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Brazil prepares for the second great LNG bailout

Brazil should give up electricity for Lent, a Rio de Janeiro-based analyst told Interfax on Wednesday, with a touch of gallows humour. However, it is no laughing matter: the hydropower-dependent country has just recorded the second-driest January in 80 years, and the prospect of electricity rationing looms. The 100 days between Carnival and kick-off for the 2014 World Cup now threaten to be the toughest period of Dilma Rousseff’s presidency. Rousseff, who has staked her political credibility on the lights staying on, is likely to write blank cheques for LNG to bail out the power sector. Analysts blame both the structural weakness of Brazil’s power sector – which affords the country little flexibility during supply tightness – and poor policy decisions for the situation. As reservoir levels run low, costly LNG imports appear to be the country’s last resort for the second consecutive […]

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Drilling Surge in Permian Drives U.S. Oil Rigs to Record

Rigs targeting oil in the U.S. surged to a record this week as producers from Concho Resources Inc. (CXO) to Pioneer Natural Resources Co. (PXD) boost horizontal drilling in the Permian Basin. U.S. oil rigs jumped by 13 to 1,443, the highest level since Baker Hughes Inc. (BHI) separated its oil and gas rig counts in 1987, the Houston-based company said in a weekly report posted on its website today. Rigs drilling horizontally in the Texas-New Mexico formation rose by 10 to 265, the highest level since at least February 2011, while vertical rigs there gained three and the directional count added one. “One could argue that all of the increase in the oil rig count this week was because of the Permian,” James Williams , president of WTRG Economics in London , Arkansas , said by telephone. “While it’s one of the oldest fields in the U.S., there […]

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Baker Hughes: US drilling rig count spikes to 1,792

The US drilling rig count jumped 23 units to 1,792 rigs working during the week ended Mar. 7, Baker Hughes Inc. reported. All 23 of those rigs were land-based, bringing that total to 1,719. Unchanged from a week ago were rigs drilling offshore at 55 and rigs drilling in inland waters at 18. A 13-unit rise in oil rigs to 1,443 outdid a 10-unit increase in gas rigs to 345. Rigs considered unclassified were unchanged at 4. Horizontal drilling rigs leaped 21 units to 1,202 while directional drilling rigs edged up 1 to 198. Canada’s rig count, meanwhile, dropped 39 units to 587, but still remained 7 rigs higher than its tally from a year ago this week. A vast majority of those units lost were oil rigs, which relinquished 34 to a total of 389. Gas rigs declined 5 units to 198. Major states, basins Reflecting the upward […]

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Egypt: IPR finds oil, gas in Southwest Gebel El-Zeit prospect

Irving, Tex., independent IPR Inc. has made a discovery in its first drilled well, SWGEZ-5, in its Southwest Gebel El-Zeit concession in the Gulf of Suez offshore Egypt. IPR operates the block, which was acquired from Devon Energy International in 2007. IPR constructed a modern 3-slot platform, 9.5-km, 8.5-in. pipeline from platform to shore, and state-of-the art surface facilities to receive future deliveries. SWGEZ-5 was drilled using Advanced Energy Systems’ ADM-IV jack up rig under the supervision of IPR’s operational teams and its joint venture operating company, PetroHurghada. The well took 43 days to drill, test, and complete to a total depth of 8,020 ft in the basement of the Precambrian age. The well encountered a total of 107 ft of net hydrocarbon pay in Late Cretaceous age Nubia and Matulla formations, as targeted prolific producers in the Gulf of Suez. SWGEZ-5 tested naturally flowing oil and gas at […]

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Crude oil propping up rail business, AAR says

Crude oil deliveries now account for a major part of the railroad business, the senior vice president of the Association of American Railroads said. AAR said more than half of the 20 commodity groups carried by rail saw decreases in their year-on-year deliveries in February. AAR Senior Vice President John Gray said better weather and a healthier economy should lead to improvements in rail volumes in the month ahead. "In the meantime, crude oil has become a significant part of the railroad business," he said in a statement Thursday. AAR reported 127,534 carloads of crude oil, or about 89 million barrels of oil, were sent by rail from Jan. 1 to March 1, a 6.5 percent increase from the same time last year. However, the 13,244 carloads, or 9.3 million barrels of oil, for the week ending March 1 was down 3.8 percent compared […]

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Enbridge line to bring Bakken, western Canadian crude eastward

A decision by Canada’s National Energy Board to approve of a plan by Enbridge to reverse an oil pipeline will open up new markets, a trade group said. Canada’s National Energy Board, an independent federal regulator, gave Enbridge approval to reverse the 397-mile segment of its so-called Line 9 pipeline between Ontario and Quebec. The decision gives Enbridge consent to increase the pipeline’s overall capacity by 25 percent to 300,000 barrels per day. "Enbridge will be permitted to operate all of Line 9 in an eastward direction in order to transport crude oil from western Canada and the U.S. Bakken region to refineries in Ontario and Quebec," the NEB said in a statement Thursday. Greg Stringham, vice president of oil sands projects at the Canadian Association of Petroleum Producers, said the NEB’s decision adds diversity to the nation’s energy market. "The NEB’s decision is an important milestone that again […]

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'Carbon bubble' threatens stock markets, say MPs

Investments in coal and oil may be overvalued, according to MPs The world’s financial markets could be creating a "carbon bubble" by over valuing the fossil fuel assets of large companies say MPs. Much of this coal and oil may have to be left in the ground to combat climate change, according to the Environmental Audit Committee (EAC) The Committee also hits out at the lack of green finance. Less than half the £200bn needed to deliver emissions cuts by 2020 is in place they say. A number of studies in recent years have warned that stock markets around the world have overvalued companies with large holdings of coal, oil and gas. The problem stems from the fact that countries including the UK agreed at a UN meeting in Mexico in 2010 to limit global temperature rises to 2C. To achieve this, economists including Sir Nicholas Stern have calculated […]

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‘Carbon bubble’ threatens stock markets, say MPs

Investments in coal and oil may be overvalued, according to MPs The world’s financial markets could be creating a "carbon bubble" by over valuing the fossil fuel assets of large companies say MPs. Much of this coal and oil may have to be left in the ground to combat climate change, according to the Environmental Audit Committee (EAC) The Committee also hits out at the lack of green finance. Less than half the £200bn needed to deliver emissions cuts by 2020 is in place they say. A number of studies in recent years have warned that stock markets around the world have overvalued companies with large holdings of coal, oil and gas. The problem stems from the fact that countries including the UK agreed at a UN meeting in Mexico in 2010 to limit global temperature rises to 2C. To achieve this, economists including Sir Nicholas Stern have calculated […]

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Gazprom Threatens Ukraine Supplies Over Late Payment

Gazprom said Friday it may suspend gas supply to Ukraine after Kiev failed to pay for February deliveries, but Russia’s gas monopoly said it will continue transit shipments to Europe. "We cannot supply gas for free. Either Ukraine redeems debt and pays for the current deliveries, or there is a risk to return to the situation of early 2009," Gazprom Chairman Alexei Miller said. Mr. Miller said that Ukraine now owes $1.89 billion for gas after it failed to meet a March 7 deadline for payment of the February deliveries. Russia switched off natural gas to Ukraine at the start of 2009 after talks on a new contract ended in failure. The failure of those talks lead to the temporary suspension of deliveries to Europe through Ukraine. But a spokesman for Gazprom said the current dispute with Ukraine wouldn’t have impact on supplies to the rest of Europe. […]

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Why Russia Can’t Afford Another Cold War

in 1958. The old Soviet Union was all but impervious to foreign economic or business pressure. Credit Agence France-Presse — Getty Images Russian troops pour over a border. An autocratic Russian leader blames the United States and unspecified “radicals and nationalists” for meddling. A puppet leader pledges fealty to Moscow. It’s no wonder the crisis in Ukraine this week drew comparisons to Hungary in 1956 and Czechoslovakia in 1968 or that a chorus of pundits proclaimed the re-emergence of the Cold War. But there’s at least one major difference between then and now: Moscow has a stock market. Continue reading the main story Under the autocratic grip of President Vladimir Putin , Russia may be a democracy in name only, but the gyrations of the Moscow stock exchange provided a minute-by-minute referendum on his military and diplomatic actions. On […]

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New Cold War Would Differ From Old

RUSSIA had some real economic problems even before the Ukrainian crisis led the United States and European countries to threaten sanctions on the country after the Russian flag was raised in Crimea, a part of Ukraine, and troops who spoke Russian appeared to take over a significant part of the region. Russia’s growth had slowed to almost nothing: Its real gross national product in the third quarter of 2013 was just 0.6 percent larger than it had been a year earlier. The ruble was weak. Its manufacturers appeared to be doing much worse than competitors in other countries. Its stock market has trailed markets in most other countries over the last year. If this is a new incarnation of the Cold War, it will be very different from the old one. Back then, the Soviet Union and the members of its empire were in some ways in their own […]

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Russia Invokes $2 Billion Ukraine Gas Debt Amid Crimea Crisis

Andrew Wilson, chief executive officer for Europe, the Middle East and Africa at Goldman Sachs Asset Management, talks about investment opportunities in emerging markets, the crisis in Ukraine and the outlook for U.S. and China growth. He speaks with Francine Lacqua on Bloomberg Television’s "On the Move." (Source: Bloomberg) Russia said Ukraine’s natural gas debt climbed to almost $2 billion and signaled supplies may be cut, ratcheting up pressure on its neighbor as they scrap over the future of the Black Sea Crimea region. Ukraine hasn’t made its February fuel payment and owes Russia $1.89 billion, according to gas export monopoly OAO Gazprom (OGZD) , which halted supplies to Ukraine five years ago amid a pricing and debt dispute, curbing flows to Europe. Lawmakers in Moscow said they’d accept the results of a March 16 referendum on Crimea joining Russia as Arseniy Yatsenyuk, Ukraine’s premier, […]

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Energy Crunch: Peaks and tipping points

Three things you shouldn’t miss this week Global riot epidemic due to demise of cheap fossil fuels  – From South America to South Asia, a new age of unrest unfolds as industrial civilisation transitions to post-carbon reality.   UK oil and gas production in terminal decline?  Offshore production by field:  http://crudeoilpeak.info/uk-peak   The Energy Transition Tipping Point is Here  – The economic foundations for fossil fuel investment collapse as the business case for renewables builds.   Diplomatic efforts are underway to diffuse tensions between Russia and the West following the overthrow of Ukrainian President Yanukovych. Should tensions escalate, one risk is the disruption of gas supplies from Russia to Europe via the Ukraine.   A standoff between Russia and Ukraine following the Orange Revolution saw gas supplies disrupted in both January 2006 and early 2009. Europe is now better placed to […]

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Oil Extends Gains in Asia

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $101.94 a barrel at 0514 GMT, up $0.38 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.37 to $108.47 a barrel. Crude edged higher overnight after Crimea’s Moscow-backed government set a referendum for March 16 to ratify its decision to secede from Ukraine and join Russia, ratcheting up tensions. The U.S. has set the stage for sanctions against people who are destabilizing Ukraine as well as certain visa restrictions. The European Union has said it would impose tough sanctions against Moscow if Russia doesn’t begin negotiations with Ukraine soon. "Short-term disruptions in oil and gas exports due to a possible escalation of the situation in Ukraine would be limited," Johannes Benigni, founder and director of JBC Energy, said in the firm’s monthly report. He said about 310,000 […]

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WTI Crude Rebounds on U.S. Jobless Claims

West Texas Intermediate crude rebounded after the biggest drop in two months as fewer Americans than projected filed applications for unemployment benefits last week. Brent advanced. Prices rose for the first time in three days, following gains in U.S. equities. Jobless claims declined to the least since November, the Labor Department said. Crude also climbed as the euro strengthened to a two-month high against the dollar. Brent increased as President Barack Obama said the U.S. and its allies will keep raising pressure on Russia to back down in Ukraine. WTI dropped as much as 1.3 percent earlier on concern that weaker demand is boosting U.S. inventories. “The jobless report is driving up the stock market and oil,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “A weak dollar makes for a stronger market. I don’t see oil going below $100. The Ukraine crisis is not over […]

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Eni CEO Sees Oil Price Falling to $90 a Barrel

Oil prices are likely to fall to around $90 a barrel as global supply rises and demand falls back thanks to a shift to more natural gas usage and increased fuel efficiency, the chief executive of Italian oil and gas major Eni SpA Paolo Scaroni said Thursday. New oil fields coming onstream in Brazil, the Barents Sea off Norway and onshore in the U.S. will lift the world’s oil supply, Mr. Scaroni said. Concurrently, the U.S. shale boom has lifted demand for natural gas, while Europeans would likely shift from using coal and oil to cleaner-burning gas to meet carbon dioxide emissions targets. Gas demand would also prove high in Asia as the region’s economies expand, Mr. Scaroni said. "I see [the oil price] going down rather than up," he said in an interview with The Wall Street Journal. Mr. Scaroni said it didn’t make sense for the company […]

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Amid carnage of war, Syria readies for Assad re-election

After three years of grinding conflict, the destruction of whole city districts and an exodus of refugees all triggered by an uprising against his rule, Bashar al-Assad is quietly preparing to be re-elected. The Syrian president has not yet announced whether he will stand for a third term, in defiance of protesters, rebel fighters and Western foes who have demanded he go; but in state-controlled parts of Damascus preparations for his candidacy are unmistakable. Public gatherings have become platforms to urge the president to nominate himself, despite a continuing civil war that has killed more than 140,000 people, fractured the country and destroyed any chance of a credible vote being held. Authorities are once again organizing demonstrations in support of Assad, accused by opponents of massacres of civilians. Shopkeepers are encouraged to show their support by painting national colors on their store fronts. Some express their […]

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Genel Energy expects more oil from Kurdish north of Iraq

LONDON, March 6 (UPI) — Oil produced from the Kurdish region of Iraq was lower than expected during the fourth quarter, though the trend should reverse, Genel Energy said Thursday. Anglo-Turkish company Genel said net production in 2013 averaged 44,000 barrels of oil equivalent per day, about 6,000 barrels less than expected. A late 2013 fire at the company’s Taq Taq field and "pricing sensitivity in the domestic market" for oil from the Tawke field, both in the Kurdish north of Iraq, were the primary causes of the production shortfall, it said. "Production guidance for 2014 is set at 60,000 – 70,000 barrels of oil equivalent per day, translating into a revenue guidance range of between $500 million – $600 million," the company said in a Thursday report. "Production volumes are expected to grow significantly year-on-year as the new [Kurdish] export pipeline comes into operation." The Kurdistan Regional Government […]

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Egypt Tries Harder To Stop Energy Firm Exodus

Egypt is enhancing exploration terms and striving to repay nearly $5 billion it owes to foreign oil and gas producers as it struggles to prevent them fleeing to more promising prospects elsewhere in Africa. Cairo needs them to expand exploration and bring new finds to production if it is to keep the lights on and avoid more civil unrest. But investors are hesitant – Egypt pays them barely enough to cover investment costs. The costing issue has been compounded since the 2011 overthrow of Hosni Mubarak by Egypt’s inability to pay foreign firms for existing output and its decision to divert for domestic use the share of gas they normally get to export. The crisis has left BG Group, a major investor which relies on Egypt for almost a fifth of its output, unable to meet export commitments. The British firm has said it […]

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Expanded Panama canal 'should be in operation' by Jan 2016

Tokyo (Platts)–7Mar2014/225 am EST/725 GMT The Panama Canal Authority expects the expanded canal "should be in operation by January 2016" after a trial period, Silvia de Marucci, ACP’s manager of marketing and forecasting, said Friday. Marucci made the comments in response to a question at the International LP Gas Seminar in Tokyo. "In January 2016, we are expecting to be operational" after a period of testing at both the Atlantic and Pacific side of locks, Marucci said. At the moment, the expansion is 65% complete, she added. The latest target is seven months behind a previous estimate of June 2015. The project was originally scheduled for completion this year. Next week, ACP intends to sign a final agreement with its contractor for the expansion project, Marucci told Platts ahead of the conference Friday. "Works were stopped about a month ago but resumed two weeks ago and we are very […]

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Expanded Panama canal ‘should be in operation’ by Jan 2016

Tokyo (Platts)–7Mar2014/225 am EST/725 GMT The Panama Canal Authority expects the expanded canal "should be in operation by January 2016" after a trial period, Silvia de Marucci, ACP’s manager of marketing and forecasting, said Friday. Marucci made the comments in response to a question at the International LP Gas Seminar in Tokyo. "In January 2016, we are expecting to be operational" after a period of testing at both the Atlantic and Pacific side of locks, Marucci said. At the moment, the expansion is 65% complete, she added. The latest target is seven months behind a previous estimate of June 2015. The project was originally scheduled for completion this year. Next week, ACP intends to sign a final agreement with its contractor for the expansion project, Marucci told Platts ahead of the conference Friday. "Works were stopped about a month ago but resumed two weeks ago and we are very […]

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Two dead in Venezuela violence as protests drag on

A Venezuelan soldier and a motorcyclist died in a confused melee sparked by the opposition’s barricading of a Caracas street, officials said on Thursday, boosting the death toll from nearly a month of violence to 20. Demonstrators have for weeks staged rallies and set up barricades to demand the resignation of President Nicolas Maduro, leading to clashes with security forces and government supporters. Motorcycle drivers clearing a barricade in the middle-class neighborhood of Los Ruices were attacked by residents from nearby buildings who threw rocks and later shot at them, National Guard Gen. Manuel Quevedo told Reuters. The motorcyclist who was killed, Jose Cantillo, who was in his early twenties, was shot in the neck, Quevedo said. "Make no mistake, the National Guard and the armed forces are going to continue patrolling the streets to restore order," he said in an interview at the scene of […]

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China Needs Industry to Enlist in 'War on Pollution'

China’s newly declared "war on pollution" includes measures designed to curb smog and speed up industrial reform, particularly for the country’s massive state enterprises. The question now is whether those influential companies will water down the measures, as they have previous attempts at environmental controls. At a once-a-year meeting of China’s legislature, government officials pledged a series of reforms and pollution-reduction targets that take aim at energy-intensive heavy industries such as steel, aluminum, cement and coal. Officials said they are aimed at addressing the bouts of heavy air pollution that have plagued some major cities and generated headlines even among media outlets tightly controlled by the state. "Smog is affecting large parts of China, and environmental pollution has become a major problem, which is nature’s red-light warning against the model of inefficient and blind development," Chinese Premier Li Keqiang said in a speech to China’s legislature on Wednesday. "We […]

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China Needs Industry to Enlist in ‘War on Pollution’

China’s newly declared "war on pollution" includes measures designed to curb smog and speed up industrial reform, particularly for the country’s massive state enterprises. The question now is whether those influential companies will water down the measures, as they have previous attempts at environmental controls. At a once-a-year meeting of China’s legislature, government officials pledged a series of reforms and pollution-reduction targets that take aim at energy-intensive heavy industries such as steel, aluminum, cement and coal. Officials said they are aimed at addressing the bouts of heavy air pollution that have plagued some major cities and generated headlines even among media outlets tightly controlled by the state. "Smog is affecting large parts of China, and environmental pollution has become a major problem, which is nature’s red-light warning against the model of inefficient and blind development," Chinese Premier Li Keqiang said in a speech to China’s legislature on Wednesday. "We […]

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Robots Star in Cleanup of Japanese Nuclear Plant

On a routine day at the Fukushima-Daiichi nuclear-power plant, a snakelike robot is cleaning the floor of the reactor buildings while another maps radiation density with a 3-D camera. In the three years since several of the plant’s reactors suffered meltdowns caused by Japan’s March 2011 earthquake and tsunami, it has become clear that melted fuel rods and debris inside the reactor buildings have to be cleaned up before the risks of radioactive discharge from the site can be contained. That’s where the robots come in. Robots are crucial in the cleanup, but that doesn’t mean they are […]

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The end of airlines predicted by no other than former Qantas CEO Geoff Dixon in July 2008

The Sydney Morning Herald published the following article 2 days after Qantas CEO Alan Joyce announced a 1 st half year loss of $252 million and job cuts of 5,000. Mayday: how Qantas went from national icon to corporate tragedy Qantas is a company of tribes at war with itself, and anyone who questions its strategy. It also is suffering from a case of the Boy Who Cried Wolf after so many years of warning that it was close to collapse unless the government bowed to its wishes. At one time, a phrase was coined by Dixon known as “constant-shock syndrome”. http://www.smh.com.au/business/aviation/mayday-how-qantas-went-from-national-icon-to-corporate-tragedy-20140228-33rax.html The SMH article describes how Chairman Leigh Clifford selected Alan Joyce as successor for CEO Geoff Dixon in May 2008. That was the month when oil prices were skyrocketing towards $130 a barrel as a result of extra demand from China for the Olympic Games. After 2 […]

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At Energy Confab, Oil Chiefs Fret Over Costs

Underneath their swagger and bravado, global energy chiefs gathered here for their annual U.S. conference expressed a palpable sense of dread over the soaring costs of their signature oil and gas projects. "All of us are facing new realities and pressures," John Watson , chairman and chief executive of Corp. , told a hotel ballroom jammed with an international assortment of men in suits and the occasional woman. "Labor and capital costs have doubled over the last decade." To pay for the rising price of extracting fossil fuels, the industry needs triple-digit oil prices, Mr. Watson warned. "The $100 barrel is the new $20," he said—a sobering statement since global oil prices haven’t been in the $20 range since 2002. Where once concerns focused on the apparent shortage of new elephant-size oil and natural gas fields, this year’s CERAWeek produced a lot of anxiety over soaring costs. Executives "are […]

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Shale, the Last Oil and Gas Train: Interview with Arthur Berman

How much faith can we put in our ability to decipher all the numbers out there telling us the US is closing in on its cornering of the global oil market? There’s another side to the story of the relentless US shale boom, one that says that some of the numbers are misunderstood, while others are simply preposterous. The truth of the matter is that the industry has to make such a big deal out of shale because it’s all that’s left. There are some good things happening behind the fairy tale numbers, though—it’s just a matter of deciphering them from a sober perspective.    In a second exclusive interview with James Stafford of Oilprice.com , energy expert Arthur Berman discusses: •    Why US gas supply growth rests solely on Marcellus •    When Bakken and Eagle Ford will peak •    The eyebrow-raising predictions for the Permian Basin •    Why […]

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Weekly Natural Gas Storage Report

    Historical Comparisons Stocks billion cubic feet (Bcf)   Year ago (02/28/13) 5-Year average (2009-2013) Region 02/28/14 02/21/14 net change implied flow   (Bcf) % change (Bcf) % change East 525     607     -82     -82       933     -43.7     895     -41.3     West 190     217     -27     -27       346     -45.1     304     -37.5     Producing 481     524     -43     -43       825     -41.7     754     -36.2         Salt 88     96     -8     -8       193     -54.4     131     -32.8         Nonsalt 393     428     -35     -35     […]

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U.S. exporting more petroleum products, EIA says

U.S. exports of petroleum products topped the 4 million barrel per day mark in December, a monthly record, the Energy Information Administration said. EIA said the United States exported 4.3 million barrels per day worth of products ranging from gasoline to jet fuel in December, the first time exports topped 4 million bpd for any single month. Not counting the United States, EIA said in its weekly petroleum report published Wednesday that global consumption of petroleum products increased 7.6 percent from 2008 to 6.5 million barrels per day last year. "Since 2008, exports of petroleum products from the United States have increased 1.7 million bpd, supplying about 25 percent of the growth in petroleum product demand outside of the United States," the administration said. Nearly three quarters of the petroleum products leave the United States from the Gulf Coast, home to about 50 percent […]

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Exxon stresses diversity in future growth agenda

Exxon Mobil Corp. Chairman Rex Tillerson said a diverse portfolio is a central part of his company’s production agenda for 2014. Tillerson said the company plans to start production from 10 separate projects this year, adding approximately 300,000 net barrels of oil equivalent per day to its portfolio. Exxon singled out a liquefied natural gas project in Papua New Guinea, gas developments in Russia, projects in the Gulf of Mexico and oil sands operations in Canada as among the major programs scheduled for this year. "These projects exemplify our focus on maintaining a diversified portfolio and highlight our ability to grow profitable volumes," he said in a statement Wednesday. Combined, projects on the books for Exxon should add 1 million net oil equivalent barrels per day to its portfolio by 2017, he said. Tillerson said the company has a "disciplined" approach to spending, […]

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Keystone XL’s Factions in Late Rush to Coax U.S. Over Pipeline

Proponents and critics of Keystone XL are unleashing a final flurry of pleas to persuade the government on the pipeline, which has become a flash point in a debate over energy development versus climate protection. The public has until the end of today to be part of the official review of whether Keystone is in the national interest. After that Secretary of State John Kerry will weigh in and President Barack Obama will decide whether to approve or scrap the long-delayed $5.4 billion plan by TransCanada Corp. to bring fuel from Alberta ’s oil sands to Gulf Coast refineries. Most of the more than 15,000 comments submitted through yesterday reiterate arguments made during five years of review. Proponents said Keystone would create jobs and boost U.S. energy security. Foes said the project would worsen climate change by promoting development of Alberta’s oil sands. “lets get-r-done NOW,” urged one commentator, […]

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Musings: Fewer December Bakken Wells Point Out Shale Challenge

Data published by the North Dakota Industrial Commission’s Department of Mineral Resources (DMR) showed a 48,305 barrel-a-day decline in the state’s production for the month of December. The report attributed the production decline primarily to the severe winter weather that hit the state at the end of last year. According to the DMR, the state experienced low temperatures of 21 to 31 degrees below zero, four major snow storms and five major wind storms in December. Oil production for November had climbed by 31,278 barrels a day to 911,292 barrels a day, for a 3.6% increase over October’s level. The production drop in December was 5.3%. The production decline, which was clearly impacted by weather, may also be demonstrating that there is a fundamental slowing in output and activity underway, which is not a good omen for the future for […]

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US rail congestion forcing utilities to idle units due to dwindling coal stocks

Washington (Platts)–6Mar2014/404 pm EST/2104 GMT Increased congestion across the US rail network due to several weeks of extreme winter cold has forced some utilities to pull coal-fired units out of service in order to preserve dwindling stockpiles, according to testimony Thursday at the Rail Energy Transportation Advisory Committee meeting at the US Surface Transportation Board. Jeff Wallace, vice president of fuel services for Atlanta-based Southern Company, told STB commissioners and energy and railroad executives the cold weather has increased the company’s coal burn "significantly" and that a number of utilities are "very concerned about our ability to get [coal] supplies." Wallace estimated coal burn this winter will be more than 15 million st above industry projections due to the cold weather. Article continues below… Request a free trial of: Coal Trader Platts Coal Trader provides:The latest prices for key benchmark coals Daily pricing for tons and allowances for SO2 […]

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Ethanol shippers avoiding Chicago bottleneck to supply low-stocked East Coast

US railroads are rerouting ethanol shipments to avoid bottlenecks in Chicago, particularly for delivery to the East Coast, where supplies are running low, rail company officials said Thursday. David Garin, BNSF’s vice president of industrial products, said Chicago — already congested as the US’ busiest freight rail hub — has been severely impacted by winter weather, leading to delays on routes using interchanges there for all commodities. Though BNSF does not serve East Coast markets, Garin was speaking at a meeting of the US Surface Transportation Board’s Rail Energy Transportation Advisory Committee as a representative of the rail industry. "Chicago is a big challenge for us," Garin said. "We’ve looked at longer routing. It may not seem to make sense to [ship ethanol on rail] through Arkansas to the East Coast, but right now where we’re trying to avoid interchanges in Chicago." Ethanol inventories […]

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Canadian Regulators Say Oil in Train Accident Was as Volatile as Gasoline

Canadian regulators said the crude oil on a train that derailed in a Quebec town last July and killed 47 people was as volatile as gasoline, highlighting the potential danger of crude shipments by rail. The report by Canada’s Transportation Safety Board marked the first time that government officials have reported comprehensive test results from the train’s oil, which was traveling from North Dakota’s Bakken Shale formation to a refinery in New Brunswick. The safety board said the oil had a flash point, the temperature at which a fire can ignite, "similar to that of unleaded gasoline." The results confirmed a Wall Street Journal analysis published last month that showed Bakken oil contains more combustible gases than oil from elsewhere. The samples in the Quebec incident were taken from cars that didn’t explode at the accident site and another train carrying oil of the same origin. Canadian regulators previously […]

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Moody’s: Ukraine line shutdown could cost Europe 56 bcm of gas

In the event of a complete stoppage in Russian natural gas transit via Ukraine, Europe will experience a gas deficit of as much as 56 billion cu m (bcm) during 2014, said Moody’s Investors Service in a recent Global Credit Research report. Such a shortfall would predominantly affect Italy, Turkey, France, the Czech Republic, Slovakia, and Austria. Warmer weather conditions, however, seasonal reductions in demand, and relatively high current gas stockpiles would to an extent mitigate the negative effects, Moody’s said. Ukraine also officially confirmed earlier this week that it would deliver gas to Europe under its 11-year transit agreement with Gazprom signed in 2009. The evolving situation in Ukraine adds uncertainty to the reliability of Gazprom’s natural gas exports via Ukraine’s 143 bcm/year Soviet-era pipeline network, which connects Gazprom’s gas transportation system with the European gas network in Poland, Slovakia, Hungary, Romania, and Moldova, said Moody’s. Prolonged turmoil […]

Posted On : Published By : Tom Whipple
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IEA sees no energy disruptions through Ukraine

PARIS, March 6 (UPI) — The International Energy Agency said it is keeping close watch over natural gas transits through Ukraine to Europe, but hasn’t observed a physical disruption. Russian Prime Minister Dmitry Medvedev this week warned Ukraine may face consequences because of its outstanding debt obligations to Russian energy company Gazprom. Europe gets about a quarter of its natural gas from Russia, though the majority of that runs through the Soviet-era pipeline network in Ukraine. Gazprom in 2009 cut natural gas supplies through Ukraine because of debt issues, though IEA said in a briefing Wednesday there has been "no physical disruption in supplies of crude oil or natural gas transiting Ukraine to Europe." The European community in response to the 2009 debt row started looking to diversify its energy market. IEA said gas transit through Ukraine to Europe increased 4.3 percent from 2012 to 2.9 trillion cubic feet, […]

Posted On : Published By : Tom Whipple
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API says LNG answer to European energy woes

WASHINGTON, March 6 (UPI) — Ukraine and Eastern European allies could benefit for the U.S. shale gas revolution, but bureaucracy is in the way, the American Petroleum Institute said. API Upstream Director Erik Milito said exporting more liquefied natural gas from the United States could help allies in Europe who are dependent on Russia for their natural gas supplies. An "energy revolution" in the United States means the country is now one of the world’s leading natural gas producers. More exports in the form of liquefied natural gas could add a layer of security to the European energy market, he said. "Unfortunately, the slow pace of federal approval for U.S. LNG export facilities has stalled the construction of infrastructure, weakening our competitive position," he said in a statement Wednesday. The majority of Russian natural gas sent to European markets passes through the Soviet-era transit network in Ukraine. Russian energy […]

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Centrica warns of uncertain British gas future

The British economy needs to outline plans to enhance energy security as it starts to rely more on imports to meet gas demands, the head of Centrica said. Sam Laidlaw, chief executive officer at Centrica, told the audience at the CERAWeek energy conference in Houston natural gas production from the British waters of the North Sea has declined substantially during the last three years. "By 2020 we will be reliant on imports to meet 70 percent of the country’s gas needs," he said in his Wednesday address. "So when it comes to security of supply, there is a pressing need for solutions." Centrica in November signed a 4 1/2 year contract to purchase as much as 3 million tons of liquefied natural gas a year from Qatar. British Energy Minister Michael Fallon said "reliable suppliers like Qatar are vital for our future energy security." […]

Posted On : Published By : Tom Whipple
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Ukraine Crisis Means Drill Baby Drill

Page added on March 6, 2014 Russia’s invasion of the Crimea is a tipping point event that will further spur the North American oil boom.  The European Union (EU) and United Statesin 2008 threatened toslap economic sanctions on Russia for invading Georgia.  But after a while the criticism faded and sanctions threats were quietly dropped, because the EU is almost entirely reliant on Russia for energy supplies. A similar situation is unfolding today as the EU and U.S. are again making false threats they will to stop exports of Russian oil and gas as punishment for invading the Ukraine.  But due to the latest humiliation by the Russians, a consensus is emerging that will demand the United States and its North American partners “drill baby, drill” for national security. Twenty years ago on January 1st the United States, Mexico, and Canada implemented the North American Free Trade Agreement. The […]

Posted On : Published By : ASPO-USA
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Peak oil demand: maybe here, but not there

For years, meaning until the arrival of U.S. shale production, much ink was spilled on the concept of “peak oil” — the argument that the world was fast approaching an absolute maximum of crude oil that can be produced on a  daily basis. Shale production has put the kabosh on that for the time being, but there’s another “peak” to argue about, and it’s peak demand. Oil consumption in Western Europe, Japan and the United States has  been declining since about 2005. Have we hit “peak demand?” Not hardly, at least not worldwide, agreed three panelists at the ongoing IHS/CERAWeek energy conference in Houston. Demand from Asia and the developing world will more than offset declines in OECD nations, said the panelists, all refiners. Bill Klesse, CEO of San Antonio-based Valero Energy, said world crude oil demand can be expected to grow about 1 million barrels per year through 2025. […]

Posted On : Published By : ASPO-USA
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Reasons for our Energy Predicament: An Overview

Quiz: What will cause world oil supply to fall? Too little oil in the ground Oil prices are too low for oil producers Oil prices are too high for oil consumers leading to recession, debt defaults, and ultimately a cut back in credit availability and very low oil prices Oil exporters are subject to civil unrest and overthrow of governments, due to low prices and/or depleting reserves Lack of money (and physical resources that might be purchased with this money) to pull oil out of the ground. Pollution related issues–too much smog in China; too many problems with fracking; too many problems with CO2. The financial current system fails, and can only be replaced by one that allows much less debt. Oil prices remain too low under such a system. In my view, any answer other that the first one is likely to be at least partially right. Ultimately, […]

Posted On : Published By : Tom Whipple
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WTI Falls for Third Day as U.S. Crude Stockpiles Gain

West Texas Intermediate declined for a third day after U.S. crude inventories increased while tension in Ukraine continued to ease. Brent was little changed. Futures dropped as much as 0.6 percent in New York , extending a 1.8 percent loss yesterday, the most in two months. Crude stockpiles gained for a seventh week while supplies at Cushing in Oklahoma , the delivery point for WTI contracts, slid to the lowest level in two years with the opening of a new pipeline. U.S. and Russian ministers met yesterday in Paris to try and resolve the stand-off in Ukraine. “Crude has been falling since Monday as the geo-political risk drops off,” Thina Saltvedt, an analyst at Oslo-based Nordea Markets, said by phone. “The Ukraine risk premium has disappeared for now as we are at least getting dialogue between Russia and the West.” WTI for April delivery dropped as much as 59 […]

Posted On : Published By : Tom Whipple
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Demand Fears Dent Oil Futures

Crude-oil futures were mixed in Asian trading hours Thursday after a sharp overnight drop on the lack of big headlines from Ukraine and signs of slowing oil demand in the U.S. On the New York Mercantile Exchange light, sweet crude futures for delivery in April traded at $100.96 a barrel at 0612 GMT–down $0.49 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.18 to $107.94 a barrel. Both Nymex and Brent crude have fallen sharply for two straight sessions after the surge in prices earlier this week when Russian troops took control of the Crimean peninsula. U.S. domestic oil inventories rose by 1.4 million barrels in the week ended Feb. 28, data from the U.S. Energy Information Administration showed. Analysts expected an overall increase of 1 million barrels. However, the real surprise for markets was the 1.4 million-barrel build-up in distillate stocks compared […]

Posted On : Published By : Tom Whipple
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Natural Gas Slides as End of Winter Approaches

Natural-gas futures extended a weekslong slide with a 3.1% decline Wednesday, as traders unwound bullish positions with the end-of-winter heating season approaching. Gas futures for front-month April delivery fell 14.4 cents to $4.5230 on the New York Mercantile Exchange, nearly eliminating all of their prior-day gains. Prices have slid more than 25% since hitting a high of $6.15 Feb. 19. Natural gas fires home heating for more than half of the U.S., and the gas market surged more than 50% in the early months of the year amid an extraordinarily cold winter season. Prices are beginning to decline since the March contract expired and contracts for warmer months take over most of the volume in the market. "We’re facing lower demand levels coming […]

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Iraq returns as world's fastest-growing oil exporter

* Iraq boosts February exports to 35-year high * Oil execs say more Iraqi growth possible in 2014 * OPEC delegates relaxed, for now, about extra Iraqi oil By Alex Lawler and Peg Mackey LONDON, March 5 (Reuters) – Iraq is reclaiming its rank as the world’s fastest-growing oil exporter, cushioning consumers from Libyan supply outages for now and, perhaps, reviving OPEC market share rivalries down the road. Despite worsening violence due to spillover from the war in Syria, Iraq – already OPEC’s second-largest producer – is likely to post one of the biggest annual output jumps in its history as BP, Exxon Mobil and other companies tap its southern fields, which are untouched by the unrest. With many export bottlenecks now cleared at the southern Basra terminals – from which almost all of Iraq’s crude is shipped – Baghdad is expected to keep up, or even exceed, the […]

Posted On : Published By : Tom Whipple
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Iraq returns as world’s fastest-growing oil exporter

* Iraq boosts February exports to 35-year high * Oil execs say more Iraqi growth possible in 2014 * OPEC delegates relaxed, for now, about extra Iraqi oil By Alex Lawler and Peg Mackey LONDON, March 5 (Reuters) – Iraq is reclaiming its rank as the world’s fastest-growing oil exporter, cushioning consumers from Libyan supply outages for now and, perhaps, reviving OPEC market share rivalries down the road. Despite worsening violence due to spillover from the war in Syria, Iraq – already OPEC’s second-largest producer – is likely to post one of the biggest annual output jumps in its history as BP, Exxon Mobil and other companies tap its southern fields, which are untouched by the unrest. With many export bottlenecks now cleared at the southern Basra terminals – from which almost all of Iraq’s crude is shipped – Baghdad is expected to keep up, or even exceed, the […]

Posted On : Published By : Tom Whipple
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Gazprom Neft ties Iraqi oil fields to main pipeline network

Russian oil company Gazprom Neft said Wednesday it connected two oil fields in eastern Iraq to the country’s central pipeline network. The company said it completed laying, testing and connecting a 100-mile oil pipeline from the Badra oil field in Wasit province to the Gharraf oil field in neighboring Nassariya province. "With infrastructure already in place at Gharraf, completion of the pipeline from Badra means that the field is now connected to the main Iraqi pipeline system," the company said in a statement. Gazprom Neft said the new system can support about 204,000 barrels of oil per day for an export terminal at the southern port city of Basra. Gazprom Neft serves as the operator at Badra in a consortium that includes Korean and Brazilian counterparts. The company is operating under the terms of a 2009 agreement with the Iraqi government to develop the […]

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Gunmen seize city council in Iraq's Samarra

An armed group in military uniform has seized the city council headquarters in the Iraqi city of Samarra and taken employees hostage, the second such attack in recent months. Two fighters, possibly wearing explosives-rigged vests or belts, seized the Samarra city council building on Tuesday morning with an unknown number of employees inside, security officials said. "The gunmen are in the council building," Police Lieutenant Dhafir Ahmed said, according to Reuters news agency. "Local council employees and court employees are trapped inside." Clashes broke out between the fighters and security forces, and a suicide bomber detonated an explosives-rigged vehicle near police and militia forces when they arrived at the scene. The blast wounded 24 people, most of them police, a doctor and an officer said, according to AFP news agency. The doctor also said that the deputy head of the city council […]

Posted On : Published By : Tom Whipple