In the Pipeline: 4/18/11

The unstoppable can-do American spirit collides with the immoveable U.S. Government — Shell expects to drill in Alaska in 2012 Wall Street Journal (4/15/11) reports: Royal Dutch Shell PLC expects to start drilling in Alaska’s Arctic waters in the summer of next year and have in place an oil-containment system specifically designed for the area ready at the same time, the head of the company’s U.S. operations said Friday…”Our aspiration is to drill in the 2012 season,” Marvin Odum, president of Shell Oil Co., the U.S. unit of the Anglo-Dutch giant, told Dow Jones Newswires in a interview. “We are hopeful, but also cautions.”..Shell still has to obtain a number of permits from the federal government in order to go ahead with its $3.5 billion investment to drill in the state’s Beaufort and Chukchi seas. Shell’s plans have been delayed by environmental lawsuits and permit issues on top of calls for better spill prevention and containment capabilities following BP PLC’s oil spill disaster in the Gulf of Mexico last year…Mr. Odum said the company will wait until about September to see the amount of progress in the permitting process before making a final decision to start deploying the system needed to drill next summer. “It takes about six months to build up the capacity you need to start the program,” Mr. Odum said. “This is a very significant resource for the country, which is worth pursuing, and we are focused on getting it done.”..Shell is planning to have in place an oil-containment system specifically designed to work in the cold-climate conditions of the Arctic by the time drilling starts, Mr. Odum said.

Good news is that Government Motors is going to sell a Volt. The bad news is that it’s replacing the one that burned down a garage Fox News (4/15/11) reports: Fire officials suspect an electric hybrid car may have sparked an overnight blaze in a garage in Barkhamsted on Center Hill Road…. Officials said they can’t rule out that the couple’s brand new Chevy Volt hybrid had something to do with the blaze…Homeowner Storm Connors and his wife, Dee, said they awoke to the sound of a smoke alarm around 4 a.m. The couple said they have lived in the home for nearly 40 years. They built it and raised their children there, so when the flames took over their attached garage Thursday morning, burning it down to its beams, the couple started to panic. They said they were worried they were going to lose their home and the memories inside…”I walked outside and looked in the garage door and it was flaming,” Dee Connors said. “I grabbed a pocketbook so I’d have a cellphone and a driver’s license and a jacket and a pair of slacks. I had no shoes, my feet were freezing.”

Instead of listening to kids who are supported by their parents, the President should be listening to American workers who are feeling the pocketbook squeeze at the pump The Hill (4/17/11) reports:  A dozen climate change activists expecting a discussion with White House staffers got a surprise meeting with the president himself…A dozen young climate change activists expecting a discussion with White House staffers Friday instead got a meeting with President Obama himself…The surprise meeting came hours ahead of the April 15-18 Power Shift 2011 conference, which is slated to include criticism of a White House that some activists allege has not been aggressive enough on climate change…“We went thinking we would meet with senior staff and in walked Barack Obama,” said Courtney Hight, co-director of the Energy Action Coalition that organized the conference, which opened Friday night…“Young people got to sit down at a table in the West Wing and have a meeting with the president and share what our priorities are and talk about solutions, and we talked about the impact of fossil fuels in our communities, and how they can wreak havoc,” Hight said onstage at the conference of largely collegiate activists.

This man has swagger Wall Street Journal (4/16/11) reports: The Chevron CEO is a rare breed these days: an unapologetic oil man. For decades—going back to Jimmy Carter—politicians have been peddling an America free of fossil fuels. Mr. Obama has taken that to an unprecedented level, closing off more acreage to drilling, pouring money into green energy, pushing new oil company taxes, instituting anticarbon regulations. America is going backward on affordable energy, even as oil hits $110 a barrel…As for biofuels, “we would need to consume land the size of states” to hit the country’s current ethanol targets. Chevron is investigating biofuels, but Mr. Watson says the “economics aren’t there” yet. Unlike many CEOs, Mr. Watson insists on products that can prosper without federal subsidies, which he believes are costly and lacking in transparency when “consumer pockets are tight, government pockets are tight…Bottom line: “We’re going to need oil and gas and coal for a long time if America wants to keep the lights on.”

Problem: supply of crude oil from Middle East is unstable. Solution: drill for oil in the U.S. and import from Canada Bloomberg (4/18/11) reports: Crude prices currently include a premium of $15 to $20 a barrel, OPEC’s Secretary General said, commenting on the commodity’s 19 percent gain this year, driven by rising unrest in oil-producing nations in the Middle East…Oil officials from Kuwait, the United Arab Emirates, Iran joined Saudi Arabia, the world’s biggest crude exporter, in saying there is no shortage of fuel in the market…“I can’t say the market is oversupplied, but the market is adequately supplied and our production in March is almost the same as our production in December, even though one of our member countries is out of production,” OPEC’s Abdalla el-Badri told reporters today in Kuwait. “Yes, the price is a concern.”..Additional shipments to make up for halts in Libyan output has been met by a lack of buyers, el-Badri said, when asked if the Organization of Petroleum Exporting Countries will decide to raise production when it meets in June…Crude fell as much as 1.1 percent in New York to $108.47 a barrel today after Saudi Oil Minister Ali al-Naimi said yesterday that the global “market is oversupplied” with crude.

NYT asked and answered their own rhetorical question, but here’s the kicker, they expect us to believe them on their word New York Times (4/18/11) reports: A year after BP’s Macondo well blew out, killing 11 men and spewing millions of barrels of oil into the Gulf of Mexico, the much-maligned federal agency responsible for policing offshore drilling has been remade, with a tough new director, an awkward new name and a sheaf of stricter safety rules. It is also trying to put some distance between itself and the industry it regulates… But is it fixed? The simple answer is no. Even those who run the agency formerly known as the Minerals Management Service concede that it will be years before they can establish a robust regulatory regime able to minimize the risks to workers and the environment while still allowing exploration offshore…“We are much safer today than we were a year ago,” said Interior Secretary Ken Salazar, who oversees the agency, “but we know we have more to do.”..Oil industry executives and their allies in Congress said that the Obama administration, in its zeal to overhaul the agency, has lost sight of what they believe the agency’s fundamental mission should be — promoting the development of the nation’s offshore oil and gas resources. Environmentalists said the agency, now known as the Bureau of Ocean Energy Management, Regulation and Enforcement, has made only cosmetic changes and remains too close to the people it is supposed to regulate.

Two cheers. When in comes to government-induced green energy investment, the U.S. doesn’t waste as much money as Germany of China Global Post (4/18/11) reports: Germany and BEIJING, China — In the rough and blustery North Sea, almost 30 miles off Germany’s coast, 12 wind turbines tower over the water, with rotors longer than football fields…Like most wind turbines, those that make up the Alpha Ventus Offshore Wind Farm have gearboxes that transmit the power of the rotors to much faster-spinning cogs that generate electricity…The strain from wind turbulence makes these gearboxes the most fragile part of the turbines and a true engineering headache…Six of the Alpha Ventus gearboxes are made by Renk, a 130-year-old engineering company based in Augsburg, southern Germany. The three decades in which Renk has been involved with wind turbines haven’t always been easy, said Toni Weiss, general manager of Renk’s industrial gear division. But he estimates the firm is now five to seven years ahead of most rivals