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Climate Change, Peak Oil and Renewable Resources

Page added on February 8, 2014 Climate change is the reality we are living in. It is not going away; it has been clearly established as a fact, IOMCO — or immediately obvious to the most casual observer. The weather is simply becoming more extreme. More tornados, more flooding, more drought, stronger hurricanes and other extreme weather events are only the tip of the iceberg. Climate change is not something that you can change overnight. It has taken a few hundred years for man to have the negative impact that it has on the climate; even if we stopped burning all fossil fuels tomorrow, it would take hundreds more to reverse the trend. We hit the big time lottery when we discovered oil and gas. It was like we stumbled upon a treasure chest with millions of years of stored energy and just like some lottery winners, we became […]

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Global-Warming Slowdown Due to Pacific Winds, Study Shows

Stronger Pacific Ocean winds may help explain the slowdown in the rate of global warming since the turn of the century, scientists said. More powerful winds in the past 20 years may be forcing warmer seas deeper and bringing cooler water to the surface, 10 researchers from the U.S. and Australia said yesterday in the journal Nature . That has cooled the average global temperature by as much as 0.2 degree Celsius (0.36 Fahrenheit) since 2001. Scientists have been trying to find out why the rate of global warming has eased in the past 20 years while greenhouse-gas emissions have surged to a record. Yesterday’s paper elaborates on a theory that deep seas are absorbing more warmth by explaining how that heat could be getting there. “The net effect of these anomalous winds is a cooling in the 2012 global average surface air temperature of 0.1–0.2 degree Celsius, which […]

Posted On : Published By : Tom Whipple
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Tougher to Drill for Oil in an Emerging-Markets Storm

National oil companies rarely lack reserves in the ground. It is capital that can be harder to come by. So emerging markets’ slide from honored guest to social pariah in many a portfolio presents a problem, and not just for these national champions. Oil-services companies could suffer, too. Petróleo Brasileiro, known as Petrobras, exemplifies all this. Three years ago, it sported a market value of $213 billion. Today, that is a mere $78 billion. The Brazilian national champion’s fall from grace is stunning, but it isn’t alone. In 2007, when both oil and emerging markets ran hot, the PFC Energy 50, a ranking of companies by market value, had four national oil companies in its top 10: PetroChina , Gazprom , Sinopec and Petrobras. Their combined value of $1.55 trillion was actually higher than the total for the five Western integrated oil majors in the top 10 that year. […]

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Peak oil isn't dead; it just smells that way

Energy analyst Chris Nelder fires back at the latest fact-free commentary on peak oil. The Oil Drum, a Web site dedicated to informed discussions about peak oil and energy,  announced on July 3 that it is closing down. (For a brief primer on peak oil, see my conversation with Brad Plumer in the Washington Post .) Those who hate the peak oil story didn’t bother to conceal their glee at the news; some even saw occasion to claim victory for their side in the "debate" over the future of fossil fuels. “We could say ‘I told you so,’ not as a school-yard epithet, but simply as a fact,” crowed Mark Mills , co-author of a lightweight book entitled The Bottomless Well , which Publishers Weekly described as “Long on Nietzschean bombast but short on some crucial specifics.” David Blackmon, a Houston-based consultant with a 33-year career in the oil […]

Posted On : Published By : Tom Whipple
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Peak oil isn’t dead; it just smells that way

Energy analyst Chris Nelder fires back at the latest fact-free commentary on peak oil. The Oil Drum, a Web site dedicated to informed discussions about peak oil and energy,  announced on July 3 that it is closing down. (For a brief primer on peak oil, see my conversation with Brad Plumer in the Washington Post .) Those who hate the peak oil story didn’t bother to conceal their glee at the news; some even saw occasion to claim victory for their side in the "debate" over the future of fossil fuels. “We could say ‘I told you so,’ not as a school-yard epithet, but simply as a fact,” crowed Mark Mills , co-author of a lightweight book entitled The Bottomless Well , which Publishers Weekly described as “Long on Nietzschean bombast but short on some crucial specifics.” David Blackmon, a Houston-based consultant with a 33-year career in the oil […]

Posted On : Published By : Tom Whipple
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Oil briefly tops $100 as demand for fuel rises

The price of oil briefly rose above $100 a barrel for the first time this year on rising demand for fuel and some positive sentiment about the U.S. job market. Benchmark U.S. crude for March delivery gained $2.04, or 2.1 percent, to close at $99.88 a barrel the New York Mercantile Exchange. Oil climbed above $100 in the afternoon before dropping back. Oil last topped $100 on Dec. 30. Energy analyst Stephen Schork said oil’s rise was brought about by rising prices for wholesale gasoline and low supplies of diesel and heating oil. That combination will encourage refiners to buy and process more crude oil. "It’s a function of a products pulling crude," he said. "The market needs product." Heating oil supplies have declined as a cold and snowy winter has homeowners constantly cranking up the thermostat. The Energy Department said Wednesday that supplies of […]

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Nymex Crude Futures Hit One-Month High on Supply Worries

U.S. oil prices briefly topped $100 a barrel for the first time this year, taking their cue from equities markets to ignore a weaker-than-expected jobs report. Expectations for continued strong demand for petroleum products and concerns that global supplies could tighten also boosted crude prices. Light, sweet crude for March delivery rose $2.04, or 2.1%, to $99.88 a barrel on the New York Mercantile Exchange, its highest settlement since Dec. 27. Prices gained 2.5% this week. Brent crude on the ICE futures exchange climbed $2.38, or 2.2%, to $109.57 a barrel, its highest settlement price since Dec. 31. Prices are up 3% for the week. Oil prices initially fell after […]

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Iran, U.N. agency resume nuclear talks in Tehran: IRNA

Iran resumed talks on its nuclear programme with the International Atomic Energy Agency (IAEA) on Saturday, the official IRNA news agency said, in discussions expected to broach sensitive military-related issues. The U.N. atomic agency hopes to persuade Iran to finally start addressing long-held suspicions that it may have researched how to build atomic bombs. Tehran has rejected the accusations of weaponization-related work as baseless and said it will cooperate with the IAEA to clear up any "ambiguities". Iran was represented in the discussions by Reza Najafi, its envoy to the IAEA, while the team from the U.N. nuclear watchdog was led by deputy IAEA director general Tero Varjoranta, IRNA said. Saturday’s meeting comes 10 days before Tehran and world powers, building on a landmark interim deal that took effect last month, start talks on a long-term accord on Iran’s nuclear aspirations that would avert the threat […]

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Exclusive: Japan makes first oil payment to Iran in a year: sources

Japan this week became the first of Iran’s oil buyers to make a payment for crude imports under an interim nuclear deal, sources told Reuters on Wednesday, as the West eased a year-long stranglehold on revenues that has crippled the Iranian economy. Tough international sanctions over the past two years have cut Iran’s oil exports in half. U.S. measures imposed a year ago stopped the remaining importers of Iranian oil from transferring cash to Tehran, starving the OPEC member of its principal source of hard currency and forcing Iran to the negotiating table over its disputed nuclear program. Tokyo’s role in sending the first funds may be a boon for Japanese firms jostling for position with international rivals to invest in Iran’s oil and gas sector, should a further agreement end Tehran’s international isolation. It is unclear why Japan was the first of Iran’s oil buyers […]

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Iraq attacks kill nine including election candidate

Attacks in Baghdad and north of the capital killed nine people on Friday, including a supporter of powerful Shiite cleric Moqtada al-Sadr who was standing in April’s parliamentary elections. The murder of Hamza al-Shammari, the first of an election candidate, comes amid a protracted surge in bloodshed with near-daily attacks nationwide and security forces battling anti-government fighters in Anbar province. Election candidates have been targeted in the past, with nearly 20 hopefuls killed ahead of April 2013 provincial council elections. Shammari, a senior leader of the Shammar tribe in Baghdad, was killed by gunmen using silenced pistols in the west Baghdad neighbourhood of Ghazaliyah, two security officials said. He had been due to stand in the April 30 election as part of the Ahrar list, which is loyal to the Sadrists. North of Baghdad, separate bombings killed eight people, security and medical officials said. In Tuz Khurmatu, a […]

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Analysis: Is Syria now a direct threat to the U.S.?

Over the last two weeks, Obama administration officials have signaled – sometimes intentionally, sometimes not – that a worst-case scenario is emerging in Syria. Peace talks are at a virtual standstill. An emboldened President Bashar al-Assad has missed two deadlines to turn over his deadliest chemical weapons. And radical extremists who have fought in Syria are carrying out attacks in Egypt and allegedly aspire to strike the United States as well. Director of National Intelligence James R. Clapper told members of Congress last week that Jabhat al-Nusra, an al-Qaeda aligned group in Syria, "does have aspirations for attacks on the homeland." American and Egyptian officials expressed alarm this week at signs that Egyptians who fought in Syria have returned home to mount an insurgency. Critics of Obama administration policy in Syria argue that none of this should come as a surprise. For years, they have predicted that […]

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Battle of the Nile: Egypt, Ethiopia clash over mega-dam

Egypt and Ethiopia remain at loggerheads over Addis Ababa’s plan to build a $4.2 billion, 6,000-megawatt dam on a major tributary of the Nile River that Cairo says will greatly reduce the flow of water that is Egypt’s lifeline. Tension between the two African states rose sharply in January after Ethiopia rejected Egypt’s demand it suspend construction of the Grand Ethiopian Renaissance Dam on the Blue Nile, the main tributary of the 4,130-mile river, the world’s longest. Egypt has vowed to protect its "historical rights" to the Nile "at any cost" and says it could lose 20 percent of its water if the giant dam in northwestern Ethiopia, one of several hydroelectric projects planned by Addis Ababa, is completed. "It would be a disaster for Egypt," Mohamed Nasr Allam, a former Egyptian water minister, lamented to the Guardian daily of London in 2013. […]

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U.S. Energy Rigs Decline by 14, Baker Hughes Reports

Rigs targeting oil and natural gas in the U.S. declined by 14 this week to 1,771, according to Baker Hughes Inc. (BHI) Oil rigs fell by six to 1,416, data posted on the company’s website show. The gas count dropped by seven to 351, the Houston-based field services company said. Miscellaneous rigs slipped by one to four. The total U.S. rig count slid amid frosty weather and storms that swept across the U.S. this week, freezing gas wells and sending spot prices of the fuel in some regions to record-highs. Chesapeake Energy Corp. (CHK) , the second-largest natural gas producer in the U.S., said yesterday that output has dropped due to “winter weather challenges” since December. “We anticipate that the fourth-quarter 2013 and first-quarter 2014 timeframe will mark our production low point and that we will see a significant quarter-to-quarter ramp up beginning in the second quarter,” Doug Lawler, […]

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Propane lack fuels crisis at Dakotas reservation

A nationwide propane shortage is hitting an American Indian reservation that straddles the border of North and South Dakota particularly hard, causing tribal officials to warn that the thousands of low-income residents who live there are running out of ways to heat their ramshackle homes. The Standing Rock Reservation is on the wind-swept Northern Plains where there is little to block the icy gales that whip in from the northwest and create wind chills as low as 50 below. Many residents live in mobile homes, some with ill-fitting doors, others with boards tacked up where the windows should be, or deteriorating roofs that leak much-needed warmth. The propane crisis escalated this week when Debbie Dogskin, a healthy 61-year-old woman, died while house-sitting for a friend in a rundown mobile home with an empty propane tank. "We think she just fell asleep and […]

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Study: Fracking, agriculture are on water demand 'collision course'

Hydraulic fracturing, or fracking, is increasing competitive pressures for water in some of the most water-stressed and drought-ridden U.S. regions, a study indicated. Fracking involves massive amounts of water, sand and chemicals injected at high pressure to fracture rock and release stored gas. The technique has unleashed a U.S. oil and gas boom. The study by Ceres — an investor group based in Boston that focuses on sustainability issues — is based on water use data from 39,294 oil and gas wells reported to FracFocus.org from January 2011 through May 2013 and water stress indicator maps developed by the World Resources Institute. More than 55 percent of the wells were in areas experiencing drought and more than 36 percent overlay regions experiencing groundwater depletion, Ceres said in a news release Wednesday announcing its "Hydraulic Fracturing and Water Stress: Water Demand by the Numbers" report. […]

Posted On : Published By : Tom Whipple
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Study: Fracking, agriculture are on water demand ‘collision course’

Hydraulic fracturing, or fracking, is increasing competitive pressures for water in some of the most water-stressed and drought-ridden U.S. regions, a study indicated. Fracking involves massive amounts of water, sand and chemicals injected at high pressure to fracture rock and release stored gas. The technique has unleashed a U.S. oil and gas boom. The study by Ceres — an investor group based in Boston that focuses on sustainability issues — is based on water use data from 39,294 oil and gas wells reported to FracFocus.org from January 2011 through May 2013 and water stress indicator maps developed by the World Resources Institute. More than 55 percent of the wells were in areas experiencing drought and more than 36 percent overlay regions experiencing groundwater depletion, Ceres said in a news release Wednesday announcing its "Hydraulic Fracturing and Water Stress: Water Demand by the Numbers" report. […]

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AAR: Oil cargo sent by rail up for year, down from previous week

U.S. rail delivery of petroleum and petroleum products was up 0.8 percent last week from the same period in 2013, the American Association of Railroads said. The AAR said Thursday 13,255 carloads of petroleum and petroleum products, or about 9.3 million barrels of oil, were delivered on the rail system for the week ending Feb. 1. While slightly up from a year earlier, it was a 12.8 percent decline from the previous week. John Gray, senior vice president for the AAR, said Thursday grain and petroleum products were the only commodity groups reporting increased shipments for last week. Gray said it was likely that severe winter conditions affected shipments. "We can’t quantify it precisely but the extreme cold probably held down rail traffic to some extent," he said. Since Jan. 1, the AAR said, 72,022 carloads, or about 50 million barrels of oil, were […]

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Think tank warns against U.S. energy 'hoarding'

Hoarding U.S. energy resources leaves the country less secure than if it moves into the global market, the Center for a New American Security finds. U.S. policymakers are mulling the prospects for more oil and natural gas exports. CNAS published a 44-page report Thursday that said the issue is "more complex" than some policymakers assert. "Hoarding energy at home, neglecting bilateral relationships with major global energy players and forfeiting economic opportunities to export energy would leave the United States less secure," the report states. "Moreover, policymakers would then be unable to use energy as a tool of economic statecraft to coerce or benefit other countries." U.S. Sen. Robert Menendez , D-N.J., chairman of the Senate Foreign Relations Committee, sent a letter to President Obama in December saying domestic energy reserves should be kept in the U.S. market to keep consumers prices low. "As the […]

Posted On : Published By : Tom Whipple
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Think tank warns against U.S. energy ‘hoarding’

Hoarding U.S. energy resources leaves the country less secure than if it moves into the global market, the Center for a New American Security finds. U.S. policymakers are mulling the prospects for more oil and natural gas exports. CNAS published a 44-page report Thursday that said the issue is "more complex" than some policymakers assert. "Hoarding energy at home, neglecting bilateral relationships with major global energy players and forfeiting economic opportunities to export energy would leave the United States less secure," the report states. "Moreover, policymakers would then be unable to use energy as a tool of economic statecraft to coerce or benefit other countries." U.S. Sen. Robert Menendez , D-N.J., chairman of the Senate Foreign Relations Committee, sent a letter to President Obama in December saying domestic energy reserves should be kept in the U.S. market to keep consumers prices low. "As the […]

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AAA president: 2014 gasoline prices may be lower but won't be cheap

AAA President Bob Darbelnet said average gasoline prices in 2014 could be less than last year but drivers should expect increases in the spring. "There is a good chance that average gasoline prices this year will cost less than in 2013 but it is not going to be cheap," Darbelnet said Thursday. "Driving to the gas station could be a lot more frustrating as prices increase this spring," he said. The AAA reported a national average price Friday of $3.26 per gallon, about 5 cents less than one month ago. During the spring, refineries start curbing production to conduct seasonal maintenance and that usually leads to an increase in gasoline prices, but by late June the national average price could be around $3.35, the auto club said. It should taper off as refiners switch back to a winter blend of gasoline in October, which […]

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AAA president: 2014 gasoline prices may be lower but won’t be cheap

AAA President Bob Darbelnet said average gasoline prices in 2014 could be less than last year but drivers should expect increases in the spring. "There is a good chance that average gasoline prices this year will cost less than in 2013 but it is not going to be cheap," Darbelnet said Thursday. "Driving to the gas station could be a lot more frustrating as prices increase this spring," he said. The AAA reported a national average price Friday of $3.26 per gallon, about 5 cents less than one month ago. During the spring, refineries start curbing production to conduct seasonal maintenance and that usually leads to an increase in gasoline prices, but by late June the national average price could be around $3.35, the auto club said. It should taper off as refiners switch back to a winter blend of gasoline in October, which […]

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US employment growth disappoints in January

The US economy added just 113,000 jobs in January, as the unemployment rate edged down to 6.6 per cent – dashing hopes of a steady acceleration in the recovery and posing a challenge to Janet Yellen in her first weeks as Federal Reserve chair. After job creation slumped in December, economists were very keen to assess whether that dip was an anomaly or a reflection of a deeper slowdown in the strength of the US economy . With payroll formation in January rebounding only slightly, and well below economists’ expectations of 180,000 new positions, fresh concerns are likely to mount about the US economy entering a new rough patch. But last month’s figures may also be a poor guide, in that bad weather across big portions of the country could have distorted the data . US equity futures were firmer, the dollar weakened and Treasury bond prices rose after […]

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Magnolia Expects Strong Production Growth amid More Drilling

More Onshore US-focused junior producer Magnolia Petroleum said Friday that it expects strong production growth in 2014 as drilling activity increases on its already-producing US leases. Magnolia, which has stakes in dozens of producing assets in North Dakota and Oklahoma, reported that it has received a large number of proposals from operators such as Devon Energy, Newfield Exploration, Chesapeake Energy and Kodiak Exploration to drill increased-density (or infill) wells across its portfolio of producing leases. Magnolia said that since the start of the year it has elected to participate in nine increased-density wells. Four of these are Skunk Creek wells targeting the Bakken and Three Forks Sanish formation in North Dakota. In addition, the company is participating in an increased-density well targeting the Woodford formation on the same spacing unit as the producing Conduit 1-5 well in Oklahoma and four increased-density wells on the same unit as the producing […]

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A pipeline runs through it

MINUTES after America’s State Department declared on January 31st that a proposed cross-border oil-pipeline would have little environmental impact, Canada’s ruling Conservatives posted an online ad bluntly directing Barack Obama to “approve Keystone XL now”. It is not the first time that Canada has dropped the diplomatic niceties when pressing Mr Obama to approve the Keystone pipeline, which would carry crude from Alberta’s tar sands to refineries on the Texas coast. Stephen Harper, Canada’s prime minister, has previously threatened to sell the oil to Asia, called approval a “no-brainer” and insisted he “would not take no for an answer”. But Mr Obama seems to be in no rush. Developing the tar sands and exporting its oil is a priority for Mr Harper, whose political roots lie in energy-rich Alberta. The pipeline, which would carry up to 730,000 barrels a day (b/d) of Alberta crude and an additional 100,000 b/d […]

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U.S. Orders Enterprise to Prioritize Propane Shipments

Enterprise Products Partners LP (EPD) must prioritize propane shipments on a pipeline to the U.S. Midwest and Northeast, where cold weather has caused heating-fuel prices to climb, federal regulators ordered in the first use of their emergency powers. The one-week directive issued late yesterday by the Federal Energy Regulatory Commission is effective immediately and applies to the Enterprise TE Products Pipeline system, which originates in Mont Belvieu, Texas . The agency cited its authority under the U.S. Interstate Commerce Act. Propane in the Midwest soared to a record premium over prices on the Gulf Coast last month as a polar vortex swept across the eastern U.S., dumping snow and ice and causing temperatures to plummet to record lows in cities from New York to Florida . Supplies of the heating fuel in the Midwest tumbled to the lowest seasonal level since at least 1994. “Clearly, it shows that the […]

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Fracking in Water-Stressed Zones Increases Risks to Communities – and Energy Producers

Nearly half of the wells hydraulically fractured (indicated by black dots) in the United States are located in areas of high or extremely high water stress (shown in red and dark red). Graphic courtesy of Ceres. Nearly half of the wells hydraulically fractured (indicated by black dots) in the United States are located in areas of high or extremely high water stress (shown in red and dark red). Graphic courtesy of Ceres Even as concerns arise about the threats hydraulic fracturing poses to water quality and human health , a new study released yesterday finds that the water demands of the “fracking” process are adding considerably to localized water depletion, especially in parts of Texas, Colorado, and California. Nearly half of the fracking wells in operation since 2011 are located in regions with high or extremely high water stress, according to the report by Ceres , a non-profit organization […]

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Statoil to Postpone 2020 Production Target

Norwegian oil company Statoil AS A has postponed its 2020 production target of 2.5 million barrels a day by three to four years and is reducing its planned capital expenditure, as the company looks to chase margins over big production numbers. Statoil said it would lower its planned capital expenditure to an average of $20 billion a year through 2016, a reduction of 8%, to free up cash. Statoil Chief Executive Helge Lund said in an interview in London that the company will cut costs $1.3 billion a year starting in 2016 in a bid to counter escalating oil sector costs. "We have been working actively with costs for several years and have seen this as a major development, but now we are turning it up a couple notches," Mr. Lund said. "These are still Statoil’s highest investments ever, so this isn’t a defensive plan." The state-controlled company is […]

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Exploration success strong in 2013, Statoil says

Norwegian oil company Statoil said Friday it had a successful 2013 in terms of oil and gas reserves generated from its exploration activity. Statoil said Friday it "delivered the best oil and gas exploration results in the industry" last year in terms of conventional oil and gas discoveries. Last year, the company said its Bay du Nord discovery off the eastern coast of Canada was one of the largest for 2013 with at least 300 million barrels of recoverable oil. In its report Friday, it said the Canadian discovery contributed to the addition of 1.25 billion barrels of oil equivalent from exploration activity in 2013. "Our operational performance was good," Helge Lund , Statoil’s president and chief executive officer, said in a statement Friday. The company said it plans to spend $3.5 billion on exploration activity in 2014, though its overall planned investment […]

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GRANTHAM: The Great American Shale Boom Is A Dangerous Waste Of Time And Money

Jeremy Grantham, whose GMO LLC investment firm manages $117 billion in assets, says the Great American Shale Boom is a dangerous waste of time and money. Grantham, who started his career as an economist at Shell, recently contemplated attending an anti-Keystone Pipeline demonstration in front of the White House.  In his new letter to clients , Grantham explains why any country, from the U.S. to China, still going down the path of developing fossil fuels is walking into a trap.  First, he argues we are overstating the benefits of switching to natural gas: “Fracking gas,” like all natural gas, is basically methane. Methane unfortunately is an even more potent greenhouse gas than CO2: at an interval of 100 years it is now estimated to be 32 times as bad, and at 20 years to be 72 times worse! If it leaks from well head to […]

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Crude-oil Futures Mixed Ahead of U.S. Employment Report

Crude-oil futures were mixed in Asian trading hours on Friday while financial markets wait for the monthly U.S. nonfarm payrolls later in the trading day. On the New York Mercantile Exchange light, sweet crude futures for delivery in March traded at $97.66 a barrel at 0623 GMT–down $0.18 in the Globex electronic session. March Brent crude on London’s ICE Futures exchange rose $0.09 to $107.28 a barrel. The U.S. employment report will give an indication about the health of the U.S. economy and whether the Federal Reserve will continue reducing the bond-buying program which has helped support commodity prices. The unusually bad weather that affected December’s employment data may have a lesser impact on the labor market in January–and a gain in payrolls of 200,000 is expected which should calm nerves and support markets, Capital Economics said. Brent crude was in positive territory extending overnight gain […]

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WTI Trades Near One-Week High on U.S. Fuel Demand Outlook

West Texas Intermediate crude traded near the highest price in a week as stronger-than-forecast economic data bolstered the outlook for fuel demand in the U.S., the world’s biggest oil user. Futures were little changed in New York after rising 0.5 percent yesterday as U.S. unemployment benefit claims slid more than economists estimated. WTI is poised for a fourth weekly gain, the longest rally in seven months, as cold weather boosts consumption of distillate fuels. London-traded Brent crude climbed as Libya’s oil output fell after protesters tampered with a pipeline. “The positioning for the U.S. economy and what the market is perceiving is providing support for oil,” said Jonathan Barratt , the chief executive officer of Barratt’s Bulletin in Sydney who predicts investors may sell WTI contracts at about $98.80 a barrel. “The draw in the products is typical for this time of the year where we see inventories start […]

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Gasoline Rises to Five-Week High on Below-Forecast Supply Gain

Gasoline climbed to a five-week high as an Energy Information Administration report yesterday showed that stockpiles rose less than analysts expected after winter weather swept the U.S. Northeast last week. Prices advanced 1.6 percent. Gasoline inventories grew by 505,000 barrels last week, said the EIA, the Energy Department’s statistical arm. Supplies were forecast to increase by 1.15 million, according to the median estimate in a Bloomberg News survey. “Gasoline may be supported by the fact that the inventory build yesterday was far less than the market anticipated in light of the poor weather,” said Andy Lipow , president of Lipow Oil Associates LLC in Houston. March-delivery gasoline rose 4.17 cents to $2.683 a gallon on the New York Mercantile Exchange , the highest settlement since Jan. 2. Trading volume was 22 percent above the 100-day average as of 3:08 p.m. Futures jumped the most in two weeks as refineries […]

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Natural Gas Sags After Smaller-Than-Expected Storage Draw

Natural-gas futures fell Thursday after U.S. stockpiles of the fuel declined less than the market had expected. Natural gas for March delivery ended 2% lower, a mild loss compared with recent volatility, traders said. Last week, futures rose more than 10% in a session, only to fall more than 9% in the next session. "Based on the last two weeks, we really didn’t gain a lot, we didn’t lose a lot," said Phil Flynn, an analyst for Price Futures Group in Chicago. The March contract ended the day down 9.9 cents at $4.931 a million British thermal units on the New York Mercantile Exchange. The relatively small move came as traders weighed concerns that supply levels could fall to exceptionally low levels by the end of […]

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$5/gal benzene: Here to stay, or recurring but shortlived fad?

If you sell, buy or trade benzene or any of its derivatives, you have heard this assertion before: Five-dollar-a-gallon benzene is a reality. It’s here to stay. It’s not a new one. In fact, you probably first heard in early- to mid-2012, or earlier if you are really plugged in, as they say. Benzene prices went on to breach the $5/gallon ($1,495/mt) three times later that year. I once heard one forecaster tell an audience that $5/gallon would be the norm in 2013. I believed him (sort of). Yes, the styrenics chain guys in the room gasped a bit, and I’m pretty sure the other downstream guys (cumene, phenol, cyclohexane and others) would have had similar reactions. If you are unfamiliar with benzene, don’t feel bad. Just know that it is a key building block in the petchems world, that it has applications in everything from food packaging to […]

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Iran determined to defend nuclear interests

Iranian Foreign Minister Javad Zarif said Thursday his country was working to resist the temptation to break off from Western negotiations. Iranian leaders have expressed frustration with what they said was bellicose rhetoric coming from U.S. officials in the wake of an interim nuclear agreement. Zarif said Thursday "perhaps the easiest" way to settle the row was to "close the doors to negotiation." "However, we firmly resist the temptation and [will] defend the Iranian national interests," he was quoted by the semiofficial Mehr News Agency as saying. Iran’s Fars News Agency said 190 of the 290 members of the Iranian Parliament endorsed a statement critical of testimony this week by U.S. Undersecretary for Political Affairs Wendy Sherman. Sherman told the U.S. Senate Committee on Foreign Relations the Iranian nuclear program was a "serious" threat to U.S. national security. A November interim agreement, she said, […]

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Iran says French majors drawn to its oil sector

Ali Majedi, Iran’s deputy oil minister, said French energy company Total is among those expressing an interest in his country’s oil sector. Iranian leaders hosted a trade delegation of roughly 140 representatives from French companies this week in Tehran. Majedi told the semiofficial Fars News Agency major French oil companies were among those who said they’re willing to invest in Iran. "The companies that have negotiated with us are considered the main group and include … Total [and oil services contractor] Technip," he said in an interview published Wednesday. Iranian President Hassan Rouhani told delegates at the World Economic Forum in Davos, Switzerland, last month his economy was opening up as a result of last year’s interim nuclear deal with Western powers. "Iran’s geopolitical situation, and also its access to the open seas, make it a geopolitically suitable model in the region," Majedi said. […]

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U.S. and Iran Jostle Ahead of Nuclear Talks

The U.S. and Iran are staking out increasingly entrenched and opposing positions over Tehran’s nuclear program, threatening the prospects of a vital foreign-policy initiative of President Barack Obama . The U.S. Treasury Department on Thursday announced new enforcement actions against companies with links to Iran for allegedly evading American sanctions against the country and aiding its nuclear and missile programs. The enforcement comes as both Democrat and Republican lawmakers exert pressure on the Obama administration to toughen its posture against Iran ahead of Feb. 18 talks aimed at ending any nuclear-arms threat from Tehran. Some congressional members and U.S. allies are concerned that an initial easing of sanctions against Iran has begun to open the floodgates of investment to the country before it has made any major concessions. But Thursday’s move strained Washington’s diplomatic engagement with Tehran, which said that the move violated terms of the negotiating process both […]

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Bombing, shooting kill 6 people in Iraq

Iraqi authorities say a car bomb and a shooting have killed six people in the country’s north. The explosion killed four people and wounded 28 others on Friday on a commercial street in Tuz Khormato, said the town’s mayor Shalal Abdoul. Tuz Khormato is 210 kilometers (130 miles) north of Baghdad. In the northern city of Mosul, gunmen shot dead two members of the Shabak minority in a drive-by shooting, said police and hospital officials. The Shabak are small ethnic minority, many of whose members follow an offshoot of Islam. Most live in villages east of Mosul, the provincial capital of the ethnically mixed Ninevah province that is predominantly Sunni Muslim. Both officials spoke on condition of anonymity because they are not authorized to speak to media. © 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn […]

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U.S. Issues Penalties Over Violations of Iran Sanctions

The Obama administration penalized nearly three dozen companies and individuals in eight countries on Thursday, accusing them of evading Iranian sanctions. It was the administration’s most extensive enforcement action to target Iran since a temporary international agreement on that country’s disputed nuclear program was completed in November and put into effect last month . Announced by the Treasury Department office that oversees sanctions enforcement, the punishments were at least partly devised to send a message that the United States is not relaxing economic pressures on Iran, apparently to blunt an atmosphere of optimism that has resulted from the temporary nuclear agreement. This week, Secretary of State John Kerry criticized France after it sent a large trade delegation to Iran. “Today’s action should leave no doubt that those who seek to evade our sanctions, support Iran’s nuclear program or assist in Iran’s promotion of international terrorism will continue to be […]

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Tensions rise as Iraqi Kurds' oil flows to Turkey

As Iraqi Kurdistan exports oil northward to Turkey through its own pipeline despite dire warnings from Baghdad about the consequences of such independent action, the prospect of a collision between Iraq’s central government and the semiautonomous Kurds increases. But as parliamentary elections loom in April, with Prime Minister Nouri al-Maliki seeking a third term amid a swelling al-Qaida insurgency raging in western Iraq, Baghdad may not be in a position to get tough right now or pick a fight with the restive Kurds and their new ally Turkey. Analysts have long speculated that the likely outcome of the Kurds’ defiance is that they could eventually declare their enclave across Iraq’s three northern provinces an independent state. The fear is that other regions, particularly the south, which contains two-thirds of Iraq’s oil reserves of 143.1 billion barrels, will also want greater autonomy from a […]

Posted On : Published By : Tom Whipple
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Tensions rise as Iraqi Kurds’ oil flows to Turkey

As Iraqi Kurdistan exports oil northward to Turkey through its own pipeline despite dire warnings from Baghdad about the consequences of such independent action, the prospect of a collision between Iraq’s central government and the semiautonomous Kurds increases. But as parliamentary elections loom in April, with Prime Minister Nouri al-Maliki seeking a third term amid a swelling al-Qaida insurgency raging in western Iraq, Baghdad may not be in a position to get tough right now or pick a fight with the restive Kurds and their new ally Turkey. Analysts have long speculated that the likely outcome of the Kurds’ defiance is that they could eventually declare their enclave across Iraq’s three northern provinces an independent state. The fear is that other regions, particularly the south, which contains two-thirds of Iraq’s oil reserves of 143.1 billion barrels, will also want greater autonomy from a […]

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U.S. stands by Baghdad in oil contract policy

The U.S. State Department said it believes any revenue generated in Iraq through oil sales should go through the central government. The U.S. Embassy in Iraq said a meeting was held Wednesday in Baghdad between Deputy Prime Minister for Energy Hussain al-Shahristani and top U.S. envoys on energy policy. The embassy in a statement said both sides reaffirmed their commitment to cooperate fully in areas of oil production and contracts. "As you know, our position has long been that we believe that all of these [oil] contracts and any revenue should go through the central government," U.S. State Department spokeswoman Jen Psaki said during her Wednesday press conference. The central government in Baghdad threatened legal action against the semiautonomous Kurdish government in the north for working independently with foreign oil companies. Kurdish oil is planned for an export terminal in Turkey, something Baghdad says […]

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Woodside to Invest Up to $2.6 Billion in Israeli Gas Venture

Woodside Petroleum Ltd. (WPL) , Australia’s second-largest oil producer, plans to buy a quarter of Israel ’s biggest natural gas field under a revised agreement for as much as $2.6 billion as demand rises in the Middle East . Woodside agreed to pay Noble Energy Inc. (NBL) and its venture partners an initial $850 million when the deal is completed, due by the end of next month, the Perth-based company said today in a statement. The stake is smaller than the 30 percent negotiated in December 2012, worth as much as $2.3 billion, though the size of the resource estimate has risen to 18.9 trillion cubic feet of natural gas from 17 trillion cubic feet. A deal would put Woodside in the middle of Israel’s nascent natural gas industry as the company’s proposed projects in Australia face delays. Woodside’s original agreement in December 2012 was held up because of […]

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Uganda takes major steps with oil majors

Ugandan Energy Minister Irene Muloni said Thursday signing agreements with international oil companies gives the country significant production opportunities. Muloni said Uganda is close to becoming a major oil producer with the signing of memorandums of understanding with Chinese, French and British oil companies. "The signing of the MOU is therefore a significant step toward the production of Uganda’s discovered oil and gas resources," she was quoted by the Ugandan newspaper the Independent as saying. Tullow Oil, a British exploration company involved in the agreements, published a report last year on its Ugandan developments. It said it has uncovered more than 1 billion barrels of oil in Uganda since operations began and most of that was in the country’s Lake Albert basin. Muloni said the agreements gives Uganda a "harmonized commercialization plan for the development" of its oil resources. She said the government […]

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Late-arriving snowfall quenches thirst of Beijing, disrupts traffic

It has been a long time in coming, but the first snow of the winter began falling in Beijing early on Friday, the second-latest arrival in the capital for over 60 years. The snowfall, only averaging 1.1 mm from 1 a.m. to 8 a.m., ended 107 precipitation-free days in the city, which had suffered from a dry spell since light rain fell on Oct. 22 last year, said the municipal meteorological observatory. Snowflakes were first seen in the southwestern suburb of Fangshan, and by 9 a.m., snow was lying in most areas in the city. The snowfall is set to continue into Friday night. At 6:15 a.m., the observatory issued a warning […]

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India needs nuclear power, for now — minister

India needs to rely on nuclear power until it can further develop renewable energy, a government official said. New and Renewable Energy Minister Farooq Abdullah, speaking at the opening Thursday of Delhi Sustainable Development Summit 2014, cited India’s growing needs for energy amid its developing economy. "India is moving forward. India needs energy. Therefore, please forgive us. We have to use nuclear energy [until] renewable energy comes up to such a level that we are able to dispense with fossil fuels and nuclear energy," Press Trust of India quoted Abdullah as saying. India, the fourth largest energy consumer in the world after the United States, China and Russia, has increased its oil imports from about 40 percent of demand in 1990 to more than 70 percent of demand by 2011, the U.S. Energy Information Administration said. Indian Prime Minister Manmohan Singh , at […]

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Fracking's Thirst for Water: Investors Warned of the Hidden Financial Risks

Some of the nation’s driest, drought-plagued places have quickly become its busiest hot spots of drilling for shale gas and oil, especially in Texas, Colorado and California. It’s a dust-bowl-sized problem likely to become worse, according to a study released Wednesday by the nonprofit sustainability advocacy group firm Ceres . Fracking, the controversial drilling technique, is consuming billions of gallons of water each year in states where water is increasingly scarce. The report warns that investors need to demand information about how energy companies are managing this problem or risk their investment portfolios being clobbered. Put simply, Ceres is saying there probably isn’t enough fracking water where fracking most wants to happen. And eventually, there will be a price to pay. The study found that nearly half the wells being hydraulically fractured in the U.S. since 2011, a time of explosive growth in shale […]

Posted On : Published By : Tom Whipple
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Fracking’s Thirst for Water: Investors Warned of the Hidden Financial Risks

Some of the nation’s driest, drought-plagued places have quickly become its busiest hot spots of drilling for shale gas and oil, especially in Texas, Colorado and California. It’s a dust-bowl-sized problem likely to become worse, according to a study released Wednesday by the nonprofit sustainability advocacy group firm Ceres . Fracking, the controversial drilling technique, is consuming billions of gallons of water each year in states where water is increasingly scarce. The report warns that investors need to demand information about how energy companies are managing this problem or risk their investment portfolios being clobbered. Put simply, Ceres is saying there probably isn’t enough fracking water where fracking most wants to happen. And eventually, there will be a price to pay. The study found that nearly half the wells being hydraulically fractured in the U.S. since 2011, a time of explosive growth in shale […]

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Senators ask EIA to study crude exports’ gasoline price effect

US Sens. Maria E. Cantwell (D-Wash.) and Ronald L. Wyden (D-Ore.) asked the US Energy Information Administration for more information on possible domestic gasoline price impacts from allowing more US crude oil to be exported. “We would like to understand how allowing unlimited export of American crude oil might affect US oil production and consumption, nationally and regionally; domestic supplies and prices, nationally and regionally, for both crude oil (paid by refiners) and refined products (paid by consumers); and exports of refined products,” they said in a Feb. 3 letter to Adam Sieminski. Cantwell, who is a senior Energy and Natural Resources Committee member, and Wyden, who chairs the committee, said they also would like EIA to identify transit modes and routes that exported crude might be expected to travel. Contact Nick Snow at [email protected] .

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Environmentalists say NC river is 'toxic soup' after coal ash spill

Environmentalists and residents of North Carolina and Virginia are anxiously waiting for toxicity test results from the Dan River, where tens of thousands of tons of coal ash spilled earlier this week. Danville’s city manager has released a statement saying that while preliminary findings indicate the area drinking water is safe, they await final confirmation. North Carolina’s Department of Environment and Natural Resources has yet to provide an official determination, but people around the Dan River report that the spill was having visible and adverse effects. The spill originated from a 27-acre pond of coal ash and slurry — the waste product of burning coal — at a defunct  Duke Energy  power plant along the Dan River in Eden, N.C.   Hundreds of workers are trying to cap the leaking pipe, which has so far allowed 82,000 tons of toxic ash and 27 million gallons of contaminated water to […]

Posted On : Published By : Tom Whipple