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Stopping Keystone Ensures More Railroad Tank-Car Spills

The Keystone XL Pipeline got another nail in its coffin Monday, in the form of a Senate energy vote that excluded the pipeline issue. But Keystone was already near death thanks to the Obama’s administration’s recent decision to ignore the evidence of a definitive government study—and instead keep listening to environmentalists’ dubious claims. The upshot will be more political fires in Washington caused by train derailments in the absence of a pipeline to transport oil more safely. After the derailment in downtown Lynchburg, Va., on April 30, approximately 30,000 gallons of Bakken crude oil burned or spilled into the James River. On May 9, a derailment north of Denver spilled another 6,500 gallons of oil, which was contained in a ditch before reaching the South Platte River. Fortunately, unlike in the 2013 derailment in Quebec where a 1.3 million-gallon spill killed 47 people and incinerated 30 buildings, no one […]

Posted On : Published By : Tom Whipple
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Texas mayor appeals for fracking data after earthquakes jolt town

The state agency responsible for regulating the oil and gas industry in Texas has requested that fracking companies report data related to wastewater disposal wells daily — instead of yearly — after hundreds of earthquakes hit an area with no history of seismic activity, said the mayor of a small Texas town on Tuesday. At least 300 small earthquakes have hit north Texas — home to the heavily-drilled Barnett Shale region — since January, according to United States Geological Survey (USGS) data. Critics say the state has acted too slowly in investigating the unusual seismic activity and its possible links to fracking activities. “The Texas Railroad Commission has sent a letter requesting that companies voluntarily give that information,” said Alan Brundrett, mayor of Azle, a small town of about 11,000 in north Texas that has experienced unusual earthquakes. “That’s the biggest issue, that the data is not available," Brundrett […]

Posted On : Published By : Tom Whipple
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The Status of U.S. Oil and Gas Production (Spring 2014)

I find it interesting that many of the individuals expressing the greatest concerns about oil and natural gas supplies are petroleum geologists.  The list includes, but is not limited to, Jean LaHerrere, Colin Campbell, Art Berman, Jeremy Leggett, David Hughes and Jeffrey Brown. Prominent entities expressing the view that there is no problem with oil and gas supplies include media sources, politicians and bureaucrats in organizations like the U.S. Department of Energy.  Is it more reasonable to expect experts in petroleum geology to give an honest assessment of petroleum resources or politicians, bureaucrats and media sources who stand to benefit from optimistic pronouncements? Based upon numerous media reports and statements by politicians you may have the impression that life couldn’t be any better for the U.S. oil and gas industry.  Production is booming and oil and gas companies are rolling in dough.  Fracking has made natural gas very cheap […]

Posted On : Published By : Tom Whipple
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Eagle Ford Output and Texas Condensate and Natural Gas

This is a brief update on Eagle Ford Crude plus Condensate (C+C) output through February 2014.  February Eagle Ford C+C output was about 1200 kb/d by my estimate. Figure 1- RRC Data provided by Kevin Carter I have used my usual method of estimation where I find the percentage of total Texas(TX) C+C output that is from the Eagle Ford(EF) play (%EF/TX is the label that I use) and multiply this by the EIA’s estimate of TX C+C output. The chart shows the Railroad Commission of Texas (RRC) Eagle Ford estimate (EF RRC) in thousands of barrels per day (kb/d), the EF est (kb/d) as described above, the percentage of EF C+C that is condensate (EF %cond/C+C), and the %EF/TX also described above. As before I would like to thank Kevin Carter who created a method to simplify gathering the Eagle Ford data. I have done estimates of Eagle Ford […]

Posted On : Published By : Tom Whipple
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Ukraine in ‘Undeclared War’ With Russia as Rebels Unite

Insurgents killed seven Ukrainian soldiers and wounded eight others in an ambush near an eastern rebel-held stronghold as the defense minister said the country was fighting an “undeclared war” with Russia . More than 30 attackers struck a convoy near the Donetsk region city of Kramatorsk at about 1 p.m., according to a statement by the Defense Ministry , which said that six paratroopers were killed. Another died later during transport to the hospital, according to Interfax. “Russia is already engaged” in Ukraine “in supporting Russian-led protesters and terrorists,” Ukrainian Prime Minister Arseniy Yatsenyuk told reporters in Brussels today after talks with European Commission President Jose Barroso . “We urge Russia to condemn them, to urge all these so-called protesters — or really, terrorists — to leave and vacate the buildings, and to do everything they can to stabilize the situation in Ukraine. Russia will fail to make Ukraine […]

Posted On : Published By : Tom Whipple
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Russian Slowdown to Shield Europe From Ukraine Gas Cuts

European natural gas traders are betting Russia ’s economy can’t afford to lose more than $100 billion if the crisis in Ukraine escalates, reducing the odds of a long-lasting supply cut to the former Soviet nation. Gas futures in the U.K., Europe’s biggest market, declined 19 percent since Russia invaded Crimea in February and tumbled last week to the lowest since 2010. An escalation of the conflict with Ukraine could cost Russia $115 billion on average in 2015, or more than 3 percent of its gross domestic product, according to IHS Inc. Expanding sanctions from the U.S. and European Union threaten Russia’s economy, which the International Monetary Fund says is entering a recession. The world’s biggest energy exporter is struggling to raise investments to stimulate growth as ties with the U.S. and the EU deteriorate, sparking capital flight and a selloff of ruble assets. “The Russian economy is already […]

Posted On : Published By : Tom Whipple
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Norwegian oil and gas production slips

STAVANGER, Norway, May 13 (UPI) –Oil and natural gas liquids production from Norway, one of Europe’s top producers, was down about 1.5 percent, government data published Tuesday show. The Norwegian Petroleum Directorate said about 1.92 million barrels of oil and natural gas liquids were produced in April, about 30,000 bpd, or roughly 1.5 percent, less than the previous month. Norway is the largest oil producer and the third-largest natural gas producer in Europe. Most of its oil went to the United Kingdom and the Netherlands last year. It supplied members of the European Union with about 21 percent of their gas needs last year, just behind Russia. NPD said final production figures for March show an average daily production rate of about 1.5 million barrels of oil and 367 billion cubic feet of saleable natural gas production. Production was down in part because of technical issues at the Skuld […]

Posted On : Published By : Tom Whipple
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WTI Trades Near 3-Day High as Supplies Seen Falling

West Texas Intermediate traded near a three-day high amid speculation that crude stockpiles declined a second week in the U.S., the world’s biggest oil consumer. Brent was steady in London . Futures were little changed in New York after rising 0.6 percent yesterday. Crude supplies near a record high probably fell by 1 million barrels last week to 396.6 million, according to a Bloomberg News survey before a government report tomorrow. Crude stockpiles at Cushing, Oklahoma, the delivery point for New York futures, probably fell for a 14th time in 15 weeks, according to a separate Bloomberg survey. “There could be further stock draws in Cushing, which will continue to support the WTI” market, Olivier Jakob , managing director at Petromatrix GmbH in Zug, Switzerland , said by e-mail. WTI for June delivery was at $100.45 a barrel, down 14 cents, in electronic trading on the New York Mercantile […]

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Oil Futures Flat in Asia

On the New York Mercantile Exchange light, sweet crude futures for delivery in May traded at $100.72 a barrel at 0620 GMT–up $0.13 in the Globex electronic session. June Brent crude on London’s ICE Futures exchange rose $0.01 to $108.42 a barrel. Industrial production in China slowed to 8.7% year over year in April compared with 8.8% in March and retail-sales growth eased to 11.9% from 12.2% in March. The data strengthened calls for monetary and policy easing, analysts said. Earlier in the day the market "largely ignored" news of a possible doubling of Libya’s oil production following the reopening of oil fields and pipelines on Monday after an eight-month blockade by protesters, Citigroup said in a report. "Given the history of inconsistent output of the past year we’d say the market is right to remain skeptical of any promised recovery but we also continue to view any sustained […]

Posted On : Published By : Tom Whipple
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Natural Gas Lands on Lowest Closing Price in a Month as Supply Starts to Overwhelm Demand

Natural-gas prices dropped to their lowest closing price in nearly six weeks as several factors have begun to convince traders that record supply can handle strong demand. Prices for the front-month June contract fell 9.7 cents, or 2.1%, to $4.434 a million British thermal units on the New York Mercantile Exchange. It’s the fourth straight losing session for gas, the longest losing streak since late February. Prices are down 7.6% since Wednesday. Several factors are building confidence in the supply of gas, most notably the steady inventory additions that started pushing down prices last week. Producers added 74 billion cubic feet of gas to storage for the week ended May 2, the U.S. Energy Information Administration said Thursday. The gains beat Wall Street expectations for the third straight week and triggered the biggest losses. Natural-gas futures dropped 3.5% that day. Money managers who had piled […]

Posted On : Published By : Tom Whipple