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Obama Administration to Propose New Offshore Areas for Oil and Gas Drilling

ENLARGE Tug boats transport the Chevron Corp. Jack St. Malo semi-submersible drilling and production platform to the Gulf of Mexico from Kiewit Offshore Services in Ingleside, Texas, U.S. on Nov. 15, 2013. Photo: Eddie Seal/Bloomberg News WASHINGTON—The Obama administration is planning to propose opening up new areas of the nation’s federally owned waters to oil and natural gas drilling, including areas along the Atlantic Coast, according to people familiar with the plan. The Interior Department is set to propose as soon as Tuesday its plan that will outline what leases the federal government will offer from 2017 to 2022, a step the government is required by law to take every five years. The plan is expected to come under increased scrutiny as low oil prices are testing the profit margins of energy companies and President Barack Obama is pursuing an aggressive climate-change agenda. Jessica Kershaw, an Interior Department spokeswoman, […]

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Boston leaking $90 million worth of natural gas

It is no secret the networks of aging underground pipes in many big cities can be dangerous. Now, a new study has found they are also bad for the environment. Focusing their attention on Boston, a group of Harvard researchers writing in current issue of the Proceedings of the National Academy of Sciences found that $90 million worth of natural gas — 15 billion cubic feet — escapes from its network of aging cast iron pipes each year. That accounts for 60 to 100 percent of the region’s release of the methane, a potent heat-trapping greenhouse gas. Methane has a 25 times greater impact on climate change than carbon dioxide over 100 years. It only represents about 9 percent of U.S. emissions (compared to 82 percent for carbon dioxide), but that is growing, partly due to contributions from the oil and gas industry. “This study helps us better understand […]

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Ministers impose curbs on fracking

Ministers have imposed a series of Labour demands on the UK’s fracking industry, in a last-minute move to avert a House of Commons defeat and pave the way for the development of shale oil and gas across Britain. A group of MPs failed on Monday to derail legislation to help fracking companies extract what experts believe are trillions of cubic feet of gas and billions of barrels of oil trapped beneath the UK. But, in a heated Commons debate, the government accepted an opposition amendment that will strengthen controls on the industry. More On this topic IN UK Politics & Policy Amber Rudd, energy minister, said it would take on board Labour’s proposals, which included tougher environmental monitoring, wider consultation, and a legal compulsion on companies to provide community benefit schemes. Activity in national parks would also be prohibited. Caroline Flint, Labour’s shadow energy and climate change secretary, commenting […]

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London in bed with shale, advocate says

British advocacy group publishes letter it says shows the government is working in favor of natural gas companies reviewing shale’s potential in the country. UPI/Gary C. Caskey LONDON, Jan. 26 (UPI) — The British Friends of the Earth said Monday it was worried by signs suggesting the government was working "hand-in-glove" with the shale gas industry. The group, a vocal opponent to the fledgling shale gas sector in the country, published a letter sent in September by the government to the "highly secret and top-level Economic Affairs Committee" on shale developments in Lancashire. Cuadrilla Resources estimates there may be as much as 200 trillion cubic feet of shale natural gas in the Bowland basin in Lancashire. Last year, the company deposited what it said was "most comprehensive" environment study of its kind to local leaders assessing its drilling ambitions. For Friends of the Earth, the letter shows the government […]

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BP Freezes Employee Pay in Response to Oil Price Slump

BP Plc (BP/) , Europe’s third-largest oil company by market value, will freeze employee pay in the latest example of cost cuts as the world’s top oil companies respond to plunging crude. The company “needs to take a number of measures in response to the harsh trading environment,” Chief Executive Officer Bob Dudley said in a memo to staff Monday. “One of the measures we are taking is a general freeze to base pay for 2015, with only a few exceptions.” BP, which employs more than 80,000 people around the world, is the first global oil company to announce a pay freeze for staff. Oil has slumped to under $50 a barrel, less than half the price six months ago, forcing producers to review spending on new projects, reduce staff and cut costs. More than 30,000 dismissals have been announced across the industry as companies slash budgets, according to […]

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Seven Ukrainian soldiers killed in past 24 hours: Kiev military

KIEV (Reuters) – Seven Ukrainian servicemen have been killed and 24 wounded in fighting in separatist eastern territories in the past 24 hours, Kiev military spokesman Vladislav Seleznyov said on Monday. Fighting in eastern Ukraine is at its worst level since a ceasefire was agreed last September. The rebels have launched an offensive on the port city of Mariupol and vowed to encircle the town of Debaltseve, where Seleznyov said fighting was the most intense. (Reporting by Natalia Zinets; Writing by Alessandra Prentice)

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Russian banker warns west over Swift

Andrey Kostin, photographed during a lunch at the FT this afternoon. One of Russia’s top bankers on Friday warned that excluding the country from the Swift banking payment system would be tantamount to “war”. The suggestion that Russia could be shut out of Swift triggered widespread alarm in Moscow’s financial community when it was floated by western politicians last summer. Russia’s banks rely heavily on the Belgium-based payments system for both domestic and international payments. However, the move was at the time considered too punitive a sanction, being described by one adviser as “the nuclear option”. Speaking at a panel in Davos on Friday Andrei Kostin, chief executive of VTB , Russia’s second-largest bank, said: “If there is no Swift, there is no banking . . . relationship, it means that the countries are on the verge of war, or they are definitely in a cold war.” “The next day, the Russian and […]

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Russia downgraded to ‘junk’ by S&P

Historical Museum, St.Basil Cathedral, Red Square, Kremlin in Moscow at night ©iStock Russia’s credit rating was cut to “junk” by Standard & Poor’s on Monday night, underscoring the dramatic economic deterioration in the world’s largest energy exporter. The downgrade is the latest blow to the Kremlin, already buffeted by a collapse in oil prices , wild gyrations in the value of the rouble and western sanctions that have all but shut Russian companies out of global capital markets. It comes as a sharp increase in fighting has ripped apart a fragile ceasefire in eastern Ukraine, triggering threats of fresh sanctions against Russia from the west. The downgrade had been widely anticipated by investors, but the rouble nonetheless tumbled on the news, dropping to 68.76Rb to the dollar. S&P said the downgrade, the first time in a decade that Russia has been assessed as below investment-grade by one of the […]

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Cease-Fire in Shreds, Ukraine Sees Heaviest Fighting in Months

DONETSK, Ukraine — The shattered remains of a tank bearing a tattered Ukrainian flag sat beside the main highway to Mariupol on Monday afternoon, a remnant of what pro-Russian rebel forces said was a failed attempt by Ukrainian forces to push into rebel-held territory a few days after a shelling attack left 30 dead in that port city. With a cease-fire in shreds, pro-Russian separatist forces mounting regular new attacks and the Ukrainian military struggling to rebound from losses at the Donetsk airport last week, eastern Ukraine is seeing by far the heaviest fighting since August. Thunderous artillery blasts could be heard from several directions Monday in the largely isolated city of Donetsk. The Ukrainian government declared a state of emergency on Monday in the Donetsk and Luhansk regions, the areas controlled by the rebels, and put the entire country on high alert. In Brussels, at the request of […]

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Russia Rating Slips to Junk, and the Ruble Takes a Beating

A customer shops at a market in Russia’s Kemerovo region in October. ENLARGE Photo: Bloomberg News Russia’s fractured economy suffered another potential blow Monday after credit-rating firm Standard & Poor’s cut the country’s credit rating to junk, sending it below investment grade for the first time in more than a decade. While the move had been largely anticipated by financial markets, the news, which came late in the Russia day, helped drive the battered ruble even lower. In cutting Russia’s rating to “BB+”, S&P cited Russia’s limited flexibility to use monetary policy to help spur growth. Heavily dependent on oil exports, Russia faces mounting pressure from U.S. and European officials over the unrest in eastern Ukraine and its annexation of the Crimea region. On Saturday, U.S. and European leaders threatened new sanctions against Moscow. At the same time, a dramatic 51% slide in the ruble in the past seven […]

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Ukraine crisis: EU leaders warn of more sanctions against Russia

Part of a missile outside an apartment building in Mariupol, eastern Ukraine, on Sunday Leaders from all 28 members of the EU have warned Russia that it faces further sanctions after fighting in Ukraine’s eastern provinces escalated in recent weeks. The heads of state noted “evidence of [Russia’s] continued and growing support” for separatists in eastern Ukraine and called on the EU to consider “further restrictive measures”, in one of the most explicit statements yet by the EU. Foreign ministers will meet on Thursday to discuss further measures at an emergency meeting called by Federica Mogherini, the EU’s foreign policy chief. The call to consider stricter sanctions marks a more cohesive line on Russia from the EU after weeks of internal disputes over how to approach the situation in Ukraine. The bloc had previously been split between hawkish member states, who had pressed for tougher sanctions, and others who […]

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Whiff of panic over Britain’s fracking policy

PRESTON, LANCASHIRE – OCTOBER 07: Engineers at work on the drilling platform of the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. The controversial method of extracting gas by pumping high pressure water and chemicals into shale formations deep underground has been blamed for two minor earthquakes in the surrounding region. Environmental campaigners are calling for a halt to the drilling of what Cuadrilla believe could be significant reserves of natural gas. (Photo by Matthew Lloyd/Getty Images) D avid Cameron’s energy policy has hardly been a model of strategic clarity. But his government has at least been consistent in its enthusiasm for shale gas. Britain’s prime minister promised several years ago to “go all out” to extract the country’s trapped resources of shale. Even the Liberal Democrats, normally cautious about any initiative that might upset environmentalists, have supported the push for hydraulic fracturing, or fracking. Not […]

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Low prices to delay ‘peak oil demand’ past 2030, says BofA

(Reuters) – The recent rout in oil prices could delay the onset of "peak oil demand," or zero global demand growth, by around five years to beyond 2030, Bank of America Merrill Lynch (BofA) said. The bank had earlier expected that the continuation of high oil prices above $100 per barrel since 2011 would result in peak oil demand by 2025 as consumers moved to smaller and more fuel efficient cars. "Eventually, high prices would have led to substitution out of oil altogether, whether towards other cheaper fossil fuels like natural gas or out of fossil fuels and towards alternatives and renewables and switched to alternative or renewable fuel," BofA said in a note on Jan. 23. It now estimates that if prices stay in the $50 to $70 per barrel range over five years, peak demand would be pushed out past 2030. Crude oil prices LCOc1 CLc1 have […]

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Robert Rapier: Why $50 Oil Won’t Last

In the past few weeks I have received numerous questions about the role of a “drop in demand” in the oil price decline. These questions are driven by many stories in the media that have referenced a drop in demand. There are two primary reasons given for this so-called demand drop. One is that years of high oil prices have resulted in reductions in consumption through conservation and improvements in vehicle fleet efficiency. The second reason is due to the strengthening dollar, oil has become more expensive for many countries since oil is generally traded in dollars. There are elements of truth behind both reasons. There has indeed been reduced oil consumption in recent years in most developed regions of the world. It is also true that the dollar has strengthened against many currencies. But despite the rationale that explains this drop in oil consumption, ultimately the data must […]

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Oil Slides to Near 6-Year Low; Saudi Arabia Holds Firm Despite Supply Glut

Oil fell to the lowest level in almost six years as signs that Saudi Arabia ’s new king will maintain its production policy and rising U.S. crude stockpiles bolstered speculation that a global glut will persist. Futures dropped as much as 2.7 percent in New York , extending a 6.4 percent slide last week. King Salman Bin Abdulaziz, who took over after the death of King Abdullah on Jan. 23, pledged to maintain the policies of his predecessor in a speech on Saudi national television. U.S. inventories climbed to 383.5 million barrels last month, the highest level for December since 1930, the American Petroleum Institute reported. Oil slumped almost 50 percent last year as the Organization of Petroleum Exporting Countries resisted calls to cut output even as the U.S. pumped at the fastest pace in more than three decades. Saudi Arabia, the world’s biggest exporter, has chosen not to […]

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$80 Oil? $200 Oil? Insiders Talk Up Market With Dire Predictions Of Shortages

With oil prices down 60 per cent since last summer, some industry insiders are trying to talk up the market by predicting wild price spikes to come, brought on by insufficient investment in oil production. John Hofmeister, a former president of Royal Dutch Shell and head of the natural gas lobby group Citizens For Affordable Energy, is calling for $80-a-barrel oil by this summer . But that’s peanuts compared to the predictions of Claudio Descalzi, head of the Italian energy company Eni Spa. He sees oil "maybe" hitting $200 a barrel within a few years. Why? Because investment in oil production is collapsing, and it will take a long time to start up new projects if and when a supply crunch comes. At the World Economic Forum, Descalzi predicted capital spending on oil would drop 10 to 13 per cent this year. And many new oil projects take five […]

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Hedge Funds Bet Oil Will Fall Further

Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001. Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks. U.S. crude supplies rose by 10.1 million barrels to 397.9 million in the week ended Jan. 16 and the country will pump the most oil since 1972 this year, the Energy Information Administration says. Saudi Arabia ’s King Salman, the new ruler of the world’s biggest oil exporter, said he will maintain the production policy of his predecessor despite a 58 percent drop in prices since June. “There’s been a rush to call a bottom,” John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund that […]

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Dollar rally only just getting started

Diverging policy pushes currency higher but tepid growth will take toll Stacks of U.S. $100 bills are arranged for a photograph in New York, U.S., on Thursday, Feb. 7, 2013. The U.S. dollar advanced in trading today to the highest in almost three weeks against a basket of major currencies. Photographer: Scott Eells/Bloomberg M ark Twain famously quipped that whenever you find yourself on the side of the majority, it is time to pause and reflect. This is always sage advice for investors, but perhaps more so this year given that many seem to have started 2015 with similar if not identical views. Case in point: the US dollar. There is a strong consensus that the dollar , which rose significantly in 2014, will continue to rise this year, a fact reflected in both long-only portfolios as well as in huge net long positioning among commodities traders. More On […]

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Saudi Arabia’s Succession Line Is Set, but the Nation’s Path Remains Uncertain

Saudi Arabia’s Succession Line Is Set, but the Nation’s Path Remains Uncertain thumbnail Saudi Arabia’s new king moved with unprecedented swiftness on Friday to appoint not only the heir to his throne but the heir to his heir as well. If all proceeds according to plan — as most Saudis and some analysts assume it will — the chain of succession dictated by King Salman after the death of his half brother Abdullah lays out who will be the head of state of one of the Arab world’s richest and most influential nations through the middle of this century. Such a long-term road map represented a show of confidence in the national project, especially in an era when longtime Arab leaders have been tossed out by popular revolts and neighboring states like Iraq, Yemen and Syria are breaking apart. But analysts who study Saudi Arabia say that despite the […]

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For Saudis, Falling Demand for Oil Is the Biggest Concern

As the world’s oil producers wring their hands over a global glut that’s pushing down prices, evidence is mounting that Saudi Arabia is more concerned about shrinking demand. The world’s largest exporter has chosen not to cut production, counting instead on lower prices to stimulate consumption, said Mohammad Al Sabban, an adviser to Saudi Arabia’s petroleum minister from 1988 to 2013. The Saudis are keeping an eye on investments in fuel efficiency and renewable energy, according to Francisco Blanch, Bank of America Corp.’s head of global commodity research. “Nobody should imagine the world will continue to demand oil as long as you have it in your fields,” Al Sabban said in an interview. “We need to prepare ourselves for that stage.” The U.S. shale revolution showed that forecasts of dwindling world oil supply were premature. It also gave credence to the old adage, attributed to a Saudi oil minister […]

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Saudis Expand Regional Power as Others Falter

CAIRO — The rulers of Saudi Arabia trembled when the Arab Spring revolts broke out four years ago. But far from undermining the Saudi dynasty, the ensuing chaos across the region appears instead to have lifted the monarchy to unrivaled power and influence. As a new king assumes the throne in Riyadh, the stability-first authoritarianism that the Saudis have long favored is resurgent from Tunis to Cairo to Manama. The election-minded Islamists that the Saudis once feared are on the run. Prince Mohammed bin Nayef, the interior minister who spearheaded the push against them, was rewarded last week with his elevation to deputy crown prince, the first in his generation in the line of succession. The catch, analysts and diplomats say, is that the ascendance of the Saudis is largely a byproduct of the feebleness or near-collapse of so many of the states around them, including Iraq, Egypt, Syria, […]

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Shiite rebels violently disperse demonstrators in Yemen

SANAA, Yemen (AP) — Shiite rebels armed with knives and batons have attacked and detained demonstrators trying to protest against them in Yemen’s capital. The Houthi rebels seized Sanaa in September and last week put the president, prime minister and top Cabinet members under house arrest. On Monday, Houthi militiamen attacked protesters and journalists at Sanaa’s Change Square. It wasn’t clear how many people they detained, though witnesses said they saw rebels attack those gathered there. Last week, the standoff in the capital grew violent and Abed Rabbo Mansour Hadi resigned as the country’s president. His Cabinet also resigned, though parliament has yet to accept their resignations. In the time since, demonstrations against the Houthis have grown across the country.

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In Bold Push Forward, Islamist Militants Attack a Major Nigerian City

MAIDUGURI, Nigeria — Maiduguri, the major city in Nigeria’s northeast, came under sustained attack from Boko Haram terrorists on Sunday, and officials here called it the group’s most audacious assault on the city to date. By early afternoon, the attackers had been beaten back, but not before dozens of soldiers had been killed, officials said. They said the insurgents had taken a major military base to the north of the city, sending about 1,400 soldiers fleeing into the bush. The attack on this city of more than two million people, a commercial and administrative hub, began late Saturday when the militants from the Islamist insurgency rushed in from at least two directions. Loud explosions could be heard in the center of the city, as well as small-arms fire and artillery in its suburbs. The attack was a significant thrust forward in a creeping campaign that began last summer to […]

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Nigeria: Trans-Forcados Pipelines Attacked Four Times This Year

Abuja — The Trans-Forcados pipelines which carries crude oil from production facilities to export terminals in Forcados has been attacked four times by vandals and oil thieves, since the beginning of this year alone. Executive Director, Gas and Power, Nigerian National Petroleum Corporation (NNPC), Dr. David Ige who disclosed this in Abuja at the weekend noted that besides the loss of thousands of barrels every day, about 1000 million cubic feet per day of gas are lost too. Ige explained that the loss of gas from the pipelines means several power plants are also shut down. "We have had the vandalisation of Trans Forcados Pipeline almost once every week for the last couple of weeks and it is not just a recent outage. From the first of January this year and today, the pipe has been vandalized, we fixed it and it is vandalized again and again and we […]

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Where to Buy Gasoline for $0.002 a Gallon, Seriously

Venezuela President Nicolas Maduro told lawmakers last week he’s considering raising gasoline prices. That might be a good idea. It’s been two decades since the government last lifted state-set local prices, the result of politicians’ concern that the move could spark protests like those that swept across the oil-rich nation following an increase in 1989. In the interim, a string of currency devaluations has pushed down the cost in dollar terms to levels that would seem implausible to consumers in other parts of the world, even after the recent oil tumble cut prices at the pump. The CHART OF THE DAY shows it now costs about 0.2 U.S. cent (that’s right; one-fifth of a penny) to buy a gallon of gasoline in Venezuela , based on black-market currency rates. Expressed another way, you can get 482 gallons with just one dollar. That’s enough to drive a Chevrolet Silverado pickup […]

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Rebels Tied to Blackout Across Most of Pakistan

ISLAMABAD, Pakistan — Towns and cities across Pakistan plunged into darkness early Sunday when what officials said was an attack by militants on a transmission line short-circuited the national electricity grid, presenting a new indictment of the government’s faltering efforts to solve the country’s chronic power crisis. Emergency efforts to end the blackout, widely described as Pakistan ’s worst ever, resulted in a partial restoration of power in the capital, Islamabad, and the most populous city, Karachi, by Sunday evening. Even so, 80 percent of the country remained without power, including the provincial capitals of Lahore, Peshawar and Quetta, an official said. The minister for water and power, Khawaja Muhammad Asif, blamed separatist rebels in the western province of Baluchistan who, he said, had blown up a critical transmission line. But experts said the attack only highlighted the growing vulnerability of Pakistan’s power grid, which has come under severe […]

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Hype, Broken Promises, and Shales

Hype, Broken Promises, and Shales thumbnail The term shale revolution has been used so much that it almost has no meaning anymore. But were shales ever really the energy panacea promised or merely a self styled hype machine? Would the frenzy in drilling ever have truly taken off if it weren’t for cheap money? These are valid questions which have not been explored adequately because too many investors, journalists and elected officials were caught up in shale mania. But was this ever truly an exercise that would provide long term benefits to American consumers? It is an inarguable fact that shales have produced copious quantities of hydrocarbons in the past few years but this is not really surprising given that the wells, by their very nature, produce the most oil or gas they will ever produce in the first twelve months or so of their lives. So when the […]

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China crude oil reserves down 4 pct

BEIJING, Jan. 26 (Xinhua) — China’s commercial crude oil stocks were down 3.89 percent at the end of December from a month before, while stocks of refined oil products dropped 4.02 percent. In December, China imported 30.1 million tonnes of crude oil, a sharp rise from the previous month, and produced 18.3 million tonnes domestically. Gasoline stocks fell 3.16 percent as lower oil prices boosted consumption. Diesel stocks rose 13.6 percent due to poor industrial demand. The stocks of kerosene fell 4.27 percent as the holiday travel peak increased air traffic.

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Obama Moves to Put Much of Refuge Off Limits to Drilling

President Barack Obama ’s call to restrict oil exploration on 12 million acres of the Arctic National Wildlife Refuge probably won’t have much practical impact for an area already off-limits to drillers, though it’s created a new fault line with the Republican-led Congress. The White House on Sunday said it would ask Congress to designate “core areas” of the 19.8 million-acre refuge as wilderness, including its 1.5 million-acre coastal plain that geologists believe lies atop a rich oil reserve. “Designating vast areas in the Arctic National Wildlife Refuge as wilderness reflects the significance this landscape holds for America and its wildlife,” Interior Secretary Sally Jewell said in the statement. The practical impact is slight because Republicans, who now control both chambers of Congress, voiced immediate opposition. And oil and gas production is already prohibited in the Arctic refuge. It does add to the list of energy issues that the […]

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The most important thing to understand about the coming oil production cutbacks

A mountain of damaged oil drums near the Exxon Refinery. Photographer: John Messina. Environmental Protection Agency. (1972) via Wikimedia Commons. (orig published at Resilience Dec 2014) What the current oil price slump means for world oil supply is starting to emerge. "Layoffs," "cutbacks," "delays," and "cancellations" are words one sees in headlines concerning the oil industry every day. That can only mean one thing in the long run: less supply later on than would otherwise have been the case. But perhaps the most important thing you need to understand about the coming oil production cutbacks is where they are going to come from, namely Canada and the United States. Why is this important? For one very simple reason. Without growth in production from these two countries, world oil production ( crude oil plus lease condensate  which is  the definition of oil ) from the first quarter of 2005 through […]

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Our Renewable Future

Or, What I’ve Learned in 12 Years Writing about Energy (7000 words, about 25 minutes reading time) Folks who pay attention to energy and climate issues are regularly treated to two competing depictions of society’s energy options. * On one hand, the fossil fuel industry claims that its products deliver unique economic benefits, and that giving up coal, oil, and natural gas in favor of renewable energy sources like solar and wind will entail sacrifice and suffering ( this gives a flavor of their argument ). Saving the climate may not be worth the trouble, they say, unless we can find affordable ways to capture and sequester carbon as we continue burning fossil fuels. On the other hand, at least some renewable energy proponents tell us there is plenty of wind and sun, the fuel is free, and the only thing standing between us and a climate-protected world of […]

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Yemen risks disintegration as south rejects Shi’ite group’s takeover

SANAA (Reuters) – No sooner had Yemeni President Abd-Rabbu Mansour Hadi announced his resignation than his country’s tenuous political fabric began to disintegrate.     Provinces across a nation barely held together by a complex web of tribal and religious alliances said they would no longer take military commands from Sanaa after the Iranian-allied Shi’ite Houthi group besieged Hadi’s home and palace this week. The emerging fragmentation of the Arabian Peninsula country has sparked fears of the "Somalization" of a state which is home to a revitalized al Qaeda insurgency as well as a neighbor to top oil exporter Saudi Arabia.     For Washington, Yemen’s splintering would make it hard to carry out a counter-terrorism strategy against al Qaeda plotters who have targeted it and its ally Saudi Arabia and claimed responsibility for the Jan. 7 Charlie Hebdo attacks in Paris. Through Hadi, a supporter of U.S. drone […]

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Fresh blow to UK fracking as MPs call for moratorium

An anti-fracking protester at a drilling test site near Salford in Lancashire last year Britain’s nascent shale gas industry has been dealt a fresh blow by a committee of MPs that has called for a moratorium on fracking and warned that the government was rushing through “undemocratic” laws to help the industry. David Cameron, prime minister, has strongly backed the development of shale gas, insisting that exploitation of Britain’s reserves could drive down the price of domestic energy and lessen the need for imports at a time when North Sea oil production was falling. More On this topic IN UK Politics & Policy But the environmental audit committee says fracking is not compatible with the government’s commitment to cutting climate change emissions. The new technology could also cause significant localised environmental damage and risks to public health, the committee will say — a claim disputed by the industry. Industry […]

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U.S., Europe Threaten New Sanctions Against Moscow

ENLARGE A girl joins adults in lighting candles during a mourning ceremony in Kiev on Sunday for people who died during shelling in Mariupol. Photo: European Pressphoto Agency U.S. and European leaders threatened new sanctions against Moscow after a missile attack blamed on pro-Russian separatists killed 30 civilians in the eastern Ukrainian city of Mariupol, the latest escalation in violence that has brought Kiev’s fight with rebels back toward full-scale war. Russia reacted with defiance, blaming Kiev and its Western backers for the surge in fighting, but it also called for urgent talks on implementing a September cease-fire. Separatists backed off earlier threats of a broad offensive on Mariupol and other targets, but shelling along the contact line between the two sides was extremely heavy over the weekend, Ukrainian military officials said. U.S. President Barack Obama said he was deeply concerned about the latest break in the cease-fire and […]

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U.K. Lawmakers Panel Calls For Moratorium on Shale Gas Fracking

ENLARGE FILE – A worker oils a pump during a hydraulic fracturing operation at an Encana Corp. well pad. Photo: Associated Press LONDON—A panel of U.K. lawmakers is calling for a moratorium on hydraulic fracturing for shale gas even as companies are applying for permits to start exploration work in the fledgling sector. The recommendation from the U.K. parliament’s Environmental Audit Committee in a report published Monday comes as parliament prepares to vote on the Infrastructure Bill , which contains a measure that would allow companies to drill and frack at depth without the landowners’ permission. Committee member Caroline Spelman, a Conservative and former Environment Secretary in the coalition government until 2012, last week also proposed an amendment to the bill imposing a moratorium on fracking, in which water, sand and chemicals are used to free oil and natural gas from shale formations, because it could risk the U.K.’s […]

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Obama Administration Moves to Block Drilling in Parts of Alaska

ENLARGE The Hulahula River Canyon in the Arctic National Wildlife Refuge in Alaska in the summer of 2010. Photo: AlaskaStock/Corbis The Obama administration is moving this week to designate areas of Alaska off limits to oil and natural gas drilling in its latest effort to bolster its environmental legacy. The Interior Department announced on Sunday that it was proposing to preserve as wilderness nearly 13 million acres of land in the 19.8 million-acre Arctic National Wildlife Refuge, including 1.5 million acres of coastal plains that is believed to have rich oil and natural gas resources. Later this week, the department also is slated to propose a draft offshore leasing plan that is expected to include more limits on future oil and gas production in Alaska. The efforts are drawing a strong rebuke from congressional Republicans. Sen. Lisa Murkowski (R., Alaska) vowed to fight the administration’s moves from her positions […]

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U.S. gas prices at April 2009 low, bottom in sight: Lundberg survey

NEW YORK (Reuters) – The average price of a gallon of gasoline in the United States fell 13.3 cents in the past two weeks, falling to its lowest level since late April 2009, but the end of a months-long slide may be near, according to the Lundberg survey released Sunday. Prices for regular grade gasoline fell to $2.07 a gallon in the survey dated Jan. 23 from the previous survey on Jan. 9. The recent drop has taken prices down more than $1.24 a gallon from the same period a year ago, a decline driven by losses in the crude oil market from its June peak. However, survey publisher Trilby Lundberg noted that the drop in pump prices was less steep than it had been in previous periods and that the price many wholesale customers paid for gasoline rose in the past 10 days, suggesting a bottoming-out or increase […]

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How we went from peak oil to too much oil

How we went from peak oil to too much oil thumbnail It’s not the worry we’ll run out of fossil fuels that’s the problem any more. Quite the opposite. Al Gore at Davos: “Companies are insisting on their right to use our atmosphere as an open sewer.” A third of oil reserves, half gas reserves and over 80% of coal must remain in the ground. If you remember the 20th Century, you probably remember people worrying we’d run out of fossil fuel. It’s a worry with a long and often over-hyped history. As Matt Novak neatly demonstrates , people have been wrong about running out of oil for well over a hundred years. In 1909, it was thought the oil age had 25 or 30 years longer. In 1919, it was two to five years. In 1937, the director of US naval petroleum reserves, told the Senate Naval Affairs […]

Posted On : Published By : ASPO-USA
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Yergin: Peak Oil Is Followed by Glut

IHS Vice Chairman Daniel Yergin speaks with Bloomberg’s Tom Keen about oil prices. They speak at the World Economic Forum in Davos, Switzerland on “Bloomberg Surveillance.” How many victory laps? Do you feel like yes, i got it right? It is hard. Here, i remember people say you do not believe in peak oil. Not really. We have seen peak oil. It has been followed by a glut. New areas open up and new technology. U.s. oil production is up 80%. for our viewers in the middle east, in 1986, the price came down and went flat. Do you predict that again? There are analogies there.

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Rosneft to Raise $6.1 Billion in Ruble Bond Placement Today

OAO Rosneft will place 400 billion rubles ($6.1 billion) in ruble bonds today as Russia’s largest oil producer plans to repay loans raised for deals and growth. Rosneft completed collecting bids for the sale in 1 hour on Jan. 23 and set the coupon at 11.9 percent, the Moscow-based company said in a statement. Russian government bonds due in June this year yield 14.65 percent, according to data compiled by Bloomberg. Sanctions on the Kremlin-led company related to Russia’s actions in Ukraine have restricted Rosneft’s access to international debt markets. At the same time, falling oil prices have reduced the availability of cash to service debts raised for deals that made Rosneft the world’s biggest publicly traded oil producer by output. The largest of the acquisitions was $55 billion for TNK-BP in 2013. Rosneft may utilize a similar plan as in December, when lenders purchased 625 billion rubles of […]

Posted On : Published By : Tom Whipple
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Russian ruble tumbles after violent weekend in east Ukraine

MOSCOW (AP) — The Russian currency fell by more than 3 percent early Monday, after Western leaders threatened to punish Russia for escalated fighting in eastern Ukraine over the weekend. The ruble tumbled to 65.8 to the dollar from 63.7, one day after rocket fire left at least 30 civilians dead in the city of Mariupol. Western leaders announced that they would consider further punitive measures against Russia for what they say is its role in supporting the separatists, while Russian officials blamed Ukrainian forces for the attack. The Russian currency, buffeted by Western sanctions and plummeting oil prices, has already lost about half its value in the past year. While sanctions are set to expire this summer, U.S. President Barack Obama said Sunday that his country would work with its European partners to "ratchet up the pressure on Russia" after the latest violence. EU officials said they would […]

Posted On : Published By : Tom Whipple
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Oil Falls as New Saudi King Says Policies Won’t Change

Oil fell in New York on speculation the death of King Abdullah of Saudi Arabia won’t signal any change in strategy for the world’s largest crude exporter. Salman Bin Abdulaziz Al Saud, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies. The kingdom will not cut production to boost prices because other producers will fill the gap, Saudi Prince Alwaleed Bin Talal Al Saud said. U.S. crude inventories rose the most since 2001 last week, according to a government report. “There already has been a pretty well established succession plan so it’s not a big deal,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “Supply has been very stout and demand’s not been what people had expected. It highlights the bearish sentiment in the market.” Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord […]

Posted On : Published By : Tom Whipple
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Oil Rebounds on Saudi King’s Death, China PMI Data

The death of Saudi King Abdullah bin Abdulaziz al Saud comes at a critical point for the kingdom’s oil policy. The WSJ’s Andrew Peaple examines what oil watchers are looking for. Crude-oil futures rebounded in Asian trade Friday after news of the death of Saudi Arabia’s King Abdullah and marginal improvement in China’s manufacturing data. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $47.10 a barrel, up $0.79 in midmorning trade on the Globex electronic session. Brent crude for March delivery on London’s ICE Futures exchange rose $0.84 to $49.36 a barrel. Saudi Arabia’s King Abdullah bin Abdulaziz al Saud died at the age of around 90, according to a royal court statement early Friday morning. The statement also said that Abdullah’s half-brother, Crown Prince Salman, who is 79 years old, was declared king and Prince Muqrin, 69, became crown prince. […]

Posted On : Published By : Tom Whipple
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Oil Falls as New Saudi King Says Policies Won’t Change

Oil fell in New York on speculation the death of King Abdullah of Saudi Arabia won’t signal any change in strategy for the world’s largest crude exporter. Salman Bin Abdulaziz Al Saud, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies. The kingdom will not cut production to boost prices because other producers will fill the gap, Saudi Prince Alwaleed Bin Talal Al Saud said. U.S. crude inventories rose the most since 2001 last week, according to a government report. “There already has been a pretty well established succession plan so it’s not a big deal,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “Supply has been very stout and demand’s not been what people had expected. It highlights the bearish sentiment in the market.” Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord […]

Posted On : Published By : Tom Whipple
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Oil Prices Won’t Return to $100: Saudi Prince Alwaleed

Oil won’t return to $100 a barrel and global oil supply will be affected by the price slump, billionaire Saudi Prince Alwaleed Bin Talal Al Saud said. Crude at $100 was an “aberration,” Alwaleed said in an interview with Bloomberg TV Friday. Saudi Arabia, the biggest OPEC producer, won’t reduce production to boost prices because other countries will “fill that gap,” he said. Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord to maintain production at 30 million barrels a day amid a glut caused in part by the fastest U.S. output in three decades. King Salman, who became the ruler after the death of King Abdullah early on Friday, will continue with his predecessor’s policy, Alwaleed said. “If we reduce our production some other countries will fill that gap,” he said. Saudi Arabia isn’t happy with low prices, “but it’s something […]

Posted On : Published By : Tom Whipple
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Plunging Oil Prices Both Underpin and Threaten U.S. Policy Objectives

Dow Jones Newswires By Jay Solomon DAVOS, Switzerland–Plunging global oil prices are both underpinning and threatening the foreign policy objectives of the Obama administration and its allies, who face what leaders assembled here described as a dangerous convergence of international crises. Fueling the uncertainty, said U.S., Arab and European officials meeting at the annual World Economic Forum, was the death Thursday of Saudi Arabia’s monarch, King Abdullah–a central player in global energy policy and the fight against international terrorism. "King Abdullah had a long history of being a brave partner with us and with the world not just in counterterrorism, but in his work on interfaith understanding," U.S. Secretary of State John Kerry told the conference. "We will miss his wisdom." Mr. Kerry rallied the world’s business and political elite in Davos to marshal their resources to fight Islamic State and other terrorist organizations that he said posed the […]

Posted On : Published By : Tom Whipple
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IMF: Most oil exporters facing deficits

Most oil exporting countries will run fiscal deficits this year if the crude price averages $57/bbl as currently indicated by markets, according to the International Monetary Fund . The main exception is Kuwait, IMF said in an update to its Regional Economic Outlook, which projects fiscal balances as percentages of each country’s gross domestic product. Kuwait’s fiscal surplus this year will fall to 11.1% of GDP from 21.9% last year, according to IMF. The only other oil exporters not expected to show deficits this year in IMF’s analysis are Turkmenistan and Uzbekistan. Among major oil exporters, Saudi Arabia faces a deficit of 10.1% of GDP in 2015 after a surplus of 1.1% in 2014. For other major exporters, IMF projects deficits this year relative to GDP of 3.7% for the United Arab Emirates, 3.4% for Iran, 6.1% for Iraq, 37.1% for Libya, 1.5% for Qatar, 15.1% for Algeria, 14.5% […]

Posted On : Published By : Tom Whipple
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Low oil prices bruising MENA, IMF says

IMF finds oil producers in the Middle East and North Africa feeling economic pain from weak crude oil market. Photo by Christopher Halloran/Shutterstock Revenue losses for oil producers in the Middle East and North Africa could reach $300 billion because of price declines, the International Monetary Fund said. Oil prices are down around 50 percent from the June 2014 highs. The decline means a source of de facto stimulus for countries that rely in oil imports, but is problematic for those that rely on oil exports for most of their government revenues . Masood Ahmed, director of Middle East programs at the IMF, said Middle East and North African oil producers are expected to be out about $300 billion, or 21 percent of their collective gross domestic product, because of the steep decline in oil prices. In the short term, most oil producers will draw on financial reserves to […]

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Dueling Oil Benchmarks Converge in Their Price, but Diverge in Their Stories

ENLARGE The economic ripples caused by the free-falling price of oil in recent months have drawn wider public attention to the daily cost of a barrel of crude. But the figures traditionally used to convey global oil prices—the West Texas Intermediate and Brent crude benchmarks—measure different things and don’t always line up. Today, for example, a barrel of oil costs $45 and change by WTI and a few dollars more by Brent . At times, the difference between the two has topped $20. Traders and economists are familiar with the reasons why WTI and Brent differ. For those newly curious about what falling oil prices mean, it’s worth learning what the benchmarks reveal, and how they’ve changed over time. The basic reason why the numbers diverge is because they are snapshots of oil prices in different places: WTI reflects the U.S. and Brent the North Sea in Europe. At […]

Posted On : Published By : Tom Whipple
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OPEC Crude Oil Production, What’s Next?

The latest  OPEC Monthly Oil Market Report  is out with OPEC production data for. The data is  “Crude Only”  and does not reflect condensate production. Also the charts, except for Libya, are not zero based. I chose to amplify the change rather than the total. All Data is in thousand barrels per day with the last data point December 2014. OPEC 12 production has averaged slightly above or below 30 million barrels per day for about two years now and there is little chance it will go anywhere very fast. But what is obvious from the above chart is there has been no surge in OPEC oil production. OPEC’s December production f 30,204,000 barrels per day is still more than 1.4 million barrels per day below the peaks of 2008 and 2012.  Algeria is struggling to keep production relatively flat.  Angola is holding its own… so far. Ecuador increased […]

Posted On : Published By : Tom Whipple