The oil & gas industry has fracked thousands of wells over the past 50+ years safely and without incident. Often times the mainstream media, looking to break headlines in the 24/7 news cycle, will report allegations of environmental damage from fracking without a lot of facts to back it up. Then after they have scarred the public and enticed government officials to act…………they move on to the next story. A new documentary, Frack Nation, premiered last night on AXS.tv. The documentary had a number of objectives for creating the film:
- Research the facts about fracking oil & gas wells.
- Interview Land Owners, Government Officials, and Scientists for their subject matter expert (SME) opinion on fracking.
- Present an alternative point of view from the popular anti-fracking movie, GasLand.
I watched the documentary and found it to be both informative and genuinely attempting to obtain the truth. I encourage you to view the film and make your own opinion as well. Below represents the summary points I picked up from this quality documentary:
- Frack Nation was funded with over $200K in donations by individuals around the world (26 countries in total) that contributed money on the entrepreneurial website KickStarter.com. (We here at MlpReport.com think this is super cool and only ads credibility to the film.)
- Farmers and land owners are financially impacted when Pennsylvania and New York enforce bans on fracking for land where owners want (and financial need) oil & gas drilling to occur.
- A family that claimed Cabot Oil & Gas contaminated their water was found to have perfectly safe water by the the State of Pennsylvania and the EPA. Frack Nation obtained a video from the EPA, via the Freedom of Information Act, displaying the family irate that the EPA found their water to be safe (you would expect them to be pleased with that result right?).
- Anti-fracking reports would lead you to believe that fracking is unregulated. Frack Nation interviews an engineer from Range Resources and they display the files and the volume of permits, environmental testing, and State/Federal regulations they must comply with for a single well.
- Frack Nation presents lots of inconsistencies about the GasLand documentery, the motivations of the GasLand Director (Josh Fox), and the validity of the facts he presents. Frack Nation attempted to interview Mr. Fox both in public and private, but he refused to answer their questions.
- GasLand displays a water faucet in Pennsylvania catching on fire, allegedly due to methane contamination from fracking. Frack Nation interviews other land owners that point out water wells have always produced methane.
- Gasland uses lots of scary words describing the chemicals that oil companies use to frack wells. Frack Nation interviews a biologist at the University of California Berkley to determine if these scary words are actually toxic to humans. That SME on all things biology explains those are simply fancy words, you could use the same descriptions for toxins in cauliflower. While cauliflower is toxic to the taste buds, its poses no danger to the body. #BOOM
Random Side Note:
The channel hosting the Frack Nation premiere, AXS.tv, is Mark Cuban’s reincarnation of his HDNet Channel. I did not even know I had this channel on DirecTv, and was interested in viewing content for the first time. I was a bit disappointed when the same promotional video on Justin Timberlake dance moves ran during every commercial period and the best programming AXS.tv seemed to offer was Dan Rather reporting. In a world where content is king AXS.tv picked a winner by premiering Frack Nation, but their regular programming seems lacking.
With all the predictions for 2013 flaoting around I had to post my favorite: Byron Wien of the Blackstone Group, LP (NYSE: BX). Byron is a regular visitor to CNBC’s Squawk Box, and someone who always has a clever perspetive on the markets.
Byron Wien Announces Predictions for Ten Surprises for 2013
New York, January 2, 2013 – Byron R. Wien, Vice Chairman, Blackstone Advisory Partners, today issued his list of Surprises for 2013. This is the 28th year Byron has given his views on a number of economic, financial market and political surprises for the coming year. Byron defines a “surprise” as an event which the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable”, having a better than 50% likelihood of happening.
Byron started the tradition in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley. Byron joined Blackstone in September 2009 as a Senior Advisor to both the firm and its clients in analyzing economic, political, market and social trends.
Byron’s Ten Surprises for 2013 are as follows:
- Iran announces it has adequate enriched uranium to produce a nuclear-armed missile and the International Atomic Energy Agency confirms the claim. Sanctions, the devaluation of the currency, weak economic conditions and diplomacy did not stop the weapons program. The world must deal with Iran as a nuclear threat rather than talk endlessly about how to prevent the nuclear capability from happening. Both the United States and Israel shift to a policy of containment rather than prevention.
- A profit margin squeeze and limited revenue growth cause 2013 earnings for the Standard & Poor’s 500 to decline below $100, disappointing investors. The S&P 500 trades below 1300. Companies complain of limited pricing power in a slow, highly competitive world economic environment.
- Financial stocks have a rough time, reversing the gains of 2012. Intense competition in commercial and investment banking, together with low trading volumes, puts pressure on profits. Layoffs continue and compensation erodes further. Regulation increases and lawsuits persist as an industry burden.
- In a surprise reversal the Democrats sponsor a vigorous program to make the United States independent of Middle East oil imports before 2020. The price of West Texas Intermediate crude falls to $70 a barrel. The Administration proposes easing restrictions on hydraulic fracking for oil and gas in less populated areas and allowing more drilling on Federal land. They see energy production, infrastructure and housing as the key job creators in the 2013 economy.
- In a surprise reversal the Republicans make a major effort to become leaders in immigration policy. They sponsor a bill that paves the way for illegal immigrants to apply for citizenship if they have lived in the United States for a decade, have no criminal record, have a high school education or have served in the military, and can pass an English proficiency test. Their goal for 2016 is to win the Hispanic vote, which they believe has a naturally conservative orientation and which put the Democrats over the top in 2012.
- The new leaders in China seem determined to implement reforms to root out corruption, to keep the economy growing at 7% or better and to begin to develop improved health care and retirement programs. The Shanghai Composite finally comes alive and the “A” shares are up more than 20% in 2013, in contrast with the previous year when Chinese stocks were down and some developing markets, notably India, rose.
- Climate change contributes to another year of crop failures, resulting in grain and livestock prices rising significantly. Demand for grains in developing economies continues to increase as the standard of living rises. More investors focus on commodities as an investment opportunity and increase their allocation to this asset class. Corn rises to $8.00 a bushel, wheat to $9.00 a bushel and cattle to $1.50 a pound.
- Although inflation remains tame, the price of gold reaches $1,900 an ounce as central bankers everywhere continue to debase their currencies and the financial markets prove treacherous.
- The Japanese economy remains lackluster and the yen declines to 100 against the dollar. The Nikkei 225 continues the strong advance that began in November and trades above 12,000 as exports improve and investors return to the stocks of the world’s third largest economy.
- The structural problems of Europe remain largely unresolved and the mild recession that began there in 2012 continues. Civil unrest subsides as the weaker countries adjust to austerity. Greece proves successful in implementing policies that reduce wasteful government expenditures and raise revenues from citizens who had been evading taxes. European equities, however, decline 10% in sympathy with the U.S. market.
Every year there are always a few Surprises that do not make the Ten because either I do not believe they are as relevant as those on the basic list or I am not comfortable with the idea that they are “probable.” Below are several “also rans” which did not make the Ten Surprises.
- Having traded below 20 for most of 2012 the VIX Volatility Index surges 33% to 30, providing a bonanza for traders. The decline in the S&P 500 increases market volatility.
- The Newtown, Connecticut, massacre finally convinces Congress to do something about gun control. As a first step they ban future civilian purchases of automatic weapons, including handguns, with clips of more than ten rounds and require more extensive background checks on all gun purchases. “It should not be easier to buy a gun than rent a car” becomes a slogan.
- Frustrated by an inability to increase revenues through raising income taxes, Congress begins to consider different approaches. There is more talk of a value-added tax as well as a wealth tax, and these ideas appear to be slowly gathering momentum.
- Congress decides that high-frequency and other computerized algorithmic-based trading practices are putting the individual investor at a disadvantage. A transaction fee designed to slow down frenetic activity and protect against “flash crashes” and glitches is imposed on intra-day trades.
- The planet finds itself saturated with technology. Semiconductor companies, software providers, social media favorites and personal computer manufacturers all report disappointing earnings and provide discouraging guidance. They lead the overall market lower. Users finally agree the present state of the art is fast enough and connected enough, and that they have more “apps” than they know what to do with. Apple bucks the trend and trades above $700 as its products continue to enjoy enormous success abroad.