Fracking ‘shifts the global energy balance’

North America’s shale oil and gas boom has shifted the balance in global energy markets, giving the US and Canada new leverage as exporters, despite the Middle East retaining a pivotal role.


While Canada has long been a major energy exporter, the rise of shale-based hydrocarbons has meant a crucial change for the United States, which could move from the being world’s leading importer of oil to a net exporter by 2017.

It has become the gold rush of the 21st century, with tens of billions of dollars in revenues and hundreds of thousands of new jobs.

“That revolution is real,” said Marvin Odum, President of Shell Oil, at a recent Platt’s conference in New York.

“America suddenly has a 100 year supply of natural gas ‘in the bank’ and the world has 250 years — thanks in part to breakthroughs in the technology that unlock hydrocarbons from tight rock and shale.”

Since 2007, the technology of hydraulic fracturing, or “fracking,” combined with horizontal drilling, has made possible the cost-effective exploitation of immense oil and gas resources locked up in subterranean shale strata.

The technology, also called “unconventional” production, remains highly controversial, with widespread, serious worries for the environment and the health of people living near the fracking locations.

But the impact has been stunning. In five years US crude oil production has risen 32 percent. In 2012 alone, it has jumped 14 percent from the previous year, to 6.4 million barrels a day.

The US Department of Energy says it could rise to 7.1 million barrels a day next year.

At that pace, the International Energy Agency predicts that the United States could become the number one producer of oil by 2017, surpassing current leaders Saudi Arabia and Russia.

And the US could become totally energy-independent by 2030.

“For natural gas, independence is almost here,” said Andrew Lipow, an independent energy analyst.

Only a few years ago such a shift was unimaginable for the United States, where dependence on imported energy has been a longtime political and security issue.

The shale boom is quickly shifting the geopolitics of oil. It reduces US exposure to the whims of the long-powerful Middle East oil producers and the Saudi-led OPEC cartel.

The Middle East now finds itself faced with two challenges, according to Kevin Massy, an energy security expert at Brookings Institution.

First, they face new competition from non-OPEC rivals in North America and elsewhere whose new production is hitting the world energy market.

And secondly, their own production is threatened by rocketing domestic consumption, Massy said.

Tempering all that is the general rise in global energy consumption, that assures that much of the new production can be absorbed into the markets.

According to the International Energy Agency, the global demand for natural gas should rise by 50 percent by 2035, and the demand for crude oil 10 percent.

Most of that demand growth will come from emerging economies, who will support the price of oil at elevated levels.

Greater independence does not mean the United States will be insulated from the markets, Massy said, since the global oil market is very fluid.

“The US is still exposed. If there is a supply disruption in Saudi Arabia and Kuwait, that… has an impact on oil prices in the United States even if US doesn’t import.”

The reality is that the Mideast will still be supplying much of the world’s energy, just not so much to the US market, said Michael Levi of the COuncil on Foreign Relations.

“The Mideast is still critical to energy supply; that will not change,” Levi said.

On the other hand, because it is harder to transport and market, the natural gas business is more regionalized, making the geopolitical impact of shale gas more important.

Fracking means countries like Ukraine, Poland, and Hungary, dependent on Russian gas, could develop their own, or buy liquefied natural gas from other countries exploiting new shale fields.

“If unconventional gas production spreads around the world, the traditional producers will see their influence erode, especially Russia versus Europe,” said Massy.

Development though has been slow outside North America. Environmental concerns are blocking fracking in France and Bulgaria, and the issue is still under debate in Britain.

In Poland the government has supported shale field development, but there the giant ExxonMobil is grinding its teeth over poor exploration results.

China too has important shale energy reserves. But some are in heavily populated areas, and others in very arid regions, making exploitation difficult. Fracking uses of large amounts of water.

Comment: There is a simple solution to the 457 visa impasse

By Joanna Howe

This debate around 457 visas boils down to a difference of opinion on how best to identify a domestic skill shortage for which a 457 visa can be used.


For Labor, the most desirable option for recognising skill shortages is employer-conducted labour market testing. Their Bill proposes that employers advertise for the occupation in which they seek to sponsor an overseas worker. Once an employer can prove that their recruitment efforts have been in vain because no suitable candidates have applied, the employer can make an application to sponsor a 457 visa worker to the department.

For the Liberals, the status quo suffices. They argue that the current 457 visa system is working well, with rorts occurring on a very limited basis and that there should be as little constraint as possible on an employer seeking to sponsor a 457 visa worker. The current mechanism for enabling employers to use the 457 visa scheme is the Consolidated Sponsored Occupations List (CSOL). So long as an occupation is on this list, then an employer can sponsor an overseas temporary migrant worker.

So where does the truth lie in the 457 visa debate? What is the best mechanism for identifying skill shortages?

We can start by unpacking the drawbacks of both Labor’s proposed reforms and the Liberal’s preference for the current system.

The issue with employer-conducted labour market testing is that this won’t stop the rorts of the 457 visa scheme. Good employers already recruit for local workers and when they can’t, they make an application to the department to use the 457 visa scheme. The vast majority of Australian employers are decent, law-abiding men and women who use the 457 visa scheme to fill genuine skill shortages. Nonetheless, bad employers exist.

Advertising in itself is not a litmus test because unscrupulous employers who want to rort the system can do so. They can fiddle with the job advertisement so that the pay is too low or the conditions are poor; they can turn back legitimate job seekers who respond to their advertisement; they can even stick the advertisement somewhere out there in cyberspace with no real intention of recruiting locally.

Put simply, a dodgy employer can do all manner of things to avoid Labor’s proposal of employer-conducted labour market testing and there is very little the Department of Immigration and Citizenship can do about it. The department does not have the manpower to really scrutinise whether an employer’s 457 visa application is legitimate.

The Liberals’ preference for the current system is even more problematic. Their denial of rorts reveals a Pollyanna view of employers. There is clear evidence to show that there are some employers are using the 457 visa scheme for ulterior purposes: to achieve a compliant staff too frightened to complain, to deunionise their existing workforce or to simply undercut Australian labour standards with workers who know that they only have 28 days before their visa expires if the employer lets them go.

The reason these rorts occur is that the current mechanism for identifying skill shortages is too crude. The CSOL has over 600 occupations on it. This is far too many. The vast majority of these occupations are simply not in demand. There are unemployed Australian workers who could do the jobs listed on the CSOL. In short, the problem with the current system is that it simply doesn’t work well enough.

So where does this leave us? A group of academics at the University of Adelaide Law School have been researching this area for some time now and we firmly believe that there is a genuine alternative that would enable the 457 visa system to work much better.

Our proposal is that labour market testing needs to be done independently of employers.

To achieve independent labour market testing the occupations listed on the aforementioned CSOL should be closely related to whether an occupation is in shortage. There should be labour market analysis conducted by the Australian Workforce Productivity Agency or some other body to ensure that the list only includes skilled occupations that are genuinely in shortage and the list should be updated over time to reflect changes in the economy. Only if an occupation is not on this list, should an employer have to make the case that a skill shortage exists and conduct their own labour market testing.

This is by far the most sensible option. Independent labour market testing limits the regulatory burden on genuine employers seeking to fill domestic shortages and eliminates the opportunities for those dodgy employers seeking to rort the system by circumventing the labour market testing requirement which occurred in the late 1990s.

This is also a fairly simple option. Currently the Australian Workforce Productivity Agency already does comprehensive labour market analysis for the permanent migration scheme. They compile and regularly update the Skilled Occupations List (SOL) which has 192 occupations on it. More resources could be given to AWPA to undergo further independent labour market testing for the 457 visa scheme.

Unfortunately the pre-election hysteria is skewing the debate on 457 visas with outlandish claims that Labor’s proposals are racist and unnecessary. Neither is true. The Liberal’s preference for the status quo is not in Australia’s best interests. While a step in the right direction, Labor’s proposal has some serious flaws that need to be properly worked through. The sad truth is neither party currently has a plan to properly fix the design flaws in Australia’s 457 visa scheme.

Dr Joanna Howe is a Lecturer in Law at the University of Adelaide. She is a former NSW Rhodes Scholar and last month presented evidence on the 457 visa to the Senate’s Legal and Constitutional Affairs Committee on behalf of a joint submission with Associate Professor Alexander Reilly and Professor Andrew Stewart.

Syrian attack ‘kills 10 children’

Syrian rebels virtually cut off roads to Aleppo from neighbouring Raqa province on Monday, severing regime supply lines as France announced it had earmarked financial aid for the opposition coalition.


After days of fighting, the insurgents took full control of Tishrin dam on the Euphrates river, a route that connects the northern provinces of Aleppo and Raqa, the Syrian Observatory for Human Rights said.

A resident of nearby Manbij confirmed the report, adding that employees of the hydropower dam were continuing operations.

“The capture of the Tishrin dam is very important. It means that the army basically has only one road left to Aleppo,” Observatory director Rami Abdel Rahman told AFP.

“The highway crossing over the Tishrin dam was the last main route from Raqa province under regime control,” he said.

With the overnight capture, the rebels now hold sway over a wide expanse of territory between the two provinces bordering Turkey, which backs the revolt against President Bashar al-Assad.

The army must now rely on the Damascus-Aleppo highway to bring reinforcements to Syria’s embattled commercial hub of Aleppo, where fighting is deadlocked.

Rebels also gained full control of Marj al-Sultan air base 15 kilometres (nine miles) east of Damascus after seizing a large part of the airport on Sunday, said the Observatory.

Further west, a warplane launched three bombs or rockets at a rebel command centre in Atme near the Turkish border without causing casualties or hitting its target, an AFP journalist said.

The village, a nerve centre of the rebellion two kilometres from Turkey, was once home to 7,000 inhabitants who have mostly fled.

In a sign of growing confidence, rebel officers have formed a commission to lay the groundwork for a future army and liaise with the political opposition on issues such as arming fighters on the ground, a spokesman said.

He said the Free Officers Assembly would seek “to lay the correct foundations for the construction of the new Syrian army, which will be non-partisan,” working with the newly formed opposition National Coalition.

France said it had allocated 1.2 million euros ($1.5 million) in emergency aid for the coalition, as Russian Prime Minister Dmitry Medvedev slammed Paris’s support of the rebels as “unacceptable”.

“France, which was first to recognise the coalition as the sole legitimate representative of the Syrian people, now wants to help it come to the aid of its countrymen in distress,” Foreign Minister Laurent Fabius said.

Faced with an increasingly offensive revolt, the Assad regime has been reducing its territorial ambitions to focus on Damascus, central Syria and Alawite bastions, as it digs in for a long war, analysts say.

Troops have been bombing rebel positions on the outskirts of the capital, including in Daraya, the site of the worst massacre in the 20-month conflict, with state media saying on Monday that troops had inflicted heavy losses on “Al-Qaeda terrorists” in their advance.

The International Committee of the Red Cross called on both sides to respect international and humanitarian law, a day after an aerial bombing killed 10 children in Deir Assafir, south of the capital.

ICRC operations director Pierre Krahenbuhl said those engaged in fighting “must at all times distinguish between civilians and persons directly participating in the fighting”.

The UN relief agency for Palestinian refugees, UNRWA, said in Jordan that it needed an additional $53 million to provide aid to up to 500,000 Palestinians in Syria.

An initial toll from the Observatory, which relies on a network of activists and medics for its information, said 34 people were killed on Monday. The watchdog has recorded a total of more than 40,000 deaths in the Syrian conflict.

Assange health could worsen: Ecuador President

In an exclusive interview in the Peruvian capital Lima, Correa said Assange’s health concerns could worsen dramatically if his now five-month long stay in the embassy goes on for much longer.


“I haven’t spoken with him since he arrived at our embassy, but the ambassador informed me that he is suffering from a slight problem in his lung — nothing too serious,” Correa, who was in Peru for a Latin American summit, told AFP.

“But there is still the danger that his physical and mental health could worsen, seeing that he is shut up in a small space, and unable to exercise in the fresh air. That would complicate the health situation of anyone,” Correa said.

Assange has been sheltering in Quito’s embassy to avoid extradition to Sweden for questioning on allegations of rape and sexual assault

Assange has strongly denied the allegations.

Assange fears that if he is extradited to Sweden, he eventually could be delivered to the United States for prosecution, where he could face a lengthy prison term or even the death sentence.

WikiLeaks enraged Washington in 2010 by leaking hundreds of thousands of classified US documents on the wars in Iraq and Afghanistan and embarrassing diplomatic cables from US embassies around the world.

Assange was arrested that same year in London but eventually was released on bail.

Ecuador granted Assange asylum on August 16, but Britain has refused to grant him safe passage out of the country – leaving the two governments in diplomatic deadlock and Assange stuck inside the embassy.

Talks to end the impasse have proved fruitless so far, but Correa said a breakthrough is still possible.

“We’re not negotiating on the basis of human rights — that term has not been used in this case. But there have been ongoing conversations” to resolve the case, he said.

“The solution to this problem is in the hands of Great Britain, Sweden and the European judicial authorities,” said Correa.

“If Britain gives him safe passage tomorrow, this whole thing is over,” he added.

Speaking about political matters back home, Correa left open the possibility that he will stand for a third consecutive presidential term.

“I have never been interested in political power, but situations where there is so much injustice, as with Ecuador’s socio-economic poverty, can only be fixed by political means,” said Correa, 49, whose term as Ecuador’s president is due to end in May.

12 jihadists killed in north Syria: NGO

Fresh clashes between Kurdish fighters and jihadists have erupted in the majority Kurdish province of Hasakah in northern Syria, a monitoring group says.


At least 12 members of the Islamic State of Iraq and the Levant (ISIS) were killed early on Friday, said the Syrian Observatory for Human Rights, which added that 22 Kurdish fighters have been killed over the past few days.

Reports of the latest Kurdish-jihadist violence emerged a day after at least 31 civilians, among them five women and four children, were killed in army shelling and an assault in the northwestern province of Idlib.

Meanwhile, Kurdish activists said there was heavy fighting in villages between Cel Agha and Gerke Lage as radical Islamists shelled Ras al-Ain.

Kurds expelled jihadist groups from Ras al-Ain in mid-July.

The fate of some 200 Kurds taken hostage by jihadists on Wednesday remains unknown, the Observatory’s Rami Abdel Rahman told AFP.

Elsewhere on Friday, forces loyal to President Bashar al-Assad again shelled the rebel-held area of Jouret al-Shiyah in the central city of Homs, said the Observatory.

The bombardment comes five days after the key rebel neighbourhood of Khaldiyeh fell out of rebel control and into army hands.

Assad’s regime is pressing an offensive aimed at taking back remaining rebel areas in Homs, Syria’s third city and dubbed by activists as “the capital of the revolution”.

Meanwhile, the air force staged several air strikes on rebel areas across Syria, including two on Al-Harra in the southern province of Daraa, where rebels have made significant progress in recent weeks, said the Observatory.

Friday’s violence comes a day after at least 185 people were killed across Syria, the Britain-based watchdog said.

More than 100,000 people have been killed in Syria’s raging war, the United Nations says.