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Libya: Fighters Clash With Troops Defending Oil Sites

Islamist militia fighters killed at least 22 soldiers on Thursday during a surprise attack in which they used speedboats in a bid to seize some of Libya ’s main oil facilities, officials said. The fighters of the Libya Dawn militia attacked the port of Al Sidra, firing rockets from speedboats and setting an oil tank on fire, security officials said. Clashes also erupted in Surt, the officials said, but the militants were eventually repelled. The soldiers were from a battalion that is affiliated with the forces of a former general, Khalifa Hifter. General Hifter’s forces have been fighting alongside forces from the internationally recognized government of Prime Minister Abdullah al-Thani against Islamist militants who have seized control of several cities, including Tripoli, the capital. A version of this brief appears in print on December 26, 2014, on page A10 of the New York edition with the headline: Libya: Fighters […]

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Africa: Falling Oil Prices Threaten Fragile African Economies

The sharp decline in world petroleum prices – hailed as a bonanza to millions of motorists in the United States – is threatening to undermine the fragile economies of several African countries dependent on oil for their sustained growth. The most vulnerable in the world’s poorest continent include Nigeria, Angola, Equatorial Guinea, Gabon and Sudan – as well as developing nations such as Algeria, Libya and Egypt in North Africa. "In the long run, governments in these oil-exporting countries should use oil revenues to support productive sectors, employment generation, and also build financial reserves when oil prices are high." — Dr. Shenggen Fan of IFPRI. Dr. Kwame Akonor, associate professor of political science at Seton Hall University in New Jersey, who has written extensively on the politics and economics of the continent, told IPS recent trends and developments such as the outbreak of Ebola and the fall of global […]

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Nigeria: Shell Loses 30,000 BPD to Oil Thieves

Royal Dutch oil giant, the Shell Petroleum Development Company, (SPDC) said it loses on the average some 30,000 barrels of crude oil every day. The company said oil thieves operating in the Niger Delta region are stealing its crude oil and has expressed worries over the increasing rate of oil theft in the area. Pipeline Asset Manager of the company, Mr. Jurgen Jansen, in Port Harcourt, Rivers State, said recently that some oil thieves tampered with one of the company’s major oil export pipelines, a 24 inch TNP around Okolo lounge, adding that the development resulted in a major loss of barrels of crude oil. According to Shell, a lot of illegal oil refining takes place in the Oloko lounge, a situation the company said had brought about severe pollution of the environment. Jansen added that a total of 243 illegal connections were made on its major pipelines in […]

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North Dakota population hits record

North Dakota Gov. Jack Dalrymple says oil-fueled economy drawing in a record number of people to the state. (Photo: Gov. Dalrymple’s office) BISMARCK, N.D., Dec. 24 (UPI) — A booming economy in North Dakota, fed largely by the oil boom, is drawing in new residents at a record pace, the state’s governor said. The state’s population has increased 2.2 percent since last year, the fastest pace of any other state in the nation. Data from the U.S. Census Bureau show the population in North Dakota is 739,482, an all-time high . "Our economic growth over the last decade continues to keep North Dakotans home, and we are attracting new residents who come for good jobs, a stable economy and a quality of life that is second to none," Gov. Jack Dalrymple said in a statement. North Dakota catapulted to the No. 2 spot in terms of oil production in […]

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China needing more energy, data show

A ship offloads oil at an offshore oil dock in Southern China’s Guangdong. Resource security, especially energy, has become a top priority for China and a potential threat to the United States as both countries compete for resources globally. UPI/Stephen Shaver Chinese President Xi Jinping’s efforts to keep economy moving in the right direction leading to growing demand for energy. UPI/Stephen Shaver BEIJING, Dec. 24 (UPI) — Efforts by the Chinese government to encourage sustainable growth have led to an increase in oil demand, government data released Wednesday show. Analysis of government data from Platts found Chinese apparent oil demand, a reflection of how much oil goes into domestic refineries combined with net oil product imports, increased in November by 3.5 percent to an average 10.31 million barrels per day. The report found demand driven largely by Chinese government efforts to keep the economy growing at a steady pace. […]

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BP Said in Talks for Share in Rosneft East Siberia Oil Producer

BP Plc (BP/) is in talks to buy a direct stake in an East Siberian oil producer from OAO Rosneft, the Russian oil producer facing U.S. and European financing bans, according to a person with direct knowledge of the matter. The talks about Rosneft’s Tass Yuriakh unit started some time ago, according to the person, who asked not to be identified because the information isn’t public. The stake may be valued at $700 million to $800 million, according to Russian daily Kommersant, which reported the deal earlier today. BP has remained committed to its partnership with Rosneft, in which it holds 20 percent, as Russia ’s relations with the U.S. and Europe sour over the conflict in Ukraine. U.S.-led sanctions, which restrict Rosneft from borrowing internationally and limit access to offshore and shale technology, don’t stop it from selling assets. BP has been seeking direct production ventures in Russia […]

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Russia called on to suspend arctic oil ambitions

WWF in Russia says low crude oil prices means arctic energy ambitions aren’t sustainable, suggests 10-year moratorium. (Photo: WWF Russia) MOSCOW, Dec. 24 (UPI) — The Russian branch of the World Wide Fund for Nature said Russia needs to suspend exploration and production efforts in the arctic because of low oil prices. At a press summit organized by the Russian Natural Resources Ministry, WWF Director Igor Chestin said it was time to halt ambitions in the Russian arctic . "We need to declare a 10-year moratorium on oil and gas exploration in the arctic," he said. "At current oil prices, these projects are absolutely unprofitable." U.S. energy company Exxon Mobil has a partnership with Russian oil company Rosneft for work in the arctic waters of Russia. With Western sanctions impeding developments, the Russian government has placed a greater emphasis on domestic exploitation of arctic reserves. Low crude oil prices […]

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Libya Oil Ports Guard Calls In Air Strikes on Islamist Militias

Libya ’s government struck from the air at Islamist militias it said shelled the country’s largest oil port today, according to the military unit in charge of protecting export terminals. The strike comes two days after the Petroleum Facilities Guard gave the militias 72 hours to return to Misrata, their main stronghold, to avoid the airstrikes after an earlier attack on the Es Sider terminal. “We decided to order attacks from the air without waiting after the rocket attack on Es Sider,” Ali al-Hasy, a spokesman for unit, said by phone from the port, where loading was halted Dec. 13 after a first round of clashes. Aircraft belonging to the internationally recognized government of Abdullah al-Thinni attacked the artillery unit that fired on the port and bombed positions in Misrata and along the front line in Bin Jawad, 35 kilometers west of Es Sider, he said. The self-proclaimed government […]

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Ruble Defense Cuts Russian Reserves by $15.7 Billion in Week

Russia ’s international reserves plunged the most in six years, losing $15.7 billion last week as the government and central bank pledged measures to support banks and defend the currency. The value of the stockpile, which includes the central bank’s reserves and two sovereign wealth funds, fell to $398.9 billion (RUREFEG) in the week through Dec. 19, the Bank of Russia said today on its website. That is 22 percent drop from January. Policy makers, led by central bank Governor Elvira Nabiullina, are fighting to stem the ruble’s worst slump since the 1998 default. With oil prices and sanctions over the Ukraine conflict pushing Russia toward recession, the authorities have raised rates and sought to ease dollar demand. The steps have helped stem the currency rout, after the ruble collapsed to a record low 80 against the dollar last week. “Such a sharp decline is clearly negative news for […]

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Russia says Kiev’s move to join NATO dangerous for Europe

MOSCOW (Reuters) – Russian Foreign Minister Sergei Lavrov said Ukraine’s pursuit of NATO membership posed a danger to European security and that the West was using Kiev’s bid to join the Atlantic alliance as a way to fuel confrontation between Russia and Ukraine. The Kiev parliament’s renunciation of Ukraine’s neutral status this week as a step toward joining NATO has outraged Moscow and deepened the worst confrontation between Russia and the West since the end of the Cold War. Lavrov is the latest Russian official to speak out against the Kiev’s bid in recent days, and who have made clear Russia would see the NATO membership of such a strategic former Soviet republic with a long common border as a direct military threat. "There are a few Western countries that want to maintain the crisis in Ukraine and to maintain and boost the confrontation between Ukraine and Russia, including […]

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Moscow seeks to reassure public that rouble crisis is over

The Russian government sought to reassure the public that the country’s currency crisis was over, but warned of economic hardship ahead. Finance minister Anton Siluanov said extreme signs of a liquidity squeeze due to the collapse of the rouble had already receded and the currency had “found its equilibrium”. More On this topic IN Europe However, Moscow expects inflation to spike higher. Andrei Belousov, economic adviser to President Vladimir Putin, said consumer price inflation, which stood at 10.4 per cent as of Wednesday, was likely to hit 11 per cent for all of 2014, while the finance ministry predicted CPI to reach as high as 11.5 per cent for the full year. Mr Putin said the government was “definitely coping with the problems faced by the economy and the country as a whole in a worthy manner”, but ordered the cabinet to skip the upcoming New Year holidays to […]

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Talks on Ukraine settlement break down

MINSK, Belarus (AP) — The foreign ministry of Belarus, which has been hosting Ukraine peace talks, says the much-anticipated round of negotiations on Friday has been scrapped. Ministry spokesman Dmitry Mironchik told The Associated Press that the talks broke down but did not give a reason. The opening round was held on Wednesday, one day after Ukraine’s decision to drop its non-aligned status, which added a new element of tension to the attempts to resolve the violent crisis in the country. The talks were to discuss how to improve an often-violated cease-fire that was declared in September, to pull back heavy weapons and to exchange of war prisoners. The negotiators included representatives of Ukraine, Russia, pro-Russian rebels and the Organization for Security and Cooperation in Europe.

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As winter arrives, natural gas is becoming less expensive

As winter arrives, natural gas is becoming less expensive thumbnail Natural gas, the nation’s most prevalent heating fuel, is getting cheaper just as winter is arriving because supplies are plentiful and temperatures have been mild. The price of natural gas has dropped 30 percent in a month, to $3.14 per 1,000 cubic feet on Tuesday from $4.50 in late November. That’s a steep drop even for a fuel notorious for volatile price swings. The lower prices are expected to linger and could reduce electricity prices and heating bills in the coming months. Natural gas is used by half of the nation’s households for heating and to generate 26 percent of the nation’s electricity. Kansas City area consumers who pay a cost-of-gas charge that changes monthly should see a decline. But the effect of the lower wholesale price is muted because area gas utilities have already bought some of their […]

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Oil Falls Amid Concern U.S. Growth Insufficient to Offset Glut

Oil fell from the highest close in more than a week amid concern that the strengthening U.S. economy won’t boost demand enough to clear a global glut. Brent crude fell as much as 1.6 percent in London , extending this year’s decline to 45 percent. OPEC will have to “step in” if prices continue to fall, Iraq’s Adel Abdul Mahdi said yesterday in an interview. Gross domestic product in the U.S., the world’s biggest consumer, rose at a 5 percent annual rate from July through September, the most since 2003, according to revised Commerce Department data. Oil is heading for the biggest annual decline since 2008 amid a global glut exacerbated by the highest U.S. output in more than three decades . Prices have dropped 20 percent since the Organization of Petroleum Exporting Countries decided to maintain its output ceiling at 30 million barrels a day in November. The […]

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Natural Gas Gains, Breaking Losing Streak

By Timothy Puko Natural gas prices rose Tuesday, rebounding from nearly two-year lows and snapping a three-session losing streak. The front-month January contract settled up 2.7 cents, or 0.9%, at $3.171 a million British thermal units on the New York Mercantile Exchange. The bounce ended a losing streak that had brought prices down as much as 16%. Prices flip-flopped around unchanged for most of the session, finishing higher from a rally that started around 1 p.m. Brokers and analysts say there are still bearish trends in the market, making a turnaround difficult. Power plants are likely to start switching to use more natural gas at these prices, Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. And there is still plenty of time for cold weather to drive demand and possibly curtail some production in January and February, analysts said. "The […]

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Libyan Islamists Pushed Back From Attack on Oil Ports

The force defending oil ports in eastern Libya pushed back an onslaught that Islamist militias had started 11 days ago to capture the facilities. “We pushed them back and it’s we who are now attacking them,” Ali al-Hasy, a spokesman of the Petroleum Facilities Guard, said by phone from Es Sider, Libya’s largest oil port. “The oil ports are safe and they suffered no damage. All the fighting took place well outside the ports.” The Tripoli-based Libyan News Agency today reported the death of Tareq Shnena, the commander of the Islamist force tasked with capturing the eastern oil ports. He succumbed to wounds sustained in the fighting near Es Sider, it said, without saying where it got the information. State-run National Oil Corp. on Dec. 13 declared force majeure in Es Sider and the neighboring Ras Lanuf oil port, Libya’s third-largest. The move came after the Islamist-backed, self-proclaimed government […]

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Iraq Cabinet Approves Lower Spending Plan on Oil’s Drop

Iraq’s cabinet approved a smaller 2015 spending plan than the government expected because of the collapse in oil, which provides most government revenue. The budget, based on a $60 a barrel price for oil, stands at 123 trillion dinars ($103 billion), Saad Al-Hadithi, spokesman for the office of the prime minister, said by phone. The budget deficit was set at 23 trillion dinars and total revenue at 99.8 trillion dinars, including oil revenue of 84 trillion dinars, Obaid Mahal, deputy secretary general of the cabinet, said by phone. The 2015 budget had initially been set at 141 trillion dinars, and was 138.4 trillion dinars in 2013. “The reason behind the cut in the budget is because of the oil price drop, and curbing unnecessary spending,” Mudher Mohammed Saleh, economic adviser to Prime Minister Haidar Al-Abadi, said by phone. Iraq, home to the world’s fifth-largest crude reserves, is engulfed in […]

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Kurdish rebels threaten renewed violence in Turkey

ANKARA, Turkey (AP) — A Kurdish rebel commander has warned that fighting in Turkey’s southeast could resume by June if efforts to end a 30-year insurgency make no progress. Murat Karayilan’s comments came days after Turkish and Kurdish officials declared a "new phase" in the peace process after widespread protests by Kurds in October threatened to derail the talks. Karayilan told Iraq-based Roj News that imprisoned Kurdish leader Abdullah Ocalan could be freed from prison by April if the talks make headway. However, he threatened to resume hostilities before Turkey’s June elections if there is no progress. His comments were carried by Turkish and Kurdish media on Wednesday. Turkey began talking to Ocalan in 2012 with the aim of ending the conflict that has killed tens of thousands of people since 1984.

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Iraq: Suicide attack kills 22 people near Baghdad

BAGHDAD (AP) — A suicide bomber blew up himself on Wednesday among a group of pro-government, anti-Islamic State group Sunni militias near Baghdad, killing at least 22 people, a latest bold attack by militants seeking to undermine government efforts to fight extremists. The attacker managed to mingle with the militiamen who gathered at a military base in the town of Madain to receive their monthly payment, two police officers said. At least 15 of the dead were Sunni militiamen and the rest were soldiers, while 55 others were wounded, they said. The town is located about 20 kilometers (14 miles) south of Baghdad. The group, known as Sahwa or the Awakening Councils, is made up of Sunni militiamen who joined U.S. troops in the fight against al-Qaida during the height of Iraq’s insurgency in 2007 and 2008. They are viewed as traitors by the Sunni militants. Three medical officials […]

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Budget including deficit, KRG deal sent to Parliament

Iraq’s Cabinet meets on Nov. 18, 2014. (Source: Iraqi Cabinet Media Office) By Published Wednesday, December 24th, 2014 Iraq’s Cabinet balanced a collapse in oil revenue while maintaining spending commitments needed to placate key constituents and keep up the fight against the so-called Islamic State (IS) militant group in a draft budget for 2015 that it approved Tuesday.The budget calls for spending of around 123 trillion Iraqi dinars (about $102.5 billion), said Abdul Qadir Omar, a member of the Parliament Finance Committee who received a copy of the approved draft.The draft budget will be put to Iraq’s…

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In Israel, Antitrust Regulator Reviews Natural Gas Development

LONDON — Israel ’s fledgling natural gas industry was rattled on Tuesday over a threat by the country’s antitrust regulator to break an American-Israeli group’s hold on the country’s gas resources. Israeli officials and the antitrust regulator have said that they are concerned that Noble Energy, a Houston-based oil company, and its partners, Delek Drilling and Avner Oil Exploration, had a lock on Israeli gas production. Noble and its partners produce nearly all of Israel’s gas from an offshore field called Tamar, and that gas is used to generate about half of the country’s electric power. They are also developing an even larger field, Leviathan . Together, Nobel estimates that the Leviathan and Tamar fields hold more than 800 billion cubic meters of gas, enough to meet current Israeli demand for about a century. With such a wealth of gas, the companies and the government are backing plans to […]

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Nigeria: Oil Exports to Dip in February

By Chika Amanze-Nwachuku And Alike Ejiofor With Agency Report Nigerian crude oil exports in February are set to fall to around 1.87 million barrels per day (bpd) from around 2.03 million bpd in January, shipping lists showed on Tuesday. This is just as the Kingdom of Saudi Arabia, the swing oil producer, has maintained that the Organisation of Petroleum Exporting Countries (OPEC) will not cut production even if the price of oil drops to $20 a barrel, adding that it will be unfair to expect the cartel to reduce output if non-members do not. According to Reuters, Nigeria’s export levels for February are expected to be lower due to less of the benchmark Qua Iboe grade, traders said, citing expected maintenance by ExxonMobil at its Eket terminal. However, exports levels were still higher than for much of 2014, as there was relatively strong production of other Nigerian grades such […]

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Oil’s Slump Gives Nigeria Chance to End $7-Billion Fuel Subsidy

The tumbling oil prices that have slashed Nigeria’s revenue and roiled currency and stock markets in Africa’s biggest economy may have a silver lining: an excuse for the government to scrap fuel subsidies that cost as much as $7 billion a year. It’s an opportunity President Goodluck Jonathan , concerned that such a move would provoke protests before his bid for re-election in February, may not seize, analysts say. “Politics often trumps prudence and there’s an entrenched social expectation for fuel to be subsidized,” Gareth Brickman an analyst at Johannesburg-based ETM Analytic said in a Nov. 28 e-mailed response to questions. “The last time subsidies were reduced there were widespread protests, and given how contentious the political environment is in Nigeria with the elections and on-going ethnic divisions, it is likely this will be the case again.” Nigeria relies on refined fuel imports to meet more than 70 percent […]

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Cheap Oil Bonanza Eludes Overextended Chinese Refiners

Huang Haidong misses the flush times in 2010 when his refinery in eastern China couldn’t produce diesel fast enough to fill the trucks lined up outside. “There was a fuel shortage,” said Huang, who works as a supply manager at one of 40 “teapot” or small, privately held plants that dot Shandong province. “We ran our units at more than 80 percent at that time and still couldn’t meet demand. But things changed after the expansion frenzy.” Huang’s plant cut processing rates by half over the past four years as China’s refining capacity expanded 33 percent and economic growth slowed in the world’s second-largest oil consumer. While the country can process about 13.4 million barrels a day of crude, the International Energy Agency in Paris estimates demand this year will be just 10.3 million. Oil’s 46 percent plunge since June has benefited Chinese consumers with the lowest gasoline prices […]

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Continental Resources announces even deeper 2015 cuts

(AP PhotoKevin Cederstrom) HOUSTON — Oklahoma City-based Continental Resources continues to cut its 2015 budget in response to falling oil prices. The exploration and production company said Monday that it plans to spend $2.7 billion on capital expenditures next year . That’s down from the $4.6 billion budget it announced last month , which itself was a cut from a from its original $5.2 billion target. The company also dramatically reduced its planned production growth. Last month, it told investors to expect 23 percent to 29 percent production growth in 2015. It’s pared that expectation back to projected growth of 16 percent to 20 percent. Continental Chief Executive Harold Hamm said the revised budget “prudently aligns our capital expenditures to lower commodity prices.” Crude oil prices have fallen nearly by half since their 2014 peak of $107.26 on June 20. Continental also reduced its expected average rig count for the year from from […]

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U.S gas price decline breaks ’08 recession record

Former House Speaker Newt Gingrich on the campaign trail in 2012 predicted U.S. oil production would help push gas prices to around $2 per gallon. UPI/Kevin Dietsch WASHINGTON, Dec. 23 (UPI) — The U.S. price for a gallon of regular unleaded gasoline has declined for the longest stretch since the so-called great recession, motor club AAA reported. AAA reports a retail price for a gallon of regular unleaded gasoline for Tuesday at $2.38, about a penny less than Monday and 87 cents less than this date in 2013. The price for a gallon of gasoline has declined every day since Sept. 25, or 89 days in row, which is longer than any period on record for the motor club. The decline streak breaks the previous 86 day record set in 2008, when the global economy slipped into recession. While several cities are selling gas below the $2 mark, no […]

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Norway’s Statoil dumps U.S. shale acreage

Norwegian energy company Statoil sells off a portion of its holdings in Marcellus shale basin in the United States. Photo by Calin Tatu/Shutterstock STAVANGER, Norway, Dec. 23 (UPI) — After suspending some rig work to save capital, Norwegian energy company Statoil said Tuesday it sold acreage in a key U.S. shale play for $394 million. Statoil said it sold a 6 percent stake in the Marcellus shale play to U.S. company Southwestern Energy, leaving the Norwegian company with a non-operated 23 percent interest in the region. Statoil in 2008 entered Marcellus through a joint venture with Chesapeake Energy and now says the divestment is part of its optimization strategy. "I am delighted that we have concluded this important transaction with Southwestern despite the turbulence in today’s energy markets," John Knight, executive vice president for global business development at Statoil, said in a statement. Statoil in early December suspended contracts […]

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North Dakota Proposes New Bakken Waste Rules

ANL Study Suggests Greater Radioactive Material is Safe Radioactive Waste Levels May be Raised On December 12th, the ND Department of Health (DoH) proposed new limits for oil waste disposal that would drastically alter the way the industry does business in the Bakken region. This comes after a study conducted by Argonne National Laboratory concluded that the level of radioactive material (TENORM) found in waste can actually be much higher than current rates and still be safe for oil and landfill workers. Amounts of radioactivity are measured in units called picocuries, and the new proposal would multiply the amount allowed in waste material by ten times. Landfills choose to accept the higher TENORM material will be required to go through a new permit modification process, which will provide better accountability for the tracking of the radioactive waste. “Currently, approved landfills can accept waste of up to 5 picocuries per gram, […]

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Oil Firms’ Predicament: Who Should Cut Output?

ENLARGE For the U.S., reducing oil production by a million barrels a day would require an enormous shift. Dozens of small U.S. companies could close in all their oil wells at once without really making a dent. Bloomberg News If the global glut of oil that has sent crude prices plunging has come largely from the U.S., why aren’t American energy companies turning off the tap? The answer can largely be explained by simple game theory. In short, even though it’s in the collective interest of the country’s oil producers to cut production, the interests of any of those producers is the opposite. Each one of them is waiting for a rival to make the change. This behavior—hoping someone else will cut production so you don’t have to—is a classic example of the “prisoner’s dilemma,” says Roger McCain, a professor in Drexel University’s economics department. “If you can’t coordinate, […]

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Even oil could face rail shortages soon

Brett Gundlock | Bloomberg Tougher rules on shipping crude by rail mean oil producers in North Dakota’s Bakken region could soon face the unwelcome choice of spending more to ship by truck or cutting back on production altogether. That’s the takeaway from a Wall Street Journal report that says that the Railway Supply Institute is warning that tens of thousands of rail cars will be sidelined because they no longer meet code in the wake of new safety regulations on shipping crude oil by train. The U.S. Department of Transportation has mandated that rail cars carrying flammable liquids meet higher safety standards. North Dakota regulators also toughened its own rules on shipping , saying that volatile gases had to be removed from crude oil before shipping. There’s a potential upside for any business not involved in oil: Farmers, manufacturers and utilities have complained for the past year that oil […]

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Exclusive – U.S. airlines confront cheap oil’s flip side: costly hedges

NEW YORK (Reuters) – Some major U.S. airlines including Delta and Southwest are rushing to finance losing bets on oil and revamp fuel hedges as tumbling crude prices leave them with billions of dollars in losses, according to people familiar with the hedging schemes. In theory, airlines are among the top beneficiaries of a six-month slump that halved crude prices to five-year lows. Oil is the biggest variable cost for airlines, often representing a third or more of their total operating expenses. But now, carriers such as Delta Air Lines and even Southwest Airlines, known for a successful hedging program that locked in cheap fuel prices before they rose a decade ago, see some of the benefits of cheap fuel eaten away by hedging costs. That is largely because they have used common but risky hedging strategies, among them a "costless collar": selling financial options that pay off when […]

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Obama Doubts and Lower Gas Prices Cloud Keystone Future

ENLARGE Pipes lie ready to become part of the Keystone XL pipeline near Cushing, Okla. President Obama has voiced skepticism over the project. Associated Press Prospects for approval of the Keystone XL pipeline are dimming amid two recent developments: lower gasoline prices and increased skepticism from President Barack Obama, whose administration has been reviewing the proposed pipeline for more than six years. Mr. Obama last week said he had doubts the pipeline would benefit the U.S., buttressing remarks he has made publicly at least three other times since early November. He said it wouldn’t create many permanent jobs or cut gas prices, as the project’s supporters have argued “It’s very good for Canadian oil companies, and it’s good for the Canadian oil industry, but it’s not going to be a huge benefit to U.S. consumers,” Mr. Obama said. Many analysts say falling U.S. gas prices boost the argument of […]

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State:Texas Oil and Gas Drilling Permits Fall 50 Percent in November

HOUSTON, Dec 23 (Reuters) – Texas, the top oil-producing U.S. state, issued roughly half as many drilling permits in November as in October, as oil and gas producers scaled back with the steep decline in crude prices since summer. The Texas Railroad Commission, the state’s industry regulator, said on Tuesday that new permits for oil wells fell 57 percent to 376, while those for new oil and gas wells retreated 46 percent to 977. Overall, the state issued 1,508 original drilling permits for all types of wells in November, compared with 3,046 in October. U.S. crude futures prices closed on Tuesday at $57.12, up more than $2 a barrel after data showing the fastest U.S. economic growth in 11 years boosted expectations that crude demand would rise. However, Tuesday’s settlement was down 47 percent from $107.95 in late June. Lower oil prices took time to translate into fewer permits. […]

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Whiting’s Proven Oil-Equivalent Reserves Up About a Third in 2014

Dec 22 (Reuters) – Whiting Petroleum Corp said on Monday its proven reserves of oil equivalent have jumped nearly a third over the past year, thanks largely to its buyout earlier this month of rival Kodiak Oil & Gas. The deal, which made Whiting the largest North Dakota oil producer, lifted the company’s proven reserves to 780 million barrels of oil equivalent, more than two-thirds of which is comprised of crude oil. The numbers for both years factor in Kodiak’s reserves, Whiting said in a statement. As part of the deal, Whiting acquired Kodiak’s proven reserves of roughly 167 million barrels of oil equivalent for $23.77 per barrel. That is far below the current benchmark price for American crude oil, about $56 per barrel, boosting the economics of the deal. Whiting also boosted a revolving credit facility to $3.5 billion from $2.5 billion. The increase is likely designed to […]

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Outlook Sours for Europe’s Oil Titans on Crude Slump: S&P

The U.S. shale-oil industry has made another enemy: Europe’s largest crude explorers. Standard & Poor’s Ratings Services revised its outlook to negative for Royal Dutch Shell Plc (RDSA) , Total SA (FP) and BP Plc (BP/) as the oil-market rout driven by weakening demand and a flood of supply from American shale fields threatens cash flow into 2016. The credit-rating company also cast a dim eye on Houston-based ConocoPhillips, saying it’s facing similar cash flow pressure, and said it may cut the ratings on Eni SpA (ENI) and BG Group Plc’s BG Energy Holdings. S&P cited “the dramatic deterioration in the oil price outlook” and the 50 percent increase in debt loads for the biggest European oil producers since the end of 2008. BP, down 7.3 percent in the past month in London , pared losses today with a 0.5 percent gain to 415.65 pence by 8:55 a.m. local […]

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Russia’s Gazprom trims expenses

Gazprom trims expenses for 2015 as Russia moves closer to the brink of recession. (UPI/Shutterstock/Igor Golovniov) The board of directors said via state news agency Sputnik , formerly RIA Novosti, it was cutting expenses by $238.7 million and expecting around $1.65 billion in foreign loans. Gazprom’s disclosure comes at a time when Russia is struggling to keep its economy in check. Western sanctions imposed in response to Russian policies and low oil prices have pushed the economy to the brink of recession. The Russian Central Bank last week raised its key interest rate by 6.5 percent to 17 percent in an effort to arrest the decline of the nation’s currency. Russia relies heavily on oil and gas revenues for economic health. With oil prices falling, Russian President Vladimir Putin said during his annual press conference last week that many of the problems in the Russian economy were caused by […]

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Russian State-Run Companies Ordered to Cut Foreign Currency Holdings

MOSCOW–The Russian government has ordered five state-run companies to cut the amount of foreign currency they hold in an attempt to stabilize the volatile currency market. The government said on its website Tuesday that gas monopoly Gazprom, oil producer Rosneft, diamond miner Alrosa, diamond producer Kristall and oil firm Zarubezhneft have to cut their foreign currency holdings by March 1, 2015 to the level they had on Oct 1, 2014. The move to prompt state-run companies to sell dollars and euros comes after a rapid depreciation in the ruble, which brought its value to all-time lows last week. Many have feared that the government may apply stricter administrative measures to limit the ruble’s weakness despite a pledge by the authorities to impose no capital controls. Write to Andrey Ostroukh at andrey.ostroukh@wsj.com

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Russia to help large borrowers as S&P mulls junk rating

MOSCOW (Reuters) – Russia’s central bank offered on Wednesday to help top exporters refinance heavy foreign debts next year, expected to be one of the toughest of President Vladimir Putin’s 15-year rule for the economy due to Western sanctions and a plunge in oil prices. The bank said it would help major Russian companies to refinance foreign debts by lending dollars and euros to those who were willing to put up their foreign borrowings as collateral. The move means that the state will in effect take on credit risk for the companies, whose foreign debt obligations have shot up in ruble terms because of the currency’s sharp slide this year. Even before the move, Standard and Poors put Russia’s sovereign credit outlook on "creditwatch negative", meaning it could downgrade it to junk as soon as January due to a "rapid deterioration of Russia’s monetary flexibility". While Russia has minimal […]

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Lukoil Sells Stake in Venezuela Project to Rosneft

MOSCOW—Russia’s largest privately owned oil company Lukoil said Tuesday it sold its share in a Venezuelan project to state-controlled oil giant Rosneft. Rosneft, the world’s largest publicly traded oil company, said its share in the National Oil Consortium LLC, the company that is developing the project called PetroMiranda, rose to 80%. Gazprom Neft , the oil arm of Russia’s natural gas monopoly Gazprom, owns 20%. All the three companies are under Western sanctions imposed for Moscow’s policy toward Ukraine.  Rosneft has consistently increased its cooperation with Venezuela, Chief Executive Igor Sechin said. “Taking into account the future decline of shale production in the U.S. and Canada, it is Venezuelan oil that can become the substitutional element for the receding volumes of those markets,” said Mr. Sechin. Lukoil President Vagit Alekperov said the company “is now implementing a number of strategically important projects, both in Russia and abroad. After the […]

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Ukraine Ends ‘Nonaligned’ Status, Earning Quick Rebuke From Russia

ENLARGE Lawmakers voted to end the nation’s nonaligned status. Agence France-Presse/Getty Images KIEV, Ukraine—Ending its status as a nonaligned nation, Ukraine rekindled aspirations to join the North Atlantic Treaty Organization, a move that drew a quick rebuke from Moscow. Though largely symbolic, Tuesday’s move highlights the depths of differences between Kiev and Moscow, which has long thought of Ukraine as its satellite and buffer against the West, and has accused the West of bringing hostile forces to its borders. Ukraine had pursued NATO membership when a pro-Western government was elected 10 years ago, but declared itself as nonaligned under the recently ousted pro-Russia president, Viktor Yanukovych, after he was elected in 2010. Ukraine’s chances of joining NATO anytime soon are practically nil, however, as members in Europe especially have little stomach for a confrontation with Russia. On Tuesday, Russian Foreign Minister Sergei Lavrov condemned the move, which he said […]

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Fracking Fracas: The Trouble with Optimistic Shale Gas Projections by the U.S. Department of Energy

The argument of the EIA and UT/BEG that their projections of shale gas production from the plays mentioned in the Nature  article are fundamentally similar is untrue, given the publicly available data. The implications of the EIA being wrong on its projections of cheap and abundant gas for decades are considerable, given that investment decisions are now being made based on these projections— including construction of infrastructure for LNG exports, gas-fired generation and even crude oil exports. Hence it is worthwhile to examine the EIA’s optimistic projections in more detail in light of the projections available from UT/BEG and the  Drilling Deeper  report (DD). Three Methodologies The two  published   UT/BEG studies  are indeed complex, focusing on myriad estimated and measured variables and the development of a tiering of sections utilizing well productivity and other data from which they infer cost of production and future production profiles. They limit […]

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Greed explained: J. Paul Getty, Aristotle and the Maximum Power Principle

Regular readers know I often write about energy, and while this piece may not at first blush seem like an energy story, you’ll soon see that the quest for an ample supply of energy is, in fact, at the heart of human greed. Greed is often said to be a central cause of our ecological and social ills. It motivates excessive and injurious exploitation of the planet and thus threatens the existence of many species including humans themselves. It leads to excessive economic inequality and the social ills presumed to be associated with that inequality. And, of course, greed is regarded as not just bad for the biosphere or society; it’s bad for the soul and therefore earns a place on the list of the  seven deadly sins . Many people are convinced that greed is learned and therefore can be unlearned or not taught in the first place. […]

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Will The Fed Intervene In The Oil Market?

In a larger sense, the Fed is already intervening in the oil sector via its zero interest rate policy (ZIRP) and its unlimited liquidity for financial speculation. The problem with financializing a critical sector of the economy is the financialization process transforms it into a systemic risk.  The trajectory of every financialized sector is the same: debt and leverage are piled ever higher on a base of collateral that eventually collapses as heightened risk becomes the Monster Id of a crowded trade. Once the Monster Id burns through the firewalls that were supposed to limit risk, the crowded “safe” trade blows up and the conflagration quickly spreads throughout the financial system. Every financialized sector thus has the potential to take down the entire financial system. The mortgage sector is a prime example of this dynamic. The financialization of the mortgage industry created the subprime mortgage firetrap, which inevitably caught […]

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Oil Prices Rise but Gains Likely to Be Limited

By Eric Yep Crude-oil futures rose in Asian trade Tuesday, but market participants said gains would be limited as oil prices remained volatile and supply-and-demand fundamentals in the market hadn’t changed. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $56.00 a barrel at 0454 GMT, up $0.74 in the Globex electronic session. February Brent crude on London’s ICE Futures exchange rose $0.34 to $60.45 a barrel. Oil prices have lost about 45% of their value since June. Markets have been fumbling around for a price floor, especially after the Organization of the Petroleum Exporting Countries refused to cut output to stem the decline in prices. Morgan Stanley said it wouldn’t be surprising to see some value buying over the next two months as global oil demand would rise in the northern winter, while spending cuts by oil companies and falling numbers […]

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Oil Advances as Traders Weigh U.S. Recovery With Saudi Policy

Oil rose in New York before a report that may show the U.S. economy expanded more than previously estimated last quarter. Prices moved between gains and losses in London after Saudi Arabia ’s oil minister said the world’s biggest exporter won’t lower production if this year’s price plunge persists. West Texas Intermediate climbed as much as 2.9 percent in New York, paring this year’s decline to 43 percent. Saudi Arabia, OPEC’s biggest producer, doesn’t plan to pump less “whatever the price is,” Oil Minister Ali Al-Naimi told the Middle East Economic Survey yesterday. The U.S. economy expanded 4.3 percent in the third quarter from a year earlier, a Bloomberg News survey shows. Crude is set for the biggest annual loss since 2008 amid the highest U.S. output in more than three decades and signs of slowing global demand growth. Stockpiles in the U.S., the world’s largest oil consumer, probably […]

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Crude Extends Fourth Weekly Decline Amid Supply Glut

Crude oil fell, extending a fourth weekly decline on concern OPEC’s refusal to cut production will worsen a global glut. Saudi Oil Minister Ali Al-Naimi said OPEC’s biggest producer will seek to maintain market share and that global demand growth this year was slower than expected. Iraq plans to boost its production next year, Oil Minister Adel Abdul Mahdi said. Trading volatility stayed at the highest level in more than three years. “Saudi Arabia is not willing to give up market share,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “With the U.S. production trajectory intact certainly in the next few months, it’s going to be a fight. It certainly looks like oil is heading toward $50.” Oil has slumped about 21 percent since OPEC decided against cutting its production target last month, prompting a plunge in the value of currencies from the Russian ruble […]

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Natural Gas Slides to Near a Two-Year Low

ENLARGE A surfer off the coast of Maine this month. Unseasonably warm weather in December has eased supply concerns. European Pressphoto Agency Mild temperatures across the U.S. have sent natural-gas futures tumbling to their lowest level in nearly two years, more good news for consumers already reaping the benefits of a 30% decline in gasoline prices. Natural-gas prices dropped 9% Monday, their largest decline since February, after the government said gas stockpiles rose above year-ago levels for the first time in 2014. Record U.S. oil and gas production, which has played a major role in driving the 48% decline in crude prices since June, is overwhelming tepid demand for home-heating fuels amid an unseasonably warm December. Many investors who earlier this year placed bets on rising gas prices have had to reverse course and cover those bets, as strong production has now closed a stockpile shortage that had lingered […]

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IMF Says Drop in Oil Prices to Persist, Help Global Growth

WASHINGTON, Dec 22 (Reuters) – The recent drop in oil prices should persist, helping to boost global economic activity by up to 0.7 percentage points next year, two senior IMF economists wrote in a blog on Monday. Brent prices have fallen more than 46 percent since the year’s peak in June of above $115 per barrel, sped up by the November decision of the Organization of Petroleum Exporting Countries (OPEC) not to reduce production. Saudi Arabia has also convinced its fellow OPEC members it is not in the group’s interest to cut oil output, however far prices may fall, the kingdom’s oil minister said. "Overall, we see this as a shot in the arm for the global economy," Olivier Blanchard, the IMF’s chief economist, and Rabah Arezki, head of the commodities research team, said in the blog. The boost to the global economy would be between 0.3 and 0.7 […]

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Baiji refinery ‘more than a year’ from re-start

Oil Minister Adil Abdulmahdi tours the besieged Baiji refinery on Sept. 11, 2014, a day after formally taking office. (Source: Office of Adil Abdulmahdi) Iraq’s largest oil refinery still faces enormous obstacles before it can resume operations, one month after Iraqi forces regained control of the city of Baiji from insurgents led by the so-called Islamic State (IS) group."It could take more than a year to get it operating again," said a senior technical official at the refinery.Since the government chased IS militants from Baiji in mid November, Iraqi forces have consolidated positions in the refinery compound itself and key parts of Bai…

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Non-OPEC Producers Called on to Cut Oil Output After Rout

Oil producers outside of OPEC should cut their “irresponsible” output with excess supplies harming the market, the United Arab Emirates energy minister said. The oil market is oversupplied by 2 million barrels a day, Mohammed Al Sada, Qatar’s energy minister, said in an interview on the sidelines of a conference in Abu Dhabi yesterday. The Organization of Petroleum Exporting Countries has produced about 30 million barrels a day since January 2013 while global output climbed more than 2 million barrels a day to 93.6 million barrels, according to data compiled by Bloomberg. “We call on all other producers to stop the increase because the increase is harming the market,” U.A.E. Energy Minister Suhail Al Mazrouei said in a separate interview at the conference. “If the increase stops, and they follow OPEC’s lead, OPEC’s decision is to fix production, if production stabilizes in 2015 things will stabilize much faster.” Brent […]

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