Category:

Enacting Cap-and-Trade Will Present Challenges Under China’s System

Photo President Xi Jinping of China addressing workers at the Boeing plant at Paine Field in Everett, Wash., on Wednesday. Credit Ruth Fremson/The New York Times BEIJING — American officials have applauded President Xi Jinping ’s commitment to a national market for greenhouse gas quotas as a breakthrough in environmental cooperation. But to work well, Mr. Xi’s pledge, made at the White House on Friday, will demand big changes from a Chinese government accustomed to heavy-handed intervention and skewed statistics. It will take years of effort to build a substantial market that plays a major role in curbing emissions, and even then, it could founder, like similar initiatives elsewhere, experts said. China has had local trials underway since 2013, supported by the liberal doling out of emissions permits or by cajoling companies to take part. Expanding those initial efforts nationwide by 2017, as Mr. Xi pledged to do, will […]

Posted On : Published By : Tom Whipple
Category:

U.S. and China team up on global warming

U.S. President Barack Obama and China’s President Xi Jinping (L) hold a joint news confernce in the Rose Garden of the White House in Washington September 25, 2015. – Tensions between the United States and China are running high on issues including cyber security, the South China Sea and currency values. So why are the U.S. and China working so well together on climate change? And what does it mean for the world? Today, President Barack Obama and President Xi Jinping announced an important climate agreement. If that sentence sounds familiar, there’s a reason. At their first summit (in California in 2013), President Obama and President Xi announced plans to cooperate in phasing out HFCs, a super-pollutant with huge global warming impacts. At their second summit (in Beijing in 2014), the two leaders reached an historic agreement to limit total emissions of heat-trapping gases in each country. Expectations for […]

Posted On : Published By : Tom Whipple
Category:

Schlumberger Won’t Extend Deadline to Buy Eurasia Drilling Stake

Schlumberger’s bid would give it a 45% stake in EDC, with an option to buy the rest of the company at a later date, an unusually large investment by a U.S.-listed company in Russia’s oil industry at a time of heightened tensions between Moscow and the West over Ukraine. It would help strengthen the presence of the world’s largest oil-services company in Russia and give it a base from which to grow in the region. EDC operates the largest fleet of onshore drilling rigs in Russia and is vital to operations at the country’s oil fields, where companies are ramping up output to compensate for the recent decline in oil prices. Russia’s economy is highly dependent on oil and gas, the sales of which account for around half its federal budget revenue. The transaction was proposed in January , accepted by EDC and originally expected to close by the […]

Posted On : Published By : Tom Whipple
Category:

Shale Oil and the 2014-15 Price Collapse

Art Berman is out with a new deck: “ The North American Unconventional Revolution & The 2014-2015 Oil Price Collapse ” (pdf) and it’s a great review of US shale, Saudi/OPEC response, and the great price fall over the past year. As always, Art is out to tell you some facts you don’t often see in the headlines: The story of the price collapse is pretty simple: It’s Chinese demand fall + US oil production growth + response of Saudi oil production growth. That’s pretty much it. Lower demand and production gains leading to surplus and lower prices. The heroic tales of rig productivity and drilling efficiency gains are what oil companies have to tell investors to show a brave face. Dig a little deeper to realize – what should be obvious to everyone – that companies are getting killed at these low prices. But future higher oil prices […]

Posted On : Published By : ASPO-USA
Category:

Oil, bonds go their separate ways

An oil pump is seen near Bakersfield, California October 14, 2014. NEW YORK (IFR) – The rebound in oil prices has not been enough to stop the bleeding at many U.S. energy companies, whose bonds keep weakening – and whose ability to muster fresh capital is dwindling away. Oil and bond prices are moving in opposite directions, underlining the market’s lack of confidence in a cash-strapped sector that is seeing its prospects go from bad to worse. The difficulties will start intensifying next week, when banks begin their twice-yearly review to set ceilings on how much exploration and production (E&P) companies can borrow. And with crude at US$45 per barrel – far below the US$60 minimum that underpins many E&P business models – the expected cut in borrowing bases will come as a double whammy. Revenue is down, capital market access is limited and cash is in short supply […]

Posted On : Published By : Tom Whipple
Category:

U.S. gasoline sales surge at fastest for over a decade

A view of the Tesoro refinery in Martinez, California, February 2, 2015. Gasoline sales to U.S. motorists rose by more than 5 percent in July compared with the same month a year before, according to the U.S. Energy Information Administration (EIA). Gasoline sales are rising at the fastest year-over-year rates for more than 14 years as demand surges. Continued economic expansion, rising employment and cheaper fuel are putting a record volume of traffic on U.S. roads as well as encouraging motorists to upgrade to larger and more fuel hungry vehicles. Gasoline sales were up 5.1 percent in July 2015 compared with July 2014, according to the EIA’s Prime Supplier Report published on Tuesday ( link.reuters.com/pyv65w ). Sales for the first seven months as a whole were up 4.4 percent compared with 2014 ( link.reuters.com/myv65w ). The Prime Supplier Report is based on a census of around 200 firms that […]

Posted On : Published By : Tom Whipple
Category:

Ban proposed for oil tankers in Great Lakes

Sen.. Gary Peters, D-Mich., calls for ban on crude oil tanker traffic in Great Lakes waters as pipeline company Enbridge conducts monitoring on pipeline running through state waters. File photo by Gary Malerba/UPI LANSING, Mich., Sept. 25 (UPI) — With Enbridge on a regional monitoring mission, two Michigan senators introduced legislation aimed at banning vessels from carrying oil through the Great Lakes. Pipeline company Enbridge is conducting emergency response drills on Line 5, a twin oil line running through the Straits of Mackinac dividing the two Michigan peninsulas. Enbridge, the company behind a major 2010 oil spill in lower Michigan, has faced safety questions over the durability of the 60-year-old Line 5. "After experiencing one of the largest inland oil spills in U.S. history, Michiganders know all too well that a pipeline break can have devastating consequences for our environment and our economy," Sen. Gary Peters , D-Mich., said […]

Posted On : Published By : Tom Whipple
Category:

E.P.A. to Bolster Testing Because of Volkswagen Scandal

Photo A 2014 Jeep Diesel being tested at the Center for Alternative Fuel Engines and Emissions at West Virginia University. Credit Tom M. Johnson for The New York Times Government regulators said Friday that they planned to step up the testing requirements of cars in the wake of the Volkswagen scandal. The Environmental Protection Agency , which disclosed last week that it had learned that Volkswagen diesel cars had equipment to evade smog-testing standards, said it had sent a letter to manufacturers of gasoline and diesel cars saying that regulators would be looking for so-called defeat devices in all vehicles. The agency said Volkswagen had used a device programmed to fool emissions testers into thinking that the car was emitting much less pollution than it was during regular driving. “Manufacturers should expect that this additional testing may add time to the confirmatory test process,” the E.P.A. wrote in its […]

Posted On : Published By : Tom Whipple
Category:

East Coast distillate fuel oil inventories higher than in recent years

graph of U.S. east coast distillate fuel oil inventories, as explained in the article text Inventories of distillate fuel oil in the U.S. East Coast are higher now than they have been in the previous three years, reaching 59 million barrels on September 18. Most of the recent increase is in the Central Atlantic region, but inventories are also higher in New England and in the Lower Atlantic, compared with previous late-September levels. Heating oil, a type of distillate fuel oil, is used as a space heating or water heating fuel in about eight million U.S. households, almost all of which are in the Northeast. In the Northeast, 27% of households use heating oil for space heating, while nationwide only 6% of households use heating oil, based on data from EIA’s latest Residential Energy Consumption Survey . The East Coast region (Petroleum Administration for Defense District, or PADD 1) […]

Posted On : Published By : Tom Whipple
Category:

BHI: Recent downward shift continues for US rig count

The US drilling rig count fell 4 units to 838 rigs working during the week ended Sept. 25, marking the fifth straight week of declines, according to data from Baker Hughes Inc. ( OGJ Online, Sept. 18, 2015 ). Since the recent peak during the week ended Aug. 25 that followed a small summer rebound, the count has dropped 47 units. It’s now down 1,093 units year-over-year. Canada’s rig count fell for a sixth straight week, dropping 6 units to 176, down 253 year-over-year. Since a recent peak after its own summer rebound, the count has declined 35 units, of which all but 1 have been oil-directed. This week, oil-directed rigs in Canada fell another 4 units to 66, down 180 year-over-year. Gas-directed rigs dropped 2 units to 110. Low crude oil prices have caused firms to substantially reduce their rig fleets over the past year to save cash. […]

Posted On : Published By : Tom Whipple