Strange Bedfellows: Frackers and AntiWar Activists

Saudi Arabia has committed countless war crimes in Yemen with American planes and bombs.
Not only does the Trump Administration not care about this, they seem proud of it.
But the Trump Administration does care about mass layoffs in Texas during an election year, and by a strange twist of fate Frackers and AntiWar Activists have wound up on the same side of an issue.

Mr Trump said on Saturday that he would do “whatever I have to do” to protect the US industry, which is facing the prospect of mass job lay-offs and production shut-ins, especially in the local shale sector.

He has also hinted that US military aid to Saudi Arabia could be on the line, reflecting the depth of the schism with one of its closest allies in the Middle East.

Frackers have recruited Rick Perry, who was President Donald Trump’s energy secretary, to lobby for them, and suspending US military aid to Saudi Arabia is part of the agenda.

Most shale producers are unprofitable at prices below $50 a barrel, so the current price of $20 a barrel is a catastrophe.

The uncomfortable fact for President Trump is that despite his long-standing criticism of OPEC and his support for free energy markets, he needs the cartel’s market intervention to keep shale producers afloat.

It's ironic that one outcome of this crisis is that the U.S. and Canada will likely be joining OPEC.
Global crude demand has fallen by a third, more than 30m barrels of day of demand, the biggest drop in history, because of the pandemic.
Even without the price war, there will be a massacre in middle America.

Nearly 100 US oil and gas producers could file for Chapter 11 over the next year, according to Buddy Clark, co-chair of the energy practice at Houston law firm Haynes and Boone...
Even companies in the Permian Basin, the low-cost oilfield in West Texas that has led America's energy boom, require an average of $49 a barrel to profitably drill, according to a survey by the Dallas Federal Reserve.
At $40 a barrel, only 15% of oil companies would survive for a year or less, the Dallas Fed survey found. Another 24% of oil companies might be able to hold out for one to two years.

Many frackers survived the 2014 oil price crash by borrowing. That window is now closed.

Defaults on high-yield energy bonds could potentially spike to 30%, they added...
The percentage of oil and gas companies with distressed credit ratios spiked from about 25% at the end of last year to 94% in mid-March, according to S&P Global Ratings...
And now that cash-strapped oil companies need to refinance their debt, the junk bond market is closed. No energy junk bonds were issued anywhere, to any company, in February and March, according to Dealogic.
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The Houthi-allied Yemeni armed forces have retaken Al-Labnat military base in Al-Jawf province from the Saudi-backed mercenaries fighting to reinstate exiled President Abdrabbuh Mansur Hadi. This is the first time in five years that it has been under Houthi control.

The pro-Hadi Islah militia at the base was reported to have handed weapons over to the Houthi forces...

The Houthis’ advance now means that they are getting closer to encircling the remaining Islah-stronghold of Marib. Saudi-supported ground forces are close to losing another northern Yemen province following most of Al-Jawf falling to the Houthi-led forces at the beginning of the month.

The collapse of the Saudi-backed ground forces could necessitate a Saudi withdrawal according to academic Samuel Ramani. He has drawn parallels with the strategic impact of the Syrian government retaking control of the city of Aleppo.

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Steven D's picture

@gjohnsit But until they run out of oil, that won;t happen. The minute it does, watch out Saudi Royals.

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"You can't just leave those who created the problem in charge of the solution."---Tyree Scott

CB's picture

@Steven D
The ruling establishment is completely inbred. Without FUKUS support, Saudi Arabia would disintegrate from forces both internal and external.

If there ever was a "gas station masquerading as a country" the name on the sign would be Saudi Arabia. This country would quickly devolve back to tribal subsistence living without it's oil wealth.

Eighty percent of the following is financed by oil profits:

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gulfgal98's picture

@Steven D We need to quit aligning ourselves with the two most despicable countries in the Middle East when it comes to human rights. One of those is Saudi Arabia. And of course, it will never happen.

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"I don't want to run the empire, I want to bring it down!" ~ Dr. Cornel West

“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy

CB's picture

@gulfgal98

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The Liberal Moonbat's picture

@CB

Ahem:

ISRAEL.

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In the Land of the Blind, the one-eyed man is declared insane when he speaks of colors.

CB's picture

on Russia and Saudi Arabia?

The Saudis are currently increasing production while Russia is staying the course. Why do the US producers expect the Saudis and Russians to decrease production when it was they who were overproducing?

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TheOtherMaven's picture

@CB

aka "It's Always Somebody Else's Fault".

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There is no justice. There can be no peace.

CB's picture

@TheOtherMaven

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enhydra lutris's picture

@CB
can't even pretend that it just happened.

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

lotlizard's picture

@enhydra lutris  
about his having boosted U.S. oil production into the top spot during his reign.

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Bob In Portland's picture

but I suspect that the worldwide usage of oil has dropped precipitously, another factor in falling oil prices.

Most people here probably remember when the oil industry claimed that we were going to run out of oil. Peak Oil, they called it. Think pieces about peak oil showed up as news and op-ed pieces all across the media, and there were debates about what to do about this. Search for more oil (the oil industry) or find another, renewable source. Oil production would rise or fall, depending on not only the profitability of oil but also the fear generated over running out of it.

Most US wars and acts of aggression over the last few decades have been around oil. Most were against countries producing oil (Iraq, Iran, Libya) or countries geographically located where pipelines could supply this oil, or natural gas, to those countries who would compete with the US (Syria, Ukraine). The harsh sanctions placed against Venezuela were about oil, not any particular crimes that these particular regimes may have committed.

Covid-19 is so thoroughly destroying the fringes of the oil industry (fracking) that the power of Big Oil is threatened. More importantly, that portion of Big Oil that occupies our Deep State structure will lose power within it.

This would be a very good thing. An American foreign policy not dependent on the oil industry (selling ours and controlling the rest of the world's) should allow the expression of alternative energy to develop. Turning around an aircraft carrier takes time, but at a certain point our oligarchy will recognize this. The profit model of attacking oil-producing countries in order to put American hands on the levers is about to end.

Further, the US plans to take on Russia directly to win the battle for the natural gas market in Europe is a major failure. The US has used its power against Russia's attempts South Stream pipelines under the Black Sea and across Turkey. The coup in Ukraine, which put anti-Russian fascists in power, was in large part an attempt to shut down Russian gas lines that run across Ukraine. Russia's Nord Stream II eliminated Russia's need for those trans-Ukrainian pipelines. If Ukraine shuts them down it shuts down its own supply of energy.

None of this does anything for us peons here and abroad in the immediate situation of plague, but it has the potential to slow or even stop much of our military advances.

Imagine planning a war to control oilfields in an oil glut where many if most industries are shutting down, where our fleets and armies are hit by covid-19, and that kind of illness would quickly degrade the military forces.

Just saying.

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CB's picture

no longer has much to do with access to oil other than preventing it's 'enemies' from profiting or circumventing embargoes.

The US now has sufficient secure domestic access of oil supplies to power it's global war machine.

War planning now has more to do with unfettered access/denial to select natural resources, specially those that are in limited supply and used in the high tech industry. Another factor, this war machine needs a major enemy (or two) to justify it's expense and even it's very existence. The world is not nearly as dangerous as they make it out to be. The truth of the matter, the Defense Industry has been corporate America's largest pork barrel since the end of WWII and the PTB have no intention of letting it run empty. (Even Bernie Sanders has been caught with his hand in this barrel.)

The amount of anti-China propaganda in Western MSM has been rapidly escalating in the last several years and is now starting to match that of Russia in the last decade. We all know what that means.

It's gonna be déjà vu all over again....

Esper’s dark vision for US-China conflict makes war more likely
March 19

The Trump administration’s deal with the Taliban may not successfully bring our war in Afghanistan to a close. Some number of U.S. forces will remain on open-ended counterterrorism missions, their presence in harm’s way creating a constant risk of escalation, and a lot could change in the “many months” that Defense Secretary Mark Esper says it will take to complete the U.S. drawdown.

Still, the deal is welcome news and could be the beginning of the end of the longest conflict in U.S. history. American troops who have seen three, four, even five or more deployments to the Middle East may finally be able to come home — or not. If Esper’s grim vision becomes reality, they may soon be fighting China instead, embarking on a new and far larger conflict that would make Afghanistan look like child’s play, put U.S. security in unnecessary danger and plunge the world into lasting turmoil.
...
The rationale here, as Esper summarized in a recent interview on CNBC, is that the United States is in a new “era of ‘great power competition,’ and that means we need to focus more on high intensity warfare going forward.” For the United States, “our long-term challenges,” Esper continued, “are China, No. 1, and Russia, No. 2. And what we see happening out there is a China that continues to grow its military strength, its economic power, its commercial activity, and it’s doing so, in many ways, illicitly — or it’s using the international rules-based order against us to continue this growth, to acquire technology, and to do the things that really undermine our [and our allies’] sovereignty, that undermine the rule of law, that really question [Beijing’s] commitment to human rights.”

Esper’s argument is compelling because it includes a bit of truth: China is a rising power and our economic rival. It is growing in military strength, and it does engage in illicit business practices, including hacking and theft of trade secrets. Beijing has acted without regard for other nations’ sovereignty (which is not to say Washington is innocent of the charge), and its treatment of the Uighur people and response to the new coronavirus outbreak in Wuhan have settled, once again, any remaining question of whether the Chinese government has adequate respect for human rights.
...

We will be seeing an escalation of these talking points as China pulls out of the COVID-19 pandemic successfully in the coming weeks. As usual, China will be damned if it does and damned if it doesn't.

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lotlizard's picture

@CB  
but for what? When you get right down to it, mainly for bringing huge amounts of military pork to the Islands as longtime ranking D member of the Senate committee overseeing “defense” spending.

It’s an economic cargo cult, but I guess you can’t blame the Islanders — sugar and pineapple are of a bygone era; prosperity surrounding the 1%’s celebrity real estate is confined to a few exclusive places as on Maui; tourism is dicey and falls precipitously anytime there’s an Asian or U.S. recession (let alone the current total shutdown).

So behind the “paradise” façade, except for the military money pump there’s nothing really rock-solid robust and steady.

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mimi's picture

@lotlizard

except for the military money pump there’s nothing really rock-solid robust and steady.

prosperity surrounding the 1%’s celebrity real estate is confined to a few exclusive places as on Maui;

Celebrity real estate is the cause for 99 percent of the island's homeless and slave working population. There is nothing more necessary than confiscating their land and share it and give it to the 99 percent.

Rock solid? The only thing solid is the revolution that will have to come.

I speak for myself of course. YMMV.

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