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Libya sees ‘good intentions’ in talks with rebels, no deal yet

Libya has seen "good intentions" at indirect talks with eastern rebels which might lead to the lifting of their blockage of major oil ports within days, acting oil minister Omar Shakmak said on Thursday. Hopes have been building in oil markets that an eight-month blockage of major oil exports ports will end ever since rebels and the government said they were close to an agreement. Any deal will help the OPEC member halt its slide into instability as the weak central government has seemed unable to control militias who helped oust Muammar Gaddafi in 2011 but kept their guns and made political demands on the state. "There are good intentions," Shakmak told reporters in the eastern city of Benghazi, adding that tribal leaders and local leaders were working hard to negotiate with the port rebels. He did not elaborate. The government also gave no update, […]

Posted On : Published By : Tom Whipple
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Mexico Seeks Flexible Tax Model for Oil Industry

;Mexico is seeking to draw up a flexible tax framework for private companies interested in the opening of the country’s oil and gas industry, in a bid to become a competitive option for investors in the North American energy sector. The government and the main conservative opposition are in early talks on a blueprint that completes the historic constitutional changes passed last December. The legislation, which is the cornerstone of President Enrique Peña Nieto’s plans to lift economic growth, opens the door for the return of private firms to exploration and production activities in Mexico after a 75-year absence. The tax framework is important because it defines how much money will be paid to private investors for taking exploratory and production risks, and how much will end up in the hands of the state as the original owner of the oil and gas resources. Investors are awaiting the […]

Posted On : Published By : Tom Whipple
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China Runs Into Natural-Resources Pushback

Strategists have long feared that China’s quest for natural resources would lead to ever-higher prices, a breakdown in trade and perhaps even wars. But a stunning rebuke to Chinese manipulation last week at the World Trade Organization is a sign that the global system is far more resilient than the worriers have claimed. The ruling made public on March 26 centered on the Chinese strategy of restricting exports of raw materials—most notably rare earth elements such as cerium and neodymium used in high-tech defense and energy systems—to give Chinese companies a leg up and inflict damage on other resource consumers. The WTO panel declared the restrictions illegal and opened the door to retaliatory tariffs from the United States, Japan and others. Analysts from elite universities to the Pentagon have worried that China is "locking up" commodities from crude oil to copper, building a mercantilist alternative to the system of […]

Posted On : Published By : Tom Whipple
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Westinghouse, Ukraine Near Deal on Nuclear Fuel for Reactors

A U.S.-based energy company and Ukraine are on the verge of signing a deal that would lessen Russia’s influence and give the West greater leverage on the former Soviet republic. Westinghouse Electric Co. of Pennsylvania said on Thursday it is in negotiations to extend its contract with Ukraine energy operator Energoatom to supply nuclear fuel for reactors, a deal that would bolster the country’s commitment to long-term cooperation with the West. The talks come after the administration has extended the welcome mat to the interim Ukraine government as Kiev looks to strike deals with Western partners. In March, Ukraine’s Prime Minister Arseniy Yatsenyuk met with President Barack Obama before meeting with Westinghouse officials in Pennsylvania. "Westinghouse is currently in discussions with Energoatom to agree on an amended fuel supply contract," Westinghouse spokesman Hans Korteweg said. Ilona Zayets, a spokeswoman for state-owned Energoatom, said the two sides are in final […]

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Fracking is depleting water supplies in America's driest areas, report shows

America’s oil and gas rush is depleting water supplies in the driest and most drought -prone areas of the country, from Texas to California , new research has found. Of the nearly 40,000 oil and gas wells drilled since 2011, three-quarters were located in areas where water is scarce, and 55% were in areas experiencing drought, the report by the Ceres investor network found . Fracking those wells used 97bn gallons of water, raising new concerns about unforeseen costs of America’s energy rush. "Hydraulic fracturing is increasing competitive pressures for water in some of the country’s most water-stressed and drought-ridden regions," said Mindy Lubber, president of the Ceres green investors’ network. Without new tougher regulations on water use, she warned industry could be on a "collision course" with other water users. "It’s a wake-up call," said Prof James Famiglietti, a hydrologist at the University of California, Irvine. "We understand […]

Posted On : Published By : Tom Whipple
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Fracking is depleting water supplies in America’s driest areas, report shows

America’s oil and gas rush is depleting water supplies in the driest and most drought -prone areas of the country, from Texas to California , new research has found. Of the nearly 40,000 oil and gas wells drilled since 2011, three-quarters were located in areas where water is scarce, and 55% were in areas experiencing drought, the report by the Ceres investor network found . Fracking those wells used 97bn gallons of water, raising new concerns about unforeseen costs of America’s energy rush. "Hydraulic fracturing is increasing competitive pressures for water in some of the country’s most water-stressed and drought-ridden regions," said Mindy Lubber, president of the Ceres green investors’ network. Without new tougher regulations on water use, she warned industry could be on a "collision course" with other water users. "It’s a wake-up call," said Prof James Famiglietti, a hydrologist at the University of California, Irvine. "We understand […]

Posted On : Published By : Tom Whipple
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2014_Bakken_Oil_Output_11MM_Barrels_A_Day

Oil production in North Dakota and Montana’s Bakken and Three Forks formations will average 1.1 million barrels per day this year, according to estimates announced Wednesday by a research firm. Wood Mackenzie anticipates that oil production in the North Dakota and Montana sections of the Bakken and Three Forks formations will grow to 1.7 million barrels per day in 2020. "We’re very confident on the future of the Bakken," said Jonathan Garrett, an analyst at Wood Mackenzie. He added that the expected lifetime of a Bakken well is 25 years to 30 years. Wood Mackenzie projects that $15 billion will be spent on drilling and completion of wells by Bakken participants in 2014. The research firm also said there is close to $118 billion in remaining value in the American portions of the Bakken and Three Forks formations, which also stretch into […]

Posted On : Published By : Tom Whipple
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Rail congestion, cold weather raise ethanol spot prices

Source: U.S. Energy Information Administration based on Oil Price Information Service (ethanol prices) and Thomson Reuters (RBOB prices). Note: RBOB is reformulated blendstock for oxygenate blending gasoline, a motor gasoline blending component intended for blending oxygenates to produce finished reformulated gasoline. Ethanol spot prices have increased steadily since early February. By late March, New York Harbor (NYH) spot ethanol prices exceeded prices for RBOB (the petroleum component of gasoline) by more than $1 per gallon. Ethanol spot prices in Chicago and Gulf Coast markets also rose above NYH RBOB prices. The premium of New York Harbor over Chicago spot ethanol prices, which averaged 25 cents per gallon in January (close to the typical transportation costs of moving ethanol from production centers in the Midwest to terminals on the East Coast in recent years) widened to $1 per gallon in early March. Logistical constraints in and around ethanol production centers […]

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Power Stations Switch to Gas, But Coal Stays on the Menu

Power utilities American Electric Power Co. and Southern Co. say the U.S. needs to keep coal in the mix for electricity generation because it’s cheap and plentiful. “Coal has to be part of the puzzle,” Nick Akins, chairman and chief executive of power giant AEP said Thursday at The Wall Street Journal’s ECOnomics conference in Santa Barbara, Calif. The dirtiest of the fossil fuels, coal has lost major market-share to natural gas in recent years as power generators switching to burning gas to create electricity. Columbus, Ohio-based AEP plans to shut down up to 6,000 megawatts of coal-fired power plants by 2016 – enough to light between 3 million and 6 million homes – mostly so it can comply with tighter federal pollution limits. By 2020, the company will generate about 46% of its electricity from coal, down from 60% today. But Mr. Akins argued the U.S. has so […]

Posted On : Published By : Tom Whipple
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Ethanol, Railroad Groups Clash Over Shipment Snarls

An ethanol plant in Stockton, Calif. Analysts say a backup of railcars has kept ethanol from making it to coastal refineries that mix it into gasoline. U.S. ethanol and railroad industry groups clashed Thursday over transportation constraints that have triggered soaring prices for the biofuel in recent weeks. Renewable Fuels Association President Bob Dinneen said in a letter to the Association of American Railroads that the "sheer chaos" of the rail system has pushed up prices for ethanol—a corn-based biofuel that is blended into gasoline—and caused consumers to pay more at the pump. The higher costs, he argued, have damaged the image of the ethanol industry. Ethanol prices have jumped in recent weeks as supplies have declined amid transportation snarls. A bitterly cold winter and rising crude-oil shipments have slowed rail traffic in the Midwest. Most ethanol is made from corn grown in that region. The backup of railcars […]

Posted On : Published By : Tom Whipple