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China Announces 12.2% Increase in Military Budget

China announced on Wednesday that it would increase its military budget for 2014 to almost $132 billion, a 12.2 percent rise over last year. The rapid growth in defense spending is another sign of the country’s goal of becoming a dominant military presence in the Pacific, with a navy able to project power across the region. The rate of growth in spending is greater than that of recent years. In 2013, China’s defense budget increased by 10.7 percent over the previous year. The country’s military spending is the second largest in the world, behind that of the United States. The buildup of the People’s Liberation Army, which also includes navy and air force branches, is considered by many analysts to be consistent with the size of China’s economy — the second largest in the world — and its global political influence. Nevertheless, the military expansion is being […]

Posted On : Published By : Tom Whipple
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BP to Carve Out U.S. Onshore Assets

BP PLC said Tuesday that it would create a new business to manage its onshore oil and natural-gas assets in the U.S.’s lower 48 states. The decision is an attempt to reverse the struggles that BP—along with other large oil companies—has had trying to coax profits from the North American shale boom. By operating its U.S. onshore assets through a separate, wholly owned company, BP hopes to "compete more effectively with the independents"—the kind of smaller, nimbler producers that have profited on the shale boom, Chief Executive Bob Dudley said at a Tuesday investor meeting. The announcement came as part of a strategy presentation that Mr. Dudley and other executives made to investors in London Tuesday. BP has been retrenching since its 2010 Macondo explosion and oil spill in the Gulf of Mexico, having sold about $40 billion in assets over the past few years with plans to sell […]

Posted On : Published By : Tom Whipple
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Murkowski said U.S. crude oil exports make sense

U.S. Sen. Lisa Murkowski , R-Alaska, said the country has a "golden opportunity" to capitalize on oil production growth if the government allows for exports. Legislation enacted in response to the Arab oil embargo in the 1970s limits U.S. options for crude oil exports. Murkowski told an audience at the CERAWeek energy conference in Houston she will call on the U.S. Energy Information Administration, part of the Energy Department, to study the economic impacts of lifting the ban. "The United States cannot squander the golden opportunity that technology, geology and American grit have bestowed upon us," she was quoted by energy news website Rigzone as saying Monday. Murkowski, ranking member of the Senate Energy and Natural Resources Committee, heard testimony in January about the prospects of exporting more crude oil. Graeme Burnett, a senior vice president from Delta Air Lines , which owns a […]

Posted On : Published By : Tom Whipple
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U.S. oil group questions EPA rules, auto sector sings praise

Representatives from the automotive sector praised U.S. rules for lower emissions, though the oil industry said it questioned the benefits. The U.S. Environmental Protection Agency introduced new so-called Tier 3 standards Monday aimed at cutting the amount of sulfur in gasoline by two-thirds by 2017. The EPA said the new standards would lower the health risks from smog and other airborne pollutants at pennies on the dollar. Michael Stanton, president of the Global Automakers Association, which represents the interests of companies ranging from Aston Martin to Toyota, said the standards would provide "instant benefits" to consumers as well as the environment. "This rule-making will reduce emissions from the existing fleet of vehicles on our roads today and opens the door for even cleaner cars in the future," he said in a statement Monday. Bob Greco, the director of downstream operations at the American Petroleum […]

Posted On : Published By : Tom Whipple
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Sieminski Says EIA Ready to Analyze Impact of U.S. Crude Exports

The U.S. Energy Information Administration is “quite prepared” to review how American exports of crude oil would affect global markets as domestic production is expected to reach about 10 million barrels a day by 2017, agency Administrator Adam Sieminski said. Sieminski said a review should consider how crude exports would affect U.S. refining operations and foreign sales of other petroleum products. “I think we can address each one of these,” he said today at the IHS CERAWeek energy conference in Houston. The goal would be to “create building blocks” for policy makers to make sense of the issues involved, Sieminski said. As to whether the U.S. should export crude oil, Sieminski said “that’s a policy question” and not one he should answer. Sieminski’s comments came in response to a request yesterday from Senator Lisa Murkowski , an Alaska Republican and ranking member of the Senate Committee on Energy and […]

Posted On : Published By : Tom Whipple
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U.S. LNG can contain Russia, Upton says

Getting more U.S. natural gas to the international market will reduce Russia’s influence in Eastern Europe, U.S. Rep. Fred Upton, R-Mich., said. Upton, chairmen of the Natural Resources Committee, has described the natural gas sector as the "bright spot" in the U.S. economy. Now it’s time to use that advantage for international gain, he said, through more exports of liquefied natural gas. "Expanding U.S. LNG exports is an opportunity to combat Russian influence and power, and we have an energy diplomacy responsibility to act quickly," he said in a statement Monday. European consumers get about 20 percent of their natural gas from Russia, though most of that runs through a Soviet-era pipeline network in Ukraine. Washington has expressed concern about Moscow’s reaction to the February ouster of Ukrainian President Viktor Yanukovych , a Kremlin ally. Upton said bureaucracy at the U.S. Energy Department meant […]

Posted On : Published By : Tom Whipple
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IHS CERAWeek: Russia, West will have to cooperate to resolve Ukraine issues

Russia’s Energy Minister Alexander Novak cancelled his Mar. 4 appearance at IHS CERAWeek given rising tensions between Russia and the Ukraine, and conference panelists discussed the emerging geopolitical situation and what it might mean for energy. Thane Gustafson, IHS senior director of Russian and Caspian energy, said an interim government is going to have to maintain order in Ukraine and to find candidates for an upcoming presidential election. “Ukraine needs fixing,” Gustafson said, adding that he believes “Moscow and the Western countries have to work together” toward a peaceful resolution. Angela Stent, Georgetown University professor in Washington, DC, and an author on US-Russian relations, said, “This isn’t the Cold War…but it has the feel of a Cold War.”  She noted “a huge difference” between Russia and the defunct Soviet Union. “This is the worse time in relations between Russia and the West since the collapse of the Soviet Union,” […]

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U.S. Does Have Weapon vs. Putin: Energy

Is it true that the U.S. has few real options to pressure Vladimir Putin to get out of Ukraine? How about a straight business statement from Washington like this: "We are delighted to announce that the U.S. is accelerating its plans to export natural gas and will soon reverse our virtual ban on oil exports. We have such abundant, new supplies of gas and oil in America that we look forward to becoming a major supplier to world markets. And the first customers we aim to serve are our good friends in Europe." These are friends, we’re again reminded by events this week, who are currently hostage to energy supplied by Russia. To date, America’s debate over what to do with its sudden wealth of energy has been about business, economics and the environment—not about securing U.S. interests abroad. Companies like Exxon Mobil , ConocoPhillips and Royal Dutch Shell […]

Posted On : Published By : Tom Whipple
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The well is running dry for big oil

Page added on March 3, 2014 Last week, I mused on the death of cars and big-picture factors working against the auto industry, including urbanization and declining driving rates in younger Americans. Now, I’ll trot out my crystal ball again and offer you another prediction: This is the beginning of the end for Big Oil, too. Now before you jump down my throat for trolling you again with hyperbole, I will state up front that I don’t expect Exxon Mobil XOM -1.01%  , BP BP -2.13%  and Chevron CVX -0.69%   to disappear tomorrow any more than I expect I-95 to start sprouting daisies. But as with the decline of automobile ownership — and in part because of it — we may also be witnessing a protracted decline in major energy stocks and fossil fuel demand. That’s bad for big oil, and bad for investors in these stocks. Efficiency […]

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Mackenzie: Keep Markets Free, Address Climate Challenges

More At IHS CERAWeek Tuesday, Andrew Mackenzie, BHP Billiton Ltd.’s chief executive officer, gave a keynote speech where he addressed the importance of the free market in marketing fossil fuels for the foreseeable future, while also addressing climate change. It is possible, he said, to use fossil fuels while also making use of technology to reduce emissions. While best known for being in the coal business – it is the largest mining company in the world – BHP Billiton has also been a player in the oil and gas industry since the 1960s. Today, BHP has a global upstream business, and is a large investor in U.S. shale, and has operations in the Gulf of Mexico. BHP also supplies oil, gas, coal and uranium, and Mackenzie said many say it will take an “all of the above” approach to meet energy demand. The company focuses on geology, technology and […]

Posted On : Published By : Tom Whipple