U.S. Topics


Natural Gas and Wyoming Fields

Randy Black writes; "Mr. Heelan is advised to study why the energy markets behave the way that they do. Prices of energy commodities are driven by demand and supply. Bottom line: Futures prices of oil and gas represent spot prices on a particular exchange, are speculative, and are almost never paid at that price when the future becomes the present.

Further, gas prices in particular, are subject to pricing issues that do not affect oil. Gas cannot be stored, nor transported with the ease that oil is stored or transported. By its nature, you can simply pour oil into inexpensive storage tanks or ships. Gas is expensive to store, and generally not as easy to transport, thus, it is normally put directly into pipelines at the point of production. Foreign natural gas is extremely difficult to transport via ship, and thus, very expensive.

This is why the major gas fields in Wyoming, known as the Pinedale/Jonah Fields, laid more or less undeveloped after their discovery for more than decade. The field which represents more than 20% of all gas discoveries in the US over the past few years is finally being developed to its potential only because the completion of a major pipeline from Pinedale to the California markets. A visit to Pinedale this week would literally find traffic jams in the little town of about 5,000. The traffic jams are drilling rigs being hauled to the fields during the seven month drilling season before further drilling is shut down during the winter breeding season for the migrating wildlife.

It is very doubtful, despite Mr. Heelan’s thoughts, that natural gas from the Middle East, or Africa, will have a major impact on the US markets.

Here is what Chairman Greenspan actually said (Wall Street Journal (4/28/04) in "Greenspan Sees Long-Term Effect
In Oil, Gas Costs": Federal Reserve Chairman Alan Greenspan said the recent surge in oil and gas prices appears to be a long-lasting phenomenon, and would probably alter business-investment decisions. If the rise in long-term prices is sustained, "it could alter the magnitude of and manner in which the United States consumes energy," Mr. Greenspan said. He didn't specify what changes to expect, but he noted that when prices rose in the 1970s, it nudged Americans to buy cars with better fuel-efficiency. Industry observers also have predicted that higher natural-gas prices in the U.S. will prompt some gas-intensive industries, such as petrochemicals and fertilizer manufacturing, to move facilities from the U.S. to parts of the world where gas is less expensive. Mr. Greenspan did say changes would be less dramatic than in the 1970s because the economy uses half as much energy per inflation-adjusted dollar of output. The central-bank chief didn't comment on how high energy prices may affect the near-term outlook for economic growth, inflation or interest rates. He focused not on current oil and gas prices, but on the price on contracts for delivery six years in the future -- long enough to incorporate forecasts of new supply. The distant-future price of oil has risen to $27 a barrel now from $16 to $18 a barrel in 1999, he noted, while that of gas has risen to $5 per million British thermal units from $2.50 in 1999.
Oil prices have risen, he said, because of "fears of long-term supply disruptions in the Middle East." The Fed chief attributed higher gas prices to the growth in demand for gas owing to its reputation for being less polluting than alternatives such as coal, while supply has been constrained by the inability to import significant gas supplies other than from Canada. He repeated his recommendation that the U.S. expand facilities for handling imported liquefied natural gas".

RH: John Allen is excellently placed to comment on this.

John Allen reports: "None of us in Wyoming deny that the state has approximately 40% of the nation's untapped natural gas reserves, whether it be in the form of gas deposits in played out oil-fields, coal-bed methane from the Powder River basin, or the new developments beginning near Pinedale. Natural gas, oil, and coal are the engines that drive this state's colonial dependency economy. If the Powder River basin in the northeastern part of the state were a separate country it would rank fifth internationally as a producer of coal. Mr. Black is absolutely correct in assessing the reasons for the late exploitation of Wyoming's natural gas reserves: location, location, location. Natural gas is presently transportable economically only by pipeline (unless it is liquified into LNG and transported in tanker ships--a dangerous proposition--you can drop a lighted match into a tanker full of of #2 crude and nothing happens other than the match will go out but no one who knows the potential would even ignite a spark near a container of liquid natural gas). The development of pipeline connections between someplace else where there is a population base and Wyoming (where there is not) is necessary before exploitation. The current development of natural gas fields in Wyoming has nothing to do with rising energy costs precipitated by our good friends in Saudi Arabia. The uses of oil and of natural gas are quite different, for the most part, although both can be used effectively to provide domestic heating. In comparative terms, natural gas is a "clean" fuel--particularly when compared with coal--and chairman Greenspan is correct in relating the price increase in this fuel to its relatively clean-burning nature. Does this mean that natural gas is a "benign" fuel environmentally? Quite emphatically, "no!" What is destructive about gas is the extractive process itself.

Although some people in the state applaud the development of natural gas fields, many others are upset by the havoc wrought by the energy industry upon the state's landscape. Industry publicists would have us (and you) believe that they can extract it without damaging the environment. I invite anyone to take a tour with me of the Powder River basin, or the Jonah fields near Pinedale, to see the enormously destructive power of the extractive process on water supplies, wildlife populations, vegetative communities. I am particularly concerned about the proposed gas well developments in the Red Desert portion of the Wyoming Basin, an interior drainage area that separates the Continental Divide into an eastern and western limb before they rejoin in the southern part of the state. This interior basin supports the world's largest herd of desert elk, nearly undisturbed environmental conditions for the study of cold desert ecosystems, and great natural beauty. Gas extraction would severely impact upon all that--just as it is currently impacting the Powder River basin and will shortly be impacting the upper Green River basin near Pinedale.

As a professor at the University of Wyoming, I should be pleased that the Jonah fields are opening up because they guarantee a flow of money via a severance tax into the state's coffers for the remainder of time I will be at the University and, hence, some measure of continued support for the state's only four-year and graduate institution of higher education. In the meantime, much of what has attracted many people to remain in Wyoming (clear air, clean water, excellent outdoor recreational opportunities, and unparalleled scenic vistas) when they could have left for much better paying jobs elsewhere--or, in my case, to come back to the state after spending most of my career elsewhere--is being destroyed by thoughtless, careless, and rapacious extractive industries that are not based in the state of Wyoming.

And Pinedale used to be a lovely small ranching community nestled at the foot of the Wind River Range. It is something different today".

RH: This is a universal problem. When I fist came to Stanford, the area south of here was full of almond trees, and we used to go for drives in the spring to see the acres of blossoms. Now it is Silicon Valley, and the blossoms are gone. While I regret their loss, there was a net gain for the whole world. Civilization has its costs, but, properly handled, it is worth it.

Randy Black praises "Professor Allen’s fine and thoughtful response regarding energy development in Wyoming.. However, on the surface, Professor Allen’s mild objections, based on the elk herd impacts, ring hollow. Similar objections were aired prior to the construction of the Alaska pipeline decades ago. Contrary to those objections, those herds today are flourishing to a positive extent never imagined, and wholly opposite from the dire predictions of the Sierra Club and others when the Alaska pipeline was first proposed.

Factually, the US government heavily restricts drilling activity from November and May in the Pinedale Anticline, Wyoming region. In other words, with few exceptions, it is not allowed due totally to the migrations of the herds. The only exemptions generally are for wells that are drilled but not completed, meaning they’ve gotten to the depth they planned but have not installed the necessary completion equipment, normally a task taking no more than a few weeks if not less time.

I recently visited the Pinedale region and believe me, no one, not one person was found who is crying about the current boom. I might add, regarding Professor Allen’s comment that nearly every place was “once a lovely small ranching community”, that it applies to parts of the American West. Many still are, especially if they don’t have gas and oil deposits. Palm Springs, California was once a charming community of date palm and citrus groves too, for that matter before golf courses and movie stars took over". RH: When I first came to the US, the name of Venice, near Los Angeles, attracted me. I expected to find something like the Italian gem. In fact, the plan to build a pseudo-Venice had been abandoned, and the landscape was dotted with oil rigs. How is Venice, CA today?

US Marines and Cuba

Cuban exile Alberto Gutiierrez said US Marines had never helped Cuba and that they would not be welcome there. He now explains his position: "The US Marine Corps won my respect in the battlefields of the Pacific six decades ago. I realize that they obey the orders from the US Commander in Chief, and have nothing to say in reference to Cuba. During the April 1961 Bay of Pigs invasion, quite a few US Marines were on standby offshore, ready to assist the Cuban exiles who had returned to fight the Castro tyranny. They never received the order to go ahead.

Since then the US Marines have landed in many places around the world, for valid reasons or with some excuse. Castro, however, never was bothered in spite of his support for international subversion, terrorist campaigns, drug dealings, shelter given to wanted US citizens,etc. A number of US laws and regulations were used to tie the hands of Cuban exiles. As result Castro remains in power and at this very moment he dares to "play games" with the US.

Most likely Castro will die of natural causes. There is a US contingency plan to be enforced after his demise. I do not know the details ,only a few rumors. But the possibility of US Marines as future "peacekeepers'' in Havana, dealing with Castro's political heirs to the detriment of the Cuban interests, cannot be discarded. On top of that, since they never helped to end our tragedy , there is no reason to welcome them on Cuban soil at the eleventh hour.

As for the agreement between the US and the Soviet Union during the Missile Crisis, I reject the tale about the imminence of World War III. Today there is a lot of information that support this. In a previous commentary I made a reference about my brief talks with CIA operatives in Hamburg, Germany, almost two months before the crisis. Among other things, the CIA knew what was going on in because members of the battered Cuban underground sounded the alarm far in advance. Why didn't the US send a warning to the Kremlin at least that September, instead of waiting for the "brink of World War III"? Curiously the Democrat losses in the Congressional election held during that "critical" time were minimal.

Castro was the only one interested in a conflict . In the book Retrato de Familia, Carlos Franqui, one of his associates in those days, describes the shooting of the U-2 by the tyrant himself, trying to provoke a confrontation. Eventually the Russian submarine base in Cienfuegos, the presence of the Red Army brigade in Cuba ,the OKEAN war games,etc were the Kremlin's answers to the secret agreement with Castro. But of course the US kept its word so well that even today, long after the end of the Soviet Union, the harassment of some Cuban exiles seeking the end of the Castro tyranny is a fact".

Marine General Michael Sullivan writes: "Alberto Gutlierrez is mistaken when he said US Marines have never helped Cuba. First of all US Marines don't pick their fights or wars but are just another method of carrying out US foreign policy. However, Marines have manned the Naval Base at Guantanamo Bay and been responsible for the Base's security and ground defenses for as long as I can remember. I first witnessed the Marine Security Force in 1966 and it's still in effect today.

What the Marines did for folks like Alberto was to risk their lives at Post 12 trying to save the Cubans, sometimes families, coming in by wooden and rubber rafts as they tried to escape the Castro regime. I witnessed it many nights as we could usually tell when the refugees were enroute as we'd hear patrol craft, gun shots and machine gun fire plus flares (many burned out early which aided the escapees) from the Cuban positions outside the Naval Base fences and along Guantanamo Bay. The Marine guards would douse the lights at Post 12 and launch a rescue party to bring the escapees ashore safely while putting themselves in peril during the process.

Also, the US Navy Admiral, commanding all operations in the Western Caribbean, stated the biggest sharks he'd ever seen were in the Guantanamo Bay area and it was no place to be dangling off a raft. Hundreds of Cubans escaped Castro's Cuba this way and were usually flown to Miami the next day. I was on my compulsory ground FAC tour and used to get my flight time by flying some of those Cubans, who had risked their lives to escape, to Miami. We never knew how many were shot or caught by the Cuban authorities prior to reaching Post 12 successfully. I wonder if Alberto has ever met or known any Cubans who have escaped Cuba in this manner? "

RH: This raises the question of what the Cubans think of Guantanamo.

Cuban exile Alberto Gutiérrez said US Marines would not be welcome in post-Castro Cuba. Marine General Sullivan pointed out that many Cubans fleeing from the Castro regime had escaped through Guantanamo. Alberto Gutiérrez replies: "Please convey my apologies to General Sullivan. He is absolutely correct. I am so occupied with other issues related to Cuba that for a moment I forgot the presence of US Marines in Guantánamo Bay. I have met a few who have served in that US Naval Base and many Cubans who ran to freedom and sought shelter there, especially a young man who in 1992 stepped on a land mine and lost a leg. He received medical treatment inside the base, and days later he was transferred to Miami for recuperation. Unfortunately, months later his two brothers were machine-gunned by Castro's troops before reaching the boundaries of the base.

Indeed the US Marines don't pick a fight, but a lot of US foreign policy is based on them. That is precisely the reason why they didn't land in Cuba during the April 1961 Bay of Pigs Invasion, but they have intervened in many other places during the last four decades. Today the future presence of US Marines in Havana as "peace keepers" following a questionable UN mandate, or just enforcing a US policy favorable to Castro's heirs in the name of a "peaceful transition", is a deplorable possibility. In 1898 the US dealt with Spain, but against Cuban interests. And the US Naval Base in Guantánamo is a consequence of additional US pressure on the Cuban people.

Sharks are big in Guantánamo Bay, but I have seen other formidable specimens in Nipe Bay and off Isabela de Sagua and Caibarien. According to the US Coast Guard, only one out of every three Cubans who escape in rafts from the Castro tyranny survives. First they have to avoid Castro's troops who are ready to shoot. Then they have to face a deadly combination of high waves, currents , overexposure and sharks. They often run out of water and food. As a result ,the Strait of Florida is a Cuban graveyard, and it is little wonder that many limbs have been found along the shoreline of Miami and the Florida Keys. Today only Cubans who reach US land are accepted.. Those intercepted at sea are repatriated.

The other side of the coin is the smuggling operation between the Cuban north coast and South Florida with the participation of Castro's officials and some Cuban "exiles". They charge a few thousand dollars per person and operate with fast motor boats. While the US Coast Guard arrests many smugglers, others successfully land their "merchandise"

Finally I take the opportunity to express my heartfelt thanks to General Sullivan for flying Cubans from Guantánamo to Miami. I know he is only one among other US Marines who have helped Cubans in distress".

RH: Once I flew over Cuban waters, and, in the clear sea there was an incredible number of huge sharks.

I described the Bay of Guantanamo and the Cuban tgowns surrounding it. General Sullivan says: "Now that you mentioned Boqueron and Caimanera, I remember them well, as they were only a stone's throw from the fenceline. We would be checking the Marine guard posts at night all along the fenceline, and when we reached the high ground we could see both towns. We'd look through our binoculars and see the Cuban night life areas where both towns seemed to be partying and whooping it up every night until the wee hours. We used to think they were having a much better time than we were behind the fence...So not all Cubans were affected by Castro or unhappy with the regime, as life appeared the same as it was pre Castro. Sailors stationed at Gitmo before Castro, while the base was open and Americans could go on liberty to those two towns, stated that they were great, little towns and Gitmo used to be a prize Navy tour where almost everyone tried to get at least one tour of duty during his career". RH: Surely the best time to escape from Castro's Cuba is when the Cuban guards are partying.

I asked if Cubans fleeing from Castro would now try to enter the US base at Guantanamo by land, since the mine fields have been removed. General Michael Sullivan replies: " I'm sure they still try to escape by water because there is at least a quarter mile cleared, open area completely around the the fence line which is shaped like a square box, except for the southern boundary. which is is the Caribbean Sea. There are several Cuban guard posts along the entire fenceline. and the guards can see anyone approaching the open areas next to the the fenceline. Escapees were debriefed by Intel before being flown out to Miami the next day, however, most had little information and were so rattled by their escape ordeal that questioning them was of little value. I remember some were so skinny that conditions in Cuba must have been really hard just to get the needed nourishment. Escapees were not permitted to stay in Guantanamo, but I don't believe any ever asked for that as they all wanted to join friends and relatives in Miami. They seemed so thankful and relieved to have made it successfully to the Naval Base and were looking forward to their next stop, Miami".

RH: I know Cuba as far east as Santiago, but I have never been to Guantanamo, which is 40 miles to the east. The bay stretches 12 miles inland. Near the head of it is the city of Guantánamo (population 130,000), which is linked to Santiago by rail and road. It was founded by French fleeing from Haiti, and there are still French-style buildings. It has two ports, Caimanera and Boquerón. The first name suggests that there are caimanes in the area. I suppose that most Cuban refugees arrive via one of the two ports. The US base it at the entrance to the bay.

General Sullivan reports: "While I was in Guantanamo, '66-'67 for seven months, no Cubans tried to flee Cuba by sneaking in through the US Naval Base fence as they were aware there was a minefield inside the fence line. The minefield allowed the Marines to man the Ground Defense Force with far fewer troops as the minefield was a formidable barrier for any attackers. Unfortunately, we lost Marines periodically maintaining the minefield, as evidently mines shift around during heavy rains and then the minefield plotting charts are inaccurate. The Cubans who were fleeing while I was there came by water from a northern direction on Guantanamo Bay. Obviously that minefield was still there in 1992 as Alberto Gutierrez relates that a Cuban lost a leg trying to enter the base overland. The minefield is no longer there as it was removed a few years ago and had considerable media coverage.

I was the GOH for a Marine Corps Birthday Celebration in Guantanamo during 1991 and, of course, the Command set up things for me to do to keep me occupied for the three days I was there. One of the events was a walking tour through the MINEFiELD...YIKES...I followed the Marine Sergeant, an explosive ordnance specialist, through the minefield almost as if I were riding on his back, and every step was exactly where he had stepped. After completing the walking tour I was presented a "certificate" which said I had successfully traversed the largest minefield in the free world. It was probably the dumbest thing I have ever undertaken, but I had no way of getting out of it without showing a lack of confidence in the Marines who maintained the minefield. That night during the Birthday Celebration festivities we heard a loud, unmistakeable explosion coming from the minefield. A report came in a few minutes later that it was a deer. Many of the deer would actually be unharmed as they can jump and move so quickly that they're able to escape the blast.

I very much enjoyed my time at Gitmo as the topography is beautiful and reminds me of Southern California, except for the high humidity. The saltwater fishing is the best I've ever done either in bays or offshore.. When the State Department opens up Cuba again for tourists, I shall return as I would like to drive the entire length of the island from Havana to Guantanamo and get a chance to meet and observe the Cuban people. I had little contact with Cubans at Gitmo as only 400 Cubans were allowed by Castro to come through the cattle chute at the Northeast Gate and work on the base daily. The trainer on the football team I coached was Cuban and used to bring me a hand rolled, Cuban cigar nearly every day and I'd reimburse him 20 cents, US, as they couldn't be purchased in US markets or on the base. That was a special treat and was the highlight of the evening under the stars overlooking the harbor lights with balmy sea breezes complete with a little rum or cognac. It doesn't get much better than that!"

RH: Clearly the mine field was on the American side of the boundary and was intended to keep Cubans out. Since the minefield was removed, was it easier for Cubans to escape? Were the Cuban workers sources of information about Cuban opinion? Did any of them seek asylum in Guantanamo?





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