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U.S., Canada under pressure on oil-train safety

Sign up for our daily Energy Newsletter Federal agencies slow to address safety standards for crude oil transport by rail, critics say. Photo courtesy Transportation Safety Board of Canada ONTARIO, Quebec, March 18 (UPI) — Federal regulators in North America are under pressure from industry bodies and environmental advocates worried about the safe transport of oil by rail. North American crude oil production has increased to the point that there’s not enough pipeline infrastructure to handle deliveries. That leaves energy companies to rely more on rail as an alternate transit method and, with that, comes more derailments involving trains carrying oil. Canadian officials are still responding to a March 7 derailment of a Canadian National Railway Co. train carrying crude oil through Ontario. Three of the 39 cars that derailed fell into an area river in a ball of flames . Canadian Transport Minister Lisa Raitt announced new regulations […]

Posted On : Published By : Tom Whipple
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U.S. working to cut flaring of natural gas

U.S. Interior Department said to expect new standards aimed at encouraging a reduction in the amount of natural gas burned off, or flared, during production. Photo by Steve Oehlenschlager/Shutterstock Sign up for our daily Energy Newsletter WASHINGTON, March 18 (UPI) — The U.S. government will roll out new standards in the coming months to cut the amount of shale natural gas wasted through flaring, the interior secretary said. Much of the natural gas associated with shale oil deposits is burned off, or flared, because of a lack of infrastructure needed to utilize the resource. U.S. Interior Secretary Sally Jewell said at the Center for Strategic and International Studies, a Washington think-tank, that her agency would propose "in the coming months" standards meant to cut emissions and reduce the amount of gas wasted during flaring . "We will be updating our decades-old standards to encourage the kind of infrastructure and […]

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Conoco becomes latest energy company to cut spending

ConocoPhillips announces plans to trim spending to adjust to low oil price environment. Photo courtesy: ConocoPhillips The company said spending of $11.5 billion through 2017 was a cut of 28 percent from its earlier expectations. That mirrors announcements from peers ranging from BP to Exxon Mobil, who’ve all said the low price of oil forced a cut in capital expenses and staff . Conoco Chairman and Chief Executive Officer Ryan Lance said his company expects low oil prices to endure the foreseeable future. "We’re taking this period of commodity price weakness to position ConocoPhillips for long-term success in any price environment," he said in a statement on Tuesday. Oil prices rallied from around $45 per barrel in February, but have pulled back in recent weeks. The price for West Texas Intermediate, the U.S. benchmark, hit a six-year low this week to trade below the $43 per barrel mark. The […]

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Anti-Fracking Movement Blamed on Russia

Harold Hamm Says Russia Hamm Claims Russia Financed Anti-Frack Movement Continental Resources’ Harold Hamm accused Russia of trying to destroy the U.S. shale oil industry. During an interview at a recent Forbes event, Hamm claims that Russians have worked with environmental groups and financed the anti-fracking movement in hopes of producing panic in the United States. Hamm of course has a vested interest in the anti-fracking movement. He was a pioneer in the use of horizontal drilling and hydraulic fracturing to extract soil from shale. and has been instrumental in the development of the Bakken shale formation which has sparked a hge oil boom. It is expected that the Bakken will produce more than 1.3 million barrels of oil this year, according to the U.S. Energy Information Agency. Related: U.S. Leads World-Wide Oil Production This isn’t the first time such accusations against Russia have been made. In June of 2014, […]

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Banks Struggle to Unload Oil Loans

Citigroup faces energy-loan losses. ENLARGE Photo: Getty Images Citigroup Inc., Goldman Sachs Group Inc., UBS AG and other large banks face tens of millions of dollars in losses on loans they made to energy companies last year, a sign of investor jitters in a sector battered by the oil slump. The banks intended to sell the loans to investors but have struggled to unload them even after cutting prices, thanks to a nine-month-long plunge that has taken Nymex crude futures to their lowest level since 2009. The losses mark a setback for Wall Street, after global banks earned $31 billion in fees over the past five years by financing energy-company stock sales, borrowing and mergers-and-acquisition transactions, according to Dealogic. Wall Street’s losses on the loans could have a chilling effect on some oil companies’ ability to fund their operations as investors take a more cautious view of the sector. […]

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Transocean to Book Charge From Rig Disposal

Transocean Ltd. said it expects to book an after-tax charge of between $300 million and $325 million as it moves to dispose of four rigs. The cuts come as plunging oil prices have wreaked havoc in the industry. The U.S. oil-rig count fell to 866 last week, the 14th straight week of declines, according to Baker Hughes Inc. The rig count hadn’t fallen below 1,000 since June 2011. Last month, the Switzerland-based company, which boasts the world’s largest fleet of offshore drilling rigs, logged a $992 million charge to correct the value of its contract drilling business. Transocean, whose chief executive abruptly resigned last month , has seen its corporate credit slashed to junk by one of the three credit-rating firms with the other two indicating possible downgrades. The company had spent billions of dollars to expand its fleet just before oil prices collapsed. It has since tried to […]

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Willbros Group Warns About Impact from Energy Downturn

Engineering company Willbros Group Inc. warned the downturn in its oil-and-gas business could lead to credit defaults that eventually may raise doubts about its ability to continue as a going concern. Shares of the energy-sector infrastructure contractor fell 51% to $2.70 in late-afternoon trading, after hitting an all-time low of $1.50 earlier. The company also said it expects to miss the deadline for its annual financial report. Houston-based Willbros said Tuesday that it is in talks with lenders to amend or get waivers on its credit agreements because the company expects to be out of compliance with certain debt-ratio requirements through next March. “The downturn in energy prices is clearly affecting our industry, and we have re-evaluated our outlook for 2015,” Chairman and Chief Executive John T. McNabb II stated in a news release. In a research note, Stifel Nicolaus said Willbros management sounded optimistic that the company could […]

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Rising energy prices will challenge western way of life

Rising energy prices will challenge western way of life thumbnail A little-known Ministry of Defence (MoD) report published earlier this year warns that converging global trends will dramatically affect UK economic prosperity through to 2040. The report says that depletion of cheap conventional “easy oil”, along with shortages of food and water due to climate change and population growth, will sustain rocketing energy prices. Long-term price spikes are likely to lead to a long recession in Western economies, fuelling internal unrest and the rise of nationalist movements. The report departs significantly from the conservative and relatively optimistic scenarios officially adopted by the British government, as exemplified in the coalition’s new Energy Security Strategy published in November last year by the Department of Energy and Climate Change (Decc). Peak “easy oil” The report predicts that “the imminent passing of the point of peak ‘easy oil’ will mean that hydrocarbon-based energy […]

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Peak Oil Price? Winners And Losers At The End Of The Era of The $100 Barrel

What if the world never again sees sustained prices for oil over $100 per barrel? What if—absent exogenous black-swan events like major wars—oil never sells for much more than $50 per barrel for decades into the future? Who wins? Who loses? Short answer: The winners are consumers everywhere, and American businesses that produce oil. The losers are nations that are oil monocultures, and businesses or policies everywhere anchored in expensive oil. Is such a scenario likely? Or is the current price collapse a kind of inverse bubble? History is often meaningfully predictive. In the roughly 150-year history of oil prices there have been just three short periods where oil sold for over $50 per barrel (measured in inflation-adjusted terms). It happened first for about 20 years after 1860 at the dawn of the oil age, followed by nearly a century with oil cycling around $20. The second price bubble, […]

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The Global Coal Boom Is Going Bust: Report

A new report by CoalSwarm and the Sierra Club provides compelling evidence that the death knell for the global coal boom might very well have rung some time between 2010 and 2012. Based on data CoalSwarm compiled of every coal plant proposed worldwide for the past five years as part of its Global Coal Plant Tracker initiative, the report finds that for every coal plant that came online, plans for two other plants were put on hold or scrapped altogether. The failure-to-completion rate was even higher, as much as 4 to 1, in Europe, South Asia, Latin America, and Africa, according to the report, which also says that the long decline in coal-fired energy production in the United States and the European Union can be expected to speed up in the near future. “From 2003 to 2014, the amount of coal-fired generating capacity retired in the US and the […]

Posted On : Published By : Tom Whipple