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Shale drillers with fewer, but better sites rewarded on Wall Street

A new breed of energy company is a hit with investors using a mantra long scorned in the oil-and-gas business: Small is beautiful. When the U.S. energy boom began almost a decade ago, the companies leading the way believed bigger was better. They amassed huge land holdings so they could drill thousands of wells—and then struggled as the freed through hydraulic fracturing pushed down prices. Like their bigger rivals, the upstarts frack to tap previously untouchable oil and gas deposits in dense shale formations. But these companies have focused on the right property instead of the most property—and raked in big stock paydays as a result. For the most part, neither the less-is-more upstarts, nor the bigger-is-better graybeards are bringing in more than they spend to drill and frack. The difference is that Wall Street no longer is throwing cash at established shale players holding loads of acreage. "It’s […]

Posted On : Published By : Tom Whipple
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Lifting U.S. oil export ban would mean greater dependence on foreign oil

The United States today is a large net importer of crude oil and refined products . And, yet the story that the country can somehow export crude oil as a foreign policy measure to help reduce Ukraine’s dependence on Russia won’t die. Oil executives and their surrogates keep bringing it up, and unsuspecting reporters amplify a message that has absolutely no basis. The reason for this oil industry public relations blitz on the Ukraine is rooted in the industry’s desire to end a decades-old ban on U.S. crude oil exports–one which the industry hopes to persuade Congress and President Obama to overturn. There is, in fact, a case regarding market efficiency for overturning the ban, but this is NOT the one the industry is using in its public relations campaign. Here’s why: The major effect of lifting the ban would be to allow domestic producers to sell lighter grades […]

Posted On : Published By : Tom Whipple
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Hydraulic Fracturing: Staying Afloat in Times of Tightening Water Supply

One of the criticisms levied against hydraulic fracturing, particularly during recent periods of drought, is the amount of water used in the process. However, energy companies are seeking to reduce water use during hydraulic fracturing, even as research shows more water is used in other activities. The numbers put things into perspective. The amount of water used to frack a well varies, but most reporting entities put the figure in a range of about 3 to 6 million gallons of water. In Pennsylvania, the average amount of water per well is about 4.4 million gallons, according to State Impact Pennsylvania, a reporting project of National Public Radio (NPR). Using a range of 3-5 million gallons of water per well in the Marcellus Shale, the State College Borough Water Authority calculated that about 12-20 million gallons of water were used in the formation each day. In Texas, the estimated average […]

Posted On : Published By : Tom Whipple
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Gas Prices Continue To Surge, Reach $4 In Some Cities

Gas prices continue to move sharply higher as the Memorial Day driving seasons approaches. Nationwide, the average price of a gallon of regular unleaded gas has reached $3.667. A month ago, the price was $3.538 according to AAA’s Daily Fuel Gauge Report. The average price of a gallon of premium has crossed $4 nationwide to $4.010. The prices increases are geographically uneven. In some large cities, regular has already risen well above $4. As higher prices spread, so do questions about the damage gas prices could do to the economy. California is the largest state in the U.S. with about 12% of the population. The price for an average gallon of regular there has topped $4.199. In some California cities,  the situation is worse. The price of an average gallon of regular is $4.288 in Los Angeles, and $4.274 in San Francisco. Many of the other states which have […]

Posted On : Published By : Tom Whipple
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Deadly gun attack in eastern Ukraine shakes fragile Geneva accord

SLAVIANSK/YENAKIEVO, Ukraine (Reuters) – At least three people were killed in a gunfight in the early hours of Sunday near a Ukrainian city controlled by pro-Russian separatists, shaking an already fragile international accord that was designed to avert a wider conflict. The incident triggered a war of words between Moscow and Ukraine’s Western-backed government, with each questioning the other’s compliance with the agreement, brokered last week in Geneva, to end a crisis that has made Russia’s ties with the West more fraught than at any time since the Cold War. The separatists said armed men from Ukraine’s Right Sector nationalist group had attacked them. The Right Sector denied any role, saying Russian special forces were behind the clash. Failure of the Geneva agreement could bring more bloodshed in eastern Ukraine, but may also prompt the United States to impose tougher sanctions on the Kremlin – with far-reaching consequences for […]

Posted On : Published By : Tom Whipple
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Douglas Westwood Says the Oil Industry Needs a Common Voice

Douglas-Westwood (DW), a UK-headquartered provider of energy business strategy, research and commercial due-diligience services, explained why "The Oil Industry Needs a Common Voice" in its latest edition of DW Monday. There is a major gap between the realities of oil & gas and the public understanding of its fundamental importance to society. To many, filling the SUV (sport utility vehicle) is just a tax on driving and natural gas an overpriced monthly charge on home ownership. Few realize the sheer scale of the industry, its huge financial commitment and the dedication of the people involved in its day-to-day operations. Oilman, like banker, has become a dirty word.  All too often the reasons for the industry to make the headlines are the very negative ones, such as the human and environmental tragedy of Macondo and long before that the recently commemorated Piper Alpha disaster .  But there are another group […]

Posted On : Published By : Tom Whipple
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Has crude oil production already peaked?

“Wait a minute,” you must be saying. “Haven’t we been hearing from the oil industry and from government and international agencies that worldwide oil production has been increasing in the last several years?” The answer, of course, is yes. But, the deeper question is whether this assertion is actually correct. Here is a key fact that casts doubt on the official reporting: When the industry and the government talk about the price of oil sold on world markets and traded on futures exchanges, they mean one thing. But, when they talk about the total production of oil, they actually mean something quite different–namely, a much broader category that includes all kinds of things that are simply not oil  and that could never be sold on the world market as oil. I’ve written about this issue of the true definition of oil before.  But Texas oilman Jeffrey Brown has been […]

Posted On : Published By : ASPO-USA
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Obama signs law to bar Iran diplomat from serving in U.N. post

President Barack Obama signed a law on Friday that effectively bars an Iranian diplomat from serving as an envoy at the United Nations because of suspicions he was involved in the 1979-81 Tehran hostage crisis. Obama signed a law passed by the U.S. Congress that blocks any individual from entering the United States who has been found to have been engaged in espionage or terrorist activity against the United States or if that person may pose a threat to U.S. national security. The United States had already said it would not grant a visa to Iran’s proposed U.N. ambassador, citing the envoy’s links to the 1979-1981 hostage crisis. Obama had come under strong pressure not to allow Hamid Abutalebi into the country to take up his position in New York. The U.S. government objects to Abutalebi because of his suspected participation in a Muslim student group […]

Posted On : Published By : Tom Whipple
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Bombs kill 4 in shopping street of Iraqi capital

Iraqi police say two bombs planted on a street full of shoppers in Baghdad have killed four people and wounded eight. They say the explosions took place in the capital’s predominantly Sunni neighborhood of Dora on Saturday morning. Later, police said a roadside bomb killed two soldiers on patrol and wounded five people in Tarmiyah, 30 miles (50 kilometers) north of Baghdad. Health officials confirmed the casualty figures. All officials spoke on condition of anonymity because they were not authorized to brief reporters. No one immediately claimed responsibility for Saturday’s attacks, but Sunni insurgent groups have stepped up attacks across the country since last year in hopes of undermining the Shiite-led government. The uptick in violence comes as Iraqis prepare to hold a crucial parliamentary election on April 30.

Posted On : Published By : Tom Whipple
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Islamist militants kill 30 in attacks around Iraq

Suspected Sunni Muslim militants killed at least 30 people around Iraq on Thursday including 12 soldiers in an assault on a remote army base in the north, deepening insecurity with a national election just two weeks away. Sectarian bloodshed has increased since the Shi’ite Muslim-led Baghdad government began an offensive against insurgents, some of them affiliated with […] Raheem Salman of Reuters reports : Suspected Sunni Muslim militants killed at least 30 people around Iraq on Thursday including 12 soldiers in an assault on a remote army base in the north, deepening insecurity with a national election just two weeks away. Sectarian bloodshed has increased since the Shi’ite Muslim-led Baghdad government began an offensive against insurgents, some of them affiliated with al Qaeda, dug in around Falluja and Ramadi in the western province of Anbar. […]

Posted On : Published By : Tom Whipple