Dear Friend:

Please join me on Saturday in Binghamton for the Broome County Rally in support of Marc Molinaro for Governor.

Let's send a message to Albany that we need new ideas that benefit all New Yorkers, not a select few.

We need government that incorporates the needs and priorities of all New Yorkers, not just New York City.

And we need leadership that puts the people of New York before politics.

I believe Marc Molinaro will do just that as Governor of our great state.

Join us this Saturday at 7:00 PM and let's rally to the finish of this critical election season!
What: Broome County Rally for Marc Molinaro
Who: Marc Molinaro, Senator Fred Akshar and other local leaders
When: Saturday, November 3 from 7:00 to 8:00 PM
Where: Holiday Inn Binghamton Downtown: 2 Hawley Street, Binghamton

I hope to see you there,

Fred Akshar

It is a cliché to say the United States has no energy policy, and in the formal sense, it's true. The federal government has never passed sweeping legislation aimed at advancing U.S. energy security that addresses both supply and demand. But even without top-down direction, America currently has a better, most sensible approach to energy development than any other country in the world, both for the short- and long-term.

Where government policy has been absent, free markets have filled the void – with great success. Thanks to technological innovation and free-flowing capital markets, U.S. energy companies have harnessed the country's abundant shale resources, and America is now the world's largest oil and gas producer, on its way to becoming a net exporter by 2022.

That’s nothing short of miraculous given the country's massive economic dependence on oil and gas imports only a decade ago. The shale boom has been an enormous boon to the U.S. economy, helping to pull the country out of the 2008 financial crisis, providing jobs and growth at a time when few other sectors could.


Meanwhile, the rise of cheap shale gas has resulted in large-scale displacement of coal in U.S. power generation, resulting in falling carbon emissions – something many European countries fail to accomplish despite carbon pricing there.

Energy security has never been better, meaning the president has considerably more flexibility in setting foreign policy. In short, the economic, environmental and geopolitical benefits of the U.S. energy boom have been huge.

But there’s more. As the low-carbon energy transition plays out, investors and energy executives around the world are starting to debate when demand for oil and gas peaks seriously. Peak demand is important because it signals that a sector’s growth trajectory has ended and that a mature industry has begun to decline.

While it’s impossible to say with any certainty when this will occur – some say as soon as five years while others, probably more astutely, put it after 2035 – the approach of peak demand will prompt some investors to exit the sector. Look no further than the U.S. coal industry over the last decade for evidence of capital flight stemming from peak demand.

Again, this event may not take place for decades. But from a macroeconomic energy policy standpoint, no country wants to be left with “stranded assets,” barrels of oil or BTUs of gas in the ground that can’t be produced because there is insufficient demand for them. OPEC nations hold over 1.2 trillion barrels of oil reserves or 82% of the world’s total. This is why the cartel has historically held so much sway over global oil markets. But undeveloped oil reserves become meaningless – and possibly worthless – if investors start to lose interest.

The United States, by contrast, is producing flat out, with oil production at a world-leading 11 million barrels a day. But its reserves are far smaller at 35.2 billion barrels. To put it in perspective, OPEC is now producing about 32.7 million barrels a day from its 1.2 trillion barrels of reserves. And the only thing holding back the United States from producing more is infrastructure constraints – a lack of pipeline and export facilities to facilitate higher shipments abroad from its prolific shale plays, where output can be ramped up or throttled back relatively quickly and easily.

U.S. Secretary of the Interior Ryan Zinke recently said that U.S. oil production might rise to as much as 14 million barrels a day by 2020. Given potential demand constraints down the road – again, even if it’s a very long road – the United States effort to produce as much as possible as quickly as possible from its shale resources is the right strategy.

This is why we should not be alarmed when some leading U.S. energy executives say that shale output could peak in the middle of next decade. That outcome is by no means certain – indeed, some independent analysts continue to increase their estimates for recoverable shale reserves – but if it happens the United States will have derived as much value as possible from the resource, without leaving anything to “stranded” chance.

OPEC, with its members’ political issues and its continued focus on oil market management, may not be able to say the same thing. Russia, shackled by crippling Western sanctions, may not be able to tell it either.

Concerns about new investments “long-dated” oil projects are already reflected in the capital spending plans of the world’s largest oil companies. Majors, the ones that generally pursue these types of mega projects with long investment horizons, have uncharacteristically failed to ratchet up capital expenditures in response to higher oil prices. Many are moving more aggressively into short-cycle shale or putting more capital into gas or LNG, not the humongous offshore projects of yesteryear like Kashagan or the costly, carbon-intensive oil sands of Canada. Free cash flow is being directed to shareholders, not new investments in dubious long-term oil projects.

Even Mideast OPEC states like Saudi Arabia, the UAE and Kuwait look reluctant to invest more in spare oil production capacity. Many are investing more heavily in petrochemicals or refineries at home or abroad, projects that will stimulate demand for their existing oil reserves. OPEC has regularly warned in recent years of the perils of under-investment, urging IOCs to step up capital expenditures. But it, for the most part, is not walking the walk itself. This helps explain why Saudi Arabia has expressed its willingness to raise its production to its full capacity of 12 million barrels a day if necessary, as the United States prepares to hit Iran with harsh energy sanctions. Riyadh has said it will invest $20 billion over the coming years to maintain – not necessarily expand – its output capacity at 12 million barrels a day. Such caution is telling considering the kingdom is sitting on 260 billion barrels of the world’s lowest cost reserves.

As the global industry begins to think more in terms of years rather than decades in making investment decisions, it becomes clear that the United States may be in the most enviable position with its short-cycle shale assets and free market economy. Indeed, maybe it has been better off without any formal energy policy from Washington at all.

I am CEO of Canary, one of the largest privately-owned oilfield services companies in the United States. I've served as a consultant to the energy industry in North America, Asia and Africa. My commentaries have been published in The Hill, Real Clear Energy, and the Economis...

Fossil-fuel divestment has come under a microscope, with news reports touting the so-called "growth" of the movement and Mayor Bill de Blasio calling on more cities to give up their investments in the industry. Unsurprisingly, many facts have been left by the wayside.

Divestment has been front and center in New York's political debates over the past year. There's been disagreement on the state level, with Gov. Andrew Cuomo pushing divestment but Comptroller Thomas DiNapoli resisting, citing his fiduciary duty and the importance of the energy sector. "Fossil fuels continue to play an integral role in powering the world's electricity generators, industry, transportation and infrastructure," the comptroller said.

Meanwhile in New York City, the mayor's office has proclaimed that divestment is underway, when in reality the city has only commenced a request-for-information process to gather comments on how some of the city's pension funds might go about divesting. No actual divestments have occurred.

So what's all the hubbub about?

Last month divestment proponents claimed the movement is growing, an attempt to generate attention for a week of climate-change meetings in New York City and earlier in San Francisco. Yet instead of focusing on the environment—a topic we all agree is important—divestment has proven a distraction.

For starters, divestment is costly. In order to get past the purely political rhetoric that often consumes the debate, my organization, the Independent Petroleum Association of America, has commissioned research to look at what the actual financial impact of divestment would be for both the city's and state's pension funds. Findings from Prof. Daniel Fischel of the University of Chicago Law School and co-authors Christopher Fiore and Todd Kendall of economic consulting firm Compass Lexecon point to substantial shortfalls in investment performance, with no impact on the environment or targeted companies.

According to their research, divestment by New York City's five pension funds—which are valued at roughly $175 billion and serve the city's teachers, police, firefighters and civil servants—would cost a $98 million to 120 million annually and $1.2 billion to $1.5 trillion over 50 years. For the New York State Common Retirement Fund, a $192.4 billion fund that serves over a million retirees and beneficiaries, full fossil fuel divestment would cost up to $198 million in foregone returns every year and $1.5 trillion over 50 years.

These real dollars supporting real people would be given up for symbolism. With the average annual New York City pension being about $40,000, a $120 million loss due to divestment is the equivalent of 3,000 yearly pension payments for 3,000 city retirees. And because the state constitution requires that pensioners be paid, the city must make up shortfalls by taking more from taxpayers.

These costs emerge for many reasons. First, energy companies provide a great diversification benefit for a portfolio. In other words, divesting energy stocks from a given portfolio means taking on higher amounts of risk, sacrificing returns, or both. Divestment also imposes fees related to selling fossil-fuel holdings and replacing them, as well as immense, ongoing compliance costs to remain "fossil free" by whatever definition is set forth. These costs were not incorporated into the report's estimates, meaning the billions in losses laid out above are just the tip of the iceberg.

What's more, even if you are willing to put the city's pension funds at risk, divestment has no impact on the environment. William Coaker, chief investment officer of the San Francisco Employees Retirements System, recently stated, "Divestment alone does not harm or punish companies that produce fossil fuels, and the only parties that could be negatively impacted by divestment are those that are not invested in them." Energy companies are also investing billions in energy-efficiency and emissions-reduction technologies, efforts that should be supported by environmental proponents, not divested from.

Divestment proponents want state and city leaders to put their money where their mouth is and give up fossil-fuel investments, but to do so ignores reality. Divestment is a high-cost, ineffective means of supporting the environment. It's time divestment activists and government leaders focus on solutions and not another empty promise with a hefty price tag. After all, it's you who will foot the bill.

Jeff Eshelman is the senior vice president of operations and public affairs at the Independent Petroleum Association of America.

The Southern Tier, stretching along the Pennsylvania border from the Binghamton region west to Jamestown, has turned in the weakest job growth of any region. This is also the area of the state that stood to gain the most economic activity from hydraulic fracturing of Marcellus Shale natural gas deposits, which was banned by the state at the end of 2014.


In Upstate New York, economic growth and JOBS that retrain young families depend on affordable energy. At this time, renewables won't cut it. They cost too much. Three stories; California, Germany, and South Australia.

A California homeowner recently shared his electric bill in the Wall Street Journal. The first 441 kilowatts per hour (kWh) bills at 21 cents. The next 1, 324 kWh escalates to 28 cents. From there it skyrockets to 43 cents. His yearly average for a three bedroom home with the thermostat set at 78 degrees is 29 cents. By the way, the guy heats with gas. Otherwise, if he heated with electric, he'd be packing for Idaho.

These rates are coming East. Governor Cuomo's objectives and game plan is the same as California's, Germany's, and South Australia's. Same plan, same results -- higher prices to the consumer, minimal change in CO2 emissions.

Currently, New Yorkers pay an average about 12 cents per kWh with mixed generation from coal to hydropower. If gas is zeroed out and only renewables are allowed to grow at the expense of other fuels, prices will rise.

The state tips the scales through subsidies, rebates, mandates, laws and regulations, prioritization of use and, in the case of New York, simply refusing permits. This means you will pay more for your energy. The increased payment is a tax. The electric companies are the tax collectors. The Governor skates. His hand is in your pocket but you'll never find his fingerprints on your wallet.

Even though Germany is wedded to green virtue, 79% of German electricity is still produced by fossil fuels. 17% is renewable, 5% is nuclear. The Germans pay 37 cents per kWh, over THREE TIMES the NYS average. After spending billions upon billions on energiewende, their plan for a renewable future, they've plateaued with emissions. The reason: wind and solar always need back-up. In Germany the back-up fuel is dirty "brown coal." To cut emissions, Germany is building
Nord 2, the Baltic Sea pipeline, to import Russian gas. Russian gas is Germany's clean-up hitter. And American LNG is in the batter's box. Germany is looking to gas to save energiewende's . . . goals.

South Australia has lots of sun and wind, gets 40% of its energy from renewables. The problem is that renewables are expensive. Rates are high, again THREE TIMES higher than the US average. Managing a renewable grid adds expense. South Australia hired Tesla to build a football field sized storage battery. While costs are unknown, we do know ratepayers are paying Tesla 79 cents a kWh to absorb surplus energy off the grid. Tesla then sells electricity back to the same customers. Nice deal for Tesla, collect coming and going. Lots of sun in Australia but only the customers get burned.

All this expense is unnecessary, predicated on a fallacy -- to save the planet we must use renewables.

Few know that the United States leads the world in the suppression of CO2 emissions. According to the Energy Information Agency, the US has lowered emissions to a level not seen in 25 years, in spite of a growing economy and a growing population. The US is Number One in total tonnage of emissions reduction, outstripping the next five nations combined. According to Bloomberg, we are the only nation that has a chance of meeting it's Paris Accord goals, even though we've pulled out of the Accord. Credit all this to fracked natural gas.

On the economic side, during the previous administration's "new normal" of 2% GDP, fracking lowered the Cost of Living Index by keeping fuel affordable. It's given hope to the Rust Belt, burnished Pennsylvania's Northern Tier, reversed the trade patterns of oil and gas, thus reducing our deficit. It has spurred new industry, revived old ones.

Renewable energy has a bright future. Even now it is cost-effective in specific markets. Hawaii comes to mind. But if the antis were really serious about helping lower worldwide emissions TODAY, they'd be appplying for jobs on the rigs or learning welding skills to work on the pipelines. That's where the real environmental gains are happening.

America is leading the way. Fracked gas is making it happen.

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