Category:

Falling oil price, rig counts helping operators meet N. Dakota gas flaring rules

Washington (Platts)–13Feb2015/325 pm EST/2025 GMT A combination of low oil prices and tumbling rig counts is assisting North Dakota operators in complying with a state mandate to reduce flaring of associated natural gas production, the state’s top oil and gas official said Friday. "It has helped," said Lynn Helms, director of North Dakota’s Department of Mineral Resources. "It has given companies some breathing room to be able to achieve gas capture goals more easily." On Friday, Helms announced that oil and gas production had reached an all-time high in North Dakota in December, climbing to nearly 1.23 million b/d and 1.51 Bcf/d, respectively. But the pace of production growth has slowed and will likely flatten in 2015 due to low oil and gas prices and falling rig counts, Helms said. The state’s rig count fell to 137 on Friday, its lowest level since July 2010 and a 37% drop […]

Posted On : Published By : Tom Whipple
Category:

After December High, North Dakota Oil Output May Stall

NEW YORK, Feb 13 (Reuters) – North Dakota’s shale oil production appears to have reached a plateau after a renewed rise at the end of last year, the state’s top oil official said on Friday, a sign that the U.S. oil boom might be slowing sooner than expected. Oil production in the No. 2 producing state rose nearly 40,000 barrels per day to 1.23 million bpd in December, resuming its years-long rise after three flat months, monthly data from the state’s Industrial Commission showed on Friday. Many forecasters, including the U.S. government, expect overall U.S. production to continue rising until the middle of this year, despite a sharp fall in drilling rigs, as increased efficiency and a focus on sweet spots maintains the shale boom that has raised U.S. output by nearly 70 percent in the last five years. Lynn Helms, the state’s head of Department of Mineral Resources […]

Posted On : Published By : Tom Whipple
Category:

Kemp: Mass Layoffs Complicate Oil Industry’s Long-Term Plans

The challenge is recruiting, training and retaining workers and maintaining an appropriate long-term labor force in an industry stuck with a profound boom-bust cycle, analyst John Kemp says. John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Feb 13 (Reuters) – "This is the really crappy part of the job, and this is what I hate about this industry frankly," the chief executive of oilfield services company Baker Hughes complained as he announced it would lay off 7,000 employees. Baker Hughes is cutting jobs in response to slumping prices and a downturn in drilling activity. But the company’s obviously frustrated chief acknowledged that "this is the industry, and it’s throwing us another one of these downturns, and we’re going to be good stewards of our business and do the right thing." So the company will cuts costs, he told investors in a conference call […]

Posted On : Published By : Tom Whipple
Category:

U.S. Droughts Will Be the Worst in 1,000 Years

U.S. Droughts Will Be the Worst in 1,000 Years thumbnail Several independent studies in recent years have predicted that the American Southwest and central Great Plains will experience extensive droughts in the second half of this century, and that advancing climate change will exacerbate those droughts . But a new analysis released today says the drying will be even more extreme than previously predicted—the worst in nearly 1,000 years. Some time between 2050 and 2100, extended drought conditions in both regions will become more severe than the megadroughts of the 12 th and 13 th centuries. Tree rings and other evidence indicate that those medieval dry periods exceeded anything seen since, across the land we know today as the continental U.S. The analysis “shows how exceptional future droughts will be,” says Benjamin Cook, a research scientist at the NASA Goddard Institute for Space Studies in New York City and […]

Posted On : Published By : Tom Whipple
Category:

BP Loses Bid for $750 Million Transocean Spill Insurance

(Bloomberg) — BP Plc isn’t covered under Transocean Ltd.’s insurance policies for the doomed Macondo well project, the Texas Supreme Court said, blocking the oil company’s access to $750 million to pay costs from the 2010 spill. The decision conflicts with an earlier ruling by a U.S. appeals court that Transocean’s carriers couldn’t deny coverage for pollution-related liabilities for a disaster that has already cost BP more than $28 billion. The appeals court later withdrew the opinion and asked the Texas justices to rule on contract interpretation. The Texas Supreme Court said Transocean’s insurance policy had to be read in context with the company’s drilling contract with BP, as the two documents “are inextricably intertwined.” BP can’t claim status as “an additional insured” because of limits in the drilling contract, the Texas court said. “BP is not entitled to coverage under the Transocean insurance policies for damages arising from […]

Posted On : Published By : Tom Whipple
Category:

Fighting rages in run-up to Ukraine ceasefire

DONETSK, Ukraine (Reuters) – Ukraine and Russian-backed rebels fought fiercely across the east of the country on Friday despite a new peace deal brokered by Germany and France. A ceasefire is due to come into effect from Sunday under the agreement, which also envisages a withdrawal of the heavy weapons responsible for many of the 5,000 casualties in the conflict that broke out almost a year ago. Kiev said pro-Russian rebels had built up their forces across separatist-held zones since the deal and both sides accused each other of killing civilians. Two people were killed and six wounded when a shell hit a cafe in the Kiev-controlled town of Shchastya near rebel-held Luhansk in eastern Ukraine, a local official said, adding other shells had struck elsewhere in the town. "The town’s heating system is broken, power lines are damaged as well as the water supply … So this is […]

Posted On : Published By : Tom Whipple
Category:

Fighting Rages in Eastern Ukraine as Cease-Fire Deadline Approaches

Despite a looming cease-fire deadline, Ukraine said Friday that at least 11 people were killed and dozens wounded in fighting in the past 24 hours. Photo: AP. Ukraine descended into further violence on Friday as Kiev and Russia-backed separatists tried to expand and defend their territory before a cease-fire brokered by European leaders was due to come into effect. Eleven Ukrainian soldiers died and 40 more were wounded in the past 24 hours in the eastern battle zone , military spokesman Col. Andriy Lysenko said. Battles were fierce near the Ukrainian-held cities of Debaltseve and Mariupol. At least 10 people were killed elsewhere, including a 7-year-old boy, according to local officials. The truce , seen as a possible last chance to put an end to a surge in the deadly fighting, is set to come into effect Sunday. But a previous deal in September collapsed, and doubts about the […]

Posted On : Published By : Tom Whipple
Category:

U.S. Faults Russia as Combat Spikes in East Ukraine

Photo As fighting intensified along a broad area of eastern Ukraine on Friday, a Ukrainian soldier loaded a tank with shells near Donetsk, one of the largest cities in the region where rebels are active. A truce agreement already considered fragile appears even more so Credit Alexei Chernyshev/Reuters ARTEMIVSK, Ukraine — As fighting erupted throughout eastern Ukraine on Friday before a cease-fire begins on Saturday night, the United States accused Russia of joining separatist rebels in an all-out attack on Ukrainian forces around the contested town of Debaltseve. When the pact was signed with a two-day window before the truce, some last-minute jockeying for position was expected. But the intensity and scope of the violence raised concerns that the agreement signed this week, rife with ill-defined and ambiguous provisions, might prove as ineffective as the first cease-fire pact, signed in September. Artillery shelling and gunfire reverberated in the area […]

Posted On : Published By : Tom Whipple
Category:

Ukraine crisis: Poroshenko says peace deal in danger

Ukraine’s president has warned that a deal to end the war in the east is in "great danger" after heavy fighting ahead of Saturday night’s ceasefire. Petro Poroshenko also accused Russia of "significantly increasing" its offensive despite the peace agreement reached in Minsk on Thursday. The US ambassador to Ukraine tweeted a satellite image that he said showed Russian artillery near Debaltseve. Shelling was heard in the rebel-held city of Donetsk early on Saturday. Fierce battles are said to be continuing around Debaltseve – a strategic government-held town almost encircled by rebel forces – and outside the southern port city of Mariupol. The BBC’s David Stern in Kiev says that as the clock ticks down to the ceasefire, fears are rising that it won’t be observed. More than a dozen civilians are said to have died in shelling in eastern Ukraine on Friday. It is unclear who was behind […]

Posted On : Published By : Tom Whipple
Category:

Russian oil production to drop by 70000 barrels a day in 2015

Given the impact of sanctions, low prices and the absence of any large projects expected to come online, oil production in Russia will drop in 2015 by 70,000 barrels a day, according to a report from the Organization of the Petroleum Exporting Countries. At the same time, production at Bashneft’s Arctic fields in the Nenets Autonomous Okrug is going up. Though Russia plans to maintain production above 10 million barrels a day, it may fall in the coming years if oil prices remain around $50 a barrel for an extended period of time, OPEC said in a monthly report released on Monday. Production is estimated to fall by 70,000 barrels a day, while oil exports will drop by 60,000 barrels a day, according to the report, TASS writes. At the same time, some companies like Bashneft have continued to see steady growth in their output, with production increasing by 15.1 percent on the […]

Posted On : Published By : Tom Whipple
Category:

The World Has Reached Peak Chicken, Peak Rice, And Peak Milk

We still haven’t reached peak oil . But peak milk happened in 2004, peak soybeans in 2009, and peak chicken in 2006. Rice peaked in 1988. A new study published in Ecology and Society explains that 21 key resources that humans rely on—mostly food —have already passed their peak rate of production. “Peak,” in this case, doesn’t mean that we’re actually producing fewer chickens or less milk yet. Instead, the researchers looked at the fact that the rate of production has plateaued, at the same time that population is increasing. Helmholtz Centre for Environmental Research in Germany , who worked on the study with colleagues from Yale University and Michigan State University . “We approached the whole thing with an open mind,” he says. “We didn’t want it to be apocalyptic. We tried to seek patterns that give reliable information about how we really harvest the Earth, knowing that […]

Posted On : Published By : Tom Whipple
Category:

Apr ICE Brent crude rises above $60/b on investor optimism over Greek debt deal

Singapore (Platts)–13Feb2015/309 am EST/809 GMT Front-month April ICE Brent crude prices breached the $60/barrel mark for the first time in over a month during mid-afternoon Asian trade Friday, February 13, amid investor optimism that a Greek debt deal with the European Union could be reached. At 2:20 pm in Singapore (0620 GMT), April ICE Brent crude prices rose 72 cents (1.21%) from Thursday’s settle to $60/b. Greek Prime Minister Alexis Tsipras and Eurogroup head Jeroen Dijsselbloem agreed Thursday on the sidelines of a European Union summit to resolve their differences over extending Greece’s current bailout, AFP reported. Article continues below… Platts Global Alert is a complete real-time information service for the global energy industry, providing breaking reports of deals done, price indicators for crude and products and more than 200 end-of-day assessments. Talks Wednesday between Greek Finance Minister Yaris Varoufakis and his 18 eurozone counterparts had broken down acrimoniously […]

Posted On : Published By : Tom Whipple
Category:

Natural-Gas Prices Dive on Smaller-Than-Expected Stockpile Drain

Dow Jones Newswires By Timothy Puko Natural-gas futures dropped Thursday after federal data showed U.S. storage levels fell less than expected last week. Storage levels shrank by 160 billion cubic feet in the week ended Feb. 6, the U.S. Energy Information Administration said. The drain was 10 bcf less than the 170-bcf consensus average of 16 forecasters surveyed by The Wall Street Journal. The EIA update is widely considered one of the best measures of supply and demand, and this draw would indicate larger supply or lower demand than expected. That caused prices to drop sharply. The front-month March contract settled down 8.4 cents, or 3%, at $2.713 a million British thermal units on the New York Mercantile Exchange. It snapped a three-session winning streak that came from colder weather and rising expectations for demand. Natural-gas analysts have overestimated storage withdrawals three weeks in a row, a trend that […]

Posted On : Published By : Tom Whipple
Category:

Global Oil Demand Expected to Grow in 2015, Says Shell CEO

LONDON— Royal Dutch Shell PLC Chief Executive Ben van Beurden sees oil demand outpacing supply growth this year, and is warning that supply may decline if oil prices stay low. In excerpted, prepared remarks released by Shell on Thursday, Mr. van Beurden said expectations for higher economic growth this year should translate into higher demand for oil. “But seeing today’s prices, supply will probably not keep pace with this growth,” according to his prepared remarks, which he is expected to deliver later Thursday. “It may even decline.” Mr. van Beurden said a rapid recovery in oil prices could “occur if projects are postponed or even canceled. This would lead to less new supply—not so much now, but in two or three years. Combined with economic growth, the market could tighten quickly in this scenario.” He said, though, that if U.S. output proves resilient in the face of today’s lower […]

Posted On : Published By : Tom Whipple
Category:

Oil Rises but Price Gains Capped by Rising U.S. Supply

LONDON—Oil prices rose on Thursday but analysts remained cautious after news that U.S. oil supplies had touched record highs. Brent crude for March delivery rose 2% to $55.80 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March recently traded at $50.16 a barrel, up $1.34, or 2.8%. Market participants said traders are looking to book gains before the expiration of the Brent March contract on Thursday. Analysts also pointed to weakness in the U.S. dollar, which is supportive of dollar-denominate commodities such as oil. Looking at the longer term fundamentals, however, the picture hasn’t changed much, analysts say. U.S. crude stockpiles rose more than expected last week, reaching another record high, according to the U.S. Energy Information Administration. The EIA also reported U.S. oil production rose by 49,000 barrels a day to 9.2 million last week, an […]

Posted On : Published By : Tom Whipple
Category:

Oil rallies on back of Ukrainian truce

Christine Lagarde, managing director or the International Monetary Fund, extends hand to Ukraine as cease-fire deal helps allay investor concerns about the state of world affairs. File Photo by Kevin Dietsch/UPI Multilateral negotiators in the capital of Belarus hammered out an "immediate and full" cease-fire agreement in eastern Ukraine that would enter into force during the weekend. Ongoing conflict in the region has put Western powers in a tug-of-war with Russia over Ukraine, a former Soviet republic. The agreement came as the International Monetary Fund extended a $17.5 billion hand to a Ukrainian economy left hobbled by war. That was enough to lift oil markets limping into the second week of February, following last week’s rally that led some analysts to speculate a floor price for crude oil has been reached. The price for the global benchmark Brent gained more than 3 percent early in the trading session to […]

Posted On : Published By : Tom Whipple
Category:

Oil bounces back as dollar weakens

LONDON (Reuters) – Brent oil futures rose to $56 a barrel on Thursday, as a weakened dollar and industry spending cuts offset worries of a supply glut after U.S. crude inventories increased for a fifth consecutive week. The dollar fell 0.25 percent against a basket of currencies .DXY, making dollar-traded commodities such as oil more attractive. "The dollar is weaker against all the commodities at the moment," said Michael Hewson, chief analyst at CMC Markets. "We saw a heavy selloff in commodities yesterday and I think that’s why we’re getting a little bit of a rebound in oil prices on the back of that." March Brent futures LCOc1 were up $1.38 at $56.04 a barrel by 0938 GMT (04:38 a.m. EST), following a 3 percent loss in the previous session that saw prices break below $54 at one point. U.S. March crude futures CLc1 were trading up $1.58 at […]

Posted On : Published By : Tom Whipple
Category:

NYMEX March gas futures settle at $2.713/MMBtu, down 8.4 cents

Houston (Platts)–12Feb2015/436 pm EST/2136 GMT The NYMEX March natural gas futures contract settled at $2.713/MMBtu Thursday, down 8.4 cents, as the market responded bearishly to gas storage data that was on the low end of analyst expectations. "The smaller-than-expected 160-Bcf draw was the third consecutive bearish miss, reinforcing the idea that the background supply/demand balance has weakened, most likely on increased supply," Citi Futures Perspective analyst Tim Evans said in an email. "This will be a test of market sentiment and will possibly downgrade the concern about upcoming cold." US natural gas in storage fell 160 Bcf to 2.268 Tcf for the week that ended Friday, the US Energy Information Administration said Thursday in its weekly gas storage report. The pull from storage stocks was on the low end of analyst expectations that EIA would estimate a 160-170 Bcf draw. "On its face, the draw was not that bearish, […]

Posted On : Published By : Tom Whipple
Category:

Saudi Arabia budget insulated from effects of lower oil prices

Source: U.S. Energy Information Administration, based on Bloomberg, International Monetary Fund Saudi Arabia is the largest exporter of crude oil and other petroleum liquids in the world, and their oil exports accounted for 89% of the country’s total revenue in 2014. The recent decline in global oil prices is decreasing the value of these exports, leading to a potential budget shortfall. In its 2015 budget, Saudi Arabia plans to spend about $230 billion but expects to take in $190.7 billion in revenue, resulting in an overall deficit of $38.6 billion. While the oil price assumption was not specified in Saudi Arabia’s budget, the budget was crafted in December 2014, when crude oil prices were between $55 and $70 dollars per barrel. In addition to having the second-largest proved oil reserves —268 billion barrels, or 16%, of the world total in 2014, behind only Venezuela’s 298 billion barrels—Saudi Arabia has […]

Posted On : Published By : Tom Whipple
Category:

Pakistan Braces for Major Water Shortages

ISLAMABAD, Pakistan — Energy-starved Pakistanis, their economy battered by chronic fuel and electricity shortages, may soon have to contend with a new resource crisis: major water shortages, the Pakistani government warned this week. A combination of global climate change and local waste and mismanagement have led to an alarmingly rapid depletion of Pakistan ’s water supply, said the minister for water and energy, Khawaja Muhammad Asif. “Under the present situation, in the next six to seven years, Pakistan can be a water-starved country,” Mr. Asif said in an interview, echoing a warning that he first issued at a news conference in Lahore this week. The prospect of a major water crisis in Pakistan, even if several years distant, offers a stark reminder of a growing challenge in other poor and densely populated countries that are vulnerable to global climate change. In Pakistan, it poses a further challenge to Prime […]

Posted On : Published By : Tom Whipple
Category:

Zuma Seeks Nuclear Power to Solve South Africa’s Energy Crisis

(Bloomberg) — South African President Jacob Zuma said his priority is to solve the energy crisis in the country that’s curbing output at mines and factories and stifling economic growth, including adding more nuclear power by 2023. “We will pursue gas, petroleum, nuclear, hydropower and other sources as part of the energy mix,” Zuma, 72, said in his annual state-of-the-nation speech in Parliament in Cape Town on Thursday. “The country is currently experiencing serious energy constraints which are an impediment to economic growth and is a major inconvenience to everyone in the country.” Zuma’s speech follows nine consecutive days of rolling blackouts implemented as demand for power outstripped supply. State utility Eskom Holdings SOC Ltd., which provides 95 percent of the nation’s electricity, has warned of almost-daily blackouts until the end of April. The power crisis has soured investor appetite for South Africa’s currency and debt. The rand reached […]

Posted On : Published By : Tom Whipple
Category:

Nigeria: NNPC Rejects “Missing U.S.$20 Billion” Indictment

Despite a recommendation by a government-appointed auditor that it should refund $1.48 billion (about N248.6 billion Naira) to the federation account, the Nigerian National Petroleum Corporation, NNPC, insisted Wednesday that it was not indicted by the investigations carried out by PricewaterhouseCoopers. The Group Managing Director, GMD, of the NNPC, Joseph Dawha, said the investigations carried out by PricewaterhouseCoopers over the alleged missing $20 billion oil money, did not indict the corporation in anyway. Mr. Dawha said the report "has clearly vindicated our long held position that the alleged unremitted crude oil revenue was a farce from day one". He said the $1.48billion the corporation was directed to refund was actually the balance of the book value of the divested assets transferred to NNPC upstream subsidiary, the NPDC, excluding taxes and royalties. "This does not constitute indictment; rather this value is still being reconciled with the Department of Petroleum Resources […]

Posted On : Published By : Tom Whipple
Category:

How an Aruba Taxi Driver Saves $17,000 Bootlegging Venezuela Gas

A Texaco fueling station stands near San Nicolas, southeast of Oranjestad, Aruba, on Jan. 3. Gasoline costs about $4.24 a gallon at Texaco and Valero service stations in Aruba. Photographer: Pietro D. Pitts/Bloomberg (Bloomberg) — How does an Aruban taxi driver who shuttles mostly U.S. visitors around the Dutch Caribbean save $17,000 a year? By sailing to Venezuela to buy the world’s cheapest fuel. The driver, who spoke on the condition of anonymity because what he’s doing is illegal, said he makes the 18-mile trip to Venezuela’s Paraguana Peninsula at least once a week, loading as much as 104 gallons of Venezuelan gasoline into numerous small containers at a cost of $120. The $3.09 a gallon he saves after expenses on each trip adds up to almost $17,000 a year. In Venezuela, 95-octane fuel costs 0.097 bolivar a liter, or about a fifth of a U.S. penny a gallon […]

Posted On : Published By : Tom Whipple
Category:

Violent clashes in Venezuela on protest movement anniversary

SAN CRISTOBAL, Venezuela (AP) — Protesters clashed with police in this anti-government stronghold Thursday amid a storm of tear gas, rocks and buckshot as Venezuelans staged dueling marches on the anniversary of last year’s bloody protest movement. While demonstrations were mostly calm elsewhere in the country, the anti-government march turned violent in this restive city near the border with Colombia, which was an epicenter of the 2014 movement. A sea of protesters marched in San Cristobal’s streets. Some youths threw projectiles at police officers clad in riot gear, who fired tear gas canisters while onlookers ran in the opposite direction with young children in their arms. At least five people were injured in the fighting, San Cristobal Mayor Patricia Gutierrez said. In Caracas, both friends and foes of Venezuela’s socialist government braved pouring rain to stage competing marches. A small group of students in Caracas rallied against the government […]

Posted On : Published By : Tom Whipple
Category:

Japan Has More Car Chargers Than Gas Stations

An electric charging cable is seen connected to the updated Nissan Leaf electric vehicle (EV) during a news conference in Tokyo. Photographer: Kiyoshi Ota/Bloomberg (Bloomberg) — There are more electric-car charging points in Japan than there are gas stations. That surprising discovery comes from Nissan Motor Co., which reported that the number of power points in Japan, including fast-chargers and those in homes, has surged to 40,000, surpassing the nation’s 34,000 gas stations. The figure shows that in the relatively brief time since electric vehicles were introduced, the infrastructure to support them has become bigger than what the oil industry built over decades in the world’s third-biggest economy — at least by this one measure. Why that matters is obvious. Nissan’s battery-powered Leaf can travel 84 miles (135 kilometers) on a charge, and the anxiety of being stuck away from home without power has restrained consumer demand. As the […]

Posted On : Published By : Tom Whipple
Category:

Revised Oil-Train Safety Rule Said to Push Back Upgrade Deadline

(Bloomberg) — The Obama administration revised its proposal to prevent oil trains from catching fire in derailments, giving companies more time to upgrade their fleets but sticking with a requirement that new tank cars have thicker walls and better brakes. The changes, described by three people familiar with the proposal who asked not to be identified because the plan has not been made public, are in proposed regulations the U.S. Transportation Department sent to the White House last week for review prior to being released. The administration is revising safety standards after a series of oil-train accidents, including a 2013 disaster in Canada that killed 47 people when a runaway train derailed and blew up. Earlier this month a train carrying ethanol derailed and caught fire outside of Dubuque, Iowa. No one was hurt. Companies that own tank cars opposed the aggressive schedule for modifying cars in the DOT’s […]

Posted On : Published By : Tom Whipple
Category:

This Producer Shows How the U.S. Can Put Brakes on Shale

(Bloomberg) — Apache Corp.’s decision to sharply curb the growth of its oil output this year suggests that the major U.S. shale producers who helped create a global oil glut will be able to reduce supplies faster than expected. One of the biggest operators in Texas’ prolific Permian basin, Apache will cut the number of rigs it uses to drill for oil by 70 percent by the end of the month, the company said in a statement today. That’s going to slow output enough to keep overall production flat for the year, compared with the Houston-based company’s November forecast for growth of as much as 12 percent. Unlike huge, billion-dollar oil developments taking place elsewhere, U.S. shale producers surprised the world with their speed in ramping up production. That nimbleness means they’ll also be able to slow down quickly, said Tyler Priest, a historian at the University of Iowa […]

Posted On : Published By : Tom Whipple
Category:

Exxon moves ahead with Alaska LNG project

Exxon submits draft reports on Alaska gas facility after Gov. Bill Walker drops lawsuit related to Point Thomson field development. Photo courtesy Gov. Bill Walker’s office Exxon Mobil said it submitted a draft environmental report to federal regulators for a $500 million liquefied natural gas project in Alaska. A preliminary engineering and design phase for the Alaska LNG project is under way. Steve Butt, Exxon’s project executive, said submitting a draft report to the Federal Energy Regulatory Commission sets the permitting process in motion. "These draft documents, known as resource reports, allow Alaska stakeholders to engage early in the regulatory process, so potential environmental and socioeconomic issues and opportunities can be proactively identified and managed," he said in a Wednesday statement. The Alaska LNG project has foundations in production from Prudhoe Bay and Point Thomson fields in the state, which combine for an average 3.5 billion cubic feet of […]

Posted On : Published By : Tom Whipple
Category:

Shale industry irked by Pennsylvania tax proposal

Pennsylvania Gov. Tom Wolf is making few friends in the shale natural gas industry with early-term policies. Photo courtesy Commonwealth of Pennsylvania HARRISBURG, Pa., Feb. 12 (UPI) — The state’s governor said gas taxes will help schools, but an energy coalition working in Pennsylvania said it will discourage capital spending plans in shale. Arguing schools have suffered from $1 billion in funding cuts, Pennsylvania Gov. Tom Wolf proposed a severance tax on gas extraction in the state to help right the state’s economic ship. The state hosts the Marcellus shale natural gas formation, which accounts for almost 40 percent of all shale gas produced in the United States. The governor’s proposal, dubbed the Pennsylvania Education Reinvestment Act, calls for a 5 percent tax plus 4.7 cents per thousand feet of gas extracted. The governor said the proposal is modeled after severance tax plans in other states in the region, […]

Posted On : Published By : Tom Whipple
Category:

BNSF makes capital commitments to North Dakota

BNSF makes $325 million commitment to improve rail network in oil-rich North Dakota. Photo: Daniel J. Graeber/UPI BISMARCK, N.D., Feb. 12 (UPI) — A $325 million commitment from BNSF Railway Co. will help meet the growing needs in the oil-rich state of North Dakota, one of the state’s senators said. BNSF early this week said it was investing in continued construction and upgrades to its rail network in North Dakota, including a centralized traffic control center meant to improve traffic efficiency through the state. "We have been working to maintain and improve our infrastructure, especially our railways, to meet the needs of our growing state," Sen. John Hoeven, R-N.D., said in a Wednesday statement . "BNSF’s $326 million investment will help to relieve backlogs now, but also plan for the continued growth of our economy." North Dakota’s economy is growing at a faster rate than any state in the […]

Posted On : Published By : Tom Whipple
Category:

Apache’s 2015 capital budget less than half of last year’s $8.5 billion

HOUSTON, Feb. 12 02/12/2015 Apache Corp. , Houston, plans a capital budget of $3.6-4 billion in 2015, with $2.1-2.3 billion directed toward onshore North America and $1.5-1.7 billion for international and offshore. The new budget is down significantly from last year’s $8.5 billion. The company lost $5.4 billion on the year, compared with earnings of $2.2 billion in 2013. In the fourth quarter, the company reported a net loss of $4.8 billion, compared with earnings of $174 million in fourth-quarter 2013. After reducing its rig count from an average of 91 in last year’s third quarter to an estimated 27 by the end of February, Apache plans to run an average of 17 rigs onshore North America in 2015. The company is also reducing its frac crews by 50% during the same time period and delaying some well completions until service costs decrease materially. “In 2015, Apache will run […]

Posted On : Published By : Tom Whipple
Category:

US House vote sends Keystone XL approval bill to Obama’s desk

WASHINGTON, DC, Feb. 12 02/12/2015 The US House of Representatives voted by 270 to 152 to pass S. 1 , which would deem the proposed Keystone XL crude oil pipeline approved more than 6 years after sponsor TransCanada Corp. applied for its presidential crossborder permit. The Feb. 11 action sends the measure to US President Barack Obama’s desk, where it is likely to be vetoed. GOP energy leaders on both side of the Capitol nevertheless urged Obama to approve the bill. “Now that Congress has spoken overwhelmingly in favor of closer energy ties with Canada, it’s time for President Obama to make a decision,” Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.) said. She said, “To me, this is a pretty simple choice between job creation and greater energy security on one hand or more of the status quo on the other.” House Energy and Commerce Committee […]

Posted On : Published By : Tom Whipple
Category:

U.S. retail sales weak, consumer spending gauge barely rises

WASHINGTON (Reuters) – U.S. consumer spending barely rose in January as households cut back on purchases of a range of goods, suggesting the economy started the first quarter on a softer note. The Commerce Department said on Thursday retail sales excluding automobiles, gasoline, building materials and food services edged up 0.1 percent last month after a 0.3 percent drop in December. The so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. "Overall, the tone of this report was disappointing as it points to a weak start to spending activity this year, despite the significant boost to disposable income from lower gasoline prices," said Millan Mulraine, deputy chief economist at TD Securities in New York. Wall Street had expected core retail sales to increase 0.4 percent last month. The soft reading could see economists trim their forecasts for first-quarter GDP growth. The economy […]

Posted On : Published By : Tom Whipple
Category:

As U.S. oil tanks swell at record rate, traders ask: for how long?

NEW YORK (Reuters) – Oil is flooding into U.S. storage tanks at an unprecedented rate, leading traders to wonder how long the hub in Cushing, Oklahoma, can keep absorbing its share of the global supply glut. About half the surplus crude accumulating in tanks across the United States is flowing into Cushing. If the build-up continues at the same rate, some industry officials and sources said, the tanks could reach maximum capacity by early April. Others suggest the flow might continue until July before it tests the limits of the dozens of steel-hulled storage tanks clustered in mid-Oklahoma. Traders have been scrambling to secure space at Cushing so they can store oil purchased at current low prices and sell it in a year at a profit exceeding $11 a barrel because the oil market has been in a structure known as contango. In January, crude oil arriving by pipeline […]

Posted On : Published By : Tom Whipple
Category:

TransCanada Plans to Seek U.S. Approval for New Pipeline Project

ENLARGE Despite the yearslong fight over Keystone XL, TransCanada plans to ask the U.S. government to permit a new and different pipeline project. Photo: Reuters The company behind the Keystone XL pipeline plans to ask the U.S. government to permit a new and different pipeline project. Despite the yearslong fight over Keystone XL, TransCanada Corp. will apply to the U.S. State Department to build a 200-mile pipeline from North Dakota’s booming oil fields across the border into Canada to connect to another proposed pipeline, according to a person briefed on the plan. In its earnings report Friday, the company will announce it is proposing the $600 million Upland Pipeline Project, which aims to transport up to 300,000 barrels a day of North Dakota crude to a connection in Saskatchewan, according to the person briefed on the plan. From there, the oil can flow on TransCanada’s planned Energy East pipeline, […]

Posted On : Published By : Tom Whipple
Category:

Today’s drought in the West is nothing compared to what may be coming

NASA forecasts megadroughts in U.S.(2:39) NASA forecasts megadroughts in U.S. (2:39) NASA scientists studied past droughts and climate models incorporating soil moisture data to estimate future drought risk. According to NASA’s study, "droughts in the U.S. Southwest and Central Plains during the last half of this century could be drier and longer than drought conditions seen in those regions in the last 1,000 years." (NASA Goddard via YouTube) The long and severe drought in the U.S. Southwest pales in comparison with what’s coming: a “megadrought” that will grip that region and the central plains later this century and probably stay there for decades, a new study says. Thirty-five years from now, if the current pace of climate change continues unabated, those areas of the country will experience a weather shift that will linger for as long as three decades, according to the study, released Thursday. Researchers from NASA and […]

Posted On : Published By : Tom Whipple
Category:

US ‘at risk of mega-drought future’

American society would need to find strategies to cope with droughts that lasted decades Related Stories The American south-west and central plains could be on course for super-droughts the like of which they have not witnessed in over a 1,000 years. Places like California are already facing very dry conditions, but these are quite gentle compared with some periods in the 12th and 13th Centuries. Scientists have now compared these earlier droughts with climate simulations for the coming decades. The study suggests events unprecedented in the last millennium may lie ahead. "These mega-droughts during the 1100s and 1200s persisted for 20, 30, 40, 50 years at a time, and they were droughts that no-one in the history of the United States has ever experienced," said Ben Cook from Nasa’s Goddard Institute for Space Studies. "The droughts that people do know about like the 1930s ‘dustbowl’ or the 1950s drought […]

Posted On : Published By : Tom Whipple
Category:

Mitsubishi introduces Concept GC-PHEV SUV to North America

« Porsche names GKN Driveline “Technology Partner” for eAxle system in 918 Spyder plug-in hybrid supercar | Main | Study: stopping at red lights exposes drivers to high levels of particulates » Concept GC-PHEV. Click to enlarge. Mitsubishi staged the North American debut of its Concept GC-PHEV (“Grand Cruiser”)—a next-generation full-size crossover plug-in hybrid. ( Earlier post .) The Concept GC-PHEV features a supercharged 3.0-liter V-6 gasoline engine paired with a high-output electric motor; 12 kWh lithium-ion battery; 8-speed automatic transmission; and Mitsubishi Motors’ advanced full-time Super All-Wheel Control (S-AWC) all-wheel drive. The PHEV drivetrain offers high performance (335 bhp/250 kW) combined with excellent fuel economy. For additional power optimization with reduced exhaust emissions, the 3.0-liter supercharged V-6 engine benefits from the latest iteration of Mitsubishi Innovative Valve timing Electronic Control (MIVEC) variable valve timing. The system’s high-capacity main drive lithium-ion battery pack can also act as a mobile […]

Posted On : Published By : Tom Whipple
Category:

Gazprom seeks Ukrainian gas payments

With cease-fire deal, and IMF package in hand, Russian energy company Gazprom says it’s time Ukraine settle its debt. UPI/Ivan Vakolenko MOSCOW, Feb. 12 (UPI) — With a $17.5 billion agreement from the International Monetary Fund in hand, Russian gas company Gazprom said Thursday it was time Ukraine settled its debt. "The economic reform program focuses on immediate macroeconomic stabilization as well as broad and deep structural reforms to provide the basis for strong and sustainable economic growth over the medium term," IMF Mission Chief for Ukraine Nikolay Gueorguiev said in a statement. Political upheaval that followed Kiev’s pivot toward the European Union in November 2013 left an already-battered Ukrainian economy in shambles. The IMF said Ukraine’s economy contracted by about 7 percent in gross domestic product last year as conflict drags on in the east of the country. This, in turn, has taken its toll on industries and […]

Posted On : Published By : Tom Whipple
Category:

Ukraine Peace Talks Yield Cease-Fire Deal

After 17 hours of negotiations, the leaders of France and Germany brokered a renewed cease-fire deal to end Ukraine’s 10-month conflict with pro-Russia separatists. MINSK, Belarus—Germany and France brokered a deal with Russia on Thursday to end nearly a year of fighting in Ukraine, but warned there was still much to do to ensure that it doesn’t fall apart the way the last one did. The revived cease-fire—to start Sunday—offers new hope for peace between Kiev and Russia-backed rebels in eastern Ukraine, although many questions remained following more than 16 hours of overnight negotiations. The rebels appeared to have won significant gains, including control over much of the ground they have taken in recent months and over the border with Russia, at least through the end of this year. For Kiev, the deal offers a chance to end a costly and bloody conflict in which Moscow has shown it […]

Posted On : Published By : Tom Whipple
Category:

Tactical pause in Putin’s assault on Ukraine

Ukrainian President Petro Poroshenko stands in an elevator after peace talks on resolving the Ukrainian crisis in Minsk, February 12, 2015. The leaders of Germany, France, Russia and Ukraine have agreed a deal to end fighting in eastern Ukraine, participants at the summit talks said on Thursday. REUTERS/Vasily Fedosenko (BELARUS – Tags: POLITICS) T he deal agreed by Vladimir Putin and Petro Poroshenko in Minsk on Thursday provides a ray of hope that the conflict in eastern Ukraine might be moving towards a settlement. But it would be foolish to view the pact more optimistically than that. After a testy 16-hour negotiation, the Russian and Ukrainian presidents have at least settled on a framework to end the fighting that has taken more than 5,000 lives. However, a similar agreement signed in the Belarusian capital last September swiftly collapsed. And any optimism about Minsk II requires a leap of faith […]

Posted On : Published By : Tom Whipple
Category:

Here’s a $9 Trillion Question

(Bloomberg) — When Group of 20 finance ministers this week urged the Federal Reserve to “minimize negative spillovers” from potential interest-rate increases, they omitted a key figure: $9 trillion. That’s the amount owed in dollars by non-bank borrowers outside the U.S., up 50 percent since the financial crisis, according to the Bank for International Settlements. Should the Fed raise interest rates as anticipated this year for the first time since 2006, higher borrowing costs for companies and governments, along with a stronger greenback, may add risks to an already-weak global recovery. The dollar debt is just one example of how the Fed’s tightening would ripple through the world economy. From the housing markets in Canada and Hong Kong to capital flows into and out of China and Turkey, the question isn’t whether there will be spillovers — it’s how big they will be, and where they will hit the […]

Posted On : Published By : Tom Whipple
Category:

Arthur Berman Interview: Why Today’s Shale Era Is The Retirement Party For Oil Production

As we’ve written about often here at PeakProsperity.com, much of what’s been ‘sold’ to us about the US shale oil revolution is massively over-hyped. The amount of commercially-recoverable shale oil is much less than touted, returns much less net energy than the petroleum our economy was built around, and is extremely unprofitable to extract for most drillers at today’s lower oil price. To separate the hype from reality, our podcast guest is Arthur Berman, a geological consultant with 34 years of experience in petroleum exploration and production.  Berman sees the recent US oil production boost from shale drilling as and short-lived and somewhat desperate; a kind of last hurrah before the lights get turned out: The EIA looks at the US tight oil plays and they see maybe five years before things start to fall off. I think it is less, but I am not going to split hairs. The […]

Posted On : Published By : Tom Whipple
Category:

Peak Nothing. Goldman Sachs Advisor Says “Too Much Physical Oil”

Goldman Sachs executive Gary Cohn says we could see so much oil, there would be no way to physically store it all, resulting in falling prices, at least in certain locational areas. Further destabilization across the globe could, logically, follow. Cohn told Bloomberg News : “I think the oil market is trying to figure out an equilibrium price. The danger here, as we try and find an equilibrium price, at some point we may end up in a situation where storage capacity gets very, very limited. We may have too much physical oil for the available storage in certain locations. And it may be a locational issue.” “And you may just see lots of oil in certain locations around the world where oil will have to price to such a cheap discount vis-a-vis the forward price that you make second tier, and third tier and fourth tier storage available.” […]

Posted On : Published By : Tom Whipple
Category:

Oil Rises but Price Gains Capped by Rising U.S. Supply

LONDON—Oil prices rose on Thursday but analysts remained cautious after news that U.S. oil supplies had touched record highs. Brent crude for March delivery rose 2% to $55.80 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March recently traded at $50.16 a barrel, up $1.34, or 2.8%. Market participants said traders are looking to book gains before the expiration of the Brent March contract on Thursday. Analysts also pointed to weakness in the U.S. dollar, which is supportive of dollar-denominate commodities such as oil. Looking at the longer term fundamentals, however, the picture hasn’t changed much, analysts say. U.S. crude stockpiles rose more than expected last week, reaching another record high, according to the U.S. Energy Information Administration. The EIA also reported U.S. oil production rose by 49,000 barrels a day to 9.2 million last week, an […]

Posted On : Published By : Tom Whipple
Category:

Oil bounces back as dollar weakens

LONDON (Reuters) – Brent oil futures rose to $56 a barrel on Thursday, as a weakened dollar and industry spending cuts offset worries of a supply glut after U.S. crude inventories increased for a fifth consecutive week. The dollar fell 0.25 percent against a basket of currencies .DXY, making dollar-traded commodities such as oil more attractive. "The dollar is weaker against all the commodities at the moment," said Michael Hewson, chief analyst at CMC Markets. "We saw a heavy selloff in commodities yesterday and I think that’s why we’re getting a little bit of a rebound in oil prices on the back of that." March Brent futures LCOc1 were up $1.38 at $56.04 a barrel by 0938 GMT (04:38 a.m. EST), following a 3 percent loss in the previous session that saw prices break below $54 at one point. U.S. March crude futures CLc1 were trading up $1.58 at […]

Posted On : Published By : Tom Whipple
Category:

Oil Layoffs Top 100,000 as Job Pilgrims’ Dreams Shatter

Workers wait in the heliport area during sunset at the Petroleos Mexicanos (Pemex) Pol-A Platform complex, located on the continental shelf in the Gulf of Mexico. Mexico’s oil prospects are grim. In late 2013, the country began taking steps to revise its constitution and end a seven-decade monopoly, anticipating billions in investment from the world’s biggest oil companies. Photographer: Susana Gonzalez/Bloomberg (Bloomberg) — The promise of plentiful jobs and salaries as high as $250k/yr lured Colombia native Clara Correa Zappa and her British husband to Perth, Australia, at the height of the continent’s oil and gas frenzy. * Engineers were in high demand in 2012, when oil prices exceeded $100/bbl, making the move across the world a no- brainer. Within 2 yrs, though, oil plunged to less than half the 2012 price and Zappa lost her job as a safety analyst. Now she’s worried her husband, who also works […]

Posted On : Published By : Tom Whipple
Category:

Iraq Minister Predicts Oil Price Recovery

An eight-month slump in the oil market has reached a bottom and prices will recover, Iraq’s oil minister predicted Tuesday. Oil prices have slumped more than 50% since June amid a surge in oil supply led by U.S. shale oil production and sluggish demand. Iraq and other members of the Organization of the Petroleum Exporting Countries have taken a hands-off approach to the selloff, opting to defend market share rather than cut production to bolster prices as the group had done in the past. “The price fall has no real justification,” oil minister Adel Abdul-Mehdi said in a statement published on the Iraq oil ministry’s website, adding that he expected oil demand to increase and spending cuts to hit high-cost oil projects, reducing supply in the market and helping to halt the fall in prices. The minister’s comments somewhat echo analysis by the International Energy Agency this week, which […]

Posted On : Published By : Tom Whipple
Category:

Oil-rich Kuwait gets power back on after widespread blackout

KUWAIT CITY (AP) — A country known for its vast energy wealth just couldn’t keep the lights on – at least for a short while. A sweeping blackout that struck the tiny but oil-rich Kuwait on Wednesday evening knocked out lights even at the international airport, brought out the amateur comedians on social media and got lawmakers Thursday asking why so much of the OPEC nation suddenly went dark. The power cut happened when a technical fault struck a transmission line linked to the al-Subbyia power station, according to Minister of Public Works, Electricity and Water Abdulaziz al-Ibrahim whose remarks were carried by the official Kuwait News Agency. Residents in the car-loving country reported unusually thick traffic jams caused by darkened traffic lights. Emergency measures used to bring power back online following the outage included the use of an electrical link to the rest of the six-member Gulf Cooperation […]

Posted On : Published By : Tom Whipple
Category:

Little noticed, new Saudi king shapes contours of power

RIYADH (Reuters) – By rapidly appointing two heirs, Saudi Arabia’s King Salman has pressed pause on "succession Sudoku", as one leading local journalist calls speculation over whose star is rising and whose waning in the large and secretive Al Saud ruling family. The choice of 69-year-old Muqrin for crown prince and 55-year-old Mohammed bin Nayef for deputy crown prince resolved the most important dilemma in the dynasty’s recent history – how to jump from sons of its founder, King Abdulaziz, to his grandsons. Yet while much attention has focused on the naming of Muqrin and bin Nayef, less noticed moves have indicated broader changes in the contours of how the Al Saud manage their power and which young princes might rule the world’s top oil exporter and key Western ally in future. After decades during which top jobs were held by the same handful of people, these appointments appear […]

Posted On : Published By : Tom Whipple