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Opinion: Busting The “Canadian Bakken” Myth

« Major Dutch waste-to-chemicals initiative more than doubles with new partners | Main | CA Energy Commission awards CSE $1.5M for development of standards-based smart EV charging platform; first employment of ISO/IEC 15118 » The financial pages of Canadian newspapers have been full of headlines lately announcing the potential of two large shale oil fields in the Northwest Territories said to contain enough oil to rival the Bakken Formation of North Dakota and Montana. The report by Canada’s National Energy Board (NEB) evaluated, for the first time, the volume of oil in place for the Canol and Bluefish shale formations, located in the territory’s Mackenzie Plain. It found the “thick and geographically extensive” Canol formation is expected to contain 145 billion barrels of oil, while the “much thinner” Bluefish shale contains 46 billion barrels. The report did not estimate the amount of recoverable oil, but points out that even […]

Posted On : Published By : Tom Whipple
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Cheniere outlines LNG project developments

Cheniere Energy Inc. plans to add 19 million tonnes/year of incremental production capacity to two LNG projects , bringing the company’s aggregate nominal production capacity to 60 million tpy by 2025. The company is developing 9 million tpy of incremental LNG production capacity through the addition of two liquefaction trains adjacent to the existing site of the Corpus Christi liquefaction (CCL) project. Expected nominal production capacity of each of these trains is 4.5 million tpy, which would increase the expected aggregate nominal production capacity to 22.5 million tpy. Cheniere initiated the regulatory process this month by filing the National Environmental Policy Act prefiling request with the US Federal Energy Regulatory Commission and Federal Transit Administration, and non-FTA approval requests with the US Department of Energy. Regulatory approvals would be expected in 2017. A final investment decision (FID) for CCL was reached last month ( OGJ Online, May 14, 2015 […]

Posted On : Published By : Tom Whipple
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Who Cares How Fast You Can Sell Debt If Borrowers Can’t Repay It

What if corporate-bond buyers focused less on how quickly they could trade the stuff and more on the basic question of, are they actually going to get their money back? Because, in a growing number of cases, they may not. While American companies seem to be in good shape based on a historically low default rate, they look a lot less good if you peek under the hood of their balance sheets. One problematic sign: the least-creditworthy companies have seen pretty much no growth in a basic measure of their earnings, even after stripping out the embattled energy companies, Bank of America Corp. analysts found. Yet these junk-rated corporations are selling debt at a rapid clip to lock in ultra-low borrowing costs, meaning their levels of debt relative to their income are steadily rising. Another problematic sign: creditors of companies that are going bankrupt are getting less of their […]

Posted On : Published By : Tom Whipple
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Shell Arctic Spill Contingency Plans In Alaska Survive Challenge

A divided federal appeals court on Thursday rejected an effort by a coalition of environmental groups to revoke federal approval of Royal Dutch Shell Plc’s oil spill response plans related to drilling on Alaska’s remote Arctic coast. By a 2-1 vote, the 9th U.S. Circuit Court of Appeals said the Bureau of Safety and Environmental Enforcement, which is part of the Department of the Interior, acted lawfully in approving the plans, which relate to Shell oil leases in the Beaufort and Chukchi seas from 2005, 2007 and 2008. It rejected arguments by environmental groups such as the National Audobon Society, the Natural Resources Defense Council and the Sierra Club, that the approval was “arbitrary” and “capricious,” based on Shell’s unsupported assumption that it could recover 90 percent to 95 percent of any oil spilled. Many environmental advocates oppose drilling in the Arctic on concern that any spill might prove […]

Posted On : Published By : Tom Whipple
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Oh US gas demand, where art thou?

In the United States, natural gas is having quite a year. Year-to-date, Platts unit Bentek Energy data shows natural gas production has averaged 72.4 Bcf/d, a 5.2 Bcf/d, or almost an 8% increase, from a year ago. This growth is impressive itself, but what makes it even more impressive is the growth has come while prices have been depressed and demand has lagged. For example, year-over-year: • Platts assessed spot prices at Henry Hub in June have averaged $2.65/MMBtu, which is more than a 40% decline from a year ago, when the June 2014 price average month-to-date was $4.59/MMBtu. • Baker Hughes shows US natural gas drilling rigs have fallen by nearly a third, from 320 to 222. • Baker Hughes shows US oil drilling rigs have fallen by over half, from 1,536 to 642. (This is important because associated gas from crude oil wells account for about for […]

Posted On : Published By : Tom Whipple
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Gazprom Seeks A Way Around Ukraine By 2019

Gazprom has vowed to entirely cut out Ukraine as a transit hub for natural gas exports to Europe. The conflict with Ukraine has scrambled the longstanding energy relationship between Russia and Europe. The European Union imports around one-third of its natural gas from Russia, but having seen those flows cut off multiple times in the past, European officials are pushing to rid themselves of their dependence on Moscow. The violence in Ukraine solidified that motivation. Russia is also unhappy with the arrangement. In an effort to separate gas exports to the EU (a critical business relationship that Moscow doesn’t want interrupted) from its ongoing conflict with Kiev (a geostrategic priority), Russia has a great incentive to cut out Ukraine. About half of Russia’s gas exports to Europe must travel through Ukraine. But that could change within the next four years, if Gazprom gets its way. “We will not export […]

Posted On : Published By : Tom Whipple
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Survey: Mid-life crisis for North Sea oil sector

Mid-life crisis for North Sea oil and gas operators as crude oil markets limp through the year, survey finds. File Photo by UPI/Shutterstock/num_skyman ABERDEEN, Scotland, June 11 (UPI) — Most oil and gas companies working in the North Sea canceled projects and about half have cut staff because of the weak oil market, a survey found. The Aberdeen & Grampian Chamber of Commerce, in partnership with law firm Bond Dickinson, said 67 percent of the companies working in the North Sea have been forced to shelve projects and half have been forced to cut staff in the depressed crude oil market. "Confidence levels are at an all-time low and we are now experiencing our first ‘recession of confidence’, and it looks gloomy in the year ahead too," James Bream, policy director for the chamber of commerce, said in a statement. The price for Brent crude oil, a North Sea […]

Posted On : Published By : Tom Whipple
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Despite IMF walkout, Greece hopes for deal on June 18

ATHENS Greece hopes to clinch a deal with its lenders at a meeting of eurozone finance ministers on June 18, the state minister said on Friday, as time runs short for the country to stave off default at the end of the month. The statement by Alekos Flabouraris came a day after the International Monetary Fund walked away from negotiations in Brussels, citing major differences, and a top EU leader bluntly told Athens to stop "gambling" with its future. A Greek source told Reuters that the entire Greek delegation that had been negotiating a cash-for-reform deal had also left for home on Thursday, citing continuing disagreements. "I hope it (a deal) will come very soon, on June 18, when the Eurogroup takes place," Flabouraris, a close aid to Greek Prime Minister Alexis Tsipras, told state television ERT. Greece needs a deal to unlock aid before the end of the […]

Posted On : Published By : Tom Whipple
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Renewable Energy Will Not Support Economic Growth

Container terminal image via shutterstock. Reproduced at Resilience.org with permission. The world needs to end its dependence on fossil fuels as quickly as possible. That’s the only sane response to climate change, and to the economic dilemma of declining oil, coal, and gas resource quality and increasing extraction costs. The nuclear industry is on life support in most countries, so the future appears to lie mostly with solar and wind power. But can we transition to these renewable energy sources and continue using energy the way we do today? And can we maintain our growth-based consumer economy? The answer to both questions is, probably not. Let’s survey four important sectors of the energy economy and tally up the opportunities and challenges. The electricity sector: Solar and wind produce electricity, and the fuel is free. Moreover, the cost of electricity from these sources is declining. These are encouraging trends. However, […]

Posted On : Published By : Tom Whipple