Today we talk about five things that happened the week of March 23, 2015:
- California Gov. Says Coal Bad, Gas Good
- Senate Vote-a-Rama Says EPA Shouldn’t Punish States Over Climate
- Gallup Poll Finds Fracking is For Old People
- Gas Exports to Mexico Set to Expand
- PA Severance Tax Popular, but Bogged Down in Legislature
1. California Gov. Says Coal Bad, Gas Good
Last Sunday, California’s Democratic Governor Jerry Brown appeared on Meet the Press to discuss the ongoing drought in his state. He touched on a few interesting issues. First, he showed some passion on climate change, pointing to coal companies as the culprit.
The big highlight from the appearance was a bit of back and forth with Sen. Ted Cruz (R-TX). Sen. Cruz is skeptical of climate change. In response, Gov. Brown said “that man betokens such a level of ignorance and a direct falsification of the existing scientific data. It’s shocking and I think that man has rendered himself absolutely unfit to be running for office.”
Gov. Brown was asked if he should be shutting down fracking, and he said:
No, not at all. First of all, fracking in California has been going on for more than 50 years…If we reduce our oil drilling in California by a few percent, which a ban on fracking would do, and we import more oil by train or by boat, that doesn’t make a lot of sense.
2. Senate Vote-a-Rama Says EPA Shouldn’t Punish States Over Climate
Last week the U.S. Senate held its occasionally-annual budget vote-a-rama:
U.S. Senate rules include a special section for consideration of the annual Budget resolution. The Budget is not subject to filibuster, but all amendments must be germane and are voted on consecutively without real debate.
During a vote-a-rama, each amendment is considered and voted on for about 10 minutes until they are finished with all amendments. It’s an exhausting process that many senators have said makes it impossible to know what is actually being considered.
In other words, the annual budget process gives any Senator the ability to get an up-or-down vote on any issue. It is arguably nonbinding, but can have serious political consequences. Democrats, led by Sen. Harry Reid (D-NV), hated the process so much that they just stopped passing a budget. Republicans promised to bring back the budget process, and the chamber voted on several energy-related amendments last week.
Sen. Mitch McConnell (R-KY) had an amendment to prevent the U.S. Environmental Protection Agency from taking highway funds away from states. That is the likely end game if a state were to refuse to go along with the President’s Clean Power Plan. Sen. McConnell’s amendment passed 57 to 43.
Sen. Michael Bennet (D-CO) offered an amendment saying that climate change is real and should be addressed with clean energy, efficiency and carbon reductions. Sen. Jim Inhofe (R-OK) opposed the amendment. It passed 53 to 47.
Three other related amendments came up:
- Sen. Roy Blunt (R-MO) had an amendment to prevent a carbon tax that passed 58 to 42.
- Sen. Bill Nelson (D-FL) had an amendment to prevent federal agencies for censoring messages related to global warming. It failed on a vote of 51 to 49 (non budget items require 60 votes).
- Sen. Bernie Sanders (D-VT) had an amendment the recognize that climate change is real and Congress should act to sharply reduce emissions. It failed 49 to 50.
3. Gallup Poll Finds Fracking is For Old People
Gallup has a new poll out:
The survey asked Americans whether they favor or oppose “hydraulic fracturing or ‘fracking.'” The survey did not further define the process, list pros or cons or measure the degree to which the public has been following the issue. But eight in 10 Americans are willing to give an opinion, with the results split evenly, along with 19% who explicitly said they didn’t have an opinion.
It is somewhat interesting that they just assume everyone is familiar with the process. Regardless, the results were not great for for the industry:
Perhaps most notably, fracking is more popular with older folks. It is also a losing issue among independents. Overall, the industry has some work to do with an election coming up.
4. Gas Exports to Mexico Set to Expand
Mexico nationalized its oil industry in the 1930s and only recently began letting foreigners invest in its oil and gas sector. There is a great deal of demand for natural gas in Mexico, and a lot of cheap gas in Texas. Also, U.S. rules for exporting pipeline gas are much easier than for liquefied natural gas by ship. All this adds up to some foreign investment in U.S.-Mexico gas pipelines. From Reuters:
Asset manager BlackRock Inc and U.S. private equity firm First Reserve have taken a joint stake worth around $900 million in the second phase of Mexico pipeline project Los Ramones, state-controlled oil company Pemex said on Twitter on Thursday.
The move also comes as Mexico’s government, which has seen the peso fall to record lows off the back of an oil price slump that has dented the appeal of its energy sector opening, sets about courting private investment.
Pemex said in September it would spend $2.5 billion on the second phase of the Los Ramones pipeline, which will eventually run from the U.S.-Mexico border to central Mexicoto help satisfy growing demand for gas by boosting cheap imports from the United States.
5. PA Severance Tax Popular, but Bogged Down in Legislature
Pennsylvania’s new Democratic Governor Tom Wolf has some good news in a new poll. First up, voters are “more optimistic about the state’s future than they have been in five years.” Perhaps more importantly, “59 percent gave approval for the budget plan and 60 percent said they approve increasing state income taxes in order to reduce property taxes.”
That budget plan is focused on a new 5% severance tax on natural gas production. Unfortunately for the Governor, that does not seem to be getting much traction in the conservative state legislature:
Steve Miskin, a spokesman for the House Republican majority, said the proposal is out of step with today’s market. “When natural gas prices are low, his tax hits its height,” Mr. Miskin said. “They arrived at $1 billion and they want to spend higher and higher to meet that goal.
”We’re not advocating for new taxes,“ Mr. Miskin said. ”If revenue is necessary, we believe it’s through liquor privatization and dealing with cost drivers.“
Interview with Katie Mehnert, the founder of Pink Petro (Starts at 23:29)
Katie grew up in Louisiana, and her dad was an engineer who at times worked in oil and gas. She studied communications at Louisiana State University, toyed with the idea of law school, and wound up working in the oil business. She did IT work for a range of different companies in Houston and St. Louis, and developed an expertise in “process design work.” That led her to a job at Shell.
At Shell, Katie found her calling in health, safety and environmental (HSE). Her first job was to think about processes that truck drivers go through and how they could be made safer. She later held a similar job at BP. Katie found her way into HSE with the help of a female engineer who mentored her. For anyone interested in HSE, Katie encourages field experience. She had an opportunity to get into the field at Shell and she argued that it is hard to work on safety processes if you have never seen them in action. Katie also make clear there are opportunities for all backgrounds. Engineers are important in health and safety, but human relations and communications skills are also important.
Katie sees a lot of challenges for women in the sector. Women are outnumbered four to one, and that disparity is worse among executives. She is even more worried about the “pipeline” of future talent, both female and otherwise. Katie had the idea that it would be helpful to find a way to connect women through social media. Perhaps, she thought, she could build a community that would help women get in, and stay in, the oil and gas business. She jotted down her idea on a napkin, but did not do much with it until her recent departure from BP.
She brought her idea to life by writing up a proposal and bringing it to a friend at Halliburton, and the company became her first source of funding. Shell has also chipped in, and together that was enough to launch Pink Petro. The network is built on an existing social platform called Jive, which is a leading product for corporate communication and collaboration. Pink Petro members get access to a focused, spam-free network. Members can learn from, and connect with, other energy professionals. They also get a smartphone app. Members are joining from around the world and Pink Petro is not limited to women in oil and gas. Anyone in energy, both male and female, is welcome to join. The group has several levels of membership, and the fees for joining adjust accordingly.
Pink Petro went live a couple weeks ago, and is rapidly growing. To get involved, check out www.pinkpetro.com.