Thursday, March 12, 2015

Oil Industry Poised To Make West Africa The New Middle East

Cameroon soldiers stand guard at a lookout post as they take part in operations against the Islamic extremists group Boko Haram, near the village of Fotokol, Cameroon
Cameroon soldiers stand guard at a lookout post as they take part in operations against the Islamic extremists group Boko Haram, their guard post is on Elbeid bridge, rear,  that separates northern Cameroon form Nigeria’s Borno state near the village of Fotokol, Cameroon.

N’Djamena, Chad (TFC) –  As of this weekend, the Nigerian extremist organization, Boko Haram, has officially pledged its allegiance to the Islamic State (ISIS) of Iraq and Syria.  This news comes only 2 weeks after the United States Africa Command (AFRICOM) began its “Operation Flintlock 2015″ in Chad’s capital city.  In fact, the “diplomatic” military convention concludes today.  Two days after Abrubaka Shekau, leader of Boko Haram, announced his solidarity with ISIS.

“We announce our allegiance to the Caliphate….and will hear and obey in times of difficulty and prosperity,” said Shekau on Saturday.  Boko Haram, roughly translated to “western education is forbidden,” is an extremist Sunni sect that has been strengthening in numbers and reeking havoc throughout Northwestern Africa, primarily Nigeria, Chad, Tunisia and Cameroon, since 2009.

On March 6, the Fifth Column reported that Saudi Arabia is requesting US ground troops as “a self-serving effort to keep the nation of Iraq as a buffer against Iran.”  The article explains the differences between the competing religious sects of Iraq, home of ISIS, and how the divided nation is on the brink of dissolution.  How convenient for the US that just as its media-darling terrorist enemy is beginning to lose influence, another group of Islamic extremists has announced its undying allegiance to the group.  This time, however, the scary Islamic terrorists are from the oft-neglected region of genocide, despair and division:  Africa.

Both groups are Sunni.  Both practice Sharia Law.  Both are smokescreens for the real reasons the US is interested in either region:  Oil and Natural Gas.

Nigeria is where Boko Haram originated.  It started as little more than a street gang in the early 2000s.  However, its members and tactics grew increasingly more extreme over the course of the first decade of the new millennium.  In 2009, the former leader of Boko Haram, Mohammed Yusuf, was publicly executed by Nigerian Police.  Yusuf was replaced by Boko Haram’s current leader, Abrubaka Shekau.  2009 and 2010 saw some of the worst violence in Nigeria in recent memory.

Boko Haram militants clashed with Nigerian soldiers in an attempt to free their spiritual leader from prison.  During the skirmish, Boko Haram saw at least 30 of its members killed and the death of one Nigerian soldier.  Less than 1 year later, Shekau led an assault on Bauchi Prison, killing 5 people and freeing over 700 inmates.  Bold, violent attacks against the Nigerian United Nations building and several police and military outposts followed into 2011.

As the western part of the world celebrated the New Year with champagne and novelty sunglasses, hiding tipsy eyes full of hope as they watched the ball drop in Times Square, Boko Haram ravaged the fishing community of Baga, killing nearly 2000 people in the first days of January, burning the village to the ground like Norse Vikings.  It is estimated that between 5000 and 7000 lives have been lost during the rise of Boko Haram and its clash with the categorically corrupt Nigerian Military and Police.

In a 2012 article published by the New York Times, Jean Herskovits bluntly states, “There is no proof that a well-organized, ideologically coherent terrorist group called Boko Haram even exists today.  Evidence suggests instead that, while the original core of the group remains active, criminal gangs have adopted the name Boko Haram to claim responsibility for attacks when it suits them.”

The article claims that Nigeria’s State Security Services issued a statement in November of 2012 stating that 4 “criminal syndicates” were sending threatening messages to the Nigerian Government in the name of Boko Haram.  3 of those 4 “criminal syndicates” were run by Southern Nigerians that do not even identify as Muslim.  One of which has leaked information to the US Embassy that caused Boko Haram to retreat from and evacuate a hotel it had captured.

Herskovits goes on to state that the root cause of this inexcusable violence lies in the overwhelming poverty and hopelessness of Nigerian society.

Nigeria has the strongest, most robust economy in Africa.  Despite this fact, 70% of its populace lives on less than $1 a day.  Massive wealth.  Massive economic inequality.  Terrorists blamed for the entirety of a country’s problems.  Does any of this sound familiar?

Historically, the US has been mostly ambivalent to the genocide, terrorism and famine that is daily life for most of Africa.  Several years of constant pressuring were needed before the crises in Sudan, Uganda, and Rwanda were even recognized as an issue by the US Government.  That is all about to change, but not for humanitarian reasons.

World Socialist Website reported earlier this month that US and NATO forces began a massive series of War Games simulations during Operation Flintlock 2015.  The simulations will focus on “interoperability and capacity-building among African, Western and US counter-terrorism forces,” according to the Pentagon’s press release.  What regions are the focus of these War Games?  None other than Nigeria, Chad, Cameroon and Tunisia, the regions being affected by the Boko Haram insurgency, of course.  US and African military officials made it clear that these “War Games” could translate to actual warfare against Boko Haram, or more accurately the regions associated with Boko Haram, in the future.

Under the banner of “Warfare” the diplomatic title of Defense News’ article on the military expansion in West Africa reads, “Us Special Ops Build Bridges in Africa.”  The article says 1300 troops from African and NATO countries are gathering for a “variety of tactical engagements.”  673 African forces, 365 NATO forces and 255 US personnel gathered in Chad to take part in “training objectives [that will] help build relationships reinforcing the capacity of participating militaries to secure a stable environment for growth and development in the nations of the region,” says Chadian Brig. Gen. Zakaria Ngobongue.

The article says Operation Flintlock is “tailor-made for the direction that the US Special Operations Command (SOCOM) has set for the troops that it is training and equipping to operate in a post-Afghanistan and Iraq world.”

Why the sudden interest in Africa?  Well, according to a report done by KPMG Africa, Nigeria has the second largest proven oil deposits in all of Africa, second only to US-ravaged Libya.  Proven deposits have grown by nearly 120% in the last 30 years.  The report outlines Western desire to plunder the virtually untapped natural resources of the region by saying, “Africa has for years been seen by western and Asian markets as a means to diversify away from too deep a dependence on Middle Eastern oil.”

Currently, the US imports about 25% of its crude oil from West Africa.  KPMG goes on to say that the percentage of oil exported from Africa to China and India has steadily increased since 2007.  In 2011, exports to China and India were up from 10% and 5%, to 14% and 8%, respectively.  Considering China’s burgeoning economy and expanded presence in the region, as well as its shaky alignment with Russia, it only makes sense for the US to pounce now and crush the region into servitude before a competitor gets the chance.

KPMG’s report says the biggest investment opportunity lies in the construction of an oil refinery network.  Libya has the largest oil reserves, but due to civil war and NATO bombings, exporting these reserves is difficult.  Nigeria, however, is the continent’s leading oil exporter, despite its smaller reserves.  Be that as it may, it has virtually no refining system established.  It exports crude oil only to have to import refined oil back into the country at an extra cost.  KPMG states that corruption, theft, and poor maintenance prevent any sustainable refining infrastructure from existing.

The report offers insight into why Africa’s strongest economy has allowed 70% of its population to live in disgraceful poverty by saying, “the system was rotten from the start and has long been crippled by patronage networks, theft, corruption and mismanagement that have seen tens of billions of dollars disappear.”  Just like the rest of the “free” world, any time oil becomes part of the equation, greed, corruption and poverty are the natural bi-products and those that don’t hold stock in the oil companies suffer and starve.  In the oil-producing sectors of Africa, income inequality is the highest and “many locals see fuel subsidies as the only benefit of living in an oil-rich nation.”

If you live in an aluminum shack with no plumbing built by missionaries, I would venture to guess cheap oil is not your primary concern.

You may be wondering who or what KPMG is.  After scouring its website for an answer to that question I found no definitive conclusion.  It appears to be some kind of analytics subsidiary of a private equity firm.  It operates out of the Cayman Islands under the umbrella of KPMG International, which operates out of Switzerland.  The Cayman Islands and Switzerland are the “economically liberal” tax-haven states favored by bankers and politicians like Mitt Romney.  Romney and his equity firm, Bain Capital, were indicted for Racketeering in January.  Bain Capital had at least $30 million in 138 individual equity funds in the Cayman Islands as of 2012.  That has to be a good sign, right?

KPMG released another report in 2013 outlining the possible fiscal benefits of launching an invasion…I mean refining venture in Nigeria.  Despite the rampant corruption of the Government, KPMG is delighted at the many tax breaks that apply to foreign investors.

The Nigerian Investment Promotion Commission Act (NIPC) of 1995 completely deregulated the flow of capital from Nigeria to foreign investors.  Under the presidency of Goodluck Jonathan, a plan known as 20:2020 has been put into effect.  The goal of 20:2020 is to make Nigeria one of the top 20 economies by the year 2020.  Goodluck Jonathan is a Christian politician born in South-Nigeria.  He took office in 2010 and has consistently ignored the needs and demands of the impoverished, predominantly Muslim, regions of Northern-Nigeria.  The epicenter of Boko Haram.

Goodluck has made it possible for oil companies to avoid any and all taxation by the Nigerian government.  According to the KPMG, the only restrictions are applied to arms trafficking and narcotics.  Not only are there no regulations, but there are a plethora of tax INCENTIVES for foreign investors:

KPMG Investment incentives − General

1.  Nigerian companies with a minimum of 25% foreign equity are exempt from payment of minimum tax (tax paid by a company that has no taxable profit or whose taxable profit is lower than the minimum tax).

2.  Income/interest earned from federal government short-term securities is exempted. Income/interest earned from bonds issued by the federal, state and local governments, and corporate bodies (including supra-nationals) is also exempted from the taxes.

3.  Proceeds from the disposal of the bonds and securities listed are exempted from Value-Added Tax (VAT).

4.  Investment allowance of 10% on qualifying expenditure on plant, machinery and equipment.

5.  Rural investment allowance of between 15% and 100% of the cost incurred in providing facilities/ infrastructure in rural areas.

6.  Capital allowance of 95% in the first year in respect of plant and machinery purchased to replace old ones.

7.  Tax exemption of between 40% and 100% of the interest earned on foreign loans advanced to companies in any industry, where the terms and tenure of the loan satisfy the conditions specified in the law.

Under unspecified circumstances, a company, foreign or native, can achieve “Pioneer Status” and qualify for even more fiscal incentives:

1.  Capital expenditure on qualifying assets incurred during the tax relief period is treated as having been incurred on the first day following the tax relief period. Pioneer companies are therefore able to fully claim capital allowances on such assets.

2.  Tax free dividends during the holiday period.

3.  Losses in the relief period may be set off against profits after the end of the period.

It is easy to see how Goodluck Jonathan could stand in front of a podium and pitch this information in a positive way.  Foreign investors are helping to build a strong Nigerian economy!  It’s easy to see how this propaganda could benefit his campaign.  It is easy to see how corrupt, corporate influence is about to devastate an already unstable region.  It is easy to see the parallels between Nigeria and it’s spiritual-predecessors in the Middle East.

The reality is fairly straightforward.  Saudi Arabia is using its controling-stake in the oil market to pit Russia, China, and the US against each other in a bidding war.  Nigeria, however, seems to have made it perfectly clear that its loyalty lies with the US.  Perhaps it learned from Saudi Arabia that any and all evil is forgiven when Uncle Sam’s pipelines pump your crude.

American dependence on oil is not going to end any time soon.  We consume almost 19 million barrels of oil per day.  Despite overwhelming opposition, fracking continues to ravage the southern part of the country, causing near-daily earthquakes and explosions in states like Oklahoma.  The Koch brothers spent almost a billion dollars to buy the Republican Party and ensure their Keystone XL pipeline gets built.

Oil’s closest ally, the Defense Sector, will undoubtedly be right behind them to jump on the lucrative African bandwagon.  Nigeria’s defense budget is 25% of its GDP.  Oddly enough, Nigeria’s GDP has more than tripled in the last decade or so.  It’s gone from less than $100 billion in the 90s to $414 billion today.  One more thing ol’ Goodluck can attribute to himself during his campaign.

Last September, the Pentagon opened its third drone hangar in West Africa, its second in Niger, northern neighbor to Nigeria.  The construction of this hangar came in tandem with an uncharacteristic push from the French military.  The French permanently deployed over 3000 troops to West Africa in a “counter-terrorism” measure after the disappearance of hundreds of school girls in Nigeria, attributed to Boko Haram, last fall.  According to the Washington Post, the US and France were “working hand in glove as they steadily expanded their presence in impoverished West Africa.”  French President Francois Hollande announced his intention to further beef up France’s military presence in Mali, Chad, Niger and Burkina Faso.

Predator drones are manufactured by General Atomics.  General Atomics has a long, storied history of being acquired and sold by oil companies like Chevron, Dutch Shell, and Gulf Oil.

Other defense contractors like the Carlyle Group, Oshkosh, and Dyncorp make billions from their weapons being sold to the Saudis and UAE.  Dyncorp, specifically, was accused of being involved in human trafficking in 2006.  Dyncorp also had a special contract under Operation Iraqi Freedom that gave it the ability to sell the weapons that murdered the population and destroyed the country and then provide “humanitarian aid and reconstruction to conflict and post-conflict areas” through a partnership with World Wide Humanitarian Services (WWHS), a subsidiary of Dyncorp.  That’s like selling someone an axe, making them pay you for cutting their leg off and then making them pay you for sewing it back on.  Then, writing off the surgery as a tax-deductible act of charity.  In our world, war is charity.  True, evil brilliance.

Why not take this business model to Africa?

It is easy to imagine the future awaiting Africa.  It is easy to imagine the Koch brothers engineering the election of the next George Bush using the same, tired hyperbole to generate fear and hate for an entire continent.  It is easy to imagine “patriots” waving flags in support of “American Liberty” while drones circle above the heads of the poverty-stricken favelas of Africa painting digital targets on the heads of people who have nothing to do with any of this.  It’s all so familiar.

The world is a desert snowglobe being shaken by the hands of oil companies and defense contractors.  No matter how or where the sand settles, they always come out on top.

Wednesday, March 11, 2015

Gold's Long Decline Is the Real Story



By
                          
Equity markets started off this year by falling. They rallied in February, working their way back into the green. The Standard & Poor's 500 Index now is up about 1 percent for the year.

Gold has traveled the opposite path: The yellow metal began at about $1,175 an ounce. By Jan. 23, it had rallied to almost $1,300. In February, gold slipped about $60 and the fall continued this month. Gold now is down about 1.6 percent year-to-date and it wouldn't be a surprise if the precious metal fell more this month.  “March has a history of being the worst” month for gold, according to Bloomberg. During the past four decades, on average, bullion futures decline 1 percent in March. “Prices fell 65 percent of the time, more than any other month.”
gold chart
The reasons gold prices can't seem to gain any traction are many: Job creation has been robust, inflation is low and the Federal Reserve is widely expected to begin the process of easing back on monetary accommodation -- strengthening the dollar and further reducing gold's appeal.  

As we noted late last year, the gold narrative has failed. The promised hyperinflation that was supposed to send gold soaring never arrived. Instead, we had disinflation, with a threat of global deflation. 

QuickTake Rise and Fall of Gold

Other stories were posited by traders who were long on hope but short on cogent analysis. The ballot proposal requiring the Swiss National Bank to hold at least 20 percent of its 520 billion franc ($523 billion) balance sheet in gold was rejected by Swiss voters. Another tale: India was going to cut its import duty on gold, leading to soaring demand. But India decided to maintain the duty. The latest bout of wishful thinking was that a gold version of the new Apple watch would consume “up to 756 metric tonnes of gold per year . . . this equates to roughly a third of gold's total annual global mine supply," according to a company called Goldcore. As my Bloomberg View colleague Mark Gilbert explained yesterday, that fantasy was laughable on its face.

The most damaging slice of reality for the gold-bug narrative has been the strength of U.S. dollar. Yes, I know, we were promised the collapse of fiat currency generally and the U.S. dollar specifically. Quantitative easing and zero interest rates were going to be the end of paper money, and mark at long last a return to the gold standard -- the one true currency.

Alas, that was not meant to be. The greenback is now at 12-year highs versus the euro; at less than 1.08, it is nearing parity, which was last seen in 2002. The dollar also is at multiyear highs versus the Japanese yen. Against a basket of major currencies, the greenback is up more than 8 percent so far in 2015, after rising more than 12 percent in 2014.

Although stocks have gained little this year, there may be more potential and for some of the same reasons that gold has underperformed: Job creation has been robust and inflation is low.

Why more potential? More hiring and rising wages are likely to help revive sluggish retail sales. Durable goods have been especially soft, and they historically tend to gain as hiring increases. Capital investment by corporate America has also been soft. But analysts have been talking about a long overdue increase in business investment, which would goose economic activity.

Perhaps the most significant difference between stocks and gold is where they are in their long-term cycles. Gold, after a rally that lasted a decade, has been declining since August 2011. Stocks have been gaining for the past six years after a huge crash in 2008-09.

If the economic trends of the past few years persist, they favor stocks over gold. 
To contact the author on this story:

Barry Ritholtz at britholtz3@bloomberg.net

To contact the editor on this story:

James Greiff at jgreiff@bloomberg.net

Tuesday, March 10, 2015

Crude Oil Prices Dip on Strong Dollar, Supply

Oil Refinery Towers Smokestacks
Reuters

http://www.foxbusiness.com/markets/2015/03/10/crude-dips-on-strong-dollar-supply/

Brent crude futures dipped below $58 a barrel on Tuesday as the dollar hit multi-year highs and the oil market remained hobbled by oversupply and weak demand.

The U.S. dollar hit a near 12-year peak against the euro and an eight-year high against the yen, hurting commodities priced in dollars by making them more expensive for holders of other currencies.

At 7.31 a.m. EDT, Brent was down 79 cents at $57.74, while U.S. crude was 45 cents lower at $49.55.

Traders and analysts said there was a risk of further falls as speculative net long positions were so high, particularly in Brent, whilst the fundamental picture remained one of weakness with no sign of any slowdown in production.

"In order to balance the market we need the supply glut to be brought down, by rising demand or lower supply," Ole Hansen, senior commodity strategist at Saxo Bank, said.

Demand from China, the world's second-largest oil consumer, slowed in February as the Lunar New Year holiday cut into shipping volumes.

At the same time, global refinery maintenance is about to peak, with global offline capacity assessed at 5.7 million barrels per day (bpd) in April, according to Energy Aspects.

"Most of the supportive factors for Brent are starting to fade," they said in a note on Tuesday, pointing out that supplies hit by weather and technical issues were returning.

Libya is expected to export more than two million barrels of crude oil this week from two ports in the east, where output has topped 245,000 bpd.

"This could add to the bearish picture in Brent," Carsten Fritsch, an oil analyst at Commerzbank, said. He said Brent had tried and failed to regain the $60 a barrel level on Monday, which triggered selling from short-term investors.

"Brent could see further declines now, given the large overhang of speculative long positions," he said.

U.S. crude has faired a little better helped by a report from market data firm Genscape that showed a modest stock build last week at the Cushing, Oklahoma, delivery point.

Investors are waiting for weekly U.S. inventory reports from industry group the American Petroleum Institute and the U.S. Department of Energy's Energy Information Administration to see if the Genscape numbers are confirmed.

According to a Reuters survey, U.S. crude stocks are set to extend their record build for a ninth week.
(Additional reporting by Keith Wallis in Singapore; editing by Jason Neely)

Monday, March 9, 2015

Derailed Canadian Crude Oil Train Still Burning

In this Monday, Feb. 16, 2015 photo provided by WCHS-TV, fire burns at the scene of a train derailment, near Mount Carbon, W.Va. Fires burned for nearly nine hours after the train carrying more than 100 tankers of crude oil derailed in a snowstorm, plunging at least one tanker into a river while sending a fireball into the sky, authorities and residents say. Photo: Bob Aaron, AP / WCHS-TV


By Jeffrey Hodgson

TORONTO, (Reuters) - A Canadian National Railway Co train carrying crude oil that derailed near the northern Ontario community of Gogama early on Saturday is still on fire, the company said late on Sunday.

The derailment is CN's second in the region in just three days and the third in less than a month. It was the latest in a series of North American derailments involving trains hauling crude oil, raising concerns about rail safety.

"Fire suppression activities are beginning, as is construction of the track diversion," CN spokesman Mark Hallman said in an email, adding that responders were working in shifts around the clock.

The railway said it confirmed that 38 cars were involved in the derailment. The train had 94 cars containing crude oil. CN did not yet have a definitive count of the number of cars that had caught fire.

The railway did not estimate when the fire will be extinguished and the line reopened.

The Ontario Provincial Police said earlier on Sunday on Twitter that the fire was burning at 80 percent of full size and posted a photo from the morning showing thick clouds of black smoke still coming from the site.

Hallman said air quality monitoring has indicated no air issues at either Gogama or a nearby aboriginal community.

The police force reopened a nearby highway closed after the derailment, but warned there would be delays for residents as CN moves equipment.

The railway said on Saturday that a bridge over a waterway had been damaged and that five tank cars had landed in the water. Oil had leaked into the water and booms were deployed to try to contain it.

CN said the crude oil on the train originated in Alberta and was destined for eastern Canada.

The incident comes after another derailment, on Thursday, blocked CN's main line in northern Ontario.

CN said the latest derailment occurred 2 miles (3.2 km) northwest of Gogama, which is some 373 miles (600 km) north of Toronto. It occurred just before 3 a.m. (0800 GMT) on Saturday and is affecting rail traffic running between Toronto and Winnipeg, Manitoba.

The Transportation Safety Board of Canada, which is investigating, noted on Saturday that the accident occurred about 23 miles (37 km) from the site of a Feb. 14 accident involving a CN crude oil train. (Editing by Leslie Adler and Chris Reese)

Friday, March 6, 2015

West African STS warning given

GAC Transfer Services handles Ship-to-Ship Transfer operations safely and seamlessly.


West African countries have started to take a keener interest in ship to ship (STS) transfer operations.
       
Those being scrutinised are usually taking place in national waters (12 mile zone) or in the countries Exclusive Economic Zone (EEZ - 200 miles), warned leading insurance service provider Skuld.

The reasons for this involve a number of factors, including:
·         Concerns over smuggling and evasion of duties.
·         Security concerns with respect to piracy and other seaborne crime.

Skuld's correspondents in the Republic of Congo have advised that the local merchant marine authority must be given advance notification of any STS operation and provide approval, before it can go ahead. A fee of up to FCFA 5 mill (about €7,600) may be charged for this approval process.
A STS performed without an approval may result in significant fines and other legal action being taken.

Further information received indicated that the Angolan authorities also require advance clearance for an STS, which specifically means notifying the Angolan navy of any planned operation.
Information to be provided to the Angolan navy, includes -

·         Names and IMO numbers of involved vessels.
·         Likely date of the operation.
·         The location of the operation.
·         Identifying the name the cargo to be transferred and the quantity.

Upon completion of the operation, a statement of facts (SOF) should be submitted to the Angolan Navy.

A failure to comply with these requirements may lead to an arrest of the vessel, fines and/or other consequences.

The decision to agree to an STS, be it in advance of a voyage or on an ad hoc basis, should always follow a careful risk management analysis, Skuld said.

There are a number of physical STS issues that need to be addressed in order to ensure any such operation is done safely. Including a pre-STS assessment of the planned operation, as well as a careful monitoring throughout.

There is a continuing risk of piracy in certain areas along the West Coast of Africa. While most incidents appear to be in and around the Gulf of Guinea, there have been reports of incidents as far south as Angola.

Vessels that are stationary during a STS operation may be at particular risk, as they cannot seek to use navigation to fend off of an attack.

Furthermore there have been instances where a purported STS operation may have been a ruse to lure a vessel in to an ambush, Skuld warned.

Therefore it is advisable to seek to conduct operations in areas where protection can be afforded by authorised bodies of the local coastal state. It is important to note that it may not always be possible to have foreign security personnel on board a vessel, armed or unarmed.

**Skuld has also announced that the P&I club has added 10 mill gt following the mutual renewals, which were completed on 20th February.

Ståle Hansen, Skuld president and CEO, said: "The 2015 renewals demonstrate that we have a solid base of loyal members who not only renew their policies with Skuld but who also bring new tonnage into the club. On top of that, attracting new and high-quality members and welcoming some previous members back proves that Skuld is an attractive partner in the marine insurance market."

Thursday, March 5, 2015

OPEC Maintains Production Levels Despite Price Plunge

1339379391_opec_logo_pa.gif


Crude prices continue their downward spiral with OPEC hitting four year lows on its basket price last week. The organization saw its basket price hit $70.80 per barrel on November 27, almost a $3 drop from the previous day’s $73.70.

While the drop has allowed consumers in the US to enjoy lower gas prices at the pump, the dip is hurting share prices of energy companies as well as the currencies of some countries.

At its meeting last week OPEC decided to maintain its current production levels instead of cutting back on flows to help stabilize prices. Prior to the cartel’s meeting in Vienna there was speculation that the group would ease back on production but they could not come to a consensus on what to do, so decided to do nothing

On the US’ NYMEX light crude oil has fallen to lows not seen in years, trading at $66.15 per barrel on November 28. Across the pond in London, Brent crude fell below $75 per barrel for the first time since September 2010.

Wednesday, March 4, 2015

GOP-led Senate fails to override Obama's Keystone veto, lawmakers say fight not over

Keystone_rail.jpg
FILE: November 14, 2014: A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota. (REUTERS)


The GOP-controlled Senate failed Wednesday to override President Obama’s veto of Keystone XL pipeline legislation but vowed to continue to fight to complete the project.

The vote was 62-37, five votes short of the 67-vote super-majority needed to override a presidential veto. The bill turned back by the president would have approved the controversial pipeline. 
“The Senate’s failure to override President Obama’s veto is a defeat for our economy and American workers," Indiana GOP Sen. Dan Coats said after the vote. "Obama and a majority of Senate Democrats have said no to creating new jobs and increasing our energy security. Despite support from the majority of Americans, this important pro-growth project remains in political paralysis.” 

But some lawmakers are looking at other ways to muscle the legislation through. 

“If we don’t win this battle today, we’ll attach [the legislation] to another bill and win the war,” North Dakota GOP Sen. John Hoeven, a major sponsor of the bill, said before the vote.

Hoeven is considering attaching the Keystone measure to a highway infrastructure bill. 

The completion of the Canada-to-Texas pipeline has been a contentious Washington issue for the past six years.

Republicans and other supporters argue the project would create tens of thousands of good-paying jobs and help the United States become less dependent on foreign oil.

Democrats and other opponents say that drilling for the oil in Canada’s tar sands will emit too much greenhouse gas and contribute to global warming.

The Senate passed the legislation Jan. 29 -- just weeks after Republicans officially took control of the chamber from Democrats, who for years had held up the effort.

Obama later vetoed the legislation, making good on his vow that no final decision could be made until the State Department completed its impact studies.

“By vetoing the bipartisan Keystone jobs bill, President Obama sided with [the] moneyed special interests over the middle class,” said Senate Majority Leader Mitch McConnell, R-Ky. 

But Sen. Barbara Boxer, D-Calif., earlier this week told The Hill newspaper that the effort to override the veto was a “ludicrous idea” and rejected the idea of attaching Keystone to the highway legislation.

"First, they hold the homeland security funding bill hostage to immigration,” Boxer said. “Now they want to hold the highway bill hostage to big polluting Canadian special interests.”