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Stop using China as an excuse for inaction on climate change

China is the world’s excuse for cruelty and barbarism. If we don’t behave atrociously, politicians and columnists assure us, China will, so we had better do it first, before we are outcompeted. You want holidays, collective bargaining rights and fair conditions in the workplace? Forget it. When Chinese workers have none, such fripperies would “hamper British/US/Australian/Canadian industry”, making it uncompetitive. Columnists like Thomas Friedman at the New York Times, gleefully regaling us with tales of Chinese workers being turfed out of their dormitories at midnight , marched to a workstation and obliged to perform a 12-hour shift to meet a last-minute order from Apple, insist that we either compete on these terms or perish. France, he once claimed, is doomed if it seeks to preserve a 35-hour week, while people in Asia “ are ready to work a 35-hour day .” In fact French workers are doing fine : […]

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Oil Prices Fall on Global Glut of Crude

Oil prices fell Monday for a third straight session as the market’s focus shifted back to the global oversupply of crude. Light, sweet crude for July delivery, the U.S. benchmark, declined 44 cents, or 0.7%, to $59.52 a barrel on the New York Mercantile Exchange. The global Brent contract for August ended down $1.26, or 2%, at $62.61 a barrel on the ICE Futures Europe exchange. The U.S. contract is now 3.1% below the high for the year set last week, and the Brent contract is 7.6% below its 2015 high set in May. Price-reporting agency Platts said Monday that the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, raised output in May to 31.1 million barrels a day, more than 1 million barrels above its quota and 1.8 million barrels above its daily demand forecast for its own oil. It was the highest level of output […]

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Oil prices fall for third straight day

Though U.S. operations in the Gulf of Mexico are in the cross hairs of tropical weather, European and Middle East concerns push crude oil prices lower in Monday trading. UPI/Maryam Rahmanian NEW YORK, June 15 (UPI) — Despite potential threats to U.S. oil production, European economic and Middle East security concerns sent oil prices lower for a third straight day. Brent crude oil prices fell more than 2.1 percent in early Monday trading to $62.50 per barrel. West Texas Intermediate, the U.S. benchmark, lost 1.6 percent to $58.98 per barrel. Both indices are below the price at which they started the month. Oil prices were lifted by upbeat forecasts on global demand from the Organization of Petroleum Exporting Countries last week. Optimism about the health of the world economy has helped oil prices recover from lows below the $50 per barrel mark in early 2015, though concerns about the […]

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Iran sees balanced oil markets

Global oil markets will remain balanced even after Iran returns to its full export potential, envoy to OPEC says. File Photo by William S. Stevens/U.S. Navy TEHRAN, June 15 (UPI) — The global market for oil will remain balanced when Iran reaches its full export potential even if that means cuts from OPEC members, an envoy said. Mehdi Assali, the Iranian envoy to the Organization of Exporting Countries, told the Oil Ministry’s news agency, Shana, equilibrium would prevail . "The market will continue to remain balanced [event] after Iran’s return," he said. "[Fellow OPEC members] will have to cut their production so that Iran’s return would not cause a drop in the prices." Iran holds the third-largest proven oil reserves among OPEC member states, behind Venezuela and Saudi Arabia, respectively. Under the terms of a joint deal reached in November 2013, oil exports are limited to around 1 million […]

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Iran’s 40 million barrels stored at sea hangs over oil market

LONDON Iran is storing as much as 40 million barrels of oil on supertankers at sea as it prepares for a sales drive if a nuclear deal can be sealed. Iran and six world powers are seeking to overcome remaining differences with a looming self-imposed June 30 deadline to reach a deal over Tehran’s disputed nuclear program. In the meantime, Iran has been parking oil off its coast, mainly on tankers belonging to its national carrier NITC. "The first thing they will try and do is offload quite a lot of that storage. (Oil Minister Bijan) Zanganeh has already warned OPEC: make room for us. In other words, we are going to sell this oil at any price," said Mehdi Varzi, a former official at the state-run National Iranian Oil Co. "Floating storage is there to be put onto the market as soon as possible after some sort of […]

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UN-sponsored Yemen talks open in Geneva

United Nations-sponsored consultations on the Yemen crisis have started in Geneva, with the aim of ending the bloody conflict in the country. Representatives from Yemen’s exiled government, the Houthi rebels, former president Ali Abdullah Saleh’s General Peoples’ Congress and other opposition groups were expected to attend the talks in Switzerland, which began on Monday morning. It was not immediately clear, however, if all of the parties were in attendance when the talks started. Ban Ki-moon, UN secretary-general, was in attendance at the opening session of the talks, posing for photographs with a number of representatives of the Gulf Cooperation Council. Yemen faces humanitarian emergency Announcing the start of "preliminary inclusive consultations" in the Swiss city, Ismail Ould Cheikh Ahmed, the UN’s peace envoy for Yemen, issued a statement before the talks calling on "Yemen’s political actors to participate in these consultations in good faith and without preconditions, and in […]

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Kurds and Syrian Rebels Storm ISIS-Held Border Town

Photo An Islamic State flag flying on Monday in Tal Abyad, a Syrian town on the Turkish border. The town represents a strategic supply route for Islamic State militants. Credit Umit Bektas/Reuters ISTANBUL — A coalition of Kurdish militias and Arab rebels stormed into a strategic Syrian town on the Turkey border on Monday, seizing most of it from Islamic State fighters who had long used the area to smuggle supplies and fighters into their self-declared caliphate, according to Kurdish militia leaders and activists. The complete loss of the town, Tal Abyad, would deal a major blow to the jihadists by cutting the primary lifeline to the Syrian city of Raqqa, which the Islamic State has ruled for more than a year and has tried to turn into a model of strict Islamic governance. The advance was a boost to opposition fighters who have watched in dismay as the […]

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Saudi Arabia and China Drift Apart on Oil

One country looms over Saudi Arabia’s current pump-till-it-slumps oil strategy: China. Resurgent U.S. oil output has raised global supply. But China has long been the gorilla on the demand side, accounting for 48% of the increase in global oil consumption in the past decade. Now China is slowing—and even that earlier, rapid growth wasn’t an unalloyed boon for oil producers. The explanation lies in the changing relationship between China’s economic growth and the oil needed to support that. Plotting the annual growth in China’s inflation-adjusted gross domestic product against its growth in oil demand, the points for the 1980s and 1990s are as expected: As GDP rose, so did oil demand in a broadly linear way. Things changed in the 21st century: China added almost as much absolute GDP in the five years through 2005 as in the previous decade. Oil consumption increased every year on average by about […]

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Nigeria should sell stakes in joint ventures with foreign partners: auditor

The Nigerian government should start selling off its stakes in oil joint ventures with foreign partners to ease the funding issues and leakage of cash due to corruption and waste which have impeded the country’s bid to increase production, oil industry auditors said Monday. The government through state oil firm Nigerian National Petroleum Corp. holds an average 57% interest in joint ventures with Shell, ExxonMobil, Chevron, Total and Eni, which account for about 90% of Nigeria’s 2 million b/d oil output. "This divestment will open the arrangement for private sector participation," auditor the Nigerian Extractive Industry Transparency Initiative (NEITI) said. "Above all, it will reduce the corrupt practices, waste and other leakages associated with the management of the JVs over the years," the agency said, adding that the recommendation, following a review of the industry by stakeholders, aimed to assist the reform program of the new government. Article continues […]

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Guesswork, inconsistency nag U.S. shale oil accounting

HOUSTON/NEW YORK Steep downward revisions to oil and gas reserves at the end of this year are likely to increase scrutiny of how energy companies tally future barrels – a process that has become more opaque with the rise of shale drilling. The revisions due in December will reflect a deep plunge in crude prices and should not come as a surprise for investors who have been pouring billions of dollars into U.S. oil companies betting that crude prices will recover. But investors may not fully appreciate other risks stemming from the wide variety of methods companies use to estimate and vet their reserves, or economically-recoverable oil and gas. Reserves have long underpinned company stock prices. Reserve growth is used at companies, including ConocoPhillips as a component of the chief executive’s compensation. Yet there is plenty of uncertainty in the industry as measuring unconventional resources such as shale oil […]

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Texas shipping operations brace for storm

Shipping operations on the Texas coast began to batten down Monday as a major storm bears down on the region. Houston pilots stopped boarding outbound vessels on the ship channel at around 2 pm CDT (1900 GMT) Monday, the West Gulf Maritime Association said in a statement. Galveston-Texas City and Brazos pilots are expected to shut down operations near dusk. The release also said offshore lightering operations have ceased until the weather improves. Chevron has evacuated some non-essential personal from its US Gulf Coast production facilities, but production has not been impacted, spokeswoman Isabel Ordonez said. Article continues below… Sign up for Global Alert today. Platts Global Alert is a complete real-time information service for the global energy industry, providing breaking reports of deals done, price indicators for crude and products and more than 200 end-of-day assessments. ExxonMobil, Shell and BP haven’t cut any production because of the storm, […]

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US crude production boost could be near: EIA economist

Stabilizing crude oil prices and falling drilling costs could soon boost US production by hundreds of thousands of barrels per day, an upstream oil and gas economist with the US Energy Information Administration, said Monday. "We’re starting to see a turn in production," Grant Nulle said during a panel discussion at EIA’s annual conference. "Conditions are conducive for this to happen." While recent EIA data has shown production declines at existing wells have outpaced production from new wells, a rebound is likely as operators focus on the most efficient wells and look to increase well completions amid falling costs and continued availability of capital, Nulle said. In a recent survey of 85,000 wells drilled between 2012 and 2014, initial production rates have roughly doubled, he said. Article continues below… Every Monday, Capitol Hill newshounds Herman Wang and Brian Scheid analyze, dissect and debate the key US oil policy issues […]

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Oil prices rise as Texas braces for tropical storm

SINGAPORE Crude prices rose after a cautious start on Tuesday, boosted by warnings that a tropical storm was about to hit the coast of oil producing state Texas. The U.S. National Hurricane Center (NHC) issued a tropical storm warning on Tuesday for the Texas coast from Baffin Bay to High Island. More than 45 percent of U.S. refining capacity is located along the U.S. Gulf Coast, which is also home to about half of the total U.S. natural gas processing capability. U.S. crude futures were up around half a dollar at $60.05 a barrel at 0700 GMT (0300 ET), staying within a trend channel of $57-$62 per barrel that has been in place since the beginning of May. Brent also rose, gaining 22 cents to $64.17 per barrel. Analysts said Brent’s gains were largely down to firm demand for refined products, such as gasoline, in Asia. "Over the first […]

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Shell Arctic drilling rig departs Seattle surrounded by protesters

SEATTLE A Royal Dutch Shell PLC drilling rig that will search for oil in the Arctic left its temporary base in Seattle on Monday for the trip north to Alaska as dozens of activists in kayaks tried to stop it, authorities said. Live television showed the rig being towed out of its terminal at the Port of Seattle with kayakers fanning out in an arc as it moved into the Puget Sound. Twenty-five people were detained by the Coast Guard for violating a safety zone around the vessel and were fined $500 each, Coast Guard spokesman George Degener said. The rig paused at Bainbridge Island, west of Seattle, and several tweets indicated it had beached. Degener said the reports were incorrect and the rig was changing towing configuration. Seattle City Council member Mike O’Brien was among the activists who paddled out to oppose Shell’s plans to resume drilling for […]

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Energy Industry Is Gassing Down

Natural gas is flared off at a plant outside of the town of Cuero, Texas. U.S. energy companies are taking their foot off the natural-gas pedal, slowing down their production growth after years of furious pumping. In the past eight years, a combination of improvements in drilling techniques and high energy prices stoked natural-gas production to all-time highs. The boom quickly sent natural-gas prices to historic lows, but output kept rising because high oil prices made it profitable for producers to keep tapping fields that yielded both oil and gas. Now, the global collapse in oil prices has producers and analysts rethinking the gas boom, too. Both gas and oil prices are down about 40% in the past year, cutting the incentive to keep drilling. A flurry of recent forecasts from government and private-sector experts suggest monthly gas production will flatten and possibly even begin to decline in 2015. […]

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Seattle Wades Into Fight Over Oil Drilling

SEATTLE—Law enforcement detained dozens of protesters Monday for trying to block a Royal Dutch Shell RDS.A -0.03 % PLC oil rig from departing the Port of Seattle for drilling off Alaska—the latest development in a weekslong standoff in which environmental activists have been joined by an unusual ally: the city itself. Monday’s action took place after the Polar Pioneer and its support vessels attempted to leave the port about 6 a.m. to begin exploratory drilling in the Chukchi Sea and were intercepted by protesters in kayaks, Coast Guard officials said. About two dozen people were detained, including Seattle City Councilman Mike O’Brien, as more activists prepared to try to block the 400-by-292-foot drilling vessel from reaching the open sea, said Coast Guard Lt. Dana Warr. Lt. Warr said the agency is enforcing a 500-yard safety zone around the vessel, and that violators face misdemeanor citations. Shell officials said that […]

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Coal, Oil Must Decline to Curb Carbon Emissions by 2020, IEA Says

LONDON—Coal and oil use must begin declining after 2020, and natural gas, nuclear and renewable energy usage must rapidly increase, for the world to begin curbing emissions in the next decade, the International Energy Agency said in a report Monday. The IEA, a Paris-based energy monitor for industrialized countries, laid out a number policies that would lead to a peak in energy-related emissions by 2020, recommending profound changes in energy consumption ahead of a key U.N. climate change summit this year . According to the IEA, in order to cap emissions coal demand needs to gradually decline over the next 15 years, falling 13% between 2013 and 2030. Oil demand should also peak after 2020, gradually declining over the course of the next decade though it will still maintain the biggest share of the overall energy mix. Meanwhile, demand for nuclear energy should more than double from its 2013 […]

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North Dakota Fights Fracking Rule

North Dakota Seeks Injunction North Dakota officials are warning that a new federal fracking rule will likely cost the state $300 a year in income and 1,900 jobs. In March,the Bureau of Land Management (BLM) finalized new rules to regulate hydraulic oil and gas fracturing on public lands. Several states have filed suit, arguing that the new rules supersede the state’s authority and “ invade ” the jurisdiction of the state regulatory bodies. Related: Federal Fracking Regulations Challenged The ruling is particularly significant to North Dakota because of it vast public lands. It is estimated that BLM has an interest in about a third of the drilling units in North Dakota that were acquired the mineral rights on defaulted farms during the the Great Depression. Lynn Helms, director of the Department of Mineral Resources believes that the ruling will cause companies to leave North Dakota, which could cost the […]

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U.S. industrial output hurt by weakness in manufacturing, mining

WASHINGTON U.S. industrial production unexpectedly fell in May as manufacturing and mining activity remained weak, a sign that a strong dollar and spending cuts in the energy sector continued to constrain economic growth. The softness in the production side of the economy contrasts starkly with recent upbeat data on retail sales, employment, consumer and small business confidence, which have pointed to a growth pickup after a sluggish start to the second quarter. "Signs of spring remain largely absent in the industrial sector. The challenges of the stronger dollar and drop in energy prices linger," said Tim Quinlan, an economist at Wells Fargo Securities in Charlotte, North Carolina. Industrial output slipped 0.2 percent last month after declining 0.5 percent in April, the Federal Reserve said on Monday. Industrial production has been weak since December, and economists had expected output to rise 0.2 percent last month. The data was likely to […]

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British fracking campaign takes early step

British fracking campaign takes preliminary steps, though local county council rejects some work on traffic concerns. File Photo by Gary C. Caskey/UPI PRESTON, England, June 15 (UPI) — A British county council at the center of the country’s fledgling hydraulic fracturing sector gave partial support Monday to shale pioneer Caudrilla Resources. Caudrilla Resources aims to target shale natural gas reserves in Lancashire County. The region’s council said Monday it recommended approval for a campaign with as many as four drilling sites and hydraulic fracturing. The recommendation was subject to restrictions ranging from hours of work to noise pollution. A second application was recommended for refusal because of the potential for an increase in traffic on the rural highway network. Caudrilla in a statement said it was pleased with the council’s decision, though expressed frustration that efforts to satisfy local concerns were not recognized. "We will await the councilors’ decisions […]

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Papal Draft Blames Most Global Warming on Human Activity

Pope Francis after a mass in Tacloban in the Philippines in January. ROME—Pope Francis calls global warming a major threat to life on the planet, says it is due mainly to human activity and describes the need to reduce the use of fossil fuels as an “urgent” matter, in a published draft of an upcoming letter on the environment. The pope’s words appear in a draft copy of “Laudato Si’” (“Be praised”), his long-awaited encyclical on the environment. The draft was published online Monday by the Italian magazine L’Espresso, three days ahead of its scheduled publication date. The Vatican spokesman, the Rev. Federico Lombardi, said in a statement that the posted text wasn’t the final document, which would remain under embargo until Thursday. In the draft, Pope Francis wrote of a “very consistent scientific consensus that we are in the presence of an alarming warming of the climactic system.” […]

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Pope Francis Calls for Climate Action in Draft of Encyclical

Photo Pope Francis in St. Peter’s Square on Sunday. A final version of his encyclical is due Thursday. Credit Giampiero Sposito/Reuters ROME — Pope Francis offers a broad vision of an endangered planet, partly blaming human activity and fossil fuels for climate change while calling for people of all religions to take swift action, according to a leaked draft of his much-awaited environmental encyclical that was posted online Monday by an Italian magazine. The unauthorized release of the 192-page draft , published by L’Espresso, angered officials at the Vatican, who warned that the document did not represent the final version of Francis’ encyclical, which remains embargoed from publication until Thursday. In the leaked document, Francis often writes eloquently, citing scientific evidence about the human role in global warming. He repeats some of his familiar themes in calling on people to move away from a consumerist model that he says […]

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Oil steadies on U.S. storm, Yemen peace talks

LONDON Oil prices steadied on Monday as a storm that could impact the Gulf of Mexico raised concerns over U.S. production but talks in Geneva offered a chance for peace in Yemen where top crude exporter Saudi Arabia has been involved in a civil war. A large tropical disturbance in the southern Gulf of Mexico has a 70 percent risk of developing into a cyclone in the next 48 hours, the U.S. National Hurricane Center said, potentially threatening oil output in the region. U.S. light crude oil CLc1, also known as West Texas Intermediate (WTI), bounced from a session low of $59.62 per barrel to trade around $59.80, down 16 cents, by 0800 GMT (0400 ET). Brent crude LCOc1 was unchanged at $63.87 a barrel. Brent has fallen from a high above $66 last week and appears to be settling into a range between $60 and $65, said Carsten […]

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Iran’s Rouhani aims to limit nuclear inspections, warns of talks delay

DUBAI Iranian President Hassan Rouhani said on Saturday a comprehensive nuclear deal could be delayed if world powers brought new issues into play, and he would not accept a U.N. inspections regime that jeopardized state secrets. Iran is aiming to strike an accord with six powers by June 30 that would curtail its nuclear program in exchange for relief from sanctions. But negotiators have hit an impasse in part over how much enhanced access International Atomic Energy Agency inspectors should have to Iranian sites. "Iran will absolutely not allow its national secrets to fall into the hands of foreigners through the Additional Protocol or any other means," Rouhani said in a televised news conference, referring to an IAEA provision that would allow more intrusive inspections in the Islamic Republic. U.S. and French diplomats have called for Iran to accept stringent measures including granting inspectors access to its military sites […]

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Libyan coalition takes on ISIL in Derna

A coalition of armed groups in the Libyan the city of Derna say they have put the Islamic State of Iraq and the Levant (ISIL) group on the backfoot. The Shura Council of Derna declared war on ISIL last week and has been engaged in clashes with the fighters for days after describing ISIL as "tyrants and criminals" and pledging not to let it take root in the city. The Shura Council says it has succeeded in forcing ISIL from mosques and hotels it had seized in western and central parts of Derna. Footage shared on social media showed fighters from the coalition involved in street battles with ISIL. One Minute ISIL ISIL holds territory in Derna, in the east, as well as in the central city of Sirte. The council more than a dozen of its fighters had been wounded in the clashes. ISIL has carried out a […]

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Libya says Algerian militant Belmokhtar killed in U.S. strike

TRIPOLI Libya’s recognized government said on Sunday veteran Algerian militant Mokhtar Belmokhtar had been killed in a U.S. air strike inside Libya as part of counter-terrorism cooperation. Earlier, the U.S. Department of Defense said the U.S. military conducted a counterterrorism strike against an Al Qaida-associated target in Libya on Saturday night, but were assessing results before providing more details. "The Libyan government in the east of Libya confirms that the U.S fighter jets conducted air strikes last night in a mission which resulted in the death of the terrorist Belmokhtar," Libya’s recognised government said. (Reporting by Ahmed Elumami; Additional reporting by Peter Cooney in Washington; Writing by Patrick Markey; Editing by Sandra Maler )

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Energy Nations Better Watch Out as Saudis Open Stock Market

Investors watch share price movements in Riyadh, Saudi Arabia. Photographer: Waseem Obaidi/Bloomberg Global equity markets are waking up to a new $558 billion magnet pulling cash out of developing nations from Russia to Malaysia. As Saudi Arabia lifts a ban on direct investments by foreigners, fund allocators are preparing to shift money out of other countries and put it to work in the Arab world’s largest stock market. While there’s little consensus on which country will be the biggest loser, money managers mostly agree that energy producers will feel the heaviest effects. Below are the views of seven emerging-markets investors and strategists on what to expect: Martial Godet, head of emerging-market equities and derivatives strategy at BNP Paribas SA in Paris: Saudi Arabia “will not be a bargain, but it can be a nice diversification from emerging Asia that has become increasingly large within emerging markets. The biggest losers […]

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Drought may hit rural Indian economy, aggravating poverty

MATHURA, India India’s farm economy could contract this fiscal year for the first time in over a decade because of drought, threatening Prime Minister Narendra Modi’s drive to lift millions in the countryside out of poverty and bolster his party’s support. Roughly half of India’s farmland lacks irrigation and relies on monsoon rain, but this year’s rainfall is officially forecast to be only 88 percent of the long-term average and, for the first time in nearly three decades, farmers face a second straight year of drought or drought-like conditions. That comes on top of a crash in commodity prices, unseasonable rain earlier this year and delayed sowing late last year because of scanty monsoon rain. "Farmers are already reeling under heavy losses … and now they don’t have money to irrigate their fields or use an optimum level of inputs like fertilizer," said Ashok Gulati, an agricultural economist who […]

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“There Could Be Trouble” As US Fracking Revolution Prepares to Go Global

A new report showing the U.S. overtaking Russia as the leading producer of oil and gas in the world should put to rest any doubt that the fracking revolution that has occurred in the U.S. is for real, or as BP’s chief economist put it, “profound.” And now with the recent Environmental Protection Agency report on the impacts of fracking on drinking water being touted by the American Petroleum Institute as proof that fracking is safe, the industry’s insatiable greed got another boost. More recently, the Harvard Business School has also joined in the discussion calling for the end of the ban on exporting U.S. crude oil and warning about the implications of missing the “opportunity” offered by fracking. So with all of this momentum, what does ExxonMobil CEO Rex Tillerson think should be next? Less regulation. As previously mentioned on DeSmog , at this year’s CERAweek conference Tillerson […]

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BP: Shales Lift U.S. to No. 1 Global NatGas, Oil Producer

Even with turbulent and unsettled conditions in the global energy markets last year, the U.S. shale industry scaled new heights, lifting the country to No. 1 among global natural gas and oil producers, BP plc reported Wednesday. The oil major’s 64th annual Statistical Review of World Energy , one of the most respected energy forecasts by private or public economists, found that the unconventional growth in North America is surpassing all expectations. Chief economist Spencer Dale discussed the findings during a webcast and highlighted events expected to shape the global energy landscape over the next few decades. In a word, it’s shale — oil and gas. No. 1 is the continuing "shale revolution" in the United States, Dale said. The revised data in this year’s review suggest that the United States overtook Russia in 2013 to become the world’s largest producer of gas and oil. "We are truly witnessing […]

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Peak Oilists are the new Flat Earthers

Apparently it is necessary to point out that Peak Oil doctrine is still wrong. Ronald Bailey explains Hubbert’s Peak Refuted: Peak Oil Theory Still Wrong . He points out an author who has written multiple books defending Peak Oil. I just checked Amazon and can find four books from the mentioned author, written in 2001, 2005, 2008, and 2010. All are selling well. Not great, but okay. I’m astounded that so many people still believe that foolishness. Article gives some info I’ve not seen before: As I have explained earlier geologist M. King Hubbert famously predicted in 1956 that U.S. domestic oil production in the lower 48 states would peak around 1970 and begin to decline. In 1969 Hubbert predicted that world oil production would peak around 2000. Yes. The ol’ gig of my precisely calculated, ironclad calculation of the date of disaster is totally wrong so I will […]

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Retreat of ‘peak oil’: supply, demand unexpectedly expand global surplus

Robert J. Samuelson WASHINGTON — The recent meeting of OPEC provides an opportunity to understand the mysteries of the global oil market. As expected, OPEC decided not to cut its oil production. Barring unanticipated developments, prices will drop, says oil analyst Larry Goldstein. Potential oil supply, including drawdowns from bloated inventories, exceeds demand. Goldstein rightly cautions, however, that no one knows where prices will settle. Oil’s dramatic price changes seem baffling. In mid-2014, crude prices averaged around $100 a barrel; now, they’re gyrating between $50 and $60. Over the same period, U.S. gasoline prices have dipped from more than $3.50 a gallon to around $2.50. With the world economy slowly recovering, why have prices collapsed? The standard explanation comes in two parts. First, oil demand is what economists call price inelastic. Slight changes in supply and demand can produce large price swings. People and businesses need fuel. If oil […]

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Greek talks failure hits shares, buoys low-risk debt

LONDON Failure in the latest talks aimed at averting a Greek default hurt shares in Europe and Asia on Monday, drove investors into the safety of low-risk government bonds and weighed on the euro. As contagion from the collapse of Sunday’s talks spread across markets, the premium investors demand to hold Spanish 10-year bonds ES10YT=TWEB over German Bunds DE10YT=TWEB hit its highest since August. "It’s clear that each day that passes we come closer to a potential Greek default and this risk aversion is a natural reaction by the market," said KBC strategist Mathias van der Jeugt. The euro EUR= fell against the dollar, with the single currency also under pressure on investor caution before a U.S. interest rate-setting meeting later in the week. Talks between Greece and its creditors broke up after less than an hour, raising prospects of Athens being unable to repay 1.6 billion euros ($1.8 […]

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Out of Options and Time, Tsipras Faces Greece’s Moment of Truth

Greek Premier Alexis Tsipras and Greek Finance Minister Yanis Varoufakis take a walk in central Athens on June 13, 2015. Greek Prime Minister Alexis Tsipras has four days to capitulate to demands to keep Greece in the euro — or prepare for a messy divorce. The collapse of talks in Brussels on Sunday has made Thursday’s meeting of euro-area finance ministers the next deadline in the saga that opened in 2009. Bills are piling up and the aid spigot, shut for 10 months, is about to be withdrawn. “This week is deal week,” Mujtaba Rahman, head of euro zone analysis at Eurasia Group in London. So what happens if the gathering in Luxembourg is a bust? Once the prospect of a successful negotiation fades so do the odds of Greece paying the $1.7 billion it owes the International Monetary Fund this month. A default makes it difficult for the […]

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No, BP, the U. S. did NOT surpass Saudi Arabia in oil production

Even the paper of record for the oil industry, Oil & Gas Journal , got it wrong. With the release of the latest BP Statistical Review of World Energy , media outlets appeared to be taking dictation rather than asking questions about which countries produced the most oil in 2014. If they had asked questions, they would have ended up with a ho-hum headline announcing that last year Russia at 10.1 million barrels per day (mbpd) and Saudi Arabia at 9.7 mbpd were once again the number one and number two producers of crude oil including lease condensate ( which is the definition of oil ). The United States at 8.7 mbpd remained in third place. The most important question they could have asked is this: How is BP defining oil? It turns out that oil according to the BP definition includes something called natural gas liquids which includes […]

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Pope Francis to deliver explosive Encyclical on climate change, poverty

A roundup of the news, views and ideas from the main stream press and the blogosphere. Click on the headline link to see the full article. Explosive intervention by Pope Francis set to transform climate change debate John Vidal, The Guardian The most anticipated papal letter for decades will be published in five languages on Thursday. It will call for an end to the ‘tyrannical’ exploitation of nature by mankind. Could it lead to a step-change in the battle against global warming? Pope Francis will call for an ethical and economic revolution to prevent catastrophic climate change and growing inequality in a letter to the world’s 1.2 billion Catholics on Thursday. In an unprecedented encyclical on the subject of the environment, the pontiff is expected to argue that humanity’s exploitation of the planet’s resources has crossed the Earth’s natural boundaries, and that the world faces ruin without a revolution […]

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The Shale-Oil Boom is Over

It comes now from the US Energy Information Agency, and is headlined by Bloomberg Business , so yes, it’s official. As Bloomberg put it, “ US Shale Boom Grinds to a Halt .” Which, actually, is overstating the case by a good bit, there isn’t going to be a “halt.” Nevertheless, as sane people everywhere have been insisting for years, the shale boom is, as it always was going to be, a bust. This — now official — assessment is in the form of a set of projections by the EIA, which, we should remember, has pretty consistently been overly optimistic in its assessment of the oil business. Remember, they were the folks who estimated that the Monterey Shale in California held 14 billion barrels of recoverable reserves — two-third of America’s total oil wealth — until they ran the numbers again and re-estimated the Monterey at 96% lower. […]

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Peak Oil in the Congressional record

Even the most ardent techno-optimists and economists admit there are limited supplies of fossil fuels, but that we don’t need to worry for a long time. It appears they have succeeded in convincing the government they’re right, because there are only 2 documents about planning for peak oil that I’m aware of at the federal level (several cities have peak oil task force recommendations): Hirsch, R. L., et al. February 2005. Peaking of World Oil Production: Impacts, mitigation, & risk management . Department of Energy. GAO. 2007. Crude oil. Uncertainty about future oil supply makes it important to develop a strategy for addressing a peak and Decline in Oil Production . U.S. Government Accountability Office. Congress is very aware of our energy situation, they just don’t call it “peak oil” very often. You’ll get a lot of hits on “energy security” or “energy crisis” at http://www.gpo.gov/fdsys/ The problem is […]

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Oil Prices Down on Strong Dollar, Concerns About Oversupply

Oil prices fell Friday on continuing concerns about oversupply. Oil prices have traded in a tight range in recent weeks, with U.S. prices pivoting around the psychologically key $60-a-barrel level. Forecasts that the global glut of crude oil is due to shrink, due to growing demand and a decline in drilling, have boosted prices from multiyear lows earlier this year. But some investors remain hesitant, especially because some U.S. companies say they can increase production if prices hold above $60. The U.S. oil price “has moved above the $61/bbl level three times since the beginning of May and failed to remain above this level,” said Dominick Chirichella, analyst at the Energy Management Institute, in a note. “This is likely to happen again.” Light, sweet crude for July delivery settled down 81 cents, or 1.3%, to $59.96 a barrel on the New York Mercantile Exchange. Despite back-to-back losses, crude still […]

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Militants attack government forces near Iraq’s Baiji refinery

BAGHDAD Islamic State militants attacked government forces and their Shi’ite militia allies on Saturday, killing 11 near the city of Baiji as part of the battle for control of Iraq’s biggest refinery, army and police sources said. Four suicide bombers in vehicles packed with explosives hit security forces and the local headquarters of the Shi’ite militias in the area of al-Hijjaj, 10 km (6 miles) to the south of Baiji town, near the refinery, sources at the nearby Tikrit security operations command said. Iraqi government forces and powerful Iranian-backed Shi’ite militias face Islamic State on several fronts in Iraq, a major oil producer and OPEC member. They include areas around Baiji refinery, north of Baghdad, and the city of Ramadi west of the capital, seized last month by Islamic State, the ultra-hardline Sunni group that poses the biggest threat to Iraq since the fall of Saddam Hussein in 2003. […]

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Oil prices end week on low note

Gains in European industrial production not enough to balance against a tilt toward the supply side, sending crude oil prices lower. Photo by akiyoko/Shutterstock. NEW YORK, June 12 (UPI) — Slow increases in industrial production in European economies were unable to offset supply concerns in energy markets, sending crude oil prices down Friday. Brent crude oil prices fell about three-quarters of one percent shortly after the opening bell on Wall Street to $64.61, continuing the late-week slump that followed a string of market reports from global energy groups. The Organization of Petroleum Exporting Countries this week said it was keeping its production levels stable on the expectation that global demand would increase. The International Energy Agency, meanwhile, said output from Iraq, Saudi Arabia and the United Arab Emirates helped push OPEC supplies to their highest levels since August 2012. Starting in June 2014 oil prices began falling steadily below […]

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« For Oil Price, Bad Is The New Good

Lately, oil prices have gone up when they should have gone down. In the last week, OPEC decided not to cut production and the two major energy agencies reported that the world over-supply problem is getting worse. Brent oil price increased from $62 to $65. Bad is the new good. The expected bad news on Friday, June 5 that OPEC would not cut production was skillfully cloaked in positive statements about growing demand. On Monday, June 8, Brent opened at $62.69 and rose to $65.70 over the next two days. On Tuesday, June 10, the EIA published its monthly Short-Term Energy Outlook (STEO) that showed that the production surplus responsible for low oil prices had increased in May to almost 3 million barrels per day (bpd). Figure 1. World liquids production surplus or deficit and Brent crude oil price. Source: EIA and Labyrinth Consulting Services, Inc. (Click image to […]

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Outflows from energy ETPs continue in May: BlackRock

LONDON Investors continued to pull money from energy exchange-traded products (ETPs) in May after a rebound in oil prices stumbled as the global supply glut showed no signs of eroding. Some $540 million exited energy ETPs globally last month, following net withdrawals of $1.2 billion in April, data from asset manager BlackRock showed. Investors piled into oil ETPs in the first quarter chasing an oil price rebound. But Brent crude futures prices slipped just over 2 percent in May, and some investors decided to take profits ahead of a potentially much bigger downward correction. "The gains were getting a bit ahead of themselves given the elevated inventory levels," said Martin Arnold, global commodity and FX strategist at ETF Securities, an issuer of ETPs. He noted that OPEC had not cut production, with Saudi Arabia raising output to a record high of around 10.3 million barrels per day (bpd) in […]

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Cash for Oil: China and Iran Strike New Oil Payment Plan

(Photo by Mark Ralston – Pool/Getty Images) Oil and gas deals between China and Iran are set to change. Last week, several news agencies in the region, including the Iran Daily and Trend News Agency said that Iran and China have agreed that China would pay in cash for the oil and gas it buys from Iran. China is currently the biggest buyer of Iranian crude oil, purchasing more than 440,000 barrels per day (b/d), but Tehran imports goods instead of receiving cash from these sales. The Iran Daily said that Iran can sell about one million b/d of oil under a preliminary nuclear agreement but the country has to use a maze of routes to receive its money. The two countries reached an agreement on payments partly in cash and the transfer of money to a third country to pay for imports. “We wanted to transfer part of […]

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Colombia: Oil Pipeline Attacked In Cordoba City

The Transandino oil pipeline was attacked in a rural area of Cordoba city, in Narino department, W Radio reported June 12. In the past 15 days, there have been three attacks against the pipeline. Authorities have not verified whether the Revolutionary Armed Forces of Colombia (FARC) is behind the attack, but FARC was responsible for nine other attacks against energy infrastructure and security forces in the departments of Cauca, Caqueta, Narino and Putumayo.

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Success of Kurdish Forces Is a Rare Bright Spot for U.S. Policy in Iraq

Photo Kurdish fighters after a clash with the Islamic State in March. They have managed to retake and hold significant territory. Credit Iraq/Reuters SULTAN ABDULLAH HILLS, Iraq — Since retaking these barren hills in northern Iraq from the jihadists of the Islamic State, Kurdish pesh merga forces have dug in: excavating trenches, unfurling barbed wire and coordinating with the United States-led military coalition to identify targets for airstrikes. The new outposts dotting the hilltops provide clear views of villages where Islamic State jihadists build truck bombs and launch attacks, but the Kurdish forces have no plans to advance, saying the territory is not theirs to fight for. “Now our main job is defense,” said Maj. Gen. Mohammed Khoshawe, a field commander. “To defend the Kurds, this is the farthest we go.” The ability of Kurdish forces in northern Iraq to retake and defend territory has been a rare success […]

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Oil bosses break long climate silence with urgent initiative

LONDON For an industry used to cautious, long-term evolution, the speed at which leaders of Europe’s biggest oil and gas companies moved to take a joint stand in the climate debate speaks volumes. Discrete talks in the eyrie of Davos in January led to a spontaneous, light bulb moment on a stage in Oslo in February. The result: a joint statement two months later. The executives agreed they had to go public, and with alacrity. Faced with growing pressure from shareholders, vocal divestment campaigns by the media and advocacy groups, there looms the critical moment of the United Nations climate summit in Paris in December. The industry campaign will speed up before then. "In the past we thought it was better to keep a low profile on the issue. I understand that tactic, but in the end it’s not a good tactic," Shell CEO Ben van Beurden told his […]

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Oil-Sands Operations Resume After Wildfire

Both major oil-sands producers’ operations are located in Alberta’s Cold Lake region, about 300 kilometers (186 miles) northeast of Alberta’s capital, Edmonton. The blaze had shut in nearly 10% of Canada’s oil-sands output, or about 233,000 barrels a day, since it was detected May 22. Canadian Natural said full production has resumed at its 80,000-barrel-a-day Primrose site, which had been evacuated due to the closure of an access road, and its 25,000-barrel-a-day Kirby South operation, which had cut back output after the shutdown of a third-party pipeline. Cenovus said operations have returned to normal at its nearby Foster Creek site, which has a capacity of 135,000 barrels a day and is jointly owned with ConocoPhillips . COP -0.81 % The Calgary-based company said it expects the 11-day shutdown to reduce second-quarter production by about 10,500 barrels a day and crimp annual production by about 2,600 barrels a day. However, […]

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Oil exploration in the U.S. Arctic continues despite current price environment

graph of Alaska crude oil production, as explained in the article text Alaska’s crude oil production has declined from 1.8 million barrels per day (MMb/d) in 1991 to 0.5 MMb/d in 2014, and it is expected to continue declining through 2040. Almost 75% of Alaska’s crude oil production from 1990 to 2012 was from the Prudhoe Bay and Kuparuk River fields in the central North Slope, which respectively produced 4.9 billion and 1.7 billion barrels of crude oil over this period. Crude oil production in Alaska is sensitive to the challenging environment—including variable ice conditions and limited time without ice coverage—as well as pipeline economics . However, recent conditional approval granted to Royal Dutch Shell to begin exploratory drilling in the Burger Prospect in the Chukchi Sea may help to offset future declines in crude oil production from other state and federally managed resources in the region. U.S. Energy […]

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