10202018Sat
Last updateFri, 19 Oct 2018 1pm

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Jan21

Publicity, Stunts and the Art of Protest

BY KATE KUNKEL

Sean-Lennon-and-Yoko-OnoBack in the day, his parents staged a “bed in” to protest the Vietnam War, so it’s not much of a surprise that Sean Lennon would use his celebrity to engage in a publicity event for a cause in which he believes. While it’s doubtful that his foray into the wilds of Pennsylvania will have any more success putting a stop to hydraulic fracturing than John and Yoko’s stunt did to stop the Vietnam War, it was a good photo op for someone whose career has been something less than stellar.

Fracking for natural gas has been the subject of a lot of attention recently: While the buzz around the 2010 anti-fracking documentary “GasLand”' had died down a bit, the 2012 Hollywood release of “Promised Land” stirred things up again. Then recently, independent filmmakers Philem McAleer and Ann McElhinney were inspired to make "Frack Nation", a response to the anti-fracking films. You Tube corporate has even entered the fray, warning McAleer and McElhinney that a complaint was filed about a "potential privacy violation" in a trailer for their documentary.

And, as New York considers lifting its 4 ½ year ban on fracking, both the environmentalists and drillers are flooding the legislators with reams of documents. Representatives of the gas industry are saying that all of the additional environmental requirements that have been piled onto the proposal from 2011 that would permit fracking will make it very difficult to drill in New York, while environmentalists say there are not enough safeguards.

As is the case with so many issues, the truth is probably somewhere in between the two extremes, but it would be so much better in this humble writer’s opinion if scare tactics and rhetoric would be left behind and actual scientific evidence could be presented without emotion.

In a brochure on one anti-fracking website aimed at Pennsylvanians, this point is raised:

To open a small business in your neighborhood, you would be required to do an Environmental Impact Study, but none has ever been conducted for any of these hydro-fracking operations.

It is a provocative statement. The problem is; it is not true. In a brief and enlightening conversation with Travis Windle of the Marcellus Shale Coalition, I learned exactly how many hoops operators must go through in order to drill. I’m attaching the document HERE for easy reference, but here are just some of the studies that must be done when planning a well site:

  • Review for presence of Threatened & Endangered Species
  • Historical & Archeological Resource search
  • Erosion & Sediment Control Plan/Permit
  • Well Access Road Permitting
  • Pre-drill Water Sampling
  • Wetland Crossing Permitting
  • Stream Crossing Permitting
  • Pollution, Prevention & Contingency Plans
  • Municipal Zoning Ordinances/Approvals (noise, building, setback, etc.)

Examples of misinformation abound, even with respect to the emissions coming from well sites. A study by MIT showed that the extraction of shale gas through hydraulic fracturing emits only a fraction more methane into the air than conventional gas drilling. The study reads:

"Taking actual field practice into account, we estimate that in 2010 the total fugitive (greenhouse gas) emissions from US shale gas-related hydraulic fracturing amounted to 216 (gigagrams of methane). This represents 3.6% of the estimated 6002 (gigagrams of methane) of fugitive emissions from all natural gas production-related sources in that year … Thus under a goal of GHG reduction it is clear that increased efforts must be made to reduce fugitive losses from this system. However, it is also clear is that the production of shale gas and specifically, the associated hydraulic fracturing operations have not materially altered the total GHG emissions from the natural gas sector."

We know that engineers and manufacturers of valves, pumps, actuators and controls and the operators who use them work very hard to meet and exceed emissions standards, so this finding is not too surprising to the industry. However, you will never see this acknowledged by opponents of fracking who claim its methane emissions are dramatically higher than those that occur during conventional natural gas drilling.

The dramatic claims by opponents continue, including flammable water, exploding well shafts and poisoned cows, but positive news is ignored. A case in point: oil- and gas-field companies from are working on converting the huge diesel pump engines used in fracking to burn the very gas they are being used to extract. That would cut down on the sooty exhaust from diesel while also cutting costs.

Do you think if we send them a link, any of the opponent websites or blogs would mention this?

Many people, including farmers leasing their lands, waiters in diners in the shale gas regions and valve technicians are making better livings because of the shale gas boom. It would be really interesting to see how many activists, including Sean and Yoko, would get involved to help them if all of this went away.

Kate Kunkel is Senior Editor of VALVE Magazine. You may reach her at This email address is being protected from spambots. You need JavaScript enabled to view it. 

Jan03

Arrests and Iran’s Quest for Nuclear Valves

BY KATE KUNKEL

Iran sanctions fuelAt the beginning of 2012, the European Union and the United States imposed sanctions on Iran’s oil and financial sectors. The stated goal of the sanctions which came into effect last summer is to prevent other countries from purchasing Iranian oil and conducting transactions with the Central Bank of Iran. The sanctions are meant to force Iran to back off what is believed to be the creation of nuclear weapons, although Iran steadfastly states that it seeks only to build nuclear power plants.

Throughout 2012, more sanctions were set in place by Canada, the U.S. and E.U. and several other countries, all in an attempt to stop Iran’s nuclear program and supposedly avert war in the Middle East. While many say there is considerable doubt that sanctions of any kind do anything but create hardship for ordinary citizens, the fact is, they are in place, and breaking them is serious business.

In December, 2012, a Swedish man was charged with breaking international sanctions against Iran after allegedly trying to export 11 valves that, according to Swedish nonproliferation expert Daniel Nord, could be used in the oil and gas industry and other sectors. However, Nord claimed the valves' properties are so advanced "it would be overkill to use them" for such purposes and they are typically used for enriching uranium, a crucial procedure for developing nuclear fuel and weaponry.

This arrest follows an August 2012 operation in Germany where Iranian-Germans were also charged with supplying valves to Iran. The products are an essential component for launching heavy water reactors and bringing them under control. A man from Iran named Hossein T. is suspected of purchasing special components for MITEC, the company responsible for building the reactor near Arak.

In 2010, the United Nations and the EU added MITEC to their blacklist of companies aiding Iran's nuclear program. Since then, anyone who does business with MITEC is committing a punishable offense. The components involved were approximately 1,800 valves in three different models, some of which were cast, others forged, some that could be used for most any benign application, others "suitable and designed for use in nuclear reactors," according to investigative files.

The valves would have been enough to equip the entire reactor, and would have represented a major step toward completing the nuclear facility.

While these arrests made headlines in Sweden and Germany, they’re not as glamorous or exciting as other news, so we don’t hear much about them here in North America. They are, however, made possible because ordinary valve distributors and manufacturers pay attention and question suspicious orders. The ISIS report from January 2009 is a fascinating read: A Company’s Discretion Detects Large Iranian Valve Orders by Scrutinizing Items and End-Users Instead of Lists.

The lesson here is that, while it would be very easy for any manufacturer to ignore warning signs that something might not be right when huge orders come in for products or countries that are not on a “list”, diligence is definitely in order.

Whether you agree with the sanctions or not, and whether or not you believe the accusation that Iran is pursuing non-civilian objectives in its nuclear energy program is real, the ramifications of ignoring warning signs could be very serious indeed. It is diligence by all of the players in the field that will insure the effectiveness of the sanctions and the possibility of ending the nuclear standoff.

Kate Kunkel is Senior Editor of VALVE Magazine. You may reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..

Dec14

Defining Crude

Kate Kunkel

1-oil-sands-plantTransCanada has been ordered to temporarily stop working on a piece of property in Texas where it has been building a pipeline to carry tar sands oil to the Gulf Coast from Canada. The landowner is in court today, December 13, representing himself in a hearing that could be a defining point in the long-running battle that has the Keystone XL project and environmentalists and landowners.

It has been argued that the tar sands oil is not in fact “crude” because it has already been heated and diluted in order to make it liquid enough to transport. Because it has been processed, it is argued, it does not meet the definition in Texas and federal statutory codes which define crude oil as "liquid hydrocarbons extracted from the earth at atmospheric temperatures”.

While TransCanada says that courts have already ruled that the diluted bitumen is in fact crude, it will be interesting to see what comes of the hearing today. What effect could a decision saying that bitumen is not in fact crude, from this judge, in this area, have on this entire project or any others going through Texas? What effect would this decision have on the suppliers for this pipeline?

Only time will tell.

Kate Kunkel is senior editor of Valve Magazine. You may contact her at This email address is being protected from spambots. You need JavaScript enabled to view it.

Dec11

The Fiscal Cliff

Cliff Edge warningNow that all of the election nonsense is over, it’s time for the government to get back to business. Quickly.

On January 1, the United States could face what has been called the “fiscal cliff”. It is then that several Bush-era tax cuts will expire, meaning, among other things, that individual income tax rates will increase to Clinton-era levels, tax rates on long-term capital gains will increase from 15% to 20%, the tax rate on dividends will increase from 15% to ordinary income tax rates And the limits on itemized deductions will be restored.

This is just a sampling of the tax changes that will cost more to all individuals. Combine that with the reduction in spending that is also possible under the Budget Control Act of 2011, and, it is feared by many, the U.S. economy will fall over the fiscal cliff.

Under the law, one half of the budget cuts will come from national defense and the other half from both mandatory and discretionary non-defense programs. So, while increasing taxes and decreasing spending would seem to be a positive move toward balancing the budget, it is believed it would push the U.S. back into a recession which the International Monetary Fund has warned would have large international spillover.

With the manufacturing, including valve, actuator and control manufacturing, just coming out of the recession and, some say, actually leading the tenuous recovery, cuts to infrastructure and defense budgets seem counterintuitive.

Of course, I don’t have any answers. I’m a writer, not an economist, but I wonder if it would behoove our illustrious leaders to look at the approach Iceland took in comparison to Greece and Spain.

Just saying.

Oct26

Foreign Takeovers and Partnerships: Technology Grab?

BY KATE KUNKEL

Nexen oilsands BLOGLast week here in Canada, the government nixed the proposed purchase of Canada’s Progress Energy Resources Corp by Malaysia’s Petronas. Another proposed acquisition, of Nexen, by China’s CNOOC Ltd. is also far from a done deal. Canadians are more than mildly concerned about the takeover by foreign, government-owned entities that have everything to gain and nothing to lose if natural resources are endangered by practices they could bring with them.

In the U.S., Dealogic estimates that Chinese companies have invested nearly $2.9 billion in oil and gas acquisitions just since the beginning of 2012, up more than 125% from 2011.

All of this begs the question, “Is all this interest a bid to take over the natural resources, or is it simply a quest to get access to the technology that has made Americans and Canadians so good at extracting liquid or gaseous gold from stubborn shale deposits?”

Many analysts, including Benjamin Schlesinger, who owns an energy consulting firm in Bethesda, Maryland, believes that Chinese oil and gas companies are investing in US shale-drilling projects in an effort to obtain technological knowledge. China lags far behind North America in terms of the technology and the technical expertise needed to fully exploit oil and gas shale plays.

While U.S. companies are inserting restrictions in their deals in an effort to prevent that from happening, it’s not clear what Canada’s Nexen or Progress Energy would have done to protect Canadian technologies. But the concern goes far beyond the technology.

In Canada, proponents of both the Nexen and Progress deals say they are bringing much-needed investment to accelerate production of Canadian oil and gas and that it shouldn’t matter who is paying the taxes and royalties on that production. But state-owned companies and sovereign wealth funds are in a unique position to exercise tax arbitrage and dodge Canadian taxes and royalties. There are many ways to lower their Canadian tax bill: they could load up the Canadian subsidiary with debt, they could use transfer pricing mechanisms to push profits outside of Canada, and in the case of LNG, they could buy at low Canadian prices and sell at high foreign prices.

There is also a real concern in both the U.S. and Canada about the lack of transparency and the degree and significance of participation by U.S. and Canadian managers. This has implications not just for natural resources and jobs, but also for national security, which of course includes technology.

So is it okay to allow state-owned foreign companies to take over domestic oil and gas companies? What would that mean to the North American valve industry? Does it put it at even more risk with respect to intellectual property theft?

Share your thoughts in the comment section on Facebook, or send your comments to me at This email address is being protected from spambots. You need JavaScript enabled to view it. and we can share them in an upcoming Blog.  

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