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Rains rally Asia crops in El Nino year, but relief seen short-lived

SINGAPORE Surprisingly strong rains in an El Nino year, typically marked by droughts in parts of Asia, have eased concerns of a lower crop output in the region. But weather forecasters are not convinced, warning of severe dryness in the autumn months. The last El Nino in 2009 had brought the worst drought in four decades to India. It hit Australian wheat crop and also reduced oil palm yields across Southeast Asia. While the forecast is for an equally severe dryness this year, recent rains have buoyed farming in India, China and Australia. "Indian monsoon (started in June) is on track, in fact it has been better than expected, and we haven’t seen any decline in rainfall in a serious manner in Malaysia or Indonesia yet," an Australia-based commodity fund manager said, declining to be identified to avoid speculation over the fund’s investments. "Australia is dry but we have […]

Posted On : Published By : Tom Whipple
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Biggest Coal Shipper’s Power Plan Offers Relief From Bear Market

The coal market’s best hope of breaking a four-year losing streak may be its biggest supplier’s plan to burn more at home. Indonesia plans to expand generating capacity by 46 percent in four years with new power plants, half of them burning coal. If that happens, fuel consumption may triple to the equivalent of 76 percent of last year’s exports and boost prices more than 50 percent, the Indonesia Coal Mining Association says. The country currently consumes less electricity than Taiwan, a nation with about a 10th of its population. Benchmark Asian coal prices fell every year since 2010 after producers from Australia to Colombia flooded the market and demand faltered in China, the biggest consumer. “Any reduction in Indonesian exports helps the seaborne market,” said Ted O’Brien, chief executive officer of Doyle Trading Consultants, a coal industry analytical firm based in Grand Junction, Colorado. “Like other Asian countries, […]

Posted On : Published By : Tom Whipple
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In bet on oil prices, WPX plans to add Bakken rigs

WILLISTON, N.D. Drilling rigs are coming back to North Dakota. WPX Energy Inc, a small oil producer in the No. 2 U.S. crude state, said on Thursday it will add two rigs this year, becoming the first since the crude price downturn to announce concrete steps to boost output. Though only the 11th-largest North Dakota oil producer, trailing Whiting Petroleum Corp and others, WPX has effectively staked out a leadership position in the state’s Bakken shale formation by saying it will add rigs, slash well completion costs and target a 20 percent boost in output by 2016. Half a dozen other companies in the crowded U.S. shale industry have talked about adding rigs but have so far balked at making definite moves. Executives say they face a dilemma: they want to drill more to capture a recent upturn in prices, but worry widespread new rig deployments would cause prices […]

Posted On : Published By : Tom Whipple
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U.S. refinery capacity reaches 18 million barrels per day

graph of U.S. operable refinery capacity, as explained in the article text Increased refinery runs—based on increases in both capacity and utilization—have helped accommodate increases in U.S. crude oil production. The United States’ capacity to refine crude oil into petroleum products—measured as operable atmospheric crude distillation unit (CDU) capacity—increased by 0.2% in 2014, reaching 18.0 million barrels per calendar day (b/d), according to EIA’s recently released annual Refinery Capacity Report . The refinery capacity reported for the beginning of 2015 includes expansions that were operable on January 1, but not necessarily operating. Because these units were not operating as of January 1, capacity for those projects is listed as idle. Dakota Prairie Refining recently completed construction of one of the few new refineries built in the United States over the past 30 years. This relatively simple refinery , which is located in western North Dakota, has CDU capacity of […]

Posted On : Published By : Tom Whipple
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Quebec Becomes Latest Hurdle to Canada’s Plans for Oil Exports

Protesters hold a banner that reads, “Don’t flow near us,” in French. Photographer: Rebecca Penty/Bloomberg Across Quebec, cardboard signs are popping up on lawns depicting a broken pipe gushing black crude. “Don’t flow near us,” they warn in French. That sums up Benoit Pigeon’s feelings about TransCanada Corp.’s proposed C$12 billion ($9.7 billion) pipeline that would traverse the province on its way to connect Alberta oil-sands fields with the Atlantic Coast. In addition to his yard sign, Pigeon has marched with street protesters and helped rally opposition to the project on Facebook. “This investment should be in renewable energy instead,” Pigeon, 51, said in an interview at his home. For a resource-rich nation eager to expand crude exports from the oil sands, Canada has been striking out lately. TransCanada’s Energy East marks the fourth time this decade an oil-sands pipeline has been mired in environmental opposition. Keystone XL, which […]

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Canada’s Weaker Dollar Helps to Blunt Oil Shock, Schembri Says

A weaker dollar is helping Canada’s economy cope with a drop in crude oil prices, central bank Deputy Governor Larry Schembri said. Regions such as Alberta, Saskatchewan and Newfoundland are hurting from the drop in crude oil prices over the last year, Schembri said in response to questions after a speech Thursday in Windsor, Ontario. Other parts of Canada are benefiting from the currency’s drop against the U.S. dollar and signs of an accelerating recovery south of the border, he said. “We are seeing more strength in Ontario to compensate for the fact that oil production and investment is declining in Alberta,” Schembri said. “That kind of adjustment is facilitated by the flexible exchange rate.” Canada’s dollar has depreciated by 13 percent against its U.S. counterpart over the last 12 months, making exporters more price competitive. It traded at C$1.2340 at 1:12 p.m. Toronto time. West Texas Intermediate is […]

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Alberta to Double Carbon Tax in Step to Toughen Environmental Policy

CALGARY, Alberta—The recently elected government of Alberta said Thursday it will double a carbon tax on industrial emissions of greenhouse gases by 2017, calling it a first step in toughening this oil-rich province’s environmental policies. In a move closely watched by Canadian oil and gas producers, the left-leaning New Democratic Party, or NDP, government said the policy is part of a broader review of environmental policies that will result in additional measures to reduce greenhouse-gas emissions in time for a year-end United Nations climate-change conference in Paris. Alberta implemented its current carbon tax—the first in North America—in 2007, but that was set to expire at the end of this month. The new policy will increase levies on large-scale emitters of carbon dioxide to 30 Canadian dollars ($24.19) a metric ton by 2017, up from C$15. Alberta’s energy industry has been shaken by the NDP’s win, and has warned about […]

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GM’s Chevy Bolt Outpacing Tesla in Cheaper Electric Car Race

General Motors Co. has released early prototype images of its Chevrolet Bolt electric car, evidence the Detroit auto maker is likely well ahead of Tesla Motors Inc. in the race to launch a more affordable long-range battery-powered car. The images show a car that is similar in size and design to the Bolt concept vehicle shown at the Detroit auto show in January. The company says the car will achieve 200 miles of driving distance on a charge, and cost about $30,000 after factoring in federal tax incentives. GM’s Chevy Bolt is slated to hit the market in 2017, at roughly the same time Tesla and other auto makers are expected to be close to launching similar offerings. Currently selling a pricier sedan called the Model S and in the midst of launching the sibling Model X SUV, Tesla expects its Model 3 to help take the product lineup […]

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German nuclear phase-out starts final stage with Grafenrheinfeld closure

Germany’s nuclear phase-out plan is entering its final stage with the first of the country’s nine remaining modern reactors shutting down for good this Saturday. Plant operator E.ON decided to close the 1.3 GW Grafenrheinfeld nuclear power plant half a year ahead of its final decommissioning date, set by the government in the weeks after the Fukushima nuclear accident in Japan in 2011, because it is not profitable to run. Last year, E.ON decided to retire the 33-year-old reactor in the southern state of Bavaria earlier than required because operation of nuclear power stations in Germany only makes economic sense if they can run for a sufficient length of time without the burden of the nuclear-fuel tax, it said. The brevity of Grafenrheinfeld’s remaining operating lifetime after a required annual refueling stop this June made an early shutdown unavoidable in the interests of E.ON’s shareholders, it said last year. […]

Posted On : Published By : Tom Whipple