Woodside Petroleum Ltd.'s independent directors late last month rejected as "inadequate" a sweetened offer by an Australian unit of the Royal Dutch/Shell Group to gain a 56 percent controlling interest in that company, up from the 34.3 percent it now holds. The bid for Woodside, which operates Australia's massive Northwest Shelf LNG export venture, marks Shell's continuing expansion into the Asia-Pacific natural gas market. The going was easier for Shell in New Zealand, where the New Zealand Commerce Commission approved the sale of gas-focused Fletcher Challenge Energy Ltd. to units of Shell and Apache Corp.
Rhetoric at the Sixth Conference of the Parties to the UN Convention on Climate Change betrayed troubling political motives. French Pres. Jacques Chirac urged representatives from the US to "cast aside their doubts and hesitations" about the need for drastic response to climate change, asserting, "Each American emits three times more greenhouse gases than a Frenchman." (That last comment is certainly up for debate!)
Light sweet crude: $34.00/bbl
Natural gas: $6.90/MMbtu
Sen. Bill Nelson (D-Fla.) said a Nov. 30 letter from Defense Secretary Donald Rumsfeld to the Senate Armed Services Committee indicates that oil and gas operations would be incompatible with defense activities in parts of the eastern Gulf of Mexico. Drilling structures and associated development would be incompatible with missile flights, low-flying drone aircraft, weapons testing and training, and other military activities in those areas, Secretary Rumsfeld told the committee.
Five oil company executives who were summoned to a Senate joint committee hearing on oil prices Nov. 9 find themselves in a Washington politics game. At the hearing, Sen. Frank L. Lautenberg (D-NJ) asked if the executives or representatives of their companies participated in Vice President Dick Cheney’s energy task force in 2001. Four answered "no," and the fifth said he wasn’t with his company at the time. A week later, the Washington Post reported on a document indicating the executives or representatives of their companies did meet with the Cheney task force.
Gotcha! Lautenberg requested an investigation by the Justice Department of possible violations of the federal “false statements” statute. Lautenberg’s witch hunt, like the tawdry hearing from which it emerged, does nothing to fortify confidence in the ability of Congress to deal with energy.
Light sweet crude: $57.79/bbl
Natural gas: $12.49/MMbtu
The American Petroleum Institute announced that it supports the state-based voluntary chemical registry that is being jointly developed by the Groundwater Protection Council and the Interstate Oil & Gas Compact Commission. "The states are the proper authority for determining requirements for chemical disclosure, so a program developed by the GWPC and endorsed by the IOGCC is a step toward a solution on disclosure," API Pres. Jack N. Gerard stated. He added, "But it is critical that we ensure confidential business information is protected, and we will work with the GWPC to improve the reporting elements.” Critics of hydraulic fracturing argue that full disclosure of frac fluid chemicals is essential to protect drinking water supplies. One Democratic U.S. Senator and three Democratic U.S. Representatives introduced bills in 2009 to require this, and to place fracing regulation under the federal Safe Drinking Water Act.
The US Supreme Court plans to address legal questions with potential to expose emitters of greenhouse gases to huge liability for harm from natural phenomena. The court agreed to hear an appeal in a case comparable to one in which oil companies are said to be liable for Gulf Coast damage from Hurricane Katrina in 2005. The case now moving onto the high court's agenda involves the electric- power industry. In Connecticut v. American Electric Power, environmental groups and the State of New York claimed emissions of carbon dioxide by major power producers aggravated global warming and caused beach erosion, drought and floods. Movement to the Supreme Court has ramifications for the case involving oil companies and Hurricane Katrina: Comer v. Murphy Oil. In that case, an appellate court refused to rule after several judges withdrew because of conflicts of interest, essentially inviting parties to seek a Supreme Court ruling. Another oil industry case, Kivalina v. ExxonMobil, also is working through the courts. In it, native Alaskans say warming caused by oil company emissions is melting Arctic sea ice and hurting fishing.
Light sweet crude: $82.20/bbl Natural gas: $3.97/MMbtu
THE REST OF THE YARN
This month ... McCarthy makes a run at reclaiming his glory (raucous) days.
McCarthy’s life would not end gracefully. He dragged himself back from Bolivia in 1957, bruised, battered, and, if not exactly penniless, no longer a rich man. Unable to build a pipeline to transport the natural gas he had discovered, he sold his Bolivian interests to a group of American companies for $1.5 million, much of which he used to repay debts. His only asset of value was the Shamrock’s aging nightclub, his beloved Cork Club, which was owned by its members. In a stab at reclaiming his glory days, McCarthy removed the club from the Shamrock and reopened it atop a downtown office building.
There he emerged as a nightclub impresario, hosting glittering floor shows packed with dancing girls and Las Vegas-style entertainers such as Soupy Sales and Mel Torme. McCarthy’s real passion, though, appeared to be bourbon.
Every few months the papers carried a new item about a fistfight or car accident. By 1964, the Cork Club was in decline. Membership, once near 6,000 people, had fallen by two- thirds. It was losing money. McCarthy fired the dancing girls. In the coming years, the club’s reputation grew increasingly sordid. In 1967, the Houston vice squad launched an investigation after a guest claimed McCarthy had hosted an “orgy” at the club, complete with live sex acts atop the tables, but nothing came of it. By 1971, it was over. Membership was down to almost nothing. McCarthy announced he was closing the club. Houston shrugged. In 1972, McCarthy sold his mansion, the one he and his wife, Faustine, had built in 1937, to a developer, who swiftly demolished it and put up apartments. Quietly, so quietly no one noticed, the McCarthys moved into a modest house in the suburb of La Porte.
Next month ...The story of Glenn McCarthy has one final chapter.
Who was the dairy farmer who struck oil while drilling for water for his cows, and ultimately leveraged the discovery into an independent oil company with over three thousand gas stations?
If you would like to participate in this month’s quiz, e-mail your answer to firstname.lastname@example.org by noon, December 15.
The winner, who will be chosen randomly from all correct answers, will receive a $50 gift card to a nice restaurant (courtesy of the ProTechnics Division of Core Laboratories).
ANSWER TO NOVEMBER’S QUIZ
Peru was the first South American country to report a true oil discovery, specifically in its Zorritos field in 1867.
Congratulations to October’s winner, Eugene Kim with Encino Energy.