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CNPC: PetroChina Makes Huge Gas Find in Sichuan Basin

PetroChina, Asia’s largest oil and gas producer, has found 308.2 billion cubic metres of technically recoverable gas in southwest China’s Sichuan basin, according to parent CNPC, one of China’s largest gas discoveries in more than a decade. China, the top energy user and fourth-largest consumer of gas, is racing to increase supply of the cleaner-burning fuel by boosting domestic exploration and raising imports, as demand is forecast to nearly quadruple between 2011 and 2030. The Moxi block of An’yue field was officially certified to hold 440.4 bcm of proven geological reserves, China National Petroleum Corporation (CNPC) said in Monday report on its website (news.cnpc.com.cn), citing PetroChina’s Exploration and Development department. PetroChina is now building a production facility able to pump 4 bcm a year under phase-1 development, which is to be followed by another 6 bcm/year in a second phase, CNPC said. CNPC […]

Posted On : Published By : Tom Whipple
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China export growth seen slowing, loans surging in January

China’s export and import growth likely cooled in January, a Reuters poll showed, underlining a broader slowdown in the world’s second-largest economy, though the Lunar New Year holiday effect may overstate the soft momentum. Weakness in China’s imports could be bad news for the rest of the world, particularly for major commodity exporters such as Australia. HSBC estimates China will overtake the United States to become the world’s biggest importer this year. Bank loans in China are expected to see a typical seasonal surge in January as banks get fresh lending quotas at this time every year, underlining relatively stable credit demand from the real economy. Many economists expect a soft slowdown in China’s economy in 2014 as policymakers try to embrace slower but better-quality growth to cut reliance on investment and pursue sustainable development. "Given the stable economic situation last year and increasing expectations over […]

Posted On : Published By : Tom Whipple
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Eleven dead in Japan after worst snowfall in decades hits capital

Eleven people died, more than a thousand were injured and tens of thousands lost power when the worst snowstorm in decades hit Tokyo and areas around the Japanese capital before heading north to blanket the tsunami-hit Pacific coast. Flights were still backed up at Tokyo’s Haneda international airport on Monday and the lobby was packed with anxious travelers, with some flights overbooked. As much as 27 cm (10.6 inches) of snow fell on Tokyo by late Saturday, the most in 45 years, Japan’s Meteorological Agency said. Back streets in outlying neighborhoods remained choked with snow and frozen slush on Monday morning, forcing commuters in heavy boots to pick their way carefully to work. Financial markets opened normally on Monday despite the heavy snowfall. Traffic accidents and falls claimed 11 lives across the nation, including one 78-year-old man in Ichikawa, just east of Tokyo. More than 1,000 […]

Posted On : Published By : Tom Whipple
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North Dakota Bakken/Three Forks Scenarios

Figure 1 A recent post at Peak Oil Barrel by Jean Laherrere suggested an ultimate recoverable resource(URR) for the North Dakota Bakken/Three Forks of about 2.5 Gb based on Hubbert Linearization.  This conflicts with a recent (April 2013) USGS mean (F50) estimate of 8.4 Gb.  I decided to update my scenarios based on the range of USGS estimates from F95=6 Gb to F5=11.3 Gb for the North Dakota(ND) Bakken/ Three Forks.  Note that at year end 2011 there were 2.6 Gb of crude proven reserves in ND and at the end of 2007 about 0.5 Gb, I will assume all of this reserve increase came from the Bakken/ Three Forks, so 2.1 Gb of proven reserves added to 0.35 Gb of oil produced from the Bakken/ Three Forks gives us 2.45 Gb for a minimum URR.  The Hubbert Linearization points to about 0.05 Gb of undiscovered oil whereas the USGS […]

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U.S. Winter Storm Seen Spreading Snow, Sleet Across South

Rain, sleet and snow are expected to spread across the southern U.S., including Atlanta’s northern suburbs, less than two weeks after a winter storm stranded thousands of motorists and children in cars, buses and schools in the region. Atlanta’s northern suburbs may get 1 to 3 inches (2.5 to 7.6 centimeters) of snow through the next three days as the storm moves from Texas to the southern Appalachian Mountains, according to the U.S. Weather Prediction Center . The city itself will probably be spared this time, said Steve Wistar, a senior meteorologist at AccuWeather Inc . in State College, Pennsylvania . “In this storm it looks like Atlanta is in the southern edge,” Wistar said. “Because the south is less prepared to deal with some of these things it will be a real concern, but most of Georgia south of Atlanta will just get rain.” […]

Posted On : Published By : Tom Whipple
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Tight Propane Supply Reaches Crisis

Federal and state officials are pushing emergency measures to get propane to people who need the gas to heat their homes in the Midwest and other regions of the country beset by persistent frigid temperatures. The measures, which include extending working hours for truckers and ordering a pipeline company to prioritize shipments to areas with tight supplies, are meant to alleviate a propane crunch that has sent prices for the fuel to record highs in some parts of the country. "The propane shortage has been a crisis for thousands of families and farmers in Minnesota and across the region," Sen. Al Franken, who represents the North Star State, said in a statement. He has been asking various federal agencies to help route more propane to places in need. Governors in affected states are trying to increase propane deliveries and make funds available for residents to pay higher heating bills. […]

Posted On : Published By : Tom Whipple
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California drought hits farmers hardest

That’s about 650,000 boxes of cantaloupe, regular and organic, he won’t be harvesting come July — about $3 million worth of produce, he estimated. It’s a few hundred workers, most of them migrants, he won’t be hiring. It’s money that won’t be spent in grocery and hardware stores in small towns across the region that produces half of the country’s homegrown fruits and vegetables. It’s a lot of schools with empty seats as farm workers looking for jobs move on with their families. “Everybody will be hurt,” Del Bosque said. “When farmers idle land, the people who have small businesses in small communities . . . they’ll all suffer. It’s a huge ripple effect through the whole valley.” California is entering its third year of drought, a recurring nightmare for those old enough to remember the prolonged dry period of 1987 to 1991 and the disaster of 1976 and 1977, the previous […]

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AAA Warns Drivers: Gas Prices Set to Rise

Filling Car With Gas AAA warned gas prices are set to rise this spring, after winter weather across many parts of the country kept demand low and provided a slight reprieve in recent weeks. Prices typically climb higher during the spring when refineries cut production to do seasonal maintenance. A regulated switch to summer-blend gasoline can also limit supplies, just as demand strengthens. AAA said expected peak prices of $3.55 to $3.75 a gallon would be lower than last year, when the national average jumped 49 cents to $3.79 a gallon in just 41 days. Bob Darbelnet, the travel group’s president and CEO, said the increase will likely be temporary, but it still may cost drivers in excess of $60 to fill up their cars. “There is a good chance that average gasoline prices this year will cost less than in 2013, but it is not going to be […]

Posted On : Published By : Tom Whipple
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The Oil Boom Doesn’t Care if Your Chickens Are Freezing to Death

Propane is a byproduct of both natural gas production and crude oil refining. Just in the past year, its production has spiked by 15 percent, and a good chunk of that new production is considered surplus, to be exported from brand new fuel terminals. In fact, just since 2012, propane exports have gone up from around 150,000 barrels to 400,000 barrels a day as of last October. It should be flush times the Hank Hills of rural America. But, according to The New York Times , it’s quite the opposite. Propane fuel prices have shot up in some areas by more than $2 a gallon since the beginning of winter, and as of the end of January, the national wholesale average for propane had more than doubled in less than a month’s time. If you’re of suburban or urban origin, […]

Posted On : Published By : Tom Whipple
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One of the world’s great investment thinkers is convinced fracking is causing earthquakes

Page added on February 8, 2014   “To me at least the connection is clear and statistically certain… far more certain than anything I ever see in the stock market or the economy.” That’s Jeremy Grantham, the highly-regarded co-founder of the $117 billion investment fund GMO, who predicted both the dot com crash of the late 1990s and the subprime meltdown a few years later. Above is an accompanying chart included in his  latest investment letter . Rather than pushing an investment idea here, he’s convinced there’s a causal link between a surge in earthquakes measuring above 3 on the richter scale in the US and the boom in  hydraulic fracturing  (“fracking”), the controversial drilling technique used to extract oil and gas from shale rock. His overall skepticism about fracking informs Grantham’s broader, bearish thesis about oil prices. In the investment letter he questions whether “this year’s $650 billion spent looking […]

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