unchanged from a week ago. Rigs drilling for oil lost 8 units to reach 1,405, while those targeting gas lost 4 units to reach 349 rigs working. Five rigs were considered unclassified, unchanged from a week ago.

Rigs drilling horizontally were reported at 1,079, down 7 units from a week ago, and 86 fewer than the comparable week last year. Rigs drilling directionally lost 2 units this week to reach 242. This compared with 233 rigs working horizontally in the comparable week a year ago.

Of the major oil and gas producing states, Oklahoma was down 5 units to 178. Texas and Louisiana, at respective counts of 843 and 106, were each down 3 units. New Mexico, at 75, and California, at 37, were each down 1 rig. Six states were unchanged: North Dakota, 178; Colorado, 62; Pennsylvania, 54; Wyoming, 46; West Virginia, 22; and Arkansas, 14. Alaska was up 2 rigs to 8 units working.

Canada’s rig count gained 21 units this week to reach 197. This count includes 147 rigs drilling for oil (up 21 units from a week ago) and 50 units drilling for gas (unchanged from last week). Canada’s rig count total was down 41 units from the comparable week last year.\


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REPOST: 5 states with the cheapest gas

Do you want to know where to get cheapest gas in the country? This NBCNews.com article shares the states with the cheapest gas rates.

Image Source: torquenews.com

 

Concerns about global economic weakness have pushed crude oil prices down in recent weeks. The decline was seen in gas prices, too. As of Dec. 6, national prices averaged $3.38 per gallon, down from $3.46 per gallon a month before. Some states have kept their prices significantly below the average nationwide price. Based on data from The American Automobile Association, 24/7 Wall St. reviewed the states with the lowest gas prices.

States impose gasoline taxes and fees, in addition to federal gasoline taxes. These taxes can vary significantly from state to state, affecting regional prices. It's not surprising then to find that the states with the lowest gas prices tend to have among the lowest fuel taxes. The states on this list are below the median in terms of taxes and fees.

States with refineries also tend to have lower prices because oil can be moved to local stations at much cheaper prices, which results in lower prices at the pump. Most of the states on this list have refineries located within its borders. Texas, which has among the cheapest gas in the country, has 26 refineries, more than any other state in the country. Louisiana has 18 refineries, the second most of any state.

Overall cost of living is generally low in the states with the lowest gas prices. Tennessee, which has the fourth-cheapest gas prices, has the lowest cost of living in the country. Oklahoma, which has the fifth-cheapest gas, has the second-lowest cost of living. Overall, all the states on this list are in the lower half in terms of cost of living.

But while cost of living is low, so is the amount of money state residents bring in. All of the states on the list had median household income in 2011 below the national median income of $50,502.

Based on AAA’s Daily Fuel Gauge Report, 24/7 Wall St. reviewed the states with the lowest gas prices as of Dec. 6. We also looked at gas prices from the same time last week, last month and last year, as well as peak prices this year, to monitor the recent activity of gas prices in different parts of the country. We also considered taxes and fees per gallon by state from the American Petroleum Institute, refineries and refining capacity by state from the U.S. Energy Information Administration, cost of living by state from the Council for Community and Economic Research and 2011 median household income from the U.S. Census Bureau.

These are the 5 states with the lowest gas prices.

1. Missouri

• Regular gas price per gallon: $3.11
• Tax per gallon: 17.3 cents (6th lowest)
• Number of operating refineries: 0

Missouri currently has the lowest gas prices in the country, at just $3.11 per gallon, the same as a month ago. However, the current price is up 9 cents a gallon from a year ago, when Missouri was also the cheapest place to fill up at the pump. Prices peaked at about $3.65 per gallon in early April, well below the roughly $3.90 per gallon across the country. In the state’s two largest metropolitan areas, St. Louis and Kansas City, gas prices are even lower, at just $3.09 a gallon.

2. Texas

• Regular gas price per gallon: $3.14
• Tax per gallon: 20.0 cents (tied-11th lowest)
• Number of operating refineries: 26

Gas prices in Texas have fallen significantly in recent weeks -- a gallon of gas cost $3.25 a month ago, with five states having lower gas prices at the time. Now, only gas in Missouri is cheaper. Gas prices in the state have only risen 4 cents a gallon in the past year, compared to the 10 cents a gallon increase across the U.S. Texas has 26 operating refineries, more than any other state in the country. Texas also levies a low 20 cents a gallon in taxes and fees, among the bottom-third of all states.

3. South Carolina

• Regular gas price per gallon: $3.15
• Tax per gallon: 16.8 cents (4th lowest)
• Number of operating refineries: 0

South Carolina residents benefit from some of the nation’s lowest state taxes on gas; residents pay just 16.8 cents per gallon. Gas prices in the state have diverged from the rest of the nation over the last month. While the current average price nationwide declined by 8 cents a gallon over the past month, South Carolina’s increased by 1 cent a gallon during that time. In the Charleston-North Charleston metro area, however, prices are down 11 cents from the month before.

4. Tennessee

• Regular gas price per gallon: $3.16
• Tax per gallon: 21.4 cents (15th lowest)
• Number of operating refineries:1

Gas prices in Tennessee have only risen 6 cents a gallon from the same time last year, boosting the state’s ranking from sixth-lowest to fourth-lowest. In the state’s two largest metropolitan areas, Memphis and Nashville, prices are even cheaper, at $3.10 and $3.15, respectively. Tennessee has the lowest cost of living among all states in the U.S. Included in that figure is the cost of transportation, where Tennessee also has the overall lowest cost.

5. Oklahoma

• Regular gas price per gallon: $3.16
• Tax per gallon: 17.0 cents (5th lowest)
• Number of operating refineries: 5

Oklahoma’s gas prices are the fifth-cheapest in the country, up from being fourth-cheapest last year, as gas prices have risen 7 cents a gallon since then. In the past year, prices peaked at just over $3.70 a gallon in September, although that was still lower than the $3.90 per gallon peak price across the U.S. Gas isn’t the only thing that is inexpensive in Oklahoma -- the state had the second-lowest cost of living in the U.S.

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