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Short-Term Energy Outlook

Highlights North Sea Brent crude oil prices averaged $64/barrel (b) in May, a $5/b increase from April and the highest monthly average of 2015. Despite estimated global inventories increasing by more than 2 million barrels per day (b/d) for the third consecutive month, several factors contributed to higher prices in May, including continued signals of higher global oil demand growth, expectations for declining U.S. tight oil production in the coming months, and the growing risk of unplanned supply outages in the Middle East and North Africa. EIA forecasts Brent crude oil prices will average $61/b in 2015 and $67/b in 2016. The 2016 price forecast is $3/b lower than in last month’s STEO. West Texas Intermediate (WTI) prices in both 2015 and 2016 are expected to average $5/b less than the Brent price. The current values of futures and options contracts for December 2015 delivery suggest ( Market Prices […]

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A $500 Billion Maybe: Why Big Iran Moment May Be Years Away

U.S. Treasury Secretary Jacob J. Lew. Photographer: Simon Dawson/Bloomberg For every investor who sees opportunity in a post-sanctions Iran, there are others who see the same old legal morass. The Islamic Republic is banking on a nuclear accord with world powers to unleash a flood of foreign cash into an economy crippled by decades of sanctions. Companies including Royal Dutch Shell Plc, BP Plc and Total SA say they’re willing to invest in the OPEC member. Major investments, however, may take years as companies weigh the risk of Iran violating the agreement, which would bring sanctions back, according to analysts and former officials. Decades of hostile relations with Western powers and tight scrutiny by the U.S. Congress and Treasury could also make many investors reluctant to jump back right away. “Businesses have become terrified about doing business with Iran, and it’s not easy to un-terrify them,” says Trita Parsi, […]

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U.S. Says It’s Firm on Iran Demands as Nuclear Deadline Looms

As Secretary of State John Kerry heads to Vienna Friday seeking to complete an agreement restricting Iran’s nuclear activities, two senior Obama administration officials rejected suggestions that the administration is backtracking on its demands in its eagerness for a deal. The U.S. is standing firm in insisting that Iran must grant access and transparency so that United Nations inspectors can verify that its nuclear program is solely for peaceful purposes, according to the officials, who are close to the negotiations and spoke on condition of anonymity. The officials’ insistence that Iran must adhere to the strict terms of an April 2 framework for a deal is significant because skeptics of a deal with Iran have raised alarms that U.S. negotiators are backsliding on their demands. “Despite getting virtually nothing in return, the president has handed Iran concession after concession after concession,” Republican House Speaker John Boehner of Ohio told […]

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U.S. lawmakers step up warnings against ‘weak’ Iran deal

WASHINGTON As talks on an Iran nuclear deal enter the final stretch, U.S. lawmakers are sharpening warnings against a "weak" agreement and laying down red lines that, if crossed, could prompt Congress to trip up a carefully crafted international pact. Several influential lawmakers said they do not want to see any sanctions lifted before Tehran begins complying with a deal, and want a tough verification regime in which inspectors could visit Iranian facilities anytime and anywhere. They also want Tehran to reveal past military dimensions of its nuclear program, particularly after Secretary of State John Kerry seemed to soften the U.S. stance last week by saying Iran would not be pressed on this point. "I have become more and more concerned with the direction of these negotiations and the potential red lines that may be crossed," Senator Bob Corker, the Republican chairman of the Senate Foreign Relations Committee, told […]

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ISIS Attacks Two Border Towns in Northern Syria

Photo As they waited at the border to cross into Turkey on Thursday, relatives of a woman who died after being wounded in Kobani, in northern Syria, mourned over her body. Credit Rodi Said/Reuters BEIRUT, Lebanon — The militants of the Islamic State carried out two new offensives in northern Syria on Thursday, entering a provincial capital and detonating large bombs in the border town of Kobani, where intensive airstrikes by a United States-led coalition helped Kurdish forces rout the jihadists last year. In southern Syria, rebel groups began a new campaign to push government forces from the city of Dara’a. The new attacks by the Islamic State came more than a week after its fighters lost the town of Tal Abyad, on the Turkish border, to Kurdish militias and Arab rebels in what was seen as a strategic setback for the group . In striking back, the Islamic […]

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Fuel Shortages to Hit Nigeria in Three Weeks, Seplat CEO Says

Nigeria will probably be hit by fuel shortages in three weeks as the government doesn’t have enough money to pay for gasoline subsidies, according to the head of Seplat Petroleum Development Co Plc. “In three weeks we will be back to scarcity because we simply don’t have the money to pay for the subsidy,” Austin Avuru, chief executive officer of Lagos-based Seplat, said on Thursday at a Bloomberg conference at the Nigerian Stock Exchange. Nigeria almost ground to a halt last month during the country’s worst fuel shortage in a decade due to a dispute between oil-product marketers and the outgoing government. The shortage left service stations closed, aircraft grounded, and businesses unable to operate. A lack of oil refining capacity means Nigeria subsidizes gasoline imports and suffers frequent fuel shortages even though it’s Africa’s biggest crude producer of about 2 million barrels a day. President Muhammadu Buhari, who […]

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Natural Gas Production in East Africa: An Inevitable Resource Curse

East African nations such as Mozambique, Uganda, Tanzania, and Kenya are experiencing a boom in oil and natural gas production that is increasingly exported by Western production companies to meet growing global demand. While these activities may appear to be an economic boon to these countries, the problem is that they could potentially cause natural gas to be a “ resource curse ” for these developing nations. A resource curse, or a “paradox of plenty,” can occur when the extraction of natural resources like fossil fuels and minerals in resource-rich countries contributes to slower economic growth than countries that are less abundant in these same natural resources. This effect could be mitigated if the government takes proactive steps to grow the rest of the economy, facilitate skills transfer, and combat corruption. Several economic mechanisms contribute to the resource curse. The import of foreign currency needed for foreign firms to […]

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Pemex in Talks With Union Over Pension, Labor Reforms

MEXICO CITY—State-owned Petróleos Mexicanos is in advanced talks with Mexico’s powerful oil workers union to lower labor costs via a pension overhaul and for more flexible work rules to secure its future in a newly competitive environment, according to people familiar with the negotiations. Success in renegotiating the collective bargaining agreement at Mexico’s biggest company by sales and staff could determine how well Pemex performs now that oil prices are low and the former energy monopoly faces private-sector competition for the first time, analysts say. Moreover, the Mexican government has said it would assume a significant portion of Pemex’s $100 billion in unfunded pension liabilities if the current system is successfully changed. “If they finally agree on these changes, it would be the most important step Pemex can take to guarantee it remains a dominant and competitive player in the long run,” said Leo Zuckermann, political analyst at the […]

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Pirates and hold-ups: crime strikes Venezuela’s oil industry

MARACAIBO, Venezuela When night falls over western Venezuela, armed gangs known as "pirates" sometimes ride boats into muggy Lake Maracaibo to steal equipment from oil wells. In the country’s Paraguana peninsula, opposite the Caribbean island of Aruba, slum dwellers at times break through a perimeter wall into Venezuela’s biggest refinery and rob machinery, construction tools, and cables to sell as scrap. On the other side of the OPEC country in Monagas state, around 26,000 potential barrels were lost in March during a shutdown after state oil company employees and contractors stole copper cables and caused a tank to overflow. Venezuela’s national crime pandemic – the United Nations says the country has the world’s second-highest murder rate after Honduras – is a growing headache for the oil industry, which accounts for nearly all of the country’s export revenues. Hold-ups and thefts in the sector are on the rise, taking a […]

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Wall Street Pumps Billions Into Renewable Energy

After years of lofty promises, Wall Street believes the renewable energy industry can produce a payoff. In just a few years, investors have gone from zero to billions in the amount of money they’re pumping into renewable-energy companies and environmentally friendly projects. Tax-equity funds and specialty financial tools like “green bonds” and yieldcos have become increasingly popular. And investments in the renewable-energy companies that benefit from these financial tools have far outperformed those in oil-and-gas drilling and coal mining since the start of 2013, according to Bloomberg New Energy Finance, a research arm of Bloomberg LP. Analysts, bankers and investors at the Renewable Energy Finance Forum in New York this week were ebullient. Many see the sector as past a tipping point: Skepticism has melted among the financial brokers of the energy world, and they have started to fund the renewable-power sector as a legitimate upcoming rival to fossil […]

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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 […]

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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, […]

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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 […]

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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 […]

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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. […]

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Greece No Closer to a Deal as Debt Deadline Nears

Photo Prime Minister Alexis Tsipras of Greece leaving a meeting in Brussels. The country and its creditors failed again to reach an agreement on revising the terms of a bailout package. Credit Yves Herman/Reuters BRUSSELS — With Greece ’s bailout set to expire at the end of the month, it is becoming clear that negotiators mean to go down to the wire. The brinkmanship brings with it the risks of reaching no agreement at all, or a last-minute deal that might do little to solve Greece’s underlying economic problems. “It looks like both sides are going to walk this to the precipice,” said Mujtaba Rahman, who heads the Europe practice for the Eurasia Group, a political-risk consultant firm. “But any deal that comes out of that is of course going to be more political and even more economically suboptimal.” On Thursday, for the fourth time in a week, a […]

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Northern England County Rejects Fracking Site

An English county government rejected one of two applications for hydraulic fracturing for natural gas on Thursday, setting the stage for a decisive vote on the drilling technique next week. The Lancashire County Council voted against allowing privately held Caudrilla Resources Ltd. to use horizontal drilling and fracking at the company’s Roseacre Wood site in northwest England over worries about the increase in traffic. County planning officials had recommended the application be rejected. The council’s planning committee now is set to decide whether to give the go-ahead for a second site, also in Lancashire, on Monday. That site had been recommended for approval by planning officials and was supposed to have been voted on Wednesday, but councilors decided to wait until Monday to consider legal advice. If approved, it would be the first site to be fracked in western Europe since 2011. Cuadrilla said it was disappointed but not […]

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Scotland expects North Sea production gains

Scottish government sees production of oil and natural gas increasing in North Sea basins. File photo by A.J. Sisco/UPI EDINBURGH, Scotland, June 25 (UPI) — Though the industry is in a downturn, the Scottish government said Thursday it expected production from the North Sea to increase by more than 10 percent. Data published by the Scottish government said the North Sea remains the largest oil producer and second largest natural gas producer in Europe. Scottish Deputy First Minister John Swinney said there’s "no disputing" the industry is depressed, but production is expected to increase by as much as 17 percent by 2019. "These figures show that considerable opportunities to extend production remain in the UKCS and that, properly supported, the industry can boost production over the next five years," Swinney said. A January report from analysis firm Wood Mackenzie said exploration activity in 2014 was off 18 percent from […]

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How Pope Francis’s climate encyclical is liberating the world

Pope Encyclical Quote In my life there are two things that have the effect of at least somewhat isolating me from others. The first is being a writer on climate change, peak oil, and the economic crises bound up with those modern predicaments. The other is being a Christian environmentalist. In the first case, my essays, as well as my social media presence, fairly well run counter to the whole of my society and culture, even when a few outliers add concurring thoughts to the mix. But in the end, by writing a write a blog about what people shouldn’t do, about the things we should give up and forsake for a concept of the greater good, about the ways our habits imperil the world and especially our children and future generations, I can kind of come off like a scold even in my most mild iteration. Even when […]

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Why are the government’s energy forecasts so bad?

In 2009, the federal government’s Energy Information Administration made a forecast for the next two decades: U.S. wind power would grow modestly, reaching 44 gigawatts of generating capacity in 2030, while solar power would remain scarce, inching up to 12 GW. Just six years later, U.S. wind capacity is already up to 66 GW, and solar has shot up to 21 GW. There’s now enough installed wind and solar to power 25 million American homes— more than three times what the EIA expected before President Obama took office. Oops. As Yogi Berra recognized, predictions are hard, especially about the future. But the EIA isn’t just some random pundit. Its Annual Energy Outlook, the nation’s most comprehensive analysis of energy data, has tremendous influence in Washington and state capitals, providing the numbers that shape policies like Obama’s Clean Power Plan to regulate carbon emissions at power plants. So it really […]

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Oil rises towards $65 on signs glut easing, Iran doubts

LONDON Oil rose towards $65 a barrel on Wednesday before a U.S. government report expected to show domestic crude inventories fell for an eighth week, a sign that a supply glut is easing. The industry group American Petroleum Institute (API) on Tuesday reported a drop in U.S. crude stocks, ahead of Wednesday’s official data. Doubts over the likelihood of a deal next week on Iran’s nuclear work also supported prices. Brent crude LCOc1 rose 30 cents to $64.75 a barrel by 0836 GMT. U.S. crude CLc1 gained 39 cents to $61.40. Both contracts made gains on Tuesday. "There could be some support from the APIs," said Tony Machacek, an oil broker at Jefferies Bache in London. "We’re probably going to be testing $66 to the upside," he added, referring to Brent. A steady decline in U.S. crude stockpiles from a record high earlier this year has been supporting prices […]

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Oil Prices Fall After Inventory Data

Oil prices declined Wednesday after data showed that crude-oil supplies shrank last week but inventories of refined products rose. Light, sweet crude for August delivery settled down 74 cents, or 1.2%, to $60.27 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 96 cents, or 1.5%, to $63.49 a barrel on ICE Futures Europe. U.S. oil prices have gained 13% this year on expectations that the global glut of crude oil is due to shrink. U.S. commercial crude-oil supplies fell by 4.9 million barrels in the week ended June 19, the U.S. Energy Information Administration said Wednesday. That was the eighth straight week of stockpile draws since inventories hit a record high in April, the longest streak of drawdowns since the eight weeks ended Jan. 4, 2008. Analysts surveyed by The Wall Street Journal had expected a draw of 2.3 million barrels. “It was a […]

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Oil’s Week Hides Weakness

For most of us, Wednesday is hump day. For oil traders, it is frequently jump or slump day. That is because it is usually when the Energy Information Administration drops its weekly statistics on U.S. oil inventories, production and consumption. The latest set, for the week ending June 19, had something for both bulls and bears—but the latter edged it. Commercial crude oil stocks fell by 4.9 million barrels, so bulls got that. But a little delving paints a different picture. For one, some oil was just transferred to the Strategic Petroleum Reserve, leaving a net reduction of 4.6 million barrels. Meanwhile, imports of crude oil fell by 2.1 million barrels last week. This explains almost half the net draw in domestic crude stocks, leaving 2.5 million barrels. Now, look at two big refined products: gasoline and distillate (the latter includes diesel). Stocks of these rose by a combined […]

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Natural Gas Rises Ahead of Inventory Data

By Nicole Friedman NEW YORK–Natural-gas prices ticked higher Wednesday ahead of weekly inventory data, which is expected to show that supplies have increased by less than is typical for this time of year. Natural-gas futures for July delivery settled up 3.3 cents, or 1.2%, at $2.759 a million British thermal units on the New York Mercantile Exchange. Natural-gas stockpiles typically grow between April and October, as producers store the heating fuel ahead of the winter, when consumption usually peaks. Producers have injected large amounts of natural gas into storage in recent weeks, suggesting that robust production is keeping the market oversupplied. The U.S. Energy Information Administration is due to release its inventory data for the week ended Thursday. Analysts and traders surveyed by The Wall Street Journal expect the agency to report that stockpiles grew by 78 billion cubic feet in the week, less than the five-year average build […]

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Syria crisis: IS re-enters Kurdish held town of Kobane

Kobane has been devastated by the fierce battle Islamic State fighters have entered the northern Syrian city of Kobane, battling Kurdish forces, activists say. The Syrian Observatory for Human Rights says a number of people were killed in fierce clashes in the centre of the town on the Syrian-Turkish border. Kurdish forces drove IS forces from Kobane early this year after a long campaign backed by US-led air strikes. The battle made international headlines – heralding what some saw as a symbolic defeat for the IS. The jihadist group has suffered a string of defeats to Kurdish forces since it was forced to withdraw from Kobane in January after a four-month battle. Early this week, Kurdish Popular Protection Units (YPG) forces said they had captured a key town, Ain Issa, just 50km (30 miles) from the IS headquarters at Raqqa, days after seizing Tal Abyad and cutting a major […]

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Under sanctions, Iran’s crude oil exports have nearly halved in three years

U.S. Energy Information Administration, based on Lloyd’s List Intelligence, Global Trade Information Services, Eurostat, and trade press Source: Note: Values may not add to the total because of independent rounding. Note: OECD is the Organization for Economic Cooperation and Development. In early April this year, Iran and the five permanent members of the United Nations Security Council plus Germany (P5+1) reached a framework agreement to guide negotiations targeting a comprehensive agreement by June 30. The comprehensive agreement could result in the lifting of crude oil-related sanctions against Iran, which in turn could result in an increase in Iran’s crude oil production and exports. However, the ultimate decision and the timing that sanctions could be lifted are highly uncertain. Sanctions imposed by the United States and the European Union (EU) at the end of 2011 and during the summer of 2012, respectively, led to the displacement of more than 1.0 […]

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Ex-Advisers Warn Obama That Iran Nuclear Deal ‘May Fall Short’ of Standards

Five former members of President Obama ’s inner circle of Iran advisers have written an open letter expressing concern that a pending accord to stem Iran ’s nuclear program “may fall short of meeting the administration’s own standard of a ‘good’ agreement” and laying out a series of minimum requirements that Iran must agree to in coming days for them to support a final deal. Several of the senior officials said the letter was prompted by concern that Mr. Obama’s negotiators were headed toward concessions that would weaken international inspection of Iran’s facilities, back away from forcing Tehran to reveal its suspected past work on weapons, and allow Iranian research and development that would put it on a course to resuming intensive production of nuclear fuel as soon as the accord expires. The public nature of the announcement by some of Mr. Obama’s best-known former advisers, all of whom […]

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Iran’s Regime Can Change. But a Nuclear Deal Isn’t Likely to Transform It.

Would a nuclear deal with Iran be a transformational accord, realigning the region and bilateral relations? Or would it be a more narrow business proposition: sanctions relief in exchange for slowing Iran’s nuclear program and buying time, or so Western diplomats hope, for more fundamental change in Tehran? Speculation is risky business. But with a nuclear deal looking likely, I’m thinking a bit about what the post-agreement future might hold. Even the mullahcracy in Tehran isn’t immune to change. A year ago, few would have predicted that we’d be close to an agreement. (Yes, some will say not to count our deals before they are signed.) Still, a transformation isn’t likely, even over time, particularly in a region that rarely offers good news or quick results. Consider: Regime preservation: Iran didn’t get into negotiations over its nuclear program because it was seeking to become Switzerland–democratic, and an integral part […]

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Tehran Must Balance Negotiations and Upcoming Elections

Iran’s parliament voted Tuesday to approve a bill that sets strict limits on international inspections of Iranian nuclear sites, a hotly debated aspect of negotiations between Iran and the six world powers. The bill would prevent the Iranian negotiating team from agreeing to allow foreign access to Iranian military sites, areas deemed as strategic to Iranian security, non-nuclear facilities and Iranian scientists. The bill still needs approval from the Guardian Council, Iran’s top legal vetting body, which is charged with interpreting the constitution and approving the eligibility of political candidates. The Guardian Council is expected to approve the bill as part of a tacit negotiation between Iranian Supreme Leader Ayatollah Ali Khamenei and the parliament. As in the United States, Iran is on the cusp of an important political season. Iranians will head to the polls Feb. 25, 2016, to elect not only the 290 members of the parliament […]

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Death Toll From Karachi, Pakistan, Heat Wave Tops 800

Photo Pakistanis took shelter in the shade outside a hospital in Karachi, Pakistan, on Wednesday. Credit Shakil Adil/Associated Press KARACHI, Pakistan — The temperature was still searingly high on Wednesday — 98 degrees Fahrenheit, or 37 degrees Celsius — but at least it was dropping. It had been as high as 113 degrees Fahrenheit, or 45 degrees Celsius. Health and rescue officials said the number of deaths, which surpassed 800 during the four days that the merciless heat wave gripped this southern port city, had also fallen on Wednesday. “Today was a lot better,” said Anwar Kazmi, a spokesman for the Edhi Foundation , which runs an ambulance service and Karachi’s largest morgue. “We’ve had 58 deaths today, compared to yesterday when the death toll rose to 300.” Meteorologists said Karachi’s weather should improve in the days ahead. “There won’t be heavy rains, but there are chances of light […]

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Japan Building Giant Battery Systems to Store Solar Power

Japanese companies are building some of the world’s biggest battery systems to address one of solar power’s biggest problems–its volatility. Handling the surges in power when the sun shines and storing that energy for use when it is cloudy or dark is a major headache for solar power producers and the utilities they supply. Mitsubishi Electric Corp.6503.TO +0.79% and NGK Insulators Ltd.5333.TO +1.68% are assembling a 50,000 kilowatt battery system for Kyushu Electric Power Co.9508.TO +0.41% to study ways to better accommodate solar power. A slightly smaller, 40,000 kilowatt battery system is under construction in Minami Soma, north of the Fukushima Daiichi nuclear power plant, for Tohoku Electric Power Co.9506.TO +0.52% to conduct similar research. The government is financing both projects at a total cost of ¥31.7 billion ($257 million), a government official said. Power companies have cited the volatility of supply as a reason for refusing to accept […]

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Oklahoma drilling regulator calls spike in quakes a ‘game changer’

A spike in earthquakes across Oklahoma is forcing the state’s energy regulator to urgently consider tougher restrictions on drilling activity, a spokesman said on Wednesday, calling it a "game changer." From June 17 to 24, there have been 35 earthquakes of magnitude 3.0 or greater in the state, according to the Oklahoma Geological Survey. Particularly worrying for regulators, some of the recent quakes occurred in the Oklahoma City metropolitan area, where there are no high-volume wastewater injection wells. The spike in quakes comes roughly two months after new rules governing the disposal of briny wastewater from drilling took full effect. Drillers were directed by the Oklahoma Corporation Commission (OCC), which regulates the oil and gas industry, to stop disposing wastewater below the state’s deepest rock formation, believed to be one of the main causes of the quakes, and to reduce the depth of wells that already go that deep. […]

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IHS examines next big deal in U.S. shale

IHS finds emerging shale basin straddling border between Texas and New Mexico doing well despite the downturn in the crude oil market. Photo by Christopher Halloran/Shutterstock HOUSTON, June 24 (UPI) — The Wolfcamp Delaware basin, a shale play straddling the Texas border with New Mexico, could be the next big deal, analysis published Wednesday from IHS found. "The Wolfcamp Delaware has promise, but right now, it is considered an adolescent in terms of its maturity," Reed Olmstead, manager of the North American analytics at IHS Energy, said in an emailed statement. The U.S. Energy Information Administration said in a drilling productivity report output from key shale basins is expected to dip lower starting in July. Low crude oil prices leaves companies with less money to spend on exploration and production and many key shale states are feeling the impact. North Dakota’s rig count is hovering near all-time lows and […]

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Alaska Sen. Lisa Murkowski ties Iran to U.S. oil export debate

Sen. Lisa Murkowski, R-Alaska, said crude oil prices would likely fall if more Iranian oil enters the market. File Photo by Kevin Dietsch/UPI WASHINGTON, June 24 (UPI) — Iranian sanctions should stay in place as long as policymakers keep a ban on domestic crude oil exports in force, a report from U.S. Sen. Lisa Murkowksi read. Debate is heating up ahead of a June 30 deadline to finalize a framework agreement that would give Iran sanctions relief in exchange for assurances against a nuclear weapon program. Iran, under the terms of a November 2013 agreement meant to curtail nuclear advancements, is limited to exports of around 1 million barrels per day, about half of the country’s full potential. The U.S. Treasury Department estimated Iran was out about $40 billion in revenue last year as a result of sanctions. Murkowski, R-Alaska, chairwoman of the Senate Energy Committee, said crude oil […]

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Two Saltwater Leaks in North Dakota

Health Department Investigating Impact on Wetland Spill Threatens Wetland Two separate saltwater spills in North Dakota this week have health officials scrambling to assess the damage and monitor the environmental impact of nearby wetlands. News agencies from across the state reported that 50 barrels of brine were spilled at a site in Burke County owned by Petro Harvester Operating Company in Burke County. Company officials also indicated they believe that the damage might not have been an accident. Karl Rockeman, head of the NDDoH division of water quality said “The company believes someone damaged the pump jack at the well head. They’re alleging that it was intentional.” A second unrelated spill was reported by Condor Petroleum, Inc. in Divide COunty and involved one barrel of oil and 39 barrels of brine were spilled. NDDoH officials are evaluating a nearby wetland for water quality impacts. Health department officials report that […]

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Exxon Mobil Stops Pumping Oil off Santa Barbara After Spill Crippled Pipeline

The oil company temporarily ceased operations last week after Santa Barbara County rejected its emergency application to truck oil to refineries , spokesman Richard Keil said. A Santa Barbara County official said the company’s problem didn’t constitute an emergency and it could go through the normal procedure to get a permit to truck oil. Federal regulators investigating the cause of the spill have said the 2-foot-wide pipe was corroded where it ruptured. Exxon Mobil had cut daily production on the Hondo, Harmony and Heritage rigs from 30,000 barrels to 10,000 barrels and was storing it at the company’s plant in Las Flores Canyon, 15 miles west of Santa Barbara. The plant separates water and natural gas from crude, and another company processes the natural gas. The plant was capable of storing up to 540,000 barrels of crude, according to Santa Barbara County. The company said it had expected to […]

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Judge’s order delays BLM’s implementation of fracing regulations

A federal district judge in Wyoming temporarily delayed the US Bureau of Land Management’s implementation of its recently issued hydraulic fracturing regulations. Judge Scott W. Skavdahl issued a stay on June 23 to give the US Department of the Interior agency until July 22 to submit a full administrative record in legal challenges by four states and two independent oil and gas producers’ associations. The regulations, which were scheduled to take effect on June 24, effectively have been delayed until early August. BLM is consulting with the US Department of Justice about Skavdahl’s decision, a Washington spokesman told OGJ. “While the matter is being resolved, BLM will follow the court’s order and will continue to process applications for permits to drill and inspect well sites under its preexisting regulations,” he said. DOI issued its final rule for fracing regulations on onshore public and Indian tribal lands earlier this year […]

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Scotland in a huff over wind energy subsidies

Scotland wants to British representatives to explain moves to lessen the government support for onshore wind energy developments. UPI/Pat Benic LONDON, June 24 (UPI) — The Scottish government said it wants the British energy secretary to come to its capital to explain the reasons behind a cut in wind energy subsidies. "The Scottish government has been clear that onshore wind should be able to compete with other technologies," Scottish Energy Minister Fergus Ewing said in a statement Wednesday. London announced plans to end public subsidies for new onshore wind farms starting in April 2016. Last year, the $1.2 billion in government support helped onshore wind power generate 5 percent of total British electricity and bring the region closer to its climate change goals, the British government said. The Scottish government countered that London’s proposal was stacked against it as nearly 70 percent of the installed onshore wind power is […]

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Norway’s oil and gas production up

Norwegian government says oil and natural gas production increased in May in a possible sign of stability in a weak crude oil market. File UPI/Shutterstock/James Jones Jr. OSLO, Norway, June 24 (UPI) — Oil and natural gas production from Norwegian basins increased last month, with oil output up 2.4 percent year-on-year, the government said Wednesday. The Norwegian Petroleum Directorate, the nation’s energy regulator, said oil production in May was 1.51 million barrels per day, which is 2.4 percent above May 2014 and 1 percent above what the regulator expected. Total sales of natural gas were 307 billion cubic feet, also an increase from the previous month. Production figures come amid modest stabilization in the crude oil market, with prices about 25 percent higher than early 2015 lows. After the Norwegian government in January handed out 54 licenses for operations in the North, Norwegian and Barents seas, Energy Minister Tord […]

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ADB: Poor face greater climate risks

Asian Development Bank finds those in poverty face a greater risk from the threat of climate change. File Photo by UPI Photo/Mohammad Kheirkhah. MANILA, June 24 (UPI) — A report from the Asian Development Bank finds widening income gaps in the Asia-Pacific leaves the poor more exposed to the risks of climate change. Vinod Thomas, general director of an independent evaluation at the ADB, said wealth gaps in the region have secondary consequences . "Climate change hurts the poor disproportionally," he said. "Environmental shocks push the poor into direr straits. Hence, responding to climate change helps to reduce inequality." The bank, in an annual review of the Pacific energy regime , said the region’s heavy reliance on imported fossil fuels leaves it particularly vulnerable to foreign markets. The bank said its regional investments of more than $500 million by next year will support a low-carbon transition. Asian economies, the […]

Posted On : Published By : Tom Whipple