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Oil Prospectors Shift Back to Wealthy Lands

In this land of towering peaks and gurgling streams, Simon Bridges wants to be lord of the rigs. As New Zealand’s resource minister, Mr. Bridges is the man behind New Zealand’s big-oil aspirations. He travels the world to pitch New Zealand to petroleum prospectors. It used to be a tough sell. New Zealand is remote and among the world’s most expensive places to drill offshore. Big prospectors largely avoided it. Today, it is experiencing an exploration boom that is part of a broader shift: After decades of focusing on less-developed nations, big companies are tilting toward wealthy countries when hunting for oil and gas. Such places have higher costs and tighter regulations, but their political stability offers […]

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Drought hits China food production: Xinhua

BEIJING (Reuters) – Severe drought and scorching heat has damaged over a million hectares of farmland in China’s Henan and Inner Mongolia provinces, with no immediate relief in sight, state news agency Xinhua reported. Henan in central China is experiencing its worst drought in 40 years with precipitation at less than half of normal levels, the agency said. Some 900,000 hectares of crops have been damaged, it said. Henan is a big producer of food crops, including soybeans, barley and rice. In some regions of the province, governments have shut off water supply to businesses such as commercial swimming pools and bath houses, while water intensive industries have been asked to restrict usage, Xinhua said. In Inner Mongolia, a drought ongoing since April has affected 150,000 hectares of farmland and 16.4 million hectares of pastures, while robbing 300,000 people of drinking water, said Xinhua. The Inner Mongolia drought was […]

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U.S. Gasoline Prices Falling on Production, Lundberg Says

U.S. refineries are flexing their muscles and helping lower gasoline prices in the middle of the peak driving season. The average price for regular gasoline at U.S. pumps dropped 9.04 cents in the two weeks ended July 25 to $3.5795 a gallon, according to Lundberg Survey Inc. It’s based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. Prices are 9.51 cents lower than a year ago and are at the lowest level since March 21, the survey showed. Retail prices declined as refineries processed the most petroleum in government records dating back to 1989 in the week ended July 11. Plants in the Midwest exceeded their nameplate capacity during that week. “It’s really a mid-summer gift,” Trilby Lundberg , the president of Lundberg Survey, said in a telephone interview yesterday. “Refiners have been on a kick to run more crude, run at high rates […]

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Not in my backyard: US sending dirty coal abroad

Coal from Appalachia rumbles into this port city, 150 railroad cars at a time, bound for the belly of the massive cargo ship Prime Lily. The ship soon sets sail for South America, its 80,000 tons of coal destined for power plants and factories, an export of American energy – and pollution. In the U.S., this coal and the carbon dioxide it will eventually release into the atmosphere are some of the unwanted leftovers of an America going greener. With the country moving to cleaner natural gas, the Obama administration wants to reduce power plant pollution to make good on its promise to the world to cut emissions. Yet the estimated 228,800 tons of carbon dioxide contained in the coal aboard the Prime Lily equals the annual emissions of a small American power plant. It’s leaving this nation’s shores, but not the planet. "This […]

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Dry Spell Brings Hard Times to State's Lake and River Tourism Industry

;California’s relentless drought is beginning to dry up revenue in its popular lake and river tourism industry. Marinas and boat ramps across the state are turning away customers, and even spots where water is still relatively plentiful say visitors are staying away, assuming things are worse than they are. Casualties abound from a three-year dry spell that also has wreaked havoc on California agriculture and prompted mandatory statewide restrictions on urban watering effective Aug. 1. Los Angeles County officials have banned swimming in summer getaway Castaic Lake, citing dangers such as unexpected drop-offs in a lake now less than half-full. Boaters there report new hazards, too. Water levels at Folsom Lake have reached near historic lows, forcing boaters out of […]

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Dry Spell Brings Hard Times to State’s Lake and River Tourism Industry

;California’s relentless drought is beginning to dry up revenue in its popular lake and river tourism industry. Marinas and boat ramps across the state are turning away customers, and even spots where water is still relatively plentiful say visitors are staying away, assuming things are worse than they are. Casualties abound from a three-year dry spell that also has wreaked havoc on California agriculture and prompted mandatory statewide restrictions on urban watering effective Aug. 1. Los Angeles County officials have banned swimming in summer getaway Castaic Lake, citing dangers such as unexpected drop-offs in a lake now less than half-full. Boaters there report new hazards, too. Water levels at Folsom Lake have reached near historic lows, forcing boaters out of […]

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As US kicks off crude exports, Iran casts a shadow in Asia

The United States faces an awkward rival in its first attempts in 40 years to export crude oil – Iran. Iran, whose economy has been throttled by Western sanctions that have halved its crude shipments, is now selling higher quality and cheaper oil to China that leaves little room for the U.S. crude to enter the world’s top energy consumer. While buyers in Japan and South Korea have been willing to trial a U.S. grade of the super-light crude known as condensate, China has already locked in annual contracts with Tehran and is not expected to take any U.S. oil in the short-term. With U.S. producers looking to open a trade route to sell surplus condensate from the U.S. shale boom, worries about quality and legal issues have added to doubts about how much of the oil the rest of Asia can take. “China gets condensate from Iran, which […]

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Europe subdued, Russia shares tumble on new sanctions

LONDON (Reuters) – The euro was stuck near its lowest level since November and Russian shares tumbled for a third straight day on Monday as new European sanctions for Moscow chilled the already frosty relationship between the two. The 28-nation EU reached an outline agreement on Friday on its first economic sanctions on Russia, which said the moves would hamper cooperation between the two and undermine the fight against terrorism. Having suffered on Friday, Europe’s main bourses were again subdued. There was more pain for Russian stocks after a report that shareholders in defunct oil producer Yukos had won a $50 billion international court case against Russia. Moscow’s dollar-denominated RTS index was down 1.6 percent, its rouble-traded peer MICEX traded 0.9 percent lower, and the rouble was down 0.5 percent against the dollar to trade at 35.32. "While the suit has been pending since 2007, any judgment will likely […]

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Solar, peak oil and net energy

Solar and renewables are being touted as the energy sources of the future, but will they provide enough power relative to the energy that must be invested in them? Engineer Graham Palmer argues there’s no easy solution to the fact that we’re running out of fossil fuels. Canadian philosopher Marshall McLuhan once quipped that the last thing a fish would notice is the water. You could almost draw a parallel to the essential role energy plays in modern society—cheap accessible energy is now so ubiquitous that we barely notice the importance of it to modern living, nor the astonishing wealth it has brought. Just one litre of petrol provides the equivalent of a week or more of pre-industrial human labour. Having achieved this miraculous transformation, it is not likely that societies will voluntarily turn back. According to Joseph Tainter’s thesis, societies grow more complex in order to solve new […]

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Anticipating the Peak of World Oil Production

These are indeed good times to be a Peak Oiler. All the  peak oil deniers are dancing with wild exuberance, pointing to that spike of US shale oil production that they believe drives the final nail in the “Peak Oil Theory” coffin. And it is all happening right before reality slaps them in the face. There is no doubt that world Crude + Condensate production, without that tight oil spike, has been on a ten year bumpy plateau. World Less USA A But, you may ask, when the shale bubble burst, won’t that only mean we will still stay on that bumpy plateau? No for several reasons. First the bursting of the shale bubble will likely cause a decline in US production of perhaps half a million barrels per day per year for three to four years. Second Russia, whose production increase of over 1.5 million barrels per day […]

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Why doesn't the 'long emergency' feel like an emergency?

In 2006 when James Howard Kunstler published his breakthrough book The Long Emergency , the next two years seemed to vindicate his warning that the oil age was coming to an end with perilous consequences. Oil soared to $147 a barrel in mid-2008. A few analysts suggested that it was headed for $200; but that was not to be. By autumn the stock market had collapsed and with it the world economy. Oil, too, then collapsed, trading in the mid-$30 range by December as demand for oil fell off a cliff with the economy. It seemed for months that the world was headed for an economic depression. But extraordinary stimulative spending by governments around the world and emergency measures by central banks reversed the trend and led to a weak, but extended recovery of sorts that […]

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Why doesn’t the ‘long emergency’ feel like an emergency?

In 2006 when James Howard Kunstler published his breakthrough book The Long Emergency , the next two years seemed to vindicate his warning that the oil age was coming to an end with perilous consequences. Oil soared to $147 a barrel in mid-2008. A few analysts suggested that it was headed for $200; but that was not to be. By autumn the stock market had collapsed and with it the world economy. Oil, too, then collapsed, trading in the mid-$30 range by December as demand for oil fell off a cliff with the economy. It seemed for months that the world was headed for an economic depression. But extraordinary stimulative spending by governments around the world and emergency measures by central banks reversed the trend and led to a weak, but extended recovery of sorts that […]

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Tech Talk – Changes in global supply and demand

Tech Talk – Changes in global supply and demand At the beginning of the month I pointed out that there are three components to the coming Energy Mess. The first of these is the steady increase in global demand for oil and its products, the second is the decline in production from existing wells and fields, and the third is the shrinking pool of places from which new oil can be recovered to make up the difference between the first two. Internal demand gnaws away at that available for export, as the situation in Saudi Arabia clearly illustrates: Figure 1. Changing relation between Saudi production, internal demand and thus available exports. ( Energy Export Databrowser ) Internal consumption has now reached 3 mbd – out of a production of around 10 mbd, a trend bound to go higher, as the country’s population continues to grow , having risen from […]

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5 Industries Worried About Peak Oil

The debate over the impact of peak oil has been raging for decades. Although few deny that the end of mass oil consumption is drawing nearer, educated estimates now range between 2020 and 2030. But more important than the timeframe of peak oil are its consequences. Some seek to spell the end of life as we know it, so reliant is the world upon black gold. Others, equally extreme in their views, embrace the news, looking forward to a time when humanity will magically clean up its act. The truth is somewhere in the middle. Clean energy sources are making major advances as they become cheaper and easier to implement while almost all OEMs have launched lavish research programs into vehicles powered by other means. But the consequences of peak oil are not to be underestimated. Society would undergo a difficult time, given the sheer spread of oil on […]

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Brent Oil Prices Rise to Two-Week High

Global oil prices rose to a two-week high on Friday as investors prepared for more market-roiling headlines from Ukraine and the Middle East over the weekend. Brent crude for September delivery rose $1.32, or 1.2%, at $108.39 a barrel, the highest closing price since July 10 on the ICE Futures Europe exchange. It was the largest one-day gain for the global benchmark since June 12. Light, sweet crude on the New York Mercantile Exchange ended almost flat, up 2 cents to $102.09 a barrel. European officials met Friday to discuss ratcheting up economic pressure on Moscow for what they say is Russia’s support for militants in eastern Ukraine. A decision to impose new sanctions could limit access to the country’s oil supplies, cutting off the world’s second-largest crude exporter behind Saudi Arabia. In the Middle East, Palestinians in the West Bank protested Israel’s military operation in the Gaza Strip […]

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Brent Gains on Russia Tension as WTI Trades Near $102

Brent oil climbed to a two-week high, widening its premium to West Texas Intermediate, as the intensifying conflict in eastern Ukraine raised tension between Russia and the West. Russia, the world’s biggest energy exporter, disputed U.S. accusations that it supplied anti-aircraft weapons to rebels in neighboring Ukraine. President Barack Obama said he expects the downing of the Malaysian Air (MAS) jet in Ukraine to push European countries to enact tougher sanctions against Russia. WTI ended the week down 1 percent on speculation that rising U.S. fuel supplies will prompt refineries to use less crude. “We’re moving on the headlines about the crisis in Ukraine ,” said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees about $120 billion of assets. “I’m skeptical that there will be any disruption of supply unless there was a major intensification of the crisis, which is unlikely.” Brent […]

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Natural-Gas Prices Fall Near Eight-Month Low on Soft Demand

-Natural-gas prices closed near their eight-month low, resuming the market’s sluggish July as unseasonably cool weather keeps damping demand. Prices for the front-month August contract settled down 6.6 cents, or 1.7%, to $3.781 a million British thermal units on the New York Mercantile Exchange. Traders refocused on the big-picture supply-demand dynamic that has shrunk the market by 20% since June, halting a one-day rally that had come from a report that showed a smaller-than-expected addition to storage. The market finished down 4.4% for the week. Weather forecasts have been cool all summer, limiting demand for air conditioning and the gas-fired electricity that fuels it. Forecasts still show mild weather, including temperatures as much as eight degrees Fahrenheit below normal, lingering over the center of the country through the first week of August. The weather has already allowed producers to put a record […]

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Oil Market Weighs Fear and Reality

Earlier this week the wise oil-market watchers at PVM, a brokerage  and consultancy, summed up the state of the market. “Not a day goes by without a political, economic, international or data event that adds further color and often confusion to an already very complex scene,” said analyst David Hufton. “Who needs the distraction of fiction when real life constantly throws up twists and turns that would stretch credibility if written in any novel?” Iraqi security forces are on high alert as the country braces for more violence in Baghdad. Reuters Too true. Life moves pretty fast. If you don’t stop to look around once in a […]

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Iraqi oil exports dip for June

Iraqi oil exports were down in June in part because of terrorist activities targeting a northern pipeline, the Ministry of Oil announced. Iraqi Ministry of Oil spokesman Assim Jihad said oil exports from southern ports at 72.8 million barrels for June. No oil marketed by the State Organization for Marketing of Oil left from a northern oil pipeline. "Export from the Kirkuk- Ceyhan pipeline was stopped because of the terrorist actions," he said in a statement Thursday. Iraqi oil exports so far this year peaked at 80 million barrels in May. A Sunni-led insurgency emerged shortly afterward, putting pressure on the central government in Baghdad. In June, the militants with the Islamic State of Iraq and Syria said they took control over the Baiji oil refinery north of Baghdad, a facility that feeds the local market. Marketing data show oil exports from the Kirkuk-Ceyhan oil pipeline peaked in November […]

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Iraqi Oil In Context: 60% Of OPEC Growth Expectations

While Iraqi crude represents about 4.4% of world production , or around 3.4 mmbd (5th largest in the world); enabling investors to shrug at any fears that ISIS will spread to the South and interrupt this supply (since it will be ‘contained’); what many do not comprehend is that in such a tight oil market as we currently have, Goldman warns that as much as 60% of OPEC’s expected capacity growth over the next five years to come from Iraq . Production losses so far have been fairly small, and have only been felt domestically. However, the larger impact of the conflict potentially lies in the medium to long term. Goldman explains the long-term implications for Iraq’s oil potential Production losses so far have been fairly small, and have only been felt domestically. However, the larger impact of the conflict potentially lies in the medium to long term. The […]

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Tanker Carrying Oil From Kurdistan Arrives Off U.S. Coast

A ship carrying crude from Iraq ’s Kurdistan region is off the coast of Florida , with the future of the oil aboard murky because of uncertainty over who has the right to sell it. The United Kalavryta is operated by Unicom Management Services Ltd., said Andy Kendrick, a spokesman for the U.S. Coast Guard. It’s scheduled to dock in Galveston, Texas , tomorrow, according to ship-tracking data compiled by Bloomberg. Iraq’s semi-autonomous Kurdistan Regional Government is seeking to sell oil from its territory and claim revenues to help finance its effort for further independence from the national government. Officials in Baghdad have said the country’s oil revenues belong to the central government. “We are aware there is a tanker off the coast of Florida currently, but our policy here has not changed — Iraq’s energy resources belong to all of the Iraqi people,” Marie Harf, a spokeswoman for […]

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Tanzania’s Natural Gas Outlook is Promising, Says IMF

A BG survey vessel gathering data off the coast of Tanzania. CGG Tanzania has a good chance of becoming a major producer and exporter of natural gas over the next decade, said the International Monetary Fund. Significant offshore discoveries have been made over the last two-to-three years and further exploration is underway, the fund said in its recent country report for Tanzania. “Although gas resources haven’t yet been declared commercially viable, estimates of discoveries indicate recoverable offshore gas resources of at least 24 trillion-26 trillion cubic feet, potentially sufficient for a four-train Liquid Natural Gas plant (possibly as a common facility for several upstream gas fields),” it said. “A final investment decision is expected at the earliest in 2016 or 2017.” Total investment during the development phase could amount to $20 billion-$40 billion, depending on the scale of the project. This would be the largest investment ever […]

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Egypt: World Bank Gives Egypt U.S.$500 Million Gas Loan

Cairo — The World Bank has agreed to give Egypt a $500 million loan to provide 1.5 million houses in 11 governorates with natural gas lines. "The Egypt Household Natural Gas Connection Project will support the Egyptian government’s programme to replace household consumption of Liquefied Petroleum Gas (LPG), which is mostly imported, with grid-connected natural gas," the website said in a statement on Thursday. About 52 percent of the neighbourhoods this project targets have poverty rates higher than the country’s national average, the statement said. "We are pleased to help improve the delivery of energy services to the people of Egypt," said Hartwig Schafer, World Bank Country Director for Egypt, Yemen, and Djibouti. "The project will provide financial support to finance the connection charges in disadvantaged areas so that poor households can also connect to the gas grid," said Husam Mohamed Beides, the project’s Task Team Leader. "We are […]

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Pemex Predicts Lowest Production in More Than Two Decades

Petroleos Mexicanos cut its output forecast to the lowest in at least 24 years as mature fields are shrinking faster than it had previously expected. The forecast was lowered to 2.41 million barrels of oil a day from a prior projection of 2.5 million, said Gustavo Hernandez, Pemex’s head of exploration and production. This will be the Mexico City-based company’s lowest annual output since at least 1990, when it produced 2.55 million barrels a day, according to the oldest available government output data. “We have been working to review the declines of each of our fields that contribute to national production,” Hernandez said today on an earnings call. “In the recent review, we obtained a better idea of the declines of the fields and have adjusted the production expectation downward.” Pemex is counting on a landmark law enacted last year that opens Mexico’s energy industry to private competition for […]

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Mexico's Pemex 2nd-Qtr Losses Widen to 52.2B Pesos

State-owned oil company Pemex reported a wider second quarter loss hurt by higher sales costs, declining asset values and higher taxes, the company said on Friday. Losses totaled 52.226 billion pesos ($4.02 billion) for the quarter, led by losses at the company’s refining unit, compared to a total loss of 49 billion pesos during the year earlier period. Revenue during the quarter rose 4.1 percent to 409 billion pesos, however, mainly because of higher domestic sales and exports, compared to revenue of 393 billion pesos during the second quarter last year. Sales costs for the quarter rose 13.2 percent, or by 24.4 billion pesos, as a result of preexisting obligations and higher production costs, the company said. "Inside and outside the company, the environment has grown more complex," said Pemex Chief Financial Officer Mario Beauregard in a call with analysts. The company’s tax […]

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Mexico’s Pemex 2nd-Qtr Losses Widen to 52.2B Pesos

State-owned oil company Pemex reported a wider second quarter loss hurt by higher sales costs, declining asset values and higher taxes, the company said on Friday. Losses totaled 52.226 billion pesos ($4.02 billion) for the quarter, led by losses at the company’s refining unit, compared to a total loss of 49 billion pesos during the year earlier period. Revenue during the quarter rose 4.1 percent to 409 billion pesos, however, mainly because of higher domestic sales and exports, compared to revenue of 393 billion pesos during the second quarter last year. Sales costs for the quarter rose 13.2 percent, or by 24.4 billion pesos, as a result of preexisting obligations and higher production costs, the company said. "Inside and outside the company, the environment has grown more complex," said Pemex Chief Financial Officer Mario Beauregard in a call with analysts. The company’s tax […]

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Venezuela could tap Chinese market by selling Citgo

Selling off U.S. refiner Citgo would free up export volumes for Venezuela to start directing oil to the Chinese market, Energy Ministry officials said. The Venezuelan Energy Ministry said it’s considering separate offers for Citgo from Deutsche Bank, Goldman Sachs and JP Morgan. Sources inside the ministry told Argus Media offers range from $10 billion to $15 billion. Combined refinery output from Citgo is 757,000 barrels per day, with most of that centered at its Lake Charles facility in Louisiana. Argus reported Thursday the sale of Citgo would free up exports the state-owned oil and gas company known as PDVSA could direct toward China. Both sides have agreements to increase exports by more than 60 percent to 1 million barrels of oil per day by 2016. Venezuela is the No. 4 oil exporter to the United States, behind Canada, Saudi Arabia and Mexico, respectively. For the week ending July […]

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EU edges to economic sanctions on Russia but narrows scope

The European Union reached outline agreement on Friday to impose the first economic sanctions on Russia over its behavior in Ukraine but scaled back their scope to exclude technology for the crucial gas sector. The sanctions on access to capital markets, arms and hi-tech goods are also likely to apply only to future contracts, leaving France free to go ahead with the controversial delivery of Mistral helicopter carriers being built for Russia. After months of hesitation, the 28-nation EU toughened its stance toward Moscow after last week’s downing of a Malaysian airliner, killing 298 people, in an area of eastern Ukraine held by Russian-backed separatists. But the narrowing of the proposed measures highlighted the difficulty of agreeing to tough sanctions among countries which have widely different economic interests and rely to varying degrees on Russian gas. After a discussion that lasted all day Thursday and part […]

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Russian execs fear lasting damage from plane crash

MOSCOW (AP) — Having for months dismissed Western sanctions on Russia as toothless, business leaders here are now afraid that the downing of the Malaysian jetliner will bring about an international isolation that will cause serious and lasting economic damage. Throughout the Ukrainian crisis, U.S. and European sanctions had mainly targeted a handful of individuals, sparing economic ties. Then last week the U.S. imposed penalties on some of Russia’s largest corporations. And when the airliner was shot down just a day later in Ukraine, allegedly by separatists with Moscow’s support, concern grew in Russia that the sanctions would only get worse as President Vladimir Putin shows little sign of cooperation. Reinforcing those concerns, the European Union said Friday it is planning newer, tougher penalties on businesses. "Over the past few months, there was a sense that Mr. Putin acted decisively, forcefully, and correctly, and that everybody else in the […]

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Canada sanctions Russian energy sector

Canadian Prime Minister announced new sanctions targeting the Russian energy sector in response to the Kremlin’s pressure on Ukraine. Harper announced sanctions against 10 separate Russian entities, including Russian independent gas company Novatek and Gazprombank, the financial arm of Russian gas giant Gazprom. The prime minister said the sanctions were meant as a response to Russia’s occupation of the Crimean region in Ukraine and its military action in eastern Ukraine. "The measures we are announcing include sanctions against a broad range of entities from Russia’s arms industry, as well as from its financial and energy sectors," he said Thursday. Novatek was included in a list of sanctioned entities outlined by the U.S. government in mid July. In a statement issued in response, Novatek said its financial situation is stable and cash flows are sufficient. Harper’s administration didn’t extend sanctions to Russian oil company Rosneft. Rosneft in […]

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Ukrainian gas situation 'normal'

Slovakian gas transit company Eustream said Friday the state of operations through Ukraine were in line with its expectations. The company said it hasn’t seen any pressure reductions or gas volume decreases at a compressor station on the border with Ukraine. "Gas flow from Ukraine is in normal mode," it said in a statement . European countries get about a quarter of their gas needs met by Russia, though most of that gas runs through Ukrainian pipelines built during the Soviet era. Ongoing crises in Ukraine is therefore putting European energy security at risk. Last month, the European Investment Bank said it was lending $132 million to Polish natural gas transmission company Gaz-System for the expansion of a pipeline that could bring gas, including domestically sourced liquefied natural gas, to the border of the Czech Republic, Slovakia and Ukraine Eustream said Thursday it was proceeding with […]

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Ukrainian gas situation ‘normal’

Slovakian gas transit company Eustream said Friday the state of operations through Ukraine were in line with its expectations. The company said it hasn’t seen any pressure reductions or gas volume decreases at a compressor station on the border with Ukraine. "Gas flow from Ukraine is in normal mode," it said in a statement . European countries get about a quarter of their gas needs met by Russia, though most of that gas runs through Ukrainian pipelines built during the Soviet era. Ongoing crises in Ukraine is therefore putting European energy security at risk. Last month, the European Investment Bank said it was lending $132 million to Polish natural gas transmission company Gaz-System for the expansion of a pipeline that could bring gas, including domestically sourced liquefied natural gas, to the border of the Czech Republic, Slovakia and Ukraine Eustream said Thursday it was proceeding with […]

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Biofuels are included in latest U.S. Navy fuel procurement

Source: U.S. Navy, used with permission Note: Above, clockwise from left: Fleet replenishment oiler USNS Henry J. Kaiser (T-AO 187), aircraft carrier USS Nimitz (CVN 68), destroyer USS Chung-Hoon (DDG 93), and cruiser USS Princeton (CG 59). Great Green Fleet demonstration, July 2012. Recently the Department of Defense (DoD) released its annual procurement for bulk fuels to be delivered to its facilities in the eastern and inland United States and Gulf Coast. For the first time, this procurement requests military-specification diesel fuel and jet fuel that are blended with biofuels. The biofuels components, however, are optional and will only be accepted if certain cost and performance requirements are met. A similar procurement for the Rocky Mountain and West Coast regions is expected to be released later this year. The U.S. Navy’s interest in biofuels is part of its goal to generate 50% of its energy from alternative sources by […]

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Russia Steps Up Help for Rebels in Ukraine War

Rather than backing down after last week’s downing of a civilian passenger jet, Russia appears to be intervening more aggressively in the war in eastern Ukraine in what American and Ukrainian officials call a dangerous escalation that will almost certainly force more robust retaliation from the United States and Europe. Russia has increased its direct involvement in fighting between the Ukrainian military and separatist insurgents, moving more of its own troops to the border and preparing to arm the rebels with ever more potent weapons, including high-powered Tornado rocket launchers, American and Ukrainian officials said on Friday. The officials, citing satellite images and other military intelligence, said that Russia had positioned heavy weapons, including tanks and other combat vehicles, at several points along the border where there has been intense fighting. On Thursday, Russia unleashed artillery attacks on eastern Ukraine from Russian territory, officials in Washington […]

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Drought drains critical US water supply

A huge volume of fresh water has disappeared from the drought-struck south west of the US in the past decade in what researchers say is a startling sign of the fragility of one of the country’s most important water supplies. Almost 65 cubic kilometres of water has been lost since late 2004 from the Colorado River Basin , an area roughly the size of France that is a vital but heavily used source of water for more than 30m people and 4m acres of farmland. The amount lost was nearly double the volume of the Colorado River’s Lake Mead , the largest man-made reservoir in the US, according to a study by scientists using data from Nasa satellites that can measure changes in water levels. “This is a lot of water to lose. We thought that the picture could be pretty bad, but this was shocking,” said the study’s […]

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Texas Petro Index: Seventh Record High as Production Closes in On All-Time

The continuing expansion in the energy sector propelled Texas oil production to new levels in the second quarter of 2014, as evidenced by Karr Ingham’s Texas Petro Index (TPI), which hit a record-high of 308.4 in June. Ingham, an economist for the Texas Alliance of Energy Producers, covered the second-quarter TPI in a presentation at Houston’s Petroleum Club Thursday. The TPI is a composite index that is derived from a comprehensive set of upstream indicators, including the price per barrel of oil, rig count, drilling permits and completions, oil and gas production volume and other indicators. It provides a picture of the overall energy health of the state. The June 2014 TPI is 7.4 percent than it was in June 2013. Compared with the January 1995 base of 100 percent, the June 2014 TPI is up 213.7 percent. Texas oil production has been increasing for last 54 months, sending […]

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WWF: Arctic Oil Well Blowout Could Spread More Than 1,000 Km

CALGARY, Alberta, July 25 (Reuters) – Oil from a spill or oil well blowout in the Arctic waters of Canada’s Beaufort Sea could easily become trapped in sea ice and potentially spread more than 1,000 kilometres to the west coast of Alaska, a World Wildlife Fund study showed on Friday. The WWF contracted RPS Applied Science Associates to model 22 different oil spill scenarios and map the spread of the oil, potential impact on the water and shoreline, and interaction with sea ice, wildlife and the surrounding ecology. Types of oil spills analysed included shipping spills, shallow-water blowouts and deep-water blowouts. The BP Plc Macondo oil well rupture in 2010 that unleashed more than four million barrels of oil into the Gulf of Mexico was a deep-water blowout. The remote Beaufort Sea is a section of the Arctic Ocean that spans the Canada-U.S. border. It comprises about 476,000 square […]

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Report Says EPA Fails to Stem Methane Gas Emissions From Pipelines

The Environmental Protection Agency is failing to control leaks of methane, a potent greenhouse gas, from the nation’s natural-gas pipelines, the agency’s inspector general said Friday. A report calls on the EPA to do more to control inadvertent emissions of methane, which has a more intense—though shorter—warming effect on the planet than carbon dioxide, the agency said. Natural gas consists almost entirely of methane. About $192 million of natural gas was lost in 2011 because of leaks in pipelines, known as distribution lines, that transport the fuel to end users, the inspector general said. That cost was borne by consumers, according to the report. The inspector general said a voluntary EPA program to encourage energy companies to address methane emissions hasn’t helped to reduce leaks. The nation’s plentiful supplies of natural gas are a central part of President Barack Obama ‘s strategy to address climate change, since burning natural […]

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IEA Oil Market Forecast: Optimistic Assumptions And An Economy Unable To Grow Out Of Its Problems

IEA Oil Market Forecast: Optimistic Assumptions And An Economy Unable To Grow Out Of Its Problems The International Energy Authority (IEA) forecasts a yearly increase of 1.3% in global oil demand during the period 2013-2019. This contrasts with the assumption of global economic growth rising from 3.6% in 2014 to around 4% thereafter [1] . How does a 1.3% increase in oil usage support economic growth of about three times that amount? The oil intensity of growth has been decreasing over time, with global oil intensity falling from  1:1 (a 1% increase in global oil consumption required for each 1% of global economic growth) to a ratio of 0.75:1, between 1995 and 2009 [2] . An extrapolation of that trend would result in an average oil intensity of about 0.65:1 during the 2013-2019 time period, with 1.3% growth in oil demand driving about 2% global economic growth. The IEA […]

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Costs up for oil sands production

The costs of producing bitumen and synthetic crude in the Albertan oil sands have increased over the past year, says the Canadian Energy Research Institute in an annual report that projects steady growth in output. Compared with last year’s report, estimated costs of production before blending and transportation are up 4.4% for steam-assisted gravity drainage , 1.6% for mining without upgrading, and 5.9% for integrated mining and upgrading ( OGJ Online, May 29, 2013 ). The new estimates of plant-gate supply costs: $50.89/bbl (Can.) for SAGD, $71.81/bbl for stand-alone mining, and $107.57/bbl for integrated mining. CERI estimates the cost of stand-alone upgrading at $40.82/bbl. When the price of West Texas Intermediate crude is $100/bbl, the only economic production technology when blending and transportation are included in the estimate is SAGD, CERI points out. After those adjustments, the WTI-equivalent supply costs at the Cushing, Okla., pricing hub are $84.99/bbl (US) […]

Posted On : Published By : Tom Whipple
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US rig count up 12 to 1,883

Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. rose 12 this week to 1,883. The Houston firm said Friday in its weekly report that 1,562 rigs were exploring for oil and 318 for gas. Three were listed as miscellaneous. A year ago there were 1,776 active rigs. Of the major oil- and gas-producing states, Louisiana gained six, California, New Mexico and Oklahoma were each up four, and West Virginia increased by one. Alaska lost three rigs, Pennsylvania and Texas were down two apiece and Ohio was off one. Arkansas, Colorado, Kansas, North Dakota, Utah and Wyoming were unchanged. The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

Posted On : Published By : Tom Whipple
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IEA Oil Market Forecast: Optimistic Assumptions And An Economy Unable To Grow Out Of Its Problems

The International Energy Authority (IEA) forecasts a yearly increase of 1.3% in global oil demand during the period 2013-2019. This contrasts with the assumption of global economic growth rising from 3.6% in 2014 to around 4% thereafter [1] . How does a 1.3% increase in oil usage support economic growth of about three times that amount? The oil intensity of growth has been decreasing over time, with global oil intensity falling from  1:1 (a 1% increase in global oil consumption required for each 1% of global economic growth) to a ratio of 0.75:1, between 1995 and 2009 [2] . An extrapolation of that trend would result in an average oil intensity of about 0.65:1 during the 2013-2019 time period, with 1.3% growth in oil demand driving about 2% global economic growth. The IEA […]

Posted On : Published By : Tom Whipple
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Peak Oil: Reality Checks From The Desert

Someone (Rock?) said refiners weren’t investing in the shale boom. Interesting that today storis come out that Exxon is considering adding 400,000 of fresh refining capacity (new distillation train, not a debottleneck) to Beumont. Upgraded refinery will be 750,000 bpd capacity and largest in the country. Also, a small refinery going in in ND and several small shuttered plants in the Rocky Mountains are being reopened. Pipeline prjects are going in all over the country too. Peope with $$ showing they believe.

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WTI Set for Weekly Drop Amid Rising Fuel Supplies; Brent Steady

West Texas Intermediate headed for the third weekly decline this month amid speculation that rising U.S. gasoline stockpiles signal reduced demand in the world’s biggest oil consumer. Brent was steady in London . Futures were little changed in New York after falling 1 percent yesterday. Gasoline inventories climbed to the highest level since March, while crude supplies dropped for a fourth week, Energy Information Administration data showed on July 23. President Barack Obama said he expects the downing of the Malaysian Air jet in Ukraine to push European nations toward tougher sanctions against Russia . “U.S. refineries are clearly turning more crude oil into refined petroleum products at present than is actually needed,” Carsten Fritsch , an analyst at Commerzbank AG in Frankfurt , said by e-mail. “The build in gasoline inventories significantly exceeded expectations. Besides the increase in production, this was also due to weaker demand.” WTI for […]

Posted On : Published By : Tom Whipple
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Oil price slips below $102 a barrel

The price of oil slipped below $102 a barrel on Friday, falling for a second day after spiking on lower U.S. inventories and tensions in the Ukraine and the Middle East. Benchmark U.S. crude for September delivery was down 10 cents to $101.97 at 0555 GMT in electronic trading on the New York Mercantile Exchange. The contract dropped $1.05 to close at $102.07 a barrel on Thursday. Brent crude, a benchmark for international oils, rose 13 cents to $107.20 in trading on the ICE exchange in London. Lower-than-expected U.S. crude inventories in a weekly Energy Department report had driven prices up on Wednesday, but expectations of stronger growth in demand were later countered as gasoline supplies were nearly three times larger than predicted. Still, the price of oil has stayed above $100 a barrel after a civilian jetliner was shot out of the sky last week over a part […]

Posted On : Published By : Tom Whipple
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Natural-Gas Prices Climb on Smaller-Than-Expected Add to Inventories

Natural-gas futures prices closed up for the first time in a week after a weekly U.S. stockpile report showed a smaller surplus than expected. Prices for the front-month August contract settled up 8.5 cents, or 2.3%, to $3.847 a million British thermal units on the New York Mercantile Exchange. It is the market’s largest gain and its first gain of more than 2% since June 12. Producers added 90 billion cubic feet of gas to storage in the week ended July 18, the U.S. Energy Information Administration said. The addition was 6 billion cubic feet less than analysts and traders had expected and nearly double the five-year average for that week of the year. Tepid demand and record supply have combined to drive a broad selloff in the past month, shrinking the price of front-month gas by 20% since mid-June. Analysts said Thursday that the […]

Posted On : Published By : Tom Whipple
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NYMEX August gas futures close 8.5 cents higher on storage report

The NYMEX August natural gas futures contract closed 8.5 cents higher at $3.847/MMBtu Thursday, a slight reversal from its recent decline after a mildly bullish weekly gas storage report showed injections below expectations. For the week that ended July 18, the US Energy Information Administration reported an injection of 90 Bcf. Analysts had expected an injection of between 94 Bcf and 98 Bcf. While the move higher came in response to the EIA report coming in below expectations, the data was bearish overall historically as the injection was almost double both the 43 Bcf build in the same week a year ago and the 46-Bcf five-year average. "We got a little bit of a pop after the number came out," Price Futures Group senior analyst Phil Flynn said. "The selloff had been priced in and now we’re going to get some of that back." Flynn cautioned that the gas […]

Posted On : Published By : Tom Whipple
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IMF Cuts 2014 Global Forecast After Slowdowns in China, U.S.

The International Monetary Fund lowered its outlook for global growth this year as expansions weaken from China to the U.S. and military conflicts raise the risk of a surge in oil prices . The world economy will advance 3.4 percent in 2014, the IMF said, less than its 3.6 percent prediction in April and stronger than last year’s 3.2 percent. Next year growth will be 4 percent, compared with an April forecast for 3.9 percent, the fund said. “Global growth could be weaker for longer, given the lack of robust momentum in advanced economies” even as interest rates stay low, the IMF said in an update to its World Economic Outlook report. “ Monetary policy should thus remain accommodative in all major advanced economies.” The IMF report reflected a world rattled by geopolitical risks that have risen since April, including the potential for “sharply higher oil prices” because of […]

Posted On : Published By : Tom Whipple
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OPEC REVENUES FACT SHEET

OPEC net oil export revenues The U.S. Energy Information Administration (EIA) estimates that, excluding Iran, members of the Organization of the Petroleum Exporting Countries (OPEC) earned about $826 billion in net oil export revenues in 2013. This was a 7% decrease from 2012 earnings, but still the second-largest earnings totals during the 1975-2013 period for which EIA has tracked OPEC oil revenues. OPEC earnings declined largely for two reasons: a drop in OPEC oil production in 2013 (largely because of the supply disruption in Libya), and a 3% decline in average crude oil prices (as measured by the Brent crude oil price marker). Saudi Arabia earned the largest share of these earnings, $274 billion in 2013, representing approximately one-third of total OPEC oil revenues. On a per capita basis, OPEC (excluding Iran) net oil export earnings reached about $2,520 in 2013. These net export earnings do not include Iran’s […]

Posted On : Published By : Tom Whipple
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Iraq Parliament Chooses New President, as Rebel Attack Kills 60

Iraqi lawmakers elected a new president on Thursday, hours after an attack on a prisoner convoy just north of the capital left dozens dead in murky circumstances. The violence illustrated the challenges facing the country’s politicians as they debate the thornier question of who will become prime minister. Iraqi security officials said the convoy was escorting prisoners from a high-security prison in Al Taji, about 15 miles north of Baghdad, when it was attacked just after dawn. The area is populated mainly by Sunnis, and the prison’s inmates are mostly Sunnis being held on terrorism charges. In a separate incident, two car bombs ripped through Karrada, a usually bustling district in central Baghdad packed with shops and restaurants, as families gathered to break the Ramadan fast at dusk on Thursday. At least […]

Posted On : Published By : Tom Whipple