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Thailand’s Oil Fund administrator says LPG, diesel subsidies should be scrapped

Thailand’s retail subsidies for diesel and LPG are coming under increased pressure and should be scrapped, the director of the country’s Energy Fund Administration Institute said last week. The subsidies as they currently stand are a "time bomb if you keep them going," said Chainoi Puenkosum, who heads EFAI, an "independent public organization" under the Energy Ministry that manages the receipts and payments of the country’s Oil Fund, from which the subsidies are paid. Subsidies are costing the country Baht 165 million/day ($5 million/day) at current levels, according to the EFAI. The subsidies keep diesel pump prices under Baht 30/liter, well below international prices, and LPG at staggered rates that are as low as one-third of international prices. The price of LPG for cooking is fixed at Baht 19/kg and accounts for 32% of consumption, and at Baht 21/kg for automobiles that consume 24% […]

Posted On : Published By : Tom Whipple
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Are natural gas suppliers purposely overproducing?

On December 27, 2013, Matt Wald published a piece in the New York Times titled New Energy Struggles on Its Way to Markets that points to the predictable consequences of having too many energy options chasing too few customers. When there is excess supply compared to demand, prices tend to fall rather dramatically. Falling prices result in some suppliers being forced to either stop selling or to sell their product for an amount that is less than production cost. Eventually, markets balance out as weaker suppliers are driven out, reducing both production and production capacity. Lower prices lead to increased demand and shifts in market share to options that seem to meet customer needs at a lower cost. The oversupply situation disappears and price begin to climb back to a more profitable level. The cycle may continue, but only after a profitable period when supply does not quite match […]

Posted On : Published By : Tom Whipple
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Study: Few Americans understand fracking

Fracking is a buzz word, but few Americans know what it actually means. That is the conclusion of a recent survey published by researchers at Oregon State, George Mason and Yale universities. More than half of the study’s 1,061 respondents reported knowing little or nothing of fracking. And almost 60 percent of those surveyed said they had no opinion on the subject. Those findings run counter to the often contentious debates seen in Washington and state capitals around the country, where policy makers are weighing the benefits of increased oil and natural gas production against potential environmental damages. “The fact that half of the people we surveyed know little if anything about fracking suggests that there may be an opportunity to educate the American citizenry in a non-partisan way about this important issue,” said Hilary Boudet, a public policy expert at Oregon State and the study’s lead author. “The […]

Posted On : Published By : Tom Whipple
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China's auto affair drives oil demand

Every two seconds, somewhere across China a customer takes delivery of a new car — part of a consumer buying blitz that will see China add 21 million new cars , trucks and buses to its fleet total in 2014. Short of a catastrophic economic downturn, a government edict against new car ownership, or draconian traffic congestion charges, a continuation of that growth rate means China will likely have a bigger motor vehicle fleet than the United States by 2020. Indeed, the combination of a low vehicle penetration rate — only 85 vehicles for every 1,000 people in China, compared with more than 800 per 1,000 in the U.S. — and […]

Posted On : Published By : Tom Whipple
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China’s auto affair drives oil demand

Every two seconds, somewhere across China a customer takes delivery of a new car — part of a consumer buying blitz that will see China add 21 million new cars , trucks and buses to its fleet total in 2014. Short of a catastrophic economic downturn, a government edict against new car ownership, or draconian traffic congestion charges, a continuation of that growth rate means China will likely have a bigger motor vehicle fleet than the United States by 2020. Indeed, the combination of a low vehicle penetration rate — only 85 vehicles for every 1,000 people in China, compared with more than 800 per 1,000 in the U.S. — and […]

Posted On : Published By : Tom Whipple
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Shale chief says steep oil price fall would choke some US output

A steep fall in oil prices would choke off production at some US fields and quickly tighten supplies, one of the leaders of the country’s shale oil revolution has said. Harold Hamm, chief executive of Continental Resources , the largest producer in the Bakken shale of North Dakota, said if an oversupply of oil drove the price down to $70 a barrel, it would “hurt” the US industry, but would quickly correct itself because it would make marginal production uneconomic. His assessment suggests that oil prices are likely to remain at around Friday’s level of about $100 a barrel for benchmark US West Texas Intermediate crude. US oil production has soared ahead of the government’s forecasts this year as the output from shales such as the Bakken and the Eagle Ford of Texas has boomed, leading some forecasters to predict an impending glut of American crude, particularly if supply […]

Posted On : Published By : Tom Whipple
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Researchers find 7,300-mile ring of mercury around tar sands in Canada

Scientists have found a nearly 7,500-square-mile ring of land and water contaminated by mercury surrounding the tar sands in Alberta, where energy companies are producing and shipping oil throughout Canada and the U.S. Government scientists are preparing to publish a report that found levels of mercury are up to 16 times higher around the tar sand operations, principally due to the excavation and transportation of the bitumen in the sands by oil and gas companies, according to Postmedia-owned Canadian newspapers like the Vancouver Sun . Environment Canada researcher Jane Kirk recently presented the findings at a toxicology conference in Nashville. The revelations add to a growing concern over the environmental impacts of the tar sands. Many environmentalists charge that the exploitation of the sands for oil will lead to an increase in carbon emissions , the destruction and contamination of land and water and health problems for Canadians. The […]

Posted On : Published By : Tom Whipple
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Peak demand: the sound of a single hand clapping

Speaking of “peak demand” about the present stasis in the world oil production is a little like the concept of “the sound of a single hand clapping” is an old Zen “koan.” This riddle has been solved by Bart Simpson in recent times. The concept of “ peak demand ” is gaining popularity in the discussion about peak oil. It is a good example of how a discussion can get lost in a no-man’s land of unsupported ideas and concepts. Peak demand, in a certain way, is a rebuttal of the idea that we have limits to what we can do on this limited planet. So, the implication  is that the present lack of growth in world oil production (which is a prelude to the peak) and the reduction of consumption in OECD countries has nothing to do with physical limits: it […]

Posted On : Published By : ASPO-USA
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The global impact of US shale | Daniel Yergin

The biggest innovation in energy so far this century has been the development of shale gas and the associated resource known as tight oil. Shale energy ranks at the top not only because of its abundance in the US, but also because of its profound global impact—as events in 2014 will continue to demonstrate. America’s shale gas and tight oil are already changing global energy markets and reducing both Europe’s competitiveness vis-à-vis the US and China’s overall manufacturing competitiveness. They are also bringing shifts in global politics. Indeed, how shale energy may change America’s role in the Middle East is becoming a hot topic in Washington DC, and in the Middle East itself. This unconventional revolution in oil and gas did not come quickly. Hydraulic fracturing—known as fracking—has been around since 1947, and initial efforts to adapt it to dense shale began in Texas in the early 1980s. But […]

Posted On : Published By : Tom Whipple
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The global impact of US shale | Daniel Yergin

The biggest innovation in energy so far this century has been the development of shale gas and the associated resource known as tight oil. Shale energy ranks at the top not only because of its abundance in the US, but also because of its profound global impact—as events in 2014 will continue to demonstrate. America’s shale gas and tight oil are already changing global energy markets and reducing both Europe’s competitiveness vis-à-vis the US and China’s overall manufacturing competitiveness. They are also bringing shifts in global politics. Indeed, how shale energy may change America’s role in the Middle East is becoming a hot topic in Washington DC, and in the Middle East itself. This unconventional revolution in oil and gas did not come quickly. Hydraulic fracturing—known as fracking—has been around since 1947, and initial efforts to adapt it to dense shale began in Texas in the early 1980s. But […]

Posted On : Published By : Tom Whipple