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Japan’s Answer to Fukushima: Coal Power

Japan is turning into a rare bright spot in the world coal market, stepping up coal-fired power generation to replace nuclear plants that went offline after the 2011 Fukushima accident. Plans by Japanese companies to spend billions of dollars on new coal-fired plants offer a striking contrast with the U.S., which has effectively blocked new coal plants using existing technology over concerns about global warming. And they show how deeply Japan’s energy picture has changed since the March 2011 earthquake and tsunami caused meltdowns at Fukushima Daiichi nuclear reactors. On Thursday, Kyushu Electric Power Co. said it would restart a long-frozen project to build a one-gigawatt coal-fired unit in southern Japan. Other utilities including Co. have announced similar plans for more coal-fired power. If the plans all come to fruition, Japan’s coal-fired power capacity would increase to around 47 gigawatts over the next decade or so, up 21% from […]

Posted On : Published By : Tom Whipple
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Facing Rising Seas, Bangladesh Confronts the Consequences of Climate Change

When a powerful storm destroyed her riverside home in 2009, Jahanara Khatun lost more than the modest roof over her head. In the aftermath, her husband died and she became so destitute that she sold her son and daughter into bonded servitude. And she may lose yet more. Ms. Khatun now lives in a bamboo shack that sits below sea level about 50 yards from a sagging berm. She spends her days collecting cow dung for fuel and struggling to grow vegetables in soil poisoned by salt water. Climate scientists predict that this area will be inundated as sea levels rise and storm surges increase, and a cyclone or another disaster could […]

Posted On : Published By : Tom Whipple
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Crude oil inventories at Cushing, Oklahoma hub down 32% over the past two months

Source: U.S. Energy Information Administration, Weekly Petroleum Status Report Crude oil inventories at Cushing, Oklahoma, the primary crude oil storage location in the United States, decreased 13 million barrels (32%) over the past two months. On March 21, Cushing inventories were less than 29 million barrels, more than 20 million barrels lower than a year ago and the lowest level since early 2012 . Cushing is the delivery location for the New York Mercantile Exchange (Nymex) West Texas Intermediate (WTI) crude oil futures contract. The recent drawdown of stocks at Cushing resulted from three factors: The startup of TransCanada’s Cushing Marketlink pipeline, which is now moving crude oil from Cushing to the U.S. Gulf Coast Sustained high crude oil runs at refineries in Petroleum Administration for Defense Districts (PADD) 2 (Midwest) and 3 (Gulf Coast), which are partially supplied from Cushing Expanded pipeline infrastructure and railroad shipments that have […]

Posted On : Published By : Tom Whipple
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Weekly Natural Gas Storage Report

Working gas in storage was 896 Bcf as of Friday, March 21, 2014, according to EIA estimates. This represents a net decline of 57 Bcf from the previous week. Stocks were 899 Bcf less than last year at this time and 926 Bcf below the 5-year average of 1,822 Bcf. In the East Region, stocks were 419 Bcf below the 5-year average following net withdrawals of 39 Bcf. Stocks in the Producing Region were 378 Bcf below the 5-year average of 754 Bcf after a net withdrawal of 15 Bcf. Stocks in the West Region were 129 Bcf below the 5-year average after a net drawdown of 3 Bcf. At 896 Bcf, total working gas is below the 5-year historical range. The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2009 through 2013. Source: Form EIA-912, "Weekly Underground Natural Gas […]

Posted On : Published By : Tom Whipple
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U.S. Energy Information Administration – EIA – Independent Statistics and Analysis

Price volatility falls to prewinter levels as storage injection season nears Natural gas markets entered January 2014 with low storage levels, following heavy withdrawals at the end of 2013. In January 2014, Lower 48 working inventories fell to a 10-year low, as freezing temperatures led to record natural gas demand and storage withdrawals. Significant inventory drawdowns continued into February 2014 , further tightening the balance between natural gas supply and demand and leading to increased natural gas spot price volatility, before relatively less severe temperatures in March brought spot price volatility back to prewinter levels. The Henry Hub natural gas spot price spiked on many days in January and February. As the winter progressed, increased spot price volatility led to increased interest in monthly delivery contracts, which provide a measure of protection against daily price fluctuations. This was particularly the case during the final three days of trading (bidweek) […]

Posted On : Published By : Tom Whipple
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Ethanol Rises Above $3 a Gallon for First Time Since 2011

Ethanol futures rose above $3 for the first time since 2011 amid demand from refineries and blenders before U.S. gasoline use rises with warmer weather. Distillers are facing delays transporting the ethanol they produce to markets after winter storms slowed deliveries and competition for rail cars forced ethanol plants to slow production . A 2007 U.S. law requires the biofuel, mostly made from corn, to be blended into gasoline, so higher ethanol costs can boost prices at the pump. Inventories last week were down 10 percent from a year earlier, according to government data. “We’re moving into the driving season, and refineries want more ethanol than they’re able to get,” Chris Wilson , an analyst at Atten Babler Risk Management LLC in Galena, Illinois , said in a telephone interview. “Also, logistics continue to be a big component.” Denatured ethanol for April delivery gained 7.3 cents, or 2.5 percent, […]

Posted On : Published By : Tom Whipple
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U.S. energy export options limited, Senate hears

It’s oil, not gas, that will increase U.S. leverage in the overseas market more quickly, the chairman of the largest stakeholder in North Dakota’s oil said. The U.S. House Foreign Relations Committee heard testimony Wednesday on how best to exploit the glut of oil and natural gas brought on by the shale boom in the United States. With Russia aggravating Western leaders over its reaction to the Ukrainian crisis, U.S. policymakers say easing some of the restrictions on oil and gas exports could weaken the Kremlin’s influence in Eastern Europe. Harold Hamm, chairman of Continental Resources Inc., the largest stakeholder in North Dakota oil fields, said the oil spigot would be easier to open. While Russia’s primary "energy weapon" is gas, the United States lacks the infrastructure to have an immediate impact. "If we want to have an overnight impact on today’s global events, we can immediately begin exporting […]

Posted On : Published By : Tom Whipple
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KMEP to build Permian carbon dioxide pipeline

Kinder Morgan Energy Partners LP will build and operate a 213-mile, 16-in. OD pipeline to transport carbon dioxide from its St. Johns source field in Apache County, Ariz., to the KMEP-operated Cortez Pipeline in Torrance County, NM. The Lobos Pipeline will have an initial capacity of 300 MMcfd, supporting current and future enhanced oil recovery projects owned by KMEP and other operators in the Permian basin of West Texas and eastern New Mexico. In addition the pipeline, KMEP plans to drill wells and build field gathering, treatment, and compression facilities at the St. Johns field. The company is targeting a third-quarter 2016 in-service date, pending regulatory approvals. The $300 million Lobos Pipeline will follow existing utility rights-of-way wherever possible. KMEP will spend an additional $700 million preparing St. Johns. KMEP bought the St. Johns dome CO and helium holdings from Enhanced Oil Resources Inc. in 2011 ( OGJ Online, […]

Posted On : Published By : Tom Whipple
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Obama Envisions Russia Sanctions Limiting Global Impact

The U.S. is looking to minimize the global harm from further penalties on Russia over Ukraine , as the International Monetary Fund moves forward with a multibillion-dollar lifeline to the government in Kiev. President Barack Obama said that Russia’s military, energy and finance industries are possible targets if it moves deeper in Ukraine. While additional sanctions would inevitably also affect the economies of the U.S. and Europe, Obama said, the goal is to limit the collateral damage. “Hopefully, we can design sanctions that minimize the impact on U.S. companies or Italian companies, and maximize the impact on the narrow set of interests in Russia that help drive the decisions that they’re making,” he said yesterday at a news conference in Rome with Italian Prime Minister Matteo Renzi. Obama spoke hours after the IMF unveiled a preliminary accord with Ukraine for a two-year loan of $14 billion to $18 billion […]

Posted On : Published By : Tom Whipple
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Crude oil inventories at Cushing, Oklahoma hub down 32% over the past two months

Crude oil inventories at Cushing, Oklahoma, the primary crude oil storage location in the United States, decreased 13 million barrels (32%) over the past two months. On March 21, Cushing inventories were less than 29 million barrels, more than 20 million barrels lower than a year ago and the lowest level since early 2012 . Cushing is the delivery location for the New York Mercantile Exchange (Nymex) West Texas Intermediate (WTI) crude oil futures contract. The recent drawdown of stocks at Cushing resulted from three factors: The startup of TransCanada’s Cushing Marketlink pipeline, which is now moving crude oil from Cushing to the U.S. Gulf Coast Sustained high crude oil runs at refineries in Petroleum Administration for Defense Districts (PADD) 2 (Midwest) and 3 (Gulf Coast), which are partially supplied from Cushing Expanded pipeline infrastructure and railroad shipments that have […]

Posted On : Published By : Tom Whipple