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U.S. Drilling Retreat Deepens as Oil Rigs Fall Below 900

(Bloomberg) — U.S. oil explorers idled oil rigs for the 14th straight week, prolonging the biggest retrenchment in drilling on record. Rigs targeting oil in the U.S. fell by 56 to 866, Baker Hughes Inc. said on its website Friday, the lowest level since March 25, 2011. The Permian Basin of Texas and New Mexico, the nation’s biggest oil field and one of its oldest, lost the most, dropping 23 rigs to 305. The U.S. rig total slid to the lowest since November 2009. The country has sidelined 709 oil rigs in 14 weeks as a price collapse has prompted the nation’s energy producers to cut billions in spending and eliminate thousands of jobs. The retrenchment threatens to slow the shale boom that turned the U.S. into the world’s largest fuel exporter. Oil analysts, traders and investors have been monitoring rig counts to determine when output will retreat enough […]

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Oil-Sands Rules Get Tougher as Alberta Seeks Less Damage

(Bloomberg) — Oil-sands producers will be forced to reduce waste water and to clean up and restore mined land within a decade as Alberta seeks to reduce environmental damage. Regulation announced by Alberta Environment Minister Kyle Fawcett in Edmonton on Friday, include limits on water withdrawals from the Athabasca River in the Canadian province’s north. Companies will also be required to slow the growth of tailings ponds, which hold waste water from bitumen mining, and restore land that existing ones are on after 10 years of the end of the mine’s life, the minister said. Oil-sands operators have come under attack for environmental impact including emissions of greenhouse gas and fresh-water use, helping to stall pipeline construction such as TransCanada Corp.’s Keystone XL. Production of bitumen, forecast to more than double by 2030, is Canada’s fastest-growing source of carbon emissions. The new rules are a more “realistic” policy framework […]

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Shale Producer Whiting Draws Exxon, Others as Suitors

Whiting Petroleum Corporation’s South Texas facilities. Source: Whiting Petroleum Corp. via Bloomberg News. (Bloomberg) — Whiting Petroleum Corp., the North Dakota oil explorer, has attracted interest from Exxon Mobil Corp. and Continental Resources Inc. as it explores a sale of the entire company, people with knowledge of the situation said. Hess Corp. and Statoil ASA are also looking at Denver-based Whiting, said the people, who asked not to be identified discussing private information. Whiting has set up a data room for potential buyers to evaluate the company’s financial information and asked them to submit bids next week, the people said. The discussions are ongoing and there’s no guarantee a deal will be reached. A potential deal for Whiting, the largest producer in North Dakota’s Bakken shale formation, may be the first in an anticipated pickup of merger activity for U.S. energy producers as they grapple with heavy debt and […]

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Speed Limits May Not Stop Fiery Oil Spills, U.S. Rail Chief Says

(Bloomberg) — Lower speed limits for railroads may be ineffective at keeping oil trains on the tracks and preventing massive fireballs, such as those triggered in a series of recent derailments, the chief U.S. railroad regulator said. “If you’re going to slow trains down, you’re going to have to slow them down to 12 miles an hour,” Sarah Feinberg, acting chief of the Federal Railroad Administration, told reporters in Washington Friday. “And then you would just have other dangers. People queuing up at grade crossings while train car after train car of volatile product goes by,” she said. “That’s not good either.” A surge in U.S. oil production has increased the amount of crude moved by rail 5,000 percent since 2009, much of it from North Dakota’s booming Bakken field. A corresponding jump in accidents, including a 2013 oil-train derailment and explosion that killed 47 people in Lac-Megantic, Quebec, […]

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BP Win Cutting Gulf Spill Tab by $4 Billion Fought by U.S.

Light trails made by passing automobiles are seen as vehicles stand at fuel pumps at a gas station operated by BP Plc in Guildford, U.K. Photographer: Jason Alden/Bloomberg (Bloomberg) — The U.S. is fighting a judge’s decision that shaved more than $4 billion off the maximum pollution penalties BP Plc must pay for its 2010 Gulf of Mexico disaster, the biggest offshore oil discharge in U.S. history. The spill size was set in January by U.S. District Judge Carl Barbier in New Orleans at 3.2 million barrels. He also rejected claims London-based BP was reckless in preparing for a disaster or had acted unreasonably in responding to the spill. The U.S. didn’t say which part of the court ruling it was appealing in a notice filed Friday. The U.S. estimated the spill at 4.2 million barrels, which could have triggered a maximum $18 billion fine. BP appealed the spill-size […]

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Oil industry must join U.S. railroads to boost train safety: regulator

WASHINGTON (Reuters) – Rail operators are going to great lengths to prevent oil train derailments but the energy sector must do more to prevent accidents from becoming fiery disasters, the leading U.S. rail regulator said on Friday. Oil train tankers have jumped the tracks in a string of mishaps in recent months that resulted in explosions and fires. Several of those shipments originated from North Dakota’s Bakken energy fields. Officials have warned that fuel from the region is particularly light and volatile. Sarah Feinberg, acting head of the Federal Railroad Administration, said the energy industry must do more to control the volatility of its cargo. "(We) are running out of things that we can put on the railroads to do," she said. "There have to be other industries that have skin in the game." A national safety plan for oil trains, due to be finalized in May, would require […]

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Fossil Fuels Will Save the World (Really)

ENLARGE Workers tend to a well head during a hydraulic fracturing operation outside Rifle, Colo., on March 29, 2013. Increased production has driven down oil prices. Photo: Associated Press The environmental movement has advanced three arguments in recent years for giving up fossil fuels: (1) that we will soon run out of them anyway; (2) that alternative sources of energy will price them out of the marketplace; and (3) that we cannot afford the climate consequences of burning them. These days, not one of the three arguments is looking very healthy. In fact, a more realistic assessment of our energy and environmental situation suggests that, for decades to come, we will continue to rely overwhelmingly on the fossil fuels that have contributed so dramatically to the world’s prosperity and progress. In 2013, about 87% of the energy that the world consumed came from fossil fuels, a figure that—remarkably—was unchanged […]

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Big Oil’s Broken Business Model

Many reasons have been provided for the dramatic plunge in the price of oil to about $60 per barrel (nearly half of what it was a year ago): slowing demand due to global economic stagnation; overproduction at shale fields in the United States; the decision of the Saudis and other Middle Eastern OPEC producers to maintain output at current levels (presumably to punish higher-cost producers in the U.S. and elsewhere); and the increased value of the dollar relative to other currencies. There is, however, one reason that’s not being discussed, and yet it could be the most important of all: the complete collapse of Big Oil’s production-maximizing business model. Until last fall, when the price decline gathered momentum, the oil giants were operating at full throttle, pumping out more petroleum every day.  They did so, of course, in part to profit from the high prices.  For most of the […]

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Peak oil explained with cartoons

Login Username: Password: Remember me Login as hidden 1 of 49 Humor and peak oil 3 Comments on "Peak oil explained with cartoons" Plantagenet on Thu, 12th Mar 2015 9:23 pm  Cartoons about how expensive oil is don’t make much sense in the middle of an oil glut when oil prices have fallen to near historic lows when adjusted for inflation. GregT on Thu, 12th Mar 2015 10:35 pm  Oil prices ajusted for inflation during non recessionary periods going back 130 years have hovered between 20 and 30 dollars a barrel. We are currently paying almost double those prices today. As usual planter, you are completely wrong. Northwest Resident on Thu, 12th Mar 2015 11:09 pm  The Teacher made a boo-boo. Name (required) Email Address (required) Website

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Brent falls below $57 on dollar rally

SINGAPORE (Reuters) – Brent crude fell below $57 a barrel on Friday as a strengthening dollar weighed on commodity markets after profit-taking by Asian investors earlier in the session. Asian investors were also mulling the impact from a tentative deal that would end a strike by U.S. refinery workers. Oil prices on Friday were initially supported by the U.S. dollar .DXY, which posted its biggest one-day fall in a month on Thursday, as it retreated from a 12-year high against a basket of major currencies on an unexpected fall in U.S. retail sales. But the greenback rallied to send Brent falling below $57 a barrel towards the end of the Asian trading day. A stronger greenback makes commodities denominated in the dollar more expensive for holders of other currencies and limits their purchases of commodities and other assets. Brent for April delivery LCOc1 was trading down 25 cents at […]

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Oil Trades Sideways; U.S. Dollar, Oversupply Cap Gains

By Eric Yep Crude-oil futures traded sideways in Asia Friday as oil markets struggled to recover from this week’s losses on the back of a strong U.S. dollar and persistent oversupply concerns. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $47.14 a barrel at 0340 GMT, up $0.09 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.17 to $57.25 a barrel. U.S. oil prices fell to a six-week low in the last session, and Brent crude is also hovering at the lower end of its trading range. The U.S. dollar had posted strong gains this week, with the euro falling to a nearly 12-year low versus the greenback helped by the European Central Bank’s bond purchases. The dollar softened a bit yesterday after weaker economic data from the U.S. but remains strong, putting pressure on […]

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U.S. Oil Prices Fall to Six-Week Low

U.S. oil prices fell to a six-week low Thursday as swelling crude inventories weighed on the market. Light, sweet oil for April delivery slid $1.12, or 2.3%, to $47.05 a barrel on the New York Mercantile Exchange, the lowest settlement since Jan. 29. The U.S. oil benchmark is down 56% from its mid-June high. Growing global oil output and lackluster demand sent prices plunging in late 2014. U.S. crude stockpiles are at their highest in about 80 years, and production continues to grow, according to the U.S. Energy Information Administration. Data service Genscape Inc., which tracks storage levels in Cushing, Okla., reported to its clients Thursday that inventories in Cushing rose by 2.2 million barrels between March 6 and March 10, according to two market participants. Prices turned lower on the news. Cushing is the delivery point for the benchmark U.S. oil-futures contract, so prices are sensitive to supply […]

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Brent extends rally as EU industrial production falters

European industrial activity on life support, suggesting a lack of a demand economy persisting in the low oil price era. UPI/Debbie Hill Brent prices increased for the second straight day Thursday, gaining 1.3 percent from the previous close to sell at $58.32 per barrel for the April contract. Brent in mid-January sold for less than $45 per barrel, but has been unable to hold above the $60 mark for any extended period so far this year. Oil prices are trading at a discount from their June 2014 high above $100 per barrel as markets shift away from the demand side on continued concerns about the health of the global economy. Eurostat, the statistics office for the European Union, said Thursday there were still lingering problems for the regional economy. Industrial production in December grew by just under one-half percent but dropped 0.1 percent in January. Year-on-year, industrial production grew […]

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Natural Gas Prices Lower After Larger-than-Expected Stockpile Drain

By Timothy Puko Natural gas futures fell Thursday after data showing a larger-than-expected draw from stockpiles that set a new record for any week in March. The U.S. Energy Information Administration said storage levels fell by 198 billion cubic feet in the week ended March 6. That is seven bcf more than the 191-bcf consensus average of 22 forecasters surveyed by The Wall Street Journal. The severe cold covering most of the country last week led to enough heating demand to cause the largest drain on record in EIA statistics dating through 1994. The previous record came last year, when 195 bcf were drained from stockpiles in the week ended March 7. Half of U.S. homes use natural gas for heating fuel, so single-digit temperatures like those that hit major markets across the country last week are big drivers for demand. The EIA update is widely considered one of […]

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Oil price decline leads to lower tax revenues in top oil-producing states

The decline in spot oil prices in the last half of 2014 and first month of 2015 has reduced oil and natural gas production tax revenues in some of the largest oil- and natural gas-producing states. Texas, North Dakota, Alaska, and Oklahoma are four of the five top oil- and natural gas-producing states, and they derive a significant share of their unrestricted operating revenues from taxes on oil and natural gas production. Although California produces more oil than both Alaska and Oklahoma, its economy is much larger, making it relatively less affected by changes in oil and natural gas prices and production. Texas collected $583 million in tax receipts from oil and natural gas production in August 2014, but tax revenue declined by 40% to $352 million in January 2015, based on data from the state’s comptroller . EIA estimates crude oil and lease condensate production in Texas also […]

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Germany Warns GOP Letter Affects Iran Talks

ENLARGE German Foreign Minister Frank-Walter Steinmeier said during a visit to Washington that the letter sent by 47 Republican senators to Iran’s leaders is affecting talks over the country’s nuclear program. Photo: Reuters BERLIN—German Foreign Minister Frank-Walter Steinmeier said Thursday a letter sent by 47 Republican senators to Iran’s leaders has complicated talks over Iran’s nuclear program by allowing Tehran to claim the West is not negotiating in good faith. Mr. Steinmeier, whose country is among the group of six nations negotiating with Iran, said the March 9 letter warning that a nuclear deal may not last beyond the Obama Administration injected a new element of distrust into the already difficult talks. “It would have been difficult enough without the letter of the 47,” Mr. Steinmeier said in an appearance at the Center for Strategic and International Studies think tank in Washington. “Now it has become somewhat more difficult.” […]

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Ayatollah Khamenei Derides Republicans’ Letter on Iran Nuclear Talks

TEHRAN — Iran ’s highest leader issued a sharp response Thursday to a letter to the country’s leadership by Republican lawmakers, deriding it as an indication that Washington is “disintegrating” from within. Ayatollah Ali Khamenei , Iran’s supreme leader, said the letter warning that any nuclear deal could be scrapped by a new president was “a sign of a decline in political ethics and the destruction of the American establishment from within.” The statement was posted on his website. Mr. Khamenei, who will have the final say in Iran over a nuclear deal, characterized the open letter written by 47 Republican senators on Monday as a reflection of Washington’s decadence. “All countries, according to the international norms, remain faithful to their commitments even after their governments change, but the American senators are officially announcing that at the end of the term of their current government, their commitments will be […]

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Oil deal imperiled by political discord

KRG Minister of Natural Resources Ashti Hawrami during a speech at the 2015 Sulaimani Forum on March 11, 2015, as Iraqi Oil Minister Adil Abd al-Mahdi looks on. (Source: American University of Iraq – Sulaimani) The fragile oil export and revenue sharing deal between Baghdad and Erbil appears to be in renewed danger of collapsing after KRG Minister of Natural Resources Ashti Hawrami publicly accused his federal counterpart of reneging on their agreement.“Why should we only have received $208 million when we are owed $3.6 billion?” Hawrami said.Hawrami aired his grievances Wednesday during a panel discussion at a conference in Sulaimaniya, sitting next to federal Oil Minister Adil Abd al-Mah…

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Spending cut planned for Kurdish oil operations

Oryx Petroleum cuts spending for Kurdish oil operations, but expects production to hold steady. UPI/Ayad Rasheed The bulk of spending for 2015 will target oil operations in northern Iraq and, while spending is reduced, output should be static, Oryx Petroleum announced. Oryx, a Canadian company focused on operations in the Kurdish north of Iraq, said it was planning 2015 capital spending of $140 million, a 60 percent reduction from the budget set in November. Oryx Chief Executive Officer Michael Ebsary said low oil prices and "disruptions to market access" in the semiautonomous region led in part to the spending revision . "Accordingly, we have moderated our capital expenditure plans to focus on our core development assets to enable us to achieve our targeted near term production growth," he said in a statement. "We are also reducing costs throughout the organization in order to increase our overall efficiency." The company […]

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Exclusive: Oil companies offer to cut 2015 spending in Iraq

BAGHDAD (Reuters) – Oil companies have proposed millions of dollars of cuts in development spending in Iraq, a senior oil ministry official said, after Baghdad told them low oil prices and its fight against Islamic State had made payments difficult. In a series of letters sent to companies such as Royal Dutch Shell, BP and Exxon Mobil since January, seen by Reuters, the oil ministry set out the need for change in response to "the rapid drastic decrease in crude oil prices". The slump in crude prices to below $60 a barrel from $115 in June has slashed government revenues in Iraq, OPEC’s second biggest exporter, just as it faces economic crisis triggered by Islamic State’s seizure of north and western provinces and surging expenditure to fund a military counter-offensive. In view of the fact that a significant proportion of development costs are passed on to Iraq, the oil […]

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Libya Warns Against Attempts to Sell Its Crude Illegally

By Benoit Faucon Libya’s National Oil Co. on Thursday warned against attempts to sell its crude oil illegally, amid mounting chaos in the oil industry. The news come after a string of attacks by purported members of the Islamic State against oil fields in the center of the country, which has already been rocked by a civil war between two rival governments. In a statement posted on its website, NOC said it had obtained "reliable sources of information in the oil market that some middlemen and brokers of unknown orientation were offering amounts of Libyan crude oil" without its approval. The state-run company, which has remained neutral in the conflict, threatened legal action at home and abroad against any buyer, referring to existing export bans from shutdown terminals Ras Lanuf and Sidra. The two eastern Libyan ports are controlled by oil guards loyal to warlord Ibrahim Jadran. Libya, once […]

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Egypt: Petroleum Ministry Pumps 43 Thousand Tonnes of Diesel Oil to Over Come Fuel Shortage – Statement

Cairo — Egypt’s ministry of petroleum pumped on Wednesday 43 thousand tonnes of diesel oil nationwide, Petroleum Minister Sherif Ismail said on Thursday, to overcome a fuel crisis which has persisted this week. Ismail said in a statement that the amount of diesel oil pumped is 110 percent more than the planned amount, describing it as "unprecedented". Egypt’s capital witnessed this week long queues outside gas stations and recurring power cuts due to fuel shortage, alongside other governorates. Ismail urged citizens to refrain from overcrowding gas stations, stressing that the amount of diesel oil pumped is proof of its availability within the domestic market. Egypt’s fuel crisis, ongoing for the past three years, usually surges during the summer, when power cuts occur with the highest frequency.

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On the River Nile, a Move to Avert a Conflict Over Water

Ethiopia’s plans to build Africa’s largest hydroelectric dam on the Nile have sparked tensions with Egypt, which depends on the river to irrigate its arid land. But after years of tensions, an international agreement to share the Nile’s waters may be in sight. For thousands of years, Egyptians have depended on the waters of the Nile flowing out of the Ethiopian highlands and central Africa. It is the world’s longest river, passing through 11 countries, but without its waters the most downstream of those nations, Egypt, is a barren desert. So when, in 2011, Ethiopia began to build a giant hydroelectric dam across the river’s largest tributary, the Blue Nile, it looked like Egypt might carry out its long-standing threat to go to war to protect its lifeline. But last weekend, all appeared to change. Ministers from Egypt, Ethiopia, and Sudan agreed on the basis for a deal for […]

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Brazil Protests Signal Return of Risk in Region as Boom Fades

Brazilian President Dilma Rousseff. Photographer: Evaristo SA/AFP via Getty Images (Bloomberg) — From pot-banging on the streets to defeats in Congress, Brazil’s President Dilma Rousseff hasn’t had a good week defending austerity measures she hopes will fix a broken economy. And it’s about to get worse. Brazilians in several cities plan to demonstrate on Sunday against corruption and growing economic hardship, demanding Rousseff’s impeachment. More than a quarter of a million people signed up on social media to participate. On Friday, pro-government unions intend to protest labor and pension cuts. Brazil is one of several Latin American countries where a cocktail of corruption scandals, slowing growth, falling currencies and accelerating inflation is eroding leaders’ popularity as a decade-long commodities boom comes to an end, said Joao Augusto de Castro Neves, Latin America analyst at Eurasia Group. It’s a hard time for Rousseff to be pushing through an austerity package. […]

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Mexico Cuts Production and Reserve Forecasts After Prices Slid

(Bloomberg) — Mexico’s National Hydrocarbons Commission lowered the country’s estimates for proven oil reserves and state-run Petroleos Mexicanos cut its 2015 production forecast after crude prices collapsed and its budget was reduced. Pemex cut its 2015 output forecast by more than 100,000 barrels to 2.288 millon barrels a day, Gustavo Hernandez, exploration and production director, said Thursday at a builders congress in Mexico City. Mexico’s proven oil reserves slid 3.1 percent to 13.02 billion barrels from a year earlier, Hydrocarbons Commissioner Juan Carlos Zepeda said Thursday in an interview at Bloomberg’s Mexico City offices. Pemex’s failure to boost reserves and drilling activity shows that opening the oil industry to outsiders is needed, Zepeda said. Mexico is opening its energy industry to foreign producers for the first time since 1938. Pemex drilled 120 wells in the fourth quarter, 36 percent less than a year earlier. “These numbers are distant from […]

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Rio Governors to Be Investigated in Petrobras Probe

ENLARGE Rio de Janeiro state Gov. Luiz Fernando Pezão will be investigated for money laundering and public-administration violations. Photo: Felipe Dana/Associated Press RIO DE JANEIRO—A Brazilian high-court judge cleared federal prosecutors Thursday to investigate the current governor and a former governor of Rio de Janeiro state, as a probe into alleged corruption surrounding state oil company Petróleo Brasileiro SA widened. Current Gov. Luiz Fernando Pezão and his predecessor, Sérgio Cabral, will be investigated for money laundering and public-administration violations. Federal prosecutors suspect them of soliciting and receiving 30 million Brazilian reais ($9.5 million) in 2010 from construction firms contracted by Petrobras to build a large refinery in Rio state. Petrobras’s former refining director, Paulo Roberto Costa, detailed the alleged payments last year as part of a cooperation agreement with prosecutors. But because of special rules guiding the prosecution of public officials, Brazil’s vice attorney general had to request authorization […]

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Its red shirts fading, Venezuela’s oil giant embraces pragmatism

CARACAS/HOUSTON (Reuters) – A subtle change in office attire may be the most telling symbol of a quiet revolution taking place inside Venezuela’s troubled economic engine, giant oil firm PDVSA. For years, PDVSA employees were encouraged to wear red shirts in support of late President Hugo Chavez’s socialist movement. Rafael Ramirez, the former oil czar famously vowed the state-owned firm would be "redder than red" and sent workers to state rallies. Over the past few months, however, the company’s new management – led by president Eulogio del Pino, a low-profile Stanford-educated engineer – has eased up on revolutionary garb and attendance at militant gatherings, according to sources within and outside the company. New posters inside its Caracas headquarters request employees don normal office wear, visitors say, a telltale sign of what could be the most sweeping changes in over a decade at a firm that controls the world’s largest […]

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Pemex Plans To Compete In Mexico’s First Two Oil Tenders

MEXICO CITY, March 12 (Reuters) – Mexican state-owned oil company Pemex plans to take part in the first two public tenders of the so-called Round One opening of the country’s oil and gas industry, a senior executive said on Thursday. Mexico has already announced terms and conditions for the first phase of the sector opening, which follows a reform finalized last year that ended Pemex’s 75-year-old oil and gas monopoly in a bid to attract more private investment. Gustavo Hernandez, Pemex’s head of exploration and production, said the firm would take part in the "first two tenders" – one for 14 production and exploration areas and the second for five contracts spread over nine production fields. "A lot of companies have approached Pemex because we have knowledge of the shallow water basin with more than 40 years of exploration and 35 years of production," Hernandez told reporters after an […]

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Venezuela’s loss is Africa’s gain in Latam crude game

HOUSTON Mar 12 (Reuters) – Shrinking crude exports from Venezuela to its neighbors has allowed African oil producers to gain a foothold among Latin American buyers, according to traders and data, and sales to one of the world’s few regions with strong demand will keep growing. Only months ago, African producers were scrambling to find new clients in the Western Hemisphere, having largely been pushed out of the U.S. market by the onshore shale oil revolution. African exports are also growing as Mexico and Brazil lack spare capacity to increase sales to neighbors. U.S. companies, which dominate refined products trade in the Americas, cannot export crude because of a decades-old ban imposed by Washington. Africa sent at least 8 million barrels to South America in the first two months of this year, double the amount in the year-ago period, according to Reuters Dirty Tanker Fixtures data. While African crude […]

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Japan Continues to Re-Embrace Coal

Coal is stockpiled at the Onahama port of Iwaki in Fukushima Prefecture in February 2014…. ENLARGE Photo: Bloomberg News TOKYO—Japan is continuing to re-embrace coal to make up for its lack of nuclear energy, with plans for another power station released Thursday bringing the number of new coal-fired plants announced this year to seven. Utilities in Japan are eager to take advantage of coal’s relative cheapness to give them a competitive edge at a time when other countries are seeking to reduce their greenhouse-gas emissions by moving away from a fuel source seen as dirty. The liberalization of Japan’s power industry by 2020 will pit power companies against each other as rivals for the first time. In addition, with a relaxation of restrictions on coal power and no new emissions targets on the horizon, utilities are increasingly seeing coal as an important part of their business plans. Kansai Electric […]

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China’s Carbon Emissions Drop for the First Time Since 2001

Steam rises from chimneys at the Junliangcheng power station in Tianjin, China. In the battle to rein in pollution, China has cut its dependence on coal. Photographer: Tomohiro Ohsumi/Bloomberg (Bloomberg) — China’s emissions of climate-warming carbon dioxide fell last year for the first time in more than a decade, offering fresh evidence that efforts to control pollution in the nation of 1.4 billion people are gaining traction. Total carbon emissions in the world’s second-biggest economy dropped 2 percent in 2014 compared with the previous year, the first drop since 2001, according to a Bloomberg New Energy Finance estimate based on preliminary energy demand data from China’s National Bureau of Statistics. “Coal demand is slowing” while all other fuels, including oil, gas and renewables, are being consumed more, said Sophie Lu, a Beijing-based analyst at BNEF. The International Energy Agency has identified shifting energy consumption in China as among the […]

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Oil CEOs Press Obama Administration to Lift Export Ban

Oil tankers sit at a rail yard at the Kinder Morgan Inc. facility in Richmond, California. U.S. energy policies severely restrict crude exports while applying no such limits to products processed in refineries. Photographer: David Paul Morris/Bloomberg (Bloomberg) — About a dozen U.S. drilling executives, including ConocoPhillips Chief Executive Officer Ryan Lance, were in Washington this week trying to persuade White House officials and lawmakers to lift the 40-year ban on U.S. oil exports, according to two people familiar with the meetings. Chief executives from the lobbying group Producers for American Crude Oil Exports, or PACE, met with White House senior energy policy adviser Brian Deese March 11 to ask the Obama administration to roll back a prohibition on most U.S. oil exports imposed after the 1973 Arab oil embargo, according to two people, who asked not to be identified because the discussions weren’t public. Producers are eager to […]

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China’s Captains of Heavy Industry Confront ‘New Normal’

ENLARGE The sun sets behind a chimney of a steel mill in Tangshan, Hebei province. Millions of metric tons of steelmaking capacity and more than 100 mines were mothballed in Hebei last year, according to officials. Photo: Reuters BEIJING—China’s resources industry leaders are confronting twin pressures likely to come into sharper relief this year: slower demand in the world’s largest commodity buyer coupled with Beijing’s tough new environmental standards. Speaking on the sidelines of this year’s annual legislative National People’s Congress, which concludes Sunday, China’s captains of heavy industry, from copper smelters to steel plants, said Beijing’s campaign to restructure the economy will likely result in lower profits, potential job losses and migrating capacity for the resources sector. The top exhibit lies just outside the nation’s capital Beijing: Hebei province, which has the capacity to produce a quarter of China’s steel — nearly three times the entire steel output […]

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A Windfall for China as Commodity Prices Plunge

ENLARGE DALIAN, China–Lower prices for oil and other commodities are delivering China a windfall, as the world’s largest importer of natural resources stocks up and saves money in the process. By some estimates, China is enjoying annual headline savings of as much as $250 billion from stepped-up purchases of discounted oil, copper and iron ore–much of it arriving aboard dented bulk carriers and greasy tankers at northeastern Dalian port and other trade gateways. “China is the mega winner from the drop in industrial commodity prices,” said Kenneth Courtis, chairman of Starfort Holdings, an investment, private equity and commodity group. He estimates that China is saving over $600 million on its daily 12-million-barrel import bill, or over $200 billion a year, following the halving in oil prices since last summer. Those savings are equivalent to the investment initiatives announced by the government to strengthen ties with neighbors by building trade […]

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Hong Kong Finds Radioactive Contamination in Sample of Japanese Tea

HONG KONG — A sample of powdered tea imported from the Japanese prefecture of Chiba, just southeast of Tokyo, had 9.3 times the legal maximum level of radioactive cesium 137 allowed in food, the Hong Kong government announced late Thursday evening. Hong Kong’s legal limits for radioactive material in food are low and stringent. But the discovery is not the first of its kind. The government’s Center for Food Safety found three samples of vegetables from Japan with “unsatisfactory” levels of radioactive contaminants in March 2011, the month that nuclear reactors in Fukushima, northeast of Tokyo, suffered partial meltdowns following a powerful earthquake and tsunami. Other samples of Japanese food have occasionally been found to have low levels of radiation since the Fukushima disaster, the Hong Kong food center said. Some tea samples were found in Japan with radioactive contamination in the months immediately after the earthquake and tsunami. […]

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Arctic Melt Brings More Persistent Heat Waves to U.S., Europe

Sea-ice melt in the Arctic, Barents and Kara seas since 2004 has made more than twice as likely atmospheric circulations that suck cold Arctic air to Europe and Asia, a group of Japanese researchers led by the University of Tokyo’s Masato Mori said in a study published in 2014 in Nature Geoscience. Photographer: Martin Bureau/AFP via Getty Images (Bloomberg) — The U.S., Europe and Russia face longer heat waves because summer winds that used to bring in cool ocean air have been weakened by climate change, German researchers said. Rapid Arctic warming disturbs air streams in ways that have “significantly” reduced summer storms, raising the likelihood of heat waves, the Potsdam Institute for Climate Impact Research said in a report Thursday in the journal Science. Hot weather in Russia in 2010 devastated crop harvests and caused wildfires. “Unabated climate change will probably further weaken summer circulation patterns which could […]

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Bakken oil production is already declining

With the large oil price drop that began last summer, the big question for world oil markets has been: How will U.S. shale drillers respond? There’s been widespread expectations that U.S. shale oil—and hence total U.S. production—would continue rising through the middle of 2015. According to data I compiled for the prolific Bakken shale oil play, production dropped in January—and looks set to drop in the following two months, at least. It could be that U.S. total production is already declining, but the data hasn’t come in yet. Read more in my new post, " Bakken oil production is already declining ." This helps clear up some questions I’d asked in my previous post, " Is U.S. oil production already declining? ", about how recent data from EIA is actually based on forecasts, rather than measurements of real production. This new post also builds on data compilation I did in […]

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Striking U.S. Oil Workers Reach Tentative Labor Pact With Shell

(Bloomberg) — The United Steelworkers union representing 30,000 U.S. oil workers reached a tentative deal on a four-year contract with Royal Dutch Shell Plc, potentially ending a nationwide strike that has lasted for over a month. The proposed deal includes annual wage increases and maintains the cost-sharing ratio of the union’s current health-care plan, the United Steelworkers said in a statement on Thursday. It also contains language addressing the USW’s concerns about worker fatigue and contractors performing routine maintenance at oil refineries. The accord could end a strike at U.S. plants that began on Feb. 1 and has since spread to sites that account for almost 20 percent of the country’s total refining capacity. It’s the first national walkout of U.S. oil workers since 1980, when a work stoppage lasted three months. The USW represents workers at plants that together account for 64 percent of U.S. fuel output. “We […]

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Bakken oil production is already declining

Production of oil in North Dakota—home to the vast majority of all wells sunk into the Bakken shale oil formation—declined in January, the latest month with data available directly from the state. The state of North Dakota has yet to release their own compilation of production statistics for January 2015—those are due out March 12 (tomorrow, as of this writing). I expect they will likewise show a drop. This runs counter to expectations from the Energy Information Administration (EIA) that Bakken oil production would continue rising through March, only starting to decline in April. It also raises questions about whether total U.S. oil production may already be declining—and that the decline simply hasn’t shown up yet in available data. To find this out, I compiled the production data from the state, and show it split into three groups: 1. the old wells (mainly conventional drilling), 2. the new wells, […]

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The coming “mother of all capacity shortages” and other economic forecasts

How tight is trucking capacity getting? KISSIMMEE, FL.  Analyst John G. Larkin , managing director and head of transportation capital markets research for Stifel, Nicholaus and Company, delivered both good news and sobering insights to the audience assembled here this week for the 77 th annual Truckload Carriers Association convention. He had plenty of “things are improving, but…” figures to share on issues such as freight capacity constraints, the state of the U.S. labor force and the declining middle class: Auto and light truck market: This market segment has seen “quite a rebound,” Larkin said, although the average age of vehicles in this segment is still 11.4 years, so replacement has not been overwhelmingly strong. In fact, the age of vehicles has increased every year since 2002.  There is also good news, at least for OEMs, in these geriatric fleet metrics, however. All those older units represent “a still […]

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Robert Rapier: Is the U.S. Running Out of Crude Oil Storage?

No, despite the popular narrative that we keep hearing, the U.S is not running out of crude oil storage. Yet there are those who are predicting that oil prices are going to fall to $20 or $30 a barrel, pointing to the crude oil storage numbers and suggesting that we are near maximum capacity and therefore a price collapse is imminent. (Although Goldman Sachs did some backpedaling on their forecast this week). The argument goes something like this: US running out of room to store oil; price collapse next? “The U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months. For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra […]

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U.S. Steel to Idle Plant, Lay Off 412 More Workers

PITTSBURGH— U.S. Steel Corp. Thursday announced more layoffs as it struggles to contend with surging imports and declining demand for the energy sector, saying it will temporarily idle one of its iron ore operations in Minnesota, affecting 412 workers. The move is the latest in a series of retrenchments by the 114-year-old steelmaker as it attempts to navigate rough waters for the industry in the U.S., and pursue a longer-term strategy of repositioning itself as a smaller, more nimble steel company. U.S. Steel last year posted its first annual profit since 2008, but like other steelmakers is now having to cope with the triple whammy of a strong dollar that makes imports cheaper, weak oil prices that are killing the market for energy-related steel, and a surge in exports from China. The idling of the plant in Keewatin, Minn., which directly ships to U.S. Steel mills, will take place […]

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Shell expects to drill offshore Alaska this year

Sign up for our daily Energy Newsletter Shell says it expects to proceed with drilling program in arctic waters off the coast of Alaska this year. Photo by Kyle Waters/Shutterstock THE HAGUE, Netherlands, March 12 (UPI) — Drilling in the arctic waters of Alaska should proceed this year assuming timely approval from the U.S. federal government, Royal Dutch Shell said Thursday. Shell’s preliminary drilling program in arctic waters offshore Alaska in 2012 was plagued by problems, including a grounded drilling rig, violations of air pollution limits, engine failures on a tow ship and an oil spill containment system damaged during testing. Shell Chief Executive Ben van Beurden said in an annual report , published Thursday, the Interior Department was reviewing a supplementary environmental impact statement on operations in the Chukchi and Beaufort seas. "We anticipate that the Department of Interior will continue to work in accordance with their proposed […]

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Oil Deaths Rise as Bakken Boom Fades

ENLARGE As crude prices retreat, oil companies have cut the rates they pay contractors who work at sites on North Dakota’s oil-rich Bakken formation by 20% or more. A drilling site outside of Williston, N.D. Photo: Reuters BISMARCK, N.D.—At least eight workers have died since October in North Dakota’s oil fields, more than in the preceding 12 months combined. The uptick in fatalities comes as many oil companies are responding to plummeting crude-oil prices by dialing back their drilling activity in the state, one of the hubs of the U.S. energy boom. Some federal safety officials say they suspect oil’s plunge might be a factor in the accidents because it puts cost-cutting pressure on oil-field services companies, whose employees do much of the work at drilling sites. The rash of accidents in North Dakota, which has the highest workplace death rate in the country, began around the time the […]

Posted On : Published By : Tom Whipple