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Putin signals that he’s ready for an oil war

The US and Europe have yet to fully deploy their  bluntest weapon against Vladimir Putin. But if stronger sanctions are deployed against him, the Russian president is vowing to make life very painful for the western oil companies doing business in his country. The US this week  quietly targeted  some Russian oil industry bosses in its latest round of sanctions, and Europe has altogether avoided oil in its list of new targets. But on April 29, Putin suggested that he’s prepared to mount an oil war if antagonized further. “We would very much wish not to resort to any measures in response,” Putin said. “I hope we won’t get to that point. But if something like that continues, we will of course have to think about who is working in the key sectors of the Russian economy, including the energy sector, and how.” The remark appeared to be a swipe at lucrative long-term Russian projects […]

Posted On : Published By : Tom Whipple
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The Crisis No One Sees Coming

Energy Independence is a Hoax Everyone wants to talk about shale, about U.S. energy independence, about oil exports… But there’s a problem: We don’t have as much oil as everyone thinks. In fact, we’re actually closer to an energy crisis than we are to energy independence. Don’t get me wrong — we have oil. It’s just too expensive for us to extract. Think about it. Two decades ago, oil cost just $20 per barrel. Now it costs nearly $100 per barrel. Well, if we have more oil than ever before, how can that be? It’s because the oil we have is too costly to produce. Here’s what I mean… The Cost of "Energy Independence" According to Bernstein Research, it now costs $104.5 per barrel to produce non-OPEC crude. Furthermore, there was an "unprecedented" jump in the cost of oil from U.S. fields, which rose from $89 a barrel in 2011 to $114 […]

Posted On : Published By : Tom Whipple
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Why Wave Power Has Lagged Far Behind as Energy Source

Researchers have long contended that power from ocean waves could make a major contribution as a renewable energy source. But a host of challenges, including the difficulty of designing a device to capture the energy of waves, have stymied efforts to generate electricity from the sea. It’s not difficult to imagine what wind energy looks like — by this point we have all seen the towering turbines dotting the landscape. The same goes for solar power and the panels that are spreading across rooftops worldwide. But there is another form of renewable energy, available in huge quantities, that doesn’t really call to mind anything at all: What does wave power technology look like? Wind and solar power have taken off in the past decade or two, as costs have come down rapidly and threats from climate change have made clear the need to transition away from fossil fuels. Meanwhile, numerous […]

Posted On : Published By : Tom Whipple
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Tornadoes, extreme weather, and climate change

The return of tornado season with a vengeance has people asking again about a possible link to climate change. At the same time, tantalizing new preliminary research finds “some evidence to suggest that tornadoes are, in fact, getting stronger.” I talked to the lead scientist behind that research. Tom Karl, the director of the National Climatic Data Center, explained in a 2011 email: What we can say with confidence is that heavy and extreme precipitation events often associated with thunderstorms and convection are increasing and have been linked to human-induced changes in atmospheric composition. Insured losses due to thunderstorms and tornadoes in the U.S. in 2013 dollars. Data and image from Property Claims Service, Munich Re . And a September 2013 study from Stanford, “ Robust increases in severe thunderstorm environments in response to greenhouse forcing ,” points to “a possible increase in the number of days supportive of […]

Posted On : Published By : Tom Whipple
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Guest blog post: more debate on the future of international oil companies

In another guest blog entry, Steven Kopits of Princeton Energy Advisors considers follows up on his previous post, examining whether the IOCs could really be headed to bankruptcy, as economist Philip Verleger suggests in a recent report.  Steve can be reached at    and his blog can be found at www.prienga.com/blog In my last Barrel post , I threw down the gauntlet to those casually predicting a collapse in oil prices, as such a collapse would effectively kill the oil business at the major oil companies.  We will know, I wrote, that such forecasters are serious when they declare the international oil companies (IOCs) “to be the walking dead.” No less than Phil Verleger, noted macro oil analyst, immediately took up the challenge.  In his weekly note (April 21st), Phil notes that “long run fundamentals may indicate bankruptcy for large oil companies.” He writes: “In the long run…companies betting […]

Posted On : Published By : Tom Whipple
Category: Uncategorized

America the Food Desert: How Peak Oil Will Make Food Less Nutritious

There’s a great post up on Reddit that articulates something that I’ve been thinking for a while. Namely, that as people get hungrier, food won’t get more expensive — it’ll just get less nutritious and more toxic. Ultimately, the entire country will become a food desert , and even the suburbs will be the culinary equivalent of an inner-city ghetto where everyone eats junk food all the time, and where diabetes and other food-related health, behavioral, and psychological problems are rampant. The growing hunger of the public will not result in increasing food prices or food scarcity, it will see decreasing food quality. More hormone rich meat, genetically modified, chemically enhanced fruit and veg, and sub-par processed foods. This influx of “cheap” food, with the more expensive organic options being far out of the price range of the poor, will result in an epidemic of diabetes and other health […]

Posted On : Published By : Tom Whipple
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WTI Trades Near 4-Week Low as Supplies Rise; Brent Steady

West Texas Intermediate traded near a four-week low after crude inventories extended a record high in the U.S., the world’s biggest oil consumer. Brent was steady. Futures were little changed in New York after capping a 1.8 percent decline last month, the biggest since November. Crude stockpiles gained 1.7 million barrels to 399.4 million last week, the highest since the Energy Information Administration began reporting weekly data in 1982. U.S. economic growth stalled in the first quarter while China ’s manufacturing grew less than economists estimated in April, separate reports show. “The trend is set for the oil market,” said Jonathan Barratt , the chief executive officer of Barratt’s Bulletin in Sydney who predicts investors may buy WTI if prices fall to $99.40 a barrel. “Barring any geopolitical occurrences, the only support will come from economic growth. If that growth is subdued then you’ll see supply continue” to build, […]

Posted On : Published By : Tom Whipple
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Oil holds steady below $100 on weak US growth

The price of oil edged lower Thursday after falling below $100 per barrel for the first time in three weeks on slower U.S. economic growth and higher supplies. Benchmark U.S. crude oil for June delivery shed 1 cent to $99.73 on the New York Mercantile Exchange. Brent crude, an international oil benchmark, added 1 cent to $108.08 on the ICE Futures exchange in London. On Wednesday, U.S. crude plunged $1.54 and Brent fell 91 cents after U.S. first-quarter economic growth of just 0.1 percent disappointed forecasters who expected an expansion of about 1 percent. The Energy Department said oil supplies rose by 1.7 million barrels last week. While the increase was less than expected by analysts, it still pushed the nation’s supply to a record 399.4 million barrels. In addition, gasoline supplies rose by 1.6 million barrels, whereas analysts had expected a decline. – Heating oil […]

Posted On : Published By : Tom Whipple
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Natural Gas Ticks Lower as Demand Concerns Ease

Natural-gas prices pulled back from a two-month high, as weather forecasts called for warmer temperatures in the Midwest than previously expected, which could reduce demand for the heating fuel. Natural gas for June delivery fell 1.6 cents, or 0.3%, to $4.815 a million British thermal units on the New York Mercantile Exchange. Prices rose 10% in April, the largest monthly gain since January. The arrival of warmer weather is alleviating both short- and long-term demand concerns. The need for heat in the U.S. is now minimal, yet temperatures aren’t high enough for utilities to use extra gas to generate electricity for air conditioners. And the mild weather has probably allowed producers to make the year’s largest addition to gas stockpiles last week. "Bearish traders are hoping that this is a turning point," said Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in […]

Posted On : Published By : Tom Whipple
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U.S. concerned by Iranian, Russian energy deal

If reports about an energy deal between Iran and Russia are true, it would be a concern to the U.S. government, State Department spokeswoman Jen Psaki said. Iranian Energy Minister Hamid Chitchian met Sunday in Tehran with Russian Energy Minister Alexander Novak to discuss upgrading Iran’s power plants and electrical transmission lines. Both sides already work together in the nuclear sector, with Russia supplying fuel for Iran’s Bushehr nuclear facility. Russia is under pressure from a U.S. government frustrated with the Kremlin’s reaction to Ukraine’s move toward the European Union, while Iran is facing its own pressure from sanctions imposed for its controversial nuclear program. Psaki told reporters during her regular press conference Tuesday she had no confirmation the bilateral energy deal was in place. "If it were true, it would be of concern," she said . Novak said earlier this week the electricity […]

Posted On : Published By : Tom Whipple