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Canada Ice Storm Leaves Crews Scrambling to Restore Electricity

Repair crews are working around the clock to restore electricity to more than 500,000 households in Ontario and Quebec after an ice storm snapped branches, brought down power lines and crimped travel in Canada ’s two most populous provinces. More than 400 flights were canceled yesterday at Toronto’s Pearson International Airport, according to the airport’s website , with dozens more scrapped in Ottawa and Montreal . The storm left up to 30 millimeters (1.2 inches) of ice in the Toronto area and may dump as much as 10 millimeters in southeastern Quebec today, Environment Canada said. In Toronto, Canada’s biggest city, about 264,000 Toronto Hydro customers were without power as of 8:42 p.m. local time yesterday, the utility said in a message on Twitter. All streetcar service in the city — on what would have been one of the year’s busiest shopping days — was suspended due to icy […]

Posted On : Published By : Tom Whipple
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Will US Light Tight Oil Save The World?

There has been plenty of hoopla lately concerning the boom in shale (LTO) oil production. From the New York Times: Surge Seen in U.S. Oil Output, Lowering Gasoline Prices Domestic oil production will continue to soar for years to come, the Energy Department predicted on Monday, scaling to levels not seen in nearly half a century by 2016. The annual outlook by the department’s Energy Information Administration was cited by experts as confirmation that the United States was well on its way — far faster than anticipated even a year ago — to achieving virtual energy independence. What the EIA is actually predicting:   AEO2014 EARLY RELEASE OVERVIEW . The data is C+C. AEO 2014 The first two points were what was actually produced in 2011 and 2012 and the rest of the blue line is what they are predicting for the future. The orange line is what they predicted last year. […]

Posted On : Published By : Tom Whipple
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If Mexico is the next Brazil in oil production, brace for disappointment

Recent reforms that would open oil exploration and development in Mexico to major oil companies for the first time in decades has the media all atwitter about the prospects of a reversal in declining Mexican oil output and a possible doubling of production. The reforms have brought out comparisons with Brazil which has a similar arrangement in which the country’s state-owned oil company works with major international oil giants to develop Brazil’s petroleum resources. Adding to the frothy atmosphere, former Brazilian President Luiz Inacio Lula da Silva proposed a partnership between Mexico and Brazil to develop oil resources in both countries. In a world with daily average oil prices hovering near record levels, such news might be welcome if only we could actually count on the accompanying optimistic production forecasts. But, it’s instructive to look at what actually happened in Brazil since the time its […]

Posted On : Published By : Tom Whipple
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Former BP geologist: peak oil is here and it will ‘break economies’

A former British Petroleum ( BP ) geologist has warned that the age of cheap oil is long gone, bringing with it the danger of “continuous recession” and increased risk of conflict and hunger. At a lecture on ‘Geohazards’ earlier this month as part of the postgraduate Natural Hazards for Insurers course at University College London (UCL), Dr. Richard G. Miller, who worked for BP from 1985 before retiring in 2008, said that official data from the International Energy Agency (IEA), US Energy Information Administration (EIA), International Monetary Fund (IMF), among other sources, showed that conventional oil had most likely peaked around 2008. Dr. Miller critiqued the official industry line that global reserves will last […]

Posted On : Published By : Tom Whipple
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Dramatic decline in industrial agriculture could herald ‘peak food’

Most conventional yield projection models are oblivious to the real world say US researchers Industrial agriculture could be hitting fundamental limits in its capacity to produce sufficient crops to feed an expanding global population according to new research published in Nature Communications . The study by scientists at the University of Nebraska-Lincoln argues that there have been abrupt declines or plateaus in the rate of production of major crops which undermine optimistic projections of constantly increasing crop yields. As much as “31% of total global rice, wheat and maize production” has experienced “yield plateaus or abrupt decreases in yield gain, including rice in eastern Asia and wheat in northwest Europe.” The declines and plateaus in production have become prevalent despite increasing investment in agriculture, which could mean that maximum potential yields […]

Posted On : Published By : Tom Whipple
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WTI Oil Rises to 2-Month High as U.S. GDP Tops Forecasts

West Texas Intermediate crude climbed to a two-month high after a report showed the U.S. economy expanded in the third quarter at a faster rate than previously estimated. Futures rose 0.3 percent, capping a weekly gain of 2.8 percent. Gross domestic product increased at a 4.1 percent annualized rate, up from a previous estimate of 3.6 percent, Commerce Department figures showed. The Federal Reserve said Dec. 18 that it will taper its bond-buying program amid improved prospects for the job market. A government report this week showed fuel use was at the highest level since 2008. “The economy is improving,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “The Fed decision was a vote of confidence in the economy and for future fuel demand.” WTI for February delivery rose 28 cents to $99.32 a barrel on the New York Mercantile Exchange […]

Posted On : Published By : Tom Whipple
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WTI-Brent Spread Narrowing as U.S. Exports Record Fuels: Energy

The price gap between the world’s two biggest oil benchmarks probably will narrow next year as U.S. exports of refined fuels reach a record and crude supply from the Middle East and North Africa expands. West Texas Intermediate, the U.S. benchmark, will average $6 a barrel less than Europe ’s Brent in 2014, from $11.65 now, according to Commerzbank AG. Goldman Sachs Group Inc. is predicting $9 and Barclays Plc $8.30. The world’s most-traded energy spread already contracted 39 percent from the eight-month high of $19.01 reached Nov. 27. While the U.S. is pumping the most crude oil in a quarter century, laws prohibit most exports, driving down costs for domestic refiners and spurring record shipments of everything from diesel to gasoline that will diminish stockpiles. The forecasters expect Brent prices to weaken as regional supply recovers, led by Iran and Libya. “The continuing arbitrage for oil products out […]

Posted On : Published By : Tom Whipple
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Natural-Gas Futures Slip 0.9% From 2-1/2-Year High

Natural-gas futures prices fell 0.9% Friday as traders cashed in after Thursday’s near 5% jump to a 2-1/2-year high. Traders said market participants took to the sidelines ahead of a mixed weekend weather outlook. Forecasters at MDA Weather Services said a "potent winter storm" was expected to move through the Midwest to the Great Lakes region, while, unusually warm temperatures are expected in the east, including record high temperatures in the mid-Atlantic region. Natural gas for January delivery settled 4.2 cents lower, at $4.418 per million British thermal units on the New York Mercantile Exchange. Gas futures gained 1.5% on the week, the seventh straight weekly rise. Friday’s estimated trading volume in the front-month contract was less than half that […]

Posted On : Published By : Tom Whipple
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NE US spot natural gas prices drop by up to $3.30/MMBtu on warmer weather

Some US Northeast spot natural gas prices sank as much as $3.30/MMBtu in trading Friday as weather forecasts called for temperatures well above seasonal norms. After being hit by multiple winter storms over the past two weeks, and with forecast temperatures dropping to as low as minus-1 Fahrenheit in Boston, temperatures are back on the rise in the Northeast. Boston is expected to see a high temperature around 54 degrees Sunday, 13 degrees above normal for this time of year. New York is forecast to see temperatures in the mid-50s to upper 60s, with Washington reaching into the low 70s. Platts unit Bentek Energy forecast total Northeast load to drop as low as 13 Bcf Sunday from 17 Bcf Friday. Prices at the Algonquin Gas Transmission city-gates dropped $3.30 to average in the lower $5.70s/MMBtu, with prices at Tennessee Gas Pipeline zone 6-200 leg […]

Posted On : Published By : Tom Whipple
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Libya Militias Fleeing Cities, Leaving Chaos

For the first time since the ouster of Col. Muammar el-Qaddafi in 2011, the independent militias that dominated Libya’s biggest cities and sometimes cowed the central government have fled from the streets, chased away by a combination of civilian protesters and armed groups. But instead of a triumph for the transitional government of Prime Minister Ali Zeidan, the retreat has marked a new stage in Libya’s descent into chaos. In Tripoli, the capital, the government is now struggling to fill the vacuum left by the sudden disappearance of the militias, which had controlled scores of government facilities and private properties. In Benghazi, it has been unable to slow an escalating campaign of assassinations and bombings that are believed to be the work of extremist militiamen who have gone underground; now the attacks are targeting the unit that passes for the government’s only security force. And where […]

Posted On : Published By : Tom Whipple